MNRL Brigham Minerals Inc

Brigham Minerals, Inc. (NYSE: MNRL) (“Brigham Minerals,” “Brigham,” or the “Company”), a leading mineral and royalty interest acquisition company, today announced record operational and financial results for the quarter ended September 30, 2022.

RECORD THIRD QUARTER 2022 OPERATIONAL AND FINANCIAL HIGHLIGHTS AND SUBSEQUENT EVENTS

• Record daily production volumes of 15,000 Boe/d (73% liquids, 50% oil)
  • Production up 15% sequentially from Q2 2022 including a 19% increase in Permian Basin volumes

• Record royalty revenues of $92.8 million
  • Up 3% sequentially from Q2 2022 driven by 15% higher volumes offset by 12% lower realized prices

• Net income totaling $44.4 million
  • Adjusted Net Income(1) of $52.2 million, excluding $7.8 million of merger related costs
  • Record Adjusted EBITDA(1) totaling $82.1 million up 3% sequentially from Q2 2022

• Declared record Q3 2022 dividend of $0.81 per share of Class A common stock(2)
  • Base Dividend of $0.16 per share of Class A common stock
  • Variable Dividend increased 7% sequentially to $0.65 per share of Class A common stock
  • Represents 75% payout ratio of Discretionary Cash Flow ex lease bonus(1)

• 10.8 net (1,786 gross) activity wells comprised of 6.7 net (929 gross) DUCs and 4.1 net (857 gross) permits
  • 1.9 net DUCs converted to PDP during Q3 2022
  • 207 gross wells spud during Q3 2022 (1.7 net locations)
  • Permian Basin activity wells totaling 7.0 net locations representing 65% of total activity wells

• Acquired 365 net royalty acres deploying $12.2 million in mineral acquisition capital
  • 100% of capital deployed to Permian Basin comprised of 59% PDP, DUC and permitted net locations

• $33.0 million cash balance and undrawn revolver capacity of $217.0 million as of September 30, 2022
  • Conservative leverage at 0.2x last quarter annualized Adjusted EBITDA(1)

• Subsequent to quarter end, closed previously announced Midland Basin acquisition with Avant Royalties
  • Roughly 3,900 net royalty acres with 19 rigs currently running across a core, well diversified position operated by Endeavor Energy Resources, Pioneer Natural Resources, Diamondback Energy and ExxonMobil
  • 0.9 net DUCs and 0.3 net permits as of close resulting in 12.0 net pro forma activity wells

(1)

Non-GAAP measure. See “Non-GAAP Financial Measures” below.

(2)

See "Quarterly Cash Dividend" section below regarding Board approval of future dividends.

PROPOSED MERGER WITH SITIO ROYALTIES

As previously announced, on September 6, 2022, Brigham and Sitio Royalties Corp. (“Sitio”) entered into a definitive merger agreement, pursuant to which Sitio will acquire Brigham in an all-stock transaction. Following the approval by the Brigham stockholders and the satisfaction of certain other closing conditions, the merger is expected to close during the first quarter of 2023.

In light of the pending merger with Sitio, Brigham has discontinued providing guidance and long-term outlook information regarding its results of operations and does not intend to update the previously issued guidance and long-term outlook information, including the guidance provided in the Company’s August 4, 2022 press release announcing its second quarter 2022 financial and operational results (“the second quarter earnings release”). Accordingly, investors are cautioned not to rely on historical forward-looking statements regarding guidance and long-term outlook information, including any such information provided in the second quarter earnings release, as those forward-looking statements were the estimates of management only as of the date provided, have not and will not be updated and were subject to the specific risks and uncertainties that accompanied such forward-looking statements. As a result of the pending merger, there will not be an investor conference call.

SUBSEQUENT EVENTS

Midland Acquisition

As previously announced, on August 22, 2022, Brigham LLC entered into a definitive purchase and sale agreement (the “Purchase Agreement”) with Avant Royalties, LP, Avant Royalties II, LP and Avant Royalties II Sidecar Fund, LP (collectively, the “Sellers”), pursuant to which Brigham LLC agreed to acquire certain mineral and royalty interests from the Sellers (the “Midland Acquisition”) for $132.5 million in cash, subject to customary closing adjustments. The Midland Acquisition was completed on October 21, 2022 and has an effective date of July 1, 2022. The Company financed the Midland Acquisition through a combination of cash on hand and borrowings under the Company’s revolving credit facility.

