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Brigham Minerals, Inc. Reports Record Second Quarter 2019 Operating and Financial Results

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Brigham Minerals, Inc. (NYSE:MNRL) ("Brigham Minerals," "Brigham," or the "Company"), a leading mineral and royalty interest acquisition company, today announced operating and financial results for the quarter ended June 30, 2019, as well as recent developments.

OPERATING AND FINANCIAL HIGHLIGHTS AND RECENT DEVELOPMENTS

  • Record Q2 2019 daily production volumes totaling 6,768 boe/d (71% liquids, 56% oil)
    • Up 26% sequentially from Q1 2019 and up 82% from Q2 2018
  • Record Q2 2019 mineral and royalty revenues totaling $23 million
    • Up 31% sequentially from Q1 2019 and up 59% from Q2 2018
  • Q2 2019 net loss totaling $3.2 million and Adjusted Net Income(1) of $3.7 million after adding back loss on extinguishment of debt
  • Q2 2019 Adjusted EBITDA(1) totaling $18.3 million
    • Up 32% sequentially from Q1 2019 and up 33% from Q2 2018
  • Declared Company's initial dividend of $0.33 per share of Class A common stock
    • Based on financial results for the full second quarter 2019 and payable August 29, 2019
  • Closed 46 transactions acquiring 2,700 net royalty acres for $40 million of capital
    • 71% to the Permian and 23% to the SCOOP/STACK
    • Plan to deploy $175 - $200 million of capital for acquisitions for full year 2019
  • Averaged 62 rigs running across the Company's diversified mineral portfolio in Q2 2019
    • 28 were in the Permian and 19 in the SCOOP/STACK
  • Record 943 gross drilled but uncompleted locations ("DUCs")
    • Despite conversion of over 200 gross DUCs to producing status during the quarter

(1) Non-GAAP measure. See "Non-GAAP Financial Measures" below.

Ben M. ("Bud") Brigham, Executive Chairman commented, "Our diversified tier-one mineral portfolio outperformed during the second quarter with exceptional sequential growth in production volumes, revenues, and EBITDA. Further, in the second quarter, we continued our disciplined "ground game" acquisition strategy adding approximately 2,700 tier-one net royalty acres, largely in the Permian Basin and the SCOOP/STACK, and believe we can deploy approximately $175 to $200 million of capital via this approach during the full year 2019. At the same time, our acquisition team remains focused on identifying and evaluating larger, accretive transactions. I'm very excited about the number of high quality, larger scale opportunities we are evaluating while executing our disciplined technical evaluation process that, over the last six years, has consistently created long-term value in tier-one oily resource plays."

Robert M. ("Rob") Roosa, Chief Executive Officer, commented, "While growth through acquisition remains a key strategy, the significant rig and completion activity on our existing mineral portfolio continues to drive organic, capex-free growth with recent strong activity. At the beginning of August, in our Delaware Basin Loving County Development Area, Occidental Petroleum Corporation(1) had two rigs developing its Silvertip project, and Exxon Mobil Corporation and EOG Resources, Inc., were running four rigs just south of Silvertip. Also, at the beginning of August, in our SCOOP play, which includes Continental Resources Inc.'s SpringBoard development area in Grady County Oklahoma, Continental and other operators were running 21 rigs across our mineral position. As a result of continued development, our Loving County Development Area and Grady County production volumes and revenues already represent approximately 10% of our Company's production and revenues, despite us being in the very early innings of development of two of the premier manufacturing mode projects in the United States. Finally, at the beginning of August, we experienced an increase in activity relative to the second quarter with 64 rigs drilling approximately 2,900 net royalty acres across the entirety of our mineral portfolio."

Blake Williams, Chief Financial Officer, added, "We are also extremely pleased to announce our first quarterly cash dividend in the amount of $0.33 per share of Class A common stock, which represents our Discretionary Cash Flow(2) for the full second quarter of 2019. The dividend, combined with our 26% sequential production growth during the quarter, underscores the Company's ability and commitment to deliver total shareholder return. We expect this growth to continue as operators convert our current inventory of 943 highly economic DUCs into producing wells."

(1) All Occidental statistics pro forma for announced merger with Anadarko.

(2) Non-GAAP measure. See "Non-GAAP Financial Measures" below.

OPERATIONAL UPDATE

Mineral and Royalty Interest Ownership Update

During the second quarter 2019, the Company completed 46 transactions acquiring 2,700 net royalty acres (standardized to a 1/8th royalty interest), for $40 million, in the Permian, SCOOP/STACK and Williston Basins. The acquired minerals are expected to deliver near-term production with 44 gross DUCs (0.1 net DUCs) and 30 gross permits (0.1 net permits). As of June 30, 2019, the Company owned roughly 74,100 net royalty acres, encompassing 12,085 (104 net) undeveloped horizontal locations, across 39 counties in what the Company views as the cores of the Permian Basin in West Texas and New Mexico, the SCOOP/STACK plays in the Anadarko Basin of Oklahoma, the Denver-Julesburg ("DJ") Basin in Colorado and Wyoming and the Williston Basin in North Dakota.

The table below summarizes the Company's mineral and royalty interest ownership at the dates indicated.

 

 

Delaware

 

Midland

 

SCOOP

 

STACK

 

DJ

 

Williston

 

Other

 

Total

Net Royalty Acres

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

21,750

 

3,500

 

10,250

 

10,050

 

15,450

 

6,900

 

6,200

 

74,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2019

 

20,550

 

3,200

 

9,750

 

9,700

 

15,450

 

6,850

 

6,000

 

71,500

Acres Added Q/Q

 

1,300

 

300

 

500

 

350

 

0

 

50

 

200

 

2,700

Acres Sold Q/Q

 

(100)

 

0

 

0

 

0

 

0

 

0

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