• Bonanza Creek Energy Announces Fourth Quarter and Full-Year 2018 Results

    ソース: Nasdaq GlobeNewswire / 27 2 2019 17:01:35   America/New_York

    DENVER, Feb. 27, 2019 (GLOBE NEWSWIRE) -- Bonanza Creek Energy, Inc. (NYSE: BCEI) (the "Company" or "Bonanza Creek") today announced its fourth quarter and full-year 2018 financial results and has posted an updated investor presentation on its corporate website.

    Highlights of the fourth quarter and full-year 2018 include:

    • Net oil and gas revenue of $66.2 million and $276.7 million for the three and twelve months ended December 31, 2018, respectively
    • Wattenberg lease operating expenses of $3.27 per Boe and $4.76 per Boe for the three and twelve months ended December 31, 2018, respectively
    • Rocky Mountain Infrastructure ("RMI") operating expenses of $1.06 per Boe and $1.35 per Boe for the three and twelve months ended December 31, 2018, respectively
    • GAAP net income of $106.1 million, or $5.15 per diluted share, and $168.2 million, or $8.16 per diluted share, for the three and twelve months ended December 31, 2018, respectively
    • Adjusted EBITDAX(1) of $41.9 million and $144.8 million for the three and twelve months ended December 31, 2018, respectively
    • Year-end 2018 Wattenberg reserves of 116.8 MMBoe, up 29% from prior year-end reserves with PV-10 growth of 60% to $955.0 million(2)
      (1)   Adjusted EBITDAX is a non-GAAP measure. Please see Schedule 5 at the end of this release for additional disclosures related to Adjusted EBITDAX and a reconciliation to net income (loss) (GAAP).
      (2)   PV-10 is a non-GAAP measure. Please see Schedule 6 at end of this release for additional disclosures related to PV-10 and a reconciliation to Standardized Measure (GAAP).

    Eric Greager, Chief Executive Officer of Bonanza Creek, commented, "We exited 2018 with significant momentum as adjusted EBITDAX increased to $41.9 million in the fourth quarter of 2018, up 9% sequentially from third quarter of 2018.  Our results continue to demonstrate the quality of our assets and our technical and operational capabilities. Our returns focused capital program, combined with an improved cost structure, provide a disciplined path to achieving greater than 30% Wattenberg production growth while maintaining leverage of approximately 0.5x in 2019.”

    Fourth Quarter 2018 Results

    During the fourth quarter of 2018, the Company reported Wattenberg average daily sales of 17.7 Mboe per day, which increased 5% from the third quarter 2018, driven by high-intensity completion designs and consistently low gathering system pressures on the Company's RMI system. Product mix for the fourth quarter of 2018 was 62% oil, 17% NGLs, and 21% residue natural gas. During the fourth quarter of 2018, the Company drilled 28 gross (21.8 net) operated wells, 8 of which were extended reach lateral ("XRL") wells, and turned to sales 17 gross (12.8 net) operated wells, 9 of which were XRL wells.

    The table below provides operating statistics for our Wattenberg assets.

      Three Months Ended(1) Twelve Months Ended(1)
      12/31/2018 12/31/2017 % Change 12/31/2018 12/31/2017 % Change
    Avg. Daily Sales Volumes:                  
    Crude oil (Bbls/d) 11,039  6,762    63%    9,589   6,646   44% 
    Natural gas (Mcf/d) 22,627  17,397    30%    20,297   19,597   3% 
    Natural gas liquids (Bbls/d) 2,928  2,311    27%    2,872   2,869     --  
    Crude oil equivalent (Boe/d) 17,738  11,972    48%    15,844   12,782   23% 
                 
    Product Mix            
      Crude oil  62%  56%   61%  52%   
      Natural gas  21%  25%   21%  26%   
      Natural gas liquids  17%  19%   18%  22%   
                 
    Average Sales Prices (before derivatives)(2):            
      Crude oil (per Bbl)  $52.70   $51.30    3%   $58.82    $46.81   25% 
      Natural gas (per Mcf)  $2.68   $2.08    29%   $2.36    $2.20   7% 
      Natural gas liquids (per Bbl)  $23.74   $19.66    21%   $21.63    $16.77   29% 
      Crude oil equivalent (per Boe)  $40.14   $35.79    12%   $42.55    $31.48   35% 
                 

    (1) Results for three and twelve months ended are for Wattenberg only. Please see tables in the back of this press release and the Annual Report on Form 10-K filed on February 27, 2019 for total Company operating statistics.
    (2) 2017 does not include the impacts of adoption ASC 606. Please refer to Note 2 - Revenue Recognition in Annual Report on Form 10-K filed on February 27, 2019 for more information.

