Third Quarter 2020 Highlights
- Consummated the business combination with the HighPeak Funds on
August 21, 2020 and raised an additional$102 million by issuing new equity through the business combination and the forward purchase agreement resulting in approximately 91.5 million shares outstanding. - Brought back online the majority of our horizonal production beginning in late
July 2020 , which was previously curtailed in mid-April due to low commodity prices. Production returned as expected with all wells producing at or above pre-shut-in rates within a few weeks of bringing the wells back online. - Initiated completion activities on twelve (12) drilled uncompleted wells (“DUCs”), including four (4) wells which had been drilled and completed prior to the closing of our business combination and eight (8) DUCs. Two (2) of the wells were turned online by quarter end.
- Commenced a one-rig drilling program in late September. Drilled one (1) horizontal Ellenburger salt-water disposal well in
Howard County and plan to spud approximately five (5) oil wells by year end. - Began constructing a company owned water disposal system in our Flat Top operating area providing future disposal and recycling opportunities.
“We raised over
Third Quarter 2020 Operational and Financial Results
- Net loss for the period from
August 22, 2020 throughSeptember 30, 2020 (the “Successor Period”) was$11.5 million , or$0.13 per diluted share. Net income for the Successor Period, excluding$14.5 million of non-cash stock-based compensation, was$540,000 , or$0.01 per diluted share. - Production averaged 3,200 barrels of oil equivalent (“BOE”) per day including 3,104 barrels of oil per day, or 97% of the production stream, for the Successor Period.
- Lease operating expense per BOE and production and ad valorem taxes per BOE averaged
$5.24 and$2.01 , respectively, for the Successor Period. General and administrative expenses for the Successor Period were approximately$0.8 million . - EBITDAX (a non-GAAP financial measure) for the Successor Period was
$3.1 million . See Reconciliation of Net Income to EBITDAX below.
- Cash flows provided by operating activities for the Successor Period were
$1.2 million . - Cash on the balance sheet at the end of the quarter was
$54.9 million with no debt.
Quarterly Report on Form 10-Q
HighPeak Energy’s financial statements and related footnotes will be available in its Quarterly Report on Form 10-Q for the quarter ended
About
Cautionary Note Regarding Forward-Looking Statements
The information in this press release contains forward-looking statements that involve risks and uncertainties. When used in this document, the words "believes," "plans," "expects," "anticipates," "forecasts," "intends," "continue," "may," "will," "could," "should," "future," "potential," "estimate" or the negative of such terms and similar expressions as they relate to
These risks and uncertainties include, among other things, volatility of commodity prices, product supply and demand, the impact of a widespread outbreak of an illness, such as the coronavirus disease 2019 (“COVID-19”) pandemic, on global and
Investor Contact:
Vice President, Business Development
817.850.9204
rhightower@highpeakenergy.com
Source:
Operating Highlights (Unaudited) | ||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||
Successor | Predecessors | Predecessors | ||||||||||||||||||||||||||
