DE
|
|
000-51801
|
|
43-2083519
|
(State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer Identification Number)
|
|
|
|
|
|
1111 Bagby Street, Suite 1600
Houston, TX
|
|
|
|
77002
|
(Address of principal executive offices)
|
|
|
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(Zip Code)
|
Dated: February 23, 2015
|
ROSETTA RESOURCES INC.
|
|
|
|
|
|
By:
|
/s/ John E. Hagale
|
|
|
|
|
|
John E. Hagale
|
|
|
Executive Vice President and Chief Financial Officer
|
Exhibit No.
|
|
Description
|
|
Press Release of Rosetta Resources Inc. dated February 23, 2015.
|
|
|
|
|
·
|
Updated two-year capital spending outlook of up to $350 million per year, targeting cash flow neutrality in 2015 and 2016
|
·
|
Released production guidance of 58 to 62 thousand barrels of oil equivalent per day for 2015 and 2016
|
·
|
Replaced 113 percent of production from all sources in 2014; 106 percent replaced through the drill bit
|
·
|
Increased total net risked resources, including proved undeveloped reserves, 15 percent to more than 900 million barrels of oil equivalent
|
·
|
Executed Credit Facility amendment converting from a total debt to EBITDA covenant to total senior secured debt to EBITDA and interest coverage covenants
|
Well Name
|
Rosetta
WI, %
|
Bench / Lateral
Length
|
# Frac
Stages
|
Gross 30-Day IP Boe/d
|
Oil %
|
||||||||||||
Intrepid 27-38 #2H
|
100
|
WC A / 7,000 ft
|
26
|
1,714
|
77
|
||||||||||||
Blue Duck 35 #1H
|
89
|
WC A / 4,100 ft
|
16
|
915
|
73
|
||||||||||||
Rodeo State 12 #3H
|
94
|
WC A / 4,100 ft
|
16
|
917
|
66
|
December 31,
|
||||||||
2014
|
2013
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
34,397
|
$
|
193,784
|
||||
Accounts receivable
|
117,070
|
122,677
|
||||||
Derivative instruments
|
221,250
|
4,307
|
||||||
Prepaid expenses
|
8,142
|
9,860
|
||||||
Deferred income taxes
|
—
|
27,976
|
||||||
Other current assets
|
3,535
|
1,284
|
||||||
Total current assets
|
384,394
|
359,888
|
||||||
Oil and natural gas properties using the full cost method of accounting:
|
||||||||
Proved properties
|
5,337,537
|
3,951,397
|
||||||
Unproved/unevaluated properties, not subject to amortization
|
550,979
|
755,438
|
||||||
Gathering systems and compressor stations
|
285,989
|
168,730
|
||||||
Other fixed assets
|
34,339
|
26,362
|
||||||
Total
|
6,208,844
|
4,901,927
|
||||||
Accumulated depreciation, depletion and amortization, including impairment
|
(2,434,003
|
)
|
(2,020,879
|
)
|
||||
Total property and equipment, net
|
3,774,841
|
2,881,048
|
||||||
Other assets:
|
||||||||
Debt issuance costs
|
25,741
|
25,602
|
||||||
Derivative instruments
|
65,419
|
5,458
|
||||||
Other long-term assets
|
272
|
4,622
|
||||||
Total other assets
|
91,432
|
35,682
|
||||||
Total assets
|
$
|
4,250,667
|
$
|
3,276,618
|
||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$
|
179,353
|
$
|
190,950
|
||||
Royalties and other payables
|
98,972
|
78,264
|
||||||
Derivative instruments
|
—
|
4,913
|
||||||
Deferred income taxes
|
72,445
|
—
|
||||||
Total current liabilities
|
350,770
|
274,127
|
||||||
Long-term liabilities:
|
||||||||
Derivative instruments
|
—
|
433
|
||||||
Long-term debt
|
2,000,000
|
1,500,000
|
||||||
