Alta Mesa Resources, Inc. (NASDAQ: AMR, “Alta Mesa” or the
“Company”) today provided an operational and financial update for
its subsidiaries Alta Mesa Holdings, LP (“Alta Mesa Upstream”) and
Kingfisher Midstream, LLC (“Kingfisher Midstream”) and announced
that Alta Mesa Upstream has filed its Annual Report on Form 10-K
for the year ended December 31, 2018.
Operational Update
Alta Mesa Upstream
First quarter 2019 production is estimated to be 37,800 BOE per
day (48% oil, 71% liquids). Alta Mesa Upstream entered the
year with six rigs actively working and reduced the rig count to
zero by the end of January. A new development program was
restarted in March by completing 16 drilled and uncompleted wells
(“DUCs”) and operating two drilling rigs. The Company’s
objective with the development program is to improve economic
returns through a revised well spacing pattern of four or five
wells per section, improved lateral placement and lower well
costs. Under the reinvigorated development program, Alta Mesa
Upstream has drilled 10 wells completing eight patterns (including
the DUCs) and through May 17, 2019 had brought 22 new wells onto
production. These wells are all tied into Kingfisher
Midstream’s system.
The wells drilled and completed in 2019 have been averaging less
than $3.0 million per well compared to $4.5 million per well
experienced by the end of the previous drilling program. The
Company has also made material progress on reducing lease operating
expenses on a unit cost basis and lowering recurring general and
administrative costs. More detail will be provided when it
reports first quarter 2019 financial results.
Kingfisher Midstream
Kingfisher Midstream’s estimated first quarter volumes are
summarized below.
- System Gas Volumes
137 MMcf per day
- Produced Water
Volumes
85,000 Bbl per day
- Crude Oil Volumes
6,600 Bbl per
day
Proved Reserves
On February 25, 2019, Alta Mesa Upstream provided an initial
estimate of 158 MMBoe for December 31, 2018 proved reserves.
Based on its April 2019 assessment of its ability to continue as a
going concern and the uncertainty of funding the related
development costs, Alta Mesa Upstream removed a total of 89 MMBoe
of proved undeveloped (“PUD”) reserves. As a result, at
December 31, 2018, Alta Mesa Upstream had 69 MMBoe of proved
developed reserves, comprised of 25 MMBbl of oil, 20 MMBbl of
natural gas liquids and 144 Bcf of natural gas. The reserves
have a Standardized Measure of Discounted Future Net Cash Flows of
$813 million. Should Alta Mesa Upstream’s ability to fund the
required development costs improve in the future, Alta Mesa
Upstream expects to recognize all or a portion of the removed PUD
reserves as proved.
Balance Sheet and Liquidity Update
At May 1, 2019, Alta Mesa Resources had debt with total face
value of $1,061 million and $144 million of total liquidity,
including $110 million of cash. Alta Mesa Upstream’s total
debt was $868 million, comprised of $368 million utilized on its
credit facility and $500 million of senior notes. The Company
previously disclosed that Alta Mesa Upstream had drawn
substantially all remaining capacity under its Credit Facility on
April 1, 2019. As of May 1, Alta Mesa Upstream’s liquidity
includes $95 million of cash.
Kingfisher Midstream had total borrowings on May 1, 2019 of $193
million within its available credit capacity of $225 million,
resulting in liquidity of $47 million comprised of $32 million of
available borrowing capacity and $15 million cash on hand.
Until the delivery of audited 2018 and unaudited first quarter 2019
financial statements and the related compliance certificates,
Kingfisher Midstream is limited to $225 million of borrowing
capacity. Once those financials are delivered, the borrowing
capacity, subject to continued covenant compliance, will return to
$300 million.
The Company continues to make progress in finalizing its Form
10-K as well the first quarter 2019 Forms 10-Q for both Alta Mesa
Resources and Alta Mesa Upstream but is unable to estimate the date
at which these filings will be completed.
