UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
November 6, 2013
Date of Report (Date of earliest event reported)
Bonanza Creek Energy, Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-35371 |
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61-1630631 |
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(State or other jurisdiction of |
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(Commission |
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(I.R.S. employer |
410 17th Street, Suite 1400
Denver, Colorado 80202
(Address of principal executive offices, including zip code)
(720) 440-6100
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On November 6, 2013, Bonanza Creek Energy, Inc. (the “Company”) entered into an amendment to its amended and restated senior secured revolving credit agreement (the “Credit Agreement”). Borrowings under the Credit Agreement are limited by a borrowing base that is calculated based upon a valuation of the Company’s oil and gas properties. The borrowing base has been increased to $450 million; however, the maximum commitments of the lenders under the Credit Agreement are currently limited to $330 million. The maturity date of the credit facility was also extended one year to September 15, 2017. The amendment is attached as Exhibit 99.1.
Item 2.02 Results of Operations and Financial Condition.
On November 7, 2013, the Company announced its results for the quarter ended September 30, 2013. A copy of the Company’s press release is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
99.1 Amendment No. 8, dated as of November 6, 2013, to the Credit Agreement, among Bonanza Creek Energy, Inc., the Guarantors, KeyBank National Association, as Administrative Agent and as Issuing Lender, and the lenders party thereto
99.2 Press release issued November 7, 2013 announcing financial and operational results for the quarter ended September 30, 2013
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Bonanza Creek Energy, Inc. | |
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Date: November 8, 2013 |
By: |
/s/ Christopher I. Humber |
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Christopher I. Humber |
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Senior Vice President, General Counsel and Secretary |
INDEX TO EXHIBITS
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Exhibit |
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Description |
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99.1 |
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Amendment No. 8, dated as of November 8, 2013, to the Credit Agreement, among Bonanza Creek Energy, Inc., the Guarantors, KeyBank National Association, as Administrative Agent and as Issuing Lender, and the lenders party thereto |
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99.2 |
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Press release issued November 7, 2013 announcing financial and operational results for the quarter ended September 30, 2013 |
Exhibit 99.1
Execution Version
AMENDMENT NO. 8
This AMENDMENT NO. 8 (this “Amendment”) dated as of November 6, 2013 (the “Effective Date”) is among Bonanza Creek Energy, Inc., a Delaware corporation (the “Borrower”), the Guarantors (as defined in the Credit Agreement referred to below), the Lenders (as defined below), and KeyBank National Association, as Administrative Agent and as Issuing Lender (as such terms are defined below).
RECITALS
A. The Borrower is party to (i) that certain Credit Agreement dated as of March 29, 2011 (as amended by Amendment No. 1 dated as of April 29, 2011, Amendment No. 2 & Agreement dated as of September 15, 2011, the Resignation, Consent and Appointment Agreement and Amendment Agreement dated as of April 6, 2012, Amendment No. 3 & Agreement dated as of May 8, 2012, Amendment No. 4 dated as of July 31, 2012, Amendment No. 5 dated as of October 30, 2012, Amendment No. 6 dated as of March 29, 2013, and Amendment No. 7 dated as of May 16, 2013 and as the same may be further amended, restated or otherwise modified from time to time, the “Credit Agreement”) among the Borrower, the lenders party thereto from time to time (the “Lenders”), and KeyBank National Association (as successor in interest to BNP Paribas), as administrative agent (in such capacity, the “Administrative Agent”) and as issuing lender (in such capacity, the “Issuing Lender”) and (ii) that certain Waiver and Agreement dated as of December 21, 2012 among the Borrower, the Lenders, the Administrative Agent and the Issuing Lender (the “Waiver”). Each capitalized term defined in the Credit Agreement and used herein without definition shall have the meaning assigned to such term in the Credit Agreement, unless expressly provided to the contrary.
B. The Lenders wish to, subject to the terms and conditions of this Amendment, (i) extend the Maturity Date, (ii) increase the Borrowing Base, and (iii) amend the Credit Agreement as provided herein.
THEREFORE, the Borrower, the Guarantors, the Administrative Agent, the Issuing Lender, and the Lenders hereby agree as follows:
Section 1. Defined Terms. As used in this Amendment, each of the terms defined in the opening paragraph and the Recitals above shall have the meanings assigned to such terms therein.
Section 2. Other Definitional Provisions. Article, Section, Schedule, and Exhibit references are to Articles and Sections of and Schedules and Exhibits to this Amendment, unless otherwise specified. All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified. The words “hereof”, “herein”, and “hereunder” and words of similar import when used in this Amendment shall refer to this Amendment as a whole and not to any particular provision of this Amendment. The term “including” means “including, without limitation,”. Paragraph headings have been inserted in this Amendment as a matter of convenience for reference only and it is agreed that such paragraph
headings are not a part of this Amendment and shall not be used in the interpretation of any provision of this Amendment.
Section 3. Redetermination of Borrowing Base.
(a) Subject to the terms of this Amendment and in accordance with Section 2.02(b)(ii) of the Credit Agreement, as amended hereby, as of the Effective Date, the Borrowing Base shall be $450,000,000, and such Borrowing Base shall remain in effect at such amount until the Borrowing Base is redetermined in accordance with Section 2.02 of the Credit Agreement.
(b) The redetermination of the Borrowing Base pursuant to this Section 3 shall constitute the scheduled redetermination of the Borrowing Base pursuant to Section 2.02 of the Credit Agreement with respect to the Independent Engineering Report delivered on or before October 1, 2013.
Section 4. Amendments to Credit Agreement.
(a) Section 1.01 of the Credit Agreement is hereby amended by adding the following new defined terms:
“Additional Lender” has the meaning given such term in Section 2.17.
“Aggregate Threshold Amount” means the sum of $330,000,000 plus the total of all Threshold Amount Increases effected under Section 2.17.
“Increase Date” has the meaning given such term in Section 2.17.
“Increasing Lender” has the meaning given such term in Section 2.17.
“Threshold Amount” means, for any Lender, such Lender’s Pro Rata Share of the Aggregate Threshold Amount then in effect, as such Threshold Amount for any Lender may be increased from time to time pursuant to Section 2.17. In the event that any Lender’s Pro Rata Share is increased or decreased, as applicable, pursuant to an assignment under Section 10.06 or otherwise, such Lender’s Threshold Amount will automatically be deemed to have increased or decreased, as applicable, in an amount sufficient to cause such Lender’s Threshold Pro Rata Share (expressed as a percentage) to equal such Lender’s Pro Rata Share (expressed as a percentage).
“Threshold Amount Deficiency” means, at any time, an amount equal to (a) the sum of (i) the aggregate outstanding principal amount of all Advances at such time and (ii) the excess, if any, of the Letter of Credit Exposure over the amount held in the Cash Collateral Account at such time minus (b) the Aggregate Threshold Amount then in effect..
“Threshold Amount Increase” has the meaning given such term in Section 2.17.
“Threshold Pro Rata Share” means, with respect to any Lender, the ratio (expressed as a percentage) of such Lender’s Threshold Amount at such time to the Aggregate Threshold Amount at such time.
(b) Section 1.01 of the Credit Agreement is hereby amended by amending and restating the following defined terms:
“Maturity Date” means September 15, 2017.
