Mid-Con Energy Partners, LP (NASDAQ: MCEP) (“Mid-Con Energy” or the
“Partnership”) announces operating and financial results for the
third quarter ended September 30, 2018.
“We are pleased to report that the third quarter of 2018 showed
continued growth and improvement across almost all areas of the
Partnership,” commented Jeff Olmstead, President and CEO. “We
continue to focus on improving our balance sheet, optimizing our
capital allocation, and building our inventory of future projects.
As we announced previously, we used some of our available liquidity
during the quarter to add several new projects in Wyoming and
Oklahoma at acquisition prices that resulted in our leverage ratio
covenant continuing to improve. Production during the quarter grew
by 23%, compared to the previous quarter, due to these recent
acquisitions and results from our capital spending. Adjusted EBITDA
increased, resulting in our leverage ratio covenant, as calculated
by our lenders, decreasing to 2.86X for the period ending September
30, 2018.”
THIRD QUARTER 2018 SUMMARY
- Closed on the acquisition of multiple oil and gas properties in
Oklahoma in July 2018 for a purchase price of $8.3 million, subject
to customary post-closing adjustments and the resolution of certain
title defects. The properties consist of approximately 1,084 MBoe
in proved developed producing reserves as of the end of the second
quarter of 2018, with average daily net production of 223 Boe/d
during May 2018.
- Closed the Worland acquisition in July 2018 for a purchase
price of $5.0 million, subject to customary post-closing
adjustments. The properties consist of approximately 1,071 MBoe in
proved developed producing reserves as of the end of the second
quarter of 2018, with average net production of 544 Boe/d during
May 2018.
- Closed the Wyoming acquisition in July 2018 for a purchase
price of $1.0 million, subject to customary post-closing
adjustments. The properties consist of large grassroots waterflood
prospects in the Powder River Basin.
- Average daily production of 3,609 Boe/d, an increase of 23.0%
sequentially and an increase of 3.1% year-over-year.
- Realized prices per Boe, inclusive of cash settlements from
matured derivatives and premiums paid, averaged $49.59/Boe, a
decrease of 5.6% sequentially and an increase of 23.3%
year-over-year.
- Lease operating expenses (“LOE”) of $6.7 million, an increase
of 26.7% sequentially and an increase of 8.7% year-over-year.
- Net loss of $3.3 million in the third quarter of 2018, a
decrease of 51.1% sequentially and a decrease of 57.7%
year-over-year.
- Adjusted EBITDA of $7.5 million, a 12.7% increase sequentially
and a 91.7% increase year-over-year.
- As of September 30, 2018, we had $96 million in outstanding
debt, an increase of $9.0 million from June 30, 2018, and a
decrease of $3.0 million from the beginning of the year. Our
Debt/EBITDA, as calculated by our credit agreement, was 2.86x, down
from 3.14x for the previous quarter. (1)
- The Partnership spent excess cash on $2.3 million in capital
expenditures (“CAPEX”) to drill three producing wells, performed
two recompletions, six capital workovers, and re-entered one
plugged well to re-establish production.
(1) Our Credit Agreement calls for us to calculate our leverage
ratio covenant for the period beginning October 1, 2017 on an
annualized basis until we reach September 30, 2018. At that point
in time the calculation returns to a trailing-twelve-month test.
This calculation also includes certain pro-forma adjustments for
acquisitions and divestitures during the calculation period.
The following table reflects selected unaudited operating and
financial results for the third quarter of 2018, compared to the
second quarter of 2018 and the third quarter of 2017. Mid-Con
Energy’s unaudited condensed consolidated financial statements are
included at the end of this press release.
|
|
Three Months
Ended |
|
|
|
September
30, |
|
|
June 30, |
|
|
September
30, |
|
($ in thousands) |
|
2018 |
|
|
2018 |
|
|
2017 |
|
Average net daily production (Boe/d)(1) |
|
|
3,609 |
|
|
|
2,934 |
|
|
|
3,500 |
|
Oil & natural gas sales including cash settlements from matured
derivatives, net of premiums(2) |
|
$ |
16,462 |
|
|
$ |
14,014 |
|
|
$ |
12,951 |
|
Net loss |
|
$ |
(3,349 |
) |
|
$ |
(6,855 |
) |
|
$ |
(7,921 |
) |
Adjusted EBITDA(3) |
|
$ |
7,475 |
|
|
$ |
6,630 |
|
|
$ |
3,899 |
|
(1) Production volumes in Boe equivalents calculated at a Btu
conversion rate of six Mcf per Bbl.(2) Net premiums include those
incurred previously, or upon settlement, that are attributable to
instruments that settled during the period.(3) Non-GAAP financial
measure. Please refer to the related disclosure and reconciliation
of net income (loss) to Adjusted EBITDA included in this press
release.
