EX-99.1 2 pressrelease-3q2019.htm EXHIBIT 99.1 Exhibit



logo.jpg
BRIGHAM MINERALS, INC.
REPORTS RECORD THIRD QUARTER 2019 OPERATING AND FINANCIAL RESULTS

AUSTIN, Texas - (BUSINESS WIRE) - November 7, 2019 - Brigham Minerals, Inc. (NYSE: MNRL) (“Brigham Minerals,” “Brigham,” or the “Company”), a leading mineral and royalty interest acquisition company, today announced record operating and financial results for the quarter ended September 30, 2019, as well as recent developments.

Q3 2019 OPERATING AND FINANCIAL HIGHLIGHTS AND RECENT DEVELOPMENTS

•
Record daily production volumes of 7,828 Boe/d (69% liquids, 54% oil)
◦
Up 16% sequentially from Q2 2019 and up 98% from Q3 2018
◦
Permian and Anadarko Basin production volumes up 20% and 33% sequentially from Q2 2019 to a record 3,489 and 2,423 Boe/d, respectively

•
Record mineral and royalty revenues totaling $24.1 million
◦
Up 5% sequentially from Q2 2019 despite a 10% reduction in realized pricing and up 47% from Q3 2018

•
Net income totaling $8.5 million

•
Adjusted EBITDA ex Lease Bonus(1) totaling $18.3 million
◦
Up 9% sequentially from Q2 2019 and up 37% from Q3 2018

•
Declared Q3 2019 dividend of $0.33 per share of Class A common stock

•
Closed 65 transactions acquiring 5,100 net royalty acres deploying $99.0 million in mineral acquisition capital
◦
Increased Permian Basin position by 3,450 net royalty acres, or 14% sequentially, from Q2 2019
◦
Increased mineral acquisition budget for the full year 2019 to $205 - $235 million

•
Averaged 63 rigs drilling approximately 2,800 net royalty acres across the Company's portfolio
◦
22% increase in net royalty acres under development from Q2 2019
◦
Permian Basin and SCOOP averaged 28 and 20 rigs, respectively,during Q3 2019
◦
Over 50% of Q3 2019 average rig count operated by Continental Resources, Inc., Exxon Mobil Corporation, Occidental Petroleum Corporation, Marathon Oil Corporation and Parsley Energy, Inc.

•
Record 996 gross (6.2 net) drilled but uncompleted locations (“DUCs”) as of September 30, 2019
◦
Net DUC inventory increased 17% to 6.2 net locations driven roughly equally by organic development of diversified portfolio and third quarter acquisitions
◦
During Q3 2019, converted 245 (26%) gross and 1.8 (35%) net DUCs in inventory as of June 30, 2019
◦
Year-to-date have converted 80% of net DUC inventory as of December 31, 2018

•
Preliminary production guidance for FY 2020 of 9,500 Boe/d to 10,500 Boe/d
◦
Anchored by current proved developed producing locations and record DUC inventory

•
Subsequent to quarter-end, increased borrowing base to $150 million driven by strong production growth

(1)
Non-GAAP measure. See “Non-GAAP Financial Measures” below.

Ben M. (“Bud”) Brigham, Executive Chairman commented, “Our diversified top-tier mineral portfolio continued to deliver with outstanding 16% sequential growth in production volumes, almost double the year ago period. Further, despite the 8% reduction in lower 48 horizontal rig activity from the second to the third quarter, we experienced an increase in rigs running and net royalty acres being drilled during the third quarter, directly evidencing our "best of the best" mineral position, where operators maintain or even increase drilling on their most economic locations when the pressure is elevated to deliver returns on capital. Therefore, our business model has repeatedly proven to be less vulnerable to macro headwinds. The third quarter was also exciting in terms of our accretive deployment of significant mineral acquisition capital, which was almost entirely allocated to the Permian




Basin. Our team executed approximately $99.0 million of mineral acquisitions that will provide substantial production and cash flow growth in the months and years to come and increase value for our shareholders. The continued “ground game” execution by our business development and technical evaluation teams drives the increase in our mineral acquisition budget for the full year 2019 to $205 - $235 million, again largely anticipated to be deployed to Permian Basin opportunities in the upcoming quarter.”

