HighPoint Resources Corporation ("we", "us" or the "Company")
(NYSE: HPR) today reported fourth quarter and full year 2019
financial and operating results, 2020 operating and financial
guidance and year-end 2019 proved reserves. Highlights include
notable increases in total production, oil volumes, proved
reserves, and EBITDAX, a meaningful improvement in operating costs
and positive well results from our drilling program.
For the fourth quarter of 2019, the Company
reported a net loss of $47.8 million, or $0.23 per diluted share.
Adjusted net income for the fourth quarter of 2019 was a loss of
$9.6 million, or $0.05 per diluted share. EBITDAX for the fourth
quarter of 2019 was $97.4 million. For 2019, the Company reported a
loss of $134.8 million, or $0.64 per diluted share. Adjusted net
income for 2019 was a net loss of $42.6 million, or $0.20 per
diluted share. EBITDAX for 2019 was $339.7 million. Adjusted net
income (loss) and EBITDAX are non-GAAP (Generally Accepted
Accounting Principles) measures. Please reference the
reconciliations to GAAP financial statements at the end of this
release.
Chief Executive Officer and President Scot
Woodall commented, "We successfully delivered on our organizational
objectives during 2019. Our operational execution and ability to
optimize costs were evident in our financial results as we
delivered 21% growth in EBITDAX. This was underpinned by
development activities that drove production sales volume growth of
23% and a corresponding increase in oil volumes of 21%. This was
accomplished with capital expenditures that were 29% lower than
2018, underscoring our commitment to maintaining capital
discipline. Our development activities delivered in a 22% increase
in year-end proved reserves to 127 MMBoe, which was driven by a 32%
percent increase in Hereford proved reserves. We also achieved our
goal of generating positive free cash flow for the second half of
the year, which was used to strengthen our balance sheet by
reducing borrowings under our credit facility."
"Operationally, a significant achievement was
the completion of our Hereford optimization program, which yielded
an enhanced geologic and reservoir understanding of the field and
provided an economic baseline for future development. Our growing
confidence in the field was supported by the Section 16 wells that
continue to exhibit strong performance. In NE Wattenberg, we
continue to bring our best wells to date online as the most recent
high-fluid intensity completions are exhibiting strong performance.
High-fluid intensity completions will remain the standard design
going forward as we deliver optimum value from our development
program."
"We will maintain a conservative capital
approach for 2020 and we have set a spending level that is
approximately 40% lower than 2019 to prioritize free cash flow
generation and no increased debt. First half activity will
primarily focus on the completion of drilled but uncompleted wells
("DUCs") at NE Wattenberg and Hereford as well as drilling
activities in NE Wattenberg. Drilling and completion operations are
anticipated to resume at Hereford during the second half of the
year and will be implemented based on the results of the larger
stimulations and spacing tests currently being employed in
Hereford. This will enable us to proceed with the most economic
future development plan going forward. Although crude prices
continue to fluctuate, our capital program economics and cash flow
are protected with an underlying hedge portfolio covering
approximately 95% of our 2020 oil production at a WTI price that is
well in excess of current prices."
OPERATING AND FINANCIAL
RESULTS
Proved Reserves
Total estimated proved reserves at year-end 2019
were 127.4 MMBoe (58% oil, 41% proved developed) compared to 104.6
MMBoe (56% oil, 49% proved developed) at year-end 2018, which is a
22% year-over-year increase. The increase in estimated proved
reserves compared to year-end 2018 is primarily the result of
extensions and discoveries of 36.1 MMBoe, which were partially
offset by price revisions of previous estimates as a result of
lower NGL yields and other revisions totaling 2.5 MMBoe. Additions
to extensions and discoveries were driven by the Hereford and NE
Wattenberg drilling programs, which resulted in a 32% increase in
Hereford proved reserves and a 13% increase in NE Wattenberg proved
reserves. Hereford reserve additions utilized the success of the
Section 16 SE wells as the plan of development to support the
additional proved undeveloped reserve bookings.
The standardized measure of discounted future
net cash flows for proved reserves at December 31, 2019 was $974
million. NYMEX pricing used in the preparation of the proved
reserves was $55.85 per barrel for oil, a percentage of
the $55.85 oil price per Bbl for NGLs and $2.58 per Mcf for
natural gas. The proved reserves were audited by Netherland,
Sewell & Associates, Inc.
Production and Financial
Results
Reported oil, natural gas and natural gas
liquids production sales volume totaled 12.5 MMBoe for 2019, which
is an increase of 23% over 2018. Reported oil production sales
volume totaled 7.7 MMBbls, which is an increase of 21% over 2018.
Production sales volume from NE Wattenberg totaled 9.4 MMBoe, which
was an increase of 5%, and production sales volume for Hereford
totaled 3.1 MMBoe, which was an increase of 155%.
Production sales volume for the fourth quarter
of 2019 totaled 3.5 MMBoe, which was an increase of 12% over the
fourth quarter of 2018. Oil volumes totaled 2.0 MMBbls, which was
an increase of 3% over the fourth quarter of 2018. Production sales
volume from NE Wattenberg totaled 2.5 MMBoe and Hereford production
volumes totaled 1.0 MMBoe.
