Alta Mesa Resources, Inc., (NASDAQ: AMR, “Alta Mesa Resources”, the
“Company” or “Alta Mesa”) today announced second quarter 2018
unaudited financial and operational results for its wholly owned
subsidiaries, Alta Mesa Holdings, LP (“Alta Mesa Upstream” or
“AMHLP”) and Kingfisher Midstream, LLC (“Kingfisher Midstream” or
“Kingfisher”). A conference call to discuss these results is
scheduled for today at 10 a.m. Central time (888-347-8149).
Highlights:
- Alta Mesa 2018 net production grew by more than 50% from
average December daily production to estimated average July
production of 31,800 BOE per day
- Kingfisher Midstream estimated July system gas volumes was 112
MMcf per day, up by more than 35% since the business combination in
February 2018
- Kingfisher Midstream has initiated plans to expand an extensive
produced water infrastructure platform to service Alta Mesa
Upstream and third-party customers with the planned transfer of
Alta Mesa Upstream’s produced water system to Kingfisher
Midstream
- Alta Mesa is providing a 2018 exit production guidance of
38,000 to 40,000 BOE per day, and updated annual production
guidance of 29,000 to 31,000 BOE per day for full year 2018
- Alta Mesa Upstream and Kingfisher Midstream each expanded their
operational footprint in the Northwest STACK, including the
expansion of Kingfisher’s high-pressure gas gathering system
- Alta Mesa’s Board of Directors authorized a $50 million Class A
common share repurchase program
Hal Chappelle, Alta Mesa’s President and Chief
Executive Officer, stated, “During the second quarter we continued
to execute on the three-year vision we laid out for Alta Mesa at
the time of the business combination. With eight rigs running
and plans to add a ninth rig shortly, we continue to deliver
industry leading production growth. We are also continuing to
identify and capture the unique opportunities for our combined
upstream and midstream asset base, as evidenced by our expanded
plans for the Northwest STACK announced today.” Chappelle
continued; “Our focus on cost control and optimized timelines in
the face of broader market service cost inflation is a testament to
our ability to achieve growth and expansion while maintaining our
commitment to capital discipline and efficiency.”
Second Quarter 2018 Financial
Summary
Net loss, attributable to Alta Mesa’s
stockholders, during the second quarter of 2018 was $6.4 million or
$0.04 per basic and diluted share. Adjusted earnings before
interest, income taxes, depreciation, depletion and amortization
and exploration costs and other items ("Adjusted EBITDAX") was
$47.4 million for the second quarter of 2018. AMHLP had a net loss
during the second quarter 2018 of $22.5 million, and Adjusted
EBITDAX of $41.6 million. Kingfisher had a net loss during the
second quarter of nearly $3.1 million, and Adjusted EBITDA of $6.1
million. Adjusted EBITDAX and Adjusted EBITDA are non-GAAP
financial measures and are described in the attached table under
“Non-GAAP Financial Information and Reconciliation. Alta Mesa
deployed $211.1 million on capital expenditures during the second
quarter 2018, with $191.2 million by Alta Mesa Upstream and
$19.9 million by Kingfisher Midstream. Alta Mesa Upstream spending
includes drilling and completion costs, and investments in fresh
water and produced water systems, certain lease payments and other
capital. Alta Mesa Upstream has maintained drilling and completion
costs at an average of $3.8 million per well.
Alta Mesa Upstream Operational Results
and Guidance Update
Total production for the second quarter of 2018
was 2,334 MBOE, an average of 25,600 BOE per day. Production
in the second quarter was impacted by offset well shut-ins for
fracture stimulation effectiveness. Alta Mesa Upstream pattern
development has increased significantly, with 90% of the wells
drilled in the second quarter being in multi-well patterns.
Estimated July 2018 average production of 31,800 BOE per day
represents a greater than 50% increase in daily production compared
to December 2017. In the second quarter, the Company completed 48
horizontal wells in the Mississippian-age Meramec/Osage section.
Alta Mesa Upstream currently has eight rigs operating in the STACK
play area and is adding a ninth rig during the third quarter of
2018. Cumulatively, Alta Mesa Upstream has now drilled about 350
horizontal wells in the STACK.
In light of production to date and the forward
outlook for the drilling and completions schedule, the Company now
expects 2018 exit production of 38,000 to 40,000 BOE per day and
average production of 29,000 to 31,000 BOE per day for full year
2018.
