Lonestar Resources US Inc. (NASDAQ: LONE) (including its
subsidiaries, “Lonestar,” “we,” “us,” “our” or the “Company”) today
reported financial and operating results for the three months ended
June 30, 2020.
HIGHLIGHTS
- Lonestar responded to a collapse in crude oil prices during the
second quarter by shutting-in most of its crude oil production in
the month of May, and consequently reported a 2% decrease in net
oil and gas production to 13,339 BOE/d during the three months
ended June 30, 2020 (“2Q20”), compared to 13,630 BOE/d for the
three months ended June 30, 2019 (“2Q19”). Production was comprised
of 70% crude oil and NGL’s on an equivalent basis.
- Lonestar reported a net loss attributable to its common
stockholders of $42.9 million during 2Q20 compared to a net income
of $11.2 million during 2Q19. Excluding, on a tax-adjusted basis,
certain items that the Company does not view as either recurring or
indicative of its ongoing financial performance, Lonestar’s
adjusted net loss for 2Q20 was $1.4 million. Most notable among
these items include: a $42.2 million unrealized (non-cash) hedging
loss on financial derivatives (‘mark-to-market’) and a $2.2 million
of non-recurring G&A expense. Please see Non-GAAP Financial
Measures at the end of this release for the definition of Adjusted
Net Income (Loss), a reconciliation of net income (loss) before
taxes to Adjusted Net Income (Loss), and the reasons for its
use.
- Lonestar reported Adjusted EBITDAX for 2Q20 of $29.1 million.
On a sequential basis, Adjusted EBITDAX remained flat due to
stringent cost management and substantial hedging despite a 50%
decrease in wellhead pricing. Please see Non-GAAP Financial
Measures at the end of this release for the definition of Adjusted
EBITDAX, a reconciliation of net (loss) income attributable to
common stockholders to Adjusted EBITDAX, and the reasons for its
use.
- Lonestar continues to utilize commodity derivatives to create a
higher degree of certainty in our cash flows and returns while
mitigating financial risk. Lonestar has crude swap volumes of 7,628
Bbls/d for the balance of 2020 (Bal ’20), at an average WTI price
of $57.36/Bbl, and 7,000 Bbls/d for 2021 (Cal ’21) at an average
WTI price of $50.40/Bbl. In most capital spending scenarios, our
crude oil hedges cover all of oil production for Bal ‘20 and Cal
‘21. Lonestar also has Henry Hub natural gas swaps covering 20,000
MMBTU/d at a weighted-average price of $2.57 per MMBTU for Bal ‘20,
and 27,500 MMBTU/d at a weighted-average price of $2.36 per MMBTU
for Cal ’21, which cover substantial portions of our anticipated
production. Notably, all of the Company’s current hedges are swaps.
Lonestar’s hedge book significantly insulates our future production
from fluctuations in the commodity markets. At the end of the
quarter, the mark-to-market of Lonestar’s hedge book is
approximately $50 million and is a significant financial and
strategic asset for the Company.
- Highly volatile oil and gas pricing experienced during the
second quarter of 2020 dictated unprecedented actions by the
industry, and Lonestar is no exception. During April, oil prices
averaged $14.00/Bbl and Lonestar sold its full deliverability. In
May, oil pricing was extremely volatile. At the wellhead, prices
started the month at approximately $5.00/Bbl and gradually
recovered to approximately $20.00/Bbl by the end of the month, and
averaged approximately $15.00/Bbl. Based on this price action,
Lonestar elected to shut-in virtually all of its crude oil
production in the month of May. By contrast, Lonestar’s properties
in the Condensate Window (Horned Frog and Sooner) offered favorable
cash flow and profitability, and the Company elected to sell gas
and NGL’s in May from these properties, while storing all of its
condensate in frac tanks in anticipation of improved pricing in
June. With oil prices essentially doubling in June, Lonestar sold
its full deliverability, including the condensate it stored during
May, and did so at twice the price it would have received in May.
As a point of reference, Lonestar estimates that if it were to have
sold its full deliverability in the second quarter of 2020, oil and
gas sales would have averaged 15,000 BOE/d. Lonestar estimates that
third quarter sales will range between 14,000 and 14,500
BOE/d.