    Net oil and gas revenue for the fourth quarter of 2018 was $66.2 million compared to $74.4 million for the third quarter of 2018. The decrease in fourth quarter 2018 net revenue compared to third quarter was primarily a result of the sale of production associated with the Mid-Continent divestiture in August of 2018. Crude oil accounted for approximately 83% of total revenue in the fourth quarter. Differentials for the Company's Wattenberg oil production during the quarter averaged approximately $5.53 per barrel off of NYMEX WTI.

    Wattenberg LOE for the fourth quarter of 2018 on a unit basis decreased by 23% to $3.27 per Boe from $4.26 per Boe in the third quarter of 2018 and compared favorably to fourth quarter guidance of $3.90 per Boe to $4.30 per Boe. Additionally, RMI operating expenses for the fourth quarter were $1.06 per Boe compared to $1.00 per Boe in the third quarter of 2018 and fourth quarter guidance of $1.20 per Boe to $1.40 per Boe.

    Unit operating expenses continue to benefit from lower regulatory, compliance, and labor costs. Additionally, the Company’s completed compressor replacement program resulted in significant reductions in maintenance and rental costs. Unit operating expenses have also benefited from new well production, re-use of centralized facilities and well maintenance activities, which have helped improve base production performance.

    Production taxes in the fourth quarter of 2018 were positively impacted by a $5.1 million net ad valorem tax settlement. The $5.1 ad valorem settlement is net of $2.3 million due to the Company's associated interest owners and is presented as a reimbursement in the severance and ad valorem taxes line items in the 2018 financial statements in the back of this press release. Please see the Company's Form 10-K filed on February 27, 2019 for more information regarding this settlement.

    The Company continued to benefit from multiple delivery points on the RMI system in the fourth quarter. The Company’s fourth gas processor (Cureton Midstream) brought online a 60 MMcf per day cryogenic gas processing plant in the fourth quarter, further enhancing the Company’s downstream optionality. This delivery point flexibility, combined with consistently low line pressures on RMI, have helped ensure minimal 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. The Company's 2018 development program did not experience constraints or delays due to access to third-party gas processing, nor does the Company anticipate any constraints in 2019.

    The Company's general and administrative ("G&A") expense was $12.1 million for the fourth quarter of 2018, which includes $2.2 million in stock compensation. Cash G&A expense, which excludes stock compensation, was $9.9 million for the fourth quarter and totaled $35.3 million for the full-year. Cash G&A is a non-GAAP measure. Please see Schedule 7 at the end of this release for a reconciliation from GAAP figure of general and administrative expense to cash G&A.

    2018 Proved Reserves, Costs Incurred, and Finding and Development Costs

    As previously reported, Bonanza Creek’s year-end 2018 proved reserves were 116.8 MMBoe, a 29% increase from year-end 2017 Wattenberg reserves.  The Company's year-end 2018 proved reserves were comprised of 64.4 MMbbls of oil, 24.9 MMbbls of NGLs, and 165.0 Bcf of natural gas and were 42% proved developed producing. At year-end the Company’s proved reserves PV-10 utilizing Securities and Exchange Commission ("SEC") pricing was $955.0 million. Bonanza Creek’s independent reserve engineering firm, Netherland, Sewell & Associates, Inc., completed its estimate of the Company’s year-end 2018 proved reserves in accordance with SEC guidelines using pricing of $65.56 per barrel for crude oil and $3.10 per million British Thermal Units (MMBtu) for natural gas. Please see Schedule 6 at the end of this release for information on SEC pricing and a reconciliation of PV-10 to the GAAP figure “Standardized Measure of Oil and Gas.”

    A breakout of the Company’s costs incurred are provided in the table below.

    (in thousands)For the Year Ended
    December 31, 2018
       
    Acquisition(1) $2,861 
    Development(2)  304,197 
    Exploration  294 
    Total(3) $307,352 
    1. Acquisition costs for unproved properties were $2.5 million in 2018.  Acquisition costs for proved properties were $0.4 million in 2018.
    2. Development costs include workover costs of $4.3 million.
    3. Includes amounts relating to asset retirement obligations of ($9.0) million.

