WildHorse Resource Development Corporation (NYSE: WRD) announced
today its operating and financial results for the three months
ended June 30, 2018. Operational highlights from second quarter
2018 include:
- Increased average daily production by
107% to 46.7 Mboe/d for the second quarter 2018 compared to 22.6
Mboe/d for the second quarter 2017
- Brought online 28 gross (26.2 net)
Eagle Ford wells in the second quarter of 2018
- Crude oil realizations in the second
quarter of 2018 were 100% of WTI as a result of low differentials
and favorable Louisiana Light Sweet (“LLS”) pricing
- The Irene/Inez/Lero Eagle Ford wells,
located in Brazos County and previously announced in first quarter
2018, reached their average final peak IP-30(1) of 788 Boe/d (89%
oil) on an average 6,404’ lateral
- The JRG C 1H, an Austin Chalk well in
southern Burleson County brought online at the end of the first
quarter, reached a peak IP-30(1) of 747 Boe/d (43% natural gas, 45%
NGLs and 12% oil) on a 5,843’ lateral
Financial highlights from second quarter 2018 and other recent
highlights include:
- Reported a Net Loss of $14.1 million
for the second quarter 2018
- Reported a Net Loss available to common
stockholders of $22.1 million or $0.22 per share for the second
quarter 2018
- Reported Adjusted Net Income available
to common stockholders(2) of $39.1 million or $0.39 per share for
the second quarter 2018
- Reported Adjusted EBITDAX(2) of $161.5
million for the second quarter 2018
- Issued an additional $200 million of
6.875% Senior Notes due 2025 in April 2018
“In the second quarter, WRD delivered excellent results which
were amplified by the strength of our takeaway capabilities and LLS
pricing. We are currently on track to meet or exceed the midpoint
of our annual guidance,” said Jay Graham, Chairman and Chief
Executive Officer of WRD. “In addition, WRD is on schedule to start
our in-field sand mine by the first quarter of 2019. We have
received all of the necessary permits for the mine and are in the
process of installing the plants and facilities. WRD is in an
enviable position with our Gulf Coast location, access to premium
markets, and reduced well costs with the completion of our sand
mine. We look forward to leveraging this unique position to drive
full cycle returns and create value for our shareholders.”
Second Quarter 2018 Results
Net production was 46.7 Mboe/d for the second quarter 2018
compared to 22.6 Mboe/d for the second quarter 2017. Second quarter
2018 net production consisted of approximately 33.4 Mbbls/d oil,
6.0 Mboe/d NGLs, and 43.5 MMcf/d natural gas.
WRD reported a Net Loss of $14.1 million for the second quarter
2018. The Net Loss available to common stockholders was $22.1
million or $0.22 per share for the second quarter 2018. Earnings in
the second quarter were impacted by a $13.8 million non-cash
contribution to shareholder’s equity related to Natural Gas
Partner’s distribution of WRD shares in May 2018, which is also
recognized on the incentive unit compensation expense line of the
income statement.
Adjusted Net Income available to common stockholders(2) for the
second quarter 2018 was $39.1 million or $0.39 per share. WRD
reported Adjusted EBITDAX(2) for the second quarter 2018 of $161.5
million compared to Adjusted EBITDAX(2) for the second quarter 2017
of $52.4 million.
Total revenues and other income for the second quarter 2018,
excluding the impact of realized hedges, were $225.4 million
compared to $70.2 million for the second quarter 2017. Total
revenues were primarily higher as a result of increased production
and higher commodity prices. Crude oil price realizations were 100%
of WTI as a result of low transportation differential and favorable
LLS pricing. Natural gas realizations were lower than previous
quarters at 73% of Henry Hub as a result of the North Louisiana
asset divestiture which had higher gas realizations. Also, in
comparison to North Louisiana, the structure of WRD’s gas contracts
in the Eagle Ford allocates a greater portion of gathering costs to
revenue deductions rather than GP&T expenses following the new
FASB revenue recognition standard (ASC 606, Revenue from Contracts
with Customers).