Robert M. (“Rob”) Roosa, Chief Executive Officer, commented, “During the third quarter, we saw active drilling and permitting activity across our portfolio that we believe will contribute to continued significant production and cash flow growth over the next 12 to 18 months. Our net DUC inventory increased 17% from the second quarter to 6.2 net locations as a result of the strong drilling activity on our organic portfolio as well as contributions from our third quarter acquisitions. We anticipate that well capitalized, high quality companies including Royal Dutch Shell, ExxonMobil, Continental Resources, Occidental Petroleum and Marathon Oil will operate more than 50% of our third quarter net DUC inventory and we anticipate these DUCs will be turned in line to production over the next six to twelve months. Our net permit inventory increased 25% from the second quarter to 4.5 net locations, which was largely driven by permitting of our organic undeveloped locations as well as permits associated with our third quarter acquisitions. Importantly, as a result of both our organic activity and acquisitions executed since the beginning of the year, we believe our full year 2020 production volumes will average between 9,500 and 10,500 Boe/d.”

Blake C. Williams, Chief Financial Officer, added, “We continue to be extremely pleased with our financial performance, especially our record revenues and Adjusted EBITDA(1) generated during the third quarter. Our strong 16% sequential production growth, largely driven by our Permian and Anadarko assets, offset the downturn in commodity price realizations, lower lease bonus revenues, and cash taxes incurred. Our discretionary cash flow per share of Class A common stock was $0.37 on a pre-tax basis, which was up 9% from the second quarter, and $0.33 per share on a post-tax basis. Our ability to hold the dividend flat this quarter underscores our strategy’s capacity to deliver superior risk-adjusted return for our shareholders.”

(1) Non-GAAP measure. See “Non-GAAP Financial Measures” below.

OPERATIONAL UPDATE

Mineral and Royalty Interest Ownership Update

During the third quarter 2019, the Company closed 65 transactions acquiring 5,100 net royalty acres (standardized to a 1/8th royalty interest), for $99.0 million, in the Permian, SCOOP/STACK and Williston Basins. The acquired minerals are anticipated to deliver near-term production growth with 84 gross DUCs (1.6 net DUCs) and 36 gross permits (0.5 net permits). As of September 30, 2019, the Company had acquired roughly 79,200 net royalty acres, across 39 counties in what the Company views as the cores of the Permian Basin in West Texas and New Mexico, the SCOOP/STACK plays in the Anadarko Basin of Oklahoma, the Denver-Julesburg (“DJ”) Basin in Colorado and Wyoming and the Williston Basin in North Dakota.

The table below summarizes the Company’s mineral and royalty interest ownership at the dates indicated.
 
 
Delaware
 
Midland
 
SCOOP
 
STACK
 
DJ
 
Williston
 
Other
 
Total
Net Royalty Acres
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2019
 
24,900
 
3,800
 
10,600
 
10,250
 
15,450
 
7,100
 
7,100
 
79,200
June 30, 2019
 
21,750
 
3,500
 
10,250
 
10,050
 
15,450
 
6,900
 
6,200
 
74,100
March 31, 2019
 
20,550
 
3,200
 
9,750
 
9,700
 
15,450
 
6,850
 
6,000
 
71,500
Acres Added Q/Q
 
3,150
 
300
 
350
 
200
 
0
 
200
 
900
 
5,100
% Added Q/Q
 
14%
 
9%
 
3%
 
2%
 
—%
 
3%
 
15%
 
7%
December 31, 2018
 
19,200
 
3,200
 
8,700
 
9,700
 
15,400
 
6,800
 
5,800
 
68,800
Acres Added YTD 2019
 
5,700
 
600
 
1,900
 
550
 
50
 
300
 
1,300
 
10,400
Acres Sold YTD 2019
 
(100)
 