    Proved Reserve Roll-Forward

     MBoe
    Balance as of December 31, 2017102,022 
    Divestitures(11,157)
    Extensions, discoveries, and infills28,832)
    Revisions to previous estimates6,024)
    Locations Removal(2,527)
    Production(6,409)
    Balance as of December 31, 2018116,785 

    Conference Call Information

    The Company will host a conference call to discuss these financial and operating results on February 28, 2019 at 10:00 a.m. Mountain Time (12:00 p.m. Eastern Time). A webcast of the live event, as well as a replay, 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 participant877-793-43623582918
    Replay855-859-20563582918

    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 initial 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, 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


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

     Successor
     Three Months Ended December 31,
     2018 2017
    Operating net revenues:   
    Oil and gas sales$66,213  $50,189 
    Operating expenses:   
    Lease operating expense5,099  10,066 
    Gas plant and midstream operating expense1,679  3,314 
    Gathering, transportation, and processing2,985   
    Severance and ad valorem taxes(1)1,211  4,748 
    Exploration47  3,386 
    Depreciation, depletion and amortization13,824  9,126 
    Abandonment and impairment of unproved properties(138)  
    General and administrative (including $2,224 and $1,035, respectively, of stock compensation)12,103  11,356 
    Total operating expenses36,810  41,996 
    Income from operations29,403  8,193 
    Other income (expense):   
    Derivative gain (loss)77,103  (12,603)
    Interest expense(833) (313)
    Gain on sale of properties604   
    Other income (loss)(183) (1,421)
    Total other income (expense)76,691  (14,337)
    Income (loss) from operations before taxes106,094  (6,144)
    Income tax benefit  376 
    Net Income (loss)$106,094  $(5,768)
        
    Net Income (loss) per basic common share*$5.16  $(0.28)
        
    Net Income (loss) per diluted common share*$5.15  $(0.28)
        
    Basic weighted-average common shares outstanding20,544  20,454 
    Diluted weighted-average common shares outstanding20,588  20,454 
    • The Successor Company follows the treasury stock method to compute basic and diluted net income (loss) per share. Please refer to Note 14 – Earnings per Share in the Form 10-K, for a detailed calculation.
      (1) Includes $5.1 million reimbursement related to an ad valorem tax settlement. Please refer to Note 8 - Commitment and Contingencies in the Form 10-K for additional information.


      Successor  Predecessor
      Twelve
    Months
    Ended
    December
    31, 2018
     April 29,
    2017
    through
    December
    31, 2017
      January 1,
    2017 through
    April 28, 2017
    Operating net revenues:       
    Oil and gas sales $276,657  $123,535   $68,589 
    Operating expenses:       
    Lease operating expense 34,825  25,862   13,128 
    Gas plant and midstream operating expense 10,788  8,341   3,541 
    Gathering, transportation, and processing 9,732      
    Severance and ad valorem taxes(1) 18,999  9,590   5,671 
    Exploration 291  3,745   3,699 
    Depreciation, depletion and amortization 41,883  21,312   28,065 
    Abandonment and impairment of unproved properties 5,271      
    Unused commitments 21     993 
    General and administrative expense (including $7,156, $11,630, and $2,116 respectively, of stock-based compensation) 42,453  42,676   15,092 
    Total operating expenses 164,263  111,526   70,189 
    Income (loss) from operations 112,394  12,009   (1,600)
    Other income (expense):       
    Derivative gain (loss) 30,271  (15,365)   
    Interest expense (2,603) (773)  (5,656)
    Gain on sale of properties 27,324      
    Reorganization items, net      8,808 
    Other income (loss) 800  (1,267)  1,108 
    Total other income (expense) 55,792  (17,405)  4,260 
    Income (loss) from operations before taxes 168,186  (5,396)  2,660 
    Income tax benefit   376    
    Net income (loss) $168,186  $(5,020)  $2,660 
            
    Net income (loss) per basic common share* $8.20  $(0.25)  $0.05 
            
    Net income (loss) per diluted common share* $8.16  $(0.25)  $0.05 
            
    Basic weighted-average common shares outstanding 20,507  20,427   49,559 
    Diluted weighted-average common shares outstanding 20,603  20,427   50,971 
    • The Predecessor Company followed the two-class method when computing the basic and diluted income (loss) per share, which allocates earnings between common shareholders and unvested participating securities. The Successor Company follows the treasury stock method to compute basic and diluted net income (loss) per share. Please refer to Note 14 – Earnings per Share in the Form 10-K, for a detailed calculation.

