Sundance Energy Australia Limited (ASX: SEA) (NASDAQ: SNDE) (the
“
Company” or “
Sundance”) reported
its third quarter 2019 financial and operations results today.
Third Quarter 2019 Financial Results
Highlights
- Third quarter net sales volumes were 1,251,144 boe or 13,599
boe per day. This represents an increase of ~22% as compared to the
same period for the prior year. Third quarter sales volumes were
~64% oil, ~20% gas and ~16% NGLs.
- Third quarter net oil sales volumes for the quarter of 8,677
Bopd were at the high end of guidance of 8,400 – 8,700 Bopd. Gas
and NGL sales volumes of ~4,923 Boe/d for the quarter were below
guidance of 5,600 – 5,800 Bopd largely due to the impact of
short-term flaring.
- Total revenue for the quarter decreased 5% to US $51.1 million
as compared to the same prior year period due to lower oil prices
in the current year period.
- Net Income for the period was US $13.4 million, representing a
33% net income margin and compared to a loss of US $19.3 million
for the prior year period. Adjusted EBITDAX1 for the period was US
$35.8 million, representing a ~67% Adjusted EBITDAX margin1 and
~18% growth as compared to the same period for the prior year.
- Average third quarter realized prices excluding the impact of
hedging were US $57.23 per barrel of oil, US $1.84 per mcf of gas,
and US $13.18 per barrel of NGL. This represents a US $0.89 per
barrel premium compared to an average WTI price of US $56.34 per
barrel for the quarter. Average third quarter realized price per
boe was US $40.84 excluding the impact of hedges and US $42.44
including their impact.
- Sundance continued to drive down cash operating costs during
the third quarter. Total Cash Operating Costs2 of US $13.83 per boe
improved ~24% as compared to the same prior year period and an ~8%
improvement as compared to the Company’s second 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 $5.05 per boe has decreased ~29% as
compared to the same prior year period and ~7% as compared to the
second quarter 2019.
- Cash operating costs for the quarter were below guidance of US
$16.00 per boe by US $2.17 per boe, or ~14%.
- As of 1 November 2019, the Company’s oil hedges covered a total
of 3,593,000 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 $60.16 per barrel. These figures
represent ~90% of the remainder of 2019 expected oil sales at the
midpoint of fourth quarter guidance and exclude hedges which have
rolled off during the first ten months of 2019.
- Third quarter development and production related capital
expenditures totaled US $42.1 million, below the low end of capital
expenditure guidance of US $50-60 million.
- Immediately subsequent to the end of the third quarter, the
Company announced that it had closed the sale of its assets in
Dimmit County, TX and received $17.8 million in cash proceeds. The
Company expects to receive the remaining transaction proceeds at
the end of the 120-day post-close period.
- While the Company drew incremental debt during the third
quarter, pro forma for receipt of the Dimmit proceeds (which were
scheduled to be received during the quarter) the Company
successfully decreased its net debt position.
Third Quarter 2019 Operational
Highlights
- The Company turned 12 gross (12.0 net) wells to sales in Live
Oak County, including the four well Georgia Buck, HT Chapman, and H
Harlan Bethune pads during the quarter.
- The Company finalized drilling the 4 gross (4.0 net) well H
Harlan Bethune pad in Live Oak County and additionally drilled the
2 gross (2.0 net) well Justin Tom pad in Atascosa county.
- As of the date of this report, the Company had additionally
completed the two well Justin Toms pad and was flowing back the
wells. The laterals for each of the Justin Tom wells have gross
perforated intervals exceeding 12,700 feet in length and are among
the longest wells drilled in the county.
- During the third quarter the Company also spud the 2 gross (2.0
net) well Washburn Ranch pad in La Salle County, and had finished
drilling these wells as of the date of this report. The Washburn
Ranch pad represents the first development activity the Company has
undertaken to date in La Salle County and an important step in
further demonstrating the quality of the Company’s inventory.
