HighPoint Resources Corporation (the "Company" or "HighPoint")
(NYSE: HPR) today reported third quarter of 2019 financial and
operating results, including significant sequential increases in
total production, oil volumes and EBITDAX over the second quarter
of 2019, meaningfully lower cash costs and positive results from
the Hereford field drilling program.
For the third quarter of 2019, the Company
reported net income of $11.1 million, or $0.05 per diluted share.
Adjusted net income for the third quarter of 2019 was a net loss of
$7.4 million, or $0.03 per diluted share. EBITDAX for the third
quarter of 2019 was $94.3 million. Adjusted net income (loss) and
EBITDAX are non-GAAP (Generally Accepted Accounting Principles)
measures. Please reference the reconciliations to GAAP net income
at the end of this release.
Chief Executive Officer and President Scot
Woodall commented, "Our third quarter results are reflective of
strong operational execution and were highlighted by robust growth
in oil volumes and a significant reduction in cash operating costs
that underpinned a 33% increase in EBITDAX to $94 million compared
to the second quarter of 2019. We also became cash flow positive
during the third quarter, which will enhance liquidity. Following
up on our recent positive operational update, we continue to
demonstrate a dramatic improvement in Hereford well performance
with results showing a substantial and continuous increase in
productivity. Today, we are providing a further positive update to
the initial seven wells in DSU 11-63-16 that are now showing a 120%
increase in current daily production with a shallower decline
profile compared to previously completed wells, demonstrating a
viable, economic development template for the Hereford field.
Similarly, the performance of the four wells on the western side of
DSU 11-63-16 continues to improve since our last update, showing a
55% increase in current daily production and are trending to peak
production. This continues to build upon the early success of the
Hereford optimization program as we assess performance
opportunities of upspacing and increased completion intensity."
OPERATING AND FINANCIAL RESULTS
The following table summarizes certain operating
and financial results for the third quarter of 2019 and 2018 and
for the second quarter of 2019:
|
Three Months Ended September 30, |
|
Three Months Ended June 30, |
|
2019 |
|
2018 |
|
Change |
|
2019 |
|
Change |
Combined production sales
volumes (MBoe) |
3,399 |
|
|
2,736 |
|
|
24 |
% |
|
2,841 |
|
|
20 |
% |
Net cash provided by operating activities ($ millions) |
$ |
96.8 |
|
|
$ |
91.3 |
|
|
6 |
% |
|
$ |
20.9 |
|
|
363 |
% |
Discretionary cash flow ($
millions) (1) |
$ |
79.9 |
|
|
$ |
65.9 |
|
|
21 |
% |
|
$ |
57.5 |
|
|
39 |
% |
Combined realized prices with
hedging (per Boe) |
$ |
36.88 |
|
|
$ |
41.23 |
|
|
(11 |
)% |
|
$ |
37.48 |
|
|
(2 |
)% |
Net income (loss) ($
millions) |
$ |
11.1 |
|
|
$ |
(29.4 |
) |
|
*nm |
|
|
$ |
(1.9 |
) |
|
*nm |
|
Per share, basic |
$ |
0.05 |
|
|
$ |
(0.14 |
) |
|
*nm |
|
|
$ |
(0.01 |
) |
|
*nm |
|
Per share, diluted |
$ |
0.05 |
|
|
$ |
(0.14 |
) |
|
*nm |
|
|
$ |
(0.01 |
) |
|
*nm |
|
Adjusted net income (loss) ($
millions) (1) |
$ |
(7.4 |
) |
|
$ |
2.3 |
|
|
*nm |
|
|
$ |
(15.0 |
) |
|
51 |
% |
Per share, basic |
$ |
(0.04 |
) |
|
$ |
0.01 |
|
|
*nm |
|
|
$ |
(0.07 |
) |
|
43 |
% |
Per share, diluted |
$ |
(0.03 |
) |
|
$ |
0.01 |
|
|
*nm |
|
|
$ |
(0.07 |
) |
|
57 |
% |
Weighted average shares
outstanding, basic (in thousands) |
210,550 |
|
|
209,502 |
|
|
1 |
% |
|
210,377 |
|
|
— |
% |
Weighted average shares
outstanding, diluted (in thousands) (1) |
210,937 |
|
|
209,502 |
|
|
1 |
% |
|
210,377 |
|
|
— |
% |
EBITDAX ($ millions) (1) |
$ |
94.3 |
|
|
$ |
78.0 |
|
|
21 |
% |
|
$ |
71.1 |
|
|
33 |
% |
(1) 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 3.4 MMBoe for the
third quarter of 2019, which was a 20% increase over the second
quarter of 2019 and a 24% increase over the third quarter of 2018.
Oil volumes totaled 2.18 MMBbls, which was a 25% increase over the
second quarter of 2019 and a 27% increase over the third quarter of
2018. Third quarter of 2019 volumes were negatively impacted by
depressed processing yields, including basin-wide ethane
rejections.
Production sales volumes for the third quarter
were comprised of approximately 64% oil, 21% natural gas and 15%
NGLs.
For the third quarter of 2019, West Texas
Intermediate ("WTI") oil prices averaged $56.45 per barrel,
Northwest Pipeline ("NWPL") natural gas prices averaged $1.91 per
MMBtu and NYMEX natural gas prices averaged $2.23 per MMBtu.
Commodity price realizations to benchmark pricing were WTI less
$4.11 per barrel of oil and NWPL less $0.88 per Mcf of gas. The NGL
price averaged approximately 10% of the WTI price per barrel as
unprecedented weakness in broader markets resulted in a 76% decline
in NGL prices compared to the third quarter of 2018.
For the third quarter of 2019, the Company had
derivative commodity swaps in place for 19,730 barrels of oil per
day tied to WTI pricing at $56.45 per barrel, 7,000 MMBtu of
natural gas per day tied to NWPL regional pricing at $1.91 per
MMBtu, and no hedges in place for NGLs.
|
Three Months Ended September 30, |
|
Three Months Ended June 30, |
|
2019 |
|
2018 |
|
Change |
|
2019 |
|
Change |
Average Realized Prices before
Hedging: |
|
|
|
|
|
|
|
|
|
Oil (per Bbl) |
$ |
52.27 |
|
|
$ |
66.96 |
|
|
(22 |
)% |
|
$ |
55.46 |
|
|
(6 |
)% |
Natural gas (per Mcf) |
1.03 |
|
|
1.59 |
|
|
(35 |
)% |
|
1.58 |
|
|
(35 |
)% |
NGLs (per Bbl) |
5.76 |
|
|
24.31 |
|
|
(76 |
)% |
|
9.81 |
|
|
(41 |
)% |
Combined (per Boe) |
35.68 |
|
|
48.10 |
|
|
(26 |
)% |
|
37.83 |
|
|
(6 |
)% |
|
|
|
|
|
|
|
|
|
|
Average Realized Prices with
Hedging: |
|
|
|
|
|
|
|
|
|
Oil (per Bbl) |
$ |
54.08 |
|
|
$ |
55.92 |
|
|
(3 |
)% |
|
$ |
54.88 |
|
|
(1 |
)% |
Natural gas (per Mcf) |
1.06 |
|
|
1.64 |
|
|
(35 |
)% |
|
1.59 |
|
|
(33 |
)% |
NGLs (per Bbl) |
5.76 |
|
|
24.31 |
|
|
(76 |
)% |
|
9.81 |
|
|
(41 |
)% |
Combined (per Boe) |
36.88 |
|
|
41.23 |
|
|
(11 |
)% |
|
37.48 |
|
|
(2 |
)% |
Lease operating expense ("LOE") averaged $2.47
per Boe in the third quarter of 2019 compared to $2.65 per Boe in
the third quarter of 2018 and $3.79 per Boe in the second quarter
of 2019. The 35% reduction from the second quarter of 2019 was due
to higher production volumes and a decrease in compressor
maintenance and workover activity.
Production tax expense averaged $2.31 per Boe in
the third quarter of 2019 compared to $4.20 per Boe in the third
quarter of 2018. The decrease in the rate for the three months
ended September 30, 2019 was due to a lower projected
effective 2019 Colorado severance tax rate. Production tax expense
averaged 6.5% of revenues in the third quarter of 2019 and is
expected to average approximately 6%-7% of revenues for the
remainder of 2019.