    (1) Includes $5.1 million reimbursement related to an ad valorem tax settlement. Please refer to Note 8 - Commitment and Contingencies in the Form 10-K for additional information.


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

     Successor
     Three Months Ended December 31,
     2018 2017
    Cash flows from operating activities:   
    Net income (loss)$106,094  $(5,768)
    Adjustments to reconcile net loss to net cash provided by (used in) operating activities:   
    Depreciation, depletion and amortization13,824  9,126 
    Abandonment and impairment of unproved properties(138)  
    Well abandonment costs and dry hole expense   
    Stock-based compensation2,223  1,035 
    Amortization of deferred financing costs and debt premium30   
    Gain on sale of properties(604)  
    Derivative (gain) loss(77,103) 12,603 
    Derivative cash settlements1,784  (1,464)
    Inventory write-off248  1,758 
    Other(3,559) 4 
    Changes in current assets and liabilities:   
         Accounts receivable(4,165) (2,450)
         Prepaid expenses and other assets1,231  (1,899)
         Accounts payable and accrued liabilities10,255  3,441 
         Settlement of asset retirement obligations(544) (231)
             Net cash provided by (used in) operating activities49,576  16,155 
    Cash flows from investing activities:   
    Acquisition of oil and gas properties(963) (309)
    Exploration and development of oil and gas properties(107,411) (34,020)
    Additions to property and equipment - non oil and gas(47) (210)
             Net cash provided by (used in) investing activities(108,421) (34,539)
    Cash flows from financing activities:   
    Proceeds from Current Credit Facility50,000   
    Proceeds from Prior Credit Facility30,000   
    Payments to Prior Credit Facility(30,000)  
    Deferred financing costs(2,239)  
             Net cash provided by (used in) financing activities47,761   
    Net change in cash, cash equivalents, and restricted cash:(11,084) (18,384)
    Cash, cash equivalents, and restricted cash:   
    Beginning of period24,086  31,166 
    End of period$13,002  $12,782 



      Successor  Predecessor
      Twelve
    Months
    Ended
    December
    31, 2018
     April 29,
    2017
    through
    December
    31, 2017
      January 1,
    2017 through
    April 28,
    2017
    Cash flows from operating activities:       
    Net income (loss) $168,186  $(5,020)  $2,660 
    Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:       
    Depreciation, depletion and amortization 41,883  21,312   28,065 
    Non-cash reorganization items      (44,160)
    Abandonment and impairment of unproved properties 5,271      
    Well abandonment costs and dry hole expense   75   2,931 
    Stock-based compensation 7,156  11,630   2,116 
    Amortization of deferred financing costs and debt premium 30     374 
    Derivative (gain) loss (30,271) 15,365    
    Derivative cash settlements (18,160) (1,464)   
    Gain on sale of oil and gas properties (27,324)     
    Inventory write-offs 248  1,758    
    Other (3,559) 11   18 
    Changes in current assets and liabilities:       
         Accounts receivable (46,988) (4,477)  (6,640)
         Prepaid expenses and other assets 2,214  (1,979)  963 
         Accounts payable and accrued liabilities 19,953  (8,470)  (5,880)
         Settlement of asset retirement obligations (2,041) (1,167)  (331)
             Net cash provided by (used in) operating activities 116,598  27,574   (19,884)
    Cash flows from investing activities:       
    Acquisition of oil and gas properties (2,892) (5,383)  (445)
    Exploration and development of oil and gas properties (264,231) (76,384)  (5,123)
    Proceeds from sale of oil and gas properties 103,134      
    Additions to property and equipment - non oil and gas (387) (874)  (454)
             Net cash used in investing activities (164,376) (82,641)  (6,022)
    Cash flows from financing activities:       
    Proceeds from Current Credit Facility 50,000      
    Proceeds from Prior Credit Facility 90,000      
    Payments to Prior Credit Facility (90,000)     
    Payments to predecessor credit facility      (191,667)
    Proceeds from sale of common stock      207,500 
    Payment of employee tax withholdings in exchange for the return of common stock (863) (2,398)  (427)
    Deferred financing costs (2,239)     
    Proceeds from exercise of stock options 1,100      
             Net cash provided by (used in) financing activities 47,998  (2,398)  15,406 
    Net change in cash, cash equivalents, and restricted cash 220  (57,465)  (10,500)
    Cash, cash equivalents, and restricted cash:       
    Beginning of period 12,782  70,247   80,747 
    End of period $13,002  $12,782   $70,247 