Average realized prices for the quarter ending June 30, 2018 and
2017, before the effect of commodity derivatives, are presented
below:
Percent
Q2'18 Q2'17 Change Oil (per Bbl) $ 68.21 $
46.77 46 % Natural Gas (per Mcf) $ 2.05 $ 3.09 -34 % NGL (per BbL)
$ 17.59 $ 16.59 6 %
Total (per Boe) $ 52.99
$ 33.90 56 %
Average realized prices for the quarter ending June 30, 2018 and
2017, after the effect of commodity derivatives, are presented
below:
Percent
Q2'18 Q2'17 Change Oil (per Bbl) $ 57.49 $
49.80 15 % Natural Gas (per Mcf) $ 2.02 $ 3.07 -34 % NGL (per BbL)
$ 17.59 $ 16.59 6 %
Total (per Boe) $ 45.30
$ 35.54 27 %
Lease operating expense (“LOE”) for the second quarter 2018 was
$12.1 million, or $2.84 per Boe, compared to $6.8 million, or $3.33
per Boe, for the second quarter 2017. The decline in LOE was the
result of optimized chemicals usage and more favorable procurement
and labor contracts.
Depletion, depreciation, and amortization (“DD&A”) for the
second quarter 2018 was higher at $70.7 million or $16.64 per boe
in comparison to $59.9 million or $12.70 per boe during the first
quarter 2018. In the first quarter, DD&A for North Louisiana
was accounted for until the execution of the definitive North
Louisiana purchase and sale agreement on February 12, 2018. Due to
this effect, DD&A on a boe basis was lower in the first quarter
of 2018. In addition, the DD&A rate in the Eagle Ford was
higher in the second quarter of 2018. As a result, higher second
quarter DD&A negatively impacted our net income relative to
expectations based on the first quarter DD&A rate.
Gathering, processing and transportation expense (“GP&T”)
for the second quarter 2018 was $0.5 million, or $0.11 per Boe,
compared to $1.9 million, or $0.95 per Boe, in the second quarter
2017. GP&T was significantly lower on a Boe basis due to the
implementation of the new FASB revenue recognition standard ASC
606, effective as of January 1, 2018, and the sale of our North
Louisiana assets. In addition, natural gas and NGL revenue
realizations were also impacted under the new standard. For
additional information, please see the appendix of this press
release and the Management’s Discussion & Analysis section of
WRD’s second quarter 2018 Form 10-Q for a reconciliation of
GP&T and pricing realizations to the previous accounting
convention.
Taxes other than income were $12.8 million for the second
quarter 2018, or $3.01 per Boe, compared to $4.5 million, or $2.20
per Boe, for the second quarter 2017. Taxes other than income in
the second quarter 2018 increased primarily due to higher price
realizations and changes in the commodity mix.
General and administrative ("G&A") expense for the second
quarter 2018 was $12.9 million, or $3.04 per Boe, compared to $10.0
million, or $4.89 per Boe, for the second quarter 2017. Reported
G&A expense is net of $1.0 million due from Tanos Exploration
for transitional services in connection with the purchase of the
North Louisiana assets. During the second quarter 2018, G&A
expense included $3.8 million, or $0.90 per Boe, of stock-based
compensation expense and $0.1 million, or $0.03 per Boe, of
acquisition related costs. Excluding acquisition related costs,
cash G&A expense(2), which does not include stock-based
compensation, was $9.0 million or $2.11 per Boe for the second
quarter 2018.
Exploration expense was $4.4 million for the second quarter 2018
compared to $11.5 million for the second quarter 2017. Exploration
expense in the second quarter reflects a decrease in seismic
acquisition costs and abandonment costs.
Net interest expense during the second quarter 2018 was $14.0
million, including amortization of deferred financing fees of
approximately $0.8 million. This compares to net interest expense
during the second quarter 2017 of $6.6 million, including
amortization of deferred financing fees of approximately $0.4
million. The increase in net interest expense is primarily the
result of higher levels of indebtedness due to the issuance of
additional senior notes in 2017 and April 2018.
Drilling and completion (“D&C”) capital expenditures totaled
$233.3 million in the second quarter 2018 and $450.0 million for
the first half of 2018 which is in line with WRD’s front-weighted
capital budget program. Sand mine expenditures totaled $15.8
million in the second quarter 2018 and $25.1 million for the first
half of 2018.
(1)
The initial production rates represent the peak average of
the initial production rates for the applicable consecutive days of
production.