Kingfisher Midstream and Produced Water
Business Update
Kingfisher Midstream’s system gas volumes have
grown by over 35% since the business combination. Estimated
system gas volumes for July of 2018 averaged 112 MMcf per day
compared to 82 MMcf per day in February. Third party volumes on the
system have grown more than 85% since the business combination in
early February. The Kingfisher 200 MMcf per day plant expansion was
placed into service in April, increasing operated inlet capacity to
260 MMcf per day. With the start-up of the 200 MMCF per day plant,
the business has achieved improved operating efficiencies and
liquid product yields. Construction on the Cimarron Express
Pipeline is proceeding with plans for mid-2019
commissioning.
To further expand the Kingfisher Midstream
platform, the Company has begun the process of transferring the
produced water business from Alta Mesa Upstream to Kingfisher
Midstream. Alta Mesa Upstream designed a system that is
readily expandable and is purpose-built for the ramp-up of produced
water volumes from Alta Mesa Upstream and other third-party
customers. This expanding system currently consists of over 200
miles of permanently installed pipe and 15 active produced water
disposal wells. System expansion, including additional
produced water disposal wells will continue through the remainder
of the year, materially increasing system capacity to meet growing
customer needs in the area. The transition of the system to
Kingfisher Midstream’s operating platform will best position the
asset for continued growth and expansion. The formal transfer of
the business is expected to be completed in 2018.
While Kingfisher Midstream has seen steady
increases in system gas volumes, due to the timing of when Alta
Mesa production and third party activity levels are expected to
increase, Kingfisher Midstream no longer expects to achieve
previously provided EBITDA guidance.
Craig Collins, Chief Operating Officer of
Kingfisher Midstream, stated, “Despite the timing shift in volume
growth, we continue to execute on our strategic vision for
Kingfisher Midstream.” Collins continued, "Solid basin fundamentals
and enhanced business delivery capabilities provide visibility for
Kingfisher’s fee-based growth over time. While the timing of our
customer’s production ramp has changed, the benefit of our
long-term acreage dedications is that we’ve captured significant
value. Our ability to provide differentiated gas gathering
and processing, crude gathering and transportation and produced
water services from a single entity is unique within the basin and
gives us confidence in our ability to expand our midstream
footprint across the STACK.”
Expansion into Step-Out Northwest STACK
Area
Alta Mesa Upstream and Kingfisher Midstream
continue to expand their operational footprint in the Northwest
STACK, primarily Major County. Encouraged by recent well results,
specialty well logging and geological analysis, Alta Mesa Upstream
is moving forward with its plans to drill additional wells in the
area. Kingfisher Midstream has started construction of a new
high-pressure pipeline with connectivity from Alta Mesa Upstream’s
southeast Major County acreage to Kingfisher Midstream’s existing
gathering system in Kingfisher County. When combined with a
low pressure gathering buildout in southeast Major County, it will
provide significant connectivity for producers into Kingfisher
Midstream’s existing gas gathering and processing system.
Alta Mesa has signed a letter agreement with a
private operator related to operations and part ownership of
approximately 17,000 acres in Major County, contiguous with Alta
Mesa’s existing acreage. Alta Mesa Upstream will be the
operator of the combined acreage position. Additionally, the
acreage will be dedicated to Kingfisher Midstream for gas, crude
oil and produced
water.
Share Repurchase Program
Alta Mesa’s Board of Directors has authorized a
program to repurchase up to $50 million of outstanding Class A
common stock. Repurchases may be made at the company’s
discretion in accordance with applicable securities laws from time
to time in open market or private transactions. James Hackett, Alta
Mesa’s Executive Chairman of the Board, stated, “Today’s
announcement that we have authorized a share repurchase program
reflects our confidene in Alta Mesa’s core business and our
commitment to enhancing shareholder value. We believe Alta Mesa
represents an attractive investment opportunity, and our strong
balance sheet provides the flexibility to make an attractive
investment in our own assets."
Conference Call InformationAlta
Mesa invites you to listen to its conference call which will
discuss its financial and operational results at 10:00 a.m.,
Central time, on Tuesday, August 14, 2018. If you wish to
participate in this conference call, dial 888-347-8149 (toll free
in US/Canada) or 412-902-4228 (for International calls), five to
ten minutes before the scheduled start time. A webcast of the call
and any related materials will be available on Alta Mesa’s website
at http://altamesaresources.irpass.com/ . Additionally, a
replay of the conference call will be available for one week
following the live broadcast by dialing 844-512-2921 (toll free in
US/Canada) or 412-317-6671 (International calls), and referencing
Conference ID #10122874.
