WildHorse Resource Development Corporation (NYSE: WRD) announced
today its operating and financial results for the three months
ended September 30, 2017.
Operational highlights from third quarter 2017 include:
- Increased average daily production by
161% to 36.6 Mboe/d for the third quarter 2017 compared to 14.0
Mboe/d for the third quarter 2016
- Brought online 27 gross (27.0 net)
Eagle Ford wells and 1 gross (1.0 net) Austin Chalk well in the
third quarter of 2017
- Total of 68 gross Gen 3 Eagle Ford
wells are now online averaging above WRD’s Eagle Ford type curve of
91 boe per foot
- Brought online 3 additional wells
outside of Cawley, Gillespie & Associates’ (“CGA”) and
management’s 3P area
- Drilled 10 gross wells on the recently
acquired Anadarko/KKR acreage
- Experienced minimal downtime from
Hurricane Harvey resulting in approximately 175 boe/d of shut in
gross production during the third quarter
- Gained efficiencies on drilling and
completions with no increases in cycle times
- Achieved an average drilling time of
13.4 days from spud to rig release on all Eagle Ford rigs in the
third quarter of 2017
- Continued successful testing of Eagle
Ford refracs with two additional tests online in the third quarter
of 2017
Financial highlights from third quarter 2017 include:
- Reported a Net Loss available to common
stockholders of $17.3 million or ($0.17) per share for the third
quarter 2017. Reported Adjusted Net Income available to common
stockholders(1) of $11.6 million or $0.12 per share for the third
quarter 2017
- Reported Adjusted EBITDAX(1) of $98.4
million for the third quarter 2017 compared to $23.7 million for
the third quarter 2016
Other significant highlights and recent events include:
- Increased the borrowing base on WRD’s
revolving credit facility to $875 million from $612.5 million in
October 2017
- Issued an additional $150 million of
6.875% Senior Notes due 2025
- Added approximately 5.3 million barrels
of crude oil hedges distributed across 2017 to 2020 during the
third and fourth quarter of 2017
- Added approximately 6.1 million barrels
of West Texas Intermediate (“WTI”) to Louisiana Light Sweet (“LLS”)
basis swaps in 2017 and 2018 at a differential of $3.99 per barrel
and $3.04 per barrel, respectively during the third and fourth
quarter of 2017
“With nearly 70 Gen 3 wells now online across our Eagle Ford
position, we continue to prove our Gen 3 design and extensively
delineate our 385,000 net acre position. Furthermore, during the
third quarter, we continued to test our acreage with three
additional wells brought online outside of CGA’s and management’s
3P area. By year end, we expect several more step out wells along
with additional tests of the Austin Chalk,” said Jay Graham,
Chairman and Chief Executive Officer of WRD. “In addition, we have
been quick to bring value forward from our recent acquisitions. At
the end of the third quarter, WRD has completed a total of 29 wells
on the Clayton Williams acreage and drilled 10 wells on the
Anadarko/KKR acreage. As we look forward to 2018, we are excited by
the opportunities ahead of us and plan to continue delineating our
acreage position in a prudent manner with an emphasis on solid
leverage metrics, ample liquidity, and a strong hedge book.”
Third Quarter 2017 Results
Net Loss available to common stockholders was $17.3 million or
($0.17) per share for the third quarter 2017. WRD also reported
Adjusted Net Income available to common stockholders(1) of $11.6
million or $0.12 per share for the third quarter 2017. WRD reported
Adjusted EBITDAX(1) for the third quarter 2017 of $98.4 million
compared to $23.7 million for the third quarter 2016.
Net production increased by 161% year-over-year to 36.6 Mboe/d
for the third quarter 2017 compared to 14.0 Mboe/d for the third
quarter 2016. Third quarter 2017 net production consisted of 62%
oil, 26% natural gas, and 12% NGLs. During the third quarter, WRD
experienced minimal downtime as a result of Hurricane Harvey, which
shut in gross production of approximately 175 boe/d. Despite being
one of closest public operators to the inclement weather, WRD’s
proactive response effort mitigated the impact of the storm. Ahead
of Harvey’s landfall, WRD secured additional oil hauling capacity,
worked with midstream providers, and prepared diesel and gasoline
for WRD and its vendors at strategically located fuel supply depots
in the field. WRD’s assets sustained no damage as a result of the
storm.