OPERATIONAL UPDATE

Mineral and Royalty Interest Ownership Update

During the third quarter 2022, the Company executed twelve transactions acquiring approximately 365 net royalty acres (standardized to a 1/8th royalty interest) and deployed $12.2 million in capital. The Company deployed substantially all of its mineral acquisition capital in the third quarter to the Permian Basin. Third quarter acquisitions are expected to deliver near-term production and cash flow growth with the addition of 26 gross DUCs (0.1 net) and 45 gross permits (0.2 net) to inventory counts.

The table below summarizes the Company’s approximate mineral and royalty interest ownership as of the dates indicated.

 

 

Delaware

 

Midland

 

Anadarko

 

DJ

 

Williston

 

Total

Net Royalty Acres

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2022

 

30,150

 

9,235

 

9,850

 

24,755

 

8,185

 

82,175

June 30, 2022

 

30,010

 

9,015

 

9,850

 

24,755

 

8,180

 

81,810

Acres Added and (Sold) Q/Q

 

140

 

220

 

—

 

—

 

5

 

365

% Added and (Sold) Q/Q

 

—%

 

2%

 

—%

 

—%

 

—%

 

—%

DUC Conversions Updates

During the third quarter 2022, the Company identified 307 gross (1.9 net) horizontal wells converted to production, which represented 30% of its net DUC inventory as of the second quarter 2022 (28% of gross DUCs). Well conversions to proved developed producing during third quarter are summarized in the table below:

Q3 2022 Wells Converted to Proved Developed Producing

 

 

Gross

 

Net

DUCs

 

307

 

1.9

Acquired Wells Net of Divestitures

 

71

 

0.2

Converted Permitted and Other

 

3

 

(0.1)

Total

 

381

 

2.0

Drilling Activity Update

During the third quarter 2022, the Company identified 207 gross (1.7 net) wells spud on its mineral position, which represents a 13% sequential increase from the second quarter 2022 on a net well basis. Brigham’s average quarterly gross and net wells spud from 2019 through the second quarter 2022 relative to the third quarter 2022 are summarized in the table below:

 

2019(1)

 

2020(1)

 

2021(1)

 

Q1 22

 

Q2 22

 

Q3 22

Gross Wells Spud

219

 

95

 

164

 

238

 

253

 

207

Net Wells Spud

1.4

 

0.7

 

1.3

 

2.1

 

1.5

 

1.7

 

(1) Amounts represent average quarterly numbers during the year.

DUC and Permit Inventory Update

The Company expects future production volumes will be driven by the continued conversion of its DUC and permit inventory. Brigham’s gross and net DUC and permit inventory as of September 30, 2022 by basin is outlined in the table below:

 

 

Development Inventory by Basin(1)

 

 

Delaware

 

Midland

 

Anadarko

 

DJ

 

Williston

 

Total

Gross Inventory

 

 

 

 

 

 

 

 

 

 

 

 

DUCs

 

207

 

368

 

18

 

166

 

170

 

929

Permits

 

355

 

149

 

5

 

149

 

199

 

857

Net Inventory

 

 

 

 

 

 

 

 

 

 

 

 

DUCs

 

2.5

 

1.8

 

0.1

 

2.0

 

0.4

 

6.7

Permits

 

2.0

 

0.7

 

—

 

0.9

 

0.4

 

4.1

 

(1) Individual amounts may not add to totals due to rounding.

FINANCIAL UPDATE

For the three months ended September 30, 2022, crude oil, natural gas and NGL production volumes increased 15% to 15,000 Boe/d as compared to the three months ended June 30, 2022 and increased 65% as compared to the same prior-year period. During the three months ended September 30, 2022, we collected revenues attributable to first payments received on production from numerous new wells turned-in-line at high initial flow rates on high-interest acreage in the Delaware and Midland basins. We typically receive first payment from an operator several months or longer after initial production, which typically covers multiple months of production, and as such, high-interest wells or wells with robust initial production rates can have a significant impact on revenues for the period in which first payments are collected.

