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
Date of Report (Date of Earliest Event Reported): November 8, 2017
PENN VIRGINIA CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Virginia | 1-13283 | 23-1184320 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
14701 St. Marys Lane, Suite 275 Houston, Texas |
77079 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code: (713) 722-6500
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. | Results of Operations and Financial Condition |
On November 8, 2017, Penn Virginia Corporation (Penn Virginia) reported its third quarter 2017 earnings. For additional information regarding Penn Virginias third quarter 2017 earnings, please refer to Penn Virginias press release attached to this report as Exhibit 99.1, which is incorporated by reference herein.
The information in this Form 8-K (including Exhibit 99.1) is being furnished, not filed, pursuant to Item 2.02. Accordingly, such information will not be incorporated by reference into any registration statement filed by Penn Virginia under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Item 9.01. | Financial Statements and Exhibits |
(d) | Exhibits. |
Exhibit Number |
Description | |
99.1 | Press Release issued November 8, 2017 regarding Penn Virginia Corporations third quarter 2017 earnings. |
SIGNATURES
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.
November 8, 2017 | PENN VIRGINIA CORPORATION | |||||
By: | /s/ Steven A. Hartman | |||||
Steven A. Hartman Senior Vice President, Chief Financial Officer and Treasurer |
Exhibit 99.1
Penn Virginia Corporation Reports Third Quarter 2017 Results
HOUSTON, November 8, 2017 (GLOBE NEWSWIRE) Penn Virginia Corporation (Penn Virginia or the Company) (NASDAQ:PVAC) today announced its financial and operational results for the third quarter of 2017.
Third Quarter 2017 Overview
| Closed the previously announced acquisition of Eagle Ford assets located primarily in Lavaca County, Texas on September 29, 2017. |
| Produced 9,396 barrels of oil equivalent per day (BOEPD), of which 73% was crude oil. For October 2017, production averaged approximately 12,200 BOEPD. |
| Incurred a net loss of $5.9 million, or $0.40 per diluted share and adjusted net income(1) of $8.6 million, or $0.57 per diluted share. Generated adjusted EBITDAX(1) of $21.5 million, or approximately $24.85 per barrel of oil equivalent (BOE), which represents a 63% margin. |
| Successfully completed the Chicken Hawk 5H well in a new landing zone of the lower Eagle Ford shale, which could optimize recoveries. |
| Recently replaced Penn Virginias two drilling rigs with three H&P flex drilling rigs in the Eagle Ford. With the increase in rig count, the Company expects production to be between 20,500 and 22,500 BOEPD for the full year 2018. |
(1) | Adjusted net income and adjusted EBITDAX are non-GAAP financial measures. Definitions of non-GAAP financial measures and reconciliations of non-GAAP financial measures to the closest GAAP-based financial measures appear at the end of this release. |
Despite the impact of Hurricane Harvey, our operations team did an excellent job of safely and efficiently preparing for this unprecedented storm and quickly restoring production, and we appreciate their significant efforts during such a difficult time, said John A. Brooks, President and Chief Executive Officer. However, Hurricane Harvey did impact our near-term development plan by slowing the drilling and completions operations going into the fourth quarter. We are addressing this by adding a third rig to our program and made improvements to our operating team. Depending on commodity prices, we anticipate keeping the third rig active through the end of 2018. We expect this rig will allow us to increase our volumes to a range of 20,500 to 22,500 BOEPD for 2018 while still aiming to drill within cash flow by year end 2018.
Mr. Brooks continued, On our latest pad, we tested a new landing zone within the lower Eagle Ford about 40 feet above the traditional landing zone. The test well, Chicken Hawk 5H, is showing initial results exceeding the Companys type curve. While it is early, we are encouraged by this data point in that it shows we can stack and stagger within the lower Eagle Ford and get better stimulation of the zone and optimize recoveries.
Third Quarter 2017 Operating Results
Total production in the third quarter of 2017 decreased approximately 7% from the second quarter of 2017 to 864 thousand barrels of oil equivalent (MBOE), or 9,396 BOEPD. Approximately 73%, or 627 MBOE, was from crude oil, 14% from natural gas liquids (NGLs), and 13% from natural gas. For October 2017, production averaged approximately 12,200 BOEPD.