Total revenues for the third quarter 2017, excluding the impact
of realized hedges, were $122.5 million compared to $33.2 million
for the third quarter 2016. Total revenues were primarily higher as
a result of increased production, acquisitions, and higher
commodity prices.
At the end of the third quarter 2017, the crude oil premium
between WTI and LLS widened resulting in favorable pricing as WRD’s
production is primarily sold at LLS pricing. However, as WRD’s
crude is marketed based on the front month contract, the improved
pricing had a minimal effect on the third quarter results. Even
without the benefit of improved LLS pricing, oil realizations were
still at the high end of our guidance at almost 100% of WTI in the
third quarter. If LLS pricing maintains the current spread to WTI,
oil price realizations as a percentage of WTI could potentially be
even higher in the fourth quarter of 2017.
Average realized prices for the quarter ending September 30,
2017 and 2016, before the effect of commodity derivatives, are
presented below:
Q3'17 Q3'16
PercentChange Oil (per Bbl) $47.89 $43.19 11% Natural
Gas (per Mcf) $2.90 $2.80 4% NGL (per BbL) $16.65 $12.06 38%
Total (per Boe) $36.30 $25.47 43%
Average realized prices for the quarter ending September 30,
2017 and 2016, after the effect of commodity derivatives, are
presented below:
Q3'17 Q3'16
PercentChange Oil (per Bbl) $49.58 $43.85 13% Natural
Gas (per Mcf) $2.99 $2.77 8% NGL (per BbL) $16.65 $12.06 38%
Total (per Boe) $37.49 $25.61 46%
LOE for the third quarter 2017 was $12.4 million, or $3.70 per
boe, compared to $2.6 million, or $2.04 per boe, for the third
quarter 2016. The year over year difference is attributable to
higher LOE on production acquired with the Clayton Williams
acquisition in December 2016 and the Anadarko/KKR acquisition in
June 2017. LOE declined 15% from $4.37 per boe in the first quarter
2017 reflecting continued efficiencies since the Clayton Williams
acquisition as well as greater produced volumes with lower cost
LOE. Third quarter 2017 LOE was also impacted by the inclusion of
the Anadarko/KKR acquisition incurring higher cost legacy
production. WRD expects to realize future LOE reductions on the
Anadarko/KKR acreage similar to the efficiencies already achieved
on the Clayton Williams acreage.
Gathering, processing and transportation expense (“GP&T”)
for the third quarter 2017 was $3.8 million, or $1.12 per boe,
compared to $1.6 million, or $1.23 per boe, in the third quarter
2016. GP&T increased quarter-over-quarter on a per unit basis
from $0.95 per boe in the second quarter of 2017. The increase
since last quarter in GP&T expense on a per unit basis is
primarily attributable to the acquisition of the Anadarko/KKR
acreage, which has higher fee gas purchasing and processing
contracts.
Taxes other than income were $6.0 million for the third quarter
2017, or $1.80 per boe, compared to $1.8 million, or $1.39 per boe,
for the third quarter 2016. Taxes other than income in the third
quarter 2017 increased primarily due to higher price realizations,
changes in commodity mix, higher ad valorem taxes associated with
increased property valuations, and Louisiana franchise taxes
incurred as a result of corporate reorganization at WRD’s initial
public offering.
General and administrative ("G&A") expense for the third
quarter 2017 was $11.0 million, or $3.28 per boe, compared to $4.9
million, or $3.82 per boe, for the third quarter 2016. During the
third quarter 2017, G&A expense included $2.4 million, or $0.72
per boe, of stock-based compensation expense and $1.0 million, or
$0.30 per boe, of acquisition related costs. Cash G&A expense
excluding acquisition related costs for the third quarter 2017 was
$7.7 million or $2.28 per boe.
Exploration expense was $4.7 million for the third quarter 2017
compared to $1.5 million for the third quarter 2016. The increase
in exploration expense was primarily due to undeveloped leasehold
impairments of $3.2 million as a result of expiring acreage leases
primarily in the Athens operating area of the North Louisiana
asset.
