• Bonanza Creek Energy Announces First Quarter 2019 Financial Results and Operational Update

    ソース: Nasdaq GlobeNewswire / 08 5 2019 16:46:02   America/New_York

    DENVER, May 08, 2019 (GLOBE NEWSWIRE) -- Bonanza Creek Energy, Inc. (NYSE: BCEI) (the "Company" or "Bonanza Creek") today announced its first quarter 2019 financial results and operating outlook and has posted an updated investor presentation on its corporate website.

    Highlights of the first quarter 2019 include:

    • First quarter 2019 sales volumes increased 17% sequentially to 20.7 thousand barrels of oil equivalent per day ("MBoe/d") on capital expenditures of $44.8 million

    • Net oil and gas revenue of $72.6 million, an increase of 10% sequentially

    • Lease operating expenses of $2.91 per Boe, a decrease of 11% sequentially

    • Rocky Mountain Infrastructure ("RMI") operating expenses of $1.24 per Boe

    • Total general and administrative ("G&A") expense of $10.3 million including $8.9 million or $4.77 per Boe of cash G&A(1) expense. The Company is reiterating full year 2019 cash G&A guidance of $3.70 per Boe to $4.20 per Boe

    • GAAP net loss of $7.0 million or $0.34 per diluted share, inclusive of $1.82 non-cash loss on derivatives

    • Adjusted EBITDAX(1) of $49.2 million, or $2.39 per diluted share, an increase of 17% sequentially

    • Total debt to trailing twelve month Adjusted EBITDAX of less than 0.5x

    (1) Non-GAAP measure, see attached reconciliation schedules at the end of this release.

    Eric Greager, Chief Executive Officer of Bonanza Creek, commented, "We are pleased with the strong start to 2019. Our skilled technical and operations teams continue to drive positive results, while new well performance in Legacy East continues to demonstrate the quality of our inventory. We remain focused on planning and efficient execution, continuing to improve our cost structure, and generating value for our shareholders.”

    First Quarter 2019 Results

    During the first quarter of 2019, the Company reported daily sales of 20.7 MBoe/d, which increased 17% from fourth quarter 2018. Product mix for the first quarter of 2019 was 65% oil, 16% NGLs, and 19% residue natural gas. During the first quarter of 2019, the Company drilled 13 gross (11.8 net) operated wells, 10 of which were extended reach lateral ("XRL") wells, and turned to sales 22 gross (14.8 net) operated wells, 8 of which were XRL wells.

    The table below provides operating statistics for our Wattenberg assets.

      Three Months Ended March 31,(1) 
      2019  2018  % Change 
    Avg. Daily Sales Volumes:         
    Crude oil (Bbls/d) 13,425   8,281   62% 
    Natural gas (Mcf/d) 24,427   18,257   34% 
    Natural gas liquids (Bbls/d) 3,240   2,415   34% 
    Crude oil equivalent (Boe/d) 20,736   13,739   51% 
              
    Product Mix         
      Crude oil 65%  60%    
      Natural gas 19%  22%    
      Natural gas liquids 16%  18%    
              
    Average Sales Prices (before derivatives):         
      Crude oil (per Bbl) $49.83   $57.01     
      Natural gas (per Mcf) $3.08   $2.64     
      Natural gas liquids (per Bbl) $14.91   $22.33     
      Crude oil equivalent (per Boe) $38.22   $41.79     
              

    (1) Results for three months ended are for Wattenberg only. Please see tables in the back of this press release and our Quarterly Report on Form 10-Q filed on May 8, 2019 for total Company operating statistics.

    Net oil and gas revenue for the first quarter of 2019 was $72.6 million compared to $66.2 million for the fourth quarter of 2018. The increase was primarily a result of increased production partially offset by lower realized prices. Crude oil accounted for approximately 84% of total revenue. Differentials for the Company's Wattenberg oil production during the quarter averaged approximately $5.45 per barrel off of NYMEX WTI.

    Wattenberg LOE for the first quarter of 2019 on a unit basis decreased by 11% to $2.91 per Boe from $3.27 per Boe in the fourth quarter of 2018 and compared favorably to full year 2019 guidance of $3.00 per Boe to $3.50 per Boe. Additionally, RMI operating expenses for the first quarter were $1.24 per Boe compared to $1.06 per Boe in fourth quarter of 2018 and in line with the Company's expectations.