“Unused Commitment Amount” means, with respect to a Lender at any time, (a) the least of (i) such Lender’s Commitment at such time, (ii) such Lender’s Threshold Amount at such time, and (iii) such Lender’s Pro Rata Share of the Borrowing Base in effect at such time minus (b) in each case the sum of (i) the aggregate outstanding principal amount of all Advances owed to such Lender at such time plus (ii) such Lender’s Pro Rata Share of the aggregate Letter of Credit Exposure at such time.
“Utilization Level” means the applicable category (being Level I, Level II, Level III, Level IV or Level V) of pricing criteria contained in Schedule I, which is based at any time of its determination on the percentage obtained by dividing (a) the outstanding principal amount of the Advances and the Letter of Credit Exposure at such time by (b) the least of (i) the Commitments, (ii) the Aggregate Threshold Amount then in effect, and (iii) the Borrowing Base then in effect at such time.
(c) The definition of “Bond Debt” in Section 1.01 of the Credit Agreement is hereby amended by deleting the reference to “March 29, 2017” and replacing it with “the date that is six months following the Maturity Date”.
(d) The first sentence of Section 2.05(c) is hereby deleted in its entirety and replaced with the following:
(c) On the date of each reduction of the aggregate Commitments pursuant to Section 2.04, the Borrower agrees to make a prepayment in respect of the outstanding amount of the Advances to the extent, if any, that the sum of the aggregate unpaid principal amount of the Advances plus the excess, if any, of the Letter of Credit Exposure over the amount held in the Cash Collateral Account at such time exceeds the least of (i) aggregate Commitments, as so reduced, (ii) the Aggregate Threshold Amount then in effect, and (iii) the Borrowing Base then in effect.
(e) The Credit Agreement is hereby amended adding the following new Section 2.05(f):
(f) Threshold Amount Deficiency. If a Threshold Amount Deficiency exists, the Borrower shall, after receipt of a written notice from the Administrative Agent, within 1 Business Day of the date such deficiency notice is received by the Borrower make a prepayment of the Advances or, if the Advances have been repaid in full,
make deposits into the Cash Collateral Account to provide cash collateral for the Letter of Credit Exposure, such that the Threshold Amount Deficiency is cured.
(f) Section 2.07(a)(i) is hereby deleted in its entirety and replaced with the following:
(i) if such issuance, increase, or extension would cause the Letter of Credit Exposure to exceed the lesser of (A) $100,000,000 and (B) an amount equal to the least of (1) the aggregate Commitments at such time, (2) the Aggregate Threshold Amount in effect at such time, and (3) the Borrowing Base in effect at such time minus, in each case under this clause (B), the sum of the aggregate outstanding principal amount of all Advances at such time;
(g) The Credit Agreement is hereby amended by adding the following new Section 2.17:
Section 2.17 Increase in Threshold Amount.
(a) At any time prior to the date that is 5 Business Days immediately preceding the Maturity Date, the Borrower may effectuate one or more increases in the Aggregate Threshold Amount (each such increase being a “Threshold Amount Increase”), by designating either one or more of the existing Lenders (each of which, in its sole discretion, may determine whether and to what degree to participate in such Threshold Amount Increase) to increase its Threshold Amount (an “Increasing Lender”) and, in the case of any other Eligible Assignee (an “Additional Lender”), to become a party to this Agreement as a Lender; provided, however, that (i) each such Threshold Amount Increase shall be equal to at least $5,000,000, and (ii) the Aggregate Threshold Amount, after giving effect to all Threshold Amount Increases effected hereunder, shall at no time exceed the aggregate Commitments. The Borrower shall provide prompt notice of such proposed Threshold Amount Increase pursuant to this Section 2.17 to the Administrative Agent and the Lenders. This Section 2.17 shall not be construed to create any obligation on the Administrative Agent or any of the Lenders to advance or to commit to advance any credit to the Borrower or to arrange for any other Person to advance or to commit to advance any credit to the Borrower.
(b) Each Threshold Amount Increase shall become effective on the date (the “Increase Date”) on or prior to which each of following conditions shall have been satisfied: (i) the receipt by the Administrative Agent of (A) an Assignment and Assumption executed by the Borrower, the Administrative Agent, the Lenders, and all Increasing Lenders and Additional Lenders participating in such Threshold Amount Increase whereby each Lender’s (including, for the avoidance of doubt, each Additional Lender’s) Commitment is reallocated based upon such Lender’s new Threshold Pro Rata Share after giving effect to such Threshold Amount Increase, and, after giving effect to such Assignment and Assumption, each Lender’s Pro Rata Share (expressed as a percentage) shall equal such Lender’s Threshold Pro Rata Share (expressed as a percentage), and (B) new or replacement, as applicable, Notes executed by the Borrower for each Lender based upon such Lender’s new
Commitment after giving effect to the Assignment and Assumption, and (ii) receipt by the Increasing Lenders and Additional Lenders participating in such Threshold Amount Increase of all such fees as agreed to between such Increasing Lenders and Additional Lenders and the Borrower.
(h) Section 6.02(g) of the Credit Agreement is hereby deleted in its entirety and replaced with the new Section 6.02(g):
(g) Bond Debt; provided that, (i) the aggregate outstanding principal amount of all such Bond Debt and Bond Refinancing Debt may not exceed $500,000,000 at any time, (ii) the Borrowing Base then in effect on funding of any such Bond Debt shall automatically reduce by an amount equal to 25% of the aggregate principal amount (without giving effect to any original issue discount) of such issuance (which reduction shall be effective on the next succeeding Business Day after such funding and such reduced Borrowing Base shall remain in effect until the date the Borrowing Base is otherwise redetermined pursuant to Section 2.02), and (iii) either (A) no Second Lien Debt shall be outstanding or (B) the proceeds of the Bond Debt shall be used to repay the Second Lien Debt in full; provided further that, notwithstanding anything to the contrary in clause (ii) hereof, no such reduction in the Borrowing Base shall be required in connection with any Bond Debt in the aggregate principal amount not to exceed $200,000,000 issued between November 6, 2013 and the date that the Borrowing Base is next redetermined pursuant to Section 2.02(b)(i);
Section 5. Representations and Warranties. The Borrower and each Guarantor represents and warrants that: (a) the representations and warranties contained in the Credit Agreement and the representations and warranties contained in the other Loan Documents are true and correct in all material respects on and as of the Effective Date as if made on and as of such date, except to the extent that any such representation or warranty expressly relates solely to an earlier date, in which case such representation or warranty is true and correct in all material respects as of such earlier date; (b) no Default has occurred and is continuing; (c) the execution, delivery and performance of this Amendment are within the corporate or limited liability company, as applicable, power and authority of such Person and have been duly authorized by appropriate corporate or limited liability company, as applicable, action and proceedings; (d) this Amendment constitutes the legal, valid, and binding obligation of such Person enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity; (e) there are no governmental or other third party consents, licenses and approvals required in connection with the execution, delivery, performance, validity and enforceability of this Amendment; (f) the Liens under the Security Instruments are valid and subsisting and secure Borrower’s obligations under the Loan Documents; and (g) as to each Guarantor, it has no defenses to the enforcement of its Guaranty.
Section 6. Conditions to Effectiveness.
(a) This Amendment shall become effective on the Effective Date and enforceable against the parties hereto upon the occurrence of the following conditions precedent:
(i) The Administrative Agent shall have received multiple original counterparts, as requested by the Administrative Agent, of this Amendment duly and validly executed and delivered by duly authorized officers of the Borrower, the Guarantors, the Issuing Lender and the Lenders.
