Rosehill Resources Inc. (“Rosehill” or the “Company”) (NASDAQ:
ROSE, ROSEW, ROSEU) today reported financial and operational
results for the fourth quarter and year ended December 31, 2019.
Fourth Quarter 2019 and Current Highlights:
- Average net production of 22,157 barrels of oil equivalent per
day (“BOEPD”) (72% oil and 86% total liquids)
- Reported a net loss attributable to Rosehill of $17.5 million,
or $1.15 per diluted share, for the fourth quarter of 2019, which
includes a $22.7 million non-cash, pre-tax loss on commodity
derivative instruments
- Delivered Adjusted EBITDAX (a non-GAAP measure defined and
reconciled below) of $57.2 million
- Reduced combined lease operating and general and administrative
expenses (“LOE” and “G&A,” respectively), excluding stock-based
compensation, per barrel of oil equivalent (“BOE”) by $2.07, or
21%, compared to third quarter of 2019
- Reduced capital expenditures to $37 million in the fourth
quarter of 2019 compared to $57 million in the third quarter of
2019
- In early February, placed a three-well pad online on the Kyle
26 lease that achieved a combined IP30 of 1,067 BOEPD per well, or
241 BOEPD per 1,000 feet, and 79% oil
- In March, placed a five-well pad online on the Z&T 32 lease
in Northern Delaware targeting the 2nd Bone Spring Sand
interval
- Commodity derivative portfolio projected settlement value of
approximately $153 million and mark-to-market value of
approximately $137 million, both as of April 9, 2020
- In March, halted all drilling and completion activity in light
of recent deteriorating global markets and commodity prices
- The Company is exploring strategic alternatives in support of
its objectives to maximize value, position the Company for
long-term growth and deleverage its balance sheet, including among
other things, a financial restructuring or other deleveraging
transaction
Full Year 2019 Highlights
- Average net production to 20,786 BOEPD (71% oil and 86% total
liquids), an increase of 13% compared to 2018
- Reported a net loss attributable to Rosehill of $23.3 million,
or $1.61 per diluted share, which included a $50.7 million
non-cash, pre-tax loss on commodity derivative instruments
- Delivered Adjusted EBITDAX (a non-GAAP measure defined and
reconciled below) of $196.7 million
- Decreased capital expenditures to $238 million, a reduction of
$135 million, compared to 2018
Management Comments
David French, Rosehill’s President and Chief
Executive Officer, commented, “We continue to be responsive to
developments in the current difficult commodity price environment
as demonstrated by our recent decision to halt all drilling and
completion activities and recent significant staff reduction.
This staffing reduction represents
approximately $11 million of direct cash
general and administrative costs on an annual basis relative
to 2019 levels. Although 2019 cash operating cost levels
were held to just over $10 per BOE and operating margins were
nearly $30 per BOE, we have elected to withdraw 2020
guidance that we issued in December 2019 until recent market
conditions stabilize. Our focus will be pursing all avenues
to manage field costs and dispatching the most economic barrels
throughout 2020.
Operational Results
For the fourth quarter of 2019, the Company’s
net production averaged 22,157 BOEPD, comprised of 15,843 barrels
of oil per day, 3,187 barrels of natural gas liquids (“NGLs”) per
day and 18.8 million cubic feet of gas (“MMCF”) per day.
Rosehill drilled seven horizontal wells and completed three wells,
ending the quarter with five drilled uncompleted wells.
For the full year 2019, the Company’s net
production averaged 20,786 BOEPD, comprised of 14,825 barrels of
oil per day, 3,060 barrels of NGLs per day and 17.4 MMCF per
day. Rosehill drilled 27 horizontal wells and completed 30
wells. On March 19, 2020, the Company announced that it halted
future drilling and completion activity for 2020 and had drilled
eight wells and completed eight wells to date in 2020.
Northern Delaware - In the Northern Delaware
area, the Company drilled six wells and completed two wells in the
fourth quarter, bringing the total completed well count for the
full year 2019 to 17 wells. The results for certain recently
connected wells, along with additional results for wells previously
reported, are presented in the table below.
|
|
BOEPD per |
|
|
Well |
Formation |
Period |
BOEPD |
1,000’ LL |
Oil % |
|
Kyle 26 B011, B015, A006 |
2nd Bone Spring - Sand |
IP30 (average) |
1,067 |
241 |
79% |
|
|
Kyle 26 B007, A001, B001 |
Lower Wolfcamp A |
IP180 (average) |
1,089 |
237 |
75% |
|
|
Z&T 32 A005, B006, C006 |
2nd Bone Spring - Sand |
IP180 (average) |
682 |
158 |
73% |
|
Southern Delaware - In the Southern Delaware,
the Company drilled and completed one well in the fourth quarter,
bringing the total completed well count for the full year 2019 to
13 wells. The results for certain wells are presented in the
table below.
