Sundance Energy Australia Limited (ASX: SEA) (NASDAQ: SNDE)
(“Sundance” or the “Company”), a U.S. onshore oil and gas
exploration and production company focused in the Eagle Ford in
South Texas, reported its second quarter 2019 financial and
operations results today.
Second Quarter 2019 Financial Results
Highlights
- Second quarter net sales volumes
were 1,264,686 boe or 13,898 boe per day, at the top end of the
Company’s public guidance. This represents an increase of ~79% as
compared to the same period for the prior year. Second quarter
sales volumes were ~59% oil, ~22% gas and ~19% NGLs.
- The higher than expected gas to oil
ratio (“GOR”) for the quarter was driven by two primary factors.
- The Dimmit assets, and in specific
the two well Red Ranch pad brought online in late first quarter,
produced at a ~23% oil cut. Pro Forma for the recently announced
Dimmit divestiture expected to close in September 2019, oil would
have represented ~62% of total sales volumes.
- Additionally, the four well Roy Esse pad which was brought
online during the quarter produced at the expected oil production
rate but overachieved in terms of gas production, further
increasing the Company’s second quarter GOR.
- Total revenue for the quarter
increased ~84% to US $52.9 million as compared to the same prior
year period.
- Net Income attributable to owners
of the Company for the period was US $3.8 million. Adjusted
EBITDAX1 for the period was US $33.7 million, representing a ~64%
Adjusted EBITDAX margin and ~230% growth as compared to the same
period for the prior year. Adjusted EBITDAX1 for the quarter
was slightly below the Company’s guidance primarily due to the
lower oil cut and the impact of realized NGL and gas prices.
- Average second quarter realized
prices excluding the impact of hedging were US $61.93 per barrel of
oil, US $2.08 per mcf of gas, and US $13.59 per barrel of NGL. This
represents a US $2.17 per barrel premium compared to an average WTI
price of US $59.76 per barrel for the quarter. Average second
quarter realized price per boe including the impact of hedges was
US $41.70.
- Sundance continued to drive down
cash operating costs during the second quarter. Total Cash
Operating Costs2 of US $15.01 per boe improved 35% as compared to
the same prior year period and a 16% improvement as compared to the
Company’s first quarter 2019 Cash Operating Costs, primarily due to
lower cash General and Administrative (“G&A”), Lease Operating
Expense (“LOE”) and Workover expenses per boe.
- Most notably, LOE of US $5.43 per boe has decreased ~48% as
compared to the same prior year period and ~31% as compared to the
first quarter 2019.
- Cash operating costs for the quarter were below guidance of US
$17.95 per boe by US $2.94 per boe, or ~16%.
- As of 1 August 2019, the Company’s
oil hedges covered a total of 4,695,000 barrels through 2023.
Hedging covered approximately ~8,000 barrels of oil per day for the
remainder of 2019 with a weighted average floor of US $60.32 per
barrel. These figures represent ~76% of the remainder of 2019
expected oil sales and exclude hedges which have rolled off during
the first seven months of 2019.
- Second quarter development and
production related expenditures totaled US $44.3 million, below the
low end of capital expenditure guidance of US $45-50 million.
- Subsequent to the end of the second
quarter, the Company announced that it had entered into a
definitive agreement to sell its assets in Dimmit County, TX for a
purchase price of USD $29.5 million, subject to customary
adjustments at closing. The sale is anticipated to close in
September 2019.
_______________________________1 Adjusted EBITDAX is a Non-IFRS
measure, please see reconciliation to net income (loss)
attributable to owners of Sundance at the end of this
release.
2 Cash Operating Costs is a Non-IFRS measure
comprising lease operating expenses, including workover expenses,
gathering, processing and transportation expenses, production tax
expense and general and administrative expenses, excluding
share-based compensation and transaction related
expenses.
Second Quarter 2019 Operational
Highlights
- Sundance brought 6.0 gross (6.0
net) wells onto production during the second quarter, including the
4.0 gross (4.0 net) well Roy Esse pad in Live Oak County and the
2.0 gross (2.0 net) well Bracken pad in McMullen County.
- During the second quarter the
Company additionally drilled the 4.0 gross (4.0 net) well HT
Chapman pad and the first two wells of the 4.0 gross (4.0 net) well
H Harlan Bethune pad in Live Oak County. Year to date the Company’s
average spud to rig release time was 11.5 days, an improvement of
33% as compared to 2018 average spud to rig release time of 17.24
days.
