• Bonanza Creek Energy Announces Second Quarter 2019 Financial Results

    ソース: Nasdaq GlobeNewswire / 07 8 2019 16:36:32   America/New_York

    DENVER, Aug. 07, 2019 (GLOBE NEWSWIRE) -- Bonanza Creek Energy, Inc. (NYSE: BCEI) (the "Company" or "Bonanza Creek") today announced its second quarter 2019 financial results and operating outlook and has posted an updated investor presentation on its corporate website.

    Highlights of the second quarter 2019 include:

    • Increasing 2019 annual production guidance to a range of 22.0 to 24.0 MBoe/d following strong second quarter 2019 sales volumes of 24.4 MBoe/d, up 18% over first quarter 2019 and 38% over fourth quarter 2018
    • The Whitetail A-4 well in the Company's Northern acreage is performing consistent with the Company's Legacy East XRL type curve
    • Net oil and gas revenue of $85.8 million, an increase of 18% over first quarter 2019
    • GAAP net income of $41.0 million, or $1.99 per diluted share, inclusive of $0.42 non-cash gain on derivatives
    • Adjusted EBITDAX(1) of $56.2 million, or $2.72 per diluted share, an increase of 14% sequentially
    • Lease operating expenses of $2.87 per Boe, a decrease of 1% over first quarter 2019
    • Total general and administrative ("G&A") expense, including non-cash, stock-based compensation, of $9.8 million. Cash G&A(1), excluding stock-based compensation, was $8.0 million for the quarter  or $3.61 per Boe, down 24% from first quarter 2019
    • Combined cash costs of LOE, Rocky Mountain Infrastructure ("RMI") operating expenses, gathering, transportation and processing ("GT&P"), and cash G&A totaled $9.65 per Boe for the quarter, down 13% from first quarter 2019
    • Total capital expenditures of $81.7 million for the quarter and $126.5 million year to date, in line with Company's full year 2019 guidance of $230.0 to $255.0 million

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

    Eric Greager, President and Chief Executive Officer of Bonanza Creek, commented, "We're encouraged with our development performance to date, and are raising our annual production guidance to a range of 22 to 24 MBoe per day with this release. Our capex in the first quarter was light versus our plan, but we paced ahead of schedule in the second quarter. Our capex year-to-date is in line with our full year expectations, having invested approximately 52% of the mid-point of our annual guidance. We're also excited to share results from our Whitetail well, which we drilled on our Northern acreage in late 2018. The well has been performing in line with our Eastern XRL type curve, and along with the Pronghorn B-28 pad, continues to demonstrate the quality of our acreage."

    Second Quarter 2019 Results

    During the second quarter of 2019, the Company reported average daily sales of 24.4 MBoe/d. Product mix for the quarter was 62% oil, 16% NGLs, and 22% residue natural gas. During the second quarter of 2019, the Company drilled 17 gross (11.2 net) operated wells, seven of which were extended reach lateral ("XRL") wells, and completed 19 gross (17.0 net) operated wells. As planned, there were no wells turned to sales during the second quarter. The company expects to turn 23 gross (20.4 net) wells to sales during the third quarter.

    The table below provides operating statistics for our Wattenberg assets.

      Three Months Ended June 30,(2) 
      2019  2018  % Change 
    Avg. Daily Sales Volumes:         
    Crude oil (Bbls/d) 15,096   8,866   70% 
    Natural gas (Mcf/d) 31,901   18,511   72% 
    Natural gas liquids (Bbls/d) 4,015   3,126   28% 
    Crude oil equivalent (Boe/d) 24,428   15,077   62% 
              
    Product Mix         
      Crude oil 62%  59%    
      Natural gas 22%  20%    
      Natural gas liquids 16%  21%    
              
    Average Sales Prices (before derivatives):         
      Crude oil (per Bbl) $54.10   $63.05     
      Natural gas (per Mcf) $1.94   $1.96     
      Natural gas liquids (per Bbl) $11.66   $17.06     
      Crude oil equivalent (per Boe) $37.88   $43.02     
              

    (2) 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 August 7, 2019 for total Company operating statistics for the 2018 period.

    Net oil and gas revenue for the second quarter of 2019 was $85.8 million compared to $72.6 million for the first quarter of 2019. The increase was primarily a result of increased production and higher oil realizations, partially offset by lower natural gas and NGL realized prices. Crude oil accounted for approximately 87% of total revenue for the quarter. Differentials for the Company's oil production during the quarter averaged approximately $5.90 per barrel off of NYMEX WTI.

    LOE for the second quarter of 2019 on a unit basis decreased by 1% to $2.87 per Boe from $2.91 per Boe in the first quarter of 2019 and is in line with full year 2019 guidance of $2.75 to $3.25 per Boe. Additionally, RMI operating expenses for the second quarter were $1.22 per Boe compared to $1.24 per Boe in first quarter of 2019, also in line with the Company's expectations and full year guidance of $1.10 to $1.40 per Boe.

    The Company's general and administrative ("G&A") expenses were $9.8 million for the second quarter of 2019, which included $1.8 million in non-cash stock-based compensation. Cash G&A, which excludes stock-based compensation, of $8.0 million for the second quarter was down from $8.9 million in the first quarter of 2019. On a per unit basis, the Company's Cash G&A decreased 24% sequentially from $4.77 per Boe in the first quarter to $3.61 per Boe in the second 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.

    Oil began flowing through the Company's new oil gathering line to the Riverside Terminal in late July. The Company's oil differential will benefit from a $1.25 to $1.50 reduction for barrels flowing through the line. The first oil sales from the line occurred in early August. Oil volumes flowing through the line will build through the remainder of 2019, but not all of the Company's oil sales will flow through the new line. The Company's oil differential guidance of $4.25 to $5.25 per barrel for the year contemplates the improved differential and expectations of oil sales through the line for the remainder of the year.

    Guidance Summary

    Guidance2Q19 ActualsYTD 2019 ActualsFY19 Guidance
      Production (MBoe/d) 24.4  22.3 22.0 - 24.0
      LOE ($/Boe)$2.87 $2.89 $2.75 - $3.25
      RMI Opex ($/Boe)$1.22 $1.23 $1.10 - $1.40
      Cash G&A ($/Boe)$3.61 $4.14 $3.70 - $4.20
      Severance Ad/Valorem (% of rev) 9.2% 7.7%8% - 9%
      Oil Differential ($/bbl)(1)$5.90 $5.69 $4.25 - $5.25
      Total Capex ($MM)$82 $127 $230 - $255
      D&C Capex ($MM)$64 $102 $210 - $220

    (1) Oil differential guidance based on WTI pricing through June 30, 2019, strip pricing as of August 6th, and includes the benefit of oil flowing through the company's new oil gathering line.

    Conference Call Information

    The Company will host a conference call to discuss these results on August 8, 2019 at 8:00 a.m. Mountain Time (10:00 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 participant877-793-43626557808
    Replay855-859-20566557808

    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 oil and associated liquids-rich natural gas in the Rocky Mountain region of the United States. The Company’s assets and operations are concentrated in rural, unincorporated Weld County within 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 June 30, 2019, filed on August 7, 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:
    Scott Landreth
    Senior Director, Finance & Investor Relations and Treasurer
    720-225-6679
    slandreth@bonanzacrk.com

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

     Three Months Ended June 30, Six Months Ended June 30,
     2019 2018 2019 2018
    Operating net revenues:       
    Oil and gas sales$85,783  $71,872  $158,377  $136,064 
    Operating expenses:       
    Lease operating expense6,390  11,316  11,816  21,775 
    Gas plant and midstream operating expense2,709  3,247  5,030  6,860 
    Gathering, transportation, and processing4,331  1,660  8,353  3,998 
    Severance and ad valorem taxes7,711  6,071  11,959  11,303 
    Exploration408  221  505  250 
    Depreciation, depletion, and amortization18,898  9,564  34,657  17,072 
    Abandonment and impairment of unproved properties878  2,477  1,757  4,979 
    Unused commitments      21 
    General and administrative expense (including $1,768, $2,184, $3,148, and $3,192, respectively, of stock-based compensation)9,803  9,917  20,081  19,451 
    Total operating expenses51,128  44,473  94,158  85,709 
    Income from operations34,655  27,399  64,219  50,355 
    Other income (expense):       
    Derivative gain (loss)8,173  (22,012) (28,371) (30,754)
    Interest expense(385) (805) (1,536) (1,162)
    Loss on sale of properties, net(1,432)   (306)  
    Other income11  277  23  290 
    Total other income (expense)6,367  (22,540) (30,190) (31,626)
    Income from operations before taxes41,022  4,859  34,029  18,729 
    Income tax benefit (expense)       
    Net income$41,022  $4,859  $34,029  $18,729 
            