|
|
BOEPD per |
|
|
Well |
Formation |
Period |
BOEPD |
1,000’ LL |
Oil % |
|
State Neal Lethco 1210 H001 |
Wolfcamp A |
IP60 |
516 |
54 |
92% |
|
|
Neal Lethco 41 H5 |
2nd Bone Spring |
IP180 |
567 |
132 |
67% |
|
Financial Results
For the fourth quarter of 2019, the Company
reported a net loss attributable to Rosehill of $17.5 million, or
$1.15 per diluted share, as compared to net income of $50.2
million, or $2.35 per diluted share, in the fourth quarter of
2018. The fourth quarter of 2019 included a $22.7 million
non-cash, pre-tax loss on commodity derivative instruments compared
to a $199.4 million non-cash, pre-tax gain on commodity derivative
instruments in the fourth quarter of 2018.
For the full year 2019, the Company reported a
net loss attributable to Rosehill of $23.3 million, or $1.61 per
diluted share, as compared to net income of $26.7 million, or $1.76
per diluted share, in the same period in 2018. The full year
2019 included a $50.7 million non-cash, pre-tax loss on commodity
derivative instruments and an $11.1 million pre-tax gain on sale of
assets. The full year 2018 included a $108.1 million
non-cash, pre-tax gain on commodity derivative instruments.
Adjusted EBITDAX totaled $57.2 million for the
fourth quarter of 2019, as compared to $63.6 million in the fourth
quarter of 2018. This decrease of 10% was driven primarily by
lower production and lower commodity pricing for natural gas and
natural gas liquids. Adjusted EBITDAX for full year 2019 was
$196.7 million, down from $204.4 million for the same period in
2018. This decrease of 4% was driven primarily by lower
commodity pricing for oil, natural gas, and natural gas
liquids.
For the fourth quarter of 2019, average realized
prices (all prices excluding the effects of derivatives) were
$55.07 per barrel of oil, $0.74 per Mcf of natural gas and $11.04
per barrel of NGLs, resulting in a total equivalent price of $41.59
per BOE, up 5% from the fourth quarter of 2018.
Rosehill’s cash operating costs for the fourth quarter of 2019
were $10.67 per BOE, which includes LOE, gathering and
transportation, production taxes and G&A and excludes costs
associated with stock-based compensation. Fourth quarter cash
operating costs per BOE increased 5% as compared to fourth quarter
of 2018, primarily attributable to increased G&A. Cash
operating costs for the full year 2019 were $11.86 per BOE, a
decrease of 4% for the same period in 2018, driven primarily by
lower LOE.
Capital Expenditures and
Liquidity
During the full year 2019 and the fourth quarter
of 2019, Rosehill incurred capital costs, excluding asset
retirement costs, of $238.0 million and $36.7 million,
respectively. The portion of capital costs related to facilities
during the full year 2019 and the fourth quarter of 2019 was $30.1
million and $0.2 million, respectively.
As of December 31, 2019, Rosehill had $3.0
million in cash on hand and $355.5 million in long-term debt, net
of discounts. Liquidity comprised of cash on hand and availability
under its revolving credit facility was approximately $83.0 million
at December 31, 2019. As previously announced, on March 19, 2020
Rosehill fully drew the amount available under its revolving credit
facility as a precautionary measure in order to increase its cash
position and preserve financial flexibility in light of current
uncertainty in the global markets and commodity prices. After
this draw, Rosehill’s total debt under its credit facility
increased to $340 million with total cash on hand of $73 million as
of March 19, 2020.
Commodity Hedging
Included below is a summary of the Company’s
commodity derivative contracts as of December 31, 2019.