|
Three Months Ended September 30, |
|
Three Months Ended June 30, |
|
2019 |
|
2018 |
|
Change |
|
2019 |
|
Change |
Average Costs (per Boe): |
|
|
|
|
|
|
|
|
|
Lease operating expenses |
$ |
2.47 |
|
|
$ |
2.65 |
|
|
(7 |
)% |
|
$ |
3.79 |
|
|
(35 |
)% |
Gathering, transportation and processing expense |
0.47 |
|
|
0.51 |
|
|
(8 |
)% |
|
0.61 |
|
|
(23 |
)% |
Production tax expenses |
2.31 |
|
|
4.20 |
|
|
(45 |
)% |
|
3.13 |
|
|
(26 |
)% |
Depreciation, depletion and amortization |
24.99 |
|
|
21.54 |
|
|
16 |
% |
|
25.56 |
|
|
(2 |
)% |
General and administrative expense |
3.25 |
|
|
4.64 |
|
|
(30 |
)% |
|
4.37 |
|
|
(26 |
)% |
Debt and Liquidity
At September 30, 2019, the Company had cash and
cash equivalents of $20 million and $299 million available under
its $500 million credit facility, after taking into account a $26
million letter of credit, resulting in total liquidity of $319
million. Net debt totaled $780 million at September 30, 2019.
The Company completed its semiannual
redetermination in October 2019 with the borrowing base under the
credit facility reaffirmed at $500 million, despite lower price
assumptions being used by lenders in the fall redetermination
process. The reaffirmation of the borrowing base reflects the
lenders' confidence in the Company's underlying reserve base.
Capital Expenditures
Capital expenditures for the third quarter of
2019 totaled $76.2 million, including $64.8 million for drilling
and completion operations. Capital projects included spudding 15
gross extended reach lateral ("XRL") wells and placing 25 gross
wells (21 XRL wells and 4 standard reach lateral ("SRL") wells) on
initial flowback.
OPERATIONAL UPDATE
Hereford Field
Production sales volumes for the third quarter
of 2019 in Hereford averaged a Company record of 10,101 Boe/d (80%
oil) or a 41% increase over the second quarter of 2019. During the
third quarter of 2019, 6 gross wells were spud and 16 gross wells
were placed on flowback.
The following provides an update of current DSU
activity:
- DSU 11-63-16 (east pad) - was placed on
flowback in June and includes seven wells drilled at a density of
16 wells per section. The wells were completed with a Gen 2
completion that used approximately 30 barrels of fluid per lateral
foot and approximately 1,500 pounds of sand per lateral foot.
Through 130 days of flowback, the average per well daily production
rate is currently 120% greater than previously completed wells,
demonstrating an economic development template for the Hereford
field. This rate continues to improve compared to the previously
disclosed daily production rate indicating a 75% per well increase
following 105 days.
- DSU 11-63-16 (west pad) - was placed on
flowback in July and includes four wells drilled at a density of 8
wells per section. The wells were completed with a Gen 3 completion
that utilized greater fluid of up to 40 barrels per lateral foot
and approximately 1,500 pounds of sand per lateral foot and
assessed performance improvement opportunities of upspacing and
increased completion intensity. Through 85 days of production, the
average per well daily production rate is presently 55% greater
than the previously completed wells and continues trending
higher.
- DSU 11-63-17 - was placed on flowback in July
and includes twelve wells drilled at a density of 12 wells per
section. The wells are assessing the performance impact of Gen 4
completions that utilized greater fluid of up to 52 barrels per
lateral foot and an average of approximately 1,500 pounds of sand
per lateral foot. These wells were stimulated with larger fluid
completions than all previous wells and continue to ramp to peak
production.
The Company continues to recognize well cost
efficiencies that have resulted in lower completed well costs.
Based on the current price outlook, future wells are anticipated to
average approximately $4.9 million for an XRL well completed with
high-fluid intensity completion. This compares to $5.1 million for
XRL wells drilled during the first half of 2019 and utilized lower
fluid.
NE Wattenberg
The Company produced an average of 26,845 Boe/d
(58% oil) in the third quarter of 2019 in NE Wattenberg and spud 9
gross wells and placed 5 gross XRL and 4 gross SRL wells on
flowback in the area. Recent activity includes placing five XRL
wells located in DSU 5-61-35 on flowback in September. Subsequent
to the end of the quarter two additional XRL wells located in DSU
5-61-35 were placed on flowback. These wells continue to ramp to
peak production and were completed with high-fluid intensity
completions.
The Company is also recognizing well cost
efficiencies in NE Wattenberg as future wells are anticipated to
cost an average of approximately $4.3 million for XRL wells
completed with high-fluid intensity completions. This compares to
$4.5 million for wells drilled during the first half of 2019.