THIRD QUARTER 2018
RESULTSProduction - Production for the third quarter of
2018 was 332 MBoe, or 3,609 Boe/d. On a daily basis, this
represented a 23.0% increase sequentially and a 3.1% increase
year-over-year. The sequential increase was primarily due to
acquisitions in Oklahoma and Wyoming during the third quarter 2018.
The year-over-year increase was primarily due to acquisitions
during 2018, partially offset by the sale of our Southern Oklahoma
assets in December 2017.
Price Realizations - Oil and natural gas sales
were $19.1 million in the third quarter of 2018, or $57.67/Boe. On
a per Boe basis, this represented a 4.9% decrease sequentially and
a 33.0% increase year-over-year. Cash settlements paid for matured
derivatives, inclusive of net premiums, were $2.7 million in the
third quarter of 2018, or $8.08/Boe. Cash settlements paid for
matured derivatives, inclusive of net premiums, were $8.17/Boe in
the second quarter of 2018. Cash settlements paid for matured
derivatives, inclusive of net premiums, were $3.15/Boe in the third
quarter of 2017. The resulting realized prices, after incorporating
cash settlements from matured derivatives, inclusive of net
premiums, were $49.59/Boe in the third quarter of 2018, $52.49/Boe
in the second quarter of 2018, and $40.22/Boe in the third quarter
of 2017. The sequential decrease in realized prices was due to
lower oil quality in Worland and higher differentials in our other
Wyoming and Texas properties. This decrease was partially offset by
higher WTI prices and higher average derivative pricing.
Lease Operating Expenses - LOE was $6.7 million
in the third quarter of 2018, representing a 26.7% increase from
the second quarter of 2018 and an increase of 8.7% from the third
quarter of 2017. LOE in the third quarter of 2018 was $20.04/Boe,
an increase of 1.9% sequentially and an increase of 5.4%
year-over-year. The sequential and year-over-year increase on an
LOE/Boe basis is primarily due to higher lifting costs in acquired
assets.
Production Taxes - Production taxes in the third
quarter of 2018 were $1.2 million, or $3.48/Boe, reflecting an
effective tax rate of 6.1%. Production taxes in the second quarter
of 2018 were $1.0 million, or $3.61/Boe, for an effective tax rate
of 6.0%. Production taxes in the third quarter of 2017 were $0.9
million, or $2.66/Boe, reflecting an effective tax rate of 6.1%.
The increase in effective tax rate sequentially was primarily due
to the acquisition of production in areas with higher production
tax rates.
Impairment Expense – There was no impairment
expense recorded for the third quarter 2018. For the second quarter
of 2018, we recorded $1.0 million of non-cash impairment expense.
For the third quarter of 2017, we recorded $4.9 million of non-cash
impairment expense.
Depreciation, Depletion and Amortization
Expenses (“DD&A”) - DD&A for the third quarter of 2018 was
$4.8 million, or $14.49/Boe. On a per Boe basis, DD&A increased
14.1% from the second quarter of 2018 and increased 7.3% from the
third quarter of 2017. The sequential and year-over-year increase
was primarily due to the net impact of the Oklahoma and Wyoming
acquisitions and Southern Oklahoma divestiture.
General and Administrative Expenses (“G&A”)
- G&A for the third quarter of 2018 was $1.5 million, or
$4.50/Boe, and included $0.3 million, or $0.91/Boe, of non-cash
equity-based compensation expense related to the Partnership’s Long
Term Incentive Program. G&A for the second quarter of 2018 was
$1.4 million, or $5.09/Boe and included $0.1 million, or $0.48/Boe,
of non-cash equity-based compensation expense related to the
Partnership’s Long Term Incentive Program. G&A for the third
quarter of 2017 was $1.2 million, or $3.69/Boe, and included $0.1
million, or $0.23/Boe, in non-cash equity-based compensation
expense related to the Partnership’s Long Term Incentive Program.