- The Company exited the quarter with
6.0 gross (6.0 net) drilled uncompleted (“DUC”) wells in Live Oak
County.
- The HT Chapman pad was turned to sales on 14 August 2019.
- Drilling of the final two wells of the H Harlan Bethune pad was
finalized and the pad is in the process of being completed as of
the date of this report.
- The Company additionally completed
the 4.0 gross (4.0 net) well Georgia Buck pad in Live Oak County
but delayed turning those wells to sales and left them temporarily
shut in to protect them while an offset operator finalized nearby
completion activities.
- Subsequent to the quarter’s end, the Georgia Buck wells were
turned to sales on 24 July 2019 and through the date of this report
averaged >1,100 boe/d per well for peak 24-hour rates with
approximately an 85% oil cut.
- As of the date of this report, the
Company was in the process of drilling the 2.0 gross (2.0 net) well
Justin Tom pad in Atascosa County. The Justin Tom wells are being
drilled with a targeted extended lateral length of 12,900
feet.
- On May 29th, Sundance and its
midstream partner completed the previously announced capacity
expansion of the CGP-41 gas processing plant through the
installation of two additional compressors. This expansion work
increased the operating gas processing capacity of the plant to 18
mmcfd, sufficient to handle Sundance’s current production in the
CGP-41 area. Subsequent to this expansion, Sundance has begun
working with its midstream partner to further expand CGP-41 towards
its design capacity to accommodate several years of resource
development growth. This second round of expansions is expected to
be completed during the fourth quarter. Similar to the initial
expansion, any such subsequent expansions would be funded by
Sundance’s midstream partner up to US $10 million cumulative
capital costs.
Third Quarter and Full Year 2019
Guidance Highlights
- Sundance believes it has reached
its peak drawn debt level at the end of Q2 and will be free cash
flow positive in the second half of 2019.
- During the third quarter, the
Company anticipates average sales volumes of 14,000 to 14,500 boe
per day driven by 12 new Live Oak wells that will produce an
average of approximately 30 days per well during the quarter. Sales
volumes guidance for full year 2019 remains unchanged at 14,000 to
15,000 boe per day. The Company anticipates an oil cut during the
third quarter of ~60% by sales volume.
- The Company now intends to bring 22
wells online during full year 2019, with certain of those wells
being extended reach laterals. During the third quarter, the
Company intends to spud 4 total wells and place 12 wells onto
production.
- Second half capital spending
guidance is US $60 to 65 million. Third quarter capital spending
represents most of this amount, ranging from US $45 to 60 million
pending exact completion timing for the extended reach Justin Toms
wells which are the last wells the Company will bring online during
2019. Full Year Capital cost guidance remains unchanged at US
$135 to $155 million.
The table below provides an overview of the
Company’s operational activity for year-to-date 20193:
|
|
|
|
|
|
|
|
|
|
|
|
|
Well Name |
County |
Spud Date |
IP Date |
Lateral Length |
Peak 24-Hr IP |
30-Day Avg (boepd) |
30-Day / 1,000' ft |
60-Day Avg (boepd) |
60-Day / 1,000' ft |
% Oil |
|
Bracken 22H |
McMullen |
24-Jan-19 |
2-Apr-19 |
6,792 |
1,690 |
1,053 |
155 |
964 |
142 |
76 |
% |
|
Bracken
23H |
McMullen |
22-Jan-19 |
2-Apr-19 |
6,630 |
1,397 |