OPERATIONAL UPDATE
- Production- Lonestar reported net oil and gas production
of 13,339 BOE/d during the three months ended June 30, 2020. 2Q20
production volumes consisted of 6,365 barrels of oil per day (48%),
2,939 barrels of NGLs per day (22%), and 24,211 Mcf of natural gas
per day (30%). Lonestar estimates that shut-ins and stored volumes
reduced average quarterly production rates by 1,700 BOE/d.
- Pricing- Lonestar’s Eagle Ford Shale assets continued to
deliver favorable wellhead realizations in 2Q20. Lonestar’s
wellhead crude oil price realization was $20.68/Bbl, which reflects
a discount of $7.17/Bbl vs. WTI. Lonestar’s realized NGL price was
$6.59/Bbl, or 32% of WTI. Lonestar’s realized wellhead natural gas
price was $1.58 per Mcf, reflecting a $0.13 discount to Henry
Hub.
- Revenues- Wellhead revenues fell by $19.8 million to
$17.2 million, or 53%, compared to the three months ended March 31,
2020 (“1Q20”), primarily driven by a 55% decrease in oil price
realizations, a 23% decrease in NGL price realizations and a 25%
decrease in natural gas price realizations.
- Expenses- In response to the sharp downturn in oil and
gas prices which have occurred during 2020, Lonestar has made a
concerted effort to reduce costs among all of its vendors and
service providers, and those organizational expense reductions are
beginning to be reflected in the Company’s financial results. In
the second quarter, total cash expenses, which include the cash
portions of lease operating, gathering, processing, transportation,
production taxes, general & administrative and interest
expenses were $22.1 million for 2Q20, which reflects a 20%
reduction compared to $27.7 million in 1Q20. On a unit of
production basis, 2Q20 total cash expenses per BOE were $17.60, a
16% reduction compared to 1Q20. It is notable that these reductions
were achieved in spite of incurrence of G&A expenses which the
Company considers non-recurring.
- Lease Operating Expenses (“LOE”), excluding rig standby costs
of $0.4 million, were $3.7 million for 2Q20, which was 52% lower
than LOE of $7.6 million in 1Q20. On a unit-of-production basis,
LOE per BOE were decreased 48% quarter over quarter to $3.01 per
BOE in 2Q20.
- Gathering, Processing & Transportation Expenses
(“GP&T”) for 2Q20 were $0.9 million, which was 59% lower than
the GP&T of $2.2 million in the three months ended 1Q20. On a
unit-of-production basis, GP&T decrease 56% quarter over
quarter from $1.64 per BOE in 2Q19 to $0.72 per BOE in 2Q20.
- Production and ad valorem taxes for 2Q20 were $1.7 million,
which was 27% lower than production taxes of $2.4 million in 1Q20.
On a unit-of-production basis, production and ad valorem taxes
decreased 21% quarter over quarter from $1.80 per BOE in 1Q20 to
$1.42 per BOE in 2Q20.
- General & Administrative Expenses (“G&A”) in 2Q20 were
$6.0 million vs. $2.9 million in 1Q20. G&A Expenses, excluding
stock-based compensation of ($1.8) million in 1Q20 and $0.1 million
in 2Q20, increased from $4.7 million to $5.9 million, respectively.
Excluding stock-based compensation, on a unit-of-production basis,
G&A per BOE increased 37% quarter over quarter from $3.56 per
BOE in 1Q20 to $4.87 per BOE in 2Q20.
- Interest expense was $10.5 million for 2Q20 vs. $11.6 million
for 1Q20. Interest expense excluding amortization of debt issuance
cost, premiums, and discounts decreased 9% quarter over quarter
from $10.8 million in 1Q20 to $9.9 million in 2Q20. On a
unit-of-production basis, interest expense per BOE decreased 1%
from $8.25 per BOE in 1Q20 to $8.16 per BOE in 2Q20.
EAGLE FORD SHALE TREND - WESTERN REGION
In our Western Region, production for 2Q20 averaged
approximately 7,800 BOE per day, a 1% increase from 2Q19
production. Production consisted of 2,804 barrels of oil per day
(36%), 2,139 barrels of NGL’s per day (27%) and 17,144 Mcf of
natural gas per day (37%). The Western Region accounted for 48% of
the Company’s production during the quarter.
