HOUSTON, March 07, 2019 (GLOBE NEWSWIRE) -- Lilis Energy, Inc. (NYSE:LLEX), an exploration and development company operating in the Permian Basin of West Texas and Southeastern New Mexico, today announced its 2018 fourth-quarter and full-year results and 2019 outlook and guidance. The Company has provided a detailed presentation on its website.
Ronald D. Ormand, Chairman and Chief Executive Officer, commented, "Lilis demonstrated significant operational, and financial growth in 2018. We made significant progress on all of our strategic objectives set out for 2018, despite difficult market conditions. Production, notably oil, proved reserves and EBITDAX substantially increased. More recently, we substantially improved and simplified our balance sheet with a transformative transaction which significantly reduces leverage and increases our liquidity position, while concurrently increasing our borrowing base to $125 million. We believe this transformative transaction positions the Company prudently to pursue our strategic goals, while allowing for patient and methodical development of our high-quality assets."
"Our 2019 development plan prioritizes project-level rate of return, cash flow maximization, and allows for flexibility in capital spending based on changing market conditions. We are targeting cash flow neutrality in the second half of 2019 and production increases with reduced capex of almost 50% compared to 2018. We expect to see continued increasing cost improvements as benefits from infrastructure, transportation agreements and capital efficiencies executed in 2018 are realized."
"We are extremely pleased with our 2018 and 2019 year-to-date accomplishments. We are very confident in the value of our assets and the outlook of the Company," concluded Mr. Ormand.
2018 Highlights and Achievements:
Continued Strong Performance and Growth
- Full-year 2018 average daily production increase of 215% over 2017, despite gas infrastructure challenges
- Oil, natural gas, and NGL sales revenue increased 225% in 2018 from 2017, to $70.2 million
- Reduced lease operating expenses (LOE) to $7.64 per Boe in 2018 from $10.14 per Boe in 2017, with continued improvement expected in 2019
- Full-year 2018 Adjusted EBITDAX of $35 million, up significantly over the prior year
- 2018 D&C capex in-line with Company guidance of $100 million
- F&D costs per Boe reduced to $6.22 per Boe
- Reduced G&A per Boe by 79%
Successful Execution of Operational Goals
Improved Liquidity and Access to Capital
- Successfully executed a new Senior Secured Revolving Credit Facility and partial conversion during 4Q18
- Reduced leverage through repayment of the Company's previously existing $50 million First Lien Term Loan and partial conversion of its Second Lien Term Loan, in conjunction with the closing of the new revolving credit facility
- Obtained $52.5 million of non-dilutive capital from infrastructure transactions
Consistent Growth of Proved Reserves
- Year-end proved reserves were 42.7 MMBoe, representing a year-over-year increase of 273%
- Total proved PV-10 increased 367% in 2018 over 2017, to $328 million (1)
- Liquids-rich proved reserves base, with crude oil representing approximately 82% of future reserve base projected revenues
Recent Events:
Balance Sheet Recapitalization
2019 Outlook and Guidance
Management reacted decisively to market conditions and slowed down drilling and completions activity in late 2018. The Company was able to delay capex, in part, due to the flexibility related to its vendor contracts. As a result, the Company has six DUC's which are currently being completed. The Company has the ability to adjust capital expenditures in the second half of 2019 based on market conditions.
2019 Estimates:
Additional details are provided in the earnings presentation, which is available on the Company website.
Financial Overview:
As reported in the Company's Form 10-K filed on March 7, 2019, total revenue was approximately $70.2 million, for the twelve months ended December 31, 2018, as compared to approximately $21.6 million, for the year ended December 31, 2017, representing an increase of approximately $48.6 million, or 225%. The higher revenues were primarily driven by an increase in liquid heavy production from the Company's Delaware Basin properties.
Lilis' production during the year ended December 31, 2018, increased from 575 MBoe in 2017 to 1,812 MBoe in 2018, an increase of 215%. This increase in production was primarily attributable to 15 additional gross wells being completed and placed on production.
During the fourth quarter of 2018, total sales increased by 4 MBoe/d, or 203%, to 6 MBoe/d compared to the fourth quarter of 2017, while oil and liquids sales increased, 2.8 MBbls/d, or 177%, to 4.4 MBbls/d as compared to the fourth quarter of 2017. Lilis expects to continue to focus on optimizing costs during 2019 as the impact of previously executed infrastructure agreements are realized.
Delaware Basin Operational Overview:
Recent Well IP Result:
The Company spud 16 gross wells and completed gross 15 wells in the Wolfcamp A, B, XY, 2nd and 3rd Bone Spring; continuing the strategy of delineating and de-risking the acreage position both geographically and geologically.
Liquidity and Hedging:
As of December 31, 2018, the Company had cash and cash equivalents and available liquidity of approximately $54 million, approximately $71 million pro forma when adjusting for the borrowing base redetermination increase, effective March 5, 2019.
Balance Sheet Recapitalization:
Effects of the conversion are summarized in the following table:
Year-End 2018 Reserves:
Lilis posted strong reserve growth in 2018. The Company's proved reserves as of December 31, 2018 totaled 42.7 MMBoe with a PV-10 SEC value of $328 million.
Proved Reserve Highlights:
- Total proved reserves as of December 31, 2018, as compared to total proved reserves as of December 31, 2017, increased 273% to 42.7 MMBoe
- Crude oil reserves increased 196% to 21.2 MMBbls; NGL reserves increased 422% to 8.4 MMBbls, and natural gas reserves increased 390% to 78.7 MMcf, as compared to 2017
Natural Gas Midstream Discussion:
Conference Call Information:
Management will host a conference call on Friday, March 8, 2019 at 11:00 AM Eastern Time to review financial results and provide an update on corporate developments. Following management's formal remarks, there will be a question and answer session.
About Lilis Energy, Inc.
Contact:
Wobbe Ploegsma
V.P. Capital Markets & Investor Relations
210-999-5400, ext. 31
Forward-Looking Statements:
Forward-looking statements regarding expected production levels are based upon our estimates of the successful completion of drilled wells on schedule. Actual sales production rates from our wells can vary considerably from tested initial production (IP) rates and are subject to natural decline rates over the life of the well.
Reconciliation of PV-10 to Standardized measure
Pre-tax PV-10, a non-GAAP financial measure as defined by the SEC, as of December 31, 2018 and 2017 is reconciled below to the standardized measure of discounted future net cash flows (in thousands)
Changes in total proved reserves for 2018 are summarized in the following table:
Lilis' internally prepared estimated proved reserves as of December 31, 2018 were audited by Cawley, Gillespie & Associates, Inc. and are summarized in the table below:
Proved Reserve Reconciliation:
Condensed Consolidated Statement of Operations Information:
Condensed Consolidated Statement of Cash Flows Information:
Condensed Consolidated Balance Sheet Information:
Non-GAAP Adjusted EBITDAX
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