2019 OPERATING GUIDANCE
The Company is providing capital expenditure and
production guidance for the fourth quarter of 2019 as discussed
below and reiterates full-year 2019 guidance.
See "Forward-Looking Statements" below.
- Production of 3.6-3.7 MMBoe
- Oil volumes to approximate 2.3 MMBbls or approximately 63% of
total production volumes
- Capital expenditures of $30-$40 million
- Lease operating expense is expected to average $2.50-$3.00 per
Boe
- Cash general and administrative expense of $2.50-$3.00 per
Boe
- Gathering, transportation and processing costs of $0.75-$0.95
per Boe
COMMODITY HEDGES UPDATE
The following table summarizes the Company's
current hedge position as of November 4, 2019:
|
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 |
4Q19 |
16,712 |
|
|
$ |
59.01 |
|
|
3,000 |
|
|
$ |
55.00 |
|
|
$ |
77.56 |
|
|
7,000 |
|
|
$ |
2.11 |
|
1Q20 |
15,000 |
|
|
$ |
60.13 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
2Q20 |
12,500 |
|
|
$ |
59.87 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
3Q20 |
14,500 |
|
|
$ |
57.35 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
4Q20 |
14,500 |
|
|
$ |
57.35 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
1Q21 |
1,000 |
|
|
$ |
57.13 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
2Q21 |
1,000 |
|
|
$ |
57.13 |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
3Q21 |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
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
Tuesday, November 5, 2019, to discuss third quarter 2019
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 6984176. The
webcast will remain on the Company's website for approximately 7
days and a replay of the call will be available through
November 12, 2019 at 855-859-2056 (404-537-3406 international)
with passcode 6984176.
An updated corporate slide presentation that will be referenced
on the conference call will be available on the “Investor
Relations” section of the Company’s website prior to the start of
the call.
Investor Events
Members of the Company's management are
currently scheduled to participate in the following investor
events:
- December 3, 2019 - Bank of America Merrill Lynch Leveraged
Finance Conference, Boca Raton, FL
Presentation materials will be posted to the investor relations
section of the Company's website at www.hpres.com prior to the
start of the events.
WEBSITE INFORMATION
This press release, along with other news about
HighPoint, is available
at http://investor.hpres.com/news-releases. We routinely post
information that may be important to investors in the investor
relations section of our website,
http://investor.hpres.com/news-releases. We use this website as a
means of disclosing material, non-public information and for
complying with our disclosure obligations under Regulation FD, and
we encourage investors to consult that section of our website
regularly for important information about the Company. The
information contained on, or that may be accessed through, our
website is not incorporated by reference into, and is not a part
of, this document. Investors interested in automatically receiving
news and information when posted to our website can also
visit http://investor.hpres.com/news-releases to sign up
for email alerts.
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 "2019 Operating Guidance", which contains projections
for certain full-year 2019 operational and financial metrics.
Forward-looking statements in this release relate to, among other
things, future production, projects and opportunities, and future
financial results including free cash flows, liquidity and debt
metrics.
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
HighPoint’s Annual Report on Form 10-K for the year ended
December 31, 2018 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. See our Quarterly Report on Form 10-Q
for the quarter ended September 30, 2019 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.