(2)
Adjusted EBITDAX, Adjusted Net Income (Loss) available to common
stockholders, Cash G&A, and net debt are financial measures not
calculated in accordance with accounting principles generally
accepted in the United States of America (“GAAP”). Please see the
reconciliation to the most comparable measures calculated in
accordance with GAAP in the "Use of Non-GAAP Financial Measures"
section of this press release.
Operational Update
WRD reported second quarter 2018 average daily production of
46.7 Mboe/d consisting of 72% oil, 15% natural gas, and 13% NGLs.
WRD brought online a total of 28 gross (26.2 net) Eagle Ford wells
and 5 Eagle Ford refracs in the second quarter 2018.
In the Eagle Ford, the Irene, Inez, and Lero wells, brought
online late in the first quarter in Brazos County have reached
their average final IP-30 rate(1) of 788 Boe/d (89% oil) on an
average 6,404’ lateral.
In the Austin Chalk, the JRG C 1H, a well located in southern
Burleson County brought online at the end of the first quarter,
reached a peak IP-30(1) of 747 Boe/d (43% natural gas, 45% NGLs and
12% oil) on a 5,843’ lateral. WRD brought online no new Austin
Chalk wells in the second quarter but expects to bring online four
Austin Chalk wells in the third quarter or early fourth quarter of
2018 depending on timing.
Financial Update
In April 2018, WRD issued an additional $200 million of 6.875%
Senior Notes due 2025. In addition, Moody’s increased WRD’s Long
Term Corporate Family Rating to B2 with a positive outlook from B3
with a stable outlook during the second quarter of 2018. Total net
debt(2) outstanding as of June 30, 2018 was $930 million, including
$249 million of debt outstanding under WRD’s revolving credit
facility, $700 million of Senior Notes due 2025, and $19 million in
cash and cash equivalents. As of June 30, 2018, WRD’s liquidity was
$820 million consisting of $19 million of cash and cash equivalents
and $801 million of availability under its revolving credit
facility. The next redetermination of the borrowing base utilizing
mid-year 2018 reserves is scheduled for October 2018.
WRD’s net debt(2) to annualized second quarter 2018 Adjusted
EBITDAX(2) ratio was 1.4 times. WRD continues to target a net
debt(2) to quarterly annualized Adjusted EBITDAX(2) ratio below 2.0
times based on the mid-point of guidance. WRD expects the available
borrowings under its revolving credit facility to provide
sufficient liquidity to finance anticipated working capital and
capital expenditure requirements.
Hedging Update
WRD utilizes its hedging program to mitigate financial risks and
the effects of commodity price volatility. Total hedged production
in the second quarter of 2018 was approximately 2.6 MMboe, or 62%
of second quarter production of 4.2 MMboe. As of August 7, 2018,
WRD had hedged approximately 65% of its remaining 2018 production
on a barrel of oil equivalent basis (using the mid-point of WRD’s
annual guidance range).
In the second quarter, WRD entered into additional natural gas
contracts extending to 2020. Specifically, WRD hedged approximately
22.4 billion cubic feet of natural gas distributed across 2018 to
2020 at approximately $2.79 per Mcfe. In addition, during the
second quarter, WRD added 3.4 MMbls of oil swaps out to 2020 and
also added 1.9 MMbls of oil basis hedges on average locking in a
LLS premium to WTI of approximately $3.01 per Bbl for the remainder
of 2018. With a combination of puts and unhedged production, WRD
maintains upside on approximately 52% of its remaining 2018 oil
production.
The following table reflects WRD’s hedged volumes and
corresponding weighted-average price, as of August 7, 2018.