For the three months ended September 30, 2022, average realized prices were $97.20 per barrel of oil, $7.09 per Mcf of natural gas, and $30.70 per barrel of NGL, for a total equivalent price of $67.21 per Boe. This represents a 12% decrease relative to the three months ended June 30, 2022 and a 39% increase relative to the same prior-year period.

The Company's net income for the three months ended September 30, 2022 was $44.4 million, inclusive of $7.8 million of merger related costs. Adjusted Net Income for three months ended September 30, 2022 was $52.2 million, excluding $7.8 million of merger related costs, up 4% from the three months ended June 30, 2022 and up 176% relative to the same prior-year period. Adjusted EBITDA was $82.1 million for the three months ended September 30, 2022, up 3% from the three months ended June 30, 2022 and up 135% relative to the same prior-year period. Adjusted EBITDA ex lease bonus was $80.7 million for the three months ended September 30, 2022, up 2% from the three months ended June 30, 2022 and up 141% from the same prior-year period. Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA ex lease bonus are Non-GAAP financial measures. For a definition of Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA ex lease bonus and a reconciliation to our most directly comparable measure calculated and presented in accordance with GAAP, please read "Non-GAAP Financial Measures” below.

As of September 30, 2022, the Company had a cash balance of $33.0 million and $217.0 million of undrawn revolver capacity under its credit facility, providing the Company with total liquidity of $250.0 million.

Results of Operations

 

Unaudited Financial and Operational Results

 

Three Months Ended

 

Nine Months Ended

($ in thousands, except for realized prices and unit expenses)

 

September 30, 2022

 

June 30, 2022

 

September 30, 2022

 

September 30, 2021

Operating Revenues

 

 

 

 

 

 

 

 

Oil sales

 

$

67,132

 

 

$

66,415

 

 

$

184,235

 

 

$

78,022

 

Natural gas sales

 

 

16,016

 

 

 

13,968

 

 

 

40,296

 

 

 

19,450

 

NGL sales

 

 

9,602

 

 

 

10,020

 

 

 

28,617

 

 

 

12,182

 

Total mineral and royalty revenue

 

$

92,750

 

 

$

90,403

 

 

$

253,148

 

 

$

109,654

 

Lease bonus and other revenue

 

 

1,456

 

 

 

476

 

 

 

3,365

 

 

 

3,894

 

Total Revenues

 

$

94,206

 

 

$

90,879

 

 

$

256,513

 

 

$

113,548

 

Production

 

 

 

 

 

 

 

 

Oil (MBbls)

 

 

691

 

 

 

612

 

 

 

1,855

 

 

 

1,245

 

Natural gas (MMcf)

 

 

2,259

 

 

 

2,011

 

 

 

6,138

 

 

 

4,441

 

NGLs (MBbls)

 

 

312

 

 

 

237

 

 

 

769

 

 

 

471

 

Equivalents (MBoe)

 

 

1,379

 

 

 

1,185

 

 

 

3,647

 

 

 

2,456

 

Equivalents per day (Boe/d)

 

 

15,000

 

 

 

13,019

 

 

 

13,361

 

 

 

8,996

 

Realized Prices ($/Boe)

 

 

 

 

 

 

 

 

Oil ($/Bbl)

 

$

97.20

 

 

$

108.37

 

 

$

99.32

 

 

$

62.68

 

Natural gas ($/Mcf)

 

 

7.09

 

 

 

6.95

 

 

 

6.56

 

 

 

4.38

 

NGLs ($/Bbl)

 

 

30.70

 

 

 

42.31

 

 

 

37.19

 

 

 

25.87

 

Average Realized Price

 

$

67.21

 

 

$

76.31

 

 

$

69.40

 

 

$

44.65

 

Operating Expenses

 

 

 

 

 

 

 

 

Gathering, transportation and marketing

 

$

2,962

 

 

$

2,246

 

 

$

7,211

 

 

$

4,967

 

Severance and ad valorem taxes

 

 

5,972

 

 

 

5,361

 

 

 

15,664

 

 

 

6,505

 

Depreciation, depletion, and amortization

 

 

14,964

 

 

 

13,449

 

 

 

40,726

 

 

 

27,129

 

General and administrative (before share-based compensation)

 

 

10,914

 

 

 

3,587

 

 

 

18,929

 

 

 

9,331

 

Total operating expenses (before share-based compensation)

 

$

34,812

 

 

$

24,643

 

 

$

82,530

 