Alta Mesa Resources, Inc., is an independent
energy company focused on the development and acquisition of
unconventional oil and natural gas reserves in the Anadarko Basin
in Oklahoma, and through Kingfisher Midstream, LLC, provides
best-in-class midstream energy services, including crude oil and
gas gathering, processing and marketing to producers in the STACK
play. Alta Mesa Resources, Inc. is headquartered in Houston,
Texas.
Safe Harbor Statement and
Disclaimer
This press release includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements, other than statements of
historical fact, regarding Alta Mesa’s strategy, future operations,
financial position, estimated revenues and losses, projected costs,
prospects, plans and objectives of management are forward-looking
statements. When used in this press release, the words “could”,
“should”, “will”, “play”, “believe”, “anticipate”, “intend”,
“estimate”, “expect”, “project” and similar expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain such identifying words. These
forward-looking statements are based on Alta Mesa’s current
expectations and assumptions about future events and are based on
currently available information as to the outcome and timing of
future events. Forward-looking statements may include statements
about Alta Mesa’s: business strategy; financial strategy;
future oil and natural gas prices; timing and amount of future
production of oil and natural gas; future drilling plans; proposed
expansion and transfer to Kingfisher of AMHLP’s produced water
infrastructure platform; production guidance; completion of
Cimarron Express Pipeline construction; future share repurchases;
marketing of oil and natural gas; leasehold or business
acquisitions, including the completion of the transaction with a
private operator; costs of developing its properties; liquidity and
access to capital; uncertainty regarding its future operating
results; and plans, objectives, expectations and intentions
contained in this press release that are not historical. Alta Mesa
cautions you that these forward-looking statements are subject to
all of the risks and uncertainties, most of which are difficult to
predict and many of which are beyond its control, incident to the
exploration for and development and production of oil and natural
gas. These risks include, but are not limited to, commodity price
volatility, low prices for oil and/or natural gas, global economic
conditions, inflation, increased operating cost, lack of
availability of drilling and production equipment and services,
environmental risks, weather risks, drilling and other operating
risks, regulatory changes, the uncertainty inherent in estimating
oil and natural gas reserves and in projecting future rates of
production, cash flow and access to capital, the timing of
development expenditures, and other risks. Information concerning
these and other factors can be found in Alta Mesa's filings with
the SEC, including its Forms 10-K, 10-Q and 8-K, which can be
obtained free of charge on the SEC's web site at
http://www.sec.gov. Should one or more of the risks or
uncertainties described in this press release occur, or should
underlying assumptions prove incorrect, Alta Mesa’s actual results
and plans could differ materially from those expressed in any
forward-looking statements. All forward-looking statements,
expressed or implied, included in this press release are expressly
qualified in their entirety by this cautionary statement. This
cautionary statement should also be considered in connection with
any subsequent written or oral forward-looking statements that we
may issue. Except as otherwise required by applicable law, Alta
Mesa disclaims any duty to update any forward-looking statements,
all of which are expressly qualified by the statements in this
section, to reflect events or circumstances after the date of this
press release.
FOR MORE INFORMATION CONTACT:
Lance L. Weaver (281) 943-5597 lweaver@altamesa.net