Company contact: Larry C. Busnardo, Vice President, Investor
Relations, 303-312-8514
HIGHPOINT RESOURCES
CORPORATIONSelected Operating
Highlights(Unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Production Data: |
|
|
|
|
|
|
|
Oil (MBbls) |
2,180 |
|
|
1,716 |
|
|
5,648 |
|
|
4,360 |
|
Natural gas (MMcf) |
4,236 |
|
|
3,294 |
|
|
11,544 |
|
|
8,946 |
|
NGLs (MBbls) |
513 |
|
|
471 |
|
|
1,466 |
|
|
1,207 |
|
Combined volumes (MBoe) |
3,399 |
|
|
2,736 |
|
|
9,038 |
|
|
7,058 |
|
Daily combined volumes (Boe/d) |
36,946 |
|
|
29,739 |
|
|
33,106 |
|
|
25,853 |
|
|
|
|
|
|
|
|
|
Average Sales
Prices (before the effects of realized hedges): |
Oil (per Bbl) |
$ |
52.27 |
|
|
$ |
66.96 |
|
|
$ |
52.82 |
|
|
$ |
64.61 |
|
Natural gas (per Mcf) |
1.03 |
|
|
1.59 |
|
|
1.58 |
|
|
1.59 |
|
NGLs (per Bbl) |
5.76 |
|
|
24.31 |
|
|
9.47 |
|
|
22.04 |
|
Combined (per Boe) |
35.68 |
|
|
48.10 |
|
|
36.57 |
|
|
45.70 |
|
|
|
|
|
|
|
|
|
Average Realized
Sales Prices (after the effects of realized hedges): |
Oil (per Bbl) |
$ |
54.08 |
|
|
$ |
55.92 |
|
|
$ |
54.31 |
|
|
$ |
54.70 |
|
Natural gas (per Mcf) |
1.06 |
|
|
1.64 |
|
|
1.52 |
|
|
1.65 |
|
NGLs (per Bbl) |
5.76 |
|
|
24.31 |
|
|
9.47 |
|
|
22.04 |
|
Combined (per Boe) |
36.88 |
|
|
41.23 |
|
|
37.42 |
|
|
39.66 |
|
|
|
|
|
|
|
|
|
Average Costs (per Boe): |
|
|
|
|
|
|
|
Lease operating expenses |
$ |
2.47 |
|
|
$ |
2.65 |
|
|
$ |
3.37 |
|
|
$ |
2.99 |
|
Gathering, transportation and processing expense |
0.47 |
|
|
0.51 |
|
|
0.56 |
|
|
0.40 |
|
Production tax expenses |
2.31 |
|
|
4.20 |
|
|
2.29 |
|
|
3.74 |
|
Depreciation, depletion and amortization |
24.99 |
|
|
21.54 |
|
|
25.47 |
|
|
21.55 |
|
General and administrative expense (1) |
3.25 |
|
|
4.64 |
|
|
4.00 |
|
|
4.88 |
|
(1) Includes long-term cash and equity incentive
compensation of $0.63 per Boe and $0.82 per Boe for the three
months ended September 30, 2019 and 2018, respectively, and
$0.79 per Boe and $0.84 per Boe for the nine months ended
September 30, 2019 and 2018, respectively.
HIGHPOINT RESOURCES
CORPORATIONConsolidated Condensed Balance
Sheets(Unaudited)
|
As of September 30, |
|
As of December 31, |
|
2019 |
|
2018 |
|
(in thousands) |
Assets: |
|
|
|
Cash and cash equivalents |
$ |
19,568 |
|
|
$ |
32,774 |
|
Other current assets (1) |
100,229 |
|
|
157,007 |
|
Property and equipment, net |
2,127,989 |
|
|
2,029,523 |
|
Other noncurrent assets (1) |
15,841 |
|
|
33,156 |
|
Total assets |
$ |
2,263,627 |
|
|
$ |
2,252,460 |
|
|
|
|
|
Liabilities and Stockholders'
Equity: |
|
|
|
Current liabilities |
$ |
185,608 |
|
|
$ |
248,185 |
|
Long-term debt, net of debt issuance costs |
793,530 |
|
|
617,387 |
|
Other long-term liabilities |
154,926 |
|
|
174,790 |
|
Stockholders' equity |
1,129,563 |
|
|
1,212,098 |
|
Total liabilities and stockholders' equity |
$ |
2,263,627 |
|
|
$ |
2,252,460 |
|
(1) At September 30, 2019, the estimated
fair value of all of the Company's commodity derivative instruments
was an asset of $46.1 million, comprised of $36.1 million of
current assets and $10.0 million of non-current assets. 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, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(in thousands, except per share amounts) |
Operating Revenues: |
|
|
|
|
|
|
|
Oil, gas and NGL production |
$ |
121,281 |
|
|
$ |
131,585 |
|
|
$ |
330,472 |
|
|
$ |
322,534 |
|
