HighPoint Resources Corporation (the "Company" or "HighPoint")
(NYSE: HPR) today reported third quarter of 2018 financial and
operating results highlighted by strong growth in oil volumes and
EBITDAX and lower lease operating expense.
For the third quarter of 2018, the Company
reported a net loss of $29.4 million, or $0.14 per diluted share.
Adjusted net income for the third quarter of 2018 was $2.3 million,
or $0.01 per diluted share. EBITDAX for the third quarter of 2018
was $78.0 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, "I am pleased with our execution and initial
results of the Hereford program in the two full quarters since
acquisition. The development program has confirmed our acquisition
and economic model for this large, oil-weighted and rural acreage
block. We are seeing positive early indications of performance from
our initial DSU as the wells have been online for three weeks and
are producing at a current average per well rate of approximately
480 Boe/d, of which approximately 90% is oil, and continue to
increase. In addition, the early well performance from the DUCs
validates the productivity of the Hereford Field and the Company's
economic model for full field development. Two of the best
performing wells are located six miles apart and have established
strong indications of productive deliverability from east to west
across our acreage position.
"We successfully managed through mid-stream
constraints that persisted into the third quarter and delivered
financial results that were highlighted by a 14% sequential
increase in both equivalent production and oil volumes, strong
growth in EBITDAX, and lower lease operating expense. Oil
represented 63% of total equivalent production and we anticipate
that the percentage of oil volumes will continue to grow in
future quarters as the Hereford development program is expanded.
DCP's commissioning of the Mewbourn 3 gas processing facility was
completed during the quarter and reached design capacity of 200
MMcf/d in mid-September. We have strategically diversified our gas
processing exposure in Northeast ("NE") Wattenberg to other
outlets, which will approximately double our first half of 2018
processing capacity by year-end. We believe this flexibility will
limit our exposure to any future mid-stream constraints in NE
Wattenberg and mitigates our reliance on DCP.
"Our favorable oil weighting, low cost structure
and attractive oil differential allows us to deliver a peer leading
basin operating margin of $40.69 per Boe for the third quarter. We
are well positioned to generate a strong growth profile with a
dominant acreage position in the oily and rural areas of the DJ
Basin. We will continue our disciplined capital approach and
maintain ample liquidity of $567 million that supports our
development program going forward."
1 Basin operating margin is defined as the average realized
price per Boe before hedging less lease operating expense,
gathering, transportation and process expense and production tax
expense
OPERATING AND FINANCIAL RESULTS
The following table summarizes certain operating
and financial results for the third quarter of 2018 and 2017 and
for the second quarter of 2018:
|
|
|
|
|
Three Months Ended September
30, |
|
Three Months Ended June
30, |
|
2018 |
|
2017 |
|
Change |
|
2018 |
|
Change |
Combined production sales volumes (MBoe) |
2,736 |
|
|
1,920 |
|
|
43 |
% |
|
2,409 |
|
|
14 |
% |
Net cash provided by operating activities ($ millions) |
$ |
91.3 |
|
|
$ |
57.2 |
|
|
60 |
% |
|
$ |
14.6 |
|
|
525 |
% |
Discretionary cash flow ($ millions) (1) |
$ |
65.9 |
|
|
$ |
34.8 |
|
|
89 |
% |
|
$ |
51.3 |
|
|
28 |
% |
Combined realized prices with hedging (per Boe) |
$ |
41.23 |
|
|
$ |
38.78 |
|
|
6 |
% |
|
$ |
39.29 |
|
|
5 |
% |
Net income (loss) ($ millions) |
$ |
(29.4 |
) |
|
$ |
(28.8 |
) |
|
(2 |
)% |
|
$ |
(46.9 |
) |
|
37 |
% |
Per share, basic |
$ |
(0.14 |
) |
|
$ |
(0.39 |
) |
|
64 |
% |
|
$ |
(0.22 |
) |
|
36 |
% |
Per share, diluted |
$ |
(0.14 |
) |
|
$ |
(0.39 |
) |
|
64 |
% |
|
$ |
(0.22 |
) |
|
36 |
% |
Adjusted net income (loss) ($ millions) (1) |
$ |
2.3 |
|
|
$ |
(5.9 |
) |
|
*nm |
|
|
$ |
(3.2 |
) |
|
*nm |
|
Per share, basic |
$ |
0.01 |
|
|
$ |
(0.08 |
) |
|
*nm |
|
|
$ |
(0.02 |
) |
|
*nm |
|
Per share, diluted |
$ |
0.01 |
|
|
$ |
(0.08 |
) |
|
*nm |
|
|
$ |
(0.02 |
) |
|
*nm |
|
Weighted average shares outstanding, basic (in thousands) |
209,502 |
|
|
74,886 |
|
|
180 |
% |
|
209,393 |
|
|
— |
% |
Weighted average shares outstanding, diluted (in thousands)
(1) |
209,502 |
|
|
74,886 |
|
|
180 |
% |
|
209,393 |
|
|
— |
% |
EBITDAX ($ millions) (2) |
$ |
78.0 |
|
|
$ |
47.9 |
|
|
63 |
% |
|
$ |
63.1 |
|
|
24 |
% |
* Not meaningful.