Excluding non-cash equity based compensation, G&A was
consistent with the second quarter of 2018 and the third quarter of
2017.
Net Interest Expense - Net interest expense for
the third quarter of 2018 was $1.6 million compared to $1.4 million
for the second quarter of 2018 and $1.6 million for the third
quarter of 2017. Sequentially, the higher net interest expense is
primarily due to rising underlying market rates and higher
borrowings outstanding. The year-over-year net interest expense
remained flat due to lower borrowings outstanding that were offset
by rising underlying market rates. The average effective interest
rate for the third quarter of 2018 was 5.6%. For the second quarter
2018, the average effective interest rate was 5.2%. For the third
quarter of 2017, average effective interest rate was 4.0%.
Net Loss - For the third quarter of 2018,
Mid-Con Energy reported a net loss of $3.3 million. Net loss per
limited partner unit was $0.14 (basic and diluted) based on the
weighted average limited partner units outstanding during the
period of 30.4 million (basic and diluted). Net loss for the second
quarter of 2018 was $6.9 million, or $0.26 (basic and diluted) per
limited partner unit, based on a weighted average of 30.3 million
(basic and diluted) limited partner units outstanding during the
period. Net loss for the third quarter of 2017 was $7.9 million, or
per limited partner unit of $0.29 (basic and diluted), based on a
weighted average limited partner units of 30.0 million (basic and
diluted). The positive sequential variance was primarily
attributable to increased production and lower impairment expense,
offset by lower realized commodity prices and higher operating
expenses. The positive variance year-over-year was primarily
attributable to an increase in realized commodity prices and lower
impairment expense.
Adjusted EBITDA - Adjusted EBITDA, a non-GAAP
measure, for the third quarter of 2018 was $7.5 million, or
$22.52/Boe. Adjusted EBITDA was $24.83/Boe in the second quarter of
2018 and $12.11/Boe in the third quarter of 2017. The sequential
decrease in Adjusted EBITDA per Boe, was primarily due to higher
basis differentials in Wyoming and Texas and higher lifting costs
in acquired assets, partially offset by higher production. The
year-over-year increase in Adjusted EBITDA, on a per Boe basis, was
primarily due to higher commodity prices.
OKLAHOMA ACQUISITIONOn July 2,
2018, we acquired multiple oil and natural gas properties located
in Oklahoma for a purchase price of $8.3 million, subject to
customary post-closing sale price adjustments and the resolution of
certain title defects. The effective date of the acquisition was
July 1, 2018. The properties consist of approximately 1,084 MBoe in
proved developed producing reserves as of the end of the second
quarter of 2018, with average daily net production of 223 Boe/d
during May 2018.
WORLAND ACQUISITIONOn July 27,
2018, we acquired multiple oil and natural gas properties and
mid-stream assets located in Washakie County, Wyoming for a
purchase price of $5.0 million, subject to customary post-closing
sale price adjustments. The effective date of the acquisition was
January 1, 2018. The properties consist of approximately 1,071 MBoe
in proved developed producing reserves as of the end of the second
quarter of 2018, with average daily net production of 544 Boe/d
during May 2018.
WYOMING ACQUISITIONOn July 10,
2018, we acquired multiple oil and natural gas properties located
in Campbell County, Wyoming, for a purchase price of $1.0 million,
subject to customary post-closing sale price adjustments. The
effective date of the acquisition was July 1, 2018. The properties
consist of large grassroots waterflood prospects located in the
Powder River Basin.
LIQUIDITYAt September 30, 2018,
the Partnership’s total liquidity of $28.1 million consisted of
$0.1 million of cash and $28 million of available borrowings under
its revolving credit facility, net of $1.0 million outstanding
standby letter of credit. At November 5, 2018 the Partnership’s
total liquidity of $29.5 million consisted of $0.5 million of cash
and $29.0 million of available borrowings under its revolving
credit facility, net of $1.0 million outstanding standby letters of
credit.
HEDGING SUMMARYMid-Con Energy
enters into various commodity derivative contracts intended to
achieve more predictable cash flows by reducing the Partnership’s
exposure to short-term fluctuations in oil prices. We believe this
risk management strategy will serve to secure a portion of our
revenues and, by retaining some opportunity to participate in
upward price movements, may also enable us to realize higher
revenues during periods when prices rise.