Net interest expense during the third quarter 2017 was $8.7
million, including amortization of deferred financing fees of
approximately $0.7 million. This compares to net interest expense
during the third quarter 2016 of $1.9 million, including
amortization of deferred financing fees of approximately $0.1
million. Capitalized interest during the third quarter 2017 was
$0.8 million. The increase in net interest expense is primarily the
result of higher levels of indebtedness due to the issuance of
senior notes in the first and third quarter of 2017.
Drilling and completion (“D&C”) capital expenditures totaled
$214.2 million in the third quarter 2017. During the third quarter,
WRD allocated approximately 92% of its D&C capex to the Eagle
Ford and 8% to North Louisiana.
(1)
Adjusted EBITDAX, Adjusted Net Income (Loss) available to common
stockholders, Cash G&A, Pro-Forma measures, and net debt are
financial measures not calculated in accordance with accounting
principles generally accepted in the United States of America
(“GAAP”). Please see the reconciliation to the most comparable
measures calculated in accordance with GAAP in the "Use of Non-GAAP
Financial Measures" section of this press release.
Operational Update
WRD reported third quarter average daily production of 36.6
Mboe/d consisting of 62% oil, 26% natural gas, and 12% NGLs. WRD
brought online a total of 28 gross (28.0 net) wells including 27
gross (27.0 net) Eagle Ford wells and 1 gross (1.0 net) Austin
Chalk well in the third quarter 2017. These new wells bring the
total number of Gen 3 Eagle Ford completions to 68 gross wells with
the average exceeding WRD’s Eagle Ford type curve of 91 boe per
foot.
During the third quarter of 2017, WRD brought online 19 gross
Eagle Ford wells on the Clayton Williams acreage bringing the total
to 29 wells. Three of the Eagle Ford wells on the Clayton Williams
acreage, the Jake #1, Jurica #1H, and Doughtie #1H, were drilled
outside of CGA’s and management’s 3P area. The Jurica/Doughtie pad,
located directly southwest of the Farmers North/Miman pad, came
online at an IP-30(2) of 674 boe/d (96% oil) and 785 boe/d (95%
oil) for each well, respectively. The Jake #1 well, previously
mentioned on the second quarter 2017 conference call, is located 7
miles north of the nearest previously completed Gen 3 well and
continues to perform in line with management’s expectations. Given
WRD’s continued delineation and development activity, WRD’s
reserves and location inventory are expected to increase at year
end. In addition, WRD also drilled 10 wells directly on the
Anadarko/KKR acreage which are expected to come online in the
fourth quarter of 2017.
WRD also brought online an Austin Chalk well, located in
Burleson County 20 miles northeast of the Winkelmann #1H, at an
IP-30(2) of 744 boe/d (32% oil, 30% NGLs, 38% natural gas)
normalized for a 6,500’ lateral. The well is showing an extremely
shallow decline and is in line with management’s expectations for
this structurally updip part of the Austin Chalk. Given encouraging
results in the Austin Chalk, at the end of the third quarter, WRD
re-allocated a rig from North Louisiana to drill two additional
Austin Chalk wells by year end. Also, during the third quarter of
2017, WRD brought online two additional Eagle Ford refracs bringing
the total to six refracs in 2017 with encouraging results on all
six wells.
In addition, WRD continues to exceed its target of 14 days from
spud to rig release with an average drilling time of 13.4 days on
all Eagle Ford rigs in the third quarter. Furthermore, WRD is
continuing to see efficiency improvements from its completions
crews and is not experiencing increased cycle times reported by
some peer operators in other basins.
For the fourth quarter of 2017, WRD expects to bring online 30
to 35 gross Eagle Ford wells, 2 gross Austin Chalk wells, and 6
gross North Louisiana wells. This is one less North Louisiana well
than previously anticipated as a rig from the area was reallocated
to the Austin Chalk at the end of the third quarter. Eagle Ford and
North Louisiana wells for the fourth quarter are currently expected
to have an average working interest of approximately 94% and 70%,
respectively. However, the average working interest may potentially
increase on the planned wells prior to completion as has been the
case in recent quarters.
(2) The initial production rates represent the peak average of the
initial production rates for the applicable consecutive days of
production.
