Market Overview

Montage Resources Corporation Announces Third Quarter 2019 Outperformance, Lowers Cash Production Costs Guidance and Increases Midpoint of Production Guidance for the Full Year 2019


Montage Resources Corporation (NYSE:MR) (the "Company" or "Montage Resources") today announced its third quarter 2019 financial and operational results along with revised full year 2019 guidance. In addition, the Company will be posting an updated investor presentation to its corporate website.

Third Quarter 2019 Highlights:

  • Average net daily production was 621.7 MMcfe per day, above the high end of the Company's previously issued guidance range and above analyst consensus expectations
  • Average natural gas equivalent realized price was $2.88 per Mcfe, including cash settled derivatives and excluding firm transportation expenses
  • Per unit cash production costs (including lease operating, transportation, gathering and compression, production and ad valorem taxes) were $1.23 per Mcfe, with the per unit cash production costs outperforming the midpoint of the Company's previously issued guidance by 9% and analyst consensus expectations
  • Net income was $4.3 million; Income from continuing operations before income taxes was $5.5 million; Adjusted net income1 was $19.3 million; and Adjusted EBITDAX1 was $83.6 million, above analyst consensus expectations
  • Capital expenditures were $65.4 million, approximately 17% better than analyst consensus expectations
  • The Company remains in a strong liquidity position with the recent 25% increase in its borrowing base to $500 million, ending the third quarter with $355 million in liquidity


Non-GAAP measure. See reconciliation for details

John Reinhart, President and CEO, commented on the Company's third quarter 2019 results, "During the third quarter, we continued to demonstrate superior operational execution and prudent financial decision making as we exhibit a strong track record of what we believe are repeatable results that differentiate our performance from others in the Appalachian basin and our small-cap upstream peers. The quarter-over-quarter reduction in capital spending driven by a decrease in year to date cycle times of approximately 34% from the 2018 program helps to illustrate our improved capital efficiency. The drilling team routinely drills a mile a day in dry gas laterals and exceeds this pace in the Marcellus while completions activity is averaging approximately nine stages for the quarter. Our per unit cash production costs are 16% lower as compared to the third quarter of 2018 and we expect to exceed our targeted general and administrative expense synergies from the merger between Eclipse Resources and Blue Ridge Mountain Resources (excluding merger-related costs) in 2019. These top-tier operating efficiencies, in addition to outstanding well results, contributed to the third quarter production outperformance and, when coupled with cash production costs per unit outperforming expectations, delivers cash operating margins that we believe are among the best in the Appalachian Basin.

For the third quarter of 2019, the Company generated revenue of $163 million, a 25% increase over the third quarter of 2018, while also recognizing a 25% increase in Adjusted EBITDAX1 over the third quarter of 2018, despite the weaker commodity price environment. From a top-line revenue perspective, we believe Montage is differentiated amongst other Appalachian peers as crude oil provided approximately 28% of our revenue for the third quarter and we will continue to focus on the development of our highest returning liquids-rich locations. Our third quarter results further highlight the strength of our cash operating margins, which have expanded to 51% from 48%, or $1.47 per Mcfe, as compared to the second quarter 2019 despite an approximate 16% decline in natural gas pricing quarter over quarter. In addition, the Company is pleased to announce we have updated our production guidance for the full year 2019 to between 545 and 552 MMcfe per day and decreased our cash production costs guidance range to between $1.30 to $1.35 per Mcfe.

As we have previously highlighted, we are committed to maintaining operational flexibility in a dynamic business environment and will continue to run one gross operated rig through the remainder of 2019 and into 2020, while continuing to unlock value with our increased capital efficiency. Our focus remains on balancing disciplined growth and cash flow generation while maintaining low leverage and ample liquidity. The natural gas macro environment we are currently experiencing reinforces the importance of being a low-cost producer with high quality assets, maintaining a top performing execution team, and having limited commitments. I believe we have managed our Company prudently and responsibly with the third quarter results demonstrating the effectiveness of our development strategy, the strength of our business, the focus of our team and the fundamental belief in the long-term prospects for Montage Resources."


Non-GAAP measure. See reconciliation for details

Operational Discussion

The Company's production for the three and nine months ended September 30, 2019 and 2018 is set forth in the following table:



Three Months Ended

September 30,


Nine Months Ended

September 30,



























Natural gas (MMcf)















NGLs (Mbbls)















Oil (Mbbls)















Total (MMcfe)






























Average daily production volume:















Natural gas (Mcf/d)


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