    Unit operating expenses continue to benefit from lower regulatory, compliance, compression, and labor costs. Additionally, the Company is benefiting from RMI as incremental production is absorbed into existing central production facilities without the need for additional tank batteries, compression or labor. Given positive results to date, the Company is lowering annual LOE guidance to a range of $2.75 per Boe to $3.25 per Boe.

    The Company continued to benefit from multiple delivery points on the RMI system in the first quarter. As previously mentioned, the Company’s fourth gas processor (Cureton Midstream) brought online a 60 MMcf per day cryogenic gas processing plant in the fourth quarter of 2018, further enhancing the Company’s downstream optionality. This delivery point flexibility, combined with consistently low line pressures on RMI, has helped minimize production constraints. Line pressure on the Company’s RMI system has remained consistent between 50 and 100 psi, well below typical field-wide operating pressures outside of RMI. Additionally, construction of the Company’s new oil gathering line to Riverside Terminal is underway and is expected to lower oil differentials in the second half of 2019 by $1.25 to $1.50 for each barrel flowing through the line.

    The Company's general and administrative ("G&A") expense was $10.3 million for the first quarter of 2019, which included $1.4 million in stock compensation. Cash G&A expense, which excludes stock compensation, was $8.9 million for the first quarter. Cash G&A is a non-GAAP measure. Please see Schedule 7 at the end of this release for a reconciliation from GAAP G&A to cash G&A.

    Guidance Summary

    Guidance1Q19 ActualsFY19 Guidance
      Production (MBoe/d) 20.7 20.0 - 24.0
      LOE ($/Boe)$2.91 $2.75 - $3.25
      RMI Opex ($/Boe)$1.24 $1.10 - $1.40
      Cash G&A ($/Boe)$4.77 $3.70 - $4.20
      Severance Ad/Valorem (% of rev) 5.9%8% - 9%
      Oil Differential ($/bbl)(1)$5.45 $4.25 - $5.25
      Total Capex ($MM)$45 $230 - $255
      D&C Capex ($MM)$39 $210 - $220

    (1) Oil differential guidance predicated on $50 WTI and $3 Henry Hub pricing environment.

    Conference Call Information

    The Company will host a conference call to discuss these results on May 9, 2019 at 9:00 a.m. Mountain Time (11:00 a.m. Eastern Time). A live webcast and replay of this event will be available on the Investor Relations section of the Company’s website at www.bonanzacrk.com. Dial-in information for the conference call is included below.

    TypePhone NumberPasscode
    Live participant877-793-43624198955
    Replay855-859-20564198955

    About Bonanza Creek Energy, Inc.

    Bonanza Creek Energy, Inc. is an independent oil and natural gas company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids-rich natural gas in the United States. The Company’s assets and operations are concentrated in the Rocky Mountain region in the Wattenberg Field, focused on the Niobrara and Codell formations. The Company’s common shares are listed for trading on the NYSE under the symbol: “BCEI.” For more information about the Company, please visit www.bonanzacrk.com. Please note that the Company routinely posts important information about the Company under the Investor Relations section of its website.

    Forward-Looking Statements

    This press release contains 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. 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. These statements are based on certain assumptions made by the Company based on management’s experience, perception of historical trends and technical analyses, current conditions, anticipated future developments and other factors believed to be appropriate and reasonable by management. When used in this press release, the words “will,” “potential,” “believe,” “estimate,” “intend,” “expect,” “may,” “should,” “anticipate,” “could,” “plan,” “predict,” “project,” “profile,” “model” or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These statements include statements regarding development and completion expectations and strategy; decreasing operating and capital costs; impact of the Company's reorganization; and updated 2019 guidance. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, that may cause actual results to differ materially from those implied or expressed by the forward-looking statements, including the following: changes in natural gas, oil and NGL prices; general economic conditions, including the performance of financial markets and interest rates; drilling results; shortages of oilfield equipment, services and personnel; operating risks such as unexpected drilling conditions; ability to acquire adequate supplies of water; risks related to derivative instruments; access to adequate gathering systems and pipeline take-away capacity; and pipeline and refining capacity constraints. Further information on such assumptions, risks and uncertainties is available in the Company’s SEC filings. We refer you to the discussion of risk factors in our Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 28, 2019, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, filed on May 8, 2019, and other filings submitted by us to the Securities Exchange Commission. The Company’s SEC filings are available on the Company’s website at www.bonanzacrk.com and on the SEC’s website at www.sec.gov. All of the forward-looking statements made in this press release are qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, including guidance, 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.