through 2020 | through August 21, 2020 | Three Months Ended 2019 | ||||||||||||||||||||||||||
Sales Volumes: | ||||||||||||||||||||||||||||
Oil (Bbls) | 124,168 | 64,493 | 26,564 | |||||||||||||||||||||||||
NGLs (Bbls) | 1,749 | 3,150 | n/a | |||||||||||||||||||||||||
Natural gas (Mcf) | 12,466 | 21,283 | 17,890 | |||||||||||||||||||||||||
Total (BOE) | 127,995 | 71,189 | 29,546 | |||||||||||||||||||||||||
Daily Sales Volumes: | ||||||||||||||||||||||||||||
Oil (Bbls/d) | 3,104 | 1,240 | 289 | |||||||||||||||||||||||||
NGLs (Bbls/d) | 44 | 61 | n/a | |||||||||||||||||||||||||
Natural gas (Mcf/d) | 312 | 409 | 194 | |||||||||||||||||||||||||
Total (BOE/d) | 3,200 | 1,369 | 321 | |||||||||||||||||||||||||
Revenues (in thousands): | ||||||||||||||||||||||||||||
Oil sales | $ | 4,787 | $ | 2,607 | $ | 1,419 | ||||||||||||||||||||||
NGL and natural gas sales | 47 | 49 | 24 | |||||||||||||||||||||||||
Total Revenues | $ | 4,834 | $ | 2,656 | $ | 1,443 | ||||||||||||||||||||||
Average sales price: | ||||||||||||||||||||||||||||
Oil (per Bbl) | $ | 38.55 | $ | 40.43 | $ | 53.42 | ||||||||||||||||||||||
NGL (per Bbl) | 16.43 | 4.91 | n/a | |||||||||||||||||||||||||
Natural gas (per Mcf) | 2.30 | 2.04 | 1.34 | |||||||||||||||||||||||||
Total (per BOE) | $ | 37.77 | $ | 37.77 | $ | 48.84 | ||||||||||||||||||||||
Weighted Average NYMEX WTI ($/Bbl) | $ | 40.20 | $ | 42.12 | $ | 56.45 | ||||||||||||||||||||||
Weighted Average NYMEX Henry Hub ($/Mcf) | 2.33 | 1.64 | 2.23 | |||||||||||||||||||||||||
Realization to benchmark | ||||||||||||||||||||||||||||
Oil (per Bbl) | 96 | % | 96 | % | 95 | % | ||||||||||||||||||||||
Natural gas (per Mcf) | 99 | % | 124 | % | 60 | % | ||||||||||||||||||||||
Operating Costs and Expenses (in thousands): | ||||||||||||||||||||||||||||
Lease operating expenses | $ | 671 | $ | 667 | $ | 536 | ||||||||||||||||||||||
Production and ad valorem taxes | 257 | 164 | 80 | |||||||||||||||||||||||||
General and administrative expenses | 816 | 567 | 841 | |||||||||||||||||||||||||
Depletion, depreciation and amortization | 2,327 | 1,294 | 822 | |||||||||||||||||||||||||
Operating costs per BOE: | ||||||||||||||||||||||||||||
Lease operating expenses | $ | 5.24 | $ | 9.38 | $ | 18.14 | ||||||||||||||||||||||
Production and ad valorem taxes | 2.01 | 2.30 | 2.71 | |||||||||||||||||||||||||
General and administrative expenses | 6.38 | 7.96 | 28.46 | |||||||||||||||||||||||||
Depletion, depreciation and amortization | 18.18 | 18.17 | 26.30 | |||||||||||||||||||||||||
Operating Highlights (Unaudited) | ||||||||||||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||||||||||
Successor | Predecessors | Predecessors | ||||||||||||||||||||||||||
through 2020 | through August 21, 2020 | Nine Months Ended 2019 | ||||||||||||||||||||||||||
Sales Volumes: | ||||||||||||||||||||||||||||
Oil (Bbls) | 124,168 | 235,557 | 79,392 | |||||||||||||||||||||||||
NGLs (Bbls) | 1,749 | 20,024 | n/a | |||||||||||||||||||||||||
Natural gas (Mcf) | 12,466 | 87,258 | 59,005 | |||||||||||||||||||||||||
Total (BOE) | 127,995 | 270,123 | 89,226 | |||||||||||||||||||||||||
Daily Sales Volumes: | ||||||||||||||||||||||||||||
Oil (Bbls/d) | 3,104 | 1,007 | 291 | |||||||||||||||||||||||||
NGLs (Bbls/d) | 44 | 86 | n/a | |||||||||||||||||||||||||
Natural gas (Mcf/d) | 312 | 373 | 216 | |||||||||||||||||||||||||
Total (BOE/d) | 3,200 | 1,154 | 327 | |||||||||||||||||||||||||
Revenues (in thousands): | ||||||||||||||||||||||||||||
Oil sales | $ | 4,787 | $ | 8,069 | $ | 4,154 | ||||||||||||||||||||||