Other operating revenues, net |
1 |
|
|
(459 |
) |
|
374 |
|
|
(200 |
) |
Total operating revenues |
121,282 |
|
|
131,126 |
|
|
330,846 |
|
|
322,334 |
|
Operating Expenses: |
|
|
|
|
|
|
|
Lease operating |
8,385 |
|
|
7,237 |
|
|
30,434 |
|
|
21,082 |
|
Gathering, transportation and processing |
1,611 |
|
|
1,398 |
|
|
5,076 |
|
|
2,829 |
|
Production tax |
7,868 |
|
|
11,504 |
|
|
20,666 |
|
|
26,363 |
|
Exploration |
56 |
|
|
19 |
|
|
93 |
|
|
39 |
|
Impairment, dry hole costs and abandonment |
1,170 |
|
|
184 |
|
|
2,487 |
|
|
609 |
|
(Gain) Loss on sale of properties |
— |
|
|
74 |
|
|
2,901 |
|
|
1,046 |
|
Depreciation, depletion and amortization |
84,948 |
|
|
58,946 |
|
|
230,170 |
|
|
152,106 |
|
Unused commitments |
4,418 |
|
|
4,574 |
|
|
13,239 |
|
|
13,684 |
|
General and administrative (1) |
11,048 |
|
|
12,696 |
|
|
36,109 |
|
|
34,427 |
|
Merger transaction expense |
2,078 |
|
|
100 |
|
|
4,492 |
|
|
6,140 |
|
Other operating expenses, net |
230 |
|
|
(764 |
) |
|
210 |
|
|
(716 |
) |
Total operating expenses |
121,812 |
|
|
95,968 |
|
|
345,877 |
|
|
257,609 |
|
Operating Income (Loss) |
(530 |
) |
|
35,158 |
|
|
(15,031 |
) |
|
64,725 |
|
Other Income and Expense: |
|
|
|
|
|
|
|
Interest and other income |
94 |
|
|
451 |
|
|
562 |
|
|
1,843 |
|
Interest expense |
(15,167 |
) |
|
(13,165 |
) |
|
(43,227 |
) |
|
(39,348 |
) |
Commodity derivative gain (loss) (2) |
31,047 |
|
|
(51,547 |
) |
|
(54,600 |
) |
|
(128,166 |
) |
Gain (loss) on extinguishment of debt |
— |
|
|
(257 |
) |
|
— |
|
|
(257 |
) |
Total other income and expense |
15,974 |
|
|
(64,518 |
) |
|
(97,265 |
) |
|
(165,928 |
) |
Income (Loss) before Income
Taxes |
15,444 |
|
|
(29,360 |
) |
|
(112,296 |
) |
|
(101,203 |
) |
(Provision for) Benefit from
Income Taxes |
(4,330 |
) |
|
— |
|
|
25,271 |
|
|
— |
|
Net Income (Loss) |
$ |
11,114 |
|
|
$ |
(29,360 |
) |
|
$ |
(87,025 |
) |
|
$ |
(101,203 |
) |
|
|
|
|
|
|
|
|
Net Income (Loss) per Common
Share |
|
|
|
|
|
|
|
Basic |
$ |
0.05 |
|
|
$ |
(0.14 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.56 |
) |
Diluted |
$ |
0.05 |
|
|
$ |
(0.14 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.56 |
) |
Weighted Average Common Shares
Outstanding |
|
|
|
|
|
|
|
Basic |
210,550 |
|
|
209,502 |
|
|
210,288 |
|
|
181,145 |
|
Diluted |
210,937 |
|
|
209,502 |
|
|
210,288 |
|
|
181,145 |
|
(1) Includes long-term cash and equity incentive
compensation of $2.1 million and $2.3 million for the three months
ended September 30, 2019 and 2018, respectively, and $7.2
million and $5.9 million for the nine months ended
September 30, 2019 and 2018, respectively.
(2) 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, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(in thousands) |
Included in commodity
derivative gain (loss): |
|
|
|
|
|
|
|
Realized gain (loss) on derivatives (1) |
$ |
4,075 |
|
|
$ |
(18,780 |
) |
|
$ |
7,731 |
|
|
$ |
(42,628 |
) |
Prior year unrealized (gain) loss transferred to realized (gain)
loss (1) |
(20,739 |
) |
|
4,920 |
|
|
(61,430 |
) |
|
20,940 |
|
Unrealized gain (loss) on derivatives (1) |
47,711 |
|
|
(37,687 |
) |
|
(901 |
) |
|
(106,478 |
) |
Total commodity derivative gain (loss) |
$ |
31,047 |
|
|
$ |
(51,547 |
) |
|
$ |
(54,600 |
) |
|
$ |
(128,166 |
) |
(1) 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 meaningful comparison to its peers.