- The three months ended September 30, 2018 adjusted net income
per diluted share is calculated with 210,728,243 diluted weighted
average shares outstanding.
- Discretionary cash flow, adjusted net income (loss) and EBITDAX
are non-GAAP measures. Please reference the reconciliations to GAAP
financial statements at the end of this release.
The Company reported oil, natural gas and
natural gas liquids ("NGL") production of 2.74 MMBoe for the
third quarter of 2018, which was an increase of 43% over the third
quarter of 2017. Oil volumes totaled 1.72 MMBbls or 63% of total
equivalent volumes, which was an increase of 43% over the third
quarter of 2017. Production sales volumes from NE Wattenberg
totaled 2.3 MMBoe and Hereford volumes totaled 0.4 MMBoe.
Production sales volumes were comprised of
approximately 63% oil, 20% natural gas and 17% NGLs.
Pro forma production for the first nine months
of 2018 was 7.4 MMBoe (62% oil and includes approximately 0.3 MMBoe
associated with Hereford for the first quarter of 2018) and it is
estimated that 0.5 MMBoe of production has been adversely impacted
due to mid-stream constraints. Despite DCP's addition of processing
capacity, the Company continues to be impacted by high line
pressures, which is having a modest impact on production.
For the third quarter of 2018, WTI oil prices
averaged $69.50 per barrel, Northwest Pipeline ("NWPL") natural gas
prices averaged $2.32 per MMBtu and NYMEX natural gas prices
averaged $2.91 per MMBtu. Commodity price realizations to benchmark
pricing were WTI less $2.51 per barrel of oil and NWPL less $0.73
per Mcf of gas. The NGL price averaged approximately 35% of the WTI
price per barrel.
For the third quarter of 2018, the Company had derivative
commodity swaps in place for 13,843 barrels of oil per day tied to
WTI pricing at $54.62 per barrel, 5,000 MMBtu of natural gas per
day tied to NWPL regional pricing at $2.68 per MMBtu and no hedges
in place for NGLs.
|
Three Months Ended September
30, |
|
Three Months Ended June
30, |
|
2018 |
|
2017 |
|
Change |
|
2018 |
|
Change |
Average Realized Prices before Hedging: |
|
|
|
|
|
|
|
|
|
Oil (per Bbl) |
$ |
66.96 |
|
|
$ |
46.08 |
|
|
45 |
% |
|
$ |
65.07 |
|
|
3 |
% |
Natural gas (per Mcf) |
1.59 |
|
|
2.37 |
|
|
(33 |
)% |
|
1.29 |
|
|
23 |
% |
NGLs (per Bbl) |
24.31 |
|
|
18.93 |
|
|
28 |
% |
|
20.84 |
|
|
17 |
% |
Combined (per Boe) |
48.10 |
|
|
34.99 |
|
|
37 |
% |
|
45.71 |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
Average Realized Prices with Hedging: |
|
|
|
|
|
|
|
|
|
Oil (per Bbl) |
$ |
55.92 |
|
|
$ |
51.86 |
|
|
8 |
% |
|
$ |
54.59 |
|
|
2 |
% |
Natural gas (per Mcf) |
1.64 |
|
|
2.51 |
|
|
(35 |
)% |
|
1.40 |
|
|
17 |
% |
NGLs (per Bbl) |
24.31 |
|
|
18.93 |
|
|
28 |
% |
|
20.84 |
|
|
17 |
% |
Combined (per Boe) |
41.23 |
|
|
38.78 |
|
|
6 |
% |
|
39.29 |
|
|
5 |
% |
Lease operating expense ("LOE") averaged $2.65
per Boe in the third quarter of 2018 compared to $3.08 per Boe in
the third quarter of 2017. The year-over-year reduction in LOE is
primarily a result of improved operating efficiencies, higher
production sales volumes, and disposition of higher LOE wells
in Utah.
Production tax expense averaged $4.20 per Boe in
the third quarter of 2018 compared to $2.80 per Boe in the third
quarter of 2017. Higher production tax expense was primarily the
result of higher oil prices. Production tax expense averaged
approximately 9% of revenues in the third quarter of 2018 compared
to 8% of revenues in the third quarter of 2017.