0
 
0
 
0
 
0
 
0
 
0
 
(100)
% Added YTD 2019
 
30%
 
19%
 
22%
 
6%
 
—%
 
4%
 
22%
 
15%


DUC Conversions Updates

The Company saw significant conversion of its DUC inventory during the third quarter with approximately 245 gross (1.8 net) horizontal wells converted to production, which represented 26% of its gross DUC inventory (35% of net DUCs) as of second quarter 2019. Thus far in 2019, the Company has converted 70% of its gross DUC inventory (80% of its net DUC inventory) on




hand at the end of 2018. As a result, we are on pace to exceed the 88% of year end 2017 gross DUCs converted during the entirety of 2018. Third quarter conversions of gross and net wells by status are summarized in the table below:
Q3 2019 Wells Converted to Proved Developed Producing
 
 
Gross
 
Net
DUCs
 
245
 
56%
 
1.8
 
50%
Permits
 
2
 
—%
 
—
 
—%
Acquired
 
169
 
39%
 
1.5
 
42%
Other
 
23
 
5%
 
0.3
 
8%
Total
 
439
 
100%
 
3.6
 
100%

Drilling Activity Update

During the third quarter 2019, the Company averaged approximately 63 rigs running on its mineral and royalty interests with approximately 2,800 net royalty acres under development as compared to 51 rigs and 2,500 net royalty acres under development on average over the prior six quarters. The Company had 28 rigs operating on its Permian Basin minerals and 20 rigs operating on its SCOOP minerals. Leading operators running rigs on Brigham’s mineral position included Continental (14 rigs), ExxonMobil (7 rigs), Occidental Petroleum (5 rigs), Marathon Oil (4 rigs) and Parsley Energy (3 rigs). Of note, ExxonMobil and Occidental continued their active drilling programs in our Loving County Development Area with on average 5 rigs drilling the majority of the third quarter. Additionally, Continental and Marathon Oil operated on average 17 rigs on the Company's SCOOP asset during the third quarter. Brigham’s rig activity over the past seven quarters is summarized in the table below:
 
Q1 18
 
Q2 18
 
Q3 18
 
Q4 18
 
Q1 19
 
Q2 19
 
Q3 19
Total Rigs
25
 
31
 
51
 
64
 
73
 
62
 
63
NRA Under Development
941
 
1,326
 
3,249
 
3,820
 
3,383
 
2,284
 
2,796
% of Total NRA
2%
 
2%
 
5%
 
6%
 
5%
 
3%
 
4%

DUC and Permit Inventory Update

The Company expects near-term production growth will be driven by the continued conversion of its DUC and permit inventory. Brigham’s gross and net DUC and permit inventory as of September 30, 2019 by basin is outlined in the table below:
 
 
Development Inventory by Basin (1)
 
 
Delaware
 
Midland
 
SCOOP
 
STACK
 
DJ
 
Williston
 
Other
 
Total
Gross Inventory
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DUCs
 
289
 
79
 
149
 
63
 
215
 
169
 
32
 
996
Permits
 
133
 
82
 
18
 
8
 
227
 
213
 
—
 
681
Net Inventory
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DUCs
 
2.9
 
0.4
 
0.9
 
0.4
 
1.2
 
0.3
 
0.1
 
6.2
Permits
 
0.9
 
0.4
 
0.1
 
—
 
2.9
 
0.3
 
—
 
4.5
(1) Individual amounts may not add to totals due to rounding.

FINANCIAL UPDATE

For the three months ended September 30, 2019, crude oil, natural gas and NGL production volumes, increased 98% to 7,828 Boe/d as compared to the same prior year period, due to a 143% increase in Permian Basin volumes and a 123% increase in Anadarko Basin volumes.

The third quarter 2019 average realized prices were $53.61 per barrel of oil, $1.60 per Mcf of natural gas, and $10.96 per barrel of NGL, for a total equivalent price of $33.51 per Boe, excluding the effect of derivative instruments. This represents a 10% decrease relative to second quarter 2019 and is 26% lower than year-ago levels of $45.26 per Boe.