856 |
129 |
824 |
124 |
76 |
% |
|
Roy
Esse 15H |
Live Oak |
1-Dec-18 |
5-May-19 |
4,718 |
1,222 |
864 |
183 |
848 |
180 |
72 |
% |
|
Roy
Esse 16H |
Live Oak |
28-Nov-18 |
5-May-19 |
4,792 |
1,371 |
988 |
206 |
912 |
190 |
75 |
% |
|
Roy
Esse 17H |
Live Oak |
26-Nov-18 |
5-May-19 |
4,657 |
1,077 |
785 |
169 |
743 |
160 |
76 |
% |
|
Roy
Esse 18H |
Live Oak |
24-Nov-18 |
5-May-19 |
4,702 |
1,099 |
805 |
171 |
753 |
160 |
73 |
% |
|
Georgia
Buck 01H |
Live Oak |
21-Feb-19 |
24-Jul-19 |
3,971 |
1,200 |
- |
- |
- |
- |
86 |
% |
|
Georgia
Buck 02H |
Live Oak |
23-Feb-19 |
24-Jul-19 |
3,814 |
1,071 |
- |
- |
- |
- |
86 |
% |
|
Georgia
Buck 03H |
Live Oak |
25-Feb-19 |
24-Jul-19 |
3,792 |
1,133 |
- |
- |
- |
- |
84 |
% |
|
Georgia
Buck 10H |
Live Oak |
26-Feb-19 |
24-Jul-19 |
3,917 |
1,105 |
- |
- |
- |
- |
85 |
% |
|
HT
Chapman 11H |
Live Oak |
16-Apr-19 |
14-Aug-19 |
5,287 |
- |
- |
- |
- |
- |
- |
|
|
HT
Chapman 12H |
Live Oak |
14-Apr-19 |
14-Aug-19 |
5,943 |
- |
- |
- |
- |
- |
- |
|
|
HT
Chapman 13H |
Live Oak |
12-Apr-19 |
14-Aug-19 |
5,894 |
- |
- |
- |
- |
- |
- |
|
|
HT
Chapman 14H |
Live Oak |
10-Apr-19 |
14-Aug-19 |
5,763 |
- |
- |
- |
- |
- |
- |
|
|
H Harlan
Bethune 15H |
Live Oak |
31-May-19 |
- |
- |
- |
- |
- |
- |
- |
- |
|
|
H Harlan
Bethune 16H |
Live Oak |
2-Jun-19 |
- |
- |
- |
- |
- |
- |
- |
- |
|
|
H Harlan
Bethune 17H |
Live Oak |
4-Jun-19 |
- |
- |
- |
- |
- |
- |
- |
- |
|
|
H Harlan
Bethune 18H |
Live Oak |
6-Jun-19 |
- |
- |
- |
- |
- |
- |
- |
- |
|
|
Justin
Tom 08H |
Atascosa |
30-Jul-19 |
- |
- |
- |
- |
- |
- |
- |
- |
|
|
Justin Tom 09H |
Atascosa |
25-Jul-19 |
- |
- |
- |
- |
- |
- |
- |
- |
|
_______________________3 Excludes the Red Ranch 18H & 19H
wells in Dimmit County.
The tables below set forth the Company’s hedge position as of
15th August 20194:
|
HEDGE POSITION OVERVIEW |
|
|
|
|
|
Total Oil Derivative Contracts |
Gas Derivative Contracts |
|
|
|
|
|
Weighted Average |
Weighted Average |
|
|
|
|
Year |
Units (Bbls) |
Floor |
|
Ceiling |
|
Units (Mcf) |
Floor |
|
Ceiling |
|
|
|
|
|
2019 |
1,229,000 |
$60.32 |
|
$68.19 |
|
1,305,000 |
$2.86 |
|
$3.13 |
|
|
|
|
|
2020 |
2,046,000 |
$56.92 |
|
$60.49 |
|
1,536,000 |
$2.65 |
|
$2.70 |
|
|
|
|
|
2021 |
732,000 |
$50.37 |
|
$59.34 |
|
1,200,000 |
$2.66 |
|
$2.66 |
|
|
|
|
|
2022 |
528,000 |
$45.68 |
|
$60.83 |
|
1,080,000 |
$2.69 |
|
$2.69 |
|
|
|
|
|
2023 |
160,000 |
$40.00 |
|
$63.10 |
|
240,000 |
$2.64 |
|
$2.64 |
|
|
|
|
|
Total |
4,695,000 |
$54.95 |
$62.45 |
5,361,000 |
$2.71 |
$2.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRUDE OIL HEDGE POSITION BY BASIS |
|
|
LLS Derivative Contracts |
Brent Derivative Contracts |
WTI Derivative Contracts |
|
|
Weighted Average |
Weighted Average |
Weighted Average |
|
Year |
Units (Bbls) |
Floor |
|
Ceiling |
|
Units (Bbls) |
Floor |
|
Ceiling |
|
Units (Bbls) |
Floor |
Ceiling |
|
2019 |
70,000 |
$52.51 |
|
$62.51 |
|
359,000 |
$58.72 |
|
$71.06 |
|
800,000 |
$61.72 |
$67.39 |
|
2020 |
- |
- |
|
- |
|
- |
- |
|
- |
|
2,046,000 |
$56.92 |
$60.49 |
|
2021 |
- |
- |
|
- |
|
- |
- |
|
- |
|
732,000 |
$50.37 |
$59.34 |
|
2022 |
- |
- |
|
- |
|
- |
- |
|
- |
|
528,000 |
$45.68 |
$60.83 |
|
2023 |
- |
- |
|
- |
|
- |
- |
|
- |
|
160,000 |
$40.00 |
$63.10 |
|
Total |
70,000 |
$52.51 |
|
$62.51 |
|
359,000 |
$58.72 |
|
$71.06 |
|
4,266,000 |
$54.67 |
$61.73 |
_________________________4 Excludes realized hedge
volumes which rolled off during the first seven months of 2019. WTI
pricing includes the impact of WTI-MEH basis hedges.