As of November 5, 2018, the following table reflects volumes
of Mid-Con Energy’s production hedged by commodity derivative
contracts, with the corresponding prices at which the production is
hedged:
OIL HEDGES |
|
4Q18 |
|
|
1Q19 |
|
|
|
|
2Q19 |
|
|
|
|
3Q19 |
|
|
|
|
4Q19 |
|
|
|
|
1Q20 |
|
|
|
|
2Q20 |
|
|
|
|
3Q20 |
|
Collar Volume (Bbl/d) |
|
|
1,141 |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
Call Strike Price ($/Bbl) |
|
$ |
53.13 |
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
Put Strike Price ($/Bbl) |
|
$ |
43.57 |
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WTI Swap Volume (Bbl/d) |
|
|
467 |
|
|
|
1,938 |
|
|
|
|
|
1,798 |
|
|
|
|
|
1,720 |
|
|
|
|
|
1,664 |
|
|
|
|
|
1,646 |
|
|
|
|
|
1,607 |
|
|
|
|
|
1,554 |
|
Swap Price ($/Bbl) |
|
$ |
54.19 |
|
|
$ |
56.24 |
|
|
|
|
$ |
56.15 |
|
|
|
|
$ |
56.10 |
|
|
|
|
$ |
56.05 |
|
|
|
|
$ |
55.17 |
|
|
|
|
$ |
55.17 |
|
|
|
|
$ |
54.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Put Volume (Bbl/d)(1) |
|
|
326 |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
Put Strike Price ($/Bbl)(1) |
|
$ |
45.00 |
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Hedged Volume (Bbl/d) |
|
|
1,934 |
|
|
|
1,938 |
|
|
|
|
|
1,798 |
|
|
|
|
|
1,720 |
|
|
|
|
|
1,664 |
|
|
|
|
|
1,646 |
|
|
|
|
|
1,607 |
|
|
|
|
|
1,554 |
|
Floor Strike Price ($/Bbl) |
|
$ |
46.38 |
|
|
$ |
56.24 |
|
|
|
|
$ |
56.15 |
|
|
|
|
$ |
56.10 |
|
|
|
|
$ |
56.05 |
|
|
|
|
$ |
55.17 |
|
|
|
|
$ |
55.17 |
|
|
|
|
$ |
54.06 |
|
% Hedged(2) |
|
|
63 |
% |
|
|
63 |
% |
|
|
|
|
59 |
% |
|
|
|
|
56 |
% |
|
|
|
|
54 |
% |
|
|
|
|
54 |
% |
|
|
|
|
52 |
% |
|
|
|
|
51 |
% |
(1) Deferred premium puts include premiums that are to be paid
monthly as the contracts settle (refer to our SEC filings for
additional details).(2) Estimated percent hedged based on the
mid-point of annual 2018 Boe production guidance updated
11/05/2018, multiplied by an approximate 93% oil weighting based on
third quarter 2018 reported production volumes.
2018 GUIDANCEThe following
outlook is subject to all the cautionary statements and limitations
described under the “Forward-Looking Statements” caption at the end
of this press release. These estimates and assumptions reflect
management’s best judgment based on current and anticipated market
conditions and other factors. Although we believe such estimates
and assumptions to be reasonable, they are inherently uncertain and
involve a number of risks and uncertainties that are beyond our
control.
FY2018 Guidance as of
11/05/2018 |
|
2018 |
Net production (Boe/d)(1) |
|
3,200 - 3,400 |
Lease operating expenses per Boe |
|
$20.00 - $21.00 |
Production taxes (% of total revenue) |
|
6.50% - 7.00% |
Estimated capital expenditures |
|
$8.7 MM |
(1) Production volumes in Boe equivalents calculated at a
rate of six Mcf per Bbl.
THIRD QUARTER 2018 CONFERENCE
CALLAs announced on October 24, 2018, Mid-Con Energy’s
management will host a conference call on Tuesday, November 6,
2018, at 9:00 a.m. ET. Interested parties are invited to
participate via telephone by dialing 1-877-847-5946 (Conference ID:
5076536) at least five minutes prior to the scheduled start time of
the call, or via webcast by clicking on "Events &
Presentations” in the investor relations section of the Mid-Con
Energy website at www.midconenergypartners.com.