Q3 - Q4 '18
2019 2020 Crude Oil
Hedge Contracts: Total crude oil volumes hedged (Bbl) 4,614,905
8,402,126 4,511,681 Volumes hedged (Bbl/d) 25,081 23,020 12,327
Total weighted-average price $ 51.53 $ 54.32 $ 53.49 Expected crude
production hedged (3) 75% - -
Natural Gas Hedge
Contracts: Total natural gas volumes hedged (MMbtu) 4,723,634
6,425,146 4,846,020 Volumes hedged (MMbtu/d) 25,672 17,603 13,240
Total weighted-average price $ 2.79 $ 2.79 $ 2.76 Expected gas
production hedged (3) 86% - -
Total Hedge Contracts:
Total hedged production (boe) 5,402,177 9,472,984 5,319,351 Volumes
hedged (Boe/d) 29,360 25,953 14,534 Total weighted-average price
($/boe) $ 44.43 $ 48.49 $ 45.79 Expected total production hedged
(3) 65% - -
LLS Basis Swaps Total crude oil volumes
hedged (Bbl) 3,339,230 - - Volumes hedged (Bbl/d) 18,148 - - Total
weighted-average price - WTI to LLS $ 3.02 - - Expected crude
production hedged (3) 54% - -
(3) Using the mid-point of WRD’s 2018
guidance ranges.
Upcoming Conferences
Members of WRD’s management team intend to participate in the
following upcoming investment conferences:
- EnerCom Oil & Gas Conference on
August 20 – 21, 2018 (Denver, CO)
- Simmons European Energy Conference on
August 28 – 29, 2018 (Gleneagles, Scotland)
- Seaport Global Chicago Energy
Conference on August 28 – 29, 2018 (Chicago, IL)
- Barclays CEO Energy-Power Conference on
September 4 – 5, 2018 (New York, NY)
- Johnson Rice 2018 Energy Conference on
September 24 – 26, 2018 (New Orleans, LA)
Presentation materials for all conferences mentioned above will
be available on WRD’s website at www.wildhorserd.com on or prior to
the day of the respective presentation.
Quarterly Report on Form 10-Q
WRD’s financial statements and related footnotes will be
available in its Quarterly Report on Form 10-Q for the quarter
ended June 30, 2018, which will be filed with the U.S. Securities
and Exchange Commission (“SEC”) on or before August 9, 2018.
Conference Call and Webcast
WRD will host an investor conference call tomorrow morning,
August 8, 2018 at 8 a.m. Central (9 a.m. Eastern) to discuss the
second quarter 2018 operating and financial results. Interested
parties are invited to participate on the call by dialing (877)
883-0383 (Conference ID: 9209183), or (412) 902-6506 for
international calls, (Conference ID: 9209183) at least 15 minutes
prior to the start of the call or via the internet at
www.wildhorserd.com. A replay of the call will be available on
WRD’s website or by phone at (877) 344-7529 (Conference ID:
10121205) for a seven-day period following the call.
About WildHorse Resource Development Corporation
WildHorse Resource Development Corporation is an independent oil
and natural gas company focused on the acquisition, exploration,
development and production of oil, natural gas and NGL properties
primarily in the Eagle Ford Shale and Austin Chalk in East Texas.
For more information, please visit our website at
www.wildhorserd.com.
Cautionary Statements and Additional Disclosures
This press release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements can be identified by words such
as “anticipates,” “intends,” “will,” “plans,” “seeks,” “believes,”
“estimates,” “could,” “expects” and similar references to future
periods. Such forward-looking statements are subject to a number of
risks and uncertainties, many of which are beyond WRD’s control.
All statements, other than historical facts included in this press
release, that address activities, events or developments that WRD
expects or anticipates will or may occur in the future, including
such things as WRD’s future capital expenditures (including the
amount and nature thereof), business strategy and measures to
implement strategy, future drilling locations and inventory,
competitive strengths, goals, expansion and growth of WRD’s
business and operations, plans, successful consummation and
integration of acquisitions and other transactions, market
conditions, references to future success, references to intentions
as to future matters and other such matters are forward-looking
statements. All forward-looking statements speak only as of the
date of this press release. Although WRD believes that the plans,
intentions and expectations reflected in or suggested by the
forward-looking statements are reasonable, there is no assurance
that these plans, intentions or expectations will be achieved.
Therefore, actual outcomes and results could materially differ from
what is expressed, implied or forecast in such statements.