The following unaudited tables present certain
production, per unit metrics and Adjusted EBITDAX that compare
results of the corresponding quarterly reporting periods:
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
|
|
|
Unaudited |
2019 |
|
2018 |
|
2019 |
|
2018 |
|
% Change |
|
|
|
|
Net Sales
Volumes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (Bbls) |
745,130 |
|
380,534 |
|
1,467,525 |
|
745,774 |
|
96 |
% |
|
|
97 |
% |
|
|
|
|
Natural gas (Mcf) |
1,688,005 |
|
1,242,251 |
|
2,960,551 |
|
2,126,674 |
|
36 |
% |
|
|
39 |
% |
|
|
|
|
NGL (Bbls) |
238,223 |
|
118,506 |
|
410,958 |
|
198,019 |
|
101 |
% |
|
|
108 |
% |
|
|
|
|
Total sales (Boe) |
1,264,686 |
|
706,081 |
|
2,371,909 |
|
1,298,239 |
|
79 |
% |
|
|
83 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Daily
Volumes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily sales |
13,898 |
|
7,759 |
|
13,104 |
|
7,173 |
|
79 |
% |
|
|
83 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product Price
Received |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total price received (per
Boe) |
$41.83 |
|
$45.19 |
|
$42.43 |
|
$45.81 |
|
(7 |
%) |
|
|
(7 |
%) |
|
|
|
|
Total realized price (per
Boe)(1)(2)(3) |
$41.70 |
|
$37.42 |
|
$43.94 |
|
$37.64 |
|
11 |
% |
|
|
17 |
% |
|
|
|
|
Total price received - Oil
(per Bbl) |
$61.93 |
|
$68.57 |
|
$59.24 |
|
$66.73 |
|
(10 |
%) |
|
|
(11 |
%) |
|
|
|
|
Total price realized - Oil
(per Bbl)(1) |
$61.21 |
|
$53.73 |
|
$61.18 |
|
$52.29 |
|
14 |
% |
|
|
17 |
% |
|
|
|
|
Total price received - Natural
gas (per Mcf) |
$2.08 |
|
$2.45 |
|
$2.29 |
|
$2.45 |
|
(15 |
%) |
|
|
(6 |
%) |
|
|
|
|
Total price realized - Natural
gas (per Mcf)(2) |
$2.20 |
|
$2.52 |
|
$2.43 |
|
$2.50 |
|
(13 |
%) |
|
|
(3 |
%) |
|
|
|
|
Total price received - NGL
(per Bbl) |
$13.59 |
|
$24.00 |
|
$16.80 |
|
$23.04 |
|
(43 |
%) |
|
|
(27 |
%) |
|
|
|
|
Total price realized - NGL
(per Bbl)(3) |
$14.33 |
|
$24.00 |
|
$17.65 |
|
$23.04 |
|
(40 |
%) |
|
|
(23 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
(1) Includes realized losses on oil derivatives of $0.2 million and
$2.3 million for the three months ended June 30, 2019 and 2018,
respectively, and realized gains of $3.6 million and realized
losses of $3.9 million for the six months ended June 30, 2019 and
2018, respectively. Also includes the impact of a fixed price
delivery contract of $8.54/Bbl and $9.09/Bbl for the three and six
months ended June 30, 2018, respectively. |
|
|
|
|
|
|
|
|
|
(2) Includes realized gains on natural gas derivatives of $0.2
million and $0.1 million for the three months ended June 30, 2019
and 2018, respectively, and realized gains of $0.4 million and $0.1
million for the six months ended June 30, 2019 and 2018,
respectively. |
|
|
|
|
|
|
|
|
|
(3) Includes realized gains on NGL derivatives of $0.2 million and
$0.3 million for the three and six months ended June 30, 2019,
respectively. |
|
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|
UNIT COST
ANALYSIS |
Three Months Ended June 30, |
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
|
|
Unaudited |
|
2019 |
|
|
|
|
2018 |
|
|
Change |
|
|
2019 |
|
|
|
2018 |
|
|
Change |
|
|
|
Revenue/Boe (Inclusive of Hedging) |
$ |