(ii) After giving effect to this Amendment, no Default shall have occurred and be continuing as of the Effective Date.
(iii) The representations and warranties in this Amendment shall be true and correct in all material respects.
(iv) The Borrower shall have paid (i) to the Administrative Agent a fee equal to $330,000 (which is 0.10% $330,000,000 Aggregate Threshold Amount in effect on the Effective Date) (the “Upfront Fee”), and (ii) all costs and expenses which have been invoiced and are payable pursuant to Section 10.04 of the Credit Agreement. The Administrative Agent shall allocate the Upfront Fee for the account of the Lenders in accordance with each Lender’s Threshold Pro Rata Share as of the Effective Date.
Section 7. Acknowledgments and Agreements.
(a) The Borrower acknowledges that on the date hereof all Obligations are payable without defense, offset, counterclaim or recoupment.
(b) The Administrative Agent, the Issuing Lender and the Lenders hereby expressly reserve all of their rights, remedies, and claims under the Loan Documents. Nothing in this Amendment shall constitute a waiver or relinquishment of (i) (1) any Default or Event of Default under any of the Loan Documents, (2) any of the agreements, terms or conditions contained in any of the Loan Documents, or (3) any rights or remedies of the Administrative Agent, the Issuing Lender or any Lender with respect to the Loan Documents, or (ii) the rights of the Administrative Agent, the Issuing Lender or any Lender to collect the full amounts owing to them under the Loan Documents.
(c) Each of the Borrower, the Administrative Agent, the Issuing Lender and the Lenders does hereby adopt, ratify, and confirm the Credit Agreement, as amended and otherwise modified hereby, and acknowledges and agrees that the Credit Agreement, as amended and otherwise modified hereby, is and remains in full force and effect, and the Borrower acknowledges and agrees that its liabilities and obligations under the Credit Agreement, as amended and otherwise modified hereby, are not impaired in any respect by this Amendment.
(d) From and after the Effective Date, all references to the Credit Agreement and the Loan Documents shall mean such Credit Agreement and such Loan Documents as amended and otherwise modified by this Amendment.
(e) This Amendment is a Loan Document for the purposes of the provisions of the other Loan Documents. Without limiting the foregoing, any breach of representations, warranties, and covenants under this Amendment shall be a Default or Event of Default, as applicable, under the Credit Agreement.
Section 8. Reaffirmation of Guaranty. Each Guarantor hereby ratifies, confirms, acknowledges and agrees that its obligations under its Guaranty, as amended and otherwise modified hereby, are in full force and effect and that such Guarantor continues to unconditionally and irrevocably guarantee the full and punctual payment, when due, whether at stated maturity or earlier by acceleration or otherwise, of all of the Obligations, as such Obligations may have been amended by this Amendment, and its execution and delivery of this Amendment does not indicate or establish an approval or consent requirement by the Guarantor in connection with the execution and delivery of amendments, consents or waivers to the Credit Agreement or any of the other Loan Documents.
Section 9. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original and all of which, taken together, constitute a single instrument. This Amendment may be executed by facsimile signature or signature delivered by other electronic means and all such signatures shall be effective as originals.
Section 10. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted pursuant to the Credit Agreement.
Section 11. Invalidity. In the event that any one or more of the provisions contained in this Amendment shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Amendment.
Section 12. Governing Law. This Amendment shall be deemed to be a contract made under and shall be governed by and construed in accordance with the laws of the State of Texas.
Section 13. RELEASE. THE BORROWER ACKNOWLEDGES THAT ON THE DATE HEREOF ALL OBLIGATIONS ARE PAYABLE WITHOUT DEFENSE, OFFSET, COUNTERCLAIM OR RECOUPMENT. IN ADDITION, EACH OF THE BORROWER, THE GUARANTORS AND EACH OF THEIR RESPECTIVE SUBSIDIARIES (FOR THEMSELVES AND THEIR RESPECTIVE SUCCESSORS, AGENTS, ASSIGNS, TRANSFEREES, OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, ATTORNEYS AND AGENTS) HEREBY RELEASES ANY AND ALL CLAIMS, CAUSES OF ACTION OR OTHER DISPUTES IT MAY HAVE AGAINST THE ADMINISTRATIVE AGENT, THE ISSUING LENDER, ANY OF THE LENDERS, LEGAL COUNSEL TO THE ADMINISTRATIVE AGENT, THE ISSUING LENDER OR ANY OF THE LENDERS, CONSULTANTS HIRED BY ANY OF THE FOREGOING, OR ANY OF THEIR RESPECTIVE AFFILIATES, SUBSIDIARIES, SHAREHOLDERS, AGENTS, DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS OR ASSIGNS OF ANY KIND OR NATURE ARISING OUT OF, RELATED TO, OR IN ANY WAY CONNECTED WITH, THE CREDIT AGREEMENT OR THE LOAN DOCUMENTS, IN EACH CASE WHICH MAY HAVE ARISEN ON OR BEFORE THE DATE OF THIS AMENDMENT. EACH OF THE BORROWER, THE GUARANTORS AND THEIR RESPECTIVE SUBSIDIARIES HEREBY ACKNOWLEDGES THAT IT HAS READ THIS AMENDMENT AND HAS CONFERRED WITH ITS COUNSEL AND ADVISORS REGARDING ITS CONTENT, INCLUDING THIS SECTION 13, AND IS FREELY AND VOLUNTARILY ENTERING INTO THIS AMENDMENT, AND HEREBY AGREES TO WAIVE ANY CLAIM THAT THE TERMS
OF THIS AMENDMENT (INCLUDING, WITHOUT LIMITATION, THE RELEASES CONTAINED HEREIN) ARE INVALID OR OTHERWISE UNENFORCEABLE.
Section 14. Entire Agreement. THIS AMENDMENT, THE CREDIT AGREEMENT AS AMENDED BY THIS AMENDMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[signature pages follow]
EXECUTED effective as of the date first above written.
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BORROWER: |
BONANZA CREEK ENERGY, INC. | |
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By: |
/s/ Michael R. Starzer |
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Name: |
Michael R. Starzer |
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Title: |
President and CEO |
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GUARANTORS: |
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BONANZA CREEK ENERGY OPERATING COMPANY, LLC | |
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By: |
/s/ Michael R. Starzer |
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Name: |
Michael R. Starzer |
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Title: |
President and CEO |
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BONANZA CREEK ENERGY RESOURCES, LLC | |
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By: |
/s/ Michael R. Starzer |
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Name: |
Michael R. Starzer |
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Title: |
President and CEO |
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BONANZA CREEK ENERGY MIDSTREAM, LLC | |
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By: |
/s/ Michael R. Starzer |
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Name: |
Michael R. Starzer |
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Title: |
President and CEO |
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BONANZA CREEK ENERGY UPSTREAM LLC | |
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By: |
/s/ Michael R. Starzer |
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Name: |
Michael R. Starzer |
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Title: |
President and CEO |
Signature Page to Amendment No. 8
Bonanza Creek Energy, Inc.
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HOLMES EASTERN COMPANY, LLC | |
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By: |
/s/ Michael R. Starzer |
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Name: |
Michael R. Starzer |
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Title: |
President and CEO |
Signature Page to Amendment No. 8
Bonanza Creek Energy, Inc.