- At this time the Company has completed its 2019 drilling plan
early through achievement of significant drilling efficiencies and
reduction of average drilling days per well. The rig has been laid
down and is expected to be picked back up in January to commence
the 2020 drilling program.
- During the third quarter the Company and its midstream partner
continued expansion of CGP-41 to increase gas processing capacity
from 18 mmcfpd to 28 mmcfpd. The Company anticipates that
this expansion, which is expected to be completed in the fourth
quarter, will accommodate future planned production growth from the
Live Oak and Atascosa Counties assets. Similar to the initial
expansion, the Company’s midstream partner will fund this and
future capital projects up to $10 million in cumulative capital
costs.
Update Regarding Process to Redomicile
to the United States
- On 8th November, the Company’s shareholders voted in favor of
the scheme of arrangement in relation to Company’s proposed
re-domiciliation from Australia to the United States. ~95% of the
total number of votes cast were in favor, and ~68% of the
shareholders present and voting were in favor.
- On 14th November, Sundance received final legal approval via a
second court hearing and lodged the court orders with the
Australian Securities and Investment Commission (ASIC), rendering
the Scheme legally effective.
- On 14th November, trading of the Company’s shares on the ASX
was suspended. However, Sundance has been advised by NASDAQ that
Sundance’s ADRs will continue trading on Nasdaq until the
implementation date (Tuesday, November 26, 2019).
- On the implementation date for the Scheme, one share in the new
Sundance Energy Inc. (US HoldCo parent) will be issued in exchange
for every 100 Sundance shares held by Sundance Shareholders as of
the Scheme Record Date (currently proposed as 7:00 pm Sydney time
on 19th November 2019).
- Sundance Energy Inc. shares are expected to commence trading on
Nasdaq under the ticker “SNDE” promptly following the
Implementation Date.
Fourth Quarter and Full Year 2019
Guidance Highlights
- Sundance expects to be free cash flow positive during the
fourth quarter.
- During the fourth quarter, the Company anticipates average
sales volumes of 13,500 to 14,000 boe per day driven by the 12
wells brought online in the third quarter as well as the two
extended reach lateral Justin Toms wells which were brought online
in early November.
- The Company has revised its full year average sales volumes
estimates to 13,300 to 13,500 boe per day, reflecting capacity
constraints and high back pressure related to the second phase
expansion of the CGP-41 gas processing facility which resulted in
flaring and curtailment.
- The Company anticipates that this expansion, which is expected
to be completed in the fourth quarter, will accommodate future
planned production growth from the Live Oak and Atascosa County
assets. Similar to the initial expansion, the Company’s
midstream partner will fund this and future capital projects up to
$10 million in cumulative capital costs.
- The Company anticipates an oil cut during the fourth quarter of
~65% by sales volume.
- As of the date of this report, the Company has turned to sales
all 20 wells planned for full year 2019 including the two wells in
its fourth quarter guidance.3
- The Company has additionally already completed its two well
drilling program for the fourth quarter and laid down its rig for
the remainder of the year. These La Salle County Washburn Ranch
wells will be held as drilled but uncompleted (“DUC”) wells at
year-end.