Fourth quarter of 2019 volumes were adversely
impacted by a blizzard in November which caused a widespread
regional power outage and resulted in all Hereford field production
being shut in for three days, with full production being restored
to the field after approximately one week.
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Production Data |
|
|
|
|
|
|
|
Oil (MBbls) |
2,020 |
|
|
1,970 |
|
|
7,668 |
|
|
6,330 |
|
Natural gas (MMcf) |
5,070 |
|
|
3,912 |
|
|
16,614 |
|
|
12,864 |
|
NGLs (MBbls) |
635 |
|
|
490 |
|
|
2,101 |
|
|
1,697 |
|
Combined volumes (MBoe) |
3,500 |
|
|
3,112 |
|
|
12,538 |
|
|
10,171 |
|
Daily combined volumes (Boe/d) |
38,043 |
|
|
33,826 |
|
|
34,351 |
|
|
27,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
For 2019, West Texas Intermediate ("WTI") oil
prices averaged $57.03 per barrel, NWPL natural gas prices averaged
$2.59 per MMBtu and NYMEX natural gas prices averaged $2.63 per
MMBtu. Commodity price differentials to benchmark pricing for 2019
were oil less $4.08 per barrel versus WTI; and natural gas less
$1.03 per Mcf compared to NWPL. The NGL price averaged
approximately 17% of the WTI price per barrel.
For the fourth quarter of 2019, WTI oil prices
averaged $56.96 per barrel, NWPL natural gas prices averaged $2.59
per MMBtu and NYMEX natural gas prices averaged $2.50 per MMBtu.
Fourth quarter of 2019 commodity price differentials to benchmark
pricing were oil less $3.92 per barrel versus WTI and natural gas
less $1.09 per Mcf compared to NWPL. The NGL price averaged
approximately 19% of the WTI price per barrel.
For the fourth quarter of 2019, the Company had
derivative commodity swaps in place for 16,712 barrels of oil per
day tied to WTI pricing at $59.01 per barrel and derivative collars
in place for 3,000 barrels of oil per day with a ceiling price of
$77.56 per barrel and a floor price of $55.00 per barrel, 7,000
MMBtu of natural gas per day tied to NWPL regional pricing at $2.11
per MMBtu, and no hedges in place for NGLs.
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Average Sales
Prices (before the effects of realized hedges): |
Oil (per Bbl) |
$ |
53.00 |
|
|
$ |
56.35 |
|
|
$ |
52.86 |
|
|
$ |
62.04 |
|
Natural gas (per Mcf) |
1.50 |
|
|
2.13 |
|
|
1.56 |
|
|
1.75 |
|
NGLs (per Bbl) |
11.23 |
|
|
22.54 |
|
|
10.00 |
|
|
22.18 |
|
Combined (per Boe) |
34.80 |
|
|
41.88 |
|
|
36.07 |
|
|
44.53 |
|
|
|
|
|
|
|
|
|
Average Realized
Sales Prices (after the effects of realized hedges): |
Oil (per Bbl) |
$ |
54.60 |
|
|
$ |
54.08 |
|
|
$ |
54.39 |
|
|
$ |
54.51 |
|
Natural gas (per Mcf) |
1.44 |
|
|
2.01 |
|
|
1.50 |
|
|
1.76 |
|
NGLs (per Bbl) |
11.23 |
|
|
22.54 |
|
|
10.00 |
|
|
22.18 |
|
Combined (per Boe) |
35.64 |
|
|
40.29 |
|
|
36.92 |
|
|
39.85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company maintained a focus on cost control
during 2019 and reduced aggregate operating costs (LOE, gathering,
transportation and processing costs, and production tax expense) by
16% to $5.74 per Boe for 2019 compared to $6.81 per Boe in 2018.
For the fourth quarter of 2019, operating costs totaled $4.52 per
Boe compared to $6.09 per Boe in the fourth quarter of 2018 or a
reduction of 26%. The Company reduced 2019 per unit cash G&A
expense by 23% compared to 2018 and fourth quarter of 2019 per unit
cash G&A expense by 32% compared to the fourth quarter of
2018.