The Company’s net income was $8.5 million for the three months ended September 30, 2019, net of $1.7 million of non-cash share-based compensation expense. Adjusted EBITDA was $19.3 million for the three months ended September 30, 2019, up 24%




relative to the same prior-year period. Adjusted EBITDA ex lease bonus was $18.3 million for the three months ended September 30, 2019, up 37% from the prior year. Adjusted EBITDA and Adjusted EBITDA ex lease bonus are non-GAAP financial measures. For a definition of Adjusted EBITDA and Adjusted EBITDA ex lease bonus and a reconciliation to our most directly comparable measure calculated and presented in accordance with GAAP, please read "Non-GAAP Financial Measures” below.

As of September 30, 2019, the Company had a cash balance of $25.8 million and $90.0 million of capacity on its revolving credit facility, providing the Company with total liquidity of $115.8 million. The Company’s debt to Adjusted EBITDA ratio was 0.6 times when annualizing the last quarter’s results, which displays Brigham’s commitment to limited leverage. As of November 6, 2019, the Company increased its borrowing base under its revolving credit facility to $150 million from $135 million, adding additional capacity to execute mineral acquisitions.

Third Quarter 2019 Results
Unaudited Financial and Operational Results
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
($ in thousands, except per unit of production data)
 
2019
 
2018
 
2019
 
2018
Operating Revenues
 
 
 
 
 
 
 
 
Oil sales
 
$
20,799

 
$
13,705

 
$
53,514

 
$
34,160

Natural gas sales
 
2,132

 
1,510

 
7,028

 
4,820

NGL sales
 
1,204

 
1,245

 
4,232

 
3,866

Total mineral and royalty revenue
 
$
24,135

 
$
16,460

 
$
64,774

 
$
42,846

Lease bonus and other revenue
 
972

 
2,241

 
3,127

 
6,827

Total Revenue
 
$
25,107

 
$
18,701

 
$
67,901

 
$
49,673

Production
 
 
 
 
 
 
 
 
Oil (MBbls)
 
388

 
211

 
1,001

 
543

Natural Gas (MMcf)
 
1,334

 
625

 
3,269

 
1,797

NGLs (MBbls)
 
110

 
48

 
274

 
152

Total Net Production (MBoe)
 
720

 
364

 
1,820

 
995

Total Net Daily Production (Boe/d)
 
7,828

 
3,953

 
6,668

 
3,645

Realized Prices ($/Boe)
 
 
 
 
 
 
 
 
Oil ($/Bbl)
 
$
53.61

 
$
64.88

 
$
53.45

 
$
62.88

     Natural gas ($/Mcf)
 
1.60

 
2.42

 
2.15

 
2.68

     NGLs ($/Bbl)
 
10.96

 
25.77

 
15.43

 
25.36

Average Realized Price excluding Derivatives
 
$
33.51

 
$
45.26

 
$
35.58

 
$
43.06

Average Realized Price including Derivatives
 
$
33.68

 
$
44.42

 
$
35.78

 
$
42.38

Operating Expenses
 
 
 
 
 
 
 
 
Gathering, transporting and marketing
 
$
1,113

 
$
887

 
$
3,750

 
$
2,894

Severance and ad valorem taxes
 
1,377

 
957

 
4,206

 
2,599

Depreciation, depletion and amortization
 
8,434

 
3,851

 
20,310

 
9,609

General and administrative (excluding share-based compensation)
 
3,331

 
1,290

 
8,547

 
4,072

Total Operating Expenses (before share-based compensation)
 
$
14,255

 
$
6,985

 
$
36,813

 
$
19,174

General and administrative, share-based compensation
 
1,737

 
—

 
8,232

 
—

Total Operating Expenses
 
$
15,992

 
$
6,985

 
$
45,045

 
$
19,174

Income From Operations
 
$
9,115

 
$
11,716

 
$
22,856

 
$
30,499

Gain (loss) on derivative instruments, net
 
91

 
(280
)
 
(521
)
 
(1,194
)
Interest expense, net
 
(65
)
 
(2,902
)
 
(5,160
)
 
(4,028
)
Loss on extinguishment of debt
 
—

 
—

 
(6,933
)
 