ALTA MESA RESOURCES,
INC.CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)(in thousands, except share and per
share data)
|
Successor |
|
|
Predecessor |
|
Successor |
|
|
Predecessor |
|
Three |
|
|
Three |
|
February 9, 2018 |
|
|
January 1, 2018 |
|
Six |
|
Months Ended |
|
|
Months Ended |
|
Through |
|
|
Through |
|
Months Ended |
|
June 30, 2018 |
|
|
June 30, 2017 |
|
June 30, 2018 |
|
|
February 8, 2018 |
|
June 30, 2017 |
OPERATING REVENUES AND
OTHER |
|
|
|
|
|
|
|
|
|
|
|
Oil |
$ |
75,291 |
|
|
|
$ |
42,348 |
|
|
$ |
115,569 |
|
|
|
$ |
30,972 |
|
|
$ |
89,288 |
|
Natural
gas |
7,980 |
|
|
|
10,642 |
|
|
13,190 |
|
|
|
4,276 |
|
|
20,233 |
|
Natural
gas liquids |
10,241 |
|
|
|
6,581 |
|
|
14,955 |
|
|
|
4,000 |
|
|
13,653 |
|
Product
sales |
19,605 |
|
|
|
— |
|
|
27,974 |
|
|
|
— |
|
|
— |
|
Gathering
and processing revenue |
7,073 |
|
|
|
— |
|
|
10,484 |
|
|
|
— |
|
|
— |
|
Other
revenues |
2,229 |
|
|
|
1,979 |
|
|
2,784 |
|
|
|
888 |
|
|
3,213 |
|
Total
operating revenues |
122,419 |
|
|
|
61,550 |
|
|
184,956 |
|
|
|
40,136 |
|
|
126,387 |
|
Gain
(loss) on sale of assets and other |
(63 |
) |
|
|
— |
|
|
5,916 |
|
|
|
— |
|
|
— |
|
Gain
(loss) on derivative contracts |
(29,219 |
) |
|
|
18,250 |
|
|
(51,865 |
) |
|
|
7,298 |
|
|
48,492 |
|
Total
operating revenues and other |
93,137 |
|
|
|
79,800 |
|
|
139,007 |
|
|
|
47,434 |
|
|
174,879 |
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
Lease
operating expense |
12,679 |
|
|
|
11,480 |
|
|
20,996 |
|
|
|
4,485 |
|
|
22,490 |
|
Marketing
and transportation expense |
2,173 |
|
|
|
6,510 |
|
|
3,194 |
|
|
|
3,725 |
|
|
12,172 |
|
Plant
operating expense |
3,313 |
|
|
|
— |
|
|
3,900 |
|
|
|
— |
|
|
— |
|
Product
expense |
19,383 |
|
|
|
— |
|
|
27,603 |
|
|
|
— |
|
|
— |
|
Gathering
and processing expense |
3,240 |
|
|
|
— |
|
|
5,578 |
|
|
|
— |
|
|
— |
|
Production taxes |
2,606 |
|
|
|
1,184 |
|
|
4,021 |
|
|
|
953 |
|
|
2,450 |
|
Workover
expense |
333 |
|
|
|
1,102 |
|
|
1,578 |
|
|
|
423 |
|
|
1,690 |
|
Exploration expense |
8,083 |
|
|
|
3,192 |
|
|
13,038 |
|
|
|
3,633 |
|
|
8,239 |
|
Depreciation, depletion, and amortization expense |
33,773 |
|
|
|
20,110 |
|
|
49,350 |
|
|
|
11,784 |
|
|
39,088 |
|
Impairment expense |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
1,188 |
|
Accretion
expense |
161 |
|
|
|
30 |
|
|
263 |
|
|
|
39 |
|
|
126 |
|
General
and administrative expense |
22,456 |
|
|
|
8,293 |
|
|
57,013 |
|
|
|
24,352 |
|
|
18,029 |
|
Total
operating expenses |
108,200 |
|
|
|
51,901 |
|
|
186,534 |
|
|
|
49,394 |
|
|
105,472 |
|
INCOME (LOSS) FROM
OPERATIONS |
(15,063 |
) |
|
|
27,899 |
|
|
(47,527 |
) |
|
|
(1,960 |
) |
|
69,407 |
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
(11,779 |
) |
|
|
(12,578 |
) |
|
(17,223 |
) |
|
|
(5,511 |
) |
|
(24,620 |
) |
Interest
income and other |
824 |
|
|
|
299 |
|
|
1,370 |
|
|
|
172 |
|
|
548 |
|
Total
other income (expense), net |
(10,955 |
) |
|
|
(12,279 |
) |
|
(15,853 |
) |
|
|
(5,339 |
) |
|
(24,072 |
) |
INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES |
(26,018 |
) |
|
|
15,620 |
|
|
(63,380 |
) |
|
|
(7,299 |
) |
|
45,335 |
|
Income
tax provision (benefit) |
(3,678 |
) |
|
|
— |
|
|
(7,491 |
) |
|
|
— |
|
|
285 |
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS |
(22,340 |
) |
|
|
15,620 |
|
|
(55,889 |
) |
|
|
(7,299 |
) |
|
45,050 |
|
Loss from
discontinued operations, net of tax |
— |
|
|
|
(30,934 |
) |
|
— |
|
|
|
(7,593 |
) |
|
(35,449 |
) |
NET INCOME (LOSS) |
(22,340 |
) |
|
|
(15,314 |
) |
|
(55,889 |
) |
|
|
(14,892 |
) |
|
9,601 |
|
Net loss
attributable to non-controlling interest |
(15,896 |
) |
|
|
— |
|
|
(36,210 |
) |
|
|
— |
|
|
— |
|
NET INCOME (LOSS)
ATTRIBUTABLE TO ALTA MESA RESOURCES, INC. STOCKHOLDERS |
$ |
(6,444 |
) |
|
|
$ |
(15,314 |
) |
|
$ |
(19,679 |
) |
|
|
$ |
(14,892 |
) |
|
$ |
9,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO ALTA MESA RESOURCES INC.