- Second half of 2019 capital spending guidance remains US $60 to
65 million. Fourth quarter capital spending is anticipated to be US
~$20 million. 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 20194:
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 |
5,737 |
1,690 |
1,053 |
184 |
964 |
168 |
76 |
% |
Bracken 23H |
McMullen |
22-Jan-19 |
2-Apr-19 |
6,664 |
1,397 |
856 |
129 |
824 |
124 |
76 |
% |
Roy Esse 15H |
Live
Oak |
1-Dec-18 |
5-May-19 |
4,756 |
1,222 |
864 |
182 |
848 |
178 |
72 |
% |
Roy Esse 16H |
Live
Oak |
28-Nov-18 |
5-May-19 |
4,823 |
1,371 |
988 |
205 |
912 |
189 |
75 |
% |
Roy Esse 17H |
Live
Oak |
26-Nov-18 |
5-May-19 |
4,691 |
1,077 |
785 |
167 |
743 |
158 |
76 |
% |
Roy Esse 18H |
Live
Oak |
24-Nov-18 |
5-May-19 |
4,656 |
1,099 |
805 |
173 |
753 |
162 |
73 |
% |
Georgia Buck 01H |
Live
Oak |
21-Feb-19 |
24-Jul-19 |
3,791 |
1,817 |
921 |
243 |
854 |
225 |
86 |
% |
Georgia Buck 02H |
Live
Oak |
23-Feb-19 |
24-Jul-19 |
3,814 |
1,079 |
802 |
210 |
709 |
186 |
85 |
% |
Georgia Buck 03H |
Live
Oak |
25-Feb-19 |
24-Jul-19 |
3,792 |
1,133 |
792 |
209 |
669 |
176 |
83 |
% |
Georgia Buck 10H |
Live
Oak |
26-Feb-19 |
24-Jul-19 |
3,917 |
1,359 |
880 |
225 |
856 |
219 |
85 |
% |
HT Chapman 11H |
Live
Oak |
16-Apr-19 |
16-Aug-19 |
5,287 |
850 |
530 |
100 |
520 |
98 |
79 |
% |
HT Chapman 12H |
Live
Oak |
14-Apr-19 |
16-Aug-19 |
5,943 |
927 |
566 |
95 |
511 |
86 |
74 |
% |
HT Chapman 13H |
Live
Oak |
12-Apr-19 |
16-Aug-19 |
5,894 |
1,148 |
805 |
137 |
768 |
130 |
76 |
% |
HT Chapman 14H |
Live
Oak |
10-Apr-19 |
17-Aug-19 |
5,763 |
1,271 |
910 |
158 |
817 |
142 |
76 |
% |
H Harlan Bethune 15H |
Live
Oak |
31-May-19 |
28-Aug-19 |
5,220 |
2,059 |
1,372 |
263 |
1,104 |
211 |
75 |
% |
H Harlan Bethune 16H |
Live
Oak |
2-Jun-19 |
28-Aug-19 |
5,180 |
1,862 |
1,382 |
267 |
1,143 |
221 |
77 |
% |
H Harlan Bethune 17H |
Live
Oak |
4-Jun-19 |
28-Aug-19 |
5,240 |
1,578 |
1,205 |
230 |
985 |
188 |
77 |
% |
H Harlan Bethune 18H |
Live
Oak |
6-Jun-19 |
28-Aug-19 |
5,280 |
1,624 |
1,237 |
234 |
1,090 |
206 |
76 |
% |
Justin Tom 08H |
Atascosa |
30-Jul-19 |
5-Nov-19 |
12,715 |
- |
- |
- |
- |
- |
- |
|
Justin Tom 09H |
Atascosa |
25-Jul-19 |
5-Nov-19 |
12,955 |
- |
- |
- |
- |
- |
- |
|
The tables below set forth the Company’s
commodity hedge position as of 18th November 20195:
HEDGE
POSITION OVERVIEW |
|
|
|
|
Total Oil Derivative Contracts |
Gas Derivative Contracts |
|
|
|
|
Weighted Average |
|
Weighted Average |
|
|
|
|
Year |
Units (Bbls) |
Floor |
Ceiling |
Units (Mcf) |
Floor |
Ceiling |
|
|
|
2019 |
487,000 |
|
60.16 |
|
68.04 |
662,000 |
|
2.85 |
|
3.06 |
|
|
|
2020 |
1,686,000 |
|
56.01 |
|
60.34 |
2,226,000 |
|
2.67 |
|
2.71 |
|
|
|
2021 |
732,000 |
|
50.37 |
|
59.34 |
1,290,000 |
|
2.65 |
|
2.65 |
|
|
|
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 |
3,593,000 |
$ |
53.19 |
$ |
61.37 |