Depreciation, depletion and amortization
averaged $21.54 per Boe in the third quarter of 2018 compared to
$22.52 per Boe in the third quarter of 2017.
|
Three Months Ended September
30, |
|
Three Months Ended June
30, |
|
2018 |
|
2017 |
|
Change |
|
2018 |
|
Change |
Average Costs (per Boe): |
|
|
|
|
|
|
|
|
|
Lease operating expenses |
$ |
2.65 |
|
|
$ |
3.08 |
|
|
(14 |
)% |
|
$ |
3.15 |
|
|
(16 |
)% |
Gathering, transportation and processing
expense |
0.51 |
|
|
0.32 |
|
|
59 |
% |
|
0.42 |
|
|
21 |
% |
Production tax expenses |
4.20 |
|
|
2.80 |
|
|
50 |
% |
|
4.02 |
|
|
4 |
% |
Depreciation, depletion and amortization |
21.54 |
|
|
22.52 |
|
|
(4 |
)% |
|
21.66 |
|
|
(1 |
)% |
General and administrative expense |
4.64 |
|
|
6.51 |
|
|
(29 |
)% |
|
4.83 |
|
|
(4 |
)% |
Debt and Liquidity
At September 30, 2018, the principal debt
balance was $627.0 million, while cash and cash equivalents were
$93.0 million, resulting in net debt of $534.0 million. Cash and
cash equivalents were primarily used during the quarter to execute
on the third quarter development program.
On September 17, 2018, the Company announced
that it had entered into a new amended and restated credit
agreement for its revolving credit facility (“Facility”). The
agreement extended the maturity date of the Facility by over three
years to 2023 and increased the borrowing base and commitments by
67% to $500 million. The increase in the borrowing base is a result
of the greater value of the NE Wattenberg assets due to ongoing
development and reflects contribution from the Hereford assets. The
Company currently has no amounts drawn on the facility and has $474
million in available borrowing capacity on the Facility after
taking into account a $26 million letter of credit.
Capital Expenditures
Capital expenditures for the third quarter of
2018 totaled $124.0 million. The Company operated three drilling
rigs and capital projects included spudding 21 extended reach
lateral ("XRL") wells and placing 27 XRL wells on initial flowback.
Capital expenditures were lower than anticipated as greater than
expected rig and service-related downtime resulted in the deferral
of certain planned spuds and completions during the quarter.
Capital expenditures included $109.3 million for
drilling and completion operations, $5.8 million for leasehold, and
$8.9 million for infrastructure and corporate assets.
OPERATIONAL UPDATE
Hereford Field
Production sales volumes for the third quarter
of 2018 in the Hereford Field averaged 4,255 Boe/d (75% oil), which
is a 68% increase over the second quarter of 2018. During the third
quarter, 14 wells were spud and 8 wells were placed on flowback,
including the initial 5 wells that were drilled and completed by
the Company. Drilling operations commenced in April on DSU
11-63-14, which included 10 XRL wells (6 Niobrara and 4 Codell).
Drilling was completed in June and flowback began on the initial
four wells at the end of September (one well had mechanical issues
and is being used as an observation well). The four wells were
completed utilizing the Company's standard completion design and
modified controlled flowback methodology. Drilling and completion
costs for the four wells averaged $5.1 million, which is consistent
with cost expectations for the Hereford Field. The Company is
seeing positive early indications of performance as the wells have
been on flowback for approximately three weeks and are currently
producing at an average rate of 480 Boe/d per well, of which
approximately 90% is oil, and continue to increase.
Completion operations continue on DSU 11-63-15
(10 XRL wells) and DSU 11-64-23 (3 XRL wells) and it is anticipated
that the wells will be placed on flowback during the fourth quarter
of 2018. Drilling operations have commenced on DSU 11-63-16 (15 XRL
wells).
Flowback commenced from the nine XRL wells
drilled, but not completed, by the previous operator in June and
July, respectively. After completing two full quarters since
acquisition, early production data has confirmed the Company's
acquisition and initial development model, including high oil
content, productive deliverability across the acreage position and
expectations of completion costs. The wells have exhibited some
production variations due to a combination of tighter effective
spacing of 18 wells per DSU, mechanical issues, and certain Codell
wells being drilled as vertical offsets to Niobrara wells compared
to a standard "wine rack" development pattern. The best performing
well is located in DSU 11-63-13 on the eastern portion of the field
and has shown strong indications of performance as it reached a
peak initial rate of approximately 700 Boe/d (84% oil) from a
lateral of 8,377 feet utilizing modified controlled flowback. The
well is located adjacent to the initial development wells located
in DSU 11-63-14. The Company has also seen solid production from
the western portion of the field as one of the DUCs in DSU 11-63-18
reached a peak initial rate of approximately 620 Boe/d (90% oil)
utilizing modified controlled flowback. This early well
performance, which is located across a six mile section of the
Hereford Field, supports the Company's model for the full scale
Hereford development program.