A replay of the conference call will be
available through November 13, 2018, by dialing 1-855-859-2056
(Conference ID: 5076536). Additionally, a webcast archive will be
available at www.midconenergypartners.com.
ABOUT MID-CON ENERGY PARTNERS,
LPMid-Con Energy is a publicly held Delaware limited
partnership formed in July 2011 to own, acquire, and develop
producing oil and natural gas properties in North America, with a
focus on Enhanced Oil Recovery. Mid-Con Energy’s core areas of
operation are located in Oklahoma, Texas, and Wyoming. For more
information, please visit Mid-Con Energy’s website at
www.midconenergypartners.com.
FORWARD-LOOKING STATEMENTSThis
press release includes “forward-looking statements” — that is,
statements related to future, not past, events within meaning of
the federal securities laws. Forward-looking statements are based
on current expectations and include any statement that does not
directly relate to a current or historical fact. In this context,
forward-looking statements often address expected future business
and financial performance, and often contain words such as
“anticipate,” “believe,” “estimate,” “intend,” “expect,” “plan,”
“project,” “should,” “goal,” “forecast,” “guidance,” “could,”
“may,” “continue,” “might,” “potential,” “scheduled,” “pursue,”
“target,” “will” and the negative of such terms or other comparable
terminology. These forward-looking statements involve certain risks
and uncertainties and ultimately may not prove to be accurate.
Actual results and future events could differ materially from those
anticipated in such statements. For further discussion of risks and
uncertainties, you should refer to Mid-Con Energy’s filings with
the Securities and Exchange Commission (“SEC”) available at
www.midconenergypartners.com or www.sec.gov. Mid-Con Energy
undertakes no obligation and does not intend to update these
forward-looking statements to reflect events or circumstances
occurring after this press release. You are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. All forward-looking
statements are qualified in their entirety by this cautionary
statement and our SEC filings. Please see the risks and
uncertainties detailed in the “Forward-Looking Statements” and
“Risk Factors” sections of our Annual Report on Form 10-K for the
year ended December 31, 2017, and in other documents and reports we
file from time to time with the SEC.
Mid-Con Energy Partners, LP and
subsidiariesCondensed Consolidated Balance
Sheets(in thousands, except per unit data)(Unaudited)
|
|
|
|
|
|
September 30,
2018 |
|
|
December 31,
2017 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
126 |
|
|
$ |
1,832 |
|
Accounts receivable |
|
|
|
|
|
|
|
|
Oil and natural gas sales |
|
|
7,725 |
|
|
|
5,262 |
|
Other |
|
|
1,617 |
|
|
|
103 |
|
Prepaid expenses and other |
|
|
242 |
|
|
|
166 |
|
Assets held for sale, net |
|
|
430 |
|
|
|
2,058 |
|
Total current assets |
|
|
10,140 |
|
|
|
9,421 |
|
Property and equipment |
|
|
|
|
|
|
|
|
Oil and natural gas properties, successful efforts
method |
|
|
|
|
|
|
|
|
Proved properties |
|
|
391,560 |
|
|
|
335,796 |
|
Unproved properties |
|
|
1,564 |
|
|
|
369 |
|
Other property and equipment |
|
|
427 |
|
|
|
427 |
|
Accumulated depletion, depreciation, amortization
and impairment |
|
|
(149,393 |
) |
|
|
(129,101 |
) |
Total property and equipment,
net |
|
|
244,158 |
|
|
|
207,491 |
|
Other assets |
|
|
1,599 |
|
|
|
2,451 |
|
Total assets |
|
$ |
255,897 |
|
|
$ |
219,363 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES, CONVERTIBLE PREFERRED UNITS AND EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
|
|
|
|
|
Trade |
|
$ |
1,048 |
|
|
$ |
593 |
|
Related parties |
|
|
4,507 |
|
|
|
1,631 |
|