NASDAQ Notice Regarding Non-Compliance with Continued
Listing Standards
The NASDAQ Stock Market LLC (“NASDAQ”) notified Alta Mesa
Resources on May 14, 2019 that it is not in compliance with NASDAQ
Listing Rule 5250(c)(1) for continued listing due to the delay in
filing its Quarterly Report on Form 10-Q for the quarter ended
March 31, 2018, and because the Company remains delinquent in
filing its Annual Report Form 10-K for the year ended December 31,
2018 (the “Initial Delinquent Filing”).
The notification from NASDAQ notes that Alta Mesa Resources is
required to submit a plan to regain compliance with NASDAQ's filing
requirements for continued listing by June 3, 2019. Upon acceptance
of the Company's compliance plan, NASDAQ is permitted to grant an
extension of up to 180 calendar days from the due date of the
Initial Delinquent Filing, or until September 30, 2019, for the
Company to regain compliance with NASDAQ's filing requirements for
continued listing. The notice has no immediate effect on the
listing of the Company’s Class A Common Stock on the NASDAQ’s
exchange.
Alta Mesa Resources is working to complete its annual and
quarterly reports and intends to file it within the time frame
required to regain compliance with NASDAQ’s listing standards.
Safe Harbor Statement and Disclaimer:
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. All statements, other than statements of historical fact,
including but not limited to, Alta Mesa Resources’ drilling plans,
timing and amount of future production, throughput and produced
water volumes, expenses, cost reductions, overhead, the timing of
the filing of the Company’s Annual Report on Form 10-K and
Quarterly Report on Form 10-Q, strategy, future operations,
financial position, prospects, plans and objectives of management
are forward-looking statements. When used in this press release,
the words “could”, “should”, “will”, “plan”, “believe”,
“anticipate”, “intend”, “estimate”, “expect”, “project” and similar
expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain such
identifying words. These forward-looking statements are based on
Alta Mesa Resources' current expectations and assumptions about
future events and are based on currently available information as
to the outcome and timing of future events. Alta Mesa Resources
cautions you that these forward-looking statements are subject to
all of the risks and uncertainties, most of which are difficult to
predict and many of which are beyond its control, incident to the
exploration for and development and production of oil and gas.
These risks include, but are not limited to, commodity price
volatility, low prices for oil and/or gas, global economic
conditions, inflation, increased operating cost, lack of
availability of drilling and production equipment and services,
operating results, environmental risks, weather risks, drilling and
other operating risks, regulatory changes, the uncertainty inherent
in estimating oil and gas reserves and in projecting future rates
of production, cash flow and access to capital, the timing of
development expenditures, and other risks. Information concerning
these and other factors can be found in Alta Mesa Resources'
filings with the SEC, including its Forms 10-K, 10-Q and 8-K, which
can be obtained free of charge on the SEC's web site at
http://www.sec.gov. Should one or more of the risks or
uncertainties described in this press release occur, or should
underlying assumptions prove incorrect, Alta Mesa Resources’ actual
results and plans could differ materially from those expressed in
any forward-looking statements. All forward-looking statements,
expressed or implied, included in this press release are expressly
qualified in their entirety by this cautionary statement. This
cautionary statement should also be considered in connection with
any subsequent written or oral forward-looking statements that we
may issue. Except as otherwise required by applicable law, Alta
Mesa Resources disclaims any duty to update any forward-looking
statements, all of which are expressly qualified by the statements
in this section, to reflect events or circumstances after the date
of this press release.
Alta Mesa Upstream’s Form 10-K is available for review on the
Company’s investor page at http://altamesaresources.irpass.com/
or on the Securities and Exchange Commission website at
www.sec.gov.
About Alta Mesa Resources:Alta Mesa Resources,
Inc. is an independent energy company focused on the development
and acquisition of unconventional oil and natural gas reserves in
the Anadarko Basin in Oklahoma, and through Kingfisher Midstream,
LLC, provides best-in-class midstream energy services, including
crude oil and gas gathering, processing and marketing and produced
water disposal to producers in the STACK play.
FOR MORE INFORMATION CONTACT: Bruce Connery, Al Petrie Advisors,
bconnery@altamesa.net, 281-943-1375
15021 Katy Freeway, Suite 400 l Houston, Texas 77094 l (281)
530-0991 l www.altamesa.net
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