5,498,000 |
$ |
2.69 |
$ |
2.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
28,000 |
$ |
52.51 |
$ |
62.51 |
139,000 |
$ |
58.54 |
$ |
71.29 |
320,000 |
$ |
61.53 |
$ |
67.11 |
2020 |
- |
|
- |
|
- |
- |
|
- |
|
- |
1,686,000 |
$ |
56.01 |
$ |
60.34 |
2021 |
- |
|
- |
|
- |
- |
|
- |
|
- |
732,000 |
$ |
50.37 |
$ |
59.34 |
2022 |
- |
|
- |
|
- |
- |
|
- |
|
- |
528,000 |
$ |
45.68 |
$ |
60.83 |
2023 |
- |
|
- |
|
- |
- |
|
- |
|
- |
160,000 |
$ |
40.00 |
$ |
63.10 |
Total |
28,000 |
$ |
52.51 |
$ |
62.51 |
139,000 |
$ |
58.54 |
$ |
71.29 |
3,426,000 |
$ |
52.98 |
$ |
60.96 |
|
|
|
|
|
|
|
|
|
|
The following unaudited tables present certain
production, per unit metrics as well as Net Income and Adjusted
EBITDAX that compare results of the corresponding quarterly
reporting periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
UNIT
COST ANALYSIS |
Three Months Ended September 30, |
|
|
|
Nine Months Ended September 30, |
|
|
|
Unaudited |
|
2019 |
|
|
|
2018 |
|
|
Change |
|
|
2019 |
|
|
|
2018 |
|
|
Change |
|
Revenue/Boe
(Inclusive of Realized Hedge Gains) |
$ |
42.44 |
|
|
$ |
47.85 |
|
|
-11 |
% |
|
$ |
43.42 |
|
|
$ |
42.15 |
|
|
3 |
% |
|
Lease
operating expense/Boe |
|
(5.05 |
) |
|
|
(7.08 |
) |
|
(29 |
%) |
|
|
(6.01 |
) |
|
|
(9.43 |
) |
|
(36 |
%) |
|
Workover
expense/Boe |
|
(0.96 |
) |
|
|
(1.95 |
) |
|
(51 |
%) |
|
|
(1.13 |
) |
|
|
(1.95 |
) |
|
(42 |
%) |
|
Gathering,
processing & transportation/Boe |
|
(2.67 |
) |
|
|
(1.94 |
) |
|
38 |
% |
|
|
(2.73 |
) |
|
|
(0.44 |
) |
|
525 |
% |
|
Production
taxes/Boe |
|
(2.27 |
) |
|
|
(3.33 |
) |
|
(32 |
%) |
|
|
(2.51 |
) |
|
|
(3.08 |
) |
|
(19 |
%) |
|
Cash
G&A/Boe(1) |
|
(2.88 |
) |
|
|
(3.84 |
) |
|
(25 |
%) |
|
|
(3.08 |
) |
|
|
(4.92 |
) |
|
(37 |
%) |
|
Adjusted
EBITDAX per Boe(2) |
$ |
28.61 |
|
|
$ |
29.71 |
|
|
(4 |
%) |
|
$ |
27.96 |
|
|
$ |
22.33 |
|
|
25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
16,933 |
|
|
$ |
(19,276 |
) |
|
- |
|
|
$ |
(16,913 |
) |
|
$ |
(85,257 |
) |
|
(80 |
%) |
|
Adjusted
EBITDAX(2) |
$ |
35,814 |
|
|
$ |
30,426 |
|
|
18 |
% |
|
$ |
101,367 |
|
|
$ |
51,894 |
|
|
95 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cash G&A is a
non-IFRS figure representing 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 September 30, 2019 and 2018,
respectively, and $0.3 million and $0.3 million for the nine months
ended September 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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
|
|
|
Unaudited |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
% Change |
|
|
|
|
|
|
Net
Sales Volumes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
(Bbls) |
|
798,256 |
|
|
665,776 |
|
|
2,265,781 |
|
|
1,411,652 |
|
20 |
% |
|
|
61 |
% |
|
|
|
|
|
|
Natural gas
(Mcf) |
|
1,537,676 |
|
|
1,285,672 |
|
|
4,498,227 |
|
|
3,412,346 |
|
20 |
% |
|
|
32 |