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Average Costs (per Boe): |
|
|
|
|
|
|
|
Lease operating expenses |
$ |
2.10 |
|
|
$ |
2.17 |
|
|
$ |
3.01 |
|
|
$ |
2.74 |
|
Gathering, transportation and processing expense |
1.60 |
|
|
0.58 |
|
|
0.85 |
|
|
0.46 |
|
Production tax expenses |
0.82 |
|
|
3.34 |
|
|
1.88 |
|
|
3.61 |
|
Depreciation, depletion and amortization |
26.03 |
|
|
24.53 |
|
|
25.62 |
|
|
22.46 |
|
General and administrative expense |
2.47 |
|
|
3.44 |
|
|
3.57 |
|
|
4.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes certain operating
and financial results for the fourth quarter of 2019 and 2018 and
the full years 2019 and 2018:
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Production sales volumes
(MBoe) |
3,500 |
|
|
3,112 |
|
|
12,538 |
|
|
10,171 |
|
Net cash provided by (used in) operating activities ($
millions) |
$ |
83.2 |
|
|
$ |
71.3 |
|
|
$ |
278.6 |
|
|
$ |
231.4 |
|
Discretionary cash flow ($
millions) (1) |
$ |
83.4 |
|
|
$ |
79.3 |
|
|
$ |
285.0 |
|
|
$ |
231.4 |
|
Net income (loss) ($
millions) |
$ |
(47.8 |
) |
|
$ |
222.4 |
|
|
$ |
(134.8 |
) |
|
$ |
121.2 |
|
Per share, basic |
$ |
(0.23 |
) |
|
$ |
1.06 |
|
|
$ |
(0.64 |
) |
|
$ |
0.64 |
|
Per share, diluted |
$ |
(0.23 |
) |
|
$ |
1.06 |
|
|
$ |
(0.64 |
) |
|
$ |
0.64 |
|
Adjusted net income (loss) ($
millions) (1) |
$ |
(9.6 |
) |
|
$ |
1.2 |
|
|
$ |
(42.6 |
) |
|
$ |
(5.5 |
) |
Per share, basic |
$ |
(0.05 |
) |
|
$ |
0.01 |
|
|
$ |
(0.20 |
) |
|
$ |
(0.03 |
) |
Per share, diluted |
$ |
(0.05 |
) |
|
$ |
0.01 |
|
|
$ |
(0.20 |
) |
|
$ |
(0.03 |
) |
Weighted average shares
outstanding, basic (in thousands) |
210,698 |
|
|
209,529 |
|
|
210,392 |
|
|
188,299 |
|
Weighted average shares
outstanding, diluted (in thousands) |
210,698 |
|
|
209,645 |
|
|
210,392 |
|
|
189,241 |
|
EBITDAX ($ millions) (1) |
$ |
97.4 |
|
|
$ |
92.1 |
|
|
$ |
339.7 |
|
|
$ |
279.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Discretionary cash flow, adjusted net income (loss) and EBITDAX are
non-GAAP (Generally Accepted Accounting Principles) measures.
Please reference the reconciliations to GAAP financial statements
at the end of this release. |
|
|
Debt and Liquidity
At December 31, 2019, the Company had cash and
cash equivalents of $16 million and $334 million in available
capacity under its $500 million credit facility, after taking into
account a $26 million letter of credit. The letter of credit will
begin reducing ratably per month beginning April 1, 2020 until it
expires on August 31, 2021. Net debt (principal balance of debt
outstanding less the cash and cash equivalents balance) totaled
$749 million at December 31, 2019.
Non-Core Asset Sale
The Company anticipates entering into agreements
to divest certain non-core, non-operated assets in three separate
transactions for expected aggregate cash proceeds of approximately
$27 million. The combined properties produced approximately 2,000
Boe/d during January 2020. The transactions are expected to close
in the first and second quarters of 2020, and are subject to
customary closing conditions and adjustments. The proceeds will be
used to reduce the outstanding balance of the Company's credit
facility.
Capital Expenditures
Capital expenditures totaled $361.0 million for
2019 and included $319.3 million for drilling and completion
operations, $4.7 million for leasehold and minerals, and $37.0
million for infrastructure and corporate purposes.
Capital expenditures for the fourth quarter of
2019 totaled $34.3 million and included included $24.4 million for
drilling and completion operations, $0.4 million for leaseholds,
and $9.5 million for infrastructure and corporate assets.
OPERATIONAL HIGHLIGHTS
Hereford Field
During 2019, production sales volume from
Hereford averaged 8,582 Boe/d (75% oil), which represents a 155%
increase over 2018. Production sales volume for the fourth quarter
of 2019 averaged a Company field record of 10,575 Boe/d (72% oil)
or a 77% increase over the fourth quarter of 2018. During the
fourth quarter of 2019, 4 gross wells were spud and no wells were
placed on flowback.
Recent activity is highlighted by DSU 11-63-17,
which includes twelve wells drilled at a density of 12 wells per
section and the performance impact of Gen 4 completions that
utilized greater fluid of up to 52 barrels per lateral foot and an
average of approximately 1,500 pounds of sand per lateral foot was
assessed. In order to gauge the performance benefits of greater
fluid, the wells were stimulated with larger fluid completions than
all previous wells. The wells exhibited early production
performance consistent with the Company's expectations prior to
being adversely impacted by a regional power outage due to a
blizzard in November that caused the wells to be shut-in.
Production was restored after three days; however, the wells did
not return to the same production trend as prior to the storm.
Based on a review of flowback and subsurface data, the Company
believes that downhole sand obstructions caused by the wells being
shut-in impeded flowback. A workover program was initiated in
January that confirmed multiple downhole sand bridges in each of
the wells. Remediation efforts were recently completed and post
workover production continues to be monitored.
In addition, completion operations were
initiated in February on 5 DUCs in the Fox Creek area at DSU
12-63-34. It is anticipated that initial flowback will commence
during the second quarter of 2020.
NE Wattenberg
During 2019, production sales volumes from NE
Wattenberg averaged 25,764 Boe/d (57% oil), which represents a 5%
increase over 2018. Production sales volumes averaged 27,464 Boe/d
(52% oil) for the fourth quarter of 2019. During the fourth quarter
of 2019, 10 gross wells were spud and 2 gross wells were placed on
flowback.