    Schedule 3: Balance Sheets
    (in thousands, unaudited)

     Successor
     As of December 31,
     2018 2017
    ASSETS   
    Current assets:   
    Cash and cash equivalents$12,916  $12,711 
    Accounts receivable:   
    Oil and gas sales31,799  28,549 
    Joint interest and other47,577  3,831 
    Prepaid expenses and other4,633  6,555 
    Inventory of oilfield equipment3,478  1,019 
    Derivative asset34,408  488 
         Total current assets134,811  53,153 
    Property and equipment (successful efforts method):   
    Proved properties719,198  555,341 
    Less: accumulated depreciation, depletion and amortization(52,842) (17,032)
    Total proved properties, net666,356  538,309 
    Unproved properties154,352  183,843 
    Wells in progress93,617  47,224 
    Other property and equipment, net of accumulated depreciation of $2,546 in 2018 and $2,224 in 20173,649  4,706 
    Total property and equipment, net917,974  774,082 
    Long-term derivative asset3,864  6 
    Other noncurrent assets4,885  3,130 
    Total assets$1,061,534  $830,371 
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    Current liabilities:   
    Accounts payable and accrued expenses$79,390  $62,129 
    Oil and gas revenue distribution payable19,903  15,667 
    Derivative liability183  11,423 
    Total current liabilities99,476  89,219 
    Long-term liabilities:   
    Credit facility50,000   
    Ad valorem taxes18,740  11,584 
    Long-term derivative liability  2,972 
    Asset retirement obligations for oil and gas properties29,405  38,262 
    Total liabilities197,621  142,037 
    Commitments and contingencies   
    Stockholders’ equity:   
    Successor preferred stock, $.01 par value, 25,000,000 shares authorized, none outstanding as of December 31, 2018 and 2017   
    Successor common stock, $.01 par value, 225,000,000 shares authorized, 20,543,940 and 20,453,549 issued and outstanding as of December 31, 2018 and 2017, respectively4,286  4,286 
    Additional paid-in capital696,461  689,068 
    Retained earnings (deficit)163,166  (5,020)
    Total stockholders’ equity863,913  688,334 
    Total liabilities and stockholders’ equity$1,061,534  $830,371 


    Schedule 4: Per unit operating margins
    (unaudited)

      For the Three Months Ended
    December 31,
     For the Twelve Months Ended
    December 31,
      2018 2017 Percent
    Change
     2018 2017 Percent
    Change
    Crude Oil Equivalent Sales Volumes (Boe) 1,632,776  1,357,028  20% 6,413,777  5,838,306  10%
                 
    Per Unit Costs ($/Boe)            
    Realized price (before derivatives)(1) $40.14  $36.73  10% $42.83  $32.65  31%
    LOE $3.12  $7.42  (58)% $5.43  $6.68  (19)%
    Midstream expense $1.03  $2.44  (58)% $1.68  $2.04  (17)%
    Severance and Ad Valorem $0.74  $3.50  (79)% $2.96  $2.61  13%
    Cash General and Administrative (2) $6.05  $7.61  (20)% $5.50  $7.54  (27)%
    Total cash operating costs $10.94  $20.97  (48)% $15.57  $18.87  (17)%
    Cash operating margin (before derivatives) $29.20  $15.76  85% $27.26  $13.78  98%
    Derivative Cash Settlements $1.09  $(1.07) % $(2.83) $(0.25) %
    Cash operating margin (after derivatives) $30.29  $14.69  106% $24.43  $13.53  81%
                 
    Non-cash items            
    Depreciation Depletion and Amortization $8.47  $6.72  26% $6.53  $8.46  (23)%
    Non-cash General and Administrative $1.36  $0.76  79% $1.12  $2.35  (53)%
                 
    (1)Crude oil and natural gas sales excludes $0.7 million, $0.3 million, $1.9, and $1.0 million of oil transportation revenues from third parties, which do not have associated sales volumes for three months ended December 31 2018 and 2017 and for the year ended December 31, 2018 and 2017, respectively.
    (2) Cash general and administrative expense excludes stock based compensation of $2.2 million and $1.0 million for the three-month periods ended December 31, 2018 and 2017, respectively, and $7.2 million and $13.7 million for the twelve-month periods ended December 31, 2018 and 2017, respectively.