 

$

47,932

 

General and administrative, share-based compensation

 

 

1,961

 

 

 

1,959

 

 

 

5,401

 

 

 

7,537

 

Total Operating Expenses

 

$

36,773

 

 

$

26,602

 

 

$

87,931

 

 

$

55,469

 

Income from Operations

 

$

57,433

 

 

$

64,277

 

 

$

168,582

 

 

$

58,079

 

Other expenses:

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(1,046

)

 

 

(1,154

)

 

 

(3,114

)

 

 

(1,105

)

Other income, net

 

 

6

 

 

 

14

 

 

 

40

 

 

 

51

 

Income Before Taxes

 

$

56,393

 

 

$

63,137

 

 

$

165,508

 

 

$

57,025

 

Income tax expense

 

 

11,950

 

 

 

12,957

 

 

 

31,820

 

 

 

10,717

 

Net Income

 

$

44,443

 

 

$

50,180

 

 

$

133,688

 

 

$

46,308

 

Less: Net income attributable to non-controlling interest

 

 

(5,984

)

 

 

(7,931

)

 

 

(21,998

)

 

 

(12,311

)

Net income attributable to Brigham Minerals, Inc. stockholders

 

$

38,459

 

 

$

42,249

 

 

$

111,690

 

 

$

33,997

 

 

 

Three Months Ended

 

Nine Months Ended

Unit Expenses ($/Boe)

 

September 30, 2022

 

June 30, 2022

 

September 30, 2022

 

September 30, 2021

Gathering, transportation and marketing

 

$

2.15

 

$

1.90

 

$

1.98

 

$

2.02

Severance and ad valorem taxes

 

 

4.33

 

 

4.52

 

 

4.29

 

 

2.65

Depreciation, depletion and amortization

 

 

10.84

 

 

11.35

 

 

11.17

 

 

11.05

General and administrative (before share-based compensation) (1)

 

 

7.91

 

 

3.03

 

 

5.19

 

 

3.80

General and administrative, share-based compensation

 

 

1.42

 

 

1.65

 

 

1.48

 

 

3.07

Interest expense, net

 

 

0.76

 

 

0.97

 

 

0.85

 

 

0.45

(1)

General and administrative expenses (before share-based compensation) for the three months ended September 30, 2022 include costs related to the Mergers of $7.8 million, or $5.63 per Boe. General and administrative expenses (before share-based compensation) for the nine months ended September 30, 2022 include costs related to the Mergers of $7.8 million, or $2.13 per Boe.

Quarterly Cash Dividend

The Company’s Board of Directors (the “Board”) has declared a quarterly cash dividend incorporating results for the third quarter 2022 of $0.81 per share of Class A common stock at a 75% payout ratio. This represents a 5% increase compared to the dividend declared for the second quarter of 2022. The third quarter dividend represents a base dividend of $0.16 per share and a variable dividend of $0.65 per share and will be paid on November 25, 2022 to holders of record as of November 18, 2022. An amount equal to the cash dividend per share will also be set aside for each outstanding award granted under the long-term incentive plan for payment upon the vesting of such awards in accordance with their terms.

Future declarations of dividends are subject to approval by the Board and to the Board’s continuing determination that the declarations of dividends are in the best interests of the Company and its shareholders. Future dividends may be adjusted at the Board’s discretion based on market conditions and capital availability.

Non-GAAP Financial Measures

Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA Margin, Discretionary Cash Flow, Discretionary Cash Flow ex lease bonus, and Net Debt are non-GAAP supplemental financial measures used by our management and by external users of our financial statements such as investors, research analysts and others to assess the financial performance of our assets and their ability to sustain dividends over the long term without regard to financing methods, capital structure or historical cost basis.

We define Adjusted Net Income as net income excluding the impacts of merger related costs. We define Adjusted EBITDA as Adjusted Net Income before depreciation, depletion and amortization, share-based compensation expense, interest expense, and income tax expense, less other income. We define Adjusted EBITDA ex lease bonus as Adjusted EBITDA further adjusted to eliminate the impacts of lease bonus and other revenues we receive due to the unpredictability of timing of the revenue. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenue. We define Discretionary Cash Flow as Adjusted EBITDA, less cash interest expense and cash taxes. We define Discretionary Cash Flow ex lease bonus as Discretionary Cash Flow further adjusted to eliminate the impacts of lease bonus and other revenues. We define Net Debt as total debt less cash and cash equivalents.

Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA Margin, Discretionary Cash Flow, Discretionary Cash Flow ex lease bonus, and Net Debt do not represent and should not be considered alternatives to, or more meaningful than, net income or any other measure of financial performance presented in accordance with GAAP as measures of our financial performance. Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA Margin, Discretionary Cash Flow and Discretionary Cash Flow ex lease bonus have important limitations as analytical tools because they exclude some but not all items that affect net income, the most directly comparable GAAP financial measure. Net Debt should not be considered an alternative to, or more meaningful than, total debt, the most directly comparable GAAP measure. Our computation of Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA Margin, Discretionary Cash Flow, Discretionary Cash Flow ex lease bonus, and Net Debt may differ from computations of similarly titled measures of other companies.

The following tables present a reconciliation of Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA Margin, Discretionary Cash Flow, Discretionary Cash Flow ex lease bonus, and Net Debt to the most directly comparable GAAP financial measure for the periods indicated.

SUPPLEMENTAL SCHEDULES

Reconciliation of Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex Lease Bonus and Adjusted EBITDA Margin

 

 

 

Three Months Ended

 

Nine Months Ended

($ In thousands)

 

September 30, 2022

 

June 30, 2022

 

September 30, 2021

 

September 30, 2022

 

September 30, 2021

Net Income

 

$

44,443

 

 

$

50,180

 

 

$

18,911

 

 

$

133,688

 

 

$

46,308

 

Add:

 

 

 

 

 

 

 

 

 

 

Merger-related costs

 

 

7,769

 

 

 

—

 

 

 

—

 

 

 

7,769

 

 

 

—

 

Adjusted Net Income

 

$

52,212

 

 

$

50,180

 

 

$

18,911

 

 

$

141,457

 

 

$

46,308

 

Add:

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion, and amortization

 

 

14,964

 

 

 

13,449

 

 

 

8,682

 

 

 

40,726

 

 

 

27,129

 

Share-based compensation expense

 

 

1,961

 

 

 

1,959

 

 

 

2,682

 

 

 

5,401

 

 

 

7,537

 

Interest expense, net

 

 

1,046

 

 

 

1,154

 

 

 

451

 

 

 

3,114

 

 

 

1,105

 

Income tax expense

 

 

11,950

 

 

 

12,957

 

 

 

4,214

 

 

 

31,820

 

 

 

10,717

 

Less:

 

 

 

 

 

 

 

 

 

 

Other income, net

 

 

6

 

 

 

14

 

 

 

36

 

 

 

40

 

 

 

51

 

Adjusted EBITDA

 

$

82,127

 

 

$

79,685

 

 

$

34,904

 

 

$

222,478

 

 

$

92,745

 

Less:

 

 

 

 

 

 

 

 

 

 

Lease bonus and other revenue

 

 

1,456

 

 

 

476

 

 

 

1,491

 

 

 

3,365

 

 

 

3,894

 

Adjusted EBITDA ex Lease Bonus

 

$

80,671

 

 

$

79,209

 

 

$

33,413

 

 

$

219,113

 

 

$

88,851

 

 

 

 

 

 

 

 

 

 

 

 

Memo: Adjusted EBITDA Margin

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

94,206

 

 

$

90,879

 

 

$

41,964

 

 

$

256,513

 

 

$

113,548

 

Adjusted EBITDA

 

$

82,127

 

 

$

79,685

 

 

$

34,904

 

 

$

222,478

 

 

$

92,745

 

Adjusted EBITDA Margin

 

 

87

%

 

 

88

%

 

 

83

%

 

 

87

%

 

 

82

%

 

Reconciliation of Discretionary Cash Flow and Discretionary Cash Flow ex Lease Bonus

 

 

 

Three Months Ended

($ In thousands, except per share amounts)

 

September 30, 2022

 

June 30, 2022

 

September 30, 2021

Adjusted EBITDA(1)

 

$

82,127

 

 

$

79,685

 

 

$

34,904

 

Less:

 

 

 

 

 

 

Adjusted EBITDA attributable to non-controlling interest

 

 

(8,517

)

 

 

(8,869

)

 

 

(7,094

)