Recent operational highlights include seven
wells located in DSU 5-61-35 that were placed on flowback in the
third quarter of 2019 and completed with high-fluid intensity
completions. The wells have exhibited strong performance as the
average per well cumulative oil production is tracking 50% above
offset analog wells completed with the previous standard completion
design after 125 days. During the first quarter of 2020, the
Company placed 6 XRL wells on flowback in February that are located
in DSU 4-61-4. These wells are on initial flowback and were
completed with high-fluid intensity completions.
2020 OPERATING GUIDANCE
The Company is providing the following guidance
for its 2020 activities. See "Forward-Looking Statements"
below.
- Capital expenditures of
approximately $200-$220 million-- First half activity will be
primarily focused on the completion of 7 DUCs in Hereford and 24
DUCs in NE Wattenberg, and the spudding of up to 13 wells. Drilling
and completion operations will resume at Hereford during the second
half of the year and will be based on the results of the Section 17
wells and the larger stimulations and spacing tests being employed
on the Hereford DUCs.-- First quarter of 2020 capital expenditures
are anticipated to total approximately $80-$90 million.
- Production of 10.5-11.0 MMBoe--
Production is estimated to be approximately 57%-58% oil.-- Includes
the effect of excluding approximately 0.6 MMBoe associated with
anticipated non-core asset sales-- First quarter of 2020 production
is expected to approximate 2.7-2.8 MMBoe (approximately 53% oil).
This represents lower sequential production from the fourth quarter
of 2019 as a result of lower aggregate spending during the second
half of 2019 and downtime associated with workover activity on the
Section 17 wells in Hereford.
- Oil price differential of
approximately $4.00 per barrel
- Lease operating expense of
$3.35-$3.55 per Boe
- Gathering, transportation and
processing costs of $1.30-$1.50 per Boe
- Cash general and administrative
expense of $34-36 million
- Unused commitment for firm natural
gas transportation charges of $18-$19 million
COMMODITY HEDGES UPDATE
As of February 26, 2020, the Company had the following commodity
hedge positions in place for crude oil for 2020 and 2021:
|
|
|
|
|
Oil (WTI) |
Period |
|
Volume Bbls/d |
|
Price $/Bbl |
1Q20 |
|
16,500 |
|
|
$ |
59.73 |
|
2Q20 |
|
14,000 |
|
|
59.43 |
|
3Q20 |
|
16,750 |
|
|
57.18 |
|
4Q20 |
|
16,750 |
|
|
57.18 |
|
1Q21 |
|
9,500 |
|
|
54.95 |
|
2Q21 |
|
9,500 |
|
|
54.95 |
|
3Q21 |
|
7,000 |
|
|
54.39 |
|
4Q21 |
|
7,000 |
|
|
54.39 |
|
|
|
|
|
|
|
|
HighPoint has sold WTI swaptions of 3,000 bbl/d
for calendar 2022 at an average strike price of $55.00/bbl.
Realized sales prices will reflect basis differentials from the
index prices to the sales location.
UPCOMING EVENTS
Teleconference Call and
Webcast
The Company plans to host a conference call on
Thursday, February 27, 2020, to discuss the results and other
items presented in this press release. The call is scheduled at
9:00 a.m. Eastern time (7:00 a.m. Mountain time). Please join the
webcast conference call live or for replay via the Internet at
www.hpres.com, accessible from the home page. To join by telephone,
call 855-760-8152 (631-485-4979 international callers) with
passcode 7246819. The webcast will remain on the Company's website
for approximately 30 days and a replay of the call will be
available through Thursday, March 5, 2020 at 855-859-2056
(404-537-3406 international) with passcode 7246819.
An updated corporate slide presentation that
will be referenced on the conference call will be available on the
“Investor Relations” section of the Company’s website prior to the
start of the call.
Investor Events
Members of management are scheduled to
participate in the Scotia Howard Weil Energy Conference in New
Orleans, Louisiana, March 24-25, 2020. The Company is scheduled to
present on Wednesday, March 25, 2020, at 2:05 pm Central time.
Presentation materials will be posted to the investor relations
section of the Company's website at www.hpres.com prior to the
start of the conference.
The Company’s annual meeting of shareholders
will be held on April 28, 2020 at 8:30 a.m. Mountain time at the
Company’s offices in Denver, Colorado.
DISCLOSURE STATEMENTS
Forward-Looking Statements
All statements in this press release, other than
statements of historical fact, are forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934.
Words such as expects, forecast, guidance, anticipates, intends,
plans, believes, seeks, estimates and similar expressions or
variations of such words are intended to identify forward-looking
statements herein; however, these are not the exclusive means of
identifying forward-looking statements. In particular, the Company
is providing "2020 Operating Guidance", which contains projections
for certain operational and financial metrics. Additional
forward-looking statements in this release relate to, among other
things, future production, cash flows, capital expenditures, costs,
projects and opportunities.
These and other forward-looking statements in
this press release are based on management's judgment as of the
date of this release and are subject to numerous risks and
uncertainties. Actual results may vary significantly from those
indicated in the forward-looking statements. Please refer to
HighPoint Resource's Annual Report on Form 10-K for the year ended
December 31, 2019 filed with the SEC, and other filings,
including our Current Reports on Form 8-K and Quarterly Reports on
Form 10-Q, all of which are incorporated by reference herein, for
further discussion of risk factors that may affect the
forward-looking statements. The Company encourages you to consider
the risks and uncertainties associated with projections and other
forward-looking statements and to not place undue reliance on any
such statements. In addition, the Company assumes no obligation to
publicly revise or update any forward-looking statements based on
future events or circumstances.