WRD cautions you that these forward-looking statements are
subject to risks and uncertainties, most of which are difficult to
predict and many of which are beyond WRD’s control, incident to the
exploration for and development, production, gathering and sale of
natural gas and oil. These risks include, but are not limited to:
commodity price volatility; inflation; lack of availability of
drilling and production equipment and services; environmental
risks; drilling and other operating risks; regulatory changes; the
uncertainty inherent in estimating natural gas and oil reserves and
in projecting future rates of production, cash flow and access to
capital; and the timing of development expenditures. Information
concerning these and other factors can be found in WRD’s filings
with the SEC, including its Forms 10-K, 10-Q and 8-K. Consequently,
all of the forward-looking statements made in this press release
are qualified by these cautionary statements and there can be no
assurances that the actual results or developments anticipated by
WRD will be realized, or even if realized, that they will have the
expected consequences to or effects on WRD, its business or
operations. WRD has no intention, and disclaims any obligation, to
update or revise any forward-looking statements, whether as a
result of new information, future results or otherwise.
Initial production rates are subject to decline over time and
should not be regarded as reflective of sustained production
levels.
Some of the above results are preliminary. Such preliminary
results are based on the most current information available to
management. As a result, WRD’s final results may vary from these
preliminary estimates. Such variances may be material; accordingly,
you should not place undue reliance on these preliminary
estimates.
Cash General and Administrative Expenses per Boe
Our presentation of cash G&A expenses is a non-GAAP measure.
We define cash G&A as total G&A determined in accordance
with GAAP less non-cash equity compensation expenses, and we may
express it on a per Boe basis. We report and provide guidance on
cash G&A because we believe this measure is commonly used by
management, analysts and investors as an indicator of cost
management and operating efficiency on a comparable basis from
period to period. In addition, management believes cash G&A is
used by analysts and others in valuation, comparison and investment
recommendations of companies in the oil and natural gas industry to
allow for analysis of G&A spend without regard to stock-based
compensation programs which can vary substantially from company to
company. Cash G&A should not be considered as an alternative
to, or more meaningful than, total G&A as determined in
accordance with GAAP and may not be comparable to other similarly
titled measures of other companies.
Management Locations
WRD has a total of 3,207 net horizontal drilling locations in
the proved, probable, and possible categories as audited by
CG&A, WRD’s third party engineers, which also includes 446 net
locations that have been identified by WRD’s management. WRD
identified those additional locations using the same methodology as
those locations to which probable and possible reserves are
attributed—by using existing geologic and engineering data from
vertical production and seismic data. Of WRD’s total 3,207 net
horizontal drilling locations, 2,761 lie within the geographic
areas to which proved, probable and possible reserves are
attributed by CG&A. The remaining 446 management identified net
horizontal drilling locations are within geographic areas to which
proved, probable or possible reserves are not attributed, but
nonetheless are locations that WRD has specifically identified
based on its evaluation of applicable geologic and engineering data
accrued over our multi-year historical drilling activities in the
surrounding area. The management location count includes 110 net
locations from the Lee County, TX acquisition which closed on March
1, 2018. The locations have been identified by WRD’s management
based on its evaluation of applicable geologic and engineering data
from historical drilling activities in the surrounding area. The
locations on which WRD actually drills wells will ultimately depend
upon the availability of capital, regulatory approvals, seasonal
restrictions, oil and natural gas prices, costs, actual drilling
results and other factors, and may differ from the locations
currently identified.
Net Locations CG&A Management Total
Dec. 31, 2017 Locations Locations(4)
Locations
Eagle Ford 2,708 445 3,154 Austin Chalk 53 0 53
Total
Locations 2,761 446 3,207
(4) Includes 110 net locations from the
Lee County, TX acquisition which closed on March 1, 2018.
Use of Non-GAAP Financial Measures
This press release and accompanying schedules include the
non-GAAP financial measures of Adjusted EBITDAX, Adjusted Net
Income (Loss) available to common stockholders, Cash G&A, and
Net Debt. The accompanying appendix and schedules provide a
reconciliation of these non-GAAP financial measures to their most
directly comparable financial measure calculated and presented in
accordance with GAAP. WRD's non-GAAP financial measures should not
be considered as alternatives to GAAP measures such as Net Income,
operating income, net cash flows provided by operating activities
or any other measure of financial performance calculated and
presented in accordance with GAAP. WRD's non-GAAP financial
measures may not be comparable to similarly-titled measures of
other companies because they may not calculate such measures in the
same manner as WRD does.
