Lilis Energy Achieves First Quarter 2019 Production Guidance and Provides Operational Update
April 25 2019 - 5:00AM
Lilis Energy, Inc. (NYSE American: LLEX), an exploration and
production company operating in the Permian Basin of West Texas and
southeastern New Mexico, today announced certain operating and
financial results for the first quarter of 2019.
Highlights include:
- Oil production of 3,530 Bop/d,
above the mid-point of Lilis guidance range of 3,400 -3,600
Bop/d
- NGL production of 827 Bbls/d
compared to guidance of 800 – 1,000 Bbls/d
- Boep/d production of 6,058
- 75% total production increase
year-over-year, with a 52% increase in oil production
- Commodity mix of 58% oil and 72%
liquids
- Realized oil pricing of 84% of WTI
for the quarter, compared to guidance of 85%
- Realized pricing of 93% of WTI in
March, resulting in approximately $16.50 per barrel improvement
over January, and substantial enhancements in profit margins, which
are expected to continue in the second quarter
- Recurring LOE per BOE of $7.26
compared to guidance of $7.00 - $7.50 per BOE
- With just one new well flowing to
sales in late Q1, oil production remained flat as compared to the
previous quarter, confirming the quality of the Company’s existing
production base, the Company expects substantial growth during the
next three quarters
- DUC completions during the first
and second quarter are expected to significantly benefit the
results of the second and third quarters of 2019 as timing
coincides with uplifts in realized pricing, and margin enhancements
being recognized
- Three wells currently flowing back and one completing
- Four additional wells will be available for completion in the
2nd quarter/early 3rd quarter
- Favorable commodity prices and
attractive contract pricing provide the Company with increased
flexibility to add another rig in the second half of 2019
The Company’s first quarter oil production came
in at 3,530 Bop/d, above the midpoint of guidance, despite
difficult weather and third-party midstream issues. Further, once
pricing contracts became effective in March, Lilis saw
substantially improved margins of approximately $16.50 per barrel
differential between January and March. The Company anticipates
realized pricing margins will further improve beginning July 1,
2019, as contracts adjust favorably. The Company strategically
planned the completion of existing DUC wells to coincide with these
enhancements.
Current drilling and development activities are
focused on flowbacks, completing existing DUCs and wells drilling.
These activities have already contributed to increased production
in April. The Company expects additional increases in oil and
liquids production in the second and third quarters based solely on
drilling and development activities currently in process. Lilis
will provide an updated operational report and second quarter
guidance in early May. The Company also reaffirms its full-year
guidance of 4,200 – 4,600 Bop/d and 1,000 – 1,200 Bbls/d of
NGLs.
Ronald D. Ormand, Chairman and Chief Executive
Officer, commented, “In the first quarter and into the second
quarter, we have seen significantly improving operating
fundamentals and results. We navigated through a difficult
commodity environment, weather impacts, and third-party midstream
issues, while also restructuring our balance sheet. We believe
Lilis Energy is now at a significant inflection point. We
expect increasing production from our current and on-going drilling
and development activities, with associated increases in cash flows
resulting from pricing contracts initiated in March and
improved commodity pricing. We are well positioned to
execute on our 2019 plan and achieve our growth objectives in the
second half of the year, with a strong balance sheet and improved
pricing margins that provide added flexibility to scale our CAPEX
program in the second half of the year.”
Production
Production of 3,530 Bop/d for the first quarter
was above the mid-point of guidance provided by the Company (3,400
– 3,600 Bop/d). Total production was 6,058 Boep/d. As previously
reported, first quarter production volumes met expectations despite
weather impacts and third-party midstream issues.
Q1 2019
Production |
Actual
Q1'19 |
|
GuidanceQ1’19 |
|
|
|
|
Oil (Bbl) |
317,669 |
|
|
Oil Production (Bop/d) |
3,530 |
|
3,400 -
3,600 |
NGLs (Bbl) |
74,446 |
|
|
NGLs Production
(Bbls/d) |
827 |
|
800 - 1,000 |
|
|
|
|
Realized Pricing
Realized pricing during the first quarter of
2019 benefited from improved regional oil differentials in the
Permian Basin, along with favorable pricing contracts commencing
March 1, 2019. For the next two quarters, the Company expects
realized pricing for oil to see an uplift, based on contracts
providing for MEH pricing. Lilis has put in place hedges for
approximately 80% of PDP oil production in 2019.