NGL and natural gas sales | 47 | 154 | 103 | |||||||||||||||||||||||||
Total Revenues | $ | 4,834 | $ | 8,223 | $ | 4,257 | ||||||||||||||||||||||
Average sales price: | ||||||||||||||||||||||||||||
Oil (per Bbl) | $ | 38.55 | $ | 34.26 | $ | 52.33 | ||||||||||||||||||||||
NGL (per Bbl) | 16.43 | 9.31 | n/a | |||||||||||||||||||||||||
Natural gas (per Mcf) | 2.30 | 0.52 | 1.75 | |||||||||||||||||||||||||
Total (per BOE) | $ | 37.77 | $ | 30.44 | $ | 47.71 | ||||||||||||||||||||||
Weighted Average NYMEX WTI ($/Bbl) | $ | 40.20 | $ | 35.17 | $ | 57.06 | ||||||||||||||||||||||
Weighted Average NYMEX Henry Hub ($/Mcf) | 2.33 | 1.76 | 2.67 | |||||||||||||||||||||||||
Realization to benchmark | ||||||||||||||||||||||||||||
Oil (per Bbl) | 96 | % | 97 | % | 92 | % | ||||||||||||||||||||||
Natural gas (per Mcf) | 99 | % | 30 | % | 66 | % | ||||||||||||||||||||||
Operating Costs and Expenses (in thousands): | ||||||||||||||||||||||||||||
Lease operating expenses | $ | 671 | $ | 4,870 | $ | 1,794 | ||||||||||||||||||||||
Production and ad valorem taxes | 257 | 566 | 261 | |||||||||||||||||||||||||
General and administrative expenses | 816 | 4,840 | 2,523 | |||||||||||||||||||||||||
Depletion, depreciation and amortization | 2,327 | 6,385 | 2,657 | |||||||||||||||||||||||||
Operating costs per BOE: | ||||||||||||||||||||||||||||
Lease operating expenses | $ | 5.24 | $ | 18.03 | $ | 20.11 | ||||||||||||||||||||||
Production and ad valorem taxes | 2.01 | 2.10 | 2.93 | |||||||||||||||||||||||||
General and administrative expenses | 6.38 | 17.92 | 28.28 | |||||||||||||||||||||||||
Depletion, depreciation and amortization | 18.18 | 23.64 | 29.27 | |||||||||||||||||||||||||
Condensed Consolidated and Combined Statements of Operations (Unaudited) (in thousands) | ||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
Successor | Predecessors | Predecessors | Successor | Predecessors | Predecessors | |||||||||||||||||||||
2020 through September 30, 2020 | through 2020 | Three Months Ended September 30, 2019 | 2020 through September 30, 2020 | 2020 through 2020 | Nine Months Ended 2019 | |||||||||||||||||||||
Operating Revenues: | ||||||||||||||||||||||||||
Crude oil sales | $ | 4,787 | $ | 2,607 | $ | 1,419 | $ | 4,787 | $ | 8,069 | $ | 4,154 | ||||||||||||||
Natural gas and NGL sales | 47 | 49 | 24 | 47 | 154 | 103 | ||||||||||||||||||||
Total operating revenues | 4,834 | 2,656 | 1,443 | 4,834 | 8,223 | 4,257 | ||||||||||||||||||||
Operating Costs and Expenses: | ||||||||||||||||||||||||||
Oil and natural gas production | 671 | 667 | 536 | 671 | 4,870 | 1,794 | ||||||||||||||||||||
Production and ad valorem axes | 257 | 164 | 80 | 257 | 566 | 261 | ||||||||||||||||||||
Exploration and abandonments | 66 | - | 159 | 66 | 4 | 2,817 | ||||||||||||||||||||
Depletion, depreciation and amortization | 2,327 | 1,294 | 822 | 2,327 | 6,385 | 2,657 | ||||||||||||||||||||
Accretion of discount on asset retirement obligations | 15 | 20 | 14 | 15 | 89 | 38 | ||||||||||||||||||||
General and administrative | 816 | 567 | 841 | 816 | 4,840 | 2,523 | ||||||||||||||||||||
Stock based compensation | 14,508 | - | - | 14,508 | - | - | ||||||||||||||||||||
Total operating costs and expenses | 18,660 | 2,712 | 2,452 | 18,660 | 16,754 | 10,090 | ||||||||||||||||||||
Loss from operations | (13,826 | ) | (56 | ) | (1,009 | ) | (13,826 | ) | (8,531 | ) | (5,833 | ) | ||||||||||||||