STOCKHOLDERS: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.04 |
) |
|
|
|
|
$ |
(0.11 |
) |
|
|
|
|
|
Diluted |
$ |
(0.04 |
) |
|
|
|
|
$ |
(0.12 |
) |
|
|
|
|
|
ALTA MESA RESOURCES,
INC.CONSOLIDATED BALANCE SHEETS
(Unaudited)(in thousands, except share and per
share data)
|
Successor |
|
|
Predecessor |
|
June 30, |
|
|
December 31, |
|
2018 |
2017 |
|
ASSETS |
|
|
|
|
CURRENT ASSETS |
|
|
|
|
Cash and
cash equivalents |
$ |
82,398 |
|
|
|
$ |
3,660 |
|
Restricted cash |
1,022 |
|
|
|
1,269 |
|
Accounts
receivable, net |
115,222 |
|
|
|
76,161 |
|
Other
receivables |
226 |
|
|
|
1,388 |
|
Receivables due from related party |
12,643 |
|
|
|
790 |
|
Note
receivable due from related party |
1,609 |
|
|
|
— |
|
Prepaid
expenses and other current assets |
4,174 |
|
|
|
2,932 |
|
Current
assets — discontinued operations |
— |
|
|
|
5,195 |
|
Derivative financial instruments |
— |
|
|
|
216 |
|
Total
current assets |
217,294 |
|
|
|
91,611 |
|
PROPERTY, PLANT AND
EQUIPMENT |
|
|
|
|
Oil and
natural gas properties, successful efforts method, net |
2,550,519 |
|
|
|
894,630 |
|
Other
property, plant and equipment, net |
343,357 |
|
|
|
32,140 |
|
Total
property, plant and equipment, net |
2,893,876 |
|
|
|
926,770 |
|
OTHER ASSETS |
|
|
|
|
Equity
method investment |
6,956 |
|
|
|
— |
|
Deferred
financing costs, net |
3,518 |
|
|
|
1,787 |
|
Notes
receivable due from related party |
11,262 |
|
|
|
12,369 |
|
Goodwill |
699,898 |
|
|
|
— |
|
Intangible assets, net |
408,706 |
|
|
|
— |
|
Deposits
and other long-term assets |
50 |
|
|
|
9,067 |
|
Non-current assets — discontinued operations |
— |
|
|
|
43,785 |
|
Deferred
tax asset |
11,954 |
|
|
|
— |
|
Derivative financial instruments |
— |
|
|
|
8 |
|
Total
other assets |
1,142,344 |
|
|
|
67,016 |
|
TOTAL ASSETS |
$ |
4,253,514 |
|
|
|
$ |
1,085,397 |
|
|
|
|
|
|
LIABILITIES,
PARTNERS' CAPITAL AND STOCKHOLDERS' EQUITY |
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
Accounts
payable and accrued liabilities |
$ |
148,866 |
|
|
|
$ |
170,489 |
|
Accounts
payable — affiliate |
— |
|
|
|
5,476 |
|
Advances
from non-operators |
6,283 |
|
|
|
5,502 |
|
Advances
from related party |
37,135 |
|
|
|
23,390 |
|
Asset
retirement obligations |
538 |
|
|
|
69 |
|
Current
liabilities — discontinued operations |
— |
|
|
|
15,419 |
|
Derivative financial instruments |
37,743 |
|
|
|
19,303 |
|
Total
current liabilities |
230,565 |
|
|
|
239,648 |
|
LONG-TERM
LIABILITIES |
|
|
|
|
Asset
retirement obligations, net of current portion |
6,439 |
|
|
|
10,400 |
|
Long-term
debt, net |
595,084 |
|
|
|
607,440 |
|
Noncurrent liabilities — discontinued operations |
— |
|
|
|
66,862 |
|
Derivative financial instruments |
6,385 |
|
|
|
1,114 |
|
Deferred
tax liability |
4,893 |
|
|
|
— |
|
Other
long-term liabilities |
6 |
|
|
|
5,488 |
|
Total
long-term liabilities |
612,807 |
|
|
|
691,304 |
|
TOTAL LIABILITIES |
843,372 |
|
|
|
930,952 |
|
PREFERRED STOCK,
$0.0001 par value |
|
|
|
|
Class A:
1,000,000 shares authorized; 3 shares issued
and outstanding |
— |
|
|
|
— |
|
Class B:
1,000,000 shares authorized; 1 share
issued and outstanding |
— |
|
|
|
— |
|
Commitments and
Contingencies |
|
|
|
|
PARTNERS' CAPITAL |
— |
|
|
|
154,445 |
|
STOCKHOLDERS'
EQUITY |
|
|
|
|
Common
stock, $0.0001 par value |
|
|
|
|
Class A:
1,200,000,000 shares authorized; 180,730,114 shares issued