Adjusted EBITDA attributable to Class A common stock

 

$

73,610

 

 

$

70,816

 

 

$

27,810

 

Less:

 

 

 

 

 

 

Cash interest expense

 

 

782

 

 

 

989

 

 

 

368

 

Cash taxes

 

 

12,091

 

 

 

13,500

 

 

 

3,238

 

Dividend equivalent rights

 

 

1,119

 

 

 

887

 

 

 

645

 

Discretionary cash flow to Class A common stock

 

$

59,618

 

 

$

55,440

 

 

$

23,559

 

Less:

 

 

 

 

 

 

Lease bonus

 

 

1,305

 

 

 

423

 

 

 

1,188

 

Discretionary cash flow ex lease bonus to Class A common stock

 

$

58,313

 

 

$

55,017

 

 

$

22,371

 

Payout Ratio:

 

 

75

%

 

 

75

%

 

 

80

%

Distributed cash flow to Class A common stock

 

$

43,735

 

 

$

41,263

 

 

$

17,897

 

 

 

 

 

 

 

 

Shares of Class A common stock

 

 

54,175

 

 

 

53,721

 

 

 

45,245

 

 

 

 

 

 

 

 

Distributed cash flow per share of Class A common stock — Dividend

 

$

0.81

 

 

$

0.77

 

 

$

0.40

 

 

(1) Refer to Reconciliation of Adjusted EBITDA from Net Income above.

 

Reconciliation of Net Debt

 

($ In thousands)

 

September 30, 2022

 

June 30, 2022

 

December 31, 2021

Total Debt

 

$

73,000

 

$

73,000

 

$

93,000

Less: Cash and Cash Equivalents

 

 

32,995

 

 

24,103

 

 

20,819

Net Debt

 

$

40,005

 

$

48,897

 

$

72,181

 

Condensed Consolidated Balance Sheets

 

 

 

September 30,

 

December 31,

(In thousands, except share amounts)

 

 

2022

 

 

 

2021

 

ASSETS

 

(Unaudited)

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

32,995

 

 

$

20,819

 

Restricted cash

 

 

6,629

 

 

 

200

 

Accounts receivable

 

 

63,317

 

 

 

30,539

 

Prepaid expenses and other

 

 

3,196

 

 

 

3,145

 

Total current assets

 

 

106,137

 

 

 

54,703

 

Oil and gas properties, at cost, using the full cost method of accounting:

 

 

 

 

Unevaluated property

 

 

310,783

 

 

 

338,613

 

Evaluated property

 

 

754,418

 

 

 

633,138

 

Less accumulated depreciation, depletion, and amortization

 

 

(354,361

)

 

 

(239,612

)

Oil and gas properties, net

 

 

710,840

 

 

 

732,139

 

Other property and equipment

 

 

3,559

 

 

 

2,060

 

Less accumulated depreciation

 

 

(1,629

)

 

 

(1,280

)

Other property and equipment, net

 

 

1,930

 

 

 

780

 

Operating lease right-of-use asset

 

 

5,883

 

 

 

6,764

 

Deferred tax asset

 

 

39,485

 

 

 

25,308

 

Other assets, net

 

 

1,202

 

 

 

1,183

 

Total assets

 

$

865,477

 

 

$

820,877

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$

21,923

 

 

$

20,473

 

Current operating lease liability

 

 

1,211

 

 

 

1,178

 

Total current liabilities

 

 

23,134

 

 

 

21,651

 

Long-term bank debt

 

 

73,000

 

 

 

93,000

 

Non-current operating lease liability

 

 

4,831

 

 

 

5,742

 

Other non-current liabilities

 

 

2,427

 

 

 

810

 

Equity:

 

 

 

 

Preferred stock, $0.01 par value; 50,000,000 authorized; no shares issued and outstanding at September 30, 2022 and December 31, 2021

 

 

—

 

 

 

—

 

Class A common stock, $0.01 par value; 400,000,000 authorized, 54,734,157 shares issued and 54,175,458 shares outstanding at September 30, 2022; 400,000,000 authorized, 48,796,518 shares issued and 48,359,888 shares outstanding at December 31, 2021

 

 

547

 

 

 

488

 

Class B common stock, $0.01 par value; 150,000,000 authorized, 6,270,684 shares issued and outstanding at September 30, 2022; 150,000,000 authorized, 11,371,517 shares issued and outstanding at December 31, 2021

 

 

—

 

 

 

—

 

Additional paid-in capital

 

 

760,879

 

 

 

634,564

 

Accumulated deficit

 

 

(91,218

)

 

 

(105,096

)

Treasury stock, at cost; 558,699 shares at September 30, 2022 and 436,630 shares at December 31, 2021

 

 

(6,338

)

 

 

(3,527

)

Total equity attributable to Brigham Minerals, Inc.