Financial Update
During the third quarter, WRD issued an additional $150 million
of 6.875% Senior Notes due 2025. Total net debt outstanding as of
September 30, 2017 was $653.1 million, including $158.5 million of
debt outstanding under WRD’s revolving credit facility, $500.0
million of Senior Notes due 2025, and $5.4 million in cash and cash
equivalents. On October 4, 2017, in connection with its regularly
scheduled mid-year redetermination, the borrowing base on WRD’s
revolving credit facility was increased to $875 million from $612.5
million. The next redetermination of the borrowing base utilizing
year-end 2017 reserves is scheduled for April 2018. As of September
30, 2017 and pro-forma for the borrowing base increase, WRD’s
liquidity was $721.9 million consisting of $5.4 million of cash and
cash equivalents and $716.5 million of availability under its
revolving credit facility.
WRD’s net debt to annualized third quarter 2017 Adjusted EBITDAX
ratio was 1.7 times. WRD continues to target a net debt to
quarterly annualized Adjusted EBITDAX ratio of 2.0 times based on
the mid-point of guidance. WRD expects the available borrowings
under its revolving credit facility to provide sufficient liquidity
to finance anticipated working capital and capital expenditure
requirements.
Hedging Update
WRD utilizes its hedging program to mitigate financial risks and
the effects of commodity price volatility. Total hedged production
in the third quarter of 2017 was approximately 2.2 MMboe, or 65% of
third quarter production of 3.4 MMboe. As of November 8, 2017, WRD
had hedged approximately 85% of fourth quarter 2017 production on a
barrel of oil equivalent basis (using the mid-point of WRD’s annual
guidance range).
During the third quarter and early fourth quarter 2017, WRD
entered into additional commodity derivative contracts for certain
crude oil volumes. Specifically, WRD hedged approximately 5.3
million barrels of crude oil distributed across 2017 to 2020 at
approximately $50 per barrel. During the third quarter and the
beginning of the fourth quarter of 2017, WRD also hedged the spread
between WTI and LLS locking in approximately 6.1 million barrels of
production in 2017 and 2018 with basis swaps at a differential of
approximately $3.99 per barrel in 2017 and $3.04 per barrel in
2018.
The following table reflects WRD’s hedged volumes and
corresponding weighted-average price, as of November 8, 2017.
Q4 2017 2018 2019
2020 Crude Oil Hedge Contracts:
Total crude oil volumes hedged (Bbl) 2,089,724 8,453,084 4,948,218
1,101,762 Volumes hedged (Bbl/d) 22,714 23,159 13,557 3,010 Total
weighted-average price (3) $52.54 $51.74 $52.47 $50.19 Expected
crude production hedged (4)
94%
- - -
Natural Gas Hedge Contracts: Total natural gas
volumes hedged (MMBtu) 5,692,660 11,825,800 9,877,900 - Volumes
hedged (MMbtu/d) 61,877 32,399 27,063 - Total weighted-average
price (3) $3.25 $3.03 $2.81 - Expected gas production hedged (4)
89%
- - -
Total Hedge Contracts: Total hedged production
(boe) 3,038,501 10,424,051 6,594,535 1,101,762 Volumes hedged
(Boe/d) 33,027 28,559 18,067 3,010 Total weighted-average price
($/boe) (3) $42.21 $45.39 $43.58 $50.19 Expected total production
hedged (4) 85% - - -
LLS Basis Swaps Total crude oil
volumes hedged (Bbl) 1,843,600 3,728,700 - - Volumes hedged (Bbl/d)
20,039 10,216 - - Total weighted-average price - WTI (3) $3.98
$3.04 - - Expected crude production hedged (4) 83% - - - (3)
Utilizing the mid-point for collars. (4) Using the mid-point of
WRD’s 2017 guidance ranges.
Upcoming Conferences
Members of WRD’s management team intend to participate in the
following upcoming investment conferences:
- Jefferies 7th Annual Energy Conference
on Tuesday to Wednesday, November 28 – 29, 2017 (Houston,
Texas)
- Capital One 12th Annual Energy
Conference on Wednesday to Thursday, December 6 – 7, 2017 (New
Orleans, Louisiana)
Presentation materials for all conferences mentioned above will
be available on WRD’s website at www.wildhorserd.com on or prior to
the day of the respective presentation.