and outstanding |
18 |
|
|
|
— |
|
Class C:
280,000,000 shares authorized; 204,921,888 shares
issued and outstanding |
20 |
|
|
|
— |
|
Additional paid in capital |
1,498,023 |
|
|
|
— |
|
Accumulated deficit |
(27,793 |
) |
|
|
— |
|
Total
stockholders' equity/partners' capital |
1,470,268 |
|
|
|
154,445 |
|
Noncontrolling interest |
1,939,874 |
|
|
|
— |
|
Total
equity |
3,410,142 |
|
|
|
154,445 |
|
TOTAL LIABILITIES,
PARTNERS' CAPITAL AND STOCKHOLDERS' EQUITY |
$ |
4,253,514 |
|
|
|
$ |
1,085,397 |
|
|
ALTA MESA RESOURCES,
INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
|
Successor |
|
|
Predecessor |
|
February 9, 2018 |
|
|
January 1, 2018 |
|
Six |
|
Through |
|
|
Through |
|
Months Ended |
|
June 30, 2018 |
|
|
February 8, 2018 |
|
June 30, 2017 |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income (loss) |
$ |
(55,889 |
) |
|
|
$ |
(14,892 |
) |
|
$ |
9,601 |
|
Adjustments to
reconcile net income (loss) to net cash (used in) provided by
operating activities: |
|
|
|
|
|
|
Depreciation, depletion, and amortization expense |
49,350 |
|
|
|
12,414 |
|
|
51,298 |
|
Impairment expense |
— |
|
|
|
5,560 |
|
|
29,124 |
|
Accretion
expense |
263 |
|
|
|
140 |
|
|
1,052 |
|
Amortization of deferred financing costs |
152 |
|
|
|
171 |
|
|
1,456 |
|
Amortization of debt premium |
(2,051 |
) |
|
|
— |
|
|
— |
|
Equity-based compensation expense |
7,729 |
|
|
|
— |
|
|
— |
|
Dry hole
expense |
— |
|
|
|
(45 |
) |
|
888 |
|
Expired
leases |
10,658 |
|
|
|
1,250 |
|
|
5,922 |
|
(Gain)
loss on derivative contracts |
51,865 |
|
|
|
(7,298 |
) |
|
(48,492 |
) |
Settlements of derivative contracts |
(18,969 |
) |
|
|
(1,661 |
) |
|
254 |
|
Premium
paid on derivative contracts |
— |
|
|
|
— |
|
|
(520 |
) |
Interest
converted into debt |
— |
|
|
|
103 |
|
|
599 |
|
Interest
on notes receivable due from related party |
(417 |
) |
|
|
(85 |
) |
|
(406 |
) |
Deferred
tax provision (benefit) |
(7,491 |
) |
|
|
— |
|
|
— |
|
Loss on
sale of assets and other |
63 |
|
|
|
1,923 |
|
|
— |
|
Gain on
acquisition of oil and gas properties |
— |
|
|
|
— |
|
|
(1,626 |
) |
Changes in assets and
liabilities: |
|
|
|
|
|
|
Accounts
receivable |
(8,585 |
) |
|
|
(20,895 |
) |
|
(11,478 |
) |
Other
receivables |
996 |
|
|
|
(9,887 |
) |
|
4,281 |
|
Receivables due from related party |
(6,818 |
) |
|
|
(117 |
) |
|
(680 |
) |
Prepaid
expenses and other non-current assets |
8,114 |
|
|
|
9,970 |
|
|
(11,644 |
) |
Advances
from related party |
(10,371 |
) |
|
|
24,116 |
|
|
(42,528 |
) |
Settlement of asset retirement obligation |
(806 |
) |
|
|
(63 |
) |
|
(977 |
) |
Accounts
payable, accrued liabilities, and other liabilities |
(80,638 |
) |
|
|
25,815 |
|
|
7,655 |
|
NET CASH
(USED IN) PROVIDED BY OPERATING ACTIVITIES |
(62,845 |
) |
|
|
26,519 |
|
|
(6,221 |
) |
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Capital
expenditures for property, plant and equipment |
(342,608 |
) |
|
|
(38,096 |
) |
|
(151,832 |
) |
Acquisitions, net of cash acquired |
(791,819 |
) |
|
|
— |
|
|
(6,251 |
) |
Contributions to equity method investments |
(6,956 |
) |
|
|
— |
|
|
— |
|
Proceeds
withdrawn from Trust Account |
1,042,742 |
|
|
|
— |
|
|
— |
|
Proceeds
from sale of assets |
11 |
|
|
|
— |
|
|
— |
|
NET CASH
PROVIDED BY (USED IN) INVESTING ACTIVITIES |
(98,630 |
) |
|
|
(38,096 |
) |
|
(158,083 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Proceeds