—

Gain on sale and distribution of equity securities
 
—

 
—

 
—

 
823

Other income, net
 
130

 
47

 
165

 
57

Income Before Taxes
 
$
9,271

 
$
8,581

 
$
10,407

 
$
26,157





Income tax expense
 
807

 
428

 
1,114

 
456

Net Income
 
$
8,464

 
$
8,153

 
$
9,293

 
$
25,701

Less: net income attributable to predecessor
 
—

 
(7,262
)
 
(5,092
)
 
(24,810
)
Less: net income attributable to temporary equity
 
(5,318
)
 
—

 
(2,377
)
 
—

Net income attributable to Brigham Minerals, Inc. Stockholders
 
$
3,146

 
891

 
$
1,824

 
891

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unit Expenses ($/Boe)
 
 
 
 
 
 
 
 
Gathering, transportation and marketing
 
$
1.55

 
$
2.44

 
$
2.06

 
$
2.91

Severance and ad valorem taxes
 
1.91

 
2.63

 
2.31

 
2.61

Depreciation, depletion and amortization
 
11.71

 
10.59

 
11.16

 
9.66

General and administrative (before share-based compensation)
 
4.63

 
3.55

 
4.69

 
4.09

General and administrative, share-based compensation
 
2.41

 
—

 
4.52

 
—

Interest expense, net
 
0.09

 
7.98

 
2.83

 
4.05


QUARTERLY CASH DIVIDEND

The Company’s Board of Directors (the “Board”) has declared a quarterly cash dividend incorporating results for the third quarter 2019 of $0.33 per share of Class A common stock, to be paid on November 27, 2019 to holders of record as of November 20, 2019. An amount equal to the cash dividend per share will also be set aside for each outstanding RSU and PSU granted under the long-term incentive plan for payment upon the vesting of such awards in accordance with their terms.

Future declarations of dividends are subject to approval by the Board and to the Board’s continuing determination that the declarations of dividends are in the best interests of the Company and its stockholders. Future dividends may be adjusted at the Board’s discretion based on market conditions and capital availability.

BRIGHAM MINERALS THIRD QUARTER 2019 EARNINGS CONFERENCE CALL
•
Friday, November 8, 2019 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time)
•
Pre-register by visiting http://dpregister.com/10136082
•
Listen to a live audio webcast of the call by visiting the Company’s website
◦
https://investors.brighamminerals.com
•
A recording of the webcast will be available on the Company’s website after the call


NON-GAAP FINANCIAL MEASURES

Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, and Discretionary Cash Flow are non-GAAP supplemental financial measures used by our management and by external users of our financial statements such as investors, research analysts and others to assess the financial performance of our assets and their ability to sustain dividends over the long term without regard to financing methods, capital structure or historical cost basis.
 
We define Adjusted Net Income as net income (loss) before loss on extinguishment of debt. We define Adjusted EBITDA as adjusted net income (loss) before depreciation, depletion and amortization, share based compensation expense, interest expense, gain or loss on sale and distribution of equity securities, gain or loss on derivative instruments and income tax expense, less other income and gain or loss on sale of oil and gas properties. We define Adjusted EBITDA ex lease bonus as Adjusted EBITDA further adjusted to eliminate the impacts of lease bonus revenue we receive due to the unpredictability of timing and magnitude of the revenue. We define Discretionary Cash Flow as Adjusted EBITDA, less cash interest expense and cash taxes.

Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, and Discretionary Cash Flow do not represent and should not be considered alternatives to, or more meaningful than, net income, income from operations, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of our financial performance. Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, and Discretionary Cash Flow have important limitations as analytical tools because they exclude some but not all items that affect net income, the most directly comparable GAAP financial measure. Our computation of Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, and Discretionary Cash Flow may differ from computations of similarly titled measures of other companies.




 
The following tables present a reconciliation of Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, and Discretionary Cash Flow to the most directly comparable GAAP financial measure for the periods indicated.