HIGHPOINT RESOURCES
CORPORATIONConsolidated Statements of Cash
Flows(Unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(in thousands) |
Operating Activities: |
|
|
|
|
|
|
|
Net income (loss) |
$ |
11,114 |
|
|
$ |
(29,360 |
) |
|
$ |
(87,025 |
) |
|
$ |
(101,203 |
) |
Adjustments to reconcile to net cash provided by operations: |
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
84,948 |
|
|
58,946 |
|
|
230,170 |
|
|
152,106 |
|
Impairment, dry hole costs and abandonment |
1,170 |
|
|
184 |
|
|
2,487 |
|
|
609 |
|
Unrealized derivative (gain) loss |
(26,972 |
) |
|
32,767 |
|
|
62,331 |
|
|
85,538 |
|
Deferred income tax benefit |
4,330 |
|
|
— |
|
|
(25,271 |
) |
|
— |
|
Incentive compensation and other non-cash charges |
2,521 |
|
|
2,323 |
|
|
9,501 |
|
|
5,813 |
|
Amortization of deferred financing costs |
642 |
|
|
598 |
|
|
1,917 |
|
|
1,729 |
|
(Gain) loss on sale of properties |
— |
|
|
74 |
|
|
2,901 |
|
|
1,046 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
(4,987 |
) |
|
(4,592 |
) |
|
13,488 |
|
|
(8,789 |
) |
Prepayments and other assets |
354 |
|
|
(332 |
) |
|
(1,109 |
) |
|
(1,421 |
) |
Accounts payable, accrued and other liabilities |
10,600 |
|
|
10,746 |
|
|
3,867 |
|
|
(25,287 |
) |
Amounts payable to oil and gas property owners |
6,139 |
|
|
8,272 |
|
|
(16,784 |
) |
|
33,804 |
|
Production taxes payable |
6,990 |
|
|
11,415 |
|
|
(1,079 |
) |
|
15,983 |
|
Net cash provided by (used in) operating activities |
$ |
96,849 |
|
|
$ |
91,298 |
|
|
$ |
195,394 |
|
|
$ |
160,185 |
|
Investing Activities: |
|
|
|
|
|
|
|
Additions to oil and gas properties, including acquisitions |
(117,823 |
) |
|
(101,798 |
) |
|
(375,976 |
) |
|
(322,614 |
) |
Additions of furniture, equipment and other |
(384 |
) |
|
(146 |
) |
|
(3,958 |
) |
|
(616 |
) |
Repayment of debt associated with merger, net of cash acquired |
— |
|
|
— |
|
|
— |
|
|
(53,357 |
) |
Other investing activities |
(1,302 |
) |
|
(298 |
) |
|
(1,400 |
) |
|
232 |
|
Net cash provided by (used in) investing activities |
$ |
(118,175 |
) |
|
$ |
(102,463 |
) |
|
$ |
(380,000 |
) |
|
$ |
(376,576 |
) |
Financing Activities: |
|
|
|
|
|
|
|
Proceeds from debt |
50,000 |
|
|
— |
|
|
200,000 |
|
|
— |
|
Principal payments on debt |
(25,000 |
) |
|
(118 |
) |
|
(26,859 |
) |
|
(350 |
) |
Other financing activities |
(218 |
) |
|
(3,116 |
) |
|
(1,741 |
) |
|
(4,745 |
) |
Net cash provided by (used in) financing activities |
$ |
24,782 |
|
|
$ |
(3,234 |
) |
|
$ |
171,400 |
|
|
$ |
(5,095 |
) |
Increase (Decrease) in Cash
and Cash Equivalents |
3,456 |
|
|
(14,399 |
) |
|
(13,206 |
) |
|
(221,486 |
) |
Beginning Cash and Cash
Equivalents |
16,112 |
|
|
107,379 |
|
|
32,774 |
|
|
314,466 |
|
Ending Cash and Cash
Equivalents |
$ |
19,568 |
|
|
$ |
92,980 |
|
|
$ |
19,568 |
|
|
$ |
92,980 |
|
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, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(in thousands) |
Net Cash Provided by (Used in) Operating Activities |
$ |
96,849 |
|
|
$ |
91,298 |
|
|
$ |
195,394 |
|
|
$ |
160,185 |
|
Adjustments to reconcile to