    For further information, please contact:
    Doug Atkinson
    Senior Manager, Investor Relations
    720-225-6690
    datkinson@bonanzacrk.com

    Scott Landreth
    Director, Finance & Treasurer
    720-225-6679
    slandreth@bonanzacrk.com

    Schedule 1: Statements of Operations
    (in thousands, expect for per share amounts, unaudited)

      
     Three Months
    Ended March 31,
    2019
     Three Months
    Ended March 31,
    2018
    Operating net revenues:   
    Oil and gas sales$72,594  $64,193 
    Operating expenses:   
    Lease operating expense5,426  10,459 
    Gas plant and midstream operating expense2,321  3,613 
    Gathering, transportation, and processing4,022  2,338 
    Severance and ad valorem taxes4,248  5,233 
    Exploration97  29 
    Depreciation, depletion, and amortization15,759  7,508 
    Abandonment and impairment of unproved properties879  2,502 
    Unused commitments  21 
    General and administrative expense (including $1,380 and $1,008, respectively, of stock-based compensation)10,278  9,533 
    Total operating expenses43,030  41,236 
    Income from operations29,564  22,957 
    Other income (expense):   
    Derivative loss(36,544) (8,742)
    Interest expense(1,151) (357)
    Gain on sale of properties1,126   
    Other income12  12 
    Total other expense(36,557) (9,087)
    Income (loss) from operations before taxes(6,993) 13,870 
    Income tax benefit (expense)   
    Net income (loss)$(6,993) $13,870 
        
    Comprehensive income (loss)$(6,993) $13,870 
        
    Basic net income (loss) per common share$(0.34) $0.68 
        
    Diluted net income (loss) per common share$(0.34) $0.68 
        
    Basic weighted-average common shares outstanding20,557  20,454 
        
    Diluted weighted-average common shares outstanding20,557  20,470 
     
     

    Schedule 2: Statements of Cash Flows
    (in thousands, unaudited)

      
     Three Months
    Ended March 31,
    2019
     Three Months
    Ended March 31,
    2018
    Cash flows from operating activities:   
    Net income (loss)$(6,993) $13,870 
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:   
    Depreciation, depletion, and amortization15,759  7,508 
    Abandonment and impairment of unproved properties879  2,502 
    Well abandonment costs and dry hole expense62   
    Stock-based compensation1,380  1,008 
    Amortization of deferred financing costs125   
    Derivative loss36,544  8,742 
    Derivative cash settlements936  (4,312)
    Gain on sale of oil and gas properties(1,126)  
    Other(900) 172 
    Changes in current assets and liabilities:   
      Accounts receivable6,237  (15,758)
      Prepaid expenses and other assets(440) 3,402 
      Accounts payable and accrued liabilities(10,150) (566)
      Settlement of asset retirement obligations(592) (665)
        Net cash provided by operating activities41,721  15,903 
    Cash flows from investing activities:   
    Acquisition of oil and gas properties(1,362) (98)
    Exploration and development of oil and gas properties(36,503) (37,664)
    Proceeds from sale of oil and gas properties1,153  20 
    Additions to property and equipment - non oil and gas(76) (103)
        Net cash used in investing activities(36,788) (37,845)
    Cash flows from financing activities:   
    Proceeds from current credit facility15,000   
    Proceeds from prior credit facility  15,000 
    Payment of employee tax withholdings in exchange for the return of common stock(153)  
      Net cash provided by financing activities14,847  15,000 
    Net change in cash, cash equivalents and restricted cash19,780  (6,942)
    Cash, cash equivalents and restricted cash:   
    Beginning of period13,002  12,782 
    End of period$32,782  $5,840 
     
     

    Schedule 3: Condensed Consolidated Balance Sheets
    (in thousands, unaudited)