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ADMINISTRATIVE AGENT/ISSUING LENDER/LENDER: |
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KEYBANK NATIONAL ASSOCIATION, as Administrative Agent, Issuing Lender, and a Lender | |
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By: |
/s/ Paul J. Pace |
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Name: |
Paul J. Pace |
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Title: |
Senior Vice President |
Signature Page to Amendment No. 8
Bonanza Creek Energy, Inc.
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LENDER: |
COMPASS BANK, as a Lender | |
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By: |
/s/ James Neblett |
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Name: |
James Neblett |
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Title: |
Vice President |
Signature Page to Amendment No. 8
Bonanza Creek Energy, Inc.
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LENDER: |
SOCIÉTÉ GÉNÉRALE, as a Lender | |
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By: |
/s/ Elena Robciuc |
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Name: |
Elena Robciuc |
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Title: |
Managing Director |
Signature Page to Amendment No. 8
Bonanza Creek Energy, Inc.
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LENDER: |
BMO HARRIS FINANCING, INC., as a Lender | |
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By: |
/s/ Kevin Utsey |
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Name: |
Kevin Utsey |
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Title: |
Director |
Signature Page to Amendment No. 8
Bonanza Creek Energy, Inc.
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LENDER: |
WELLS FARGO BANK. N.A., as a Lender | |
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By: |
/s/ Suzanne Ridenhour |
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Name: |
Suzanne Ridenhour |
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Title: |
Director |
Signature Page to Amendment No. 8
Bonanza Creek Energy, Inc.
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LENDER: |
JPMORGAN CHASE BANK, N.A., as a Lender | |
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By: |
/s/ David Morris |
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Name: |
David Morris |
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Title: |
Authorized Officer |
Signature Page to Amendment No. 8
Bonanza Creek Energy, Inc.
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LENDER: |
ROYAL BANK OF CANADA, as a Lender | |
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By: |
/s/ Mark Lumpkin, Jr. |
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Name: |
Mark Lumpkin, Jr. |
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Title: |
Authorized Signatory |
Signature Page to Amendment No. 8
Bonanza Creek Energy, Inc.
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LENDER: |
CADENCE BANK, N.A., as a Lender | |
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By: |
/s/ Eric Broussard |
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Name: |
Eric Broussard |
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Title: |
Senior Vice President |
Signature Page to Amendment No. 8
Bonanza Creek Energy, Inc.
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LENDER: |
IBERIABANK, as a Lender | |
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By: |
/s/ Cameron Jones |
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Name: |
Cameron Jones |
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Title: |
Vice President |
Signature Page to Amendment No. 8
Bonanza Creek Energy, Inc.
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LENDER: |
THE BANK OF NOVA SCOTIA, as a Lender | |
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By: |
/s/ Justin Perdue |
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Name: |
Justin Perdue |
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Title: |
Director |
Signature Page to Amendment No. 8
Bonanza Creek Energy, Inc.
Exhibit 99.2
Bonanza Creek Energy Announces Third Quarter 2013 Financial Results and Provides an Operations Update; Sales Volumes Up 88% over Third Quarter 2012 and 32% over Previous Quarter
DENVER, November 7, 2013 — Bonanza Creek Energy, Inc. (NYSE: BCEI) today reported its third quarter 2013 financial and operating results, including an update to its catalyst well testing program in the Wattenberg Field and its Cotton Valley oil development in southern Arkansas.
Key third quarter 2013 highlights from continuing operations(1) include:
· Achieved record sales volumes of 17,656 barrels of oil equivalent per day (Boe/d)
· Increased Wattenberg horizontal production to an average of 11,128 Boe/d
· Accelerated production in the Mid-Continent region to 5,854 Boe/d
· Reported strong well results in the Codell formation, Niobrara C Bench and Niobrara B Bench downspacing tests
· Financial performance compared to third quarter 2012:
· Net revenue of $126.0 million, an increase of 116%
· Adjusted EBITDAX(2) of $86.7 million, an increase of 119%
· Unit cash margin(2) of $57.74 per Boe, an increase of 28%
· Net income of $17.8 million, or $0.44 per diluted share, an increase of 420%
· Adjusted net income(2) of $25.6 million, or $0.63 per diluted share, an increase of 210%
(1) Bonanza Creek began the divestiture process of its California properties in the second quarter 2012, with one property remaining to be sold as of September 30, 2013. Under generally accepted accounting principles, the results of operations for the California properties are presented as “discontinued operations.”
(2) Non-GAAP measure, see attached Reconciliation Schedules
Michael Starzer, Bonanza Creek’s President and Chief Executive Officer, commented: “We are pleased to report strong financial and operating results for the third quarter. The Company ramped up its drilling and completion efforts during the first half of 2013 with the expectation that a significant increase in volumes would occur in the third and fourth quarters. I wish to congratulate our operating teams in their continuing development of Bonanza Creek’s assets and the evaluation of upside potential. The Company’s largely contiguous acreage positions in the Wattenberg Field and Mid-Continent continue to provide opportunities to drive down costs and add value for our shareholders.”
Tony Buchanon, Bonanza Creek’s Executive Vice President and Chief Operating Officer, commented: “Our catalyst testing program continues to show encouraging results in each of the Niobrara and Codell horizons providing further comfort that our reserve assumptions are appropriate and our inventory outlook is secure. We have begun drilling our 15-well super-section test and expect to finish drilling by year-end. With completion operations scheduled for January and February, we expect meaningful production to start late in the first quarter and we look forward to communicating those results next year.”
Third Quarter 2013 Financial Results from Continuing Operations
Net revenue for third quarter 2013 was $126.0 million, compared to $58.3 million for third quarter 2012. Crude oil and liquids accounted for approximately 90% of total revenue.
Average realized prices for third quarter 2013, before the effect of commodity derivatives, were $100.37 per Bbl of oil, $4.58 per Mcf of natural gas and $55.14 per Bbl of NGLs, compared to $87.75 per Bbl of oil, $3.36 per Mcf of natural gas and $56.41 per Bbl of NGLs for third quarter 2012.
Lease operating expense for third quarter 2013 was $13.0 million, or $7.98 per Boe, compared to $8.4 million, or $9.76 per Boe, for third quarter 2012.
General and administrative expense (“G&A”) for third quarter 2013 was $13.8 million, or $8.50 per Boe, compared to $9.3 million, or $10.79 per Boe, for third quarter 2012. Cash G&A (non-GAAP, excludes stock-based compensation expense) was $11.2 million, or $6.87 per Boe for the third quarter of 2013 compared to $7.9 million, or $9.12 per Boe for third quarter 2012.
Depreciation, depletion and amortization for third quarter 2013 was $36.8 million, or $22.63 per Boe, compared to $17.7 million, or $20.48 per Boe, for the third quarter 2012.
Interest expense for third quarter 2013 was $6.2 million compared to $1.1 million for the third quarter 2012. The increase in interest expense is primarily related to the issuance of $300 million of 6.75% senior notes on April 9, 2013.
Adjusted EBITDAX for third quarter 2013 was $86.7 million, compared to $39.6 million for the third quarter 2012. Unhedged per unit cash margin for the quarter was $57.74 per Boe, compared to $45.05 for third quarter 2012.