WildHorse Resource Development
Corporation
Statements of Condensed Consolidated
Operations
For the Three Months Ended June 30, (Amounts
in $000s except per share data)
2018 2017
Revenues and other
income:
Oil sales $ 207,392 $ 52,963 Natural gas sales 8,106 13,277 NGL
sales 9,668 3,404 Other income 247
529 Total operating revenues and other income
225,413 70,173
Operating
Expenses:
Lease operating expenses 12,088 6,837 Gathering, processing and
transportation 476 1,942 Taxes other than income 12,779 4,509
Depreciation, depletion and amortization 70,694 33,229 General and
administrative expenses 12,917 10,049 Exploration expense 4,369
11,504 Incentive unit compensation expense 13,776 - (Gain) loss on
sale of properties (3,167 ) - Other operating (income) expense
111 25 Total expenses
124,043 68,095
Income (loss) from operations 101,370 2,078
Other Income
(Expense):
Interest expense (14,002 ) (6,633 ) Debt extinguishment costs - -
Gain (loss) on derivative instruments (110,805 ) 46,116 Other
income (expense) (13 ) (2 ) Total other
income (expense) (124,820 ) 39,481
Income (loss) before income taxes (23,450 ) 41,559
Income tax benefit (expense) 9,356
(15,193 )
Net Income (loss) (14,094 )
26,366 Preferred stock dividends 7,961 73
Undistributed earnings allocated to participating securities
- 387 Net income (loss)
available to common stockholders $ (22,055 ) $ 25,906
Earnings per share Basic $ (0.22 ) 0.28 Diluted $
(0.22 ) 0.28 Weighted average shares outstanding Basic
99,411 93,685 Diluted 99,411 93,685
WildHorse Resource Development
Corporation
Statements of Condensed Consolidated
Cash Flows
For the Three Months Ended June 30, (Amounts
in $000s)
2018 2017 Cash
flows from operating activities: Net Income (Loss) $ (14,094 )
$ 26,366 Adjustments to reconcile net income (loss) to cash flows
provided by operating activities Depreciation, depletion and
amortization 70,579 33,074 Accretion of asset retirement
obligations 115 155 Impairments of unproved properties 4,359 9,980
Amortization of debt issuance costs 768 439 Accretion of senior
note discount premium (35 ) 63 (Gain) loss on derivative
instruments 110,805 (46,116 ) Cash settlements on derivative
instruments (29,508 ) 2,076 Consideration paid to customers, net of
amortization (904 ) - Deferred income tax expense (benefit) (12,800
) 15,193 Non-cash incentive unit compensation expense 13,776 -
Amortization of equity awards 3,835 1,308 (Gain) loss on sale of
properties (3,167 ) - Changes in operating assets and liabilities
29,809 1,677 Net cash provided by
operating activities 173,538 44,215
Cash flows from investing activities: Net cash used
in investing activities (292,252 ) (699,543 )
Cash flows from financing activities: Net cash provided by
financing activities 130,836 576,619
Net change in cash, cash equivalents, and restricted cash $
12,122 $ (78,709 ) Cash, cash equivalents and restricted cash,
beginning of period 7,017 94,094 Cash,
cash equivalents and restricted cash, end of period $ 19,139
$ 15,385
WildHorse Resource Development
Corporation
Operating Data
For the Three Months Ended
June 30, 2018 2017
Production
volumes
Oil Sales (MBbls) 3,041 1,133 Natural Gas Sales (MMcf) 3,954 4,299
NGL Sales (MBbls) 550 205 Total (Mboe) 4,249 2,054
Total (Mboe/d) 46.7 22.6
Average unit costs
per boe
Lease operating expense $ 2.84 $ 3.33 Gathering, processing and
transportation $ 0.11 $ 0.95 Taxes other than income $ 3.01 $ 2.20
General and administrative expenses $ 3.04 $ 4.89 Cash General and
administrative expenses $ 2.14 $ 4.26 Acquisition-related expenses
$ 0.03 $ 1.07
WildHorse Resource Development
Corporation
Condensed Consolidated Balance
Sheets
June 30, December
31, (Amounts in $000s)
2018 2017
ASSETS Current Assets: Cash and cash equivalents $ 19,139 $
226 Accounts receivable, net 109,017 84,103 Derivative instruments
- 2,336 Prepaid expenses and other current assets
4,669 3,290 Total Current Assets 132,825
89,955 Property & equipment: Oil and natural gas
properties 3,007,462 2,999,728 Other property and equipment 53,124