Penn Virginia drilled and turned to sales seven gross (five net) Eagle Ford wells during the quarter, completing operations on its Chicken Hawk and Jake Berger pads. The Company tested two different stack and stagger configurations. The Chicken Hawk 2H and Jake Berger 2H wells were landed in the upper Eagle Ford. The Chicken Hawk 5H well was landed in the upper portion of the lower Eagle Ford and is testing a new landing zone. The balance of the wells targeted the traditional lower Eagle Ford. Penn Virginias average working interest in the Chicken Hawk and Jake Berger pads are approximately 76% and 64%, respectively.
The table below shows production results and related operating information for the Companys recent Eagle Ford wells:
Gross / Net Wells |
Lateral Length (Feet) |
Frac Stages |
Proppant (lbs per foot) |
24-Hour IP Avg Daily Prod (1) (BOPD/1000 ft) |
Equivalent Rate (BOEPD/1000 ft) |
Oil % |
||||||||||||||||||||||
2-String Type Curve |
6000 | 24 | 2000 | 225 | 251 | 90 | % | |||||||||||||||||||||
Lager 3H |
1 / .4 | 7920 | 40 | 2452 | 245 | 317 | 77 | % | ||||||||||||||||||||
Zebra 6H |
1 / .4 | 4592 | 27 | 2817 | 247 | 276 | 89 | % | ||||||||||||||||||||
Zebra 7H |
1 / .4 | 4860 | 29 | 2934 | 326 | 367 | 89 | % | ||||||||||||||||||||
Chicken Hawk 2H (2) |
1 / .8 | 4386 | 22 | 2485 | 92 | 104 | 88 | % | ||||||||||||||||||||
Chicken Hawk 3H |
1 / .8 | 4314 | 22 | 2213 | 178 | 196 | 90 | % | ||||||||||||||||||||
Chicken Hawk 4H |
1 / .8 | 4822 | 24 | 2458 | 196 | 218 | 90 | % | ||||||||||||||||||||
Chicken Hawk 5H (3) |
1 / .8 | 2866 | 16 | 1985 | 236 | 265 | 89 | % | ||||||||||||||||||||
Jake Berger 2H (2) |
1 / .6 | 4730 | 24 | 2516 | 103 | 118 | 87 | % | ||||||||||||||||||||
Jake Berger 4H |
1 / .6 | 4443 | 26 | 2811 | 212 | 239 | 89 | % | ||||||||||||||||||||
Jake Berger 5H |
1 / .6 | 6211 | 36 | 2896 | 158 | 172 | 92 | % |
(1) | Wellhead rates only; the natural gas associated with these wells is yielding between 135 and 155 barrels of NGLs per million cubic feet. |
(2) | Well completed in the Upper Eagle Ford (Marl). |
(3) | Well completed in the Upper Bench of the Lower Eagle Ford. |
During the third quarter of 2017, Penn Virginias drilling operations were significantly impacted by mechanical issues on both of its contracted drilling rigs. The associated downtime resulted in delays and contributed to drilling shorter than expected laterals for several of the Companys horizontal wells. Both of the previous drilling rigs have been released, and the Company has recently contracted three Helmerich and Payne (H&P) flex rigs.
To assist in the execution of Penn Virginias future drilling plans, the Company recently hired a Vice President of Operations with extensive drilling and completion experience in the Eagle Ford play. Penn Virginia has also expanded its team with several new key personnel, which will complement the Companys existing operations and technical teams.
Penn Virginia has completed frac operations on the four-well Rhino Hunter pad and the wells have been placed on flowback. Frac operations have commenced on the three-well Oryx Hunter pad and the Company expects to turn these three wells to sales in late November 2017. Two of the H&P rigs are currently drilling wells on the Furrh pad located in Area 1 and the Geo Hunter pad located in Area 2. Operational improvements have already been realized as the Geo Hunter 3H was drilled four and a half days faster than the Lager 3H at an equivalent depth. The third H&P rig has begun mobilization and is expected to begin drilling on the Schacherl Effenberger pad located in Area 2 by mid-November 2017. A total of six wells on the three pads are expected to be drilled by the end of 2017, with completion operations anticipated to commence immediately following drilling operations. Given the uncertainty in timing of drilling and completion activities in the fourth quarter, the Companys fourth quarter production volumes may not fully benefit from higher activity levels. This may cause lower than expected volumes during the fourth quarter depending on completion schedules causing some volumes to shift into the first quarter of 2018. Contingent upon the level of commodity prices, the Company currently plans to maintain a three-rig drilling program throughout 2018.
In the third quarter of 2017, Penn Virginia added 19,600 net acres through the acquisition and leased more than 300 incremental acres, thereby increasing its core acreage position to approximately 75,800 net acres, net of expirations for the quarter. The Company currently has an estimated 605 gross (454 net) drilling locations, of which 88% are Penn Virginia operated and 43 are anticipated to be extended reach laterals. Approximately 92% of the Companys core acreage is held by production. This location count estimate does not include any locations in the upper Eagle Ford or Austin Chalk formations.
Looking to next year, we have developed a detailed plan that supports our significant production growth targets, while remaining steadfast in our focus on maintaining financial discipline, said Mr. Brooks. I feel confident the new rigs and technical expertise we have added will restore our previous operational efficiency with a clear path to continued improvements.
Third Quarter 2017 Financial Results
Total product revenues were $34.3 million in the third quarter of 2017 compared to $36.3 million in the second quarter of 2017, primarily due to a 7% decrease in production that was partially offset by increased commodity prices. Crude oil sales contributed approximately 87% of total product revenues.
Total direct operating expenses, which consist of lease operating expense (LOE), gathering, processing and transportation (GPT) expense, severance and ad valorem taxes, and cash general and administrative (G&A) expense, were $15.3 million, or $17.66 per BOE, in the third quarter of 2017 compared to $12.9 million, or $13.96 per BOE, in the second quarter. Cash G&A expense rose $3.1 million from the previous quarter to $5.9 million, with the increase substantially associated with $1.5 million of transaction-related expenses associated with the recent acquisition and added personnel costs to support future drilling plans.
Net loss for the third quarter of 2017 was $5.9 million, or $0.40 per diluted share, compared to net income of $21.3 million, or $1.42 per diluted share, in the second quarter of 2017.
Adjusted net income(1) was $8.6 million, or $0.57 per diluted share in the third quarter of 2017, compared to $9.9 million or $0.66 per diluted share in the second quarter of 2017.
Adjusted EBITDAX(1) was $21.5 million in the third quarter of 2017, an 8% decrease from the second quarter of 2017. Adjusted EBITDAX per BOE was $24.85 for the third quarter of 2017.
(1) | Adjusted net income and Adjusted EBITDAX are non-GAAP financial measures. Definitions of non-GAAP financial measures and reconciliations of non-GAAP financial measures to the closest GAAP-based financial measures appear at the end of this release. |
Hedging Update
Penn Virginia enters into oil hedges on a portion of its production to help mitigate commodity price risk.
The table below sets forth Penn Virginias current oil hedge positions:
WTI - Oil Volumes (Barrels Per Day) |
WTI - Average Price ($/barrel) |
LLS - Oil Volumes (Barrels Per Day) |
LLS - Average Price ($/barrel) |
|||||||||||||
2017 Q4 |
4,381 | $ | 48.59 | 663 | $ | 56.18 | ||||||||||
2018 |
5,477 | $ | 49.30 | 1,500 | $ | 51.97 | ||||||||||
2019 |
2,915 | $ | 49.87 | 2,500 | $ | 51.30 | ||||||||||
2020 |
1,000 | $ | 50.35 | | |
Balance Sheet and Liquidity
During the third quarter of 2017, the Company incurred $29.4 million of capital expenditures in addition to amounts incurred in connection with the recent acquisition. Drilling and completion capital represented approximately 98% of non-acquisition related capital. Penn Virginia underspent third quarter drilling and completion capital by approximately $20 million due primarily to delays caused by Hurricane Harvey and is shifting this amount to its 2018 capital spending program.
As of September 30, 2017, Penn Virginia had $57.0 million outstanding on its credit facility and liquidity of $187.2 million. As of November 6, 2017, the Company had $61.0 million outstanding on its credit facility and $179.7 million of liquidity.
The Company is committed to maintaining financial discipline and a strong balance sheet with a targeted net debt to EBITDAX ratio of 1.5x or below. Penn Virginia believes it will achieve its leverage target by the end of 2018 and expects to spend within cash flow by the fourth quarter of 2018. At the end of the third quarter of 2017, pro forma for the recent acquisition, the Companys net debt to EBITDAX ratio was 2.4x.
Guidance
The table below sets forth the Companys current operational guidance for 2017 and 2018.