Net income for third quarter 2013 was $17.8 million, or $0.44 per diluted share, compared to net income of $3.4 million, or $0.09 per diluted share, for third quarter 2012. Excluding the impact of unrealized commodity derivative losses, gain on sale and impairment of oil and gas properties and stock-based compensation expense, adjusted net income for third quarter 2013 was $25.6 million, or $0.63 per diluted share, compared to adjusted net income of $8.4 million, or $0.21 per diluted share for third quarter 2012.
Operations Update
During third quarter 2013, the Company achieved an average production rate of 17,656 Boe/d from continuing operations, comprised of 66% crude oil, 6% NGLs, and 28% natural gas, increasing total production by 88% over third quarter 2012 and 32% over the previous quarter. The Company also maintained its top safety record with no recordable lost time incidents for the nine months ended September 30.
Rocky Mountain Region — Wattenberg Horizontal Development
During third quarter 2013, the Rocky Mountain region produced 11,802 Boe/d, or 67% of total company volumes, with 11,128 Boe/d coming from horizontal wells. Production increased 135% and the contribution from horizontal wells grew 271% over third quarter 2012. Compared to the previous quarter, Rocky Mountain volumes increased 41% and horizontal production volumes grew by 55%.
The Company spud 27 gross (26.1 net) horizontal wells and tied 30 gross (28.3 net) horizontal wells into sales during the quarter. For the nine months ended September 30, it spud 68 gross (63.4 net) horizontal wells and tied in 58 gross (53.4 net) horizontal wells into sales. It averaged 10.7 days spud to spud during the third quarter with three full-time rigs, achieving a new record
spud to spud time of seven days. The Company is currently drilling with those three rigs on its super-section test. Drilling on the super-section is scheduled to conclude by year-end with completions expected to occur in January and February.
The catalyst well testing program continues to achieve positive results, further demonstrating the ability to enhance recovery of original oil in place. The Company has been actively testing the Codell formation and the Niobrara C Bench, as well as 40-acre spacing density and extended reach laterals in the Niobrara B Bench.
The Company now has three Codell wells on production with an average 30-day production rate of 540 Boe/d at 69% crude oil. It also has five Niobrara C Bench wells currently producing with an average 30-day production rate of 422 Boe/d at 83% crude oil. Successful testing of the Niobrara C Bench continues to demonstrate its viability across Bonanza Creek’s Wattenberg acreage position. In addition, the Codell formation has delivered results to date that have exceeded expectations.
The Company’s 40-acre spacing Niobrara B Bench testing is ongoing. The first two wells drilled as offsets to an existing well produced 30-day average rates of approximately 418 Boe/d at 80% crude oil, performing within the expected range for average 80-acre Niobrara B Bench wells in that area. The subsequent four well pilot test achieved a 30-day average rate of 343 Boe/d at 83% crude oil with a 60-day average rate of 292 Boe/d at 77% crude oil. Isolated operational issues hampered post-frac clean-up on two wells and all four wells were affected by higher than anticipated line pressures, primarily restricting initial gas rate.
The extended reach lateral testing program continues to exhibit strong production resulting from a shallower decline profile than the standard lateral length wells. Most notably, the second extended reach lateral well had an initial 30-day average rate of 767 Boe/d and a 60-day average rate of 752 Boe/d. The Company’s third extended reach lateral was drilled and completed to a lateral length of approximately 9,000 feet and is currently in its early flowback period.
During the quarter, work continued on a number of significant infrastructure projects designed to reduce system gathering pressures. Bonanza Creek proactively installed upgrades to its gas gathering system and increased its compression capabilities, while its midstream partners increased gas processing capacity and added area compression facilities. Also during the quarter, the Company installed a pipeline system to supply frac water to drill sites in an effort to reduce costs and truck traffic.
Mid-Continent Cotton Valley Program
The Mid-Continent region contributed 5,854 Boe/d, or 33% of total company net sales volumes for third quarter 2013, comprised of 51% crude oil, 17% natural gas liquids and 32% natural gas. Sales volumes increased by approximately 34% over third quarter 2012.
During the third quarter 2013, Bonanza Creek spud 12 gross (8.3 net) 10-acre spaced Cotton Valley wells, tied 14 gross (10.3 net) wells into sales and performed 32 gross (27.5 net) recompletions. For the nine months ended September 30, it spud 39 gross (31.7 net) wells, tied 38 gross (32.3 net) wells into sales and performed 82 gross (73.9 net) recompletions.
In 2013, the Company has drilled eight wells to test 5-acre spacing. There has been no observed interference and initial production and subsequent recompletion efforts have all been above expectations.
Financial and Risk Management Update
Debt and Liquidity
As of September 30, 2013, Bonanza Creek had a $600 million revolving credit facility with approximately $38.5 million drawn on a borrowing base of $330 million. In addition, the Company had a letter of credit totaling $36.0 million and cash totaling $17.4 million, resulting in total liquidity of $272.9 million. On November 6, 2013, the lenders under the Company’s revolving credit agreement completed their semi-annual borrowing base redetermination which resulted in an increase of the available borrowing base to $450 million. The Company elected to limit bank commitments to $330 million while reserving the option to access, at the Company’s request, the full $450 million prior to the next semi-annual redetermination. The maturity date of the credit facility was also increased by one year to September 15, 2017. Based on cash on hand as of September 30, 2013, and available borrowings under the credit facility following the redetermination of the borrowing base, the Company had approximately $392.9 million available to fund its operations and development and exploration activities as of November 6, 2013.
Commodity Derivatives Positions
The following table summarizes the Company’s crude oil and natural gas commodity derivative positions as of September 30, 2013 and settling quarterly thereafter:
|
Settlement |
|
Swap |
|
Fixed |
|
Collar |
|
Average |
|
Average |
|
Average |
|
|
Oil |
|
Bbl/d |
|
$ |
|
Bbl/d |
|
$ |
|
$ |
|
$ |
|
|
Q4 2013 |
|
3,939 |
|
93.81 |
|
5,022 |
|
|
|
87.99 |
|
101.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2014 |
|
2,133 |
|
96.19 |
|
5,617 |
|
|
|
86.33 |
|
97.09 |
|
|
Q2 2014 |
|
2,126 |
|
96.21 |
|
4,846 |
|
|
|
86.55 |
|
96.72 |
|
|
Q3 2014 |
|
1,370 |
|
94.40 |
|
4,326 |
|
|
|
86.16 |
|
96.57 |
|
|
Q4 2014 |
|
1,370 |
|
94.40 |
|
4,326 |
|
|
|
86.16 |
|
96.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2014 |
|
|
|
|
|
1,000 |
|
60.00 |
|
85.00 |
|
99.50 |
|
|
Q2 2014 |
|
|
|
|
|
1,000 |
|
60.00 |
|
85.00 |
|
99.50 |
|
|
Q3 2014 |
|
|
|
|
|
1,000 |
|
60.00 |
|
85.00 |
|
99.50 |
|
|
Q4 2014 |
|
|
|
|
|
1,000 |
|
60.00 |
|
85.00 |
|
99.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2015 |
|
|
|
|
|
1,500 |
|
60.00 |
|
80.00 |
|
98.15 |
|
|
Gas |
|
MMBtu/d |
|
$ |
|
|
Q4 2013 |
|
166 |
|
6.40 |
|
Conference Call Information
Bonanza Creek will host a conference call on Friday, November 8, 2013 at 9:00 a.m. Mountain Time (11:00 a.m. Eastern Time). To access the live interactive call, please dial (877) 474-9504 or (857) 244-7557 and use the passcode 44587551. This call is being webcast and can be accessed at Bonanza Creek’s website www.bonanzacrk.com for one year after the event.