| |
|
2020 |
|
2021 |
|
2022 |
| |
| Commodity
derivative swaps |
|
Oil: |
|
|
|
|
|
| |
Notional volume (Bbls)
(1)(2) |
1,000,000 |
|
|
— |
|
|
— |
|
|
|
Weighted average fixed price ($/Bbl) |
$ |
67.69 |
|
|
$ |
— |
|
|
$ |
— |
|
| Natural
gas: |
|
|
|
|
|
| |
Notional volume (MMBtu) |
1,970,368 |
|
|
1,615,792 |
|
|
1,276,142 |
|
| |
Weighted average fixed price
($/MMbtu) |
$ |
2.75 |
|
|
$ |
2.79 |
|
|
$ |
2.85 |
|
| |
|
|
|
|
|
|
| Commodity
derivative three-way collars |
|
Oil: |
|
|
|
|
|
| |
Notional volume (Bbls) |
3,294,000 |
|
|
4,200,000 |
|
|
2,000,000 |
|
| |
Weighted average ceiling price
($/Bbl) |
$ |
70.29 |
|
|
$ |
60.40 |
|
|
$ |
61.45 |
|
| |
Weighted average floor price
($/Bbl) |
$ |
57.50 |
|
|
$ |
54.49 |
|
|
$ |
55.00 |
|
| |
Weighted average sold put option
price ($/Bbl) |
$ |
47.50 |
|
|
$ |
45.51 |
|
|
$ |
45.00 |
|
| |
|
|
|
|
|
|
| Crude oil
basis swaps |
| Midland /
Cushing: |
|
|
|
|
|
| |
Notional volume (Bbls) |
5,254,000 |
|
|
4,200,000 |
|
|
2,100,000 |
|
| |
Weighted average fixed price
($/Bbl) |
$ |
(0.83 |
) |
|
$ |
0.49 |
|
|
$ |
0.54 |
|
| |
|
|
|
|
|
|
| Argus WTI
roll: |
|
|
|
|
|
| |
Notional volume (Bbls) |
665,650 |
|
|
— |
|
|
— |
|
| |
Weighted average fixed price
($/Bbl) |
$ |
0.40 |
|
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
| NYMEX WTI
roll: |
|
|
|
|
|
| |
Notional volume (Bbls) |
2,791,102 |
|
|
— |
|
|
— |
|
| |
Weighted average fixed price
($/Bbl) |
$ |
0.42 |
|
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
| Natural
gas basis swaps |
| EP
Permian: |
|
|
|
|
|
| |
Notional volume (MMBtu) |
2,096,160 |
|
|
— |
|
|
— |
|
| |
Weighted average fixed price
($/MMBtu) |
$ |
(1.03 |
) |
|
$ |
— |
|
|
$ |
— |
|
(1) During the second quarter of 2019, the
Company entered into commodity derivative swaps where it bought
2,160,000 barrels of crude oil at a weighted average fixed price of
$50.48 per barrel to offset commodity derivative swaps for the year
ended December 31, 2021, it previously sold 2,160,000 barrels of
crude oil at a weighted average fixed price of $61.21 per
barrel.
(2) During the second quarter of 2019, the
Company entered into commodity derivative swaps where it bought
1,100,000 barrels of crude oil at a weighted average fixed price of
$50.55 per barrel to offset commodity derivative swaps for the year
ended December 31, 2022, it previously sold 1,100,000 barrels of
crude oil at a weighted average fixed price of $58.42 per
barrel.
The Company does not plan to hold a conference
call to discuss its fourth quarter financial and operating
results.
About Rosehill Resources
Inc.
Rosehill Resources Inc. is an independent oil
and gas exploration company with assets positioned in the Delaware
Basin portion of the Permian Basin.
ROSEHILL RESOURCES
INC.OPERATIONAL HIGHLIGHTS
| |
|
Three Months |
|
Twelve Months |
| |
|
Ended December 31, |
|
Ended December 31, |
| |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
Oil sales |
|
$ |
80,270 |
|
|
$ |
74,125 |
|
|
$ |
286,710 |
|
|
$ |
271,539 |
|
|
Natural gas sales |
|
1,274 |
|
|
2,706 |
|
|
2,489 |
|
|
9,392 |
|
|
Natural gas liquids sales |
|
3,237 |
|
|
6,174 |
|
|
13,084 |
|
|
20,944 |
|
|
Total revenues |
|
$ |
84,781 |
|
|
$ |
83,005 |
|
|
$ |
302,283 |
|
|
$ |
301,875 |
|
| Average sales price
(1): |
|
|
|
|
|
|
|
|
| Oil (per Bbl) |
|
$ |
55.07 |
|
|
$ |
48.51 |
|
|
$ |
52.99 |
|
|
$ |
55.27 |
|
| Natural gas (per Mcf) |
|
0.74 |
|
|
1.64 |
|
|
0.39 |
|
|
1.80 |
|
| NGLs (per Bbl) |
|
11.04 |
|
|
21.14 |
|
|
11.71 |
|
|
23.07 |
|
| Total (per Boe) |
|
$ |
41.59 |
|
|
$ |
39.60 |
|
|
$ |
39.84 |
|
|
$ |
45.10 |
|
| Total, including effects of
gain (loss) on settled |
|
|
|
|
|
|
|
|