Derivative financial instruments |
|
|
10,644 |
|
|
|
4,252 |
|
Accrued liabilities |
|
|
2,011 |
|
|
|
603 |
|
Liabilities related to assets held for sale |
|
|
— |
|
|
|
77 |
|
Total current liabilities |
|
|
18,210 |
|
|
|
7,156 |
|
Derivative financial instruments |
|
|
7,326 |
|
|
|
666 |
|
Long-term debt |
|
|
96,000 |
|
|
|
99,000 |
|
Other long-term liabilities |
|
|
52 |
|
|
|
70 |
|
Asset retirement obligations |
|
|
39,192 |
|
|
|
10,249 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
Class A convertible preferred units - 11,627,906 issued and
outstanding, respectively |
|
|
21,411 |
|
|
|
20,534 |
|
Class B convertible preferred units - 9,803,921 and 0 issued and
outstanding, respectively |
|
|
14,587 |
|
|
|
— |
|
Equity, per accompanying statements |
|
|
|
|
|
|
|
|
General partner |
|
|
(815 |
) |
|
|
(572 |
) |
Limited partners - 30,436,124 and 30,090,463 units
issued and outstanding, respectively |
|
|
59,934 |
|
|
|
82,260 |
|
Total equity |
|
|
59,119 |
|
|
|
81,688 |
|
Total liabilities, convertible
preferred units and equity |
|
$ |
255,897 |
|
|
$ |
219,363 |
|
Mid-Con Energy Partners, LP and
subsidiariesCondensed Consolidated Statements of
Operations (in thousands, except per unit
data) (Unaudited)
|
|
Three Months
Ended |
|
|
Nine Months
Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil sales |
|
$ |
18,765 |
|
|
$ |
13,731 |
|
|
$ |
49,240 |
|
|
$ |
42,343 |
|
Natural gas sales |
|
|
380 |
|
|
|
233 |
|
|
|
812 |
|
|
|
917 |
|
Other operating revenues |
|
|
320 |
|
|
|
— |
|
|
|
320 |
|
|
|
— |
|
(Loss) gain on derivatives, net |
|
|
(6,358 |
) |
|
|
(2,749 |
) |
|
|
(19,240 |
) |
|
|
2,916 |
|
Total revenues |
|
|
13,107 |
|
|
|
11,215 |
|
|
|
31,132 |
|
|
|
46,176 |
|
Operating costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating expenses |
|
|
6,654 |
|
|
|
6,122 |
|
|
|
16,706 |
|
|
|
16,695 |
|
Oil and natural gas production taxes |
|
|
1,157 |
|
|
|
857 |
|
|
|
2,992 |
|
|
|
2,366 |
|
Other operating expenses |
|
|
288 |
|
|
|
— |
|
|
|
288 |
|
|
|
— |
|
Impairment of proved oil and natural gas
properties |
|
|
— |
|
|
|
4,850 |
|
|
|
9,710 |
|
|
|
22,522 |
|
Depreciation, depletion and amortization |
|
|
4,812 |
|
|
|
4,350 |
|
|
|
11,646 |
|
|
|
13,850 |
|
Dry holes and abandonments of unproved
properties |
|
|
10 |
|
|
|
— |
|
|
|
195 |
|
|
|
— |
|
Accretion of discount on asset retirement
obligations |
|
|
404 |
|
|
|
142 |
|
|
|
748 |
|
|
|
386 |
|
General and administrative |
|
|
1,494 |
|
|
|
1,188 |
|
|
|
4,746 |
|
|
|
4,485 |
|
Total operating costs and expenses |
|
|
14,819 |
|
|
|
17,509 |
|
|
|
47,031 |
|
|
|
60,304 |
|
Loss on sales of oil and natural gas properties, net |
|
|
(1 |
) |
|
|
— |
|
|
|
(389 |
) |
|
|
— |
|
Loss from operations |
|
|
(1,713 |
) |
|
|
(6,294 |
) |
|
|
(16,288 |
) |
|
|
(14,128 |
) |
Other (expense) income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
1 |
|
|
|
3 |
|
|
|
3 |
|
|
|
8 |
|
Interest expense |
|
|
(1,620 |
) |
|
|
(1,626 |
) |
|
|
(4,369 |
) |
|
|
(4,615 |
) |
Other income |
|
|
20 |
|
|
|
4 |
|
|
|
20 |
|
|
|
70 |
|
(Loss) gain on settlements of asset retirement
obligations |
|
|
(37 |
) |
|
|
(8 |
) |
|
|
12 |
|
|
|
(13 |
) |
Total other expense |
|
|
(1,636 |
) |
|
|
(1,627 |
) |
|
|
(4,334 |
) |
|
|
(4,550 |
) |
Net loss |
|
|
(3,349 |
) |
|
|
(7,921 |
) |
|
|
(20,622 |
) |
|
|
(18,678 |
) |
Less: Distributions to preferred unitholders |
|
|
1,148 |
|
|
|
783 |
|
|
|
3,303 |
|
|
|
2,275 |
|
Less: General partner's interest in net loss |
|
|
(39 |
) |
|
|
(94 |
) |
|
|
(243 |
) |
|
|
(222 |
) |
Limited partners' interest in net loss |
|
$ |
(4,458 |
) |
|
$ |
(8,610 |
) |
|
$ |
(23,682 |
) |
|
$ |
(20,731 |
) |