About Bonanza Creek Energy, Inc.
Bonanza Creek Energy, Inc. is an independent oil and natural gas Company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids-rich natural gas in the United States. The Company’s assets and operations are concentrated primarily in the Rocky Mountains in the Wattenberg Field, focused on the Niobrara oil shale, and in southern Arkansas, focused on the oily Cotton Valley sands. The Company’s common shares are listed for trading on the NYSE under the symbol: “BCEI.” For more information about the Company, please visit www.bonanzacrk.com. Please note that the Company routinely posts important information about the Company under the Investor Relations section of its website.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Company based on management’s experience, perception of historical trends and technical analyses, current conditions, anticipated future developments and other factors believed to be appropriate and reasonable by management. When used in this press release, the words “will,” “potential,” “believe,” “estimate,” “intend,” “expect,” “may,” “should,” “anticipate,” “could,” “plan,” “predict,” “project,” “profile,” “model” or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These statements include statements regarding forecasted production; forecasted completions; liquidity; timing and pace of drilling; results of the Company’s catalyst well testing program; viability of the Company’s acreage position; gathering pressures; and reduction of costs and traffic related to supplying frac water. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, that may cause actual results to differ materially from those implied or expressed by the forward-looking statements, including the following: changes in natural gas, oil and NGL prices; general economic conditions, including the performance of financial markets and interest rates; drilling results; shortages of oilfield equipment, services and personnel; operating risks such as unexpected drilling conditions; ability to acquire adequate supplies of water; risks related to derivative instruments; access to adequate gathering systems and pipeline take-away capacity; and pipeline and refining capacity constraints. Further information on such assumptions, risks and uncertainties is available in the Company’s SEC filings. We refer you to the discussion of risk factors in our Annual Report on Form 10-K for the year ended December 31, 2012 and other filings submitted by us to the Securities Exchange Commission. The Company’s SEC filings are available on the Company’s website at www.bonanzacrk.com and on the SEC’s website at www.sec.gov. All of the forward-looking statements made in this press release are qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, including guidance, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
For further information, please contact:
Mr. Ryan Zorn
Vice President — Finance
720-440-6172
Mr. James Masters
Investor Relations Manager
720-440-6121
Schedule 1: Statement of Operations
(in thousands, expect for per share data, unaudited)
|
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||
|
|
|
September 30, |
|
September 30, |
| ||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
NET REVENUES |
|
|
|
|
|
|
|
|
| ||||
|
Oil and gas sales |
|
$ |
125,973 |
|
$ |
58,328 |
|
$ |
288,798 |
|
$ |
157,613 |
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
| ||||
|
Lease operating |
|
12,958 |
|
8,444 |
|
36,986 |
|
22,506 |
| ||||
|
Severance and ad valorem taxes |
|
8,086 |
|
3,022 |
|
18,251 |
|
9,387 |
| ||||
|
Exploration |
|
2,099 |
|
6,359 |
|
3,524 |
|
9,564 |
| ||||
|
Depreciation, depletion and amortization |
|
36,750 |
|
17,716 |
|
89,630 |
|
41,751 |
| ||||
|
Impairment of oil and gas properties |
|
— |
|
269 |
|
— |
|
269 |
| ||||
|
General and administrative (including $2,652, $1,446, $9,716, and $2,912, respectively, of stock-based compensation) |
|
13,811 |
|
9,335 |
|
40,260 |
|
22,410 |
| ||||
|
Total operating expenses |
|
73,704 |
|
45,145 |
|
188,651 |
|
105,887 |
| ||||
|
INCOME FROM OPERATIONS |
|
52,269 |
|
13,183 |
|
100,147 |
|
51,726 |
| ||||
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
| ||||
|
Other income (loss) |
|
(54 |
) |
(91 |
) |
(3 |
) |
(83 |
) | ||||
|
Interest expense |
|
(6,180 |
) |
(1,125 |
) |
(14,013 |
) |
(2,342 |
) | ||||
|
Unrealized gain (loss) in fair value of commodity derivatives |
|
(10,017 |
) |
(9,007 |
) |
(4,576 |
) |
2,985 |
| ||||
|
Realized gain (loss) in fair value of commodity derivatives |
|
(6,872 |
) |
(93 |
) |
(9,867 |
) |
(1,173 |
) | ||||
|
Total other (loss) |
|
(23,123 |
) |
(10,316 |
) |
(28,459 |
) |
(613 |
) | ||||
|
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES |
|
$ |
29,146 |
|
$ |
2,867 |
|
$ |
71,688 |
|
$ |
51,113 |
|
|
Income tax benefit (expense) |
|
(11,221 |
) |
(1,223 |
) |
(27,607 |
) |
(19,797 |
) | ||||
|
INCOME FROM CONTINUING OPERATIONS |
|
17,925 |
|
1,644 |
|
44,081 |
|
31,316 |
| ||||
|
DISCONTINUED OPERATIONS |
|
|
|
|
|
|
|
|
| ||||
|
Income (loss) from operations associated with oil and gas properties held for sale |
|
(234 |
) |
(1,410 |
) |
(535 |
) |
(792 |
) | ||||
|
Gain (loss) on sale of oil and gas properties |
|
— |
|
4,280 |
|
— |
|
4,280 |
| ||||
|
Income tax (expense) benefit |
|
90 |
|
(1,093 |
) |
206 |
|
(1,331 |
) | ||||
|
Income (loss) associated with oil and gas properties held for sale |
|
(144 |
) |
1,777 |
|
(329 |
) |
2,157 |
| ||||
|
NET INCOME |
|
$ |
17,781 |
|
$ |
3,421 |
|
$ |
43,752 |
|
$ |
33,473 |
|
|
BASIC AND DILUTED INCOME (LOSS) PER SHARE |
|
|
|
|
|
|
|
|
| ||||
|
Income (loss) from continuing operations |
|
$ |
0.44 |
|
$ |
0.04 |
|
$ |
1.10 |
|
$ |
0.79 |
|
|
Income (loss) from discontinued operations |
|
$ |
(0.00 |
) |
$ |
0.05 |
|
$ |
(0.01 |
) |
$ |
0.05 |
|
|
Net income (loss) per common share |
|
$ |
0.44 |
|
$ |
0.09 |
|
$ |
1.09 |
|
$ |
0.85 |
|
|
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK |
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
40,267 |
|
39,477 |
|
40,210 |
|
39,476 |
| ||||
|
Diluted |
|
40,321 |
|
39,477 |
|
40,266 |
|
39,476 |
| ||||
Schedule 2: Statement of Cash Flows
(in thousands, unaudited)
|
|
|
Nine Months Ended |
| ||||
|
|
|
September 30, |
| ||||
|
|
|
2013 |
|
2012 |
| ||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
| ||
|
Net income |
|
$ |
43,752 |
|
$ |
33,473 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
| ||
|
Depreciation, depletion and amortization |
|
89,897 |
|
43,901 |
| ||
|
Impairment of oil and gas properties |
|
— |
|
1,917 |
| ||
|
Deferred income taxes |
|
27,401 |
|
20,557 |
| ||
|
Stock compensation |
|
9,716 |
|
2,912 |
| ||
|
Exploration |
|
1,688 |
|
7,379 |
| ||
|
Amortization of deferred financing costs |
|
1,120 |
|
500 |
| ||
|
Accretion of contractual obligation for land acquisition |