% |
|
|
|
|
|
|
NGL
(Bbls) |
|
196,609 |
|
|
144,933 |
|
|
607,567 |
|
|
342,952 |
|
36 |
% |
|
|
77 |
% |
|
|
|
|
|
|
Total sales
(Boe) |
|
1,251,144 |
|
|
1,024,988 |
|
|
3,623,052 |
|
|
2,323,328 |
|
22 |
% |
|
|
56 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Daily Volumes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
daily sales |
|
13,599 |
|
|
11,141 |
|
|
13,271 |
|
|
8,510 |
|
22 |
% |
|
|
56 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product Price Received |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total price
received (per Boe) |
$ |
40.84 |
|
$ |
52.51 |
|
$ |
41.88 |
|
$ |
48.76 |
|
(22 |
%) |
|
|
(14 |
%) |
|
|
|
|
|
|
Total
realized price (per Boe)(1)(2)(3) |
$ |
42.44 |
|
$ |
47.85 |
|
$ |
43.42 |
|
$ |
42.15 |
|
(11 |
%) |
|
|
3 |
% |
|
|
|
|
|
|
Total price
received - Oil (per Bbl) |
$ |
57.23 |
|
$ |
69.59 |
|
$ |
58.53 |
|
$ |
68.01 |
|
(18 |
%) |
|
|
(14 |
%) |
|
|
|
|
|
|
Total price
realized - Oil (per Bbl)(1) |
$ |
58.86 |
|
$ |
62.62 |
|
$ |
60.36 |
|
$ |
57.16 |
|
(6 |
%) |
|
|
6 |
% |
|
|
|
|
|
|
Total price
received - Natural gas (per Mcf) |
$ |
1.84 |
|
$ |
2.65 |
|
$ |
2.14 |
|
$ |
2.53 |
|
(31 |
%) |
|
|
(15 |
%) |
|
|
|
|
|
|
Total price
realized - Natural gas (per Mcf)(2) |
$ |
2.16 |
|
$ |
2.64 |
|
$ |
2.34 |
|
$ |
2.55 |
|
(18 |
%) |
|
|
(8 |
%) |
|
|
|
|
|
|
Total price
received - NGL (per Bbl) |
$ |
13.18 |
|
$ |
28.15 |
|
$ |
15.63 |
|
$ |
25.20 |
|
(53 |
%) |
|
|
(38 |
%) |
|
|
|
|
|
|
Total price
realized - NGL (per Bbl)(3) |
$ |
14.24 |
|
$ |
27.32 |
|
$ |
16.54 |
|
$ |
24.85 |
|
(48 |
%) |
|
|
(33 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes realized
gains on oil derivatives of $1.2 million and realized losses of
$4.6 million for the three months ended September 30, 2019 and
2018, respectively, and realized gains of $4.1 million and realized
losses of $8.6 million for the nine months ended September 30, 2019
and 2018, respectively. Also includes the impact of a fixed price
delivery contract of $4.74 nine months ended September 30, 2018,
respectively. |
|
|
|
|
|
|
(2) Includes realized
gains on natural gas derivatives of $0.5 million and realized
losses of $16 thousand for the three months ended September 30,
2019 and 2018, respectively, and realized gains of $0.9 million and
$0.1 million for the nine months ended September 30, 2019 and 2018,
respectively. |
|
|
|
|
|
|
(3) Includes realized
gains on NGL derivatives of $0.2 million and realized losses of
$0.1 million for the three months ended September 30, 2019 and
2018, respectively, and realized gains of $0.6 million and realized
losses of $0.1 million for the nine months ended September 30, 2019
and 2018, respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Financial StatementsThe
Company’s unaudited condensed consolidated financial statements are
included below.