Interest income | 1 | - | - | 1 | - | - | ||||||||||||||||||||
Other expense | - | - | - | - | (76,503 | ) | - | |||||||||||||||||||
Loss before income taxes | (13,825 | ) | (56 | ) | (1,009 | ) | (13,825 | ) | (85,034 | ) | (5,833 | ) | ||||||||||||||
Income tax benefit | (2,309 | ) | - | - | (2,309 | ) | - | - | ||||||||||||||||||
Net loss | $ | (11,516 | ) | $ | (56 | ) | $ | (1,009 | ) | $ | (11,516 | ) | $ | (85,034 | ) | $ | (5,833 | ) | ||||||||
Earnings per share: | ||||||||||||||||||||||||||
Basic net loss | $ | (0.13 | ) | $ | (0.13 | ) | ||||||||||||||||||||
Diluted net loss | $ | (0.13 | ) | $ | (0.13 | ) | ||||||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||||||
Basic | 91,592 | 91,592 | ||||||||||||||||||||||||
Diluted | 91,592 | 91,592 | ||||||||||||||||||||||||
Summary Balance Sheet Data (Unaudited) | ||||||||
(in thousands) | ||||||||
Successor | Predecessors | |||||||
September 30, 2020 | 2019 | |||||||
Cash and cash equivalents | $ | 54,874 | $ | 22,711 | ||||
Other current assets | 9,746 | 69,315 | ||||||
Oil and natural gas properties, net | 466,367 | 405,374 | ||||||
Other assets | 515 | 508 | ||||||
Total assets | $ | 531,502 | $ | 497,908 | ||||
Current liabilities | $ | 15,052 | $ | 30,980 | ||||
Long-term debt | - | - | ||||||
Other long-term liabilities | 42,998 | 2,212 | ||||||
Stockholders' equity | ||||||||
Common stock | 9 | - | ||||||
Additional paid-in capital | 575,739 | - | ||||||
Accumulated deficit | (102,296 | ) | - | |||||
Partners' capital | - | 464,716 | ||||||
Total stockholders' equity | 473,452 | 464,716 | ||||||
Total liabilities and stockholders' equity | $ | 531,502 | $ | 497,908 | ||||
Condensed Consolidated and Combined Statements of Cash Flows (Unaudited) | |||||||||||||
(in thousands) | |||||||||||||
Nine Months Ended | |||||||||||||
Successor | Predecessors | Predecessors | |||||||||||
through 2020 | through August 21, 2020 | Nine Months Ended 2019 | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||
Net loss | $ | (11,516 | ) | $ | (85,034 | ) | $ | (5,833 | ) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operations: | |||||||||||||
Exploration and abandonment expense | 14 | 4 | 2,817 | ||||||||||
Depletion, depreciation and amortization expense | 2,327 | 6,385 | 2,657 | ||||||||||
Accretion expense | 15 | 89 | 38 | ||||||||||
Stock based compensation expense | 14,508 | - | - | ||||||||||
Loss on terminated acquisition | - | 76,500 | - | ||||||||||
Deferred income taxes | (3 | ) | - | - | |||||||||
Changes in operating assets and liabilities: | |||||||||||||
Accounts receivable | (3,404 | ) | 844 | 1,425 | |||||||||
Inventory and other current assets | (357 | ) | (196 | ) | - | ||||||||
Accounts payable and accrued liabilities | (430 | ) | (2,694 | ) | 744 | ||||||||
Net cash provided by (used in) operating activities | 1,154 | (4,102 | ) | 1,848 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||
Additions to oil and natural gas properties | (17,908 | ) | (47,548 | ) | (14,823 | ) | |||||||
Changes in working capital associated with oil and natural gas property additions | (23,421 | ) | 5,532 | 5,586 | |||||||||
Acquisitions of oil and natural gas properties | (704 | ) | (3,338 | ) | (9,440 | ) | |||||||
Issuance of notes receivable | - | (7,482 | ) | - | |||||||||
Other property additions | - | (50 | ) | (7 | ) | ||||||||
Extension payment on acquisition | - | (15,000 | ) | - | |||||||||