SUPPLEMENTAL SCHEDULES


Reconciliation of Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA ex Lease Bonus

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
($ In thousands)
 
2019
 
2018
 
2019
 
2018
Net Income
 
$
8,464

 
$
8,153

 
$
9,293

 
$
25,701

Add:
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
 
—

 
—

 
6,933

 
—

Adjusted Net Income
 
$
8,464

 
$
8,153

 
$
16,226

 
$
25,701

Add:
 
 
 
 
 
 
 
 
Depreciation, depletion and amortization
 
8,434

 
3,851

 
20,310

 
9,609

Share-based compensation expense
 
1,737

 
—

 
8,232

 
—

Interest expense
 
65

 
2,902

 
5,160

 
4,028

Loss on derivative instruments, net
 
—

 
280

 
521

 
1,194

Income tax expense
 
807

 
428

 
1,114

 
456

Less:
 
 
 
 
 
 
 
 
Gain on derivative instruments, net
 
91

 
—

 
—

 
—

Other income, net
 
130

 
47

 
165

 
57

Gain on sale and distribution of equity securities
 
—

 
—

 
—

 
823

Adjusted EBITDA
 
$
19,286

 
$
15,567

 
$
51,398

 
$
40,108

Lease bonus
 
972

 
2,241

 
3,127

 
6,827

Adjusted EBITDA ex Lease Bonus
 
$
18,314

 
$
13,326

 
$
48,271

 
$
33,281






Reconciliation of Discretionary Cash Flow
 
 
Three Months Ended
($ In thousands, except per share amounts)
 
September 30, 2019
 
June 30, 2019
Adjusted EBITDA (1)
 
$
19,286

 
$
18,289

Less:
 
 
 
 
Adjusted EBITDA attributable to non-controlling interest
 
(10,931
)
 
(10,366
)
Adjusted EBITDA attributable to Class A Common Stock
 
$
8,355

 
$
7,923

Less:
 
 
 
 
Cash interest expense
 
72

 
550

Cash taxes
 
731

 
117

Dividend equivalent rights
 
224

 
—

Retained cash flow
 
—

 
—

Less:
 
 
 
 
Lease bonus attributable to Class A Common Stock
 
421

 
641

Discretionary cash flow to Class A Common Stock ex Lease Bonus
 
$
6,907

 
$
6,615

Plus:
 
 
 
 
Lease bonus attributable to Class A Common Stock
 
421

 
641

Discretionary cash flow to Class A Common Stock
 
$
7,328

 
$
7,256

Plus:
 
 
 
 
Cash taxes
 
731

 
117

Discretionary cash flow to Class A Common Stock Pre-Tax
 
8,059

 
7,373

 
 
 
 
 
Shares of Class A Common Stock
 
21,997

 
21,997

 
 
 
 
 
Discretionary cash flow per share of Class A Common Stock ex. Lease Bonus
 
$
0.31

 
$
0.30

Discretionary cash flow per share of Class A Common Stock - Dividend
 
$
0.33

 
$
0.33

Discretionary cash flow per share of Class A Common Stock Pre-Tax
 
$
0.37

 
$
0.34

(1) Refer to Reconciliation of Adjusted EBITDA from Net Income above.





UNAUDITED CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS
($ In thousands)
 
September 30,
 
December 31,
ASSETS
 
2019
 
2018
Current assets:
 
 
 
 
          Cash and cash equivalents
 
$
25,848

 
$
31,985

          Restricted cash
 
—

 
474

          Accounts receivable
 
23,047

 
20,695

          Prepaid expenses and other
 
2,505

 
7,103

          Short-term derivative assets
 
146

 
1,057

                    Total current assets
 
51,546

 
61,314

Oil and gas properties, at cost, using the full cost method of accounting
 
 
 
 
          Unevaluated property
 
276,888

 
228,151

          Evaluated property
 
423,884

 
289,851

          Less accumulated depreciation, depletion and amortization
 
(49,488
)
 
(27,628
)
                    Oil and gas properties - net
 
651,284

 
490,374

          Other property and equipment
 
5,808

 
5,408

           Less accumulated depreciation
 
(3,566
)
 
(3,115
)
                    Other property and equipment - net
 
2,242

 
2,293

Deferred tax asset
 
9,977

 
—

Other assets, net
 
1,155

 
45

          Total assets
 
$
716,204

 
$
554,026

 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’/MEMBERS' EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
          Accounts payable and accrued liabilities
 