from long-term debt |
80,000 |
|
|
|
60,000 |
|
|
165,065 |
|
Repayments of long-term debt |
(193,565 |
) |
|
|
(43,000 |
) |
|
(10,000 |
) |
Additions
to deferred financing costs |
(3,670 |
) |
|
|
— |
|
|
(170 |
) |
Capital
distributions |
— |
|
|
|
(68 |
) |
|
— |
|
Capital
contributions |
— |
|
|
|
— |
|
|
7,875 |
|
Proceeds
from issuance of Class A shares |
400,000 |
|
|
|
— |
|
|
— |
|
Repayment
of sponsor note |
(2,000 |
) |
|
|
— |
|
|
— |
|
Repayment
of deferred underwriting compensation |
(36,225 |
) |
|
|
— |
|
|
— |
|
Redemption of Class A common shares |
(33 |
) |
|
|
— |
|
|
— |
|
NET
CASH PROVIDED BY FINANCING ACTIVITIES |
244,507 |
|
|
|
16,932 |
|
|
162,770 |
|
NET INCREASE (DECREASE)
IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
83,032 |
|
|
|
5,355 |
|
|
(1,534 |
) |
CASH,
CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period |
388 |
|
|
|
4,990 |
|
|
7,618 |
|
CASH,
CASH EQUIVALENTS AND RESTRICTED CASH, end of period |
$ |
83,420 |
|
|
|
$ |
10,345 |
|
|
$ |
6,084 |
|
*Non-GAAP Financial Information and
Reconciliation
Alta Mesa Reconciliation of Net Loss to Adjusted
EBITDAX. Adjusted EBITDAX is a non-GAAP financial measure and
as used herein represents net income (loss) before interest
expense, exploration expense, depletion, depreciation and
amortization, impairment of oil and natural gas properties,
accretion of asset retirement obligations, tax expense, gain (loss)
on sale of assets and the non-cash portion of gain/loss on oil,
natural gas and natural gas liquids derivative contracts. Alta
Mesa’s management believes Adjusted EBITDAX is useful because it
allows external users of our consolidated financial statements,
such as industry analysts, investors, lenders and rating agencies,
to more effectively evaluate our operating performance, compare the
results of our operations from period to period and against our
peers without regard to our financing methods or capital structure
and because it highlights trends in our business that may not
otherwise be apparent when relying solely on GAAP measures.
Adjusted EBITDAX is not a measurement of Alta Mesa’s financial
performance under GAAP, and should not be considered as an
alternative to net income (loss), operating income (loss) or any
other performance measure derived in accordance with GAAP or as an
alternative to net cash provided by operating activities as a
measure of Alta Mesa’s profitability or liquidity. Adjusted EBITDAX
has significant limitations, including that it does not reflect
Alta Mesa’s cash requirements for capital expenditures, contractual
commitments, working capital or debt service. In addition, other
companies may calculate Adjusted EBITDAX differently than Alta Mesa
does, limiting its usefulness as a comparative measure. The
following table sets forth a reconciliation of net income (loss) as
determined in accordance with GAAP to Adjusted EBITDAX for the
periods indicated (unaudited in thousands):
Alta Mesa EBITDAX Calculation (Non-GAAP
Measure) |
|
Feb 9 - June 30, 2018 Successor |
Jan 1 - Feb 8, 2018 Predecessor |
Q2-2018Successor |
|
|
|
|
|
Net Loss attributable
to Alta Mesa |
|
$ |
(19,679 |
) |
$ |
(14,892 |
) |
$ |
(6,444 |
) |
Net Loss attributable
to Noncontrolling Interest |
|
|
(36,210 |
) |
|
- |
|
|
(15,896 |
) |
Taxes |
|
|
(7,491 |
) |
|
- |
|
|
(3,678 |
) |