Net cash used in investing activities | (42,033 | ) | (67,886 | ) | (18,684 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||
Proceeds from stock offering | 102,093 | - | - | ||||||||||
Stock offering costs | (8,383 | ) | - | - | |||||||||
Cash acquired from non-successors in HighPeak business combination | 100 | - | - | ||||||||||
Contributions from partners | - | 54,000 | 19,934 | ||||||||||
Distributions to partners | - | (2,780 | ) | - | |||||||||
Net cash provided by financing activities | 93,810 | 51,220 | 19,934 | ||||||||||
Net increase (decrease) in cash and cash equivalents | 52,931 | (20,768 | ) | 3,098 | |||||||||
Cash and cash equivalents, beginning of period | 1,943 | 22,711 | 894 | ||||||||||
Cash and cash equivalents, end of period | $ | 54,874 | $ | 1,943 | $ | 3,992 |
Reconciliation of Net Income to EBITDAX
EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define EBITDAX as net income before interest expense, income taxes, depreciation, depletion and amortization, exploration and other expenses, impairment and abandonment expenses, non-cash gains or losses on derivatives, stock-based compensation, gain on exchange of debt, gains and losses from the sale of assets, transaction costs and nonrecurring workforce reduction severance payments. EBITDAX is not a measure of net income as determined by GAAP.
Our management believes EBITDAX is useful as it allows them to more effectively evaluate our operating performance and compare the results of our operations from period to period and against our peers without regard to our financing methods or capital structure. We exclude the items listed above from net income in arriving at EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from EBITDAX are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of EBITDAX. Our presentation of EBITDAX should not be construed as an inference that our results will be unaffected by unusual or nonrecurring items. Our computations of EBITDAX may not be comparable to other similarly titled measures of other companies.
The following table presents a reconciliation of EBITDAX to net income, our most directly comparable financial measure calculated and presented in accordance with GAAP:
Reconciliation of Net Loss to EBITDAX (Unaudited) | ||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||
Successor | Predecessors | Predecessors | Successor | Predecessors | Predecessors | |||||||||||||||||||||||||
2020 through 2020 | through 2020 | Three Months Ended September 30, 2019 | 2020 through September 30, 2020 | 2020 through 2020 | Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||
Net loss attributable to common stockholders | $ | (11,516 | ) | $ | (56 | ) | $ | (1,009 | ) | $ | (11,516 | ) | $ | (85,034 | ) | $ | (5,833 | ) | ||||||||||||
Income tax benefit | (2,309 | ) | - | - | (2,309 | ) | - | - | ||||||||||||||||||||||
Depletion, depreciation and amortization | 2,327 | 1,294 | 822 | 2,327 | 6,385 | 2,657 | ||||||||||||||||||||||||
Stock based compensation | 14,508 | - | - | 14,508 | - | - | ||||||||||||||||||||||||
Exploration and abandonment expense | 66 | - | 159 | 66 | 4 | 2,817 | ||||||||||||||||||||||||
Accretion on asset retirement obligation | 15 | 20 | 14 | 15 | 89 | 38 | ||||||||||||||||||||||||
Other expense (loss on terminated acquisition) | - | - | - | - | 76,500 | - | ||||||||||||||||||||||||
EBITDAX | $ | 3,091 | $ | 1,258 | $ | (14 | ) | $ | 3,091 | $ | (2,056 | ) | $ | (321 | ) |
Source:
2020 GlobeNewswire, Inc., source