$
7,291

 
$
5,662

          Current portion of debt
 
—

 
2,188

                    Total current liabilities
 
7,291

 
7,850

Long-term debt
 
45,000

 
168,517

Deferred tax liability
 
—

 
3,684

Other non-current liabilities
 
449

 
27

Temporary equity
 
603,986

 
—

Shareholders’ and members’ equity:
 
 
 
 
          Members’ contributed capital
 
—

 
208,728

Preferred stock, $0.01 par value; 50,000,000 authorized; no shares issued and outstanding
 
—

 
—

Class A common stock, $0.01 par value; 400,000,000 authorized, 21,997,198 shares issued and outstanding at September 30, 2019
 
220

 
—

Class B common stock, $0.01 par value; 150,000,000 authorized, 28,777,802 shares issued and outstanding at September 30, 2019
 
—

 
—

          Additional paid-in capital
 
63,203

 
(3,057
)
          Accumulated (deficit) earnings
 
(3,945
)
 
168,277

Total shareholders’ equity attributable to Brigham Minerals, Inc. and members’ equity
 
59,478

 
373,948

          Total liabilities and shareholders’ and members’ equity
 
$
716,204

 
$
554,026












UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS

 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
($ In thousands)
 
2019
 
2018
 
2019
 
2018
REVENUES
 
 
 
 
 
 
 
 
Mineral and royalty revenues
 
$
24,135

 
$
16,460

 
$
64,774

 
$
42,846

Lease bonus and other revenues
 
972

 
2,241

 
3,127

 
6,827

Total revenues
 
25,107

 
18,701

 
67,901

 
49,673

OPERATING EXPENSES
 
 
 
 
 
 
 
 
Gathering, transportation and marketing
 
1,113

 
887

 
3,750

 
2,894

Severance and ad valorem taxes
 
1,377

 
957

 
4,206

 
2,599

Depreciation, depletion and amortization
 
8,434

 
3,851

 
20,310

 
9,609

General and administrative (excluding share-based compensation)
 
3,331

 
1,290

 
8,547

 
4,072

Total operating expenses (excluding share-based compensation)
 
14,255

 
6,985

 
36,813

 
19,174

General and administrative, share-based compensation
 
1,737

 
—

 
8,232

 
—

Total operating expenses
 
15,992

 
6,985

 
45,045

 
19,174

INCOME FROM OPERATIONS
 
9,115

 
11,716

 
22,856

 
30,499

Gain (loss) on derivative instruments, net
 
91

 
(280
)
 
(521
)
 
(1,194
)
Interest expense, net
 
(65
)
 
(2,902
)
 
(5,160
)
 
(4,028
)
Loss on extinguishment of debt
 
—

 
—

 
(6,933
)
 
—

Gain on sale and distribution of equity securities
 
—

 
—

 
—

 
823

Other income, net
 
130

 
47

 
165

 
57

Income before income taxes
 
9,271

 
8,581

 
10,407

 
26,157

Income tax expense
 
807

 
428

 
1,114

 
456

NET INCOME
 
$
8,464

 
$
8,153

 
$
9,293

 
$
25,701

Less: net income attributable to Predecessor
 
—

 
(7,262
)
 
(5,092
)
 
(24,810
)
Less: net income attributable to temporary equity
 
(5,318
)
 
—

 
(2,377
)
 
—

Net income attributable to Brigham Minerals, Inc. shareholders
 
$
3,146

 
$
891

 
$
1,824

 
$
891




























UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF CASH FLOWS
 
 
Nine Months Ended Sept 30,
($ In thousands)
 
2019
 
2018
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
Net income
 
$
9,293

 
$
25,701

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation, depletion and amortization
 