Deferred income taxes
|
207,854
|
136,407
|
||||||
Other long-term liabilities
|
22,930
|
17,317
|
||||||
Total liabilities
|
$
|
2,581,554
|
$
|
1,928,284
|
||||
Commitments and contingencies
|
||||||||
Stockholders' equity:
|
||||||||
Preferred stock, $0.001 par value; authorized 5,000,000 shares; no shares issued in 2014 or 2013
|
—
|
—
|
||||||
Common stock, $0.001 par value; authorized 150,000,000 shares; issued 62,306,601 shares and 62,032,162 shares at December 31, 2014 and 2013, respectively
|
62
|
61
|
||||||
Additional paid-in capital
|
1,192,836
|
1,182,672
|
||||||
Treasury stock, at cost; 788,493 shares and 724,755 shares at December 31, 2014 and 2013, respectively
|
(27,414
|
)
|
(24,592
|
)
|
||||
Accumulated other comprehensive loss
|
(234
|
)
|
(108
|
)
|
||||
Retained earnings
|
503,863
|
190,301
|
||||||
Total stockholders' equity
|
1,669,113
|
1,348,334
|
||||||
Total liabilities and stockholders' equity
|
$
|
4,250,667
|
$
|
3,276,618
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Revenues:
|
||||||||||||
Oil sales
|
$
|
574,552
|
$
|
475,119
|
$
|
318,782
|
||||||
NGL sales
|
222,682
|
198,966
|
160,461
|
|||||||||
Natural gas sales
|
213,609
|
147,028
|
93,711
|
|||||||||
Derivative instruments
|
293,836
|
(7,095
|
)
|
40,545
|
||||||||
Total revenues
|
1,304,679
|
814,018
|
613,499
|
|||||||||
Operating costs and expenses:
|
||||||||||||
Lease operating expense
|
93,202
|
53,336
|
35,138
|
|||||||||
Treating and transportation
|
88,501
|
71,338
|
51,826
|
|||||||||
Taxes, other than income
|
45,956
|
31,075
|
24,013
|
|||||||||
Depreciation, depletion and amortization
|
415,823
|
218,571
|
154,223
|
|||||||||
Reserve for commercial disputes
|
5,800
|
20,450
|
—
|
|||||||||
General and administrative costs
|
79,297
|
73,043
|
68,731
|
|||||||||
Total operating costs and expenses
|
728,579
|
467,813
|
333,931
|
|||||||||
Operating income
|
576,100
|
346,205
|
279,568
|
|||||||||
Other expense (income):
|
||||||||||||
Interest expense, net of interest capitalized
|
75,292
|
35,957
|
24,316
|
|||||||||
Interest income
|
(15
|
)
|
(2
|
)
|
(7
|
)
|
||||||
Other expense, net
|
12,379
|
314
|
60
|
|||||||||
Total other expense
|
87,656
|
36,269
|
24,369
|
|||||||||
Income before provision for income taxes
|
488,444
|
309,936
|
255,199
|
|||||||||
Income tax expense
|
174,882
|
110,584
|
95,904
|
|||||||||
Net income
|
$
|
313,562
|
$
|
199,352
|
$
|
159,295
|
||||||
Earnings per share:
|
||||||||||||
Basic
|
$
|
5.10
|
$
|
3.40
|
$
|
3.03
|
||||||
Diluted
|
$
|
5.09
|
$
|
3.39
|
$
|
3.01
|
||||||
Weighted average shares outstanding:
|
||||||||||||
Basic
|
61,455
|
58,571
|
52,496
|
|||||||||
Diluted
|
61,649
|
58,830
|
52,887
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
313,562
|
$
|
199,352
|
$
|
159,295
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation, depletion and amortization
|
415,823
|
218,571
|
154,223
|
|||||||||
Deferred income taxes
|
172,042
|
100,876
|
95,904
|
|||||||||
Amortization of deferred loan fees recorded as interest expense
|
3,838
|
8,421
|
2,856
|
|||||||||
Loss on debt extinguishment
|
3,101
|
—
|
—
|
|||||||||
Stock-based compensation expense
|
8,806
|
10,979
|