ABOUT HIGHPOINT RESOURCES
CORPORATION
HighPoint Resources Corporation (NYSE: HPR) is a
Denver, Colorado based company focused on the development of oil
and natural gas assets located in the Denver-Julesburg Basin of
Colorado. Additional information about the Company may be found on
its website at www.hpres.com.
HIGHPOINT RESOURCES
CORPORATIONSelected Operating
Highlights(Unaudited)
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Production Data: |
|
|
|
|
|
|
|
Oil (MBbls) |
2,020 |
|
|
1,970 |
|
|
7,668 |
|
|
6,330 |
|
Natural gas (MMcf) |
5,070 |
|
|
3,912 |
|
|
16,614 |
|
|
12,864 |
|
NGLs (MBbls) |
635 |
|
|
490 |
|
|
2,101 |
|
|
1,697 |
|
Combined volumes (MBoe) |
3,500 |
|
|
3,112 |
|
|
12,538 |
|
|
10,171 |
|
Daily combined volumes (Boe/d) |
38,043 |
|
|
33,826 |
|
|
34,351 |
|
|
27,866 |
|
|
|
|
|
|
|
|
|
Average Sales
Prices (before the effects of realized hedges): |
Oil (per Bbl) |
$ |
53.00 |
|
|
$ |
56.35 |
|
|
$ |
52.86 |
|
|
$ |
62.04 |
|
Natural gas (per Mcf) |
1.50 |
|
|
2.13 |
|
|
1.56 |
|
|
1.75 |
|
NGLs (per Bbl) |
11.23 |
|
|
22.54 |
|
|
10.00 |
|
|
22.18 |
|
Combined (per Boe) |
34.80 |
|
|
41.88 |
|
|
36.07 |
|
|
44.53 |
|
|
|
|
|
|
|
|
|
Average Realized
Sales Prices (after the effects of realized hedges): |
Oil (per Bbl) |
$ |
54.60 |
|
|
$ |
54.08 |
|
|
$ |
54.39 |
|
|
$ |
54.51 |
|
Natural gas (per Mcf) |
1.44 |
|
|
2.01 |
|
|
1.50 |
|
|
1.76 |
|
NGLs (per Bbl) |
11.23 |
|
|
22.54 |
|
|
10.00 |
|
|
22.18 |
|
Combined (per Boe) |
35.64 |
|
|
40.29 |
|
|
36.92 |
|
|
39.85 |
|
|
|
|
|
|
|
|
|
Average Costs (per Boe): |
|
|
|
|
|
|
|
Lease operating expenses |
$ |
2.10 |
|
|
$ |
2.17 |
|
|
$ |
3.01 |
|
|
$ |
2.74 |
|
Gathering, transportation and processing expense |
1.60 |
|
|
0.58 |
|
|
0.85 |
|
|
0.46 |
|
Production tax expenses |
0.82 |
|
|
3.34 |
|
|
1.88 |
|
|
3.61 |
|
Depreciation, depletion and amortization |
26.03 |
|
|
24.53 |
|
|
25.62 |
|
|
22.46 |
|
General and administrative expense (1) |
2.47 |
|
|
3.44 |
|
|
3.57 |
|
|
4.44 |
|
(1) |
Includes long-term cash and equity incentive compensation of $0.42
per Boe for both of the three months ended December 31, 2019 and
2018, respectively, and $0.69 per Boe and $0.71 per Boe for the
twelve months ended December 31, 2019 and 2018, respectively. |
|
|
HIGHPOINT RESOURCES
CORPORATIONConsolidated Condensed Balance
Sheets(Unaudited)
|
As of December 31, |
|
As ofDecember 31, |
|
2019 |
|
2018 |
|
|
|
(in thousands) |
Assets: |
|
|
|
Cash and cash equivalents |
$ |
16,449 |
|
|
$ |
32,774 |
|
Other current assets (1) |
69,988 |
|
|
157,007 |
|
Property and equipment, net |
2,064,174 |
|
|
2,029,523 |
|
Other noncurrent assets |
5,441 |
|
|
33,156 |
|
Total assets |
$ |
2,156,052 |
|
|
$ |
2,252,460 |
|
|
|
|
|
Liabilities and Stockholders'
Equity: |
|
|
|
Current liabilities (1) |
$ |
175,478 |
|
|
$ |
248,185 |
|
Long-term debt, net of debt issuance costs |
758,911 |
|
|
617,387 |
|
Other long-term liabilities (1) |
138,345 |
|
|
174,790 |
|
Stockholders' equity |
1,083,318 |
|
|
1,212,098 |
|
Total liabilities and stockholders' equity |
$ |
2,156,052 |
|
|
$ |
2,252,460 |
|
(1) |
At December 31, 2019, the estimated fair value of all of the
Company's commodity derivative instruments was a net liability of
$1.2 million, comprised of $3.9 million of current assets, $4.4
million of current liabilities and $0.7 million of noncurrent
liabilities. This amount will fluctuate based on estimated
future commodity prices and the current hedge position. |
|
|
HIGHPOINT RESOURCES
CORPORATIONConsolidated Statements of
Operations(Unaudited)
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
(in thousands, except per share amounts) |
Operating Revenues: |
|
|
|
|
|
|
|
Oil, gas and NGL production |
$ |
121,802 |
|
|
$ |
130,383 |
|
|
$ |
452,274 |
|
|
$ |
452,917 |
|
Other operating revenues |