| commodity derivatives, net
(per Boe) |
|
$ |
38.73 |
|
|
$ |
40.42 |
|
|
$ |
37.91 |
|
|
$ |
42.79 |
|
| |
|
|
|
|
|
|
|
|
| Net
production: |
|
|
|
|
|
|
|
|
| Oil (MBbls) |
|
1,458 |
|
|
1,528 |
|
|
5,411 |
|
|
4,913 |
|
| Natural gas (MMcf) |
|
1,727 |
|
|
1,654 |
|
|
6,352 |
|
|
5,231 |
|
| NGLs (MBbls) |
|
293 |
|
|
292 |
|
|
1,117 |
|
|
908 |
|
| Total (MBoe) |
|
2,038 |
|
|
2,096 |
|
|
7,587 |
|
|
6,693 |
|
| Average daily net
production volume: |
|
|
|
|
|
|
|
|
| Oil (Bbls/d) |
|
15,843 |
|
|
16,604 |
|
|
14,825 |
|
|
13,460 |
|
| Natural gas (Mcf/d) |
|
18,768 |
|
|
17,981 |
|
|
17,403 |
|
|
14,332 |
|
| NGLs (Bbls/d) |
|
3,187 |
|
|
3,178 |
|
|
3,060 |
|
|
2,488 |
|
| Total (Boe/d) |
|
22,157 |
|
|
22,779 |
|
|
20,786 |
|
|
18,337 |
|
|
Average costs (per BOE): |
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
$ |
4.38 |
|
|
$ |
4.63 |
|
|
$ |
4.92 |
|
|
$ |
5.66 |
|
|
Production taxes |
|
2.37 |
|
|
1.90 |
|
|
2.30 |
|
|
2.34 |
|
|
Gathering and transportation |
|
0.59 |
|
|
0.81 |
|
|
0.76 |
|
|
0.74 |
|
|
Depreciation, depletion, amortization and accretion |
|
17.07 |
|
|
17.67 |
|
|
18.18 |
|
|
21.19 |
|
|
Exploration costs |
|
6.26 |
|
|
0.34 |
|
|
2.10 |
|
|
0.65 |
|
|
General and administrative, excluding stock-based compensation |
|
3.33 |
|
|
2.83 |
|
|
3.88 |
|
|
3.58 |
|
|
Stock-based compensation |
|
0.82 |
|
|
0.55 |
|
|
0.83 |
|
|
0.97 |
|
|
(Gain) loss on disposition of property and equipment |
|
(0.01 |
) |
|
0.08 |
|
|
(1.47 |
) |
|
0.07 |
|
|
Total (per Boe) |
|
$ |
34.81 |
|
|
$ |
28.81 |
|
|
$ |
31.50 |
|
|
$ |
35.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excluding the effects of realized and
unrealized commodity derivative transactions unless noted
otherwise
ROSEHILL RESOURCES
INC.STATEMENTS OF OPERATIONS(In
thousands, except per share amounts)
| |
|
Three Months |
|
Twelve Months |
| |
|
Ended December 31, |
|
Ended December 31, |
| |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
Oil sales |
|
$ |
80,270 |
|
|
$ |
74,125 |
|
|
$ |
286,710 |
|
|
$ |
271,539 |
|
|
Natural gas sales |
|
1,274 |
|
|
2,706 |
|
|
2,489 |
|
|
9,392 |
|
|
Natural gas liquids sales |
|
3,237 |
|
|
6,174 |
|
|
13,084 |
|
|
20,944 |
|
|
Total revenues |
|
84,781 |
|
|
83,005 |
|
|
302,283 |
|
|
301,875 |
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
8,929 |
|
|
9,695 |
|
|
37,348 |
|
|
37,881 |
|
|
Production and ad valorem taxes |
|
4,828 |
|
|
3,991 |
|
|
17,432 |
|
|
15,635 |
|
|
Gathering and transportation |
|
1,194 |
|
|
1,693 |
|
|
5,756 |
|
|
4,939 |
|
|
Depreciation, depletion, amortization and accretion |
|
34,779 |
|
|
37,031 |
|
|
137,937 |
|
|
141,815 |
|
|
Impairment of oil and natural gas properties |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Exploration costs |
|
12,761 |
|
|
715 |
|
|
15,917 |
|
|
4,374 |
|
|
General and administrative |
|
8,463 |
|
|
7,100 |
|
|
35,729 |
|
|
30,469 |
|
|
(Gain) loss on disposition of property and equipment |
|
(11 |
) |
|
174 |
|
|
(11,117 |
) |
|
499 |
|
|
Total operating expenses |
|
70,943 |
|
|
60,399 |
|
|
239,002 |
|
|
235,612 |
|
| Operating
income |
|
13,838 |
|
|
22,606 |
|
|
63,281 |
|
|
66,263 |
|
| Other income
(expense): |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(5,668 |
) |
|
(5,597 |
) |
|
(25,228 |
) |
|
(19,489 |
) |
|
Gain (loss) on commodity derivative instruments, net |
|
(28,512 |
) |
|
201,157 |
|
|
(65,338 |
) |
|
92,604 |
|
|
Other income (expense), net |
|
11 |
|
|
(3,583 |
) |
|
(660 |
) |
|
(3,254 |
) |
|
Total other income (expense), net |
|
(34,169 |
) |
|
191,977 |
|
|
(91,226 |
) |
|
69,861 |
|
| Income (loss) before
income taxes |
|
(20,331 |
) |
|
214,583 |
|
|
(27,945 |
) |