18,539
|
|||||||||
(Gain) loss due to change in fair value of derivative instruments
|
(282,250
|
)
|
16,345
|
(19,662
|
)
|
|||||||
Change in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
5,607
|
(18,849
|
)
|
(26,454
|
)
|
|||||||
Prepaid expenses
|
3,001
|
21
|
(2,780
|
)
|
||||||||
Other current assets
|
(2,250
|
)
|
172
|
680
|
||||||||
Long-term assets
|
99
|
(108
|
)
|
650
|
||||||||
Accounts payable and accrued liabilities
|
(12,565
|
)
|
37,370
|
(19,997
|
)
|
|||||||
Royalties and other payables
|
20,707
|
16,627
|
10,948
|
|||||||||
Other long-term liabilities
|
(813
|
)
|
3,413
|
(3,572
|
)
|
|||||||
Income taxes
|
(103
|
)
|
(2,181
|
)
|
—
|
|||||||
Net cash provided by operating activities
|
648,605
|
591,009
|
370,630
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Acquisitions of oil and gas assets
|
(79,600
|
)
|
(956,892
|
)
|
—
|
|||||||
Additions to oil and gas assets
|
(1,218,614
|
)
|
(871,092
|
)
|
(622,168
|
)
|
||||||
Disposals of oil and gas assets
|
661
|
(1,304
|
)
|
88,527
|
||||||||
Net cash used in investing activities
|
(1,297,553
|
)
|
(1,829,288
|
)
|
(533,641
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Borrowings on Credit Facility
|
1,050,000
|
670,000
|
290,000
|
|||||||||
Payments on Credit Facility
|
(850,000
|
)
|
(880,000
|
)
|
(110,000
|
)
|
||||||
Repayments on Restated Term Loan
|
—
|
—
|
(20,000
|
)
|
||||||||
Issuance of Senior Notes
|
500,000
|
1,300,000
|
—
|
|||||||||
Retirement of Senior Notes
|
(200,000
|
)
|
—
|
—
|
||||||||
Proceeds from issuance of common stock
|
—
|
329,008
|
—
|
|||||||||
Deferred loan fees
|
(8,364
|
)
|
(28,280
|
)
|
(1,980
|
)
|
||||||
Proceeds from stock options exercised
|
618
|
4,981
|
910
|
|||||||||
Purchases of treasury stock
|
(2,822
|
)
|
(7,113
|
)
|
(6,183
|
)
|
||||||
Excess tax benefit from share-based awards
|
129
|
6,681
|
—
|
|||||||||
Net cash provided by financing activities
|
489,561
|
1,395,277
|
152,747
|
|||||||||
Net (decrease) increase in cash
|
(159,387
|
)
|
156,998
|
(10,264
|
)
|
|||||||
Cash and cash equivalents, beginning of year
|
193,784
|
36,786
|
47,050
|
|||||||||
Cash and cash equivalents, end of year
|
$
|
34,397
|
$
|
193,784
|
$
|
36,786
|
||||||
Supplemental disclosures:
|
||||||||||||
Cash paid for interest expense, net of capitalized interest
|
$
|
73,426
|
$
|
24,824
|
$
|
20,834
|
||||||
Cash paid (received) for income taxes
|
$
|
3,248
|
$
|
2,941
|
$
|
(105
|
)
|
|||||
Supplemental non-cash disclosures:
|
||||||||||||
Capital expenditures included in Accounts payable and accrued liabilities
|
$
|
118,284
|
$
|
118,725
|
$
|
88,844
|
|
Three Months Ended December 31,
|
Twelve Months Ended December 31,
|
||||||||||||||||||||||
|
2014
|
2013
|
% Change Increase/
(Decrease) |
2014
|
2013
|
% Change Increase/
(Decrease) |
||||||||||||||||||
|
||||||||||||||||||||||||
Daily production by area (Boe/d):
|
||||||||||||||||||||||||
Eagle Ford
|
65.2
|
48.1
|
36
|
%
|
59.3
|
47.6
|
25
|
%
|
||||||||||||||||
Permian
|
7.9
|
3.5
|
126
|
%
|
6.3
|
1.8
|
250
|
%
|
||||||||||||||||
Other
|
-
|
0.1
|
(100
|
%)
|
0.1
|
0.2
|
(50
|
%)
|
||||||||||||||||
Total (Boe/d)
|
73.1
|
51.7
|
41
|
%
|
65.7
|
49.6
|
32
|