Quarterly Report on Form 10-Q
WRD’s financial statements and related footnotes will be
available in its Quarterly Report on Form 10-Q for the quarter
ended September 30, 2017, which will be filed with the U.S.
Securities and Exchange Commission (“SEC”) on or before November
14, 2017.
Conference Call and Webcast
WRD will host an investor conference call tomorrow morning,
November 9, 2017 at 8 a.m. Central (9 a.m. Eastern) to discuss
these operating and financial results. Interested parties are
invited to participate on the call by dialing (877) 883-0383
(Conference ID: 1125213), or (412) 902-6506 for international
calls, (Conference ID: 1125213) at least 15 minutes prior to the
start of the call or via the internet at www.wildhorserd.com. A
replay of the call will be available on WRD’s website or by phone
at (877) 344-7529 (Conference ID: 10112285) for a seven-day period
following the call.
About WildHorse Resource Development Corporation
WildHorse Resource Development Corporation is an independent oil
and natural gas company focused on the acquisition, exploration,
development and production of oil, natural gas and NGL properties
primarily in the Eagle Ford Shale in East Texas and the
Over-Pressured Cotton Valley in North Louisiana. For more
information, please visit WRD’s website at www.wildhorserd.com.
Cautionary Statements and Additional Disclosures
This press release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements can be identified by words such
as “anticipates,” “intends,” “will,” “plans,” “seeks,” “believes,”
“estimates,” “could,” “expects” and similar references to future
periods. Such forward-looking statements are subject to a number of
risks and uncertainties, many of which are beyond WRD’s control.
All statements, other than historical facts included in this press
release, that address activities, events or developments that WRD
expects or anticipates will or may occur in the future, including
such things as WRD’s future capital expenditures (including the
amount and nature thereof), business strategy and measures to
implement strategy, future drilling locations and inventory,
competitive strengths, goals, expansion and growth of WRD’s
business and operations, plans, successful consummation and
integration of acquisitions and other transactions, market
conditions, references to future success, references to intentions
as to future matters and other such matters are forward-looking
statements. All forward-looking statements speak only as of the
date of this press release. Although WRD believes that the plans,
intentions and expectations reflected in or suggested by the
forward-looking statements are reasonable, there is no assurance
that these plans, intentions or expectations will be achieved.
Therefore, actual outcomes and results could materially differ from
what is expressed, implied or forecast in such statements.
WRD cautions you that these forward-looking statements are
subject to risks and uncertainties, most of which are difficult to
predict and many of which are beyond WRD’s control, incident to the
exploration for and development, production, gathering and sale of
natural gas and oil. These risks include, but are not limited to:
commodity price volatility; inflation; lack of availability of
drilling and production equipment and services; environmental
risks; drilling and other operating risks; regulatory changes; the
uncertainty inherent in estimating natural gas and oil reserves and
in projecting future rates of production, cash flow and access to
capital; and the timing of development expenditures. Information
concerning these and other factors can be found in WRD’s filings
with the SEC, including its Forms 10-K, 10-Q and 8-K. Consequently,
all of the forward-looking statements made in this press release
are qualified by these cautionary statements and there can be no
assurances that the actual results or developments anticipated by
WRD will be realized, or even if realized, that they will have the
expected consequences to or effects on WRD, its business or
operations. WRD has no intention, and disclaims any obligation, to
update or revise any forward-looking statements, whether as a
result of new information, future results or otherwise.
Initial production rates are subject to decline over time and
should not be regarded as reflective of sustained production
levels.
Some of the above results are preliminary. Such preliminary
results are based on the most current information available to
management. As a result, WRD’s final results may vary from these
preliminary estimates. Such variances may be material; accordingly,
you should not place undue reliance on these preliminary
estimates.
Cash General and Administrative Expenses
Our presentation of cash G&A expenses is a non-GAAP measure.
We define cash G&A as total G&A determined in accordance
with GAAP less non-cash equity compensation expenses, and we may
express it on a per boe basis. We report and provide guidance on
cash G&A because we believe this measure is commonly used by
management, analysts and investors as an indicator of cost
management and operating efficiency on a comparable basis from
period to period. In addition, management believes cash G&A is
used by analysts and others in valuation, comparison and investment
recommendations of companies in the oil and natural gas industry to
allow for analysis of G&A spend without regard to stock-based
compensation programs which can vary substantially from company to
company. Cash G&A should not be considered as an alternative
to, or more meaningful than, total G&A as determined in
accordance with GAAP and may not be comparable to other similarly
titled measures of other companies.