    Comprehensive income$41,022  $4,859  $34,029  $18,729 
            
    Basic net income per common share$1.99  $0.24  $1.65  $0.91 
            
    Diluted net income per common share$1.99  $0.24  $1.65  $0.91 
            
    Basic weighted-average common shares outstanding20,618  20,488  20,588  20,471 
            
    Diluted weighted-average common shares outstanding20,664  20,603  20,630  20,538 

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

     Three Months Ended June 30, Six Months Ended June 30,
     2019 2018 2019 2018
    Cash flows from operating activities:       
    Net income$41,022  $4,859  $34,029  $18,729 
    Adjustments to reconcile net income to net cash provided by operating activities:       
    Depreciation, depletion, and amortization18,898  9,564  34,657  17,072 
    Abandonment and impairment of unproved properties878  2,477  1,757  4,979 
    Well abandonment costs and dry hole expense    62   
    Stock-based compensation1,768  2,184  3,148  3,192 
    Amortization of deferred financing costs123    248   
    Derivative loss (gain)(8,173) 22,012  28,371  30,754 
    Derivative cash settlements(543) (7,310) 393  (11,622)
    Loss on sale of properties, net1,432    306   
    Other(1)   (901) 172 
    Changes in current assets and liabilities:       
    Accounts receivable8,852  (4,618) 15,089  (20,376)
    Prepaid expenses and other assets(263) (2,467) (703) 935 
    Accounts payable and accrued liabilities(683) (323) (10,833) (889)
    Settlement of asset retirement obligations(583) (132) (1,175) (797)
    Net cash provided by operating activities62,727  26,246  104,448  42,149 
    Cash flows from investing activities:       
    Acquisition of oil and gas properties(10,376) (1,197) (11,738) (1,295)
    Exploration and development of oil and gas properties(74,895) (53,818) (111,398) (91,482)
    Proceeds from sale of oil and gas properties    1,153  20 
    Additions to property and equipment - non oil and gas(72) (177) (148) (280)
    Net cash used in investing activities(85,343) (55,192) (122,131) (93,037)
    Cash flows from financing activities:       
    Proceeds from Current Credit Facility    15,000   
    Proceeds from Prior Credit Facility  45,000    60,000 
    Proceeds from exercise of stock options  968    968 
    Payment of employee tax withholdings in exchange for the return of common stock(930) (794) (1,083) (794)
    Net cash provided by financing activities(930) 45,174  13,917  60,174 
    Net change in cash, cash equivalents, and restricted cash(23,546) 16,228  (3,766) 9,286 
    Cash, cash equivalents, and restricted cash:       
    Beginning of period32,782  5,840  13,002  12,782 
    End of period$9,236  $22,068  $9,236  $22,068 

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

     June 30, 2019 December 31, 2018
    ASSETS   
    Current assets:   
    Cash and cash equivalents$9,149  $12,916 
    Accounts receivable:   
    Oil and gas sales40,341  31,799 
    Joint interest and other23,946  47,577 
    Prepaid expenses and other5,336  4,633 
    Inventory of oilfield equipment2,946  3,478 
    Derivative assets11,116  34,408 
    Total current assets92,834  134,811 
    Property and equipment (successful efforts method):   
    Proved properties802,452  719,198 
    Less: accumulated depreciation, depletion and amortization(86,265) (52,842)
    Total proved properties, net716,187  666,356 
    Unproved properties155,882  154,352 
    Wells in progress133,364  93,617 
    Other property and equipment, net of accumulated depreciation of $2,853 in 2019 and $2,546 in 20183,490  3,649 
    Total property and equipment, net1,008,923  917,974 
    Long-term derivative assets1,176  3,864 
    Right-of-use assets38,623   
    Other noncurrent assets3,782  4,885 
    Total assets$1,145,338  $1,061,534 
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    Current liabilities:   
    Accounts payable and accrued expenses$45,087  $79,390 
    Oil and gas revenue distribution payable30,262  19,903 
    Current portion of lease liability10,593   
    Derivative liability2,066  183 
    Total current liabilities88,008  99,476 
        
    Long-term liabilities:   
    Credit facility65,000  50,000 
    Lease liability28,792   
    Ad valorem taxes34,370  18,740 
    Asset retirement obligations for oil and gas properties (note 9)29,162  29,405 
    Total liabilities245,332  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, 20,632,999 and 20,543,940 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively4,285  4,286 
    Additional paid-in capital698,526  696,461 
    Retained earnings197,195  163,166 
    Total stockholders’ equity900,006  863,913 
    Total liabilities and stockholders’ equity$1,145,338  $1,061,534 

    Schedule 4: Per unit operating margins
    (unaudited)

     Three Months Ended June 30,(1) Six Months Ended June 30,(1)
     2019 2018 Percent Change 2019 2018 Percent Change
    Sales volume           
    Oil (MBbl)1,374  807  70% 2,582  1,552  66%
    Gas (MMcf)2,903  1,685  72% 5,101  3,328  53%
    NGL (MBbl)365  284  29% 657  502  31%
    Equivalent (MBoe)2,223  1,372  62% 4,089  2,609  57%
                