%
|
||||||||||||||||
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
Daily production:
|
||||||||||||||||||||||||
Oil (Bbls/d)
|
19.8
|
15.0
|
32
|
%
|
19.1
|
13.7
|
39
|
%
|
||||||||||||||||
NGLs (Bbls/d)
|
26.3
|
17.4
|
51
|
%
|
23.0
|
17.5
|
31
|
%
|
||||||||||||||||
Natural Gas (Mcf/d)
|
161.9
|
116.0
|
40
|
%
|
141.4
|
110.5
|
28
|
%
|
||||||||||||||||
Total (Boe/d)
|
73.1
|
51.7
|
41
|
%
|
65.7
|
49.6
|
32
|
%
|
||||||||||||||||
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
Average sales prices:
|
||||||||||||||||||||||||
Oil, excluding derivatives ($/Bbl)
|
$
|
61.52
|
$
|
88.60
|
(31
|
%)
|
$
|
82.61
|
$
|
95.04
|
(13
|
%)
|
||||||||||||
Oil, including realized derivatives ($/Bbl)
|
69.22
|
88.55
|
(22
|
%)
|
83.10
|
93.74
|
(11
|
%)
|
||||||||||||||||
NGL, excluding derivatives ($/Bbl)
|
19.00
|
34.12
|
(44
|
%)
|
26.48
|
31.10
|
(15
|
%)
|
||||||||||||||||
NGL, including realized derivatives ($/Bbl)
|
23.24
|
34.73
|
(33
|
%)
|
27.78
|
32.83
|
(15
|
%)
|
||||||||||||||||
Natural gas, excluding derivatives ($/Mcf)
|
3.74
|
3.62
|
3
|
%
|
4.14
|
3.64
|
14
|
%
|
||||||||||||||||
Natural gas, including realized derivatives ($/Mcf)
|
3.78
|
3.77
|
0
|
%
|
4.09
|
3.76
|
9
|
%
|
||||||||||||||||
Total (excluding realized derivatives) ($/Boe)
|
$
|
31.80
|
$
|
45.24
|
(30
|
%)
|
$
|
42.18
|
$
|
45.31
|
(7
|
%)
|
||||||||||||
Total (including realized derivatives) ($/Boe)
|
$
|
35.48
|
$
|
45.76
|
(22
|
%)
|
$
|
42.66
|
$
|
45.82
|
(7
|
%)
|
||||||||||||
|
||||||||||||||||||||||||
Average costs (per Boe):
|
||||||||||||||||||||||||
Direct LOE
|
$
|
2.84
|
$
|
2.61
|
9
|
%
|
$
|
2.90
|
$
|
2.49
|
16
|
%
|
||||||||||||
Workovers
|
0.34
|
0.98
|
(65
|
%)
|
0.94
|
0.39
|
141
|
%
|
||||||||||||||||
Insurance
|
0.04
|
0.05
|
(20
|
%)
|
0.05
|
0.06
|
(17
|
%)
|
||||||||||||||||
Treating and Transportation
|
3.80
|
3.97
|
(4
|
%)
|
3.69
|
3.94
|
(6
|
%)
|
||||||||||||||||
Taxes, other than income
|
1.53
|
1.43
|
7
|
%
|
1.92
|
1.71
|
12
|
%
|
||||||||||||||||
DD&A
|
18.17
|
13.69
|
33
|
%
|
17.35
|
12.06
|
44
|
%
|
||||||||||||||||
G&A, excluding stock-based compensation
|
2.33
|
3.68
|
(37
|
%)
|
2.94
|
3.42
|
(14
|
%)
|
||||||||||||||||
Interest expense
|
3.22
|
2.09
|
54
|
%
|
3.14
|
1.98
|
59
|
%
|
Product
|
Settlement
Period |
Derivative
Instrument |
Notional Daily
Volume |
Average
Floor/Fixed Prices |
Average
Ceiling Prices |
|||||||||
Crude oil
|
2015
|
Costless Collar
|
7,376
|
55.00
|
84.79
|
|||||||||
Crude oil
|
2015
|
Swap
|
12,000
|
89.81
|
||||||||||
Crude oil
|
2016
|
Swap
|
6,000
|
90.28
|
Product
|
Settlement
Period |
Derivative
Instrument |
Notional Daily
Volume |
Fixed Prices
per Bbl |
||||||
NGLs
|
2015
|
Swap
|
7,000
|
31.90
|
Product
|
Settlement
Period |
Derivative
Instrument |
Notional Daily
Volume |
Average
Floor/Fixed Prices |
Average
Ceiling Prices |
|||||||||
Natural gas
|
2015
|
Costless Collar
|
50,000
|
3.60
|
5.04
|
|||||||||
Natural gas
|
2016
|
Costless Collar
|
40,000
|
3.50
|
5.58
|
|||||||||
Natural gas
|
2015
|
Swap
|
50,000
|
4.13
|
||||||||||
Natural gas
|
2016
|
Swap
|
30,000
|
4.04
|
Three months ended December 31,
|
Twelve months ended December 31,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Net income (GAAP)