NE Wattenberg
The Company produced an average of 25,477 Boe/d
(61% oil) in the third quarter of 2018 in NE Wattenberg,
representing a 38% increase over the third quarter of 2017. For the
third quarter of 2018, the Company drilled 7 XRL wells and placed
19 XRL wells on initial flowback. The Company continues to see
strong performance from DSU 5-61-27 (10 XRL wells), which is
located in the east-central portion of NE Wattenberg. Initial
flowback began in the second quarter and after six months of
production the wells are currently producing approximately 615
Boe/d (80% oil) per well, highlighting the resource opportunity of
the remaining 15 undeveloped DSUs in this area of the field.
MARKETING UPDATE
The Company’s NE Wattenberg gas volume allocated
to DCP progressively increased during the third quarter as a result
of DCP's Mewbourn 3 gas processing facility being commissioned in
August and reaching design capacity in September. The Company has
diversified its gas processing exposure in NE Wattenberg to other
outlets and has approximately doubled its first half 2018 capacity,
with a further increase expected in the first half of 2019. This
added flexibility mitigates the Company's reliance on DCP and
limits any local mid-stream issues in NE Wattenberg for the
foreseeable future.
FOURTH QUARTER OPERATING GUIDANCE
The Company is providing capital expenditure and
production guidance for the fourth quarter of 2018 as discussed
below.
See "Forward-Looking Statements" below.
- Capital expenditures of $120-$130 million- Incorporates
the impact of recent third-party rig and service-related downtime,
which resulted in the deferral of certain drilling and completion
activity to the first quarter of 2019
- Production sales volumes of 3.1-3.3 MMBoe
- Oil volumes of 2.0-2.1 MMBbls or approximately 64% of total
production volumes
- Lease operating expense of $8-$9 million
- General and administrative expenses of $10-$11
million
- Gathering, transportation and processing costs of $2-$3
million
COMMODITY HEDGES UPDATE
The following table summarizes our current hedge
position as of October 31, 2018:
|
Oil (WTI) Swaps |
|
Oil (WTI) Collars |
|
Natural Gas (NWPL) Swaps |
Period |
Volume Bbls/d |
|
Price $/Bbl |
|
Volume Bbls/d |
|
Floor$Bbl |
|
Ceiling$/Bbl |
|
Volume MMBtu/d |
|
Price $/MMBtu |
4Q18 |
13,806 |
|
|
$ |
54.63 |
|
|
2,000 |
|
|
$ |
60.00 |
|
|
$ |
77.27 |
|
|
5,000 |
|
|
$ |
2.68 |
|
1Q19 |
17,774 |
|
|
$ |
58.33 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
5,000 |
|
|
$ |
2.05 |
|
2Q19 |
19,250 |
|
|
$ |
59.09 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
5,000 |
|
|
$ |
2.05 |
|
3Q19 |
18,231 |
|
|
$ |
58.96 |
|
|
3,000 |
|
|
$ |
55.00 |
|
|
$ |
77.56 |
|
|
5,000 |
|
|
$ |
2.05 |
|
4Q19 |
18,212 |
|
|
$ |
58.97 |
|
|
3,000 |
|
|
$ |
55.00 |
|
|
$ |
77.56 |
|
|
5,000 |
|
|
$ |
2.05 |
|
1Q20 |
7,000 |
|
|
$ |
61.92 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
2Q20 |
7,000 |
|
|
$ |
61.92 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
3Q20 |
5,500 |
|
|
$ |
60.57 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
4Q20 |
5,500 |
|
|
$ |
60.57 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
Realized sales prices will reflect basis
differentials from the index prices to the sales location.
UPCOMING EVENTS
Third Quarter Conference Call and Webcast
The Company plans to host a conference call on
Thursday, November 1, 2018, to discuss third quarter 2018
results. The call is scheduled at 10:00 a.m. Eastern time (8:00
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 1459015. The webcast
will remain on the Company's website for approximately 7 days and a
replay of the call will be available through November 8, 2018
at (855) 859-2056 ((404) 537-3406 international) with passcode
1459015.
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 "Fourth Quarter Operating Guidance", which contains
projections for certain fourth quarter operational and financial
metrics. Additional forward-looking statements in this release
relate to, among other things, future capital expenditures, costs,
projects and opportunities; and the availability of adequate
natural gas processing capacity, future line pressures and the
timing and effect of new midstream facilities, and future
diversification of gas processing capacity.
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 the
Bill Barrett Corporation's Annual Report on Form 10-K for the year
ended December 31, 2017 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. In addition, actual results could
differ from those indicated by the forward-looking statements due
to future regulatory developments, including Proposition 112. See
our Quarterly Report on Form 10-Q for the quarter ended September
30, 2018 for additional information. 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 September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Production Data: |
|
|
|
|
|
|
|
Oil (MBbls) |
1,716 |
|
|
1,202 |
|
|
4,360 |
|
|
2,929 |
|
Natural gas (MMcf) |
3,294 |
|
|
2,274 |
|
|
8,946 |
|
|
6,084 |
|
NGLs (MBbls) |
471 |
|
|
339 |
|
|
1,207 |
|
|
936 |
|
Combined volumes (MBoe) |
2,736 |
|
|
1,920 |
|
|
7,058 |
|
|
4,879 |
|
Daily combined volumes (Boe/d) |
29,739 |
|
|
20,870 |
|
|
25,853 |
|
|
17,872 |
|
|
|
|
|
|
|
|
|
Average Sales Prices (before the effects of realized
hedges): |
Oil (per Bbl) |
$ |
66.96 |
|
|
$ |
46.08 |
|
|
$ |
64.61 |
|
|
$ |
46.52 |
|
Natural gas (per Mcf) |
1.59 |
|
|
2.37 |
|
|
1.59 |
|
|
2.48 |
|
NGLs (per Bbl) |
24.31 |
|
|
18.93 |
|
|
22.04 |
|
|
18.40 |
|
Combined (per Boe) |
48.10 |
|
|
34.99 |
|
|
45.70 |
|
|
34.54 |
|
|
|
|
|
|
|
|
|
Average Realized Sales Prices (after the effects of
realized hedges): |
Oil (per Bbl) |
$ |
55.92 |
|
|
$ |
51.86 |
|
|
$ |
54.70 |
|
|
$ |
52.18 |
|
Natural gas (per Mcf) |
1.64 |
|
|
2.51 |
|
|
1.65 |
|
|
2.56 |
|
NGLs (per Bbl) |
24.31 |
|
|
18.93 |
|
|
22.04 |
|
|
18.40 |
|
Combined (per Boe) |
41.23 |
|
|
38.78 |
|
|
39.66 |
|
|
38.04 |
|
|
|
|
|
|
|
|
|
Average Costs (per Boe): |
|
|
|
|
|
|
|
Lease operating expenses |
$ |
2.65 |
|
|
$ |
3.08 |
|
|
$ |
2.99 |
|
|
$ |
3.54 |
|
Gathering, transportation and processing
expense |
0.51 |
|
|
0.32 |
|
|
0.40 |
|
|
0.34 |
|
Production tax expenses |
4.20 |
|
|
2.80 |
|
|
3.74 |
|
|
1.87 |
|
Depreciation, depletion and amortization |
21.54 |
|
|
22.52 |
|
|
21.55 |
|
|
24.81 |
|
General and administrative expense (1) |
4.64 |
|
|
6.51 |
|
|
4.88 |
|
|
6.31 |
|
- Includes long-term cash and equity incentive compensation of
$0.82 per Boe and $1.40 per Boe for the three months ended
September 30, 2018 and 2017, respectively, and $0.84 per Boe
and $1.12 per Boe for the nine months ended September 30, 2018
and 2017, respectively.
HIGHPOINT RESOURCES
CORPORATIONConsolidated Condensed Balance
Sheets(Unaudited)
|
|
As of September 30, |
|
As of December 31, |
|
2018 |
|
2017 |
|
(in thousands) |
Assets: |
|
|
|
Cash and cash equivalents |
$ |
92,980 |
|
|
$ |
314,466 |
|
Other current assets |
71,002 |
|
|
53,197 |
|
Property and equipment, net |
1,973,869 |
|
|
1,018,880 |
|
Other noncurrent assets |
6,795 |
|
|
4,163 |
|
Total assets |
$ |
2,144,646 |
|
|
$ |
1,390,706 |
|
|
|
|
|
Liabilities and Stockholders' Equity: |
|
|
|
Current liabilities (1) |
$ |
338,832 |
|
|
$ |
148,934 |
|
Long-term debt, net of debt issuance costs |
617,006 |
|
|
617,744 |
|
Other long-term liabilities (1) |
201,011 |
|
|
25,474 |
|
Stockholders' equity |
987,797 |
|
|
598,554 |
|
Total liabilities and stockholders' equity |
$ |
2,144,646 |
|
|
$ |
1,390,706 |
|
- At September 30, 2018, the estimated fair value of all of
the Company's commodity derivative instruments was a liability of
$118.0 million, comprised of $87.5 million of current liabilities
and $30.5 million of non-current 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 September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(in thousands, except per share
amounts) |
Operating Revenues: |
|
|
|
|
|
|
|
Oil, gas and NGL production |
$ |
131,585 |
|
|
$ |
67,175 |
|
|
$ |
322,534 |
|
|
$ |
168,541 |
|
Other operating revenues, net |
(459 |
) |
|
690 |
|
|
(200 |
) |