53,003 Accumulated depreciation, depletion and impairment
(351,248 ) (368,245 ) Total property and equipment,
net 2,709,338 2,684,486 Other noncurrent assets Derivative
instruments 491 86 Debt issuance costs 3,618 3,573 Other
13,256 - Total Assets $
2,859,528 $ 2,778,100
LIABILITIES AND
EQUITY Current Liabilities: Accounts payable $ 65,710 $ 53,005
Accrued liabilities 193,552 199,952 Short-term derivative
instruments 107,206 58,074 Total
Current Liabilities 366,468 311,031 Noncurrent Liabilities:
Long-term debt 935,609 770,596 Asset retirement obligations 7,518
14,467 Deferred tax liabilities 20,612 71,470 Derivative
instruments 61,866 18,676 Other noncurrent liabilities
874 1,085 Total liabilities 1,392,947
1,187,325 Series A Perpetual Convertible Preferred Stock
447,726 445,483 Stockholders' equity: Common stock 1,020
1,012 Additional paid-in capital 1,141,140 1,118,507 Accumulated
earnings (deficit) (123,305 ) 25,773
Total stockholders' equity 1,018,855 1,145,292
Total Liabilities & Equity $ 2,859,528 $
2,778,100
WildHorse Resource Development
Corporation
Commodity Hedge Positions
The following table reflects WRD’s hedged
volumes and corresponding weighted-average price, as of August 7,
2018:
Q2 - Q4 '18 2019 2020 Crude Oil
Derivative Contracts: Swap contracts: Volume (Bbl) 2,958,527
6,652,369 4,511,681 Weighted-average fixed price $52.36 $54.45
$53.49 Deferred put options Volume (Bbl) 1,656,378 1,749,757
- Weighted-average floor price $50.04 $53.83 - Weighted-average put
premium
($3.64)
($5.43) - LLS basis swaps Volume (Bbl) 3,339,230 - -
Weighted-average fixed price - WTI to LLS $3.02 - -
Natural Gas Derivative Contracts: Swap contracts: Volume
(MMBtu) 4,723,634 6,425,146 4,846,020 Weighted-average fixed price
$2.79 $2.79 $2.76
Calculation of Adjusted EBITDAX:
We evaluate performance based on Adjusted EBITDAX. Adjusted
EBITDAX is defined as Net Income (loss), plus interest expense;
debt extinguishment costs; income tax expense; depreciation,
depletion and amortization; impairment of goodwill and long-lived
properties; accretion of asset retirement obligations; losses on
commodity derivative contracts and cash settlements received;
losses on sale of properties; stock-based compensation;
incentive-based compensation expenses; exploration costs; provision
for environmental remediation; transaction related costs; IPO
related expenses; the North Louisiana settlement, and other
non-routine items, less interest income; income tax; unrealized
gains/losses on commodity derivative contracts and cash settlements
paid; gains on sale of assets and other non-routine items. The
following table presents WRD’s information for the periods
indicated:
Adjusted EBITDAX
For the Three Months Ended June 30, (Amounts in
$000s)
2018 2017 Net Income (Loss) $ (14,094 ) $
26,366
Add
(Deduct):
Interest expense, net 14,002 6,633 Income tax (benefit) expense
(9,356 ) 15,193 Depreciation, depletion and amortization 70,694
33,229 Exploration expense 4,369 11,504 (Gain) loss on derivative
instruments 110,805 (46,116 ) Cash settlements received / (paid) on
commodity derivatives (29,508 ) 2,076 Stock-based compensation
3,835 1,308 Incentive unit compensation 13,776 - Acquisition
related costs 129 2,199 Gain on sale of North Louisiana disposal
group (3,167 ) - Debt Extinguishment costs -
- Adjusted EBITDAX $ 161,485 $ 52,392
Calculation of Adjusted Net Income (Loss) Available to Common
Stockholders:
Adjusted Net Income (Loss) available to common stockholders is a
supplemental non-GAAP financial measure that is used by external
users of WRD’s financial statements. We define Adjusted Net Income
(Loss) available to common stockholders as Net Income (Loss)
available to common stockholders excluding the impact of certain
items including gains or losses on commodity derivative instruments
not yet settled, gains or losses on sales of properties, debt
extinguishment costs, stock-based compensation, incentive-unit
compensation expense, impairment-related expenses, the tax benefit