Use of Non-GAAP Financial Measures
This press release and accompanying schedules include the
non-GAAP financial measures of Adjusted EBITDAX, Adjusted Net
Income (Loss) available to common stockholders, and Net Debt. The
accompanying appendix and schedules provide a reconciliation of
these non-GAAP financial measures to their most directly comparable
financial measure calculated and presented in accordance with GAAP.
WRD's non-GAAP financial measures should not be considered as
alternatives to GAAP measures such as Net Income, operating income,
net cash flows provided by operating activities or any other
measure of financial performance calculated and presented in
accordance with GAAP. WRD's non-GAAP financial measures may not be
comparable to similarly-titled measures of other companies because
they may not calculate such measures in the same manner as WRD
does.
WildHorse Resource Development
Corporation
Statements of Consolidated and Combined
Operations
For the Three MonthsEnded September 30,
(Amounts in $000s except per share data)
2017
2016
Revenues:
Oil sales $ 100,391 $ 19,208 Natural gas sales 14,906 12,135 NGL
sales 6,881 1,466 Other income 308 430
Total operating revenues 122,486 33,239
Operating
Expenses:
Lease operating expenses 12,435 2,625 Gathering, processing and
transportation 3,761 1,580 Gathering system operating expense 9 (19
) Taxes other than income 6,047 1,797 Depreciation, depletion and
amortization 51,843 19,418 General and administrative expenses
11,043 4,927 Exploration expense 4,749 1,453
Total expenses 89,887 31,781
Income (loss) from operations 32,599 1,458
Other Income
(Expense):
Interest expense (8,749 ) (1,856 ) Debt extinguishment costs - -
Gain (loss) on derivative instruments (40,288 ) 3,670 Other income
(expense) (12 ) (15 ) Total other income (expense)
(49,049 ) 1,799 Income (loss) before
income taxes (16,450 ) 3,257 Income tax benefit (expense)
5,646 (200 )
Net Income (loss) (10,804
) 3,057 Net income (loss) attributable to
previous owners - 5,161 Net income (loss) attributable to
predecessor - (2,104 ) Net income (loss)
available to WRD (10,804 ) - Preferred stock dividends 6,450 -
Undistributed earnings allocated to participating securities
- - Net income (loss) available to common
stockholders $ (17,254 ) $ - Earnings per share Basic
$ (0.17 ) - Diluted $ (0.17 ) - Weighted average shares
outstanding Basic 99,142 - Diluted 99,142 -
WildHorse Resource Development
Corporation
Statements of Consolidated and Combined
Cash Flows
For the Three MonthsEnded September 30,
(Amounts in $000s)
2017 2016 Cash
flows from operating activities: Net Income (Loss) $ (10,804 )
$ 3,057 Adjustments to reconcile net income (loss) to cash flows
provided by operating activities Depreciation, depletion and
amortization 51,642 19,317 Accretion of asset retirement
obligations 201 101 Dry hole expense and impairments of unproved
properties 3,247 - Amortization of debt issuance costs 685 114
(Gain) loss on derivative instruments 40,288 (3,669 ) Cash
settlements on derivative instruments 5,802 170 Accretion of senior
note discount 92 - Deferred income tax expense (6,630 ) 205 Debt
extinguishment expense - - Amortization of equity awards 2,414 -
Changes in operating assets and liabilities (15,779 )
(12,334 ) Net cash provided by (used in) operating activities
71,158 6,961
Cash flows from
investing activities: Net cash used in investing activities
(237,222 ) (18,320 )
Cash flows from
financing activities: Net cash provided by financing activities
156,840 7,312 Net Change in Cash
and Cash Equivalents $ (9,224 ) $ (4,047 ) Cash and Cash
Equivalents, Beginning of Period 14,633 5,498 Cash and Cash
Equivalents, End of Period 5,409 1,451
WildHorse Resource Development
Corporation
Operating Data
For the Three MonthsEnded September 30,
2017 2016
Production
volumes
Oil Sales (MBbls) 2,097 445 Natural Gas Sales (MMcf) 5,133 4,331
NGL Sales (MBbls) 413 122 Total (Mboe) 3,365 1,288