|
$
|
185,467
|
$
|
29,495
|
$
|
313,562
|
$
|
199,352
|
||||||||
Unrealized derivative (gain) loss
|
(265,040
|
)
|
13,064
|
(282,250
|
)
|
16,345
|
||||||||||
Permian acquisition - transaction and financing costs
|
-
|
125
|
550
|
7,958
|
||||||||||||
Loss on debt extinguishment
|
-
|
-
|
12,629
|
-
|
||||||||||||
Reserve for commercial dispute
|
-
|
20,450
|
5,800
|
20,450
|
||||||||||||
Tax expense (benefit)
|
95,070
|
(12,154
|
)
|
94,435
|
(16,169
|
)
|
||||||||||
Adjusted net income (Non-GAAP)
|
$
|
15,497
|
$
|
50,980
|
$
|
144,726
|
$
|
227,936
|
||||||||
Net income per share (GAAP)
|
||||||||||||||||
Basic
|
$
|
3.02
|
$
|
0.48
|
$
|
5.10
|
$
|
3.40
|
||||||||
Diluted
|
3.01
|
0.48
|
5.09
|
3.39
|
||||||||||||
Adjusted net income per share (Non-GAAP)
|
||||||||||||||||
Basic
|
$
|
0.25
|
$
|
0.83
|
$
|
2.35
|
$
|
3.89
|
||||||||
Diluted
|
0.25
|
0.83
|
2.35
|
3.87
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Net income (GAAP)
|
$
|
313,562
|
$
|
199,352
|
$
|
159,295
|
||||||
Interest expense, net of interest capitalized
|
75,292
|
35,957
|
24,316
|
|||||||||
Income tax expense
|
174,882
|
110,584
|
95,904
|
|||||||||
Other expense, net
|
12,379
|
314
|
60
|
|||||||||
Depreciation, depletion and amoritzation
|
415,823
|
218,571
|
154,223
|
|||||||||
EBITDA (Non-GAAP)
|
$
|
991,938
|
$
|
564,778
|
$
|
433,798
|
||||||
Unrealized derivative (gain) loss
|
(282,250
|
)
|
16,345
|
(19,662
|
)
|
|||||||
Stock-based compensation expense
|
8,806
|
10,979
|
18,539
|
|||||||||
Interest income
|
(15
|
)
|
(2
|
)
|
(7
|
)
|
||||||
Cash premium on debt extinguishment
|
(9,500
|
)
|
-
|
-
|
||||||||
Adjusted EBITDA (Non-GAAP)
|
$
|
708,979
|
$
|
592,100
|
$
|
432,668
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Cash flows from operating activities (GAAP)
|
$
|
648,605
|
$
|
591,009
|
$
|
370,630
|
||||||
Interest expense, net of interest capitalized
|
75,292
|
35,957
|
24,316
|
|||||||||
Amortization of deferred loan fees recorded as interest expense
|
(3,838
|
)
|
(8,421
|
)
|
(2,856
|
)
|
||||||
Current income tax expense
|
2,840
|
9,708
|
-
|
|||||||||
Change in operating assets and liabilities
|
(13,683
|
)
|
(36,465
|
)
|
40,525
|
|||||||
Other cash adjustments
|
(237
|
)
|
312
|
53
|
||||||||
Adjusted EBITDA (Non-GAAP)
|
$
|
708,979
|
$
|
592,100
|
$
|
432,668
|
2015 First Quarter
|
2015 Full-Year
|
|||||||||||||||||||||||
MBoe/d
|
||||||||||||||||||||||||
Average Daily Production
|
64
|
-
|
67
|
58
|
-
|
62
|
||||||||||||||||||
$/Boe
|
||||||||||||||||||||||||
Direct Lease Operating Expense
|
$
|
2.90
|
-
|
$
|
3.05
|
$
|
3.25
|
-
|
$
|
3.50
|
||||||||||||||
Workover Expenses
|
1.10
|
-
|
1.15
|
0.90
|
-
|
1.00
|
||||||||||||||||||
Insurance
|
0.05
|
-
|
0.05
|
0.05
|
-
|
0.05
|
||||||||||||||||||
Treating and Transportation
|
4.00
|
-
|
4.25
|
4.25
|
-
|
4.65
|
||||||||||||||||||
Taxes, other than income
|
1.35
|
-
|
1.45
|
1.55
|
-
|
1.70
|
||||||||||||||||||
DD&A
|
16.85
|
-
|
17.40
|
*17.00
|
-
|
*18.00
|
||||||||||||||||||
G&A, excluding Stock-Based Compensation
|
3.20
|
-
|
3.35
|
3.60
|
-
|
3.90
|
||||||||||||||||||
Interest Expense
|
3.60
|
-
|
3.75
|
4.20
|
-
|
4.55
|