|
926 |
|
Total operating revenues |
131,126 |
|
|
67,865 |
|
|
322,334 |
|
|
169,467 |
|
Operating Expenses: |
|
|
|
|
|
|
|
Lease operating |
7,237 |
|
|
5,919 |
|
|
21,082 |
|
|
17,287 |
|
Gathering, transportation and processing |
1,398 |
|
|
620 |
|
|
2,829 |
|
|
1,644 |
|
Production tax |
11,504 |
|
|
5,384 |
|
|
26,363 |
|
|
9,140 |
|
Exploration |
19 |
|
|
18 |
|
|
39 |
|
|
48 |
|
Impairment, dry hole costs and abandonment |
184 |
|
|
261 |
|
|
609 |
|
|
8,336 |
|
(Gain) Loss on sale of properties |
74 |
|
|
— |
|
|
1,046 |
|
|
(92 |
) |
Depreciation, depletion and amortization |
58,946 |
|
|
41,732 |
|
|
152,106 |
|
|
119,409 |
|
Unused commitments |
4,574 |
|
|
4,557 |
|
|
13,684 |
|
|
13,687 |
|
General and administrative (1) |
12,696 |
|
|
12,496 |
|
|
34,427 |
|
|
30,788 |
|
Merger transaction expense |
100 |
|
|
— |
|
|
6,140 |
|
|
— |
|
Other operating expenses, net |
(764 |
) |
|
(282 |
) |
|
(716 |
) |
|
(1,610 |
) |
Total operating expenses |
95,968 |
|
|
70,705 |
|
|
257,609 |
|
|
198,637 |
|
Operating Income (Loss) |
35,158 |
|
|
(2,840 |
) |
|
64,725 |
|
|
(29,170 |
) |
Other Income and Expense: |
|
|
|
|
|
|
|
Interest and other income |
451 |
|
|
332 |
|
|
1,843 |
|
|
1,030 |
|
Interest expense |
(13,165 |
) |
|
(13,926 |
) |
|
(39,348 |
) |
|
(44,014 |
) |
Commodity derivative gain (loss) (2) |
(51,547 |
) |
|
(12,408 |
) |
|
(128,166 |
) |
|
19,654 |
|
Gain (loss) on extinguishment of debt |
(257 |
) |
|
— |
|
|
(257 |
) |
|
(7,904 |
) |
Total other income and expense |
(64,518 |
) |
|
(26,002 |
) |
|
(165,928 |
) |
|
(31,234 |
) |
Income (Loss) before Income Taxes |
(29,360 |
) |
|
(28,842 |
) |
|
(101,203 |
) |
|
(60,404 |
) |
(Provision for) Benefit from Income Taxes |
— |
|
|
— |
|
|
— |
|
|
— |
|
Net Income (Loss) |
$ |
(29,360 |
) |
|
$ |
(28,842 |
) |
|
$ |
(101,203 |
) |
|
$ |
(60,404 |
) |
|
|
|
|
|
|
|
|
Net Income (Loss) per Common Share |
|
|
|
|
|
|
|
Basic |
$ |
(0.14 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.56 |
) |
|
$ |
(0.81 |
) |
Diluted |
$ |
(0.14 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.56 |
) |
|
$ |
(0.81 |
) |
Weighted Average Common Shares Outstanding |
|
|
|
|
|
|
|
Basic |
209,502 |
|
|
74,886 |
|
|
181,145 |
|
|
74,743 |
|
Diluted |
209,502 |
|
|
74,886 |
|
|
181,145 |
|
|
74,743 |
|
- Includes long-term cash and equity incentive compensation of
$2.3 million and $2.7 million for the three months ended
September 30, 2018 and 2017, respectively, and $5.9 million
and $5.5 million for the nine months ended September 30, 2018
and 2017, respectively.
- 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 September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(in thousands) |
Included in commodity derivative gain (loss): |
|
|
|
|
|
|
|
Realized gain (loss) on derivatives (1) |
$ |
(18,780 |
) |
|
$ |
7,263 |
|
|
$ |
(42,628 |
) |
|
$ |
17,062 |
|
Prior year unrealized (gain) loss transferred to
realized (gain) loss (1) |
4,920 |
|
|
(1,036 |
) |
|
20,940 |
|
|
(2,114 |
) |
Unrealized gain (loss) on derivatives (1) |
(37,687 |
) |
|
(18,635 |
) |
|
(106,478 |
) |
|
4,706 |
|
Total commodity derivative gain (loss) |
$ |
(51,547 |
) |
|
$ |
(12,408 |
) |
|
$ |
(128,166 |
) |
|
$ |
19,654 |
|
- Realized and unrealized gains and losses on commodity
derivatives are presented herein as separate line items but are
combined for a total commodity derivative gain (loss) in the
Consolidated Statements of Operations. This separate presentation
is a non-GAAP measure. Management believes the separate
presentation of the realized and unrealized commodity derivative
gains and losses is useful because the realized cash settlement
portion provides a better understanding of the Company's hedge
position. The Company also believes that this disclosure
allows for a more accurate comparison to its peers.