    Realized pricing (before derivatives)           
    Oil ($/Bbl)$54.10  $63.05  (14)% $52.10  $60.15  (13)%
    Gas ($/Mcf)$1.94  $1.96  (1)% $2.43  $2.29  6%
    NGL ($/Bbl)$11.66  $17.06  (32)% $13.10  $19.34  (32)%
    Equivalent ($/Boe)$37.88  $43.01  (12)% $38.04  $42.43  (10)%
                
    Per Unit Costs ($/Boe)           
    Realized price equivalent (before derivatives)$37.88  $43.01  (12)% $38.04  $42.43  (10)%
    Lease operating expense2.87  6.01  (52)% 2.89  6.01  (52)%
    Gathering, transportation and processing1.95  1.21  61% 2.04  1.53  33%
    Gas plant and midstream operating expense1.22  1.59  (23)% 1.23  1.74  (29)%
    Severance and ad valorem3.47  3.89  (11)% 2.92  3.78  (23)%
    Cash general and administrative(2)3.61  5.78  (38)% 4.14  6.38  (35)%
    Total cash operating costs$13.12  $18.48  (29)% $13.22  $19.44  (32)%
    Cash operating margin (before derivatives)$24.76  $24.53  1% $24.82  $22.99  8%
    Derivative cash settlements(0.24) (5.33) (95)% 0.10  (4.45) (102)%
    Cash operating margin (after derivatives)$24.52  $19.20  28% $24.92  $18.54  34%
                
    Non-cash items           
    Non-cash general and administrative$0.80  $1.59  (50)% $0.77  $1.22  (37)%

    (1) The Company's Mid-Continent region assets were sold on August 6, 2018, and therefore, the data in the table reflects Mid-Continent region activity during the three and six months ended June 30, 2018.
    (2) Cash general and administrative expense excludes stock-based compensation of $1.8 million and $2.2 million for the three months ended June 30, 2019 and 2018, respectively, and $3.1 million and $3.2 million for the six months ended June 30, 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 as determined by GAAP.

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

      Three Months Ended June 30, Six Months Ended June 30,
      2019 2018 2019 2018
    Net income $41,022  $4,859  $34,029  $18,729 
    Adjustments to net income:        
    Derivative loss (gain) (8,173) 22,012  28,371  30,754 
    Derivative cash settlements (543) (7,310) 393  (11,622)
    Loss on sale of oil and gas properties (1,432)   (306)  
    Abandonment and impairment of unproved properties 878  2,477  1,757  4,979 
    Well abandonment and exploratory dry hole expense     62   
    Unused commitments       21 
    Stock-based compensation (1) 1,768  2,184  3,148  3,192 
    Severance costs (1)     418   
    Total adjustments before taxes (7,502) 19,363  33,843  27,324 
    Income tax effect        
    Total adjustments after taxes $(7,502) $19,363  $33,843  $27,324 
             
    Adjusted net income $33,520  $24,222  $67,872  $46,053 
    Adjusted net income per diluted share $1.62  $1.18  $3.29  $2.24 
             
    Diluted weighted-average common shares outstanding 20,664  20,603  20,630  20,538 
             
    (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 to the non-GAAP financial measure of Adjusted EBITDAX.

      Three Months Ended June 30, Six Months Ended June 30,
      2019 2018 2019 2018
    Net income $41,022  $4,859  $34,029  $18,729 
    Exploration 408  221  505  250 
    Depreciation, depletion and amortization 18,898  9,564  34,657  17,072 
    Amortization of deferred financing costs 123    248   
    Abandonment and impairment of unproved properties 878  2,477  1,757  4,979 
    Unused commitments       21 
    Stock-based compensation (1) 1,768  2,184  3,148  3,192 
    Severance costs (1)     418   
    Loss on sale of oil and gas properties 1,432    306   
    Interest expense 385  805  1,536  1,162 
    Derivative loss (gain) (8,173) 22,012  28,371  30,754 
    Derivative cash settlements (543) (7,310) 393  (11,622)
    Income tax effect        
    Adjusted EBITDAX $56,198  $34,812  $105,368  $64,537 
             
    (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 June 30, Six Months Ended June 30,
      2019 2018 2019 2018
    General and administrative expense $9,803  $9,917  $20,081  $19,451 
    Stock-based compensation (1,768) (2,184) (3,148) (3,192)
    Cash G&A $8,035  $7,733  $16,933  $16,259 

     

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