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

Source Press Release
Company Bonanza Creek Energy Inc 
Tags Production/Development, Upstream Activities, Guidance, Financial & Operating Data
Date May 08, 2019

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 realizedprices. 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

Guidance  1Q19 Actuals  FY19 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 . Dial-in information for the conference call is included below.

Type  Phone Number  Passcode 
Live participant  877-793-4362  4198955 
Replay  855-859-2056  4198955 
Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd