Ascent Resources Utica Holdings Reports Fourth Quarter And Full Year 2019 Operating Results And Announces 2020 Guidance
OKLAHOMA CITY, Feb. 21, 2020 /PRNewswire/ -- Ascent Resources Utica Holdings, LLC ("Ascent" or "the Company" or "our") today announced its fourth quarter and full year 2019 financial and operating results and 2020 outlook. In addition, Ascent announced a conference call with analysts and investors scheduled for 7 AM CST / 8 AM EST, Monday, February 24, 2020. For more detailed information on Ascent's assets and business, please refer to the presentation and additional information located at https://www.ascentresources.com/investors.
Fourth Quarter 2019 Highlights:
- Cash flows from operating activities were $221 million, and free cash flow was $17 million
- Net income was $65 million, adjusted net income was $98 million and adjusted EBITDAX was $341 million
- Net production averaged 2,272 mmcfe per day
- Net liquids production averaged over 47,000 bbl per day
- Extended maturity of $2.5 billion revolving credit facility to April 2024
- Reaffirmed $2.0 billion borrowing base on revolving credit facility
Full Year 2019 Highlights:
- Net income was $466 million, adjusted net income was $328 million and adjusted EBITDAX was $1.2 billion
- Net production averaged 1,970 mmcfe per day
- SEC proved reserves grew 21% year-over-year to 9.3 tcfe
- Year-end leverage decreased to less than 2.5x net debt / LTM adjusted EBITDAX
2020 Outlook:
- Full year 2020 capital expenditures are projected to range from $700 to $800 million, excluding capitalized interest
- Net production in 2020 is projected to average 2.0 to 2.3 bcfe per day
- Free cash flow for 2020 is expected at current commodity prices and rig activity
"Ascent successfully delivered on our operational and financial objectives in 2019," said Jeff Fisher, Chairman and Chief Executive Officer. "Our results reflect the strength of the Southern Utica and the talents of our team to develop this prolific asset. As a result, our business plan has successfully transitioned Ascent into a sustainable free cash flow generating company of scale in today's upstream energy market."
Fourth Quarter 2019 Results
For the fourth quarter of 2019, Ascent reported net income of $65 million and adjusted net income of $98 million, compared to net income of $124 million and adjusted net income of $132 million in the fourth quarter of 2018. The Company's adjusted EBITDAX for the fourth of quarter 2019 was $341 million, which is a 7% increase compared to $318 million for the fourth quarter of 2018.
Average daily production for the fourth quarter of 2019 was 2,272 mmcfe per day, a 28% increase compared to the fourth quarter of 2018 and consisted of 1,988 mmcf per day of natural gas, 14,652 barrels (bbl) per day of oil and 32,630 bbl per day of natural gas liquids (NGL).
During the fourth quarter of 2019, Ascent generated positive free cash flow of $17 million. This is Ascent's first quarter of positive free cash flow, and the Company believes it will generate increasing amounts of free cash flow in 2020 and beyond.
As previously reported, Ascent amended its $2.5 billion credit facility with its lenders in order to extend the maturity of the facility to April 2024. Additionally, the bank group, led by JPMorgan Chase NA as administrative agent, reaffirmed the borrowing base at $2.0 billion.
Full Year 2019 Results
For the full year 2019, Ascent reported net income of $466 million and adjusted net income of $328 million, compared to a net loss of $4 million and adjusted net income of $244 million in the full year 2018. Adjusted EBITDAX for the full year was $1.2 billion, which is a 36% increase compared to $844 million for full year 2018.
Average daily production for full year 2019 was 1,970 mmcfe per day, a 45% increase compared to the full year 2018 and consisted of 1,749 mmcf per day of natural gas, 13,134 bbl per day of oil and 23,795 bbl per day of natural gas liquids (NGL). Total net liquids production for the full year 2019 averaged 36,929 bbl per day, which represents a 116% increase as compared to the full year 2018.
Ascent's disciplined focus on cost improvements resulted in an 11% year-over-year improvement to gathering, processing and transportation expenses in 2019 to $1.19 per mcfe, compared to $1.33 per mcfe in 2018, by more fully optimizing our firm transportation commitments and in-basin sales. Additionally, general and administrative per unit costs have reduced 35% year-over-year to $0.08 per mcfe, compared to $0.13 per mcfe in 2018.
2020 Outlook
"We exited 2019 as indicated on prior investor calls, with approximately 2.3 bcfe per day of net daily production, substantial liquidity and, more importantly, free cash flow generation that will allow us to create sustainable value growth for our investors," said Mr. Fisher. "Our team has led the industry in efficiently building the seventh largest producer of natural gas in the United States, capable of generating substantial free cash flow into the future. Our focus has shifted from production growth to free cash flow generation and liquidity growth. Our core competencies in industry-leading, low-cost, high-return development underpinned by strong financial discipline and risk management have distinguished Ascent in the sector," added Mr. Fisher.
Ascent's 2020 full year outlook includes a capital budget of $700 to $800 million, and average total net production is expected to range between 2.0 and 2.3 bcfe per day. Full year 2020 free cash flow is expected at current commodity prices and rig activity.
Capital Spending Overview
Fourth quarter and full year 2019 capital expenditures incurred decreased to $205 million and $1.3 billion, respectively, compared to $374 million and $2.8 billion(a) in the fourth quarter and full year 2018, respectively. A summary of the Company's 2019 and 2018 capital expenditures is provided in the table below:
|
|
Three Months Ended |
|
Years Ended |
||||||||||||
|
|
December 31, |
|
December 31, |
||||||||||||
($ in thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Capital Expenditures: |
|
|
|
|
|
|
|
|
||||||||
Drilling and completion costs |
|
$ |
149,821 |
|
|
$ |
263,737 |
|
|
$ |
1,030,294 |
|
|
$ |
923,141 |
|
Acquisition and leasehold costs(a) |
|
30,483 |
|
|
75,301 |
|
|
141,631 |
|
|
1,725,144 |
|
||||
Capitalized interest |
|
24,474 |
|
|
34,637 |
|
|
123,370 |
|
|
126,406 |
|
||||
Total Capital Expenditures |
|
$ |
204,778 |
|
|
$ |
373,675 |
|
|
$ |
1,295,295 |
|
|
$ |
2,774,691 |
|
|
|
(a) |
Acquisition and leasehold costs for the full year 2018 included $1.5 billion related to significant acquisitions in the third quarter 2018. |
Balance Sheet and Hedge Position Update
As of December 31, 2019, Ascent's principal amount of debt outstanding was approximately $2.8 billion, including $1.2 billion drawn under its revolving credit facility, compared to $2.6 billion as of December 31, 2018. As of December 31, 2019, Ascent had $171 million of letters of credit issued and $641 million of available capacity under the $2.0 billion borrowing base.
As of December 31, 2019, Ascent's leverage profile improved as highlighted by the net debt / LTM adjusted EBITDAX ratio below 2.5x, as compared to 3.0x on December 31, 2018. Ascent had total liquidity available of approximately $650 million as of December 31, 2019.
Ascent has a robust hedge portfolio in place for 2020 to prudently reduce its exposure to fluctuations in future commodity prices and to protect our expected operating cash flow against significant market movements or volatility. As of December 31, 2019 nearly 80% of the Company's forecasted natural gas production (at the midpoint of production guidance) was hedged at approximately $2.71 per mmbtu ($2.87 per mcf) for calendar year 2020. More than 35% of Ascent's expected calendar year 2020 crude oil production was hedged at an average price of $56.89 per bbl. The mark-to-market value of our hedge portfolio was approximately $420 million as of February 17, 2020.
2019 Year End Reserves
Ascent's proved reserves under SEC guidelines grew 21% year-over-year to 9.3 trillion cubic feet equivalent (tcfe) as of December 31, 2019, replacing 327% of full year 2019 production and the PV-10 of Ascent's proved reserves was approximately $4.0 billion as of the same date. A summary of changes to Ascent's proved reserves for the full year 2019 is included in the table below:
|
Year Ended |
||
|
December 31, |
||
(in mmcfe) |
2019 |
||
|
|
|
|
Proved Reserves at December 31, 2018 |
|
7,615,763 |
|
Extensions, discoveries and other additions |
|
2,982,736 |
|
Revisions |
|
(630,831) |
|
Purchases of reserves |
|
12,407 |
|
Sales of reserves |
|
(9,247) |
|
Production |
|
(719,113) |
|
Proved Reserves at December 31, 2019 |
|
9,251,715 |
|
|
|
|
|
Proved developed reserves |
|
3,910,032 |
|
Proved developed reserves percentage |
|
42 |
% |
Standardized Measure of Discounted Future Net Cash Flows ($ in thousands)(GAAP) |
$ |
3,957,652 |
|
Add: Present value of future income taxes discounted at 10% per annum(a) |
— |
|
|
PV-10 ($ in thousands) (Non-GAAP)(a) |
$ |
3,957,652 |
|
|
|
(a) |
Reserve volumes and PV-10 were estimated using SEC reserve recognition standards and pricing assumptions based on the unweighted arithmetic average of the prices on the first day of each month within the 12-month period ended December 31, 2019. The prices used in Ascent's reserve reports were $2.58 per mmbtu of natural gas and $55.85 per bbl of oil and condensate, before basis differential adjustments. PV-10 is a non-GAAP measure that typically differs from the standardized measure, because the former does not include the effects of estimated future income tax expense. However, because Ascent is a disregarded entity for income tax purposes, it has estimated no future income tax expense and the two measures are the same as of December 31, 2019, as calculated in the reconciliation above. PV-10 can be used within the industry and by creditors and securities analysts to evaluate estimated net cash flows from proved reserves on a more comparable basis. |
Corporate Responsibility
During the fourth quarter of 2019, Ascent issued its first Environmental, Social & Governance Report highlighting Ascent's commitment to sustainable business practices and social responsibility. Specifically, the Company highlighted and provided performance results related to greenhouse gas emissions, health and safety and social engagement. Additional updates of the report will be published on a regular basis going forward. The report can be found at www.ascentresources.com/investors.
About Ascent Resources:
Ascent is the seventh largest producer of natural gas in the United States in terms of daily production and is focused on acquiring, exploring for, developing, producing, and operating natural gas and oil properties located in the Utica Shale in Southeast Ohio. With a continued focus on good corporate citizenship, Ascent is committed to delivering low cost clean burning energy to our country and the world, while reducing environmental impacts. For more information, visit www.ascentresources.com.
Contact:
James Short – Director of Strategic Planning & Investor Relations
[email protected]
This news release contains forward-looking statements within the meaning of US federal securities laws. Forward-looking statements express views of Ascent regarding future plans and expectations. Forward-looking statements in this news release include, but are not limited to, statements regarding future operations, business strategy, liquidity and cash flows of Ascent. These statements are based on numerous assumptions and are subject to known and unknown risks and uncertainties, including, commodity price volatility, inherent uncertainty in estimating natural gas, oil and NGL reserves, environmental and regulatory risks, availability of capital, and the other risks described in Ascent's most recent investor presentation provided at www.ascentresources.com/investors. Actual future results may vary materially from those expressed or implied in this news release and Ascent's business, financial condition, results of operations and cash flow could be materially and adversely affected by such risks and uncertainties. As a result, forward-looking statements should be understood to be only predictions and statements of Ascent's current beliefs; they are not guarantees of performance.
ASCENT RESOURCES UTICA HOLDINGS, LLC |
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended |
|
Years Ended |
||||||||||||
|
|
December 31, |
|
December 31, |
||||||||||||
($ in thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenues: |
|
|
|
|
|
|
|
|
||||||||
Natural gas |
|
$ |
415,718 |
|
|
$ |
559,511 |
|
|
$ |
1,589,099 |
|
|
$ |
1,444,368 |
|
Oil |
|
66,593 |
|
|
37,789 |
|
|
241,521 |
|
|
133,786 |
|
||||
NGL |
|
57,668 |
|
|
41,144 |
|
|
148,639 |
|
|
109,221 |
|
||||
Commodity derivative gain (loss) |
|
83,616 |
|
|
20,489 |
|
|
441,139 |
|
|
(90,881) |
|
||||
Total Revenues |
|
623,595 |
|
|
658,933 |
|
|
2,420,398 |
|
|
1,596,494 |
|
||||
Operating Expenses: |
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses |
|
20,327 |
|
|
15,736 |
|
|
72,606 |
|
|
50,163 |
|
||||
Gathering, processing and transportation expenses |
|
236,158 |
|
|
201,512 |
|
|
856,126 |
|
|
658,117 |
|
||||
Production and ad valorem taxes |
|
8,198 |
|
|
7,697 |
|
|
34,167 |
|
|
23,362 |
|
||||
Exploration expenses |
|
41,561 |
|
|
40,513 |
|
|
124,477 |
|
|
156,450 |
|
||||
General and administrative expenses |
|
15,322 |
|
|
26,712 |
|
|
61,027 |
|
|
63,794 |
|
||||
Acquisition expenses |
|
— |
|
|
277 |
|
|
— |
|
|
9,407 |
|
||||
Natural gas and oil depreciation, depletion and amortization |
|
203,091 |
|
|
158,327 |
|
|
702,414 |
|
|
500,773 |
|
||||
Depreciation and amortization of other assets |
|
875 |
|
|
1,030 |
|
|
3,239 |
|
|
3,912 |
|
||||
Total Operating Expenses |
|
525,532 |
|
|
451,804 |
|
|
1,854,056 |
|
|
1,465,978 |
|
||||
Income from Operations |
|
98,063 |
|
|
207,129 |
|
|
566,342 |
|
|
130,516 |
|
||||
Other (Expense) Income: |
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
(34,249) |
|
|
(25,732) |
|
|
(109,114) |
|
|
(92,227) |
|
||||
Change in fair value of embedded derivative |
|
622 |
|
|
4,704 |
|
|
5,026 |
|
|
18,865 |
|
||||
Losses on purchases or exchanges of debt |
|
— |
|
|
(62,233) |
|
|
— |
|
|
(62,233) |
|
||||
Other income |
|
819 |
|
|
371 |
|
|
3,711 |
|
|
683 |
|
||||
Total Other Expense |
|
(32,808) |
|
|
(82,890) |
|
|
(100,377) |
|
|
(134,912) |
|
||||
Net Income (Loss) |
|
$ |
65,255 |
|
|
$ |
124,239 |
|
|
$ |
465,965 |
|
|
$ |
(4,396) |
|
ASCENT RESOURCES UTICA HOLDINGS, LLC |
||||||||
CONSOLIDATED BALANCE SHEETS DATA |
||||||||
(Unaudited) |
||||||||
|
||||||||
|
|
December 31, |
||||||
($ in thousands) |
|
2019 |
|
2018 |
||||
|
|
|
|
|
||||
Total Current Assets |
|
$ |
545,116 |
|
|
$ |
521,914 |
|
|
|
|
|
|
||||
Property and equipment, net |
|
6,374,276 |
|
|
5,908,629 |
|
||
Other long-term assets |
|
91,026 |
|
|
56,279 |
|
||
Total Assets |
|
$ |
7,010,418 |
|
|
$ |
6,486,822 |
|
|
|
|
|
|
||||
Total Current Liabilities |
|
$ |
485,292 |
|
|
$ |
656,108 |
|
Long-Term Liabilities: |
|
|
|
|
||||
Long-term debt, net |
|
2,838,676 |
|
|
2,582,820 |
|
||
Other long-term liabilities |
|
5,067 |
|
|
32,797 |
|
||
Total Long-Term Liabilities |
|
2,843,743 |
|
|
2,615,617 |
|
||
|
|
|
|
|
||||
Member's Equity |
|
3,681,383 |
|
|
3,215,097 |
|
||
Total Liabilities and Member's Equity |
|
$ |
7,010,418 |
|
|
$ |
6,486,822 |
|
ASCENT RESOURCES UTICA HOLDINGS, LLC |
||||||||||||||||
CONSOLIDATED CASH FLOW DATA |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended |
|
Years Ended |
||||||||||||
|
|
December 31, |
|
December 31, |
||||||||||||
($ in thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Cash and Cash Equivalents, Beginning of Period |
|
$ |
6,798 |
|
|
$ |
10,868 |
|
|
$ |
11,030 |
|
|
$ |
119,215 |
|
Net Cash Provided by Operating Activities |
|
220,908 |
|
|
181,442 |
|
|
1,140,118 |
|
|
688,733 |
|
||||
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
||||||||
Drilling and completion costs |
|
(235,338) |
|
|
(270,630) |
|
|
(1,125,216) |
|
|
(906,064) |
|
||||
Acquisitions of natural gas and oil properties |
|
(55,860) |
|
|
(114,673) |
|
|
(258,001) |
|
|
(1,409,494) |
|
||||
Proceeds from divestitures of natural gas and oil properties |
|
(2,067) |
|
|
— |
|
|
12,474 |
|
|
6,564 |
|
||||
Additions to other property and equipment |
|
(583) |
|
|
(263) |
|
|
(3,547) |
|
|
(1,512) |
|
||||
Net Cash Used in Investing Activities |
|
(293,848) |
|
|
(385,566) |
|
|
(1,374,290) |
|
|
(2,310,506) |
|
||||
Net Cash Provided by Financing Activities |
|
73,488 |
|
|
204,286 |
|
|
230,488 |
|
|
1,513,588 |
|
||||
Net Increase / (Decrease) in Cash and Cash Equivalents |
|
548 |
|
|
162 |
|
|
(3,684) |
|
|
(108,185) |
|
||||
Cash and Cash Equivalents, End of Period |
|
$ |
7,346 |
|
|
$ |
11,030 |
|
|
$ |
7,346 |
|
|
$ |
11,030 |
|
ASCENT RESOURCES UTICA HOLDINGS, LLC |
|||||||||||||||||
NATURAL GAS, OIL AND NGL PRODUCTION AND PRICES |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
|
|||||||||||||||||
|
|
Three Months Ended |
|
Years Ended |
|||||||||||||
|
|
December 31, |
|
December 31, |
|||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Production |
|
|
|
|
|
|
|
|
|||||||||
Natural gas (mmcf) |
|
182,913 |
|
|
148,815 |
|
|
638,243 |
|
|
457,747 |
|
|||||
Oil (mbbls) |
|
1,348 |
|
|
713 |
|
|
4,794 |
|
|
2,262 |
|
|||||
NGL (mbbls) |
|
3,002 |
|
|
1,684 |
|
|
8,685 |
|
|
3,974 |
|
|||||
Natural Gas Equivalents (mmcfe) |
|
209,016 |
|
|
163,190 |
|
|
719,113 |
|
|
495,168 |
|
|||||
|
|
|
|
|
|
|
|
|
|||||||||
Daily Production |
|
|
|
|
|
|
|
|
|||||||||
Natural gas (mmcf/d) |
|
1,988 |
|
|
1,618 |
|
|
1,749 |
|
|
1,254 |
|
|||||
Oil (bbls/d) |
|
15 |
|
|
8 |
|
|
13 |
|
|
6 |
|
|||||
NGL (bbls/d) |
|
33 |
|
|
18 |
|
|
24 |
|
|
11 |
|
|||||
Natural Gas Equivalents (mmcfe/d) |
|
2,272 |
|
|
1,774 |
|
|
1,970 |
|
|
1,357 |
|
|||||
% Natural Gas |
|
88 |
% |
|
91 |
% |
|
89 |
% |
|
92 |
% |
|||||
% Liquids |
|
12 |
% |
|
9 |
% |
|
11 |
% |
|
8 |
% |
|||||
|
|
|
|
|
|
|
|
|
|||||||||
Average Realized Prices |
|
|
|
|
|
|
|
|
|||||||||
Natural gas ($/mcf) |
|
$ |
2.27 |
|
|
$ |
3.76 |
|
|
$ |
2.49 |
|
|
$ |
3.16 |
|
|
Oil ($/bbl) |
|
$ |
49.40 |
|
|
|
$ |
53.03 |
|
|
$ |
50.38 |
|
|
$ |
59.15 |
|
NGL ($/bbl) |
|
$ |
19.21 |
|
|
$ |
24.44 |
|
|
$ |
17.11 |
|
|
$ |
27.48 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Natural Gas Equivalents ($/mcfe) |
|
$ |
2.58 |
|
|
$ |
3.91 |
|
|
$ |
2.75 |
|
|
$ |
3.41 |
|
|
Settlements of commodity derivatives ($/mcfe) |
|
0.39 |
|
|
(0.48) |
|
|
0.27 |
|
|
(0.11) |
|
|||||
Average sales price, after effects of settled derivatives ($/mcfe) |
|
$ |
2.97 |
|
|
$ |
3.43 |
|
|
$ |
3.02 |
|
|
$ |
3.30 |
|
ASCENT RESOURCES UTICA HOLDINGS, LLC |
||||||||||||||||
RECONCILIATIONS OF ADJUSTED NET INCOME |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended |
|
Years Ended |
||||||||||||
|
|
December 31, |
|
December 31, |
||||||||||||
($ in thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss) |
|
$ |
65,255 |
|
|
$ |
124,239 |
|
|
$ |
465,965 |
|
|
$ |
(4,396) |
|
Adjustments to reconcile net income (loss) to adjusted net income: |
|
|
|
|
|
|
|
|
||||||||
Impairment of unproved natural gas and oil properties |
|
36,450 |
|
|
39,231 |
|
|
115,802 |
|
|
153,047 |
|
||||
Change in fair value of commodity derivatives |
|
(3,077) |
|
|
(98,754) |
|
|
(249,457) |
|
|
34,138 |
|
||||
Change in fair value of embedded derivative |
|
(622) |
|
|
(4,704) |
|
|
(5,026) |
|
|
(18,865) |
|
||||
Losses on purchases or exchanges of debt |
|
— |
|
|
62,233 |
|
|
— |
|
|
62,233 |
|
||||
Non-recurring legal expense |
|
— |
|
|
9,428 |
|
|
— |
|
|
9,428 |
|
||||
Acquisition expenses and other |
|
61 |
|
|
358 |
|
|
375 |
|
|
8,063 |
|
||||
Adjusted Net Income (Non-GAAP)(a)(b) |
|
$ |
98,067 |
|
|
$ |
132,031 |
|
|
$ |
327,659 |
|
|
$ |
243,648 |
|
|
|
|
(a) |
As shown above, and on pages 10 and 11, Ascent uses adjusted net income, EBITDAX, adjusted EBITDAX, discretionary cash flow and free cash flow (non-GAAP measures) as supplemental measures to evaluate the performance of its assets. Ascent believes these non-GAAP measures provide meaningful information to our investors, as discussed below. These non-GAAP measures, as used and defined by Ascent, are not measures of performance as determined by United States generally accepted accounting principles (US GAAP) and may not be comparable to similarly titled measures employed by other companies. |
|
|
Non-GAAP measures should not be considered in isolation or as substitutes for operating income, net income or loss, cash flows provided by operating, investing and financing activities or other income or cash flow statement data prepared in accordance with US GAAP. Non-GAAP measures provide no information regarding a company's capital structure, borrowings, interest costs, capital expenditures and working capital movement. Non-GAAP measures do not represent funds available for discretionary use because those funds may be required for debt service, capital expenditures, working capital, taxes, exploration expenses and other commitments and obligations. However, Ascent's management team believes these non-GAAP measures are useful to an investor in evaluating Ascent's financial performance because these measures: |
|
|
• |
Are widely used by investors in the natural gas and oil industry to measure a company's operating performance without regard to items excluded from the calculation of such term, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure, and the method by which assets were acquired, among other factors; |
|
• |
Are more comparable to estimates used by analysts; |
|
• |
Help investors to more meaningfully evaluate and compare the results of Ascent's operations from period to period by removing the effect of its capital structure from its operating structure; |
|
• |
Excludes one-time items, non-cash items or items whose timing cannot be reasonably estimated; and |
|
• |
Are used by Ascent's management team for various purposes, including as a measure of operating performance, in presentations to its Board of Managers and as a basis for strategic planning and forecasting. |
|
There are significant limitations to using non-GAAP measures as measures of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect Ascent's net income or loss, the lack of comparability of results of operations of different companies, and the different methods of calculating non-GAAP measures reported by different companies. |
|
(b) |
Ascent defines "adjusted net income" as net income (loss) before impairment of unproved natural gas and oil properties; losses on purchases or exchanges of debt; changes in fair value of commodity derivatives; changes in fair value of embedded derivative; non-recurring legal expense (benefit); acquisition expenses and other; and impairment of other property and equipment. |
ASCENT RESOURCES UTICA HOLDINGS, LLC |
||||||||||||||||
RECONCILIATIONS OF EBITDAX AND ADJUSTED EBITDAX |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
December 31, |
|
December 31, |
||||||||||||
($ in thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss) |
|
$ |
65,255 |
|
|
$ |
124,239 |
|
|
$ |
465,965 |
|
|
$ |
(4,396) |
|
Adjustments to reconcile net income (loss) to EBITDAX: |
|
|
|
|
|
|
|
|
||||||||
Exploration expenses |
|
41,561 |
|
|
40,513 |
|
|
124,477 |
|
|
156,450 |
|
||||
Natural gas and oil depreciation, depletion and amortization |
|
203,091 |
|
|
158,327 |
|
|
702,414 |
|
|
500,773 |
|
||||
Depreciation and amortization of other assets |
|
875 |
|
|
1,030 |
|
|
3,239 |
|
|
3,912 |
|
||||
Interest expense, net |
|
34,249 |
|
|
25,732 |
|
|
109,114 |
|
|
92,227 |
|
||||
EBITDAX (Non-GAAP)(a)(b) |
|
345,031 |
|
|
349,841 |
|
|
1,405,209 |
|
|
748,966 |
|
||||
Adjustments to reconcile EBITDAX to Adjusted EBITDAX: |
|
|
|
|
|
|
|
|
||||||||
Change in fair value of embedded derivative |
|
(622) |
|
|
(4,704) |
|
|
(5,026) |
|
|
(18,865) |
|
||||
Change in fair value of commodity derivatives |
|
(3,077) |
|
|
(98,754) |
|
|
(249,457) |
|
|
34,138 |
|
||||
Losses on purchases or exchanges of debt |
|
— |
|
|
62,233 |
|
|
— |
|
|
62,233 |
|
||||
Non-recurring legal expense |
|
— |
|
|
9,428 |
|
|
— |
|
|
9,428 |
|
||||
Acquisition expenses and other |
|
61 |
|
|
358 |
|
|
375 |
|
|
8,063 |
|
||||
Adjusted EBITDAX (Non-GAAP)(b)(c) |
|
$ |
341,393 |
|
|
$ |
318,402 |
|
|
$ |
1,151,101 |
|
|
$ |
843,963 |
|
|
|
(a) |
Ascent defines "EBITDAX" as net income (loss) before exploration expenses; depreciation, depletion and amortization; and interest expense, net. |
(b) |
See footnote (a) on page 9 for a discussion around our uses of non-GAAP measures. |
(c) |
Ascent defines "adjusted EBITDAX" as EBITDAX before changes in losses on purchases or exchanges of debt; changes in fair value of commodity derivatives; non-recurring legal expense (benefit); acquisition expenses; fair value of embedded derivative; and other unusual items. |
ASCENT RESOURCES UTICA HOLDINGS, LLC |
||||
RECONCILIATIONS OF DISCRETIONARY CASH FLOW AND FREE CASH FLOW |
||||
(Unaudited) |
||||
|
||||
|
|
Three Months Ended |
||
|
|
December 31, |
||
($ in thousands) |
|
2019 |
||
|
|
|
||
Net Cash Provided by Operating Activities |
|
$ |
220,908 |
|
Adjustments to reconcile Net Cash Provided by Operating Activities to Discretionary Cash Flow: |
|
|
||
Increase in accounts receivable and other assets |
|
44,958 |
|
|
Decrease in accounts payable, liabilities and other |
|
42,281 |
|
|
Discretionary Cash Flow (Non-GAAP)(a)(b) |
|
308,147 |
|
|
Adjustments to reconcile Discretionary Cash Flow to Free Cash Flow: |
|
|
||
Drilling and completion costs |
|
(235,338) |
|
|
Acquisitions of natural gas and oil properties |
|
(55,860) |
|
|
Free Cash Flow (Non-GAAP)(b)(c) |
|
$ |
16,949 |
|
|
|
(a) |
Discretionary cash flow is widely accepted as a financial indicator of a natural gas and oil company's ability to generate cash which is used to internally fund exploration and development activities and service debt. Ascent defines "discretionary cash flow" as net cash provided by operating activities before changes in operating assets and liabilities. |
(b) |
See footnote (a) on page 9 for a discussion around our uses of non-GAAP measures. |
(c) |
Free cash flow is an indicator of a company's ability to generate funding to maintain or expand its asset base, make distributions and repurchase or extinguish debt. Ascent defines "free cash flow" as discretionary cash flow less cash drilling and completion costs and acquisitions of natural gas and oil properties. |
SOURCE Ascent Resources, LLC
Related Links
http://www.ascentresources.com
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