discretionary cash flow: |
|
|
|
|
|
|
|
Exploration expense |
56 |
|
|
19 |
|
|
93 |
|
|
39 |
|
Merger transaction expense |
2,078 |
|
|
100 |
|
|
4,492 |
|
|
6,140 |
|
Changes in working capital |
(19,096 |
) |
|
(25,509 |
) |
|
1,617 |
|
|
(14,290 |
) |
Discretionary Cash Flow |
$ |
79,887 |
|
|
$ |
65,908 |
|
|
$ |
201,596 |
|
|
$ |
152,074 |
|
Adjusted Net Income (Loss) Reconciliation
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(in thousands, except per share amounts) |
Net Income (Loss) |
$ |
11,114 |
|
|
$ |
(29,360 |
) |
|
$ |
(87,025 |
) |
|
$ |
(101,203 |
) |
Provision for (Benefit from) income taxes |
4,330 |
|
|
— |
|
|
(25,271 |
) |
|
— |
|
Income (Loss) before income
taxes |
15,444 |
|
|
(29,360 |
) |
|
(112,296 |
) |
|
(101,203 |
) |
|
|
|
|
|
|
|
|
Adjustments to net income
(loss): |
|
|
|
|
|
|
|
Unrealized derivative (gain) loss |
(26,972 |
) |
|
32,767 |
|
|
62,331 |
|
|
85,538 |
|
(Gain) loss on sale of properties |
— |
|
|
74 |
|
|
2,901 |
|
|
1,046 |
|
(Gain) loss on extinguishment of debt |
— |
|
|
257 |
|
|
— |
|
|
257 |
|
One-time item: |
|
|
|
|
|
|
|
Merger transaction expense |
2,078 |
|
|
100 |
|
|
4,492 |
|
|
6,140 |
|
(Income) expense related to properties sold |
229 |
|
|
(764 |
) |
|
(43 |
) |
|
(716 |
) |
Adjusted Income (Loss) before
income taxes |
(9,221 |
) |
|
3,074 |
|
|
(42,615 |
) |
|
(8,938 |
) |
Adjusted (provision for) benefit from income taxes (1) |
1,851 |
|
|
(757 |
) |
|
9,588 |
|
|
2,202 |
|
Adjusted Net Income
(Loss) |
$ |
(7,370 |
) |
|
$ |
2,317 |
|
|
$ |
(33,027 |
) |
|
$ |
(6,736 |
) |
Per share, diluted |
$ |
(0.03 |
) |
|
$ |
0.01 |
|
|
$ |
(0.16 |
) |
|
$ |
(0.04 |
) |
(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, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(in thousands) |
Net Income (Loss) |
$ |
11,114 |
|
|
$ |
(29,360 |
) |
|
$ |
(87,025 |
) |
|
$ |
(101,203 |
) |
Adjustments to reconcile to
EBITDAX: |
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
84,948 |
|
|
58,946 |
|
|
230,170 |
|
|
152,106 |
|
Impairment, dry hole and abandonment expense |
1,170 |
|
|
184 |
|
|
2,487 |
|
|
609 |
|
Exploration expense |
56 |
|
|
19 |
|
|
93 |
|
|
39 |
|
Unrealized derivative (gain) loss |
(26,972 |
) |
|
32,767 |
|
|
62,331 |
|
|
85,538 |
|
Incentive compensation and other non-cash charges |
2,521 |
|
|
2,323 |
|
|
9,501 |
|
|
5,813 |
|
Merger transaction expense |
2,078 |
|
|
100 |
|
|
4,492 |
|
|
6,140 |
|
(Gain) loss on sale of properties |
— |
|
|
74 |
|
|
2,901 |
|
|
1,046 |
|
(Gain) loss on extinguishment of debt |
— |
|
|
257 |
|
|
— |
|
|
257 |
|
Interest and other income |
(94 |
) |
|
(451 |
) |
|
(562 |
) |
|
(1,843 |
) |
Interest expense |
15,167 |
|
|
13,165 |
|
|
43,227 |
|
|
39,348 |
|
Provision for (benefit from) income taxes |
4,330 |
|
|
— |
|
|
(25,271 |
) |
|
— |
|
EBITDAX |
$ |
94,318 |
|
|
$ |
78,024 |
|
|
$ |
242,344 |
|
|
$ |
187,850 |
|
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.
HighPoint Resources (NYSE:HPR)
Historical Stock Chart
From Jun 2024 to Jul 2024
HighPoint Resources (NYSE:HPR)
Historical Stock Chart
From Jul 2023 to Jul 2024