|
|
19-Mar |
|
|
Q1'19 |
|
Realized
Pricing |
|
|
Oil ($/
Bbl) |
$ |
53.83 |
|
$ |
46.28 |
|
Natural
Gas ($/ MCF) |
$ |
1.32 |
|
$ |
1.66 |
|
NGLs ($/
BOE) |
$ |
23.50 |
|
$ |
19.75 |
|
Realized
% of WTI |
|
93 |
% |
|
84 |
% |
|
|
|
|
|
|
|
Benchmark pricing for the quarter included NYMEX
WTI at $54.87/Bbl, NYMEX Henry Hub natural gas at $3.16/MMBtu and
NGLs at $18.96/Bbl.
Current Operations Updates
The Company had six DUCs at year-end 2018.
During the first quarter of 2019, the Company brought on the Oso
#1H, which is currently in flowback, and completed the Haley #1H
and Haley #2H in early April. Both Haley wells utilized zipper frac
completions and have seen some of the Company’s most encouraging
results to date.
Flowback:
- Oso #1H – Target: Upper WC A
- Haley #1H – Target: Lower WC A
- Haley #2H – Target: Upper WC A
Completing:
- NE Axis #2H – Target: Lower WC A.
Frac completed, 43 stages, 1.5 mile lateral
- NW Axis #2H – Target: Lower WC
A
- Kudu A #2H – Target: Lower WC B. To
be zipper frac stimulated, when Kudu B #2H is drilled and cased,
will be a dual frac completion with the Kudu B #2H
- Ox #1H – Target: Upper WC B.
Preparing for stimulation
Drilling:
- Kudu B #2H – Target: Upper WC B. Setting 2nd Intermediate at
12,529 ft MD, on schedule for TD of 20,496 ft MD.
Conference Call
Management will host a conference call on
Friday, May 10, 2019 at 11:00 a.m. EDT to review financial results
and provide an update on corporate developments. Following
management’s formal remarks, there will be a question and answer
session.
Participants are asked to preregister for the
call through the following link: http://dpregister.com/10131051.
Please note that registered participants will receive their dial in
number upon registration and will dial directly into the call
without delay. Those without internet access or who are unable to
pre-register may dial in by calling: 1-844-695-5520 (domestic),
1-412-902-6761 (international). All callers should dial in
approximately 10 minutes prior to the scheduled start time and ask
to be joined into the Lilis Energy Inc. call. The conference call
will also be available through a live webcast, which can be
accessed via the following link:
https://services.choruscall.com/links/llex190510.html, which is
also available through the company’s website at:
http://investors.lilisenergy.com/events-presentations. A webcast
replay of the call will be available approximately one hour after
the end of the call through August 10, 2019. The replay can be
accessed through the above links.
About Lilis Energy, Inc.
Lilis Energy, Inc. is a Houston-based
independent oil and gas exploration and production company that
operates in the Permian’s Delaware Basin, considered amongst the
leading resource plays in North America. Lilis’ current total
net acreage in the Permian Basin is over 20,000 acres. Lilis
Energy's near-term E&P focus is to grow current reserves and
production and pursue strategic acquisitions in its core areas.
For more information, please visit www.lilisenergy.com.
Forward-Looking Statements:
This press release contains forward-looking
statements within the meaning of the federal securities laws. Such
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the Company.
These risks include, but are not limited to, our ability to
replicate the results described in this release for future wells;
the ability to finance our continued exploration, drilling
operations and working capital needs; all the other uncertainties,
costs and risks involved in exploration and development activities;
and the other risks identified in the Company’s Annual Report on
Form 10-K and its other filings with the Securities and Exchange
Commission. 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 press release are made as of the date hereof, and the Company
does not undertake any obligation to update the forward-looking
statements as a result of new information, future events or
otherwise.
Forward-looking statements regarding expected
production levels are based upon our estimates of the successful
completion of drilled wells on schedule. Actual sales
production rates from our wells can vary considerably from tested
initial production (IP) rates and are subject to natural decline
rates over the life of the well.
Contact:
Wobbe PloegsmaV.P. Capital Markets &
Investor Relations210-999-5400, ext. 31
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