related to the Tax Cuts and Jobs Act, the North Louisiana
settlement, and the tax effects related to these adjustments. We
believe Adjusted Net Income (Loss) available to common stockholders
is useful to investors because it provides readers with a more
meaningful measure of our profitability before recording certain
items for which the timing or amount cannot be reasonably
determined. However, this measure is provided in addition to, not
as an alternative for, and should be read in conjunction with, the
information contained in our financial statements prepared in
accordance with GAAP. The following table provides a reconciliation
of Net Income (Loss) available to common stockholders as determined
in accordance with GAAP to Adjusted Net Income (Loss) available to
common stockholders for the periods indicated:
Adjusted Net Income (Loss) available to
common stockholders
For the Three Months Ended June 30,
2018 (Amounts in $000s) (Basic / Diluted EPS)
Net Income (Loss) available to common stockholders $ (22,055
) ($0.22 ) Add (Deduct) (Gain) loss on derivative
instruments 110,805 1.11 Cash settlements received / (paid) on
commodity derivatives (29,508 ) (0.30 ) Stock-based compensation
3,835 0.04 Impairment of oil and gas properties - - Incentive unit
compensation expense 13,776 0.14 Gain on sale of North Louisiana
disposal group (3,167 ) (0.03 ) Debt extinguishment costs -
- Adjusted income (loss) before tax effect
73,686 0.74 Tax effect related to adjustments (20,929 )
(0.21 ) Adjusted income (loss) after tax effect
52,757 0.53 Preferred stock dividend 7,961
0.08 Undistributed earnings allocated to participating securities
- - Adjusted net income (loss) 60,718
0.61 Preferred stock dividend (7,961 ) (0.08 ) Undistributed
adjusted earnings allocated to participating securities
(13,615 ) (0.14 ) Adjusted net income (loss) available to
common shareholders $ 39,142 $ 0.39 Weighted
average basic and diluted shares outstanding 99,411
Calculation of Net Debt:
Net Debt is a supplemental non-GAAP financial measure that is
used by external users of WRD’s financial statements. We define Net
Debt as total debt minus cash and cash equivalents. We believe Net
Debt is useful to investors because it provides readers with a more
meaningful measure of our outstanding indebtedness. However, this
measure is provided in addition to, not as an alternative for, and
should be read in conjunction with, the information contained in
our financial statements prepared in accordance with GAAP.
GP&T and Revenue Recognition Reconciliation – Second
Quarter 2018
The table below reconciles revenue and gathering, processing and
transportation expense to the reporting convention prior to the
implementation of the new FASB revenue recognition standard on
January 1, 2018 (ASC 606, Revenue from Contracts with Customers).
For additional information on the GP&T reconciliation and the
new revenue recognition standard, see the Management’s Discussion
& Analysis section of WRD’s second quarter 2018 10-Q to be
filed on or before August 9, 2018.
Prior Reporting Variance
New FASB Revenue Recognition
Standard
Guidance (prior
reporting}
Revenues: Gas revenue $9,540 ($1,434) $8,106 NGL revenue
$12,193 ($2,525) $9,668 Other Income $304 ($57) $247 Natural
gas price realization (% of Henry Hub) 86% -13% 73% 90% - 94% NGL
price realization (% of WTI) 33% -7% 26% 33% - 37%
Operating expenses: Lease operating expenses $12,395 ($307)
$12,088 GP&T expense $4,022 ($3,546) $476 Depreciation,
depletion, and amortization $70,849 ($155) $70,694 Other operating
(income) expense $282 ($171) $111 GP&T per boe $0.95
($0.84) $0.11 $1.10 - $1.40
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version on businesswire.com: https://www.businesswire.com/news/home/20180807005841/en/
WildHorse Resource Development CorporationPearce Hammond, CFA,
(713) 255-7094Vice President, Investor
Relationsphammond@wildhorserd.com-Vedran Vuk, (713)
255-6962Director of Investor Relationsvvuk@wildhorserd.com
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