 

 

663,870

 

 

 

526,429

 

Non-controlling interests

 

 

98,215

 

 

 

173,245

 

Total equity

 

$

762,085

 

 

$

699,674

 

Total liabilities and equity

 

$

865,477

 

 

$

820,877

 

 

Unaudited Condensed Consolidated Statements of Operations

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

(In thousands, except per share data)

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

REVENUES

 

 

 

 

 

 

 

 

Mineral and royalty revenues

 

$

92,750

 

 

$

40,473

 

 

$

253,148

 

 

$

109,654

 

Lease bonus and other revenues

 

 

1,456

 

 

 

1,491

 

 

 

3,365

 

 

 

3,894

 

Total revenues

 

 

94,206

 

 

 

41,964

 

 

 

256,513

 

 

 

113,548

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

Gathering, transportation and marketing

 

 

2,962

 

 

 

1,641

 

 

 

7,211

 

 

 

4,967

 

Severance and ad valorem taxes

 

 

5,972

 

 

 

2,372

 

 

 

15,664

 

 

 

6,505

 

Depreciation, depletion, and amortization

 

 

14,964

 

 

 

8,682

 

 

 

40,726

 

 

 

27,129

 

General and administrative

 

 

12,875

 

 

 

5,729

 

 

 

24,330

 

 

 

16,868

 

Total operating expenses

 

 

36,773

 

 

 

18,424

 

 

 

87,931

 

 

 

55,469

 

INCOME FROM OPERATIONS

 

 

57,433

 

 

 

23,540

 

 

 

168,582

 

 

 

58,079

 

Interest expense, net

 

 

(1,046

)

 

 

(451

)

 

 

(3,114

)

 

 

(1,105

)

Other income, net

 

 

6

 

 

 

36

 

 

 

40

 

 

 

51

 

Income before income taxes

 

 

56,393

 

 

 

23,125

 

 

 

165,508

 

 

 

57,025

 

Income tax expense

 

 

11,950

 

 

 

4,214

 

 

 

31,820

 

 

 

10,717

 

NET INCOME

 

$

44,443

 

 

$

18,911

 

 

$

133,688

 

 

$

46,308

 

Less: Net income attributable to non-controlling interest

 

 

(5,984

)

 

 

(4,698

)

 

 

(21,998

)

 

 

(12,311

)

Net income attributable to Brigham Minerals, Inc. stockholders

 

$

38,459

 

 

$

14,213

 

 

$

111,690

 

 

$

33,997

 

 

 

 

 

 

 

 

 

 

NET INCOME PER COMMON SHARE

 

 

 

 

 

 

 

Basic

 

$

0.71

 

 

$

0.31

 

 

$

2.16

 

 

$

0.77

 

Diluted

 

$

0.69

 

 

$

0.31

 

 

$

2.09

 

 

$

0.75

 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

Basic

 

 

53,943

 

 

 

45,198

 

 

 

51,663

 

 

 

44,216

 

Diluted

 

 

55,942

 

 

 

45,888

 

 

 

53,463

 

 

 

45,056

 

 

Unaudited Condensed Consolidated Statement of Cash Flows

 

 

 

Nine Months Ended September 30,

(In thousands)

 

 

2022

 

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

Net income

 

$

133,688

 

 

$

46,308

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation, depletion and amortization

 

 

40,726

 

 

 

27,129

 

Share-based compensation expense

 

 

5,401

 

 

 

7,537

 

Amortization of debt issuance costs

 

 

467

 

 

 

217

 

Deferred income tax expense

 

 

2,499

 

 

 

2,794

 

Credit losses

 

 

274

 

 

 

144

 

Changes in operating assets and liabilities:

 

 

 

 

(Increase) in accounts receivable

 

 

(33,052

)

 

 

(10,999

)