11 |
|
|
300 |
|
|
385 |
|
|
100 |
|
Total operating revenues |
121,813 |
|
|
130,683 |
|
|
452,659 |
|
|
453,017 |
|
Operating Expenses: |
|
|
|
|
|
|
|
Lease operating expense |
7,362 |
|
|
6,768 |
|
|
37,796 |
|
|
27,850 |
|
Gathering, transportation and processing expense |
5,609 |
|
|
1,815 |
|
|
10,685 |
|
|
4,644 |
|
Production tax expense |
2,875 |
|
|
10,399 |
|
|
23,541 |
|
|
36,762 |
|
Exploration expense |
50 |
|
|
31 |
|
|
143 |
|
|
70 |
|
Impairment and abandonment expense |
7,155 |
|
|
110 |
|
|
9,642 |
|
|
719 |
|
(Gain) loss on sale of properties |
— |
|
|
— |
|
|
2,901 |
|
|
1,046 |
|
Depreciation, depletion and amortization |
91,106 |
|
|
76,374 |
|
|
321,276 |
|
|
228,480 |
|
Unused commitments |
4,467 |
|
|
4,503 |
|
|
17,706 |
|
|
18,187 |
|
General and administrative expense (1) |
8,650 |
|
|
10,703 |
|
|
44,759 |
|
|
45,130 |
|
Merger transaction expense |
— |
|
|
1,851 |
|
|
4,492 |
|
|
7,991 |
|
Other operating expenses, net |
192 |
|
|
1,989 |
|
|
402 |
|
|
1,273 |
|
Total operating expenses |
127,466 |
|
|
114,543 |
|
|
473,343 |
|
|
372,152 |
|
Operating Income (Loss) |
(5,653 |
) |
|
16,140 |
|
|
(20,684 |
) |
|
80,865 |
|
Other Income and Expense: |
|
|
|
|
|
|
|
Interest and other income |
229 |
|
|
(50 |
) |
|
791 |
|
|
1,793 |
|
Interest expense |
(14,873 |
) |
|
(13,355 |
) |
|
(58,100 |
) |
|
(52,703 |
) |
Commodity derivative gain (loss) (2) |
(44,353 |
) |
|
221,515 |
|
|
(98,953 |
) |
|
93,349 |
|
Gain (loss) on extinguishment of debt |
— |
|
|
— |
|
|
— |
|
|
(257 |
) |
Total other income and expense |
(58,997 |
) |
|
208,110 |
|
|
(156,262 |
) |
|
42,182 |
|
Income (Loss) before Income
Taxes |
(64,650 |
) |
|
224,250 |
|
|
(176,946 |
) |
|
123,047 |
|
(Provision for) Benefit from
Income Taxes |
16,845 |
|
|
(1,827 |
) |
|
42,116 |
|
|
(1,827 |
) |
Net Income (Loss) |
$ |
(47,805 |
) |
|
$ |
222,423 |
|
|
$ |
(134,830 |
) |
|
$ |
121,220 |
|
|
|
|
|
|
|
|
|
Net Income (Loss) per Common
Share |
|
|
|
|
|
|
|
Basic |
$ |
(0.23 |
) |
|
$ |
1.06 |
|
|
$ |
(0.64 |
) |
|
$ |
0.64 |
|
Diluted |
$ |
(0.23 |
) |
|
$ |
1.06 |
|
|
$ |
(0.64 |
) |
|
$ |
0.64 |
|
Weighted Average Common Shares
Outstanding |
|
|
|
|
|
|
|
Basic |
210,698 |
|
|
209,529 |
|
|
210,392 |
|
|
188,299 |
|
Diluted |
210,698 |
|
|
209,645 |
|
|
210,392 |
|
|
189,241 |
|
(1) |
Includes long-term cash and equity incentive compensation of $1.5
million and $1.3 million for the three months ended December 31,
2019 and 2018, respectively, and $8.6 million and $7.2 million for
the twelve months ended December 31, 2019 and 2018,
respectively. |
(2) |
The table below summarizes the realized and unrealized gains and
losses the Company recognized related to its oil and natural gas
derivative instruments for the periods indicated: |
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
(in thousands) |
Included in commodity
derivative gain (loss): |
|
|
|
|
|
|
|
Realized gain (loss) on derivatives |
$ |
2,936 |
|
|
$ |
(4,959 |
) |
|
$ |
10,667 |
|
|
$ |
(47,587 |
) |
Reversal of prior year unrealized gain transferred to realized
gain |
(19,736 |
) |
|
4,138 |
|
|
(81,166 |
) |
|
20,940 |
|
Unrealized gain (loss) on derivatives |
(27,553 |
) |
|
222,336 |
|
|
(28,454 |
) |
|
119,996 |
|
Total commodity derivative gain (loss) |
$ |
(44,353 |
) |
|
$ |
221,515 |
|
|
$ |
(98,953 |
) |
|
$ |
93,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HIGHPOINT RESOURCES
CORPORATIONConsolidated Statements of Cash
Flows(Unaudited)
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
(in thousands) |
Operating Activities: |
|
|
|
|
|
|
|
Net income (loss) |
$ |
(47,805 |
) |
|
$ |
222,423 |
|
|
$ |
(134,830 |
) |
|
$ |
121,220 |
|
Adjustments to reconcile to net cash provided by operations: |
Depreciation, depletion and amortization |
91,106 |
|
|
76,374 |
|
|
321,276 |