41.70 |
|
|
|
$ |
37.42 |
|
|
11 |
% |
|
$ |
43.94 |
|
|
$ |
37.64 |
|
|
17 |
% |
|
|
|
Lease operating
expense/Boe |
|
(5.43 |
) |
|
|
|
(10.45 |
) |
|
(48 |
%) |
|
|
(6.55 |
) |
|
|
(9.88 |
) |
|
(34 |
%) |
|
|
|
Workover expense/Boe |
|
(1.14 |
) |
|
|
|
(1.85 |
) |
|
(38 |
%) |
|
|
(1.22 |
) |
|
|
(1.94 |
) |
|
(37 |
%) |
|
|
|
Gathering, processing and
transportation /Boe |
|
(2.95 |
) |
|
|
|
(1.19 |
) |
|
148 |
% |
|
|
(2.77 |
) |
|
|
(0.65 |
) |
|
327 |
% |
|
|
|
Production taxes/Boe |
|
(2.46 |
) |
|
|
|
(2.67 |
) |
|
(8 |
%) |
|
|
(2.63 |
) |
|
|
(1.49 |
) |
|
77 |
% |
|
|
|
Cash G&A/Boe(1) |
|
(3.03 |
) |
|
|
|
(6.84 |
) |
|
(56 |
%) |
|
|
(3.19 |
) |
|
|
(5.77 |
) |
|
(45 |
%) |
|
|
|
Net EBITDAX Margin per
Boe |
$ |
26.69 |
|
|
|
$ |
14.42 |
|
|
85 |
% |
|
$ |
27.58 |
|
|
$ |
17.91 |
|
|
54 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDAX(2) |
$ |
33,730 |
|
|
|
$ |
10,211 |
|
|
230 |
% |
|
$ |
65,435 |
|
|
$ |
21,491 |
|
|
204 |
% |
|
|
|
Adjusted EBITDAX Margin
(3) |
|
64.0 |
% |
|
|
|
38.7 |
% |
|
65 |
% |
|
|
62.8 |
% |
|
|
44.0 |
% |
|
43 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cash G&A represents general and administrative expenses
(non transaction-related) incurred less equity-settled share based
compensation expense, which totaled $0.1 million and $(0.2) million
for the three months ended June 30, 2019 and 2018, respectively,
and $0.3 million and $0.2 million for the six months ended June 30,
2019 and 2018, respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) See reconciliation of income (loss) attributable to owners of
the Company to Adjusted EBITDAX included at end of release. |
|
|
|
(3) Adjusted EBITDAX Margin represents Adjusted EBITDAX as a
percentage of revenue, inclusive of commodity derivative
settlements, during the period. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Financial
StatementsThe Company’s unaudited condensed consolidated
financial statements are included below.
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
Unaudited (US$000s) |
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
Revenue |
$ |
52,901 |
|
|
$ |
28,729 |
|
|
$ |
100,641 |
|
|
$ |
52,765 |
|
|
|
Lease operating, workover and
production tax expenses |
|
(11,411 |
) |
|
|
(10,568 |
) |
|
|
(24,668 |
) |
|
|
(19,082 |
) |
|
|
Gathering, processing and
transportation expenses |
|
(3,735 |
) |
|
|
(840 |
) |
|
|
(6,560 |
) |
|
|
(840 |
) |
|
|
General and administrative expenses (non transaction-related) |
|
(3,970 |
) |
|
|
(4,644 |
) |
|
|
(7,838 |
) |
|
|
(7,675 |
) |
|
|
Transaction-related expense |
|
(487 |
) |
|
|
(11,351 |
) |
|
|
(1,014 |
) |
|
|
(12,377 |
) |
|
|
Depreciation and amortisation
expense |
|
(20,927 |
) |
|
|
(15,027 |
) |
|
|
(41,265 |
) |
|
|
(27,214 |
) |
|
|
Impairment expense |
|
(5,761 |
) |
|
|
(18,936 |
) |
|
|
(9,240 |
) |
|
|
(21,893 |
) |
|
|
Finance costs, net of amounts
capitalized |
|
(8,366 |
) |
|
|
(6,363 |
) |
|
|
(16,609 |
) |
|
|
(10,346 |
) |
|
|
Gain (loss) on commodity
hedging, net (1) |
|
10,286 |
|
|
|
(16,496 |
) |
|
|
(23,057 |
) |
|
|
(23,180 |
) |
|
|
Loss on interest rate
derivative financial instruments, net (2) |
|
(2,406 |
) |
|
|
(434 |
) |
|
|
(4,026 |
) |
|
|