EAGLE FORD SHALE TREND - CENTRAL REGION
In our Central Region, 2Q20 production averaged approximately
5,311 BOE/d, a 6% decrease from 2Q19 rates. Production consisted of
3,432 barrels of oil per day (65%), 746 barrels of NGL’s per day
(14%), and 6,803 Mcf of natural gas per day (21%). The decrease in
production is largely driven by the shut-in of crude oil production
volumes all of our wells in Gonzales, Karnes, Fayette and Lavaca
Counties. The Central Region accounted for 50% of the Company’s
production during the quarter.
In June, Lonestar began flowback operations on the Hawkeye #14H,
Hawkeye #15H, and Hawkeye #16H. These new wells have since cleaned
up after flowback and registered the following Max-30 rates which
average 1,461 BOE/d:
- Hawkeye #14H – With a 10,979’ perforated interval, the #14H
recorded Max-30 rates of 1,186 Bbls/d oil, 87 Bbls/d of NGLs, and
625 Mcf/d, or 1,377 BOE/d on a three-stream basis and was achieved
on a 30/64” choke. Currently, the #14H is producing 961 Bbls/d oil,
57 Bbls/d of NGLs, 410 Mcf/d gas, or 1,086 BOE/d on a three-stream
basis.
- Hawkeye #15H – With a 10,608’ perforated interval, the #15H
recorded Max-30 rates 1,372 Bbls/d oil, 101 Bbls/d of NGLs, and 729
Mcf/d, or 1,595 BOE/d on a three-stream basis and was achieved on a
30/64” choke. Currently, the #15H is producing 1,062 Bbls/d oil, 64
Bbls/d of NGLs, 459 Mcf/d gas, or 1,205 BOE/d on a three-stream
basis.
- Hawkeye #16H – With a 9,885’ perforated interval, the #16H
recorded Max-30 rates 1,217 Bbls/d oil, 88 Bbls/d of NGLs, and 635
Mcf/d, or 1,411 BOE/d on a three-stream basis and was achieved on a
30/64” choke. Currently, the #16H is producing 970 Bbls/d oil, 55
Bbls/d of NGLs, and 396 Mcf/d gas, or 1,091 BOE/d on a three-stream
basis.
In July, the Company completed drilling operations on the
Hawkeye #33H, Hawkeye #34H, and Hawkeye #35. These wells were
drilled to total measured depths of 20,500, 20,358 feet, and
20,467, respectively, and are expected to have perforated intervals
averaging approximately 10,800 feet. These wells are currently held
in inventory as Drilled Uncompleted (DUC’s). Lonestar expects to
hold a 50% WI / 37.5% NRI in these wells.
ABOUT LONESTAR RESOURCES US INC.
Lonestar is an independent oil and natural gas company, focused
on the development, production, and acquisition of unconventional
oil, NGLs, and natural gas properties in the Eagle Ford Shale in
Texas, where we have accumulated approximately 71,153 gross (51,760
net) acres in what we believe to be the formation’s crude oil and
condensate windows, as of June 30, 2020. For more information,
please visit www.lonestarresources.com.