      
     March 31, 2019 December 31, 2018
    ASSETS   
    Current assets:   
    Cash and cash equivalents$32,695  $12,916 
    Accounts receivable:   
    Oil and gas sales47,281  31,799 
    Joint interest and other25,858  47,577 
    Prepaid expenses and other5,073  4,633 
    Inventory of oilfield equipment2,484  3,478 
    Derivative assets6,400  34,408 
         Total current assets119,791  134,811 
    Property and equipment (successful efforts method):   
    Proved properties782,323  719,198 
    Less: accumulated depreciation, depletion and amortization(67,886) (52,842)
    Total proved properties, net714,437  666,356 
    Unproved properties154,599  154,352 
    Wells in progress73,993  93,617 
    Other property and equipment, net of accumulated depreciation of $2,701 in 2019 and $2,546 in 20183,570  3,649 
    Total property and equipment, net946,599  917,974 
    Long-term derivative assets  3,864 
    Right-of-use assets31,999   
    Other noncurrent assets4,998  4,885 
    Total assets$1,103,387  $1,061,534 
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    Current liabilities:   
    Accounts payable and accrued expenses$56,021  $79,390 
    Oil and gas revenue distribution payable31,314  19,903 
    Current portion of right-of-use liability8,429   
    Derivative liability4,889  183 
    Total current liabilities100,653  99,476 
        
    Long-term liabilities:   
    Credit facility65,000  50,000 
    Right-of-use liability24,359   
    Ad valorem taxes25,850  18,740 
    Asset retirement obligations for oil and gas properties29,378  29,405 
    Total liabilities245,240  197,621 
        
    Commitments and contingencies   
        
    Stockholders’ equity:   
    Preferred stock, $.01 par value, 25,000,000 shares authorized, none outstanding   
    Common stock, $.01 par value, 225,000,000 shares authorized, 20,558,591 and 20,543,940 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively4,286  4,286 
    Additional paid-in capital697,688  696,461 
    Retained earnings156,173  163,166 
    Total stockholders’ equity858,147  863,913 
    Total liabilities and stockholders’ equity$1,103,387  $1,061,534 
     
     

    Schedule 4: Per unit operating margins
    (unaudited)

     Three Months Ended March 31,(1) 
     2019 2018 Percent
    Change
     
    Sales volume      
    Oil (MBbl)1,208  895  35% 
    Gas (MMcf)2,198  2,135  3% 
    NGL (MBbl)292  258  13% 
    Equivalent (MBoe)1,866  1,509  24% 
           
    Realized pricing (before derivatives)      
    Oil ($/Bbl)$49.83  $57.89  (14)% 
    Gas ($/Mcf)$3.08  $2.78  11% 
    NGL ($/Bbl)$14.91  $23.33  (36)% 
    Equivalent ($/Boe)$38.22  $42.27  (10)% 
           
    Per Unit Costs ($/Boe)      
    Realized price equivalent (before derivatives)$38.22  $42.27  (10)% 
    Lease operating expense2.91  6.93  (58)% 
    Gathering, transportation and processing2.16  1.55  39% 
    Gas plant and midstream operating expense1.24  2.39  (48)% 
    Severance and ad valorem2.28  3.47  (34)% 
    Cash general and administrative(2)4.77  5.65  (16)% 
    Total cash operating costs$13.36  $19.99  (33)% 
    Cash operating margin (before derivatives)$24.86  $22.28  12% 
    Derivative cash settlements0.50  (2.85) % 
    Cash operating margin (after derivatives)$25.36  $19.43  31% 
           
    Non-cash items      
    Non-cash general and administrative$0.74  $0.67  10% 
                

    (1) The Mid-Continent region assets were sold August 6, 2018, and therefore, the data in the table above excludes the Mid-Continent region activity during the three months ended March 31, 2019 as compared to the three months ended March 31, 2018.
    (2) Cash general and administrative expense excludes stock-based compensation of $1.4 million and $1.0 million for the three months ended March 31, 2019 and 2018, respectively.