(434 |
) |
|
|
Loss on debt
extinguishment |
|
- |
|
|
|
(2,428 |
) |
|
|
- |
|
|
|
(2,428 |
) |
|
|
Other items income (expense),
net (3) |
|
(229 |
) |
|
|
5,656 |
|
|
|
(210 |
) |
|
|
6,721 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) before
income tax |
|
5,895 |
|
|
|
(52,702 |
) |
|
|
(33,846 |
) |
|
|
(65,983 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense) |
|
(2,119 |
) |
|
|
(5,307 |
) |
|
|
6,201 |
|
|
|
(7,610 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss)
attributable to owners of the Company |
$ |
3,776 |
|
|
$ |
(58,009 |
) |
|
$ |
(27,645 |
) |
|
$ |
(73,593 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Included an
unrealized gain on commodity hedging of $10.5 million and an
unrealized loss of $14.2 million for the three months ended June
30, 2019 and 2018, respectively, and unrealized losses of $26.6
million and $19.3 million for the year ended June 30, 2019 and
2018, respectively. |
|
|
(2) Included an unrealized loss on interest rate swaps of $2.4
million and $0.4 million for the three months ended June 30, 2019
and 2018, respectively, and unrealized losses of $4.1 million and
$0.4 million for the six months ended June 30, 2019 and 2018,
respectively. |
|
|
(3) Included a
realized gain on foreign currency derivatives of $5.8 million and
$6.8 million for the three and six months ended June 30, 2018,
respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
(US$'000s) |
June 30, 2019 |
|
December 31, 2018 |
|
|
|
(Unaudited) |
|
(Audited) |
|
|
Cash |
$ |
977 |
|
$ |
1,581 |
|
|
Trade and other
receivables |
|
16,623 |
|
|
23,633 |
|
|
Derivative assets -
current |
|
4,123 |
|
|
24,315 |
|
|
Other current assets |
|
3,907 |
|
|
3,546 |
|
|
Assets held for sale(1) |
|
23,746 |
|
|
24,284 |
|
|
Total current assets |
|
49,376 |
|
|
77,359 |
|
|
|
|
|
|
|
|
Oil and gas properties |
|
755,118 |
|
|
712,870 |
|
|
Derivative assets - non
current |
|
2,033 |
|
|
8,003 |
|
|
Lease right-of-use assets |
|
12,592 |
|
|
- |
|
|
Other assets |
|
3,481 |
|
|
3,847 |
|
|
Total
assets |
$ |
822,600 |
|
$ |
802,079 |
|
|
|
|
|
|
|
|
Current liabilities |
$ |
64,108 |
|
$ |
70,919 |
|
|
Derivative liabilities -
current |
|
2,218 |
|
|
436 |
|
|
Lease liabilities -
current |
|
6,942 |
|
|
- |
|
|
Liabilities held for
sale(1) |
|
1,245 |
|
|
1,125 |
|
|
Total current liabilities |
|
74,513 |
|
|
72,480 |
|
|
|
|
|
|
|
|
Credit facilities, net of
financing fees |
|
341,922 |
|
|
300,440 |
|
|
Derivative liabilities - non
current |
|
5,288 |
|
|
2,578 |
|
|
Lease liabilities - non
current |
|
5,693 |
|
|
- |
|
|
Other non current
liabilities |
|
29,160 |
|
|
33,206 |
|
|
Total
liabilities |
$ |
456,576 |
|
$ |
408,704 |
|
|
|
|
|
|
|
|
Net
assets |
$ |
366,024 |
|
$ |
393,375 |
|
|
Equity |
$ |
366,024 |
|
$ |
393,375 |
|
|
|
|
|
|
|
|
(1) The Company's Dimmit County Eagle Ford assets (and related
liabilities) were classified as held for sale as of June 30, 2019
and December 31, 2018. In July 2019, the Company entered into
a definitive agreement to sell its Dimmit County assets for a
purchase price of $29.5 million, subject to customary adjustments
at closing. The sale is expected to close by the end of the