Limited partners' interest in net loss per unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.14 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.78 |
) |
|
$ |
(0.69 |
) |
Weighted average limited partner units outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limited partner units (basic and diluted) |
|
|
30,392 |
|
|
|
30,042 |
|
|
|
30,292 |
|
|
|
29,972 |
|
Mid-Con Energy Partners, LP and
subsidiariesCondensed Consolidated Statements of
Cash Flows (in thousands) (Unaudited)
|
|
Nine Months
EndedSeptember 30, |
|
|
|
2018 |
|
|
2017 |
|
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(20,622 |
) |
|
$ |
(18,678 |
) |
Adjustments to reconcile net loss to net cash
provided by operating activities |
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
11,646 |
|
|
|
13,850 |
|
Debt issuance costs amortization |
|
|
503 |
|
|
|
1,023 |
|
Accretion of discount on asset retirement
obligations |
|
|
748 |
|
|
|
386 |
|
Impairment of proved oil and natural gas
properties |
|
|
9,710 |
|
|
|
22,522 |
|
Dry holes and abandonments of unproved
properties |
|
|
195 |
|
|
|
— |
|
(Gain) loss on settlements of asset retirement
obligations |
|
|
(12 |
) |
|
|
13 |
|
Cash paid for settlements of asset retirement
obligations |
|
|
(102 |
) |
|
|
(30 |
) |
Mark to market on derivatives |
|
|
|
|
|
|
|
|
Loss (gain) on derivatives, net |
|
|
19,240 |
|
|
|
(2,916 |
) |
Cash settlements (paid) received for
matured derivatives |
|
|
(5,988 |
) |
|
|
524 |
|
Cash settlements received from early
termination of derivatives |
|
|
— |
|
|
|
147 |
|
Cash premiums paid for derivatives |
|
|
(200 |
) |
|
|
(5,009 |
) |
Loss on sales of oil and natural gas
properties |
|
|
389 |
|
|
|
— |
|
Non-cash equity-based compensation |
|
|
670 |
|
|
|
409 |
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(2,463 |
) |
|
|
697 |
|
Other receivables |
|
|
(646 |
) |
|
|
150 |
|
Prepaids and other |
|
|
(76 |
) |
|
|
363 |
|
Accounts payable - trade and accrued
liabilities |
|
|
689 |
|
|
|
1,009 |
|
Accounts payable - related parties |
|
|
2,452 |
|
|
|
(557 |
) |
Net cash provided
by operating activities |
|
|
16,133 |
|
|
|
13,903 |
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
Acquisitions of oil and natural gas properties |
|
|
(21,626 |
) |
|
|
(4,668 |
) |
Additions to oil and natural gas properties |
|
|
(6,072 |
) |
|
|
(7,281 |
) |
Additions to other property and equipment |
|
|
— |
|
|
|
(133 |
) |
Proceeds from sales of oil and natural gas
properties |
|
|
1,163 |
|
|
|
— |
|
Net cash used in
investing activities |
|
|
(26,535 |
) |
|
|
(12,082 |
) |
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
Proceeds from line of credit |
|
|
20,000 |
|
|
|
6,000 |
|
Payments on line of credit |
|
|
(23,000 |
) |
|
|
(6,000 |
) |
Offering costs |
|
|
— |
|
|
|
(92 |
) |
Debt issuance costs |
|
|
(651 |
) |
|
|
— |
|
Proceeds from sale of Class B convertible preferred
units, net of offering costs |
|
|
14,847 |
|
|
|
— |
|
Distributions to Class A convertible preferred
units |
|
|
(2,000 |
) |
|
|
(1,500 |
) |
Distributions to Class B convertible preferred
units |
|
|
(500 |
) |
|
|
— |
|
Net cash provided
by (used in) financing activities |
|
|
8,696 |
|
|
|
(1,592 |
) |
Net (decrease)
increase in cash and cash equivalents |
|
|
(1,706 |
) |
|
|
229 |
|
Beginning cash and cash equivalents |
|
|
1,832 |
|
|
|
2,359 |
|
Ending cash and cash equivalents |
|
$ |
126 |
|
|
$ |
2,588 |
|
|
|
|
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURESThis
press release, the financial tables and other supplemental
information include “Adjusted EBITDA,” which is a non-generally
accepted accounting principles (“Non-GAAP”) measure used by our
management to describe financial performance with external users of
our financial statements.