    Schedule 5: Adjusted Net Income
    (in thousands, except per share amounts, unaudited)

    Adjusted net income is a supplemental non-GAAP financial measure that is used by management to present recurring profitability that is more comparable between periods by excluding items that are non-recurring in nature or items which are not easily estimable. Management believes adjusted net income provides external users of the Company's consolidated financial statements such as industry analysts, investors, creditors, and rating agencies with additional information to assist in their analysis of the Company. The Company defines adjusted net income as net income after adjusting first for (1) the impact of certain non-cash items and one-time transactions and then (2) the non-cash and one time items’ impact on taxes based on a tax rate that approximates the Company's effective tax rate in each period. Adjusted net income is not a measure of net income (loss) as determined by GAAP.

    The following table presents a reconciliation of the GAAP financial measure of net income (loss) to the non-GAAP financial measure of adjusted net income.

      Three Months Ended
    March 31,
     
      2019 2018 
    Net income (loss) $(6,993) $13,870  
    Adjustments to net income (loss):     
    Derivative loss 36,544  8,742  
    Derivative cash settlements 936  (4,312) 
    Gain on sale of oil and gas properties (1,126)   
    Abandonment and impairment of unproved properties 879  2,502  
    Exploratory dry hole expense 62    
    Unused commitments   21  
    Stock-based compensation (1) 1,380  1,008  
    Severance costs (1) 418    
    Total adjustments before taxes 39,093  7,961  
    Income tax effect     
    Total adjustments after taxes $39,093  $7,961  
          
    Adjusted net income $32,100  $21,831  
    Adjusted net income per diluted share $1.56  $1.07  
          
    Diluted weighted-average common shares outstanding 20,557  20,470  
          
    (1) Included as a portion of general and administrative expense in the statements of operations.
     

    Schedule 6: Adjusted EBITDAX
    (in thousands, unaudited)

    Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management to provide a metric of the Company's ability to internally generate funds for exploration and development of oil and gas properties. The metric excludes items which are non-recurring in nature and/or items which are not reasonably estimable. Management believes adjusted EBITDAX provides external users of the Company’s consolidated financial statements such as industry analysts, investors, lenders, and rating agencies with additional information to assist in their analysis of the Company. The Company defines Adjusted EBITDAX as earnings before interest expense, income taxes, depreciation, depletion, amortization, impairment, exploration expenses and other similar non-cash and non-recurring charges. Adjusted EBITDAX is not a measure of net income (loss) or cash flows as determined by GAAP.

    The following table presents a reconciliation of the GAAP financial measure of net income (loss) to the non-GAAP financial measure of Adjusted EBITDAX.

      Three Months Ended March 31, 
      2019 2018 
    Net income (loss) $(6,993) $13,870  
    Exploration 97  29  
    Depreciation, depletion and amortization 15,759  7,508  
    Amortization of deferred financing costs 125    
    Abandonment and impairment of unproved properties 879  2,502  
    Unused commitments   21  
    Stock-based compensation (1) 1,380  1,008  
    Severance costs (1) 418    
    Interest expense 1,151  357  
    Derivative loss 36,544  8,742  
    Derivative cash settlements 936  (4,312) 
    Gain on sale of oil and gas properties (1,126)   
    Adjusted EBITDAX $49,170  $29,725  
          
    (1) Included as a portion of general and administrative expense in the statements of operations.
     
     

    Schedule 7: Recurring Cash G&A
    (in thousands, unaudited)

    Recurring cash G&A is a supplemental non-GAAP financial measure that is used by management to provide only the cash portion of its G&A expense, which can be used to evaluate cost management and operating efficiency on a comparable basis from period to period. Management believes recurring cash G&A provides external users of the Company’s consolidated financial statements such as industry analysts, investors, lenders, and rating agencies with additional information to assist in their analysis of the Company. The Company defines recurring cash G&A as GAAP general and administrative expense exclusive of the Company's stock based compensation and one-time charges. The Company refers to recurring cash G&A to provide typical recurring cash G&A costs that are planned for in a given period. Recurring cash G&A is not a fully inclusive measure of general and administrative expense as determined by GAAP.

    The following table presents a reconciliation of the GAAP financial measure of general and administrative expense to the non-GAAP financial measure of recurring cash G&A.

      Three Months Ended March 31, 
      2019 2018 
    General and administrative $10,278  $9,533  
    Stock-based compensation (1,380) (1,008) 
    Cash G&A $8,898  $8,525  

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