CAUTIONARY & FORWARD-LOOKING STATEMENTS
Lonestar Resources US Inc. cautions that this press release
contains forward-looking statements, including, but not limited to;
Lonestar’s execution of its growth strategies; growth in Lonestar’s
leasehold, reserves and asset value; and Lonestar’s ability to
create shareholder value. These statements involve substantial
known and unknown risks, uncertainties and other important factors
that may cause our actual results, levels of activity, performance
or achievements to be materially different from the information
expressed or implied by these forward-looking statements. These
risks and uncertainties include, but are not limited to, the
following: volatility of oil, natural gas and NGL prices, and
potential write-down of the carrying values of crude oil and
natural gas properties; inability to successfully replace proved
producing reserves; substantial capital expenditures required for
exploration, development and exploitation projects; potential
liabilities resulting from operating hazards, natural disasters or
other interruptions; risks related using the latest available
horizontal drilling and completion techniques; uncertainties tied
to lengthy period of development of identified drilling locations;
unexpected delays and cost overrun related to the development of
estimated proved undeveloped reserves; concentration risk related
to properties, which are located primarily in the Eagle Ford Shale
of South Texas; loss of lease on undeveloped leasehold acreage that
may result from lack of development or commercialization;
inaccuracies in assumptions made in estimating proved reserves; our
limited control over activities in properties Lonestar does not
operate; potential inconsistency between the present value of
future net revenues from our proved reserves and the current market
value of our estimated oil and natural gas reserves; risks related
to derivative activities; losses resulting from title deficiencies;
risks related to health, safety and environmental laws and
regulations; additional regulation of hydraulic fracturing; reduced
demand for crude oil, natural gas and NGLs resulting from
conservation measures and technological advances; inability to
acquire adequate supplies of water for our drilling operations or
to dispose of or recycle the used water economically and in an
environmentally safe manner; climate change laws and regulations
restricting emissions of “greenhouse gases” that may increase
operating costs and reduce demand for the crude oil and natural
gas; fluctuations in the differential between benchmark prices of
crude oil and natural gas and the reference or regional index price
used to price actual crude oil and natural gas sales; and the other
important factors discussed under the caption “Risk Factors” in our
Annual Report on Form 10-K filed with the Securities and Exchange
Commission, or the SEC, on April 13, 2020, as well as other
documents that we may file from time to time with the SEC. We may
not actually achieve the plans, intentions or expectations
disclosed in our forward-looking statements, and you should not
place undue reliance on our forward-looking statements. Actual
results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking
statements we make. The forward-looking statements in this press
release represent our views as of the date of this press release.
We anticipate that subsequent events and developments will cause
our views to change. However, while we may elect to update these
forward-looking statements at some point in the future, we have no
current intention of doing so except to the extent required by
applicable law. You should, therefore, not rely on these
forward-looking statements as representing our views as of any date
subsequent to the date of this press release.
(Financial Statements to Follow)
Lonestar Resources US Inc.
Condensed Consolidated Balance Sheets (In thousands, except par
value and share data)
June 30, 2020
December 31, 2019
Assets
Current assets
Cash and cash equivalents
$
1,259
$
3,137
Accounts receivable
Oil, natural gas liquid and natural gas
sales
11,681
15,991
Joint interest owners and others, net
821
1,310
Derivative financial instruments
45,502
5,095
Prepaid expenses and other
7,150
2,208
Total current assets
66,413
27,741
Property and equipment
Oil and gas properties, using the
successful efforts method of accounting
Proved properties
1,102,958
1,050,168
Unproved properties
77,597
76,462
Other property and equipment
21,537
21,401
Less accumulated depreciation, depletion,
amortization and impairment
(705,182
)
(464,671
)
Property and equipment, net
496,910
683,360
Accounts receivable – related party
5,978
5,816
Derivative financial instruments
12,447
1,754
Other non-current assets
2,232
2,108
Total assets
$
583,980
$
720,779
Liabilities and Stockholders'
(Deficit) Equity
Current liabilities
Accounts payable
$
12,896
$
33,355
Accounts payable – related party
269
189
Oil, natural gas liquid and natural gas
sales payable
10,061
14,811
Accrued liabilities
34,098
26,905
Derivative financial instruments
2,537
8,564
Current maturities of long-term debt
531,583
247,000
Total current liabilities
591,444
330,824
Long-term liabilities
Long-term debt
11,250
255,068
Asset retirement obligations
7,251
7,055
Deferred tax liabilities, net
—
931
Warrant liability
—
129
Warrant liability – related party
1
235
Derivative financial instruments
2,993
1,898
Other non-current liabilities
1,270
3,752
Total long-term liabilities
22,765
269,068
Commitments and contingencies
Stockholders' (deficit) equity
Class A voting common stock, $0.001 par
value, 100,000,000 shares authorized, 25,369,191 and 24,945,594
shares issued and outstanding, respectively
142,655
142,655
Series A-1 convertible participating
preferred stock, $0.001 par value, 104,893 and 100,328 shares
issued and outstanding, respectively
—
—
Additional paid-in capital
176,006
175,738
Accumulated deficit
(348,890
)
(197,506
)
Total stockholders' (deficit) equity
(30,229
)
120,887
Total liabilities and stockholders'
(deficit) equity
$
583,980
$
720,779
Lonestar Resources US Inc.