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS |
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
Unaudited (US$000s) |
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Revenue |
$ |
51,097 |
|
|
$ |
53,824 |
|
|
$ |
151,738 |
|
|
$ |
106,589 |
|
Lease
operating, workover and production tax expense |
|
(10,365 |
) |
|
|
(12,681 |
) |
|
|
(34,922 |
) |
|
|
(33,575 |
) |
Gathering,
processing and transportation expense |
|
(3,338 |
) |
|
|
(1,988 |
) |
|
|
(9,898 |
) |
|
|
(1,016 |
) |
General and
administrative expenses - non transaction-related |
|
(3,652 |
) |
|
|
(4,100 |
) |
|
|
(11,490 |
) |
|
|
(11,775 |
) |
General and
administrative expenses - transaction-related (1) |
|
(506 |
) |
|
|
- |
|
|
|
(1,511 |
) |
|
|
(12,377 |
) |
Depreciation
and amortisation expense |
|
(22,206 |
) |
|
|
(17,228 |
) |
|
|
(63,471 |
) |
|
|
(44,441 |
) |
Impairment
expense |
|
(1,014 |
) |
|
|
(1,889 |
) |
|
|
(10,254 |
) |
|
|
(23,782 |
) |
Finance
costs, net of amounts capitalized |
|
(8,824 |
) |
|
|
(7,198 |
) |
|
|
(25,552 |
) |
|
|
(17,543 |
) |
Gain (loss)
on commodity derivative financial instruments, net (2) |
|
16,301 |
|
|
|
(28,608 |
) |
|
|
(6,756 |
) |
|
|
(51,788 |
) |
Gain (loss)
on interest rate derivative financial instruments, net (3) |
|
(577 |
) |
|
|
607 |
|
|
|
(4,604 |
) |
|
|
173 |
|
Loss on debt
extinguishment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,428 |
) |
Other items
income (expense), net (4) |
|
17 |
|
|
|
(15 |
) |
|
|
(193 |
) |
|
|
6,706 |
|
|
|
|
|
|
|
|
|
Income (loss) before income tax |
|
16,933 |
|
|
|
(19,276 |
) |
|
|
(16,913 |
) |
|
|
(85,257 |
) |
|
|
|
|
|
|
|
|
Income tax
benefit (expense) |
|
(3,559 |
) |
|
|
- |
|
|
|
2,642 |
|
|
|
(7,610 |
) |
|
|
|
|
|
|
|
|
Income (loss) attributable to owners of the
Company |
$ |
13,374 |
|
|
$ |
(19,276 |
) |
|
$ |
(14,271 |
) |
|
$ |
(92,867 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Transaction-related costs for the three and nine months ended
September 30, 2019 included legal and other professional service
fees incurred in connection with the Company’s re-domiciliation
from Australia to the United States. For the nine months ended
September 30, 2018, transaction-costs related to legal, and other
professional service fees incurred to complete its 2018 Eagle Ford
acquisition. |
|
|
|
|
|
|
|
|
(2) Included an
unrealized gain on commodity derivatives of $14.3 million and an
unrealized loss of $23.8 million for the three months ended
September 30, 2019 and 2018, respectively, and an unrealized loss
of $12.3 million and $43.1 million for the nine months ended
September 30, 2019 and 2018, respectively. |
|
|
|
|
|
|
|
|
(3) Included an
unrealized loss on interest rate swaps of $0.3 million and an
unrealized gain of $0.8 million for the three months ended
September 30, 2019 and 2018, respectively, and an unrealized loss
of $4.4 million and an unrealized gain of $0.3 million for the nine
months ended September 30, 2019 and 2018, respectively. |
|
(4) Included a
realized gain on foreign currency derivatives of nil and $6.8
million for nine months ended September 30, 2018. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
(US$'000s) |
September
30, 2019 |
|
December 31,
2018 |
|
(Unaudited) |
|
(Audited) |
Cash |
$ |
1,930 |
|
$ |
1,581 |
Trade and
other receivables |
|
21,171 |
|
|
23,633 |