|
571 |
|
— |
| ||
|
Valuation (increase) in commodity derivatives |
|
4,576 |
|
(2,985 |
) | ||
|
(Gain) on sale of oil and gas properties |
|
— |
|
(4,280 |
) | ||
|
Other |
|
— |
|
71 |
| ||
|
(Increase) decrease in operating assets: |
|
|
|
|
| ||
|
Accounts receivable |
|
(32,081 |
) |
(18,153 |
) | ||
|
Prepaid expenses and other assets |
|
727 |
|
353 |
| ||
|
(Decrease) increase in operating liabilities: |
|
|
|
|
| ||
|
Accounts payable and accrued liabilities |
|
33,961 |
|
7,149 |
| ||
|
Settlement of asset retirement obligations |
|
(73 |
) |
(146 |
) | ||
|
Net cash provided by operating activities |
|
181,255 |
|
92,648 |
| ||
|
|
|
|
|
|
| ||
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
| ||
|
Proceeds from sale of oil and gas properties |
|
— |
|
5,212 |
| ||
|
Acquisition of oil and gas properties |
|
(10,969 |
) |
(12,809 |
) | ||
|
Payments of contractual obligations |
|
(12,000 |
) |
— |
| ||
|
Exploration and development of oil and gas properties |
|
(306,685 |
) |
(183,357 |
) | ||
|
Natural gas plant capital expenditures |
|
(4,459 |
) |
(12,009 |
) | ||
|
Decrease in restricted cash |
|
79 |
|
252 |
| ||
|
Additions to property and equipment-non oil and gas |
|
(3,695 |
) |
(2,203 |
) | ||
|
Net cash (used) in investing activities |
|
(337,729 |
) |
(204,914 |
) | ||
|
|
|
|
|
|
| ||
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
| ||
|
Increase in bank revolving credit |
|
72,000 |
|
115,700 |
| ||
|
Payment on bank revolving credit |
|
(191,500 |
) |
— |
| ||
|
Proceeds from sale of senior notes |
|
300,000 |
|
— |
| ||
|
Offering costs related to sale of senior notes |
|
(7,343 |
) |
— |
| ||
|
Common stock returned for tax withholdings |
|
(3,503 |
) |
— |
| ||
|
Deferred financing costs |
|
(79 |
) |
(678 |
) | ||
|
Net cash provided by financing activities |
|
169,575 |
|
115,022 |
| ||
|
Net increase in cash and cash equivalents |
|
13,101 |
|
2,757 |
| ||
|
|
|
|
|
|
| ||
|
Cash and cash equivalents, beginning of period |
|
4,268 |
|
2,089 |
| ||
|
Cash and cash equivalents, end of period |
|
$ |
17,369 |
|
$ |
4,846 |
|
Schedule 3: Condensed Balance Sheet
(in thousands, unaudited)
|
|
|
September 30, |
|
December 31, |
| ||
|
|
|
2013 |
|
2012 |
| ||
|
Assets |
|
|
|
|
| ||
|
Current assets |
|
$ |
101,850 |
|
$ |
55,304 |
|
|
|
|
|
|
|
| ||
|
Oil and gas properties and gas plant, net |
|
1,180,800 |
|
938,975 |
| ||
|
Other assets |
|
16,680 |
|
7,629 |
| ||
|
Oil and gas properties held for sale, less accumulated depreciation, depletion, and amortization |
|
442 |
|
582 |
| ||
|
Total Assets |
|
$ |
1,299,772 |
|
$ |
1,002,490 |
|
|
|
|
|
|
|
| ||
|
Liabilities and Stockholders’ Equity |
|
|
|
|
| ||
|
Current liabilities |
|
145,823 |
|
102,603 |
| ||
|
|
|
|
|
|
| ||
|
Long-term debt |
|
338,500 |
|
158,000 |
| ||
|
Deferred taxes |
|
137,778 |
|
110,377 |
| ||
|
Other long-term liabilities |
|
49,189 |
|
52,992 |
| ||
|
Total Liabilities |
|
$ |
671,290 |
|
$ |
423,972 |
|
|
|
|
|
|
|
| ||
|
Stockholders’ Equity |
|
628,482 |
|
578,518 |
| ||
|
Total Liabilities and Stockholders’ Equity |
|
$ |
1,299,772 |
|
$ |
1,002,490 |
|
Schedule 4: Volumes and Realized Prices (Before the Effect of Commodity Hedges)
(unaudited)
|
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||
|
|
|
September 30, |
|
September 30, |
| ||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
Wellhead Volumes and Prices |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Crude Oil and Condensate Sales Volumes (Bbl/d) |
|
|
|
|
|
|
|
|
| ||||
|
Rocky Mountains |
|
8,736 |
|
3,667 |
|
6,595 |
|
2,923 |
| ||||
|
Mid-Continent |
|
2,988 |
|
2,497 |
|
2,928 |
|
2,415 |
| ||||
|
Total |
|
11,724 |
|
6,163 |
|
9,523 |
|
5,338 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Crude Oil and Condensate Realized Prices ($/Bbl) |
|
|
|
|
|
|
|
|
| ||||
|
Rocky Mountains |
|
$ |
97.80 |
|
$ |
84.33 |
|
$ |
91.35 |
|
$ |
87.17 |
|
|
Mid-Continent |
|
107.88 |
|
92.76 |
|
100.87 |
|
96.81 |
| ||||
|
Composite |
|
$ |
100.37 |
|
$ |
87.75 |
|
$ |
94.28 |
|
$ |
91.53 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Natural Gas Liquids Sales Volumes (Bbl/d) |
|
|
|
|
|
|
|
|
| ||||
|
Rocky Mountains |
|
40 |
|
— |
|
28 |
|
— |
| ||||
|
Mid-Continent |
|
1,022 |
|
724 |
|
895 |
|
739 |
| ||||
|
Total |
|
1,062 |
|
724 |
|
922 |
|
739 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Natural Gas Liquids Realized Prices ($/Bbl) |
|
|
|
|
|
|
|
|
| ||||
|
Rocky Mountains |
|
$ |
20.52 |
|
$ |
63.04 |
|
$ |
29.76 |
|
$ |
— |
|
|
Mid-Continent |
|
56.48 |
|
56.70 |
|
53.40 |
|
55.90 |
| ||||
|
Composite |
|
$ |
55.14 |
|
$ |
56.41 |
|
$ |
52.70 |
|
$ |
55.90 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Natural Gas Sales Volumes (Mcf/d) |
|
|
|
|
|
|
|
|
| ||||
|
Rocky Mountains |
|
18,156 |
|
8,381 |
|
15,036 |
|
5,877 |
| ||||
|
Mid-Continent |
|
11,058 |
|
6,712 |
|
9,316 |
|
7,775 |
| ||||
|
Total |
|
29,214 |
|
15,093 |
|
24,352 |
|
13,652 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Natural Gas Realized Prices ($/Mcf) |
|
|
|
|
|
|
|
|
| ||||
|
Rocky Mountains |
|
$ |
5.05 |
|
$ |
3.55 |
|
$ |
5.01 |
|
$ |
4.07 |
|
|
Mid-Continent |
|
3.79 |
|
3.12 |
|
3.84 |
|
2.67 |
| ||||
|
Composite |
|
$ |
4.58 |
|
$ |
3.36 |
|
$ |
4.56 |
|
$ |
3.27 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Crude Oil Equivalent Sales Volumes (Boe/d) |
|
|
|
|
|
|
|
|
| ||||
|
Rocky Mountains |
|
11,802 |
|
5,033 |
|
9,128 |
|
3,917 |
| ||||
|
Mid-Continent |
|
5,854 |
|
4,370 |
|
5,376 |
|
4,466 |
| ||||
|
Total |
|
17,656 |
|
9,403 |
|
14,504 |
|
8,383 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total Sales Volumes (MMBoe) |
|
1.6 |
|
0.9 |
|
4.0 |
|
2.3 |
| ||||
Schedule 5: Adjusted Net Income
(in thousands, except per share amounts, unaudited)
This release contains the non-GAAP financial measures adjusted net income and adjusted net income per diluted share, which exclude (1) unrealized loss or gain in fair value of commodity derivatives, (2) gain on sale of oil and gas properties, (3) impairment of oil and gas properties and (4) stock-based compensation expense. The amounts included in the calculation of adjusted net income and adjusted net income per diluted share, below, were computed in accordance with GAAP. We believe adjusted net income and adjusted net income per diluted share are useful to investors because they provide readers with a more meaningful measure of our profitability before recording certain items the timing or amount of which cannot be reasonably determined. However, these measures are provided in addition to, not as an alternative for and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes in our SEC filings and posted on our website. The following tables provide a reconciliation of adjusted net income for the three and nine months ended September 30, 2013 and 2012, respectively.