20,310

 
9,609

Share-based compensation expense
 
8,232

 
—

Loss on extinguishment of debt
 
6,933

 
—

Amortization of debt issue costs
 
354

 
501

Deferred income taxes
 
2

 
303

Loss on derivative instruments, net
 
521

 
1,194

Net cash received (paid) for derivative settlements
 
356

 
(670
)
Gain on sale of equity securities
 
—

 
(823
)
Bad debt expense
 
293

 
—

Changes in operating assets and liabilities:
 
 
 
 
Decrease (increase) in accounts receivable
 
(2,612
)
 
(9,342
)
Decrease (increase) in other current assets
 
970

 
(4,845
)
Increase (decrease) in accounts payable and accrued liabilities
 
1,827

 
218

Increase/(Decrease) in other long-term liabilities
 
$
46

 
$
—

Net cash provided by operating activities
 
$
46,525

 
$
21,846

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
Acquisitions of oil and gas properties
 
(181,484
)
 
(164,051
)
Additions to other fixed assets
 
(400
)
 
(571
)
Proceeds from sale of oil and gas properties, net
 
2,001

 
125

Proceeds from sale of equity securities
 
—

 
933

Changes in restricted cash held in escrow for acquisitions
 
33

 
(933
)
Net cash used in investing activities
 
$
(179,850
)
 
$
(164,497
)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
Payments of short-term related party loan
 
—

 
(7,000
)
Borrowings of short-term related party loan
 
—

 
7,000

Payments of short-term debt
 
(4,596
)
 
 
Payments of long-term debt
 
(195,404
)
 
(70,000
)
Borrowing of long-term debt
 
70,000

 
193,000

Payment of debt extinguishment fees
 
(2,091
)
 
—

Proceeds from issuance of Class A common stock
 
277,075

 
—

Capital contributions
 
—

 
46,011

Dividends paid
 
(7,206
)
 
—

Distribution to holders of temporary equity
 
(9,379
)
 
—

Loan closing costs
 
(1,211
)
 
(4,614
)
Net cash provided by financing activities
 
$
127,188

 
$
164,397

(Decrease) increase in cash and cash equivalents
 
(6,137
)
 
21,746

Cash and cash equivalents, beginning of period
 
31,985

 
6,886

Cash and cash equivalents, end of period
 
25,848

 
28,632

Supplemental disclosure of non-cash activity:
 
 
 
 
Equity securities distributed
 
$
—

 
$
(3,313
)
Accrued capital expenditures
 
286

 
5

Capitalized share-based compensation expense
 
2,425

 
—

Increase (decrease) in temporary equity for adjustment to fair value, with offsetting decrease (increase) in additional paid-in capital
 
93,546

 
—












ABOUT BRIGHAM MINERALS, INC.

Brigham Minerals is an Austin, Texas, based company that acquires and actively manages a portfolio of mineral and royalty interests in the core of some of the most active, highly economic, liquids-rich resource basins across the continental United States. Brigham Minerals’ assets are located in the Permian Basin in Texas and New Mexico, the SCOOP and STACK plays in the Anadarko Basin of Oklahoma, the DJ Basin in Colorado and Wyoming, and the Williston Basin in North Dakota. The Company’s primary business objective is to maximize risk-adjusted total return to its shareholders by both capturing organic growth in its existing assets as well as leveraging its highly experienced technical evaluation team to continue acquiring minerals.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements. 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. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including the Company’s minerals acquisition capital budget and other guidance including 2020 production guidance within this press release. These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include, but are not limited to, downturns in operator activity due to commodity price fluctuations, the Company’s ability to integrate acquisitions into its existing business, changes in oil, natural gas and NGL prices, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, operational factors affecting the commencement or maintenance of producing wells on the Company’s properties, the condition of the capital markets generally, as well as the Company’s ability to access them, the proximity to and capacity of transportation facilities, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Company’s business and other important factors. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company’s actual results and plans could differ materially from those expressed in any forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement is made 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.

Contacts
At the Company:
Brigham Minerals, Inc.
Blake C. Williams
Chief Financial Officer
(512) 220-6350

Or

For Investor and Media Inquiries:
Lincoln Churchill Advisors
Julie D. Baughman
(512) 220-1500
InvestorRelations@brighamminerals.com
SOURCE Brigham Minerals, Inc.