Total (Mboe/d) 36.6 14.0
Average unit costs
per boe
Lease operating expense $ 3.70 $ 2.04 Gathering, processing and
transportation $ 1.12 $ 1.23 Taxes other than income $ 1.80 $ 1.39
General and administrative expenses $ 3.28 $ 3.82 Cash General and
administrative expenses $ 2.58 $ 3.82 Acquisition-related expenses
$ 0.30 $ 0.04
WildHorse Resource Development
Corporation
Consolidated Balance Sheet
September 30, December 31, (Amounts in
$000s)
2017 2016 ASSETS Current Assets:
Cash and cash equivalents $ 5,409 $ 3,115 Accounts receivable, net
60,658 26,428 Short-term derivative instruments 2,537 - Prepaid
expenses and other current assets 3,156 1,633
Total Current Assets 71,760 31,176 Property &
equipment: Oil and natural gas properties 2,716,000 1,573,848 Other
property and equipment 47,105 34,344 Accumulated depreciation,
depletion and impairment (311,279 ) (200,293 ) Total
property and equipment, net 2,451,826 1,407,899 Other
noncurrent assets Restricted cash 502 886 Long-term derivative
instruments 9,667 - Debt issuance costs 2,777 2,320 Other long-term
assets - - Total Assets $ 2,536,532
$ 1,442,281
LIABILITIES AND EQUITY
Current Liabilities: Accounts payable $ 31,608 $ 21,014 Accrued
liabilities 135,895 23,371 Short-term derivative instruments 3,302
14,087 Asset retirement obligations 90 90
Total Current Liabilities 170,895 58,562 Noncurrent
Liabilities: Long-term debt 642,567 242,750 Asset retirement
obligations 14,043 10,943 Deferred tax liabilities 132,815 112,552
Long-term derivative instruments 1,426 8,091 Other long-term
liabilities 1,190 1,495 Total
liabilities 962,936 434,393 Series A Perpetual Convertible
Preferred Stock 438,861 - Stockholders' equity: Common stock
1,012 917 Additional paid-in capital 1,114,829 1,017,368
Accumulated earnings (deficit) 18,894 (10,397
) Total stockholders' equity 1,134,735 1,007,888
Total Liabilities & Equity $ 2,536,532 $ 1,442,281
WildHorse Resource Development
Corporation
Commodity Hedge Positions
The following table reflects WRD’s hedged
volumes and corresponding weighted-average price, as of November 8,
2017.
Q4 2017 2018 2019 2020 Crude
Oil Derivative Contracts: Swap contracts: Volume (Bbl)
1,302,656 6,834,488 4,537,693 1,101,762 Weighted-average fixed
price $ 51.04 $ 52.31 $ 52.69 $ 50.19 Collar contracts:
Volume (Bbl) 13,668 25,096 - - Weighted-average floor price $ 50.00
$ 50.00 - - Weighted-average ceiling price $ 62.10 $ 62.10 - -
Deferred put options Volume (Bbl) 773,400 1,593,500 410,525
- Weighted-average floor price $ 55.00 $ 49.23 $ 50.00 -
Weighted-average put premium ($4.77 ) ($4.61 ) ($5.95 ) -
LLS basis swaps Volume (Bbl) 1,843,600 3,728,700 - -
Weighted-average fixed price - WTI $ 3.98 $ 3.04 - -
Natural Gas Derivative Contracts: Swap contracts: Volume
(MMBtu) 1,909,600 11,825,800 9,877,900 - Weighted-average fixed
price $ 3.10 $ 3.03 $ 2.81 - Collar contracts: Volume
(MMBtu) 1,380,000 - - - Weighted-average floor price $ 3.00 - - -
Weighted-average ceiling price $ 3.36 - - - Deferred put
options Volume (MMBtu) 2,403,060 - - - Weighted-average floor price
$ 3.40 - - - Weighted-average put premium ($0.37 ) - - -
Calculation of Adjusted EBITDAX:
We evaluate performance based on Adjusted EBITDAX. Adjusted
EBITDAX is defined as Net Income (loss), plus interest expense;
debt extinguishment costs; income tax expense; depreciation,
depletion and amortization; impairment of goodwill and long-lived
properties; accretion of asset retirement obligations; losses on
commodity derivative contracts and cash settlements received;
losses on sale of properties; stock-based compensation;
incentive-based compensation expenses; exploration costs; provision
for environmental remediation; transaction related costs; IPO
related expenses; and other non-routine items, less interest
income; income tax benefit; gains on commodity derivative contracts
and cash settlements paid; gains on sale of assets and other