third quarter. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS |
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
Unaudited (US$000s) |
|
2019 |
|
|
|
2018 |
|
|
|
|
Operating |
|
|
|
|
|
|
Receipts from sales |
$ |
102,867 |
|
|
$ |
49,620 |
|
|
|
|
Payments for operating and
administrative expenses |
|
(42,145 |
) |
|
|
(41,204 |
) |
|
|
|
Settlements of restoration
provision |
|
(116 |
) |
|
|
(29 |
) |
|
|
|
Receipts (payments) for
commodity derivative settlements, net |
|
6,638 |
|
|
|
(3,667 |
) |
|
|
|
Other, net |
|
- |
|
|
|
(2,301 |
) |
|
|
|
Net cash provided by
operating activities |
$ |
67,244 |
|
|
$ |
2,419 |
|
|
|
|
|
|
|
|
|
|
|
Investing |
|
|
|
|
|
|
Payments for development
expenditures |
|
(92,252 |
) |
|
|
(40,717 |
) |
|
|
|
Payments for exploration
expenditures |
|
(564 |
) |
|
|
(1,927 |
) |
|
|
|
Payment for Eagle Ford
acquisition, net |
|
- |
|
|
|
(220,132 |
) |
|
|
|
Sale of non current
assets |
|
50 |
|
|
|
- |
|
|
|
|
Other |
|
(121 |
) |
|
|
(79 |
) |
|
|
|
Net cash used in
investing activities |
$ |
(92,887 |
) |
|
$ |
(262,855 |
) |
|
|
|
|
|
|
|
|
|
|
Financing |
|
|
|
|
|
|
Interest paid, net of
capitalized portion |
|
(14,732 |
) |
|
|
(12,436 |
) |
|
|
|
Deferred financing costs
capitalized |
|
(232 |
) |
|
|
(16,724 |
) |
|
|
|
Proceeds from borrowings |
|
40,000 |
|
|
|
250,000 |
|
|
|
|
Repayments of borrowings
(including production prepayment) |
|
- |
|
|
|
(210,194 |
) |
|
|
|
Proceeds from the issuance of
shares |
|
- |
|
|
|
253,517 |
|
|
|
|
Payments for the costs of
capital raisings |
|
- |
|
|
|
(10,260 |
) |
|
|
|
Receipts from settlements of
foreign currency derivatives |
|
- |
|
|
|
6,849 |
|
|
|
|
Other |
|
2 |
|
|
|
- |
|
|
|
|
Net cash provided by
financing activities |
$ |
25,038 |
|
|
$ |
260,752 |
|
|
|
|
|
|
|
|
|
|
|
Total Net Cash
Provided (Used) |
$ |
(605 |
) |
|
$ |
316 |
|
|
|
|
|
|
|
|
|
|
|
Cash beginning of
year |
$ |
1,581 |
|
|
$ |
5,761 |
|
|
|
|
FX effect |
|
1 |
|
|
|
180 |
|
|
|
|
Cash at end of
period |
$ |
977 |
|
|
$ |
6,257 |
|
|
|
|
|
|
|
|
|
|
Conference CallThe Company will
host a conference call for investors on Thursday 15th August, 2019
at 4 p.m. MDT (Friday, 16th August, 2019 at 8 a.m. AEST).
Interested investors can listen to the call via
webcast at https://edge.media-server.com/m6/p/4tsj3ygb. The webcast
will also be available for replay on the Company’s website.
Additional InformationWe define
“Adjusted EBITDAX”, a non-IFRS measure, as earnings before interest
expense, income taxes, depreciation, depletion and amortization,
property impairments, gain/(loss) on sale of non-current assets,
exploration expense, share based compensation and income, gains and
losses on commodity hedging, net of settlements of commodity
hedging and items that the Company believes affect the
comparability of operating results such as items whose timing
and/or amount cannot be reasonably estimated or items that are
non-recurring. Management uses Adjusted EBITDAX to facilitate
comparisons of its performance between periods and to the
performance of its peers. This non-IFRS financial measure
should not be considered as a substitute for, nor superior to,
measures of financial performance prepared in accordance with
IFRS.