(Increase) in other current assets

 

 

(49

)

 

 

(1,753

)

Increase in accounts payable and accrued liabilities

 

 

12,773

 

 

 

968

 

Increase in other long-term liabilities

 

 

—

 

 

 

20

 

Net cash provided by operating activities

 

$

162,727

 

 

$

72,365

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

Additions to oil and gas properties

 

 

(71,748

)

 

 

(49,203

)

Additions to other fixed assets

 

 

(1,373

)

 

 

(28

)

Proceeds from sale of oil and gas properties, net

 

 

74,370

 

 

 

4,441

 

Net cash provided by (used in) investing activities

 

$

1,249

 

 

$

(44,790

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

Payments of long-term debt

 

 

(70,000

)

 

 

(4,000

)

Borrowing of long-term debt

 

 

50,000

 

 

 

37,000

 

Offering costs of Class A common stock

 

 

(78

)

 

 

—

 

Dividends paid

 

 

(97,574

)

 

 

(41,374

)

Distribution to holders of non-controlling interest

 

 

(17,490

)

 

 

(12,668

)

Debt issuance costs

 

 

(486

)

 

 

(247

)

Payment of employee tax withholding for settlement of equity compensation awards

 

 

(9,743

)

 

 

(1,136

)

Net cash used in financing activities

 

$

(145,371

)

 

$

(22,425

)

Change in cash and cash equivalents and restricted cash

 

 

18,605

 

 

 

5,150

 

Cash and cash equivalents and restricted cash, beginning of period

 

 

21,019

 

 

 

9,144

 

Cash and cash equivalents and restricted cash, end of period

 

$

39,624

 

 

$

14,294

 

Supplemental disclosure of non-cash activity:

 

 

 

 

Accrued capital expenditures

 

$

284

 

 

$

36

 

Capitalized share-based compensation cost

 

$

4,476

 

 

$

5,475

 

Issuance of Class A common stock for acquisitions of oil and gas properties, net

 

$

17,629

 

 

$

—

 

Temporary equity cumulative adjustment to carrying value

 

$

—

 

 

$

54,294

 

Supplemental cash flow information:

 

 

 

 

Cash payments for loan commitment fees and interest

 

$

(2,789

)

 

$

(898

)

Tax payments, net of refunds

 

$

(23,655

)

 

$

(6,481

)

ABOUT BRIGHAM MINERALS, INC.

Brigham Minerals is an Austin, Texas, based company that acquires and actively manages a portfolio of mineral and royalty interests in the core of some of the most active, highly economic, liquids-rich resource basins across the continental United States. Brigham Minerals’ assets are located in the Delaware and Midland Basins in West Texas and New Mexico, the Anadarko Basin of Oklahoma, the DJ Basin in Colorado and Wyoming, and the Williston Basin in North Dakota. The Company’s primary business objective is to maximize risk-adjusted total return to its shareholders by both capturing organic growth in its existing assets as well as leveraging its highly experienced technical evaluation team to continue acquiring minerals.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements pertaining to our pending merger with Sitio and the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including production and other guidance within this press release. These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include, but are not limited to, operator capital discipline and inflation impacts on their cash flows, the Company’s ability to integrate acquisitions into its existing business, changes in oil, natural gas and NGL prices, weather and environmental conditions, the timing of planned capital expenditures, availability of and competition for acquisitions, operational factors affecting the commencement or maintenance of producing wells on the Company’s properties, the condition of the capital markets generally, as well as the Company’s ability to access them, economic and competitive conditions, including those resulting from the current conflict between Russia and Ukraine and elevated inflation levels resulting from global supply and demand imbalances, the proximity to and capacity of transportation, uncertainties regarding environmental regulations or litigation, global or national health events, such as the COVID-19 pandemic, potential future pandemics, the actions of the Organization of Petroleum Exporting Countries and other significant producers and governments and the ability of such producers to agree to and maintain oil price and production controls and other legal or regulatory developments affecting the Company’s business and other important factors. These and other applicable uncertainties, factors and risks are described more fully in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2021, and any subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company’s actual results and plans could differ materially from those expressed in any forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise except as required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221102006160/en/

At the Company: Brigham Minerals, Inc. Blake C. Williams Chief Financial Officer (512) 220-1500 InvestorRelations@brighamminerals.com