|
136,124 |
|
|
Income tax (benefit) expense |
|
6,315 |
|
|
12,639 |
|
|
2,143 |
|
|
18,162 |
|
| Net income
(loss) |
|
(26,646 |
) |
|
201,944 |
|
|
(30,088 |
) |
|
117,962 |
|
| Net income (loss) attributable
to noncontrolling interest |
|
(17,223 |
) |
|
143,799 |
|
|
(38,503 |
) |
|
59,926 |
|
| Net income attributable to
Rosehill Resources Inc. before preferred stock dividends |
|
(9,423 |
) |
|
58,145 |
|
|
8,415 |
|
|
58,036 |
|
| Series A Preferred Stock
dividends and deemed dividends |
|
2,093 |
|
|
2,031 |
|
|
8,174 |
|
|
7,938 |
|
| Series B Preferred Stock
dividends, deemed dividends, and return |
|
5,964 |
|
|
5,943 |
|
|
23,590 |
|
|
23,437 |
|
| Net income (loss)
attributable to Rosehill Resources Inc. common
stockholders |
|
$ |
(17,480 |
) |
|
$ |
50,171 |
|
|
$ |
(23,349 |
) |
|
$ |
26,661 |
|
| Earnings (loss) per
common share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(1.15 |
) |
|
$ |
3.72 |
|
|
$ |
(1.61 |
) |
|
$ |
3.25 |
|
|
Diluted |
|
$ |
(1.15 |
) |
|
$ |
2.35 |
|
|
$ |
(1.61 |
) |
|
$ |
1.76 |
|
| Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
15,220 |
|
|
13,477 |
|
|
14,475 |
|
|
8,196 |
|
|
Diluted |
|
15,220 |
|
|
22,229 |
|
|
14,475 |
|
|
46,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ROSEHILL RESOURCES
INC.CONSOLIDATED BALANCE SHEETS(In
thousands, except share and per share amount)
| |
|
December 31, 2019 |
|
December 31, 2018 |
|
ASSETS |
|
|
|
|
| Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,991 |
|
|
$ |
20,157 |
|
|
Accounts receivable |
|
34,910 |
|
|
32,338 |
|
|
Derivative assets |
|
10,340 |
|
|
30,819 |
|
|
Prepaid and other current assets |
|
2,393 |
|
|
1,371 |
|
|
Total current assets |
|
50,634 |
|
|
84,685 |
|
| Property and
equipment: |
|
|
|
|
|
Oil and natural gas properties (successful efforts), net |
|
744,597 |
|
|
666,797 |
|
|
Other property and equipment, net |
|
2,984 |
|
|
2,592 |
|
|
Total property and equipment, net |
|
747,581 |
|
|
669,389 |
|
|
Other assets, net |
|
3,466 |
|
|
4,678 |
|
|
Derivative assets |
|
33,105 |
|
|
58,314 |
|
|
Deferred tax assets |
|
37,726 |
|
|
— |
|
| Total
assets |
|
$ |
872,512 |
|
|
$ |
817,066 |
|
|
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’
EQUITY |
|
|
|
|
| Current
liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
15,922 |
|
|
$ |
21,013 |
|
|
Accounts payable, related parties |
|
209 |
|
|
287 |
|
|
Derivative liabilities |
|
4,016 |
|
|
— |
|
|
Accrued liabilities and other |
|
26,513 |
|
|
27,335 |
|
|
Accrued capital expenditures |
|
23,031 |
|
|
30,529 |
|
|
Total current liabilities |
|
69,691 |
|
|
79,164 |
|
| Long-term
liabilities: |
|
|
|
|
|
Long-term debt, net |
|
355,511 |
|
|
288,298 |
|
|
Asset retirement obligations |
|
14,431 |
|
|
13,524 |
|
|
Deferred tax liabilities |
|
1,196 |
|
|
9,278 |
|
|
Derivative liabilities |
|
1,300 |
|
|
696 |
|
|
Liability related to tax receivable agreement |
|
53,809 |
|
|
3,518 |
|
|
Other liabilities |
|
432 |
|
|
140 |
|
|
Total long-term liabilities |
|
426,679 |
|
|
315,454 |
|
| Total
liabilities |
|
496,370 |
|
|
394,618 |
|
| Commitments and
contingencies (Note 17) |
|
|
|
|
| Mezzanine
equity |
|
|
|
|
|
Series B Preferred Stock; $0.0001 par value, 10.0% Redeemable,
$1,000 per share liquidation preference; of the 1,000,000 shares of
Preferred Stock authorized, 210,000 shares designated, 156,746
shares issued and outstanding as of December 31, 2019 and 2018 |
|
163,026 |
|
|
155,111 |
|
| Stockholders’
equity |
|
|
|
|
|
Series A Preferred Stock; $0.0001 par value, 8.0% Cumulative
Perpetual Convertible, $1,000 per share liquidation preference; of
the 1,000,000 shares of Preferred Stock authorized, 150,000 shares