|
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||
|
|
|
September 30, |
|
September 30, |
| ||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
Net Income |
|
$ |
17,781 |
|
$ |
3,421 |
|
$ |
43,752 |
|
$ |
33,473 |
|
|
Unrealized loss (gain) in fair value of derivatives |
|
10,017 |
|
9,007 |
|
4,576 |
|
(2,985 |
) | ||||
|
(Gain) on sale of oil and gas properties |
|
— |
|
(4,280 |
) |
— |
|
(4,280 |
) | ||||
|
Impairment of oil and gas properties |
|
— |
|
1,917 |
|
— |
|
1,917 |
| ||||
|
Stock-based compensation |
|
2,652 |
|
1,446 |
|
9,716 |
|
2,912 |
| ||||
|
Total adjustments before tax |
|
12,669 |
|
8,090 |
|
14,292 |
|
(2,436 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Adjustment of income tax effect |
|
4,878 |
|
3,268 |
|
5,502 |
|
938 |
| ||||
|
Total adjustments after tax |
|
7,791 |
|
4,822 |
|
8,790 |
|
(1,498 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Adjusted net income |
|
$ |
25,572 |
|
$ |
8,243 |
|
$ |
52,542 |
|
$ |
31,975 |
|
|
Adjusted net income per diluted share |
|
$ |
0.63 |
|
$ |
0.21 |
|
$ |
1.31 |
|
$ |
0.81 |
|
Schedule 6: Adjusted EBITDAX
(in thousands, except per share amounts, unaudited)
We define adjusted EBITDAX as net income, plus (1) exploration expense, (2) depreciation, depletion and amortization expense, (3) impairment of oil and gas properties, (4) stock-based compensation expense, (5) gain on sale of oil and gas properties, (6) interest expense, (7) unrealized loss or gain in fair value of commodity derivatives, and (8) income tax expense. Adjusted EBITDAX is not a measure of net income or cash flow as determined by GAAP. Adjusted EBITDAX is presented herein and reconciled to the GAAP measure of net income because of its wide acceptance by the investment community as a financial indicator of a Company’s ability to internally fund development and exploration activities. This measure is provided in addition to, not as an alternative for and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes) in our SEC filings and posted on our website. The following table provides a reconciliation of adjusted EBITDAX to net income for the three and nine months ended September 30, 2013 and 2012, respectively.
|
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||
|
|
|
September 30, |
|
September 30, |
| ||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
Net Income |
|
$ |
17,781 |
|
$ |
3,421 |
|
$ |
43,752 |
|
$ |
33,473 |
|
|
Exploration |
|
2,099 |
|
6,365 |
|
3,590 |
|
9,581 |
| ||||
|
Depreciation, depletion and amortization |
|
36,814 |
|
18,286 |
|
89,897 |
|
43,901 |
| ||||
|
Impairment of oil and gas properties |
|
— |
|
1,917 |
|
— |
|
1,917 |
| ||||
|
Stock-based compensation |
|
2,653 |
|
1,446 |
|
9,716 |
|
2,912 |
| ||||
|
(Gain) on sale of oil and gas properties |
|
— |
|
(4,280 |
) |
— |
|
(4,280 |
) | ||||
|
Interest expense |
|
6,180 |
|
1,126 |
|
14,013 |
|
2,342 |
| ||||
|
Unrealized loss (gain) in fair value of commodity derivatives |
|
10,017 |
|
9,007 |
|
4,576 |
|
(2,985 |
) | ||||
|
Income tax expense |
|
11,131 |
|
2,315 |
|
27,401 |
|
21,129 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Adjusted EBITDAX |
|
$ |
86,675 |
|
$ |
39,603 |
|
$ |
192,945 |
|
$ |
107,990 |
|
|
Adjusted EBITDAX per diluted share |
|
$ |
2.15 |
|
$ |
1.00 |
|
$ |
4.79 |
|
$ |
2.74 |
|
Schedule 7: Cash Margin
(in thousands)
We define unhedged cash margin per Boe as oil and natural gas revenues, less (1) lease operating expense, (2) oil and natural gas taxes, and (3) cash G&A expense (excludes stock-based compensation), divided by production for continuing operations. Cash margin is presented herein and reconciled to the GAAP measure of net revenues because of its wide acceptance by the investment community as a financial indicator of a Company’s ability to generate cash flow from sales. This measure is provided in addition to, not as an alternative for and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes) in our SEC filings and posted on our website. The following table provides a reconciliation of cash margin to net revenues for the three and nine months ended September 30, 2013 and 2012, respectively.
|
|
|
Three Months Ended |
|
Nine Months Ended |
| ||||||||
|
|
|
September 30, |
|
September 30, |
| ||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
Net revenues |
|
$ |
125,973 |
|
$ |
58,328 |
|
$ |
288,798 |
|
$ |
157,613 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Lease operating expense |
|
12,958 |
|
8,444 |
|
36,986 |
|
22,506 |
| ||||
|
Severance & ad valorem taxes |
|
8,086 |
|
3,022 |
|
18,251 |
|
9,387 |
| ||||
|
Cash G&A expense |
|
11,159 |
|
7,889 |
|
30,544 |
|
19,498 |
| ||||
|
Cash Operating Margin |
|
$ |
93,770 |
|
$ |
38,973 |
|
$ |
203,017 |
|
$ |
106,222 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Production from continuing operations (MBoe) |
|
1,624 |
|
865 |
|
3,960 |
|
2,289 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Unhedged cash margin per Boe |
|
$ |
57.74 |
|
$ |
45.05 |
|
$ |
51.27 |
|
$ |
46.41 |
|