|
|
228,480 |
|
Deferred income taxes |
(16,845 |
) |
|
1,827 |
|
|
(42,116 |
) |
|
1,827 |
|
Impairment and abandonment expense |
7,155 |
|
|
110 |
|
|
9,642 |
|
|
719 |
|
Unrealized derivative (gain) loss |
47,289 |
|
|
(226,474 |
) |
|
109,620 |
|
|
(140,936 |
) |
Stock compensation and other non-cash charges |
1,805 |
|
|
2,524 |
|
|
11,306 |
|
|
8,337 |
|
Amortization of deferred financing costs |
639 |
|
|
636 |
|
|
2,556 |
|
|
2,365 |
|
(Gain) loss on extinguishment of debt |
— |
|
|
— |
|
|
— |
|
|
257 |
|
(Gain) loss on sale of properties |
— |
|
|
— |
|
|
2,901 |
|
|
1,046 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
(2,693 |
) |
|
(4,908 |
) |
|
10,795 |
|
|
(13,697 |
) |
Prepayments and other assets |
1,082 |
|
|
628 |
|
|
(27 |
) |
|
(793 |
) |
Accounts payable, accrued and other liabilities |
(837 |
) |
|
(15,037 |
) |
|
3,030 |
|
|
(40,324 |
) |
Amounts payable to oil and gas property owners |
(1,086 |
) |
|
695 |
|
|
(17,870 |
) |
|
34,499 |
|
Production taxes payable |
3,431 |
|
|
12,458 |
|
|
2,352 |
|
|
28,441 |
|
Net cash provided by (used in) operating activities |
$ |
83,241 |
|
|
$ |
71,256 |
|
|
$ |
278,635 |
|
|
$ |
231,441 |
|
Investing Activities: |
|
|
|
|
|
|
|
Additions to oil and gas properties, including acquisitions |
(50,440 |
) |
|
(131,002 |
) |
|
(426,416 |
) |
|
(453,616 |
) |
Additions of furniture, equipment and other |
(704 |
) |
|
(237 |
) |
|
(4,662 |
) |
|
(853 |
) |
Repayment of debt associated with merger, net of cash acquired |
— |
|
|
— |
|
|
— |
|
|
(53,357 |
) |
Proceeds from sale of properties |
— |
|
|
(221 |
) |
|
1,334 |
|
|
(221 |
) |
Other investing activities |
(212 |
) |
|
353 |
|
|
(1,612 |
) |
|
364 |
|
Net cash provided by (used in) investing activities |
$ |
(51,356 |
) |
|
$ |
(131,107 |
) |
|
$ |
(431,356 |
) |
|
$ |
(507,683 |
) |
Financing Activities: |
|
|
|
|
|
|
|
Proceeds from debt |
22,000 |
|
|
— |
|
|
222,000 |
|
|
— |
|
Principal payments on debt |
(57,000 |
) |
|
(119 |
) |
|
(83,859 |
) |
|
(469 |
) |
Other financing activities |
(4 |
) |
|
(236 |
) |
|
(1,745 |
) |
|
(4,981 |
) |
Net cash provided by (used in) financing activities |
$ |
(35,004 |
) |
|
$ |
(355 |
) |
|
$ |
136,396 |
|
|
$ |
(5,450 |
) |
Increase (Decrease) in Cash
and Cash Equivalents |
(3,119 |
) |
|
(60,206 |
) |
|
(16,325 |
) |
|
(281,692 |
) |
Beginning Cash and Cash
Equivalents |
19,568 |
|
|
92,980 |
|
|
32,774 |
|
|
314,466 |
|
Ending Cash and Cash
Equivalents |
$ |
16,449 |
|
|
$ |
32,774 |
|
|
$ |
16,449 |
|
|
$ |
32,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HIGHPOINT RESOURCES
CORPORATIONReconciliation of Discretionary Cash
Flow, Adjusted Net Income (Loss) and
EBITDAX(Unaudited)
Discretionary Cash Flow Reconciliation
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
(in thousands) |
Net Cash Provided by (Used in) Operating Activities |
$ |
83,241 |
|
|
$ |
71,256 |
|
|
$ |
278,635 |
|
|
$ |
231,441 |
|
Adjustments to reconcile to
discretionary cash flow: |
|
|
|
|
|
|
|
Exploration expense |
50 |
|
|
31 |
|
|
143 |
|
|
70 |
|
Merger transaction expense |
— |
|
|
1,851 |
|
|
4,492 |
|
|
7,991 |
|
Changes in working capital |
103 |
|
|
6,164 |
|
|
1,720 |
|
|
(8,126 |
) |
Discretionary Cash Flow |
$ |
83,394 |
|
|
$ |
79,302 |
|
|
$ |
284,990 |
|
|
$ |
231,376 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income (Loss) Reconciliation
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
(in thousands, except per share amounts) |
Net Income (Loss) |
$ |
(47,805 |
) |
|
$ |
222,423 |
|
|
$ |
(134,830 |
) |
|
$ |
121,220 |
|
Provision for (Benefit
from) income taxes |
(16,845 |
) |
|
1,827 |
|
|
(42,116 |
) |
|
1,827 |
|
Income (Loss) before Income
Taxes |
(64,650 |
) |
|
224,250 |
|
|
(176,946 |
) |
|
123,047 |
|
Adjustments to Net Income
(Loss): |
|
|
|
|
|
|
|