designated, 105,589 and 101,699 shares issued and outstanding as of
December 31, 2019 and 2018, respectively |
|
88,551 |
|
|
84,631 |
|
|
Class A Common Stock; $0.0001 par value, 250,000,000 shares
authorized and 28,554,526 and 13,760,136 shares issued and
outstanding as of December 31, 2019 and 2018, respectively |
|
3 |
|
|
1 |
|
|
Class B Common Stock; $0.0001 par value, 30,000,000 shares
authorized, 15,707,692 and 29,807,692 shares issued and outstanding
as of and December 31, 2019 and 2018, respectively |
|
2 |
|
|
3 |
|
|
Additional paid-in capital |
|
72,859 |
|
|
42,271 |
|
|
Retained earnings |
|
11,126 |
|
|
26,661 |
|
|
Total common stockholders’ equity |
|
83,990 |
|
|
68,936 |
|
|
Noncontrolling interest |
|
40,575 |
|
|
113,770 |
|
| Total stockholders’
equity |
|
213,116 |
|
|
267,337 |
|
| Total liabilities,
mezzanine equity and stockholders’ equity |
|
$ |
872,512 |
|
|
$ |
817,066 |
|
| |
|
|
|
|
|
|
|
|
ROSEHILL RESOURCES
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands)
| |
|
Year Ended December 31, |
| |
|
2019 |
|
|
2018 |
|
| Cash flows from
operating activities: |
|
|
|
|
|
|
|
Net income (loss) |
|
(30,088 |
) |
|
117,962 |
|
|
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
|
Depreciation, depletion, amortization, accretion and impairment of
oil and gas properties |
|
137,937 |
|
|
141,815 |
|
|
Deferred income taxes (benefit) |
|
2,143 |
|
|
18,157 |
|
|
Stock-based compensation |
|
6,301 |
|
|
6,522 |
|
|
(Gain) loss on disposition of property and equipment |
|
(11,117 |
) |
|
499 |
|
|
(Gain) loss on derivative instruments |
|
65,602 |
|
|
(92,534 |
) |
|
Net cash (paid) received in settlement of derivative
instruments |
|
(15,294 |
) |
|
(14,683 |
) |
|
Amortization of debt issuance costs |
|
1,943 |
|
|
2,139 |
|
|
Write-off of undeveloped and exploratory costs |
|
12,377 |
|
|
— |
|
|
Settlement of asset retirement obligations |
|
(7 |
) |
|
(801 |
) |
|
(Gain) loss from revaluation of tax receivable agreement
liability |
|
170 |
|
|
3,518 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Increase in accounts receivable and accounts receivable, related
parties |
|
(2,563 |
) |
|
(14,816 |
) |
|
Decrease (increase) in prepaid and other assets |
|
259 |
|
|
(59 |
) |
|
Increase (decrease) in accounts payable and accrued liabilities and
other |
|
(180 |
) |
|
8,526 |
|
|
Increase (decrease) in accounts payable, related parties |
|
(74 |
) |
|
64 |
|
|
Net cash provided by operating activities |
|
167,409 |
|
|
176,309 |
|
| Cash flows from
investing activities: |
|
|
|
|
|
Additions to oil and natural gas properties |
|
(249,864 |
) |
|
(377,897 |
) |
|
Acquisition of White Wolf |
|
— |
|
|
(4,005 |
) |
|
Acquisition of land and leasehold, royalty and mineral
interest |
|
(1,262 |
) |
|
(15,281 |
) |
|
Proceeds received from disposition of oil and natural gas
properties |
|
21,770 |
|
|
— |
|
|
Additions to other property and equipment |
|
(1,039 |
) |
|
(2,160 |
) |
|
Net cash used in investing activities |
|
(230,395 |
) |
|
(399,343 |
) |
| Cash flows from
financing activities: |
|
|
|
|
|
Proceeds from revolving credit facility |
|
128,000 |
|
|
274,000 |
|
|
Repayment on revolving credit facility |
|
(62,000 |
) |
|
(80,000 |
) |
|
Proceeds from Class A Common Stock offering |
|
— |
|
|
40,511 |
|
|
Class A Common Stock offering issuance costs |
|
— |
|
|
(1,155 |
) |
|
Series B Preferred Stock upfront fees and transaction costs |
|
— |
|
|
(20 |
) |
|
Debt issuance costs |
|
(799 |
) |
|
(3,330 |
) |
|
Dividends paid on preferred stock |
|
(19,120 |
) |
|
(10,716 |
) |
|
Restricted stock used for tax withholdings |
|
(246 |
) |
|
(749 |
) |
|