2017 | 2018 | |||||||||||||||
Production (BOEPD) | % oil | % oil | ||||||||||||||
Fourth quarter |
13,300 14,000 | 74 | % | 23,000 25,000 | 73 | % | ||||||||||
Full Year |
10,400 11,000 | 73 | % | 20,500 22,500 | 73 | % | ||||||||||
Realized Price Differentials - Fourth Qtr. |
||||||||||||||||
Oil (off WTI, per barrel) |
$ 1.00 - $2.00 | |||||||||||||||
Natural gas (off Henry Hub, per MMBtu) |
$ 0.10 - $0.20 | |||||||||||||||
Direct Operating Expenses - Fourth Qtr., per BOE |
||||||||||||||||
Lease operating expense |
$ 4.75 - $5.25 | |||||||||||||||
GPT expense |
$ 2.75 - $3.00 | |||||||||||||||
Ad valorem and production taxes |
$ 2.80 - $3.10 | |||||||||||||||
Cash G&A expense |
$ 3.20 - $3.50 | |||||||||||||||
Fourth Quarter Capital Expenditures (millions) |
$ 45 - $ 65 | |||||||||||||||
Full Year Capital Expenditures (millions) |
$ 120 -$ 140 | $ 255 - $ 295 |
| With the third rig expected to remain through the end of 2018, the Company expects approximately 75% production growth from the fourth quarter of 2017 to the fourth quarter of 2018, and 100% production growth in 2018 over 2017 volumes. |
| Fourth quarter 2017 volumes are expected to be slightly lower than previous guidance due to drilling and completion delays but the Company anticipates achieving the previously guided to range of 14,600 to 15,200 BOEPD by the end of the fourth quarter of 2017. |
| Due to drilling schedule delays, full year capital expenditures for 2018 include approximately $20 million of spending that is shifting from 2017. |
Third Quarter 2017 Conference Call
A conference call and webcast discussing third quarter 2017 financial and operational results is scheduled for Thursday, November 9, 2017 at 11:00 a.m. EST. Prepared remarks will be followed by a question and answer period. Investors and analysts may participate via phone by dialing (877) 316-5288 (international: (734) 385-4977) five to 10 minutes before the scheduled start time, or via webcast by logging on to the Companys website, www.pennvirginia.com, at least 15 minutes prior to the scheduled start time to download supporting materials and install any necessary audio software.
An on-demand replay of the webcast will also be available on the Companys website beginning shortly after the webcast. The replay will also be available from November 9, 2017 through November 16, 2017 by dialing (855) 859-2056 (international: (404) 537-3406) and entering the pass code 99844250.
About Penn Virginia Corporation
Penn Virginia Corporation is an independent oil and gas company engaged in the exploration, development and production of oil, NGLs and natural gas in various domestic onshore regions of the United States, with a primary focus in the Eagle Ford Shale in south Texas. For more information, please visit our website at www.pennvirginia.com.
Forward-Looking Statements
Certain statements contained herein that are not descriptions of historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as guidance, projects, estimates, expects, continues, intends, plans, believes, forecasts, future, and variations of such words or similar expressions in this press release to identify forward-looking statements. Because such statements include assumptions, risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, the following: risks related to the recently completed acquisition, the Companys ability to realize expected benefits of the recently completed acquisition; potential adverse effects of the completed bankruptcy proceedings on our liquidity, results of operations, business prospects, ability to retain financing and other risks and uncertainties related to our emergence from bankruptcy; our ability to satisfy our short-term and long-term liquidity needs, including our ability to generate sufficient cash flows from operations or to obtain adequate financing to fund our capital expenditures and meet working capital needs; negative events or publicity adversely affecting our ability to maintain our relationships with our suppliers, service providers, customers, employees, and other third parties; the occurrence and effects of unusual weather or operating conditions, including force majeure events and hurricanes; new capital structure and the adoption of fresh start accounting, including the risk that assumptions and factors used in estimating enterprise value vary significantly from the current estimates in connection with the application of fresh start accounting; plans, objectives, expectations and intentions contained in this press release that are not historical; our ability to execute our business plan in the current commodity price environment; any decline in and volatility of commodity prices for oil, NGLs, and natural gas; our anticipated production and development results; our ability to develop, explore for, acquire and replace oil and natural gas reserves and sustain production; our ability to generate profits or achieve targeted reserves in our development and exploratory drilling and well operations; any impairments, write-downs or write-offs of our reserves or assets; the projected demand for and supply of oil, NGLs and natural gas; our ability to contract for drilling rigs, frac crews, supplies and services at reasonable costs; our ability to obtain adequate pipeline transportation capacity for our oil and gas production at reasonable cost and to sell the production at, or at reasonable discounts to, market prices; the uncertainties inherent in projecting future rates of production for our wells and the extent to which actual production differs from that estimated in our proved oil and natural gas reserves; drilling and operating risks; concentration of assets; our ability to compete effectively against other oil and gas companies; leasehold terms expiring before production can be established and our ability to replace expired leases; costs or results of any strategic initiatives; environmental obligations, results of new drilling activities, locations and methods, costs and liabilities that are not covered by an effective indemnity or insurance; the timing of receipt of necessary regulatory permits; the effect of commodity
and financial derivative arrangements; our ability to retain or attract senior management and key employees; counterparty risk related to the ability of these parties to meet their future obligations; compliance with and changes in governmental regulations or enforcement practices, especially with respect to environmental, health and safety matters; physical, electronic and cybersecurity breaches; litigation that impacts us, our assets or our midstream service providers; uncertainties relating to general domestic and international economic and political conditions; and other risks set forth in our filings with the SEC. Additional information concerning these and other factors can be found in our press releases and public filings with the SEC, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q.