Derivative
assets - current |
|
12,876 |
|
|
24,315 |
Other
current assets |
|
3,415 |
|
|
3,546 |
Assets held
for sale(1) |
|
22,707 |
|
|
24,284 |
Total
current assets |
|
62,099 |
|
|
77,359 |
|
|
|
|
Oil and gas
properties |
|
779,931 |
|
|
712,870 |
Derivative
assets - non current |
|
6,341 |
|
|
8,003 |
Lease
right-of-use assets |
|
12,453 |
|
|
- |
Other
assets |
|
3,544 |
|
|
3,847 |
Total assets |
$ |
864,368 |
|
$ |
802,079 |
|
|
|
|
Current
liabilities |
$ |
76,417 |
|
$ |
70,919 |
Derivative
liabilities - current |
|
2,045 |
|
|
436 |
Lease
liabilities - current |
|
5,819 |
|
|
- |
Liabilities
held for sale(1) |
|
1,395 |
|
|
1,125 |
Total
current liabilities |
|
85,676 |
|
|
72,480 |
|
|
|
|
Credit
facilities, net of financing fees |
|
352,803 |
|
|
300,440 |
Derivative
liabilities - non current |
|
4,559 |
|
|
2,578 |
Lease
liabilities - non current |
|
6,826 |
|
|
- |
Other non
current liabilities |
|
34,904 |
|
|
33,206 |
Total liabilities |
$ |
484,768 |
|
$ |
408,704 |
|
|
|
|
Net
assets |
$ |
379,600 |
|
$ |
393,375 |
Equity |
$ |
379,600 |
|
$ |
393,375 |
|
|
|
|
(1) The Company's Dimmit County Eagle Ford assets (and related
liabilities) were classified as held for sale as of September 30,
2019 and December 31, 2018. On October 1, 2019, the Company sold
these assets for cash proceeds of $17.8 million at closing and
expects to receive the remaining sale proceeds from the transaction
at the end of the 120-day post-close period. |
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS |
|
|
|
|
|
Nine Months Ended September 30, |
Unaudited (US$000s) |
|
2019 |
|
|
|
2018 |
|
Operating |
|
|
|
Receipts
from sales |
$ |
148,896 |
|
|
$ |
92,896 |
|
Payments for
operating and administrative expenses |
|
(54,311 |
) |
|
|
(54,247 |
) |
Receipts
(payments) for commodity derivative settlements, net |
|
9,185 |
|
|
|
(6,077 |
) |
Other,
net |
|
(110 |
) |
|
|
(2,324 |
) |
Net
cash provided by operating activities |
$ |
103,660 |
|
|
$ |
30,248 |
|
|
|
|
|
Investing |
|
|
|
Payments for
development expenditures |
|
(120,114 |
) |
|
|
(85,325 |
) |
Payments for
exploration expenditures |
|
(927 |
) |
|
|
(6,401 |
) |
Payment for
Eagle Ford acquisition, net |
|
- |
|
|
|
(215,765 |
) |
Other |
|
(125 |
) |
|
|
(246 |
) |
Net
cash used in investing activities |
$ |
(121,166 |
) |
|
$ |
(307,737 |
) |
|
|
|
|
Financing |
|
|
|
Interest
paid, net of capitalized portion |
|
(22,837 |
) |
|
|
(18,652 |
) |
Deferred
financing costs capitalized |
|
(232 |
) |
|
|
(16,700 |
) |
Proceeds
from borrowings |
|
50,000 |
|
|
|
78,000 |
|
Repayments
of borrowings (including production prepayment) |
|
- |
|
|
|
(18,194 |
) |
Proceeds
from the issuance of shares |
|
- |
|
|
|
253,517 |
|
Payments for
the costs of capital raisings |
|
- |
|
|
|
(10,294 |
) |
Receipts
from settlements of foreign currency derivatives |
|
- |
|
|
|
6,838 |
|
Payments of
lease liabilities |
|
(8,853 |
) |
|
|
- |
|
Other |
|
(229 |
) |
|
|
(150 |
) |
Net
cash provided by financing activities |
$ |
17,849 |
|
|
$ |
274,365 |
|
|
|
|
|
Total Net Cash Provided (Used) |
$ |
343 |
|
|
$ |
(3,124 |
) |
|
|
|
|
Cash
beginning of year |
$ |
1,581 |
|
|
$ |
5,761 |
|
FX
effect |
|
6 |
|
|
|
25 |
|
Cash
at end of period |
$ |
1,930 |
|
|
$ |
2,662 |
|
|
|
|
|
Conference Call
The Company will host a conference call for