    Schedule 5: Adjusted EBITDAX
    (in thousands, unaudited)

    Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. 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 GAAP financial measures of net income (loss) to the non-GAAP financial measure of Adjusted EBITDAX.

     Three Months Ended Twelve Months Ended
     December 31, December 31,
     2018 2017 2018 2017
    Net Income (loss)$106,094  $(5,768) $168,186  $(2,360)
    Exploration47  3,386  291  7,444 
    Depreciation, depletion and amortization13,824  9,126  41,883  49,377 
    Abandonment and impairment of unproved properties(138)   5,271   
    Stock-based Compensation (1)2,224  1,035  7,156  13,746 
    Cash severance costs (1)    279  1,605 
    Unused commitments    21   
    Gain on sale of oil and gas properties(604)   (27,324)  
    Ad valorem reimbursement(2)(5,134)   (5,134)  
    Advisor fees related to CEO search and strategic alternatives(1)  2,774    2,774 
    Deferred financing costs amortization30    30  374 
    Pre-petition advisory fees(1)      683 
    Post-petition restructuring fees(1)      3,740 
    Reorganization items      (8,808)
    Interest expense833  313  2,603  6,429 
    Derivative (gain) loss(77,103) 12,603  (30,271) 15,365 
    Derivative cash settlements1,784  (1,464) (18,160) (1,464)
    Income tax (benefit)  (376)   (376)
    Adjusted EBITDAX$41,857  $21,629  $144,831  $88,529 
            
    (1) Included as a portion of general and administrative expense on the consolidated statement of operations.
    (2) $5.1 million reimbursement related to an ad valorem tax settlement. Please refer to the Form 10-K for additional information.


    Schedule 6: PV-10 of Estimated Proved Reserves

    PV-10 is derived from the Standardized Measure, which is the most directly comparable GAAP financial measure. PV-10 is a computation of the Standardized Measure on a pre-tax basis. PV-10 is equal to the Standardized Measure at the applicable date, before deducting future income taxes, discounted at 10%. We believe that the presentation of PV-10 is relevant and useful to investors because it presents the discounted future net cash flows attributable to our estimated net proved reserves prior to taking into account future corporate income taxes, and it is a useful measure for evaluating the relative monetary significance of our oil and natural gas properties. Further, investors may utilize the measure as a basis for comparison of the relative size and value of our reserves to other companies. We use this measure when assessing the potential return on investment related to our oil and natural gas properties. PV-10, however, is not a substitute for the Standardized Measure. Our PV-10 measure and the Standardized Measure do not purport to present the fair value of our proved oil and natural gas reserves.

    The following table presents a reconciliation of non-GAAP financial measure of PV-10 to the GAAP Standardized Measure.

      December 31,
    (in thousands) 2018
       
    PV-10 (1) $954,980 
    Present value of future income taxes discounted at 10% (2)  
    Standardized Measure $954,980 
       
    (1) The 12-month average benchmark pricing used to estimate SEC proved reserves and PV-10 value for crude oil and natural gas was $65.56 per Bbl of WTI crude oil and $3.10 per MMBtu of natural gas at Henry Hub before differential adjustments. After differential adjustments, the Company's SEC pricing realizations for year-end 2018 were $59.29 per Bbl of oil, $22.06 per Bbl of NGLs, and $2.28 per Mcf of natural gas.
    (2) The tax basis of the Company's oil and gas properties as of December 31, 2018 provides more tax deduction than income generation when reserve estimates were prepared using 2018 SEC pricing.


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

    Cash G&A is a supplemental non-GAAP financial measure that is used by management and external users of the Company’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines cash G&A as GAAP general and administrative expense exclusive of the Company's stock based compensation. The Company refers to cash G&A to provide typical cash G&A costs that are planned for in a given period. 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 GAAP financial measures of G&A expense to the non-GAAP financial measure of cash G&A.

      Three Months Ended Twelve Months Ended
      12/31/2018 12/31/2017 12/31/2018 12/31/2017
    General and Administrative Expense $12,103  $11,356  $42,453  $57,768 
    Stock Compensation (2,224) (1,035) (7,156) (13,746)
    Cash G&A 9,879  10,321  35,297  44,022 

     

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