Below is a reconciliation from the net income (loss)
attributable to owners of the Company to Adjusted EBITDAX:
IFRS Income (Loss) Attributable to Owners of Sundance
Reconciliation to Adjusted EBITDAX |
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
Unaudited (US$000s) |
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
Income (loss) attributable to owners of the Company |
$ |
3,776 |
|
|
$ |
(58,009 |
) |
|
$ |
(27,645 |
) |
|
$ |
(73,593 |
) |
|
|
Income tax expense (benefit) |
|
2,119 |
|
|
|
5,307 |
|
|
|
(6,201 |
) |
|
|
7,610 |
|
|
|
Finance costs, net of amounts capitalized |
|
8,366 |
|
|
|
6,363 |
|
|
|
16,609 |
|
|
|
10,346 |
|
|
|
Loss on debt extinguishment |
|
- |
|
|
|
2,428 |
|
|
|
- |
|
|
|
2,428 |
|
|
|
(Gain) loss on derivative financial instruments, net |
|
(10,286 |
) |
|
|
16,496 |
|
|
|
23,057 |
|
|
|
23,180 |
|
|
|
Settlement of commodity derivatives financial instruments |
|
(168 |
) |
|
|
(2,311 |
) |
|
|
3,583 |
|
|
|
(3,894 |
) |
|
|
Loss on interest rate derivative financial instruments, net |
|
2,406 |
|
|
|
434 |
|
|
|
4,026 |
|
|
|
434 |
|
|
|
Depreciation and amortization |
|
20,927 |
|
|
|
15,027 |
|
|
|
41,265 |
|
|
|
27,214 |
|
|
|
Impairment expense |
|
5,761 |
|
|
|
18,936 |
|
|
|
9,240 |
|
|
|
21,893 |
|
|
|
Noncash share-based compensation |
|
142 |
|
|
|
(184 |
) |
|
|
277 |
|
|
|
186 |
|
|
|
Transaction-related costs included in general and administrative
expenses and other |
|
487 |
|
|
|
11,351 |
|
|
|
1,014 |
|
|
|
12,377 |
|
|
|
Gain on foreign currency derivatives |
|
- |
|
|
|
(5,766 |
) |
|
|
- |
|
|
|
(6,838 |
) |
|
|
Other (income) expense, net |
|
200 |
|
|
|
139 |
|
|
|
210 |
|
|
|
148 |
|
|
|
Adjusted
EBITDAX |
$ |
33,730 |
|
|
$ |
10,211 |
|
|
$ |
65,435 |
|
|
$ |
21,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company reports under International Financial Reporting
Standards (IFRS). All amounts are reported in US dollars
unless otherwise noted.
The Company’s full Unaudited Activities Report
as filed with the Australian Securities Exchange (ASX) and
Securities and Exchange Commission on Form 6-K for the Quarter
Ended June 30, 2019 can be found at
www.sundanceenergy.net.
The Company’s 2018 Annual Report as filed with
the ASX and Form 20-F as filed with the SEC can be found at
www.sundanceenergy.net.
About Sundance Energy Australia Limited
Sundance Energy Australia Limited (“Sundance” or
the “Company”) is an Australian-based, independent energy
exploration company, with a wholly owned US subsidiary, Sundance
Energy Inc., located in Denver, Colorado, USA. The Company is
focused on the acquisition and development of large, repeatable oil
and natural gas resource plays in North America. Current activities
are focused in the Eagle Ford. A comprehensive overview of
the Company can be found on Sundance’s website at
www.sundanceenergy.net.
Summary Information
The following disclaimer applies to this
document and any information contained in it. The information in
this release is of general background and does not purport to be
complete. It should be read in conjunction with Sundance’s periodic
and continuous disclosure announcements lodged with ASX Limited
that are available at www.asx.com.au and Sundance’s filings with
the Securities and Exchange Commission available at
www.sec.gov.
Forward Looking Statements
This release may contain forward-looking
statements. These statements relate to the Company’s expectations,
beliefs, intentions or strategies regarding the future. These
statements can be identified by the use of words like “anticipate”,
“believe”, “intend”, “estimate”, “expect”, “may”, “plan”,
“project”, “will”, “should”, “seek” and similar words or
expressions containing same.
These forward-looking statements reflect the
Company’s views and assumptions with respect to future events as of
the date of this release and are subject to a variety of
unpredictable risks, uncertainties, and other unknowns. Actual and
future results and trends could differ materially from those set
forth in such statements due to various factors, many of which are
beyond our ability to control or predict. These include, but are
not limited to, risks or uncertainties associated with the
discovery and development of oil and natural gas reserves, cash
flows and liquidity, business and financial strategy, budget,
projections and operating results, oil and natural gas prices,
amount, nature and timing of capital expenditures, including future
development costs, availability and terms of capital and general
economic and business conditions. Given these uncertainties, no one
should place undue reliance on any forward looking statements
attributable to Sundance, or any of its affiliates or persons
acting on its behalf. Although every effort has been made to
ensure this release sets forth a fair and accurate view, we do not
undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
For more information, please contact:
United States:John RobertsVP Finance &
Investor RelationsTel: +1 (720) 638-2400 |
|
Eric McCradyCEO and Managing Director Tel: +1 (303) 543-5703 |
Australia:Mike HannellChairman Tel: + 61 8 8274
2128 or+ 61 418 834 957 |
|
|
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