|
HIGHPOINT RESOURCES
CORPORATIONConsolidated Statements of Cash
Flows(Unaudited) |
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(in thousands) |
Operating Activities: |
|
|
|
|
|
|
|
Net income (loss) |
$ |
(29,360 |
) |
|
$ |
(28,842 |
) |
|
$ |
(101,203 |
) |
|
$ |
(60,404 |
) |
Adjustments to reconcile to net cash provided by
operations: |
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
58,946 |
|
|
41,732 |
|
|
152,106 |
|
|
119,409 |
|
Impairment, dry hole costs and abandonment |
184 |
|
|
261 |
|
|
609 |
|
|
8,336 |
|
Unrealized derivative (gain) loss |
32,767 |
|
|
19,672 |
|
|
85,538 |
|
|
(2,592 |
) |
Incentive compensation and other non-cash
charges |
2,323 |
|
|
1,480 |
|
|
5,813 |
|
|
5,134 |
|
Amortization of deferred financing costs |
598 |
|
|
510 |
|
|
1,729 |
|
|
1,665 |
|
(Gain) loss on sale of properties |
74 |
|
|
— |
|
|
1,046 |
|
|
(92 |
) |
(Gain) loss on extinguishment of debt |
257 |
|
|
— |
|
|
257 |
|
|
7,904 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
(4,592 |
) |
|
(11,679 |
) |
|
(8,789 |
) |
|
(9,252 |
) |
Prepayments and other assets |
(332 |
) |
|
397 |
|
|
(1,421 |
) |
|
(980 |
) |
Accounts payable, accrued and other liabilities |
10,746 |
|
|
25,656 |
|
|
(25,287 |
) |
|
20,071 |
|
Amounts payable to oil and gas property owners |
8,272 |
|
|
3,698 |
|
|
33,804 |
|
|
6,371 |
|
Production taxes payable |
11,415 |
|
|
4,299 |
|
|
15,983 |
|
|
(187 |
) |
Net cash provided by (used in) operating
activities |
$ |
91,298 |
|
|
$ |
57,184 |
|
|
$ |
160,185 |
|
|
$ |
95,383 |
|
Investing Activities: |
|
|
|
|
|
|
|
Additions to oil and gas properties, including
acquisitions |
(101,798 |
) |
|
(56,552 |
) |
|
(322,614 |
) |
|
(160,788 |
) |
Additions of furniture, equipment and other |
(146 |
) |
|
(67 |
) |
|
(616 |
) |
|
(268 |
) |
Repayment of debt associated with merger, net of
cash acquired |
— |
|
|
— |
|
|
(53,357 |
) |
|
— |
|
Proceeds from sale of properties and other investing
activities |
(519 |
) |
|
(97 |
) |
|
11 |
|
|
(712 |
) |
Net cash provided by (used in) investing
activities |
$ |
(102,463 |
) |
|
$ |
(56,716 |
) |
|
$ |
(376,576 |
) |
|
$ |
(161,768 |
) |
Financing Activities: |
|
|
|
|
|
|
|
Proceeds from debt |
— |
|
|
— |
|
|
— |
|
|
275,000 |
|
Principal payments on debt |
(118 |
) |
|
(115 |
) |
|
(350 |
) |
|
(322,228 |
) |
Proceeds from sale of common stock, net of offering
costs |
1 |
|
|
— |
|
|
1 |
|
|
(298 |
) |
Deferred financing costs and other |
(3,117 |
) |
|
(33 |
) |
|
(4,746 |
) |
|
(6,045 |
) |
Net cash provided by (used in) financing
activities |
$ |
(3,234 |
) |
|
$ |
(148 |
) |
|
$ |
(5,095 |
) |
|
$ |
(53,571 |
) |
Increase (Decrease) in Cash and Cash Equivalents |
(14,399 |
) |
|
320 |
|
|
(221,486 |
) |
|
(119,956 |
) |
Beginning Cash and Cash Equivalents |
107,379 |
|
|
155,565 |
|
|
314,466 |
|
|
275,841 |
|
Ending Cash and Cash Equivalents |
$ |
92,980 |
|
|
$ |
155,885 |
|
|
$ |
92,980 |
|
|
$ |
155,885 |
|
|
HIGHPOINT RESOURCES
CORPORATIONReconciliation of Discretionary Cash
Flow, Adjusted Net Income (Loss) and
EBITDAX(Unaudited) |
|
Discretionary Cash Flow Reconciliation |
|
|
|
|
|
|
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Net Cash Provided by (Used in) Operating Activities |
$ |
91,298 |
|
|
$ |
57,184 |
|
|
$ |