Unaudited Condensed Consolidated Statements of Operations (In
thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Revenues
Oil sales
$
11,976
$
44,726
$
41,986
$
78,310
Natural gas liquid sales
1,762
3,549
4,362
6,942
Natural gas sales
3,482
3,940
7,902
7,704
Total revenues
17,220
52,215
54,250
92,956
Expenses
Lease operating and gas gathering
4,903
8,929
14,692
16,638
Production and ad valorem taxes
1,721
2,818
4,091
5,109
Depreciation, depletion and
amortization
16,575
21,515
40,929
39,486
Loss on sale and disposal of oil and gas
properties
1,254
155
1,254
33,046
Impairment of oil and gas properties
—
—
199,908
—
General and administrative
5,981
3,841
8,856
8,221
Other expense (income)
58
—
(139
)
(2
)
Total expenses
30,492
37,258
269,591
102,498
(Loss) income from operations
(13,272
)
14,957
(215,341
)
(9,542
)
Other (expense) income
Interest expense
(10,512
)
(10,778
)
(22,122
)
(21,434
)
Change in fair value of warrants
—
796
363
694
(Loss) gain on derivative financial
instruments
(21,141
)
9,514
80,029
(26,724
)
Total other (expense) income
(31,653
)
(468
)
58,270
(47,464
)
Loss (income) before income
taxes
(44,925
)
14,489
(157,071
)
(57,006
)
Income tax benefit (expense)
4,332
(1,200
)
5,687
11,732
Net (loss) income
(40,593
)
13,289
(151,384
)
(45,274
)
Preferred stock dividends
(2,308
)
(2,112
)
(4,566
)
(4,177
)
Net (loss) income attributable to
common stockholders
$
(42,901
)
$
11,177
$
(155,950
)
$
(49,451
)
Net (loss) income per common
share
Basic
$
(1.70
)
$
0.28
$
(6.20
)
$
(1.99
)
Diluted
$
(1.70
)
$
0.28
$
(6.20
)
$
(1.99
)
Weighted average common shares
outstanding
Basic
25,307,714
24,924,169
25,154,151
24,811,895
Diluted
25,307,714
24,924,169
25,154,151
24,811,895
Lonestar Resources US Inc.
Unaudited Condensed Consolidated Statements of Cash Flows (In
thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Cash flows from operating
activities
Net income (loss)
$
(40,593
)
$
13,289
$
(151,384
)
$
(45,274
)
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation, depletion and
amortization
16,575
21,515
40,929
39,486
Stock-based compensation
24
(181
)
(1,998
)
352
Deferred taxes
445
1,234
(931
)
(11,688
)
(Gain) loss on derivative financial
instruments
21,140
(9,514
)
(80,029
)
26,724
Settlements of derivative financial
instruments
22,902
(4,888
)
23,998
(3,579
)
Impairment of oil and natural gas
properties
—
—
199,908
—
Loss (gain) on disposal of property and
equipment
—
—
83
(17
)
Loss on sale of oil and gas properties
1,254
155
1,254
33,046
Non-cash interest expense
606
483
1,374
1,182
Change in fair value of warrants
—
(796
)
(363
)
(694
)
Changes in operating assets and
liabilities:
Accounts receivable
(6,306
)
(1,363
)
(189
)
(3,379
)
Prepaid expenses and other assets
(523
)
(996
)
(897
)
(692
)
Accounts payable and accrued expenses
1,052
9,424
(1,344
)
2,720
Net cash provided by operating
activities
$
16,576
$
28,362
$
30,411
$
38,187
Cash flows from investing
activities
Acquisition of oil and gas properties
(898
)
(673
)
(1,714
)
(3,025
)
Development of oil and gas properties
(38,071
)
(38,559
)
(72,824
)
(67,696
)
Proceeds from sale of oil and gas
properties
2,520
(154
)
2,837
11,953
Purchases of other property and
equipment
(112
)
(351
)
(636
)
(3,267
)
Net cash used in investing
activities
(36,561
)
(39,737
)
(72,337
)
(62,035
)
Cash flows from financing
activities
Proceeds from borrowings
20,157
24,000
48,157
54,000
Payments on borrowings
(55
)
(13,052
)
(8,109
)
(32,167
)
Net cash provided by financing
activities
20,102
10,948
40,048
21,833
Net increase (decrease) in cash and
cash equivalents
117
(427
)
(1,878
)
(2,015
)
Cash and cash equivalents, beginning of
the period
1,142
3,767
3,137
5,355
Cash and cash equivalents, end of the
period
$
1,259
$
3,340
$
1,259
$
3,340
Supplemental information:
Cash paid for interest
$
17,079
$
3,027
$
21,036
$
19,770
Non-cash investing and financing
activities:
Change in asset retirement obligation
277
67
24
(455
)
Change in liabilities for capital
expenditures
(15,769
)
27,654
(16,809
)
28,384
NON-GAAP FINANCIAL MEASURES (Unaudited)
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by
GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure
that is used by management and external users of the Company’s
consolidated financial statements, such as industry analysts,
investors, lenders and rating agencies. The Company defines
Adjusted EBITDAX as net (loss) income attributable to common
stockholders before depreciation, depletion, amortization and
accretion, exploration costs, non-recurring costs, loss (gain) on
sales of oil and natural gas properties, impairment of oil and gas
properties, stock-based compensation, interest expense, income tax
(benefit) expense, rig standby expense, other income (expense),
unrealized (gain) loss on derivative financial instruments and
unrealized (gain) loss on warrants.
