Market Overview

HighPoint Resources Reports First Quarter 2019 Financial and Operating Results

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  • Reported production sales volume of 2.8 million barrels of oil equivalent ("MMBoe") (62% oil) for the first quarter of 2019, represents an increase of 46% from the first quarter of 2018
     
  • Oil production sales volume of 1.72 million barrels of oil ("MMBbls") for the first quarter of 2019, represents an increase of 51% from the first quarter of 2018
     
  • Strong EBITDAX growth of 65% from the first quarter of 2018 driven by higher production, low oil price differential and low cost structure
     
  • Most recent five wells in Hereford reached average cumulative production of approximately 20,000 barrels of oil per well after 60 days of production on controlled flowback, which is consistent with expectations
     
  • Strong performance from Northeast ("NE") Wattenberg high-fluid intensity completions as initial wells are tracking more than 20% above the base type-curve after 205 days of production

DENVER, May 06, 2019 (GLOBE NEWSWIRE) -- HighPoint Resources Corporation (the "Company" or "HighPoint") (NYSE:HPR) today reported first quarter of 2019 financial and operating results, including strong growth in EBITDAX and positive well performance in both Hereford and NE Wattenberg.

For the first quarter of 2019, the Company reported a net loss of $96.2 million, or $0.46 per diluted share. Adjusted net income for the first quarter of 2019 was a net loss of $10.7 million, or $0.05 per diluted share. EBITDAX for the first quarter of 2019 was $76.9 million. Adjusted net income (loss) and EBITDAX are non-GAAP (Generally Accepted Accounting Principles) measures. Please reference the reconciliations to GAAP financial statements at the end of this release.

Chief Executive Officer and President Scot Woodall commented, "We have had an excellent start to the year as we reported solid first quarter results. We delivered year-over-year growth in production sales volumes of 46%, strong EBITDAX growth of 65% and a basin operating margin1 of $30.31 per Boe. We met production guidance despite being impacted by several periods of severe winter weather during the quarter that affected field operations in both NE Wattenberg and Hereford. Overall, our team did an efficient job of working through these issues in a timely fashion."

"Operationally, we are seeing good production results in Hereford as the five most recent wells have reached average cumulative production of approximately 20,000 barrels of oil per well after 60 days. We recently initiated our development optimization program within Hereford, which will provide valuable drilling and completion data and a multi-generational improvement in completion design and allow us to deliver optimum value from the Hereford asset. We also continue to see strong results from our NE Wattenberg high-fluid intensity completions as the initial pilot wells are averaging more than 20% above base type-curve expectations."

"The recent signing of Colorado Senate Bill 19-181 into law brings certainty to the industry and our stakeholders. We believe its focus on local control should not affect our highly advantaged acreage position, which is located exclusively in rural areas of Weld County. Implementation of this new bill will require changes at the COGCC and multiple rule makings; however, we expect these rule makings will not impact our ability to execute on our future development plans and fully develop our well-positioned acreage within the DJ Basin."

1 Basin operating margin is defined as the average realized price per Boe before hedging less lease operating expense, gathering, transportation and process expense and production tax expense

OPERATING AND FINANCIAL RESULTS

The following table summarizes certain operating and financial results for the first quarter of 2019 and 2018 and for the fourth quarter of 2018:

       
  Three Months Ended   Three Months Ended
  March 31,   December 31,
  2019   2018   Change   2018   Change
Combined production sales volumes (MBoe) 2,798     1,914     46  %   3,112     (10 )%
Net cash provided by operating activities ($ millions) $ 77.7     $ 54.3     43  %   $ 71.3     9  %
Discretionary cash flow ($ millions) (1) $ 64.2     $ 34.9     84  %   $ 79.3     (19 )%
Combined realized prices with hedging (per Boe) $ 38.01     $ 37.86      %   $ 40.29     (6 )%
Net income (loss) ($ millions) $ (96.2 )   $ (24.9 )   (286 )%   $ 222.4     *nm
Per share, basic $ (0.46 )   $ (0.20 )   (130 )%   $ 1.06     *nm
Per share, diluted $ (0.46 )   $ (0.20 )   (130 )%   $ 1.06     *nm
Adjusted net income (loss) ($ millions) (1) $ (10.7 )   $ (5.9 )   (81 )%   $ 1.2     *nm
Per share, basic $ (0.05 )   $ (0.05 )    %   $ 0.01     *nm
Per share, diluted $ (0.05 )   $ (0.05 )    %   $ 0.01     *nm
Weighted average shares outstanding, basic (in thousands) 209,932     123,596     70  %   209,529      %
Weighted average shares outstanding, diluted (in thousands) (1) 209,932     123,596     70  %   209,645      %
EBITDAX ($ millions) (1) $ 76.9     $ 46.7     65  %   $ 92.1     (17 )%


*     Not meaningful.
       
(1)     Discretionary cash flow, adjusted net income (loss) and EBITDAX are non-GAAP measures. Please reference the reconciliations to GAAP financial statements at the end of this release.
       

The Company reported oil, natural gas and natural gas liquids ("NGL") production of 2.8 MMBoe for the first quarter of 2019, which was an increase of 46% over the first quarter of 2018. Oil volumes totaled 1.72 MMBbls or 62% of total equivalent production sales volumes, which was an increase of 51% over the first quarter of 2018. The Company estimates that approximately 65 MBoe of production was deferred during the first quarter as a result of adverse weather in both NE Wattenberg and Hereford.

Production sales volumes for the first quarter were comprised of approximately 62% oil, 22% natural gas and 16% NGLs.

For the first quarter of 2019, WTI oil prices averaged $54.90 per barrel, Northwest Pipeline ("NWPL") natural gas prices averaged $3.79 per MMBtu and NYMEX natural gas prices averaged $3.15 per MMBtu. Commodity price realizations to benchmark pricing were WTI less $4.01 per barrel of oil and NWPL less $1.58 per Mcf of gas. The NGL price averaged approximately 24% of the WTI price per barrel and was impacted by temporary third-party processing inefficiencies that adversely affected prices.

For the first quarter of 2019, the Company had derivative commodity swaps in place for 17,085 barrels of oil per day tied to WTI pricing at $58.33 per barrel, 12,500 MMBtu of natural gas per day tied to NWPL regional pricing at $3.06 per MMBtu, derivative collars in place for 2,500 MMBtu of natural gas with a ceiling price of $4.45 per MMBtu and a floor price of $3.25 per MMBtu, and no hedges in place for NGLs.

       
  Three Months Ended   Three Months Ended
  March 31,   December 31,
  2019   2018   Change   2018   Change
Average Realized Prices before Hedging:                  
Oil (per Bbl) $ 50.82     $ 60.45     (16 )%   $ 56.35     (10 )%
Natural gas (per Mcf) 2.21     1.95     13  %   2.13     4  %
NGLs (per Bbl) 13.29     20.31     (35 )%   22.54     (41 )%
Combined (per Boe) 36.35     42.24     (14 )%   41.88     (13 )%
                   
Average Realized Prices with Hedging:                  
Oil (per Bbl) $ 54.01     $ 53.00     2
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