non-routine items. The following table presents WRD’s information
for the periods indicated:
Adjusted EBITDAX
For the Three MonthsEnded September 30,
(Amounts in $000s)
2017 2016 Net Income (Loss)
$ (10,804 ) $ 3,057
Add
(Deduct):
Interest expense, net 8,749 1,856 Income tax (benefit) expense
(5,646 ) 200 Depreciation, depletion and amortization 51,843 19,418
Exploration expense 4,749 1,453 (Gain) loss on derivative
instruments 40,288 (3,670 ) Cash settlements received / (paid) on
commodity derivatives 5,802 170 Stock-based compensation 2,414 -
Acquisition related costs 998 51 Initial public offering costs -
1,182 Non-cash liability amortization - -
Adjusted EBITDAX $ 98,393 $ 23,717
Calculation of Adjusted Net Income (Loss) Available to Common
Stockholders:
Adjusted Net Income (Loss) available to common stockholders is a
supplemental non-GAAP financial measure that is used by external
users of WRD’s financial statements. We define Adjusted Net Income
(Loss) available to common stockholders as Net Income (Loss)
available to common stockholders excluding the impact of certain
items including gains or losses on commodity derivative instruments
not yet settled, gains or losses on sales of properties, debt
extinguishment costs, stock-based compensation, incentive-unit
compensation expense, impairment-related expenses and the tax
effects related to these adjustments. We believe Adjusted Net
Income (Loss) available to common stockholders is useful to
investors because it provides readers with a more meaningful
measure of our profitability before recording certain items for
which the timing or amount cannot be reasonably determined.
However, this measure is provided in addition to, not as an
alternative for, and should be read in conjunction with, the
information contained in our financial statements prepared in
accordance with GAAP. The following table provides a reconciliation
of Net Income (Loss) available to common stockholders as determined
in accordance with GAAP to Adjusted Net Income (Loss) available to
common stockholders for the periods indicated:
Adjusted Net Income (Loss) available to
common stockholders
For the Three MonthsEnded September 30, 2017
(Amounts in $000s) (Basic / Diluted EPS) Net Income (Loss)
available to common stockholders $ (17,254 ) ($0.17 ) Add
(Deduct) (Gain) loss on derivative instruments 40,288 0.41
Cash settlements received / (paid) on
commodity derivatives
5,802 0.06 Stock-based compensation 2,414 0.02 Impairment of oil
and gas properties 3,247 0.03 Debt extinguishment costs -
- Adjusted income (loss) before tax effect
34,497 0.35 Tax effect related to adjustments
(18,956
)
(0.19
) Adjusted income (loss) after tax effect
15,541
0.16
Preferred stock dividend 6,450 0.07 Undistributed earnings
allocated to participating securities
-
-
Adjusted net income (loss)
21,991
0.22
Preferred stock dividend (6,450 ) (0.07 ) Undistributed adjusted
earnings allocated to participating securities
(3,917
) (0.04 ) Adjusted net income (loss) available to common
shareholders $
11,624
$
0.12
Weighted average basic and diluted shares outstanding
99,142
Calculation of Net Debt:
Net Debt is a supplemental non-GAAP financial measure that is
used by external users of WRD’s financial statements. We define Net
Debt as total debt minus cash and cash equivalents. We believe Net
Debt is useful to investors because it provides readers with a more
meaningful measure of our outstanding indebtedness. However, this
measure is provided in addition to, not as an alternative for, and
should be read in conjunction with, the information contained in
our financial statements prepared in accordance with GAAP.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171108006488/en/
WildHorse Resource Development CorporationPearce Hammond, CFA,
713-255-7094Vice President, Investor
Relationsir@wildhorserd.com
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