Management believes Adjusted EBITDAX provides useful information
to investors because it assists investors in the evaluation of the
Company’s operating performance and comparison of the results of
the Company’s operations from period to period without regard to
its financing methods or capital structure. The Company excludes
the items listed above from net (loss) income attributable to
common stockholders in arriving at Adjusted EBITDAX to eliminate
the impact of certain non-cash items or because these amounts can
vary substantially from company to company within its industry
depending upon accounting methods and book values of assets,
capital structures and the method by which the assets were
acquired. Adjusted EBITDAX should not be considered as an
alternative to, or more meaningful than, net (loss) income
attributable to common stockholders as determined in accordance
with GAAP. Certain items excluded from Adjusted 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 Adjusted EBITDAX. The Company’s
computations of Adjusted EBITDAX may not be comparable to other
similarly titled measures of other companies.
The following table presents a reconciliation of Adjusted
EBITDAX to the GAAP financial measure of net (loss) income
attributable to common stockholders for each of the periods
indicated.
Three Months Ended June 30,
Six Months Ended June
30,
($ in thousands)
2020
2019
2020
2019
Net (Loss) Income
$
(42,901
)
$
11,177
$
(151,384
)
$
(49,451
)
Income tax expense (benefit)
(4,332
)
1,200
(5,687
)
(11,732
)
Interest expense (1)
12,820
12,890
26,688
25,611
Exploration expense
—
—
—
190
Depreciation, depletion and
amortization
16,575
21,515
40,929
39,486
EBITDAX
$
(17,838
)
$
46,782
$
(89,454
)
$
4,104
Rig standby expense
373
310
434
416
Non-recurring costs (2)
2,942
—
2,942
—
Stock-based compensation
73
98
(1,729
)
1,027
Loss on sale of oil and gas properties
1,254
155
1,254
33,046
Impairment of oil and gas properties
—
—
199,908
—
Unrealized loss (gain) on derivative
financial instruments
42,195
(13,760
)
(50,793
)
21,749
Unrealized gain on warrants
—
(796
)
(363
)
(694
)
Other expense
58
678
(139
)
861
Adjusted EBITDAX
$
29,057
$
33,467
$
62,060
$
60,509
1 Interest expense also includes dividends paid on Series A
Preferred Stock 2 Non-recurring legal expenses
Adjusted Net Income (Loss)
Adjusted net (loss) income comparable to analysts’ estimates as
set forth in this release represents income or loss before income
taxes adjusted for certain non-cash items (detailed in the
accompanying table) less income taxes. We believe adjusted net
(loss) income is calculated on the same basis as analysts’
estimates and that many investors use this published research in
making investment decisions and evaluating operational trends of
the Company and its performance relative to other oil and gas
producing companies.
The following table presents a reconciliation of Adjusted Net
(Loss) Income to the GAAP financial measure of net income (loss)
before taxes for each of the periods indicated.
Lonestar Resources US Inc.
Unaudited Reconciliation of Income (Loss) Before Taxes As Reported
To Income (Loss) Before Taxes Excluding Certain Items, a non-GAAP
measure (Adjusted Net Income (Loss))
Three Months Ended June
30,
Six Months Ended June
30,
($ in thousands)
2020
2019
2020
2019
(Loss) income before income taxes, as
reported
$
(44,925
)
$
14,489
$
(157,071
)
$
(57,006
)
Adjustments for special items:
Impairment of oil and gas properties
—
—
199,908
—
General & administrative non-recurring
costs
—
7
—
382
Rig standby expense
373
310
434
416
Non-recurring legal expense
2,243
670
2,243
670
Unrealized hedging loss (gain)
42,195
(13,760
)
(50,793
)
21,749
Loss on sale of oil and gas properties
1,254
155
1,254
33,046
Stock based compensation
73
98
(1,729
)
1,027
Loss before income taxes, as adjusted
$
1,213
$
1,969
$
(5,754
)
$
284
Income tax benefit (expense), as
adjusted
Deferred (a)
(255
)
(426
)
1,208
(61
)
Net income (loss) excluding certain items,
a non-GAAP measure
958
1,543
(4,546
)
223
Preferred stock dividends
(2,308
)
(2,112
)
(4,566
)
(4,177
)
Net loss excluding certain items, a
non-GAAP measure
$
(1,350
)
$
(569
)
$
(9,112
)
$
(3,954
)
a) Effective tax rate for 2020 and 2019 is estimated to be
approximately 21%.
Lonestar Resources US Inc.
Unaudited Operating Results
In thousands, except per share and unit
data
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Operating Results
Net loss attributable to common
stockholders
$
(42,901
)
$
11,177
$
(155,950
)
$
(49,451
)
Net loss per common share – basic
(1.70
)
0.28
(6.20
)
(1.99
)
Net loss per common share – diluted
(1.70
)
0.28
(6.20
)
(1.99
)
Net cash provided by operating
activities
30,411
28,362
30,411
38,187
Revenues
Oil
$
11,976
$
44,726
$
41,986
$
78,310
NGLs
1,762
3,549
4,362
6,942
Natural gas
3,482
3,940
7,902
7,704
Total revenues
$
17,220
$
52,215
$
54,250
$
92,956
Total production volumes by
product
Oil (Bbls)
579,179
709,361
1,237,680
1,299,457
NGLs (Bbls)
267,462
263,994
570,933
481,555
Natural gas (Mcf)
2,203,209
1,601,656
4,313,625
2,896,860
Total barrels of oil equivalent (6:1)
1,213,843
1,240,298
2,527,551
2,263,822
Daily production volumes by
product
Oil (Bbls/d)
6,365
7,795
6,800
7,179
NGLs (Bbls/d)
2,939
2,901
3,137
2,661
Natural gas (Mcf/d)
24,211
17,601
23,701
16,005
Total barrels of oil equivalent
(BOE/d)
13,339
13,630
13,888
12,507
Average realized prices
Oil ($ per Bbl)
$
20.68
$
63.05
$
33.92
$
60.26
NGLs ($ per Bbl)
6.59
13.44
7.64
14.42
Natural gas ($ per Mcf)
1.58
2.46
1.83
2.66
Total oil equivalent, excluding the effect
from commodity derivatives ($ per BOE)
14.19
42.10
21.46
41.06
Total oil equivalent, including the effect
from commodity derivatives ($ per BOE)
31.22
38.63
32.88
38.86
Operating and other expenses
Lease operating and gas gathering
$
4,903
$
8,929
$
14,692
$
16,638
Production and ad valorem taxes
1,721
2,818
4,091
5,109
Depreciation, depletion and
amortization
16,575
21,515
40,929
39,486
General and administrative
5,981
3,841
8,856
8,221
Interest expense
10,512
10,778
22,122
21,434
Operating and other expenses per
BOE
Lease operating and gas gathering
$
4.04
$
7.20
$
5.81
$
7.35
Production and ad valorem taxes
1.42
2.27
1.62
2.26
Depreciation, depletion and
amortization
13.65
17.35
16.19
17.44
General and administrative (1)
4.93
3.10
3.50
3.63
Interest expense (2)
8.66
8.69
8.75
9.47
(1) General and administrative expenses include stock-based
compensation (2) Interest expense includes amortization of debt
issuance cost, premiums, and discounts
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200816005038/en/
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