ITEM 7.01 Regulation FD Disclosure.
On
In connection with the Offering, the Company provided the following information:
Industry and Operational Update
Oil prices have deteriorated due to a softening of global demand caused by the COVID-19 (Coronavirus) pandemic and were highly volatile following actions of OPEC+ countries to relax or eliminate their production quotas and then agree to production quotas. Though we have put hedges in place that will largely protect our revenues in 2020, the duration and full impacts of the COVID-19 pandemic and any further actions by OPEC+ countries are unknown at this time. As further discussed below, we have taken steps to preserve liquidity, reduce our operating budget and curtail our near-term operations, but we can provide no assurance regarding the long-term impact of these developments on our business.
As a company, we continue to manage the business to preserve the value of our reserves and conserve our assets in light of the demand impacts of the COVID-19 pandemic. Along with others in the energy industry, we are impacted by fundamentals driven by the duration of the pandemic and the impact on the economy. We have managed the business effectively through the market's downturns over the last several years and believe we are positioned to continue to do so, by leveraging our assets and implementing strategies.
In mid-March, we communicated a 25 percent reduction to our 2020 planned capital
spending and have further reduced our planned capital spending estimate for all
of 2020 to approximately
At the end of the first quarter of 2020, we were producing more than 150,000 barrels per day (net) of oil following the acquisition of Felix. We have since curtailed production driven by the collapse in oil prices. We shut-in approximately 30,000 bbl/d on a net basis in May, which represented about 45,000 bbl/d less in the market on a gross basis. With the recent recovery in oil prices, we have begun bringing these wells back online.
Our liquidity at
For the remainder of 2020, we have 92,087 bbl/d of oil hedged with fixed price
swaps at a weighted average price of
The information in this report is furnished and is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
This report includes "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements, other than
statements of historical facts, included in this report that address activities,
events or developments that the company expects, believes or anticipates will or
may occur in the future are forward-looking statements. Such statements are
subject to a number of assumptions, risks and uncertainties, many of which are
beyond the control of the company. Statements regarding future drilling and
production are subject to all of the risks and uncertainties normally incident
to the exploration for and development and production of oil and gas. These
risks include, but are not limited to, the volatility of oil, natural gas and
NGL prices; uncertainties inherent in estimating oil, natural gas and NGL
reserves; drilling risks; environmental risks; political or regulatory changes;
and disruptions to general economic conditions, including disruptions
attributable to pandemics such as the COVID-19 pandemic. Investors are cautioned
that any such statements are not guarantees of future performance and that
actual results or developments may differ materially from those projected in the
forward-looking statements. The forward-looking statements in this report are
made as of the date of this report.
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