Unrealized derivative (gain) loss |
47,289 |
|
|
(226,474 |
) |
|
109,620 |
|
|
(140,936 |
) |
Impairment expense |
3,854 |
|
|
— |
|
|
3,854 |
|
|
— |
|
(Gain) loss on extinguishment of debt |
— |
|
|
— |
|
|
— |
|
|
257 |
|
(Gain) loss on sale of properties |
— |
|
|
— |
|
|
2,901 |
|
|
1,046 |
|
One-time items: |
|
|
|
|
|
|
|
Merger transaction expense |
— |
|
|
1,851 |
|
|
4,492 |
|
|
7,991 |
|
(Income) expense related to properties sold |
192 |
|
|
1,989 |
|
|
149 |
|
|
1,273 |
|
Adjusted Income (Loss) before Income Taxes |
(13,315 |
) |
|
1,616 |
|
|
(55,930 |
) |
|
(7,322 |
) |
Adjusted (provision for) benefit from income taxes (1) |
3,723 |
|
|
(399 |
) |
|
13,311 |
|
|
1,803 |
|
Adjusted Net Income
(Loss) |
$ |
(9,592 |
) |
|
$ |
1,217 |
|
|
$ |
(42,619 |
) |
|
$ |
(5,519 |
) |
Per share, diluted |
$ |
(0.05 |
) |
|
$ |
0.01 |
|
|
$ |
(0.20 |
) |
|
$ |
(0.03 |
) |
(1) |
Adjusted (provision for) benefit from income taxes is calculated
using the Company's current effective tax rate prior to applying
the valuation allowance against deferred tax assets. |
|
|
EBITDAX Reconciliation
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
(in thousands) |
Net Income (Loss) |
$ |
(47,805 |
) |
|
$ |
222,423 |
|
|
$ |
(134,830 |
) |
|
$ |
121,220 |
|
Adjustments to reconcile to
EBITDAX: |
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
91,106 |
|
|
76,374 |
|
|
321,276 |
|
|
228,480 |
|
Impairment and abandonment expense |
7,155 |
|
|
110 |
|
|
9,642 |
|
|
719 |
|
Exploration expense |
50 |
|
|
31 |
|
|
143 |
|
|
70 |
|
Unrealized derivative (gain) loss |
47,289 |
|
|
(226,474 |
) |
|
109,620 |
|
|
(140,936 |
) |
Stock compensation and other non-cash charges |
1,805 |
|
|
2,524 |
|
|
11,306 |
|
|
8,337 |
|
Merger transaction expense |
— |
|
|
1,851 |
|
|
4,492 |
|
|
7,991 |
|
(Gain) loss on extinguishment of debt |
— |
|
|
— |
|
|
— |
|
|
257 |
|
(Gain) loss on sale of properties |
— |
|
|
— |
|
|
2,901 |
|
|
1,046 |
|
Interest and other income |
(229 |
) |
|
50 |
|
|
(791 |
) |
|
(1,793 |
) |
Interest expense |
14,873 |
|
|
13,355 |
|
|
58,100 |
|
|
52,703 |
|
Provision for (benefit from) income taxes |
(16,845 |
) |
|
1,827 |
|
|
(42,116 |
) |
|
1,827 |
|
EBITDAX |
$ |
97,399 |
|
|
$ |
92,071 |
|
|
$ |
339,743 |
|
|
$ |
279,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discretionary cash flow and adjusted net income
(loss) are non-GAAP measures. These measures are presented because
management believes that they provide useful additional information
to investors for analysis of the Company's ability to internally
generate funds for exploration, development and acquisitions as
well as adjusting net income (loss) for certain items to allow for
a more consistent comparison from period to period. In addition,
the Company believes that these measures are widely used by
professional research analysts and others in the valuation,
comparison and investment recommendations of companies in the oil
and gas exploration and production industry, and that many
investors use the published research of industry research analysts
in making investment decisions.
These measures should not be considered in
isolation or as a substitute for net income, income from
operations, net cash provided by operating activities or other
income, profitability, cash flow or liquidity measures prepared in
accordance with GAAP. The definition of these measures may vary
among companies, and, therefore, the amounts presented may not be
comparable to similarly titled measures of other companies.
Company contact: Larry C. Busnardo, Vice
President, Investor Relations, 303-312-8514
HighPoint Resources (NYSE:HPR)
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From Mar 2024 to Apr 2024
HighPoint Resources (NYSE:HPR)
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From Apr 2023 to Apr 2024