investors on Monday 18th November 2019 at 4 p.m. MDT (Tuesday, 19th
November, 2019 at 10 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 Information
We 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 September 30, |
|
Nine Months Ended September 30, |
Unaudited (US$000s) |
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Income (loss) attributable to owners of the Company |
$ |
13,374 |
|
|
$ |
(19,276 |
) |
|
$ |
(14,271 |
) |
|
$ |
(92,867 |
) |
Income tax expense (benefit) |
|
3,559 |
|
|
|
- |
|
|
|
(2,642 |
) |
|
|
7,610 |
|
Finance costs, net of amounts capitalized |
|
8,824 |
|
|
|
7,198 |
|
|
|
25,552 |
|
|
|
17,543 |
|
Loss on debt extinguishment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,428 |
|
(Gain) loss on commodity derivative financial instruments, net |
|
(16,301 |
) |
|
|
28,608 |
|
|
|
6,756 |
|
|
|
51,788 |
|
Settlement of commodity derivatives financial instruments |
|
2,007 |
|
|
|
(4,775 |
) |
|
|
5,590 |
|
|
|
(8,669 |
) |
Loss on interest rate derivative financial instruments, net |
|
577 |
|
|
|
(607 |
) |
|
|
4,604 |
|
|
|
(173 |
) |
Depreciation and amortization |
|
22,206 |
|
|
|
17,228 |
|
|
|
63,471 |
|
|
|
44,441 |
|
Impairment expense |
|
1,014 |
|
|
|
1,889 |
|
|
|
10,254 |
|
|
|
23,782 |
|
Noncash share-based compensation |
|
58 |
|
|
|
159 |
|
|
|
334 |
|
|
|
345 |
|
Transaction-related expenses included in general &
administrative expenses |
|
497 |
|
|
|
- |
|
|
|
1,511 |
|
|
|
12,377 |
|
Gain on foreign currency derivatives |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(6,838 |
) |
Other (income) expense, net |
|
(1 |
) |
|
|
2 |
|
|
|
208 |
|
|
|
127 |
|
Adjusted EBITDAX |
$ |
35,814 |
|
|
$ |
30,426 |
|
|
$ |
101,367 |
|
|
$ |
51,894 |
|
|
|
|
|
|
|
|
|
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 September 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, headquartered 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
redomiciliation (including the ability to recognize any benefits
therefrom), 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.
Important Notice
This release does not constitute an offer to
sell, or a solicitation of an offer to buy, securities in the
United States or any other jurisdiction. Any securities described
in this press release have not been registered under the US
Securities Act of 1933, as amended, and may not be offered or sold
in the United States except in transactions exempt from, or not
subject to, registration under the US Securities Act and applicable
US state securities laws.
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 |
|
|
1 Adjusted EBITDAX and Adjusted EBITDAX margin are Non-IFRS
measures, 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 (excluding minimum revenue
commitment shortfall deficiency fees), production tax expense and
general and administrative expenses, excluding share-based
compensation and transaction related expenses.
3 Excludes the Red Ranch 18H & 19H wells brought online in
1Q19 and included as part of sale of Dimmit County assets.
4 Excludes the Red Ranch 18H & 19H wells brought online in
1Q19 and included as part of sale of Dimmit County assets.
5 Excludes realized hedge volumes which rolled off during the
first ten months of 2019. WTI pricing includes the impact of
WTI-MEH basis hedges.
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