Payment on capital lease obligation |
|
(15 |
) |
|
(32 |
) |
|
Net cash provided by financing activities |
|
45,820 |
|
|
218,509 |
|
|
Net increase (decrease) in cash, cash equivalents, and restricted
cash |
|
(17,166 |
) |
|
(4,525 |
) |
| Cash, cash equivalents
and restricted cash beginning of period |
|
20,157 |
|
|
24,682 |
|
|
Cash, cash equivalents and restricted cash end of
period |
|
$ |
2,991 |
|
|
$ |
20,157 |
|
|
|
|
|
|
|
|
|
|
|
ROSEHILL RESOURCES
INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)(In thousands)
Supplemental cash flow information and noncash
activity:
| |
|
Year Ended December 31, |
|
|
|
|
2019 |
|
|
|
2018 |
|
| Supplemental disclosures: |
|
|
|
|
|
|
|
|
| Cash paid for interest |
|
$ |
23,305 |
|
|
$ |
17,065 |
|
| |
|
|
|
|
|
|
|
|
| Supplemental noncash
activity: |
|
|
|
|
|
|
|
|
| Asset retirement obligations
incurred, net of revision of estimates |
|
$ |
(308 |
) |
|
$ |
4,697 |
|
| Changes in accrued capital
expenditures |
|
7,498 |
|
|
14,516 |
|
| Changes in accounts payable
for capital expenditures |
|
6,712 |
|
|
7,456 |
|
| Series A Preferred Stock
dividends paid-in-kind |
|
4,141 |
|
|
3,971 |
|
| Series A Preferred Stock cash
dividends declared and payable |
|
— |
|
|
1,015 |
|
| Series B Preferred Stock
dividends paid-in-kind |
|
— |
|
|
6,120 |
|
| Series B Preferred Stock cash
dividends declared and payable |
|
3,950 |
|
|
2,347 |
|
| Series B Preferred Stock
return |
|
6,386 |
|
|
6,798 |
|
| Series B Preferred Stock
deemed dividend |
|
1,529 |
|
|
1,345 |
|
Non-GAAP Measures
Adjusted EBITDAX
Adjusted EBITDAX is a supplemental non-GAAP
financial measure that is used by Rosehill’s management and
external users of Rosehill’s financial statements, such as industry
analysts, investors, lenders and rating agencies. The Company
defines Adjusted EBITDAX as net income (loss) before interest
expense, income taxes, depreciation, depletion, amortization, and
accretion, (gains) losses on commodity derivatives excluding net
cash receipts (payments) on settled commodity derivatives, stock
settled stock-based compensation, exploration costs, gains and
losses from the sale of assets and other non-cash operating items.
Adjusted EBITDAX is not a measure of net income as determined by
United States generally accepted accounting principles (“U.S.
GAAP”).
Management believes Adjusted EBITDAX is useful
because it allows for more effective evaluation and comparison of
Rosehill’s operating performance and results of operations from
period to period without regard to the Company’s financing methods
or capital structure. Rosehill excludes the items listed above from
net income in arriving at Adjusted EBITDAX because these amounts
can vary substantially from company to company within the industry
depending upon accounting methods and book values of assets,
capital structures, and the method by which the assets were
acquired. Adjusted EBITDAX should not be considered as an
alternative to, or more meaningful than, net income as determined
in accordance with U.S. GAAP or as an indicator of the Company’s
operating performance or liquidity. Certain items excluded from
Adjusted EBITDAX are significant components in understanding and
assessing a company’s financial performance, such as a company’s
cost of capital and tax structure, as well as the historic costs of
depreciable assets, none of which are components of Adjusted
EBITDAX. Rosehill’s presentation of Adjusted EBITDAX should not be
construed as an inference that its results will be unaffected by
unusual or non-recurring items. Rosehill’s computations of Adjusted
EBITDAX may not be comparable to other similarly titled measures of
other companies.