Interest |
|
|
17,223 |
|
|
5,511 |
|
|
11,779 |
|
(Gain) Loss on sale of
assets and other |
|
|
(5,916 |
) |
|
- |
|
|
63 |
|
Loss from discontinued
operations, net |
|
|
- |
|
|
7,593 |
|
|
- |
|
(Gain) Loss on
derivative contracts |
|
|
51,865 |
|
|
(7,298 |
) |
|
29,219 |
|
Settlements of
derivative contracts |
|
|
(18,969 |
) |
|
(1,661 |
) |
|
(14,359 |
) |
Exploration |
|
|
13,038 |
|
|
3,633 |
|
|
8,083 |
|
Depreciation, depletion
and amortization |
|
|
49,350 |
|
|
11,784 |
|
|
33,773 |
|
Accretion expense |
|
|
263 |
|
|
39 |
|
|
161 |
|
Stock compensation
expense |
|
|
7,729 |
|
|
- |
|
|
4,263 |
|
EBITDAX |
|
|
51,203 |
|
|
4,709 |
|
|
46,964 |
|
Non-recurring Business
Combination Expense |
|
|
25,734 |
|
|
17,040 |
|
|
443 |
|
Adjusted
EBITDAX |
|
$ |
76,937 |
|
$ |
21,749 |
|
$ |
47,407 |
|
AMHLP and
Kingfisher |
Q2-2018 Successor |
Q2-2018 Successor |
|
YTD 2018Successor |
YTD 2018Successor |
EBITDAX Calculation (Non-GAAP Measure) |
AMHLP |
Kingfisher |
|
AMHLP |
Kingfisher |
|
|
|
|
|
|
Net Loss to Alta
Mesa |
$ |
(22,477 |
) |
$ |
(3,049 |
) |
|
$ |
(57,048 |
) |
$ |
(4,913 |
) |
Taxes |
|
7 |
|
|
- |
|
|
|
7 |
|
|
- |
|
Interest |
|
10,361 |
|
|
1,418 |
|
|
|
15,557 |
|
|
1,666 |
|
(Gain) loss on sale of
assets and other |
|
63 |
|
|
- |
|
|
|
(5,916 |
) |
|
- |
|
Loss on derivative
contracts |
|
29,219 |
|
|
- |
|
|
|
51,865 |
|
|
- |
|
Settlements of
derivative contracts |
|
(14,359 |
) |
|
- |
|
|
|
(18,969 |
) |
|
- |
|
Exploration |
|
8,083 |
|
|
- |
|
|
|
13,038 |
|
|
- |
|
Depreciation, depletion
and amortization |
|
26,509 |
|
|
7,264 |
|
|
|
37,445 |
|
|
11,905 |
|
Accretion expense |
|
161 |
|
|
|
|
263 |
|
|
- |
|
Stock compensation
expense |
|
3,621 |
|
|
465 |
|
|
|
6,389 |
|
|
507 |
|
EBITDAX |
|
41,188 |
|
|
6,098 |
|
|
|
42,631 |
|
|
9,165 |
|
Non-recurring Business
Combination Expense |
|
443 |
|
|
- |
|
|
|
25,734 |
|
|
- |
|
Adjusted
EBITDAX |
$ |
41,631 |
|
$ |
6,098 |
|
|
$ |
68,365 |
|
$ |
9,165 |
|
*Successor Company and Period:The financial
statements and certain footnote presentations separate the
Company’s presentations into two distinct periods, the period
before the consummation of the Business Combination, which is from
January 1, 2018 to February 8, 2018 (“2018 Predecessor Period”) and
the period after the consummation of the Business Combination,
which is from February 9, 2018 to June 30, 2018 (“Successor
Period”), to indicate the application of the different basis of
accounting between the periods presented. The three months
ended June 30, 2017 is referred to as the “2017 Predecessor
Period”. AMHLP is the “Predecessor” for periods prior to the
Business Combination, which do not include the consolidation of the
Company and Kingfisher. For the periods after the Business
Combination, Alta Mesa Resources, including the consolidation of
AMHLP and Kingfisher, is the “Successor”.
Prices
Below is a table of average hedged and unhedged
prices received by AMHLP.
Average Prices including settlements of derivative contracts |
Q2-2018 |
Oil (per
Bbl) |
|
$54.29 |
Natural
Gas (per Mcf) |
|
2.02 |
Natural
Gas Liquids (per Bbl) |
|
18.47 |
|
|
|
|
Average Prices excluding settlements of derivative contracts |
Q2-2018 |
Oil (per
Bbl) |
|
$67.09 |
Natural
Gas (per Mcf) |
|
2.02 |
Natural
Gas Liquids (per Bbl) |
|
18.47 |
|
|
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