The Partnership believes the Non-GAAP financial
measure described above is useful to investors because it is used
by many companies in its industry as a measurement of financial
performance and is commonly employed by financial analysts and
others to evaluate the financial performance of the Partnership and
to compare the financial performance of the Partnership with the
performance of other publicly traded partnerships within its
industry.
Adjusted EBITDA should not be considered an
alternative to net income, net cash provided by operating
activities or any other measure of financial performance or
liquidity presented in accordance with GAAP.
Adjusted EBITDA is defined as net income (loss)
plus (minus):
- Interest expense, net;
- Depreciation, depletion and amortization;
- Accretion of discount on asset retirement obligations;
- Impairment of proved oil and natural gas properties;
- Dry holes and abandonments of unproved properties;
- (Gain) loss on derivatives, net;
- Cash settlements received (paid) for matured derivatives,
net;
- Cash settlements received (paid) for early terminations of
derivatives;
- Cash premiums received (paid) for derivatives, net;
- Non-cash equity-based compensation; and
- (Gain) loss on sales of oil and natural gas properties,
net.
Mid-Con Energy Partners, LP and
subsidiariesReconciliation of Net Loss to Adjusted
EBITDA (in thousands)(Unaudited)
|
|
Three Months
Ended |
|
|
|
September
30, |
|
|
June 30, |
|
|
September
30, |
|
|
|
2018 |
|
|
2018 |
|
|
2017 |
|
Net loss |
|
$ |
(3,349 |
) |
|
$ |
(6,855 |
) |
|
$ |
(7,921 |
) |
Interest expense, net |
|
|
1,619 |
|
|
|
1,410 |
|
|
|
1,623 |
|
Depreciation, depletion and amortization |
|
|
4,812 |
|
|
|
3,393 |
|
|
|
4,350 |
|
Accretion of discount on asset retirement
obligations |
|
|
404 |
|
|
|
191 |
|
|
|
142 |
|
Impairment of proved oil & natural gas
properties |
|
|
— |
|
|
|
959 |
|
|
|
4,850 |
|
Dry holes and abandonment of unproved
properties |
|
|
10 |
|
|
|
97 |
|
|
|
— |
|
Loss on derivatives, net |
|
|
6,358 |
|
|
|
9,500 |
|
|
|
2,749 |
|
Cash settlements (paid) received for matured
derivatives, net |
|
|
(2,483 |
) |
|
|
(2,181 |
) |
|
|
323 |
|
Cash settlements received for early termination of
derivatives |
|
|
— |
|
|
|
— |
|
|
|
147 |
|
Cash premiums paid for derivatives, net |
|
|
(200 |
) |
|
|
— |
|
|
|
(2,438 |
) |
Non-cash equity-based compensation |
|
|
303 |
|
|
|
128 |
|
|
|
74 |
|
Loss (gain) on sales of oil and natural gas
properties |
|
|
1 |
|
|
|
(12 |
) |
|
|
— |
|
Adjusted EBITDA |
|
$ |
7,475 |
|
|
$ |
6,630 |
|
|
$ |
3,899 |
|
INVESTOR RELATIONS
CONTACTIR@midcon-energy.com(918) 743-7575
Mid Con Energy Partners (NASDAQ:MCEP)
Historical Stock Chart
From Aug 2024 to Sep 2024
Mid Con Energy Partners (NASDAQ:MCEP)
Historical Stock Chart
From Sep 2023 to Sep 2024