160,185 |
|
|
$ |
95,383 |
|
Adjustments to reconcile to discretionary cash flow: |
|
|
|
|
|
|
|
Exploration expense |
19 |
|
|
18 |
|
|
39 |
|
|
48 |
|
Merger transaction expense |
100 |
|
|
— |
|
|
6,140 |
|
|
— |
|
Changes in working capital |
(25,509 |
) |
|
(22,371 |
) |
|
(14,290 |
) |
|
(16,023 |
) |
Discretionary Cash Flow |
$ |
65,908 |
|
|
$ |
34,831 |
|
|
$ |
152,074 |
|
|
$ |
79,408 |
|
Adjusted Net Income (Loss) Reconciliation
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except per share
amounts) |
Net Income (Loss) |
$ |
(29,360 |
) |
|
$ |
(28,842 |
) |
|
$ |
(101,203 |
) |
|
$ |
(60,404 |
) |
Provision for (Benefit from) income taxes |
— |
|
|
— |
|
|
— |
|
|
— |
|
Income (Loss) before income taxes |
(29,360 |
) |
|
(28,842 |
) |
|
(101,203 |
) |
|
(60,404 |
) |
|
|
|
|
|
|
|
|
Adjustments to net income (loss): |
|
|
|
|
|
|
|
Unrealized derivative (gain) loss |
32,767 |
|
|
19,672 |
|
|
85,538 |
|
|
(2,592 |
) |
Impairment expense |
— |
|
|
— |
|
|
— |
|
|
8,010 |
|
(Gain) loss on sale of properties |
74 |
|
|
— |
|
|
1,046 |
|
|
(92 |
) |
(Gain) loss on extinguishment of debt |
257 |
|
|
— |
|
|
257 |
|
|
7,904 |
|
One-time item: |
|
|
|
|
|
|
|
Merger transaction expense |
100 |
|
|
— |
|
|
6,140 |
|
|
— |
|
(Income) expense related to properties sold |
(764 |
) |
|
(282 |
) |
|
(716 |
) |
|
(1,610 |
) |
Adjusted Income (Loss) before income taxes |
3,074 |
|
|
(9,452 |
) |
|
(8,938 |
) |
|
(48,784 |
) |
Adjusted (provision for) benefit from income taxes
(1) |
(757 |
) |
|
3,549 |
|
|
2,202 |
|
|
18,460 |
|
Adjusted Net Income (Loss) |
$ |
2,317 |
|
|
$ |
(5,903 |
) |
|
$ |
(6,736 |
) |
|
$ |
(30,324 |
) |
Per share, diluted |
$ |
0.01 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.41 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 September
30, |
|
Nine Months Ended September
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Net Income (Loss) |
$ |
(29,360 |
) |
|
$ |
(28,842 |
) |
|
$ |
(101,203 |
) |
|
$ |
(60,404 |
) |
Adjustments to reconcile to EBITDAX: |
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
58,946 |
|
|
41,732 |
|
|
152,106 |
|
|
119,409 |
|
Impairment, dry hole and abandonment expense |
184 |
|
|
261 |
|
|
609 |
|
|
8,336 |
|
Exploration expense |
19 |
|
|
18 |
|
|
39 |
|
|
48 |
|
Unrealized derivative (gain) loss |
32,767 |
|
|
19,672 |
|
|
85,538 |
|
|
(2,592 |
) |
Incentive compensation and other non-cash
charges |
2,323 |
|
|
1,480 |
|
|
5,813 |
|
|
5,134 |
|
Merger transaction expense |
100 |
|
|
— |
|
|
6,140 |
|
|
— |
|
(Gain) loss on sale of properties |
74 |
|
|
— |
|
|
1,046 |
|
|
(92 |
) |
(Gain) loss on extinguishment of debt |
257 |
|
|
— |
|
|
257 |
|
|
7,904 |
|
Interest and other income |
(451 |
) |
|
(332 |
) |
|
(1,843 |
) |
|
(1,030 |
) |
Interest expense |
13,165 |
|
|
13,926 |
|
|
39,348 |
|
|
44,014 |
|
EBITDAX |
$ |
78,024 |
|
|
$ |
47,915 |
|
|
$ |
187,850 |
|
|
$ |
120,727 |
|
Discretionary cash flow, adjusted net income
(loss) and EBITDAX 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
performance and, in the case of discretionary cash flow, liquidity.
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)
Historical Stock Chart
From May 2024 to Jun 2024
HighPoint Resources (NYSE:HPR)
Historical Stock Chart
From Jun 2023 to Jun 2024