We have provided below a reconciliation of
Adjusted EBITDAX to net income (loss), the most directly comparable
U.S. GAAP financial measure.
| |
Three Months Ended |
|
Twelve Months Ended |
| |
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
| |
2019 |
|
2018 |
|
2019 |
|
2018 |
| |
|
| |
(In thousands) |
|
Net income (loss) |
$ |
(26,646 |
) |
|
$ |
201,944 |
|
|
$ |
(30,088 |
) |
|
$ |
117,962 |
|
| Interest expense, net |
5,668 |
|
|
5,597 |
|
|
25,228 |
|
|
19,489 |
|
| Income tax expense (benefit) |
6,315 |
|
|
12,639 |
|
|
2,143 |
|
|
18,162 |
|
| Depreciation, depletion,
amortization and accretion |
34,779 |
|
|
37,031 |
|
|
137,937 |
|
|
141,815 |
|
| Unrealized (gain) loss on
commodity derivatives, net |
22,691 |
|
|
(199,446 |
) |
|
50,664 |
|
|
(108,086 |
) |
| Stock settled stock-based
compensation |
1,675 |
|
|
1,203 |
|
|
6,124 |
|
|
6,477 |
|
| Exploration costs |
12,761 |
|
|
715 |
|
|
15,917 |
|
|
4,374 |
|
| (Gain) loss on disposition of
property and equipment |
(11 |
) |
|
174 |
|
|
(11,117 |
) |
|
499 |
|
| Other non-cash (income) expense,
net |
17 |
|
|
3,719 |
|
|
(109 |
) |
|
3,667 |
|
| Adjusted EBITDAX |
$ |
57,249 |
|
|
$ |
63,576 |
|
|
$ |
196,699 |
|
|
$ |
204,359 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward-Looking Statements
This communication includes certain statements
that may constitute “forward-looking statements” for purposes of
the federal securities laws. All statements, other than statements
of historical fact included in this communication, regarding
Rosehill’s opportunities in the Delaware Basin, strategy, future
operations, expected drilling and completions activity, financial
position and liquidity, estimated results of operations, future
earnings, future capital spending plans, prospects, plans and
objectives of management are forward-looking statements. When used
in this communication, the words “could,” “believe,” “anticipate,”
“intend,” “estimate,” “expect,” “project,” “guidance,” “forecast,”
“continue” and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain such identifying words.
You should not place undue reliance on these
forward-looking statements. Although the Company believes that the
plans, intentions and expectations reflected in or suggested by the
forward-looking statements in this communication are reasonable, no
assurance can be given that these plans, intentions or expectations
will be achieved or occur, and actual results could differ
materially and adversely from those anticipated or implied by the
forward-looking statements. Some factors that could cause actual
results to differ include, but are not limited to, the Company’s
future drilling plans, uncertainty in the global markets, impact of
the COVID-19 pandemic, commodity price declines and volatility,
inflation, lack of availability of drilling and completion
equipment and services, environmental risks, drilling and other
operating risks, regulatory changes, the uncertainty inherent in
estimating oil and natural gas reserves and in projecting future
rates of production, cash flow and access to capital, the ability
to realize the projected value of the derivatives portfolio, the
ability of the Company to comply with its debt agreements and
preferred equity, the ability of the Company to continue as a going
concern, and other risks and uncertainties discussed under the
section titled “Risk Factors” in the Company’s Form 10-K, and in
other public filings with the Securities and Exchange Commission
(the “SEC”) by the Company. Many risks are beyond the Company’s
control or unpredictable at this time. For example, as noted in the
Company’s Form 10-K for the year ended December 31, 2019, pursuant
to accounting principles generally accepted in the United States,
certain conditions raise substantial doubt about our ability to
continue as a going concern within the next year and one day post
issuance of the consolidated financial statements for the year
ended December 31, 2019. For more information, please read the
Company's Form 10-K filed on April 14, 2020. The Company’s SEC
filings are available publicly on the SEC’s website at www.sec.gov.
These forward-looking statements are based on management’s current
expectations and assumptions about future events and are based on
currently available information as to the outcome and timing of
future events. All forward-looking statements speak only as of the
date of this communication. Except as otherwise required by
applicable law, the Company disclaims any duty to update any
forward-looking statements, all of which are expressly qualified by
the statements in this section, to reflect events or circumstances
after the date of this communication.
Contact Information:
|
David L. French |
Craig Owen |
|
President and Chief Executive Officer |
Senior Vice President and Chief Financial Officer |
|
281-675-3400 |
281-675-3400 |
Rose Hill Acquisition (NASDAQ:ROSE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Rose Hill Acquisition (NASDAQ:ROSE)
Historical Stock Chart
From Apr 2023 to Apr 2024