Many of the factors that will determine our future results are beyond the ability of management to control or predict. Readers should not place undue reliance on forward-looking statements, which reflect managements views only as of the date hereof. The statements in this release speak only as of the date of this release. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law.
Contact
Steve Hartman
Chief Financial Officer
Ph: (713) 722-6529
E-Mail: invest@pennvirginia.com
PENN VIRGINIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - unaudited
(in thousands, except per share data)
Successor | Successor | Successor | Predecessor | Successor | Predecessor | |||||||||||||||||||
Three Months Ended September 30, |
Three Months Ended June 30, |
September 13 Through September 30, |
July 1 Through September 12, |
Nine Months Ended September 30, |
January 1 Through September 12, |
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2017 | 2017 | 2016 | 2016 | 2017 | 2016 | |||||||||||||||||||
Revenues |
||||||||||||||||||||||||
Crude oil |
$ | 29,963 | $ | 32,351 | $ | 5,508 | $ | 23,392 | $ | 92,387 | $ | 81,377 | ||||||||||||
Natural gas liquids (NGLs) |
2,393 | 2,043 | 333 | 1,680 | 6,738 | 6,064 | ||||||||||||||||||
Natural gas |
1,977 | 1,880 | 475 | 1,889 | 6,200 | 6,208 | ||||||||||||||||||
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Total product revenues |
34,333 | 36,274 | 6,316 | 26,961 | 105,325 | 93,649 | ||||||||||||||||||
Gain (loss) on sales of assets, net |
9 | (134 | ) | | 504 | (60 | ) | 1,261 | ||||||||||||||||
Other, net |
117 | 142 | 33 | (804 | ) | 462 | (600 | ) | ||||||||||||||||
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Total revenues |
34,459 | 36,282 | 6,349 | 26,661 | 105,727 | 94,310 | ||||||||||||||||||
Operating expenses |
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Lease operating |
5,254 | 5,370 | 756 | 4,209 | 15,540 | 15,626 | ||||||||||||||||||
Gathering, processing and transportation |
2,399 | 2,555 | 576 | 4,767 | 7,505 | 13,235 | ||||||||||||||||||
Production and ad valorem taxes |
1,668 | 2,119 | 375 | 574 | 5,766 | 3,490 | ||||||||||||||||||
General and administrative |
5,939 | 2,873 | 1,476 | 6,748 | 12,093 | 37,434 | ||||||||||||||||||
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Total direct operating expenses |
15,260 | 12,917 | 3,183 | 16,298 | 40,904 | 69,785 | ||||||||||||||||||
Share-based compensation - equity classified awards |
1,013 | 848 | | 147 | 2,707 | 1,511 | ||||||||||||||||||
Exploration |
| | | 4,641 | | 10,288 | ||||||||||||||||||
Depreciation, depletion and amortization |
10,659 | 11,076 | 2,029 | 8,024 | 31,545 | 33,582 | ||||||||||||||||||
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Total operating expenses |
26,932 | 24,841 | 5,212 | 29,110 | 75,156 | 115,166 | ||||||||||||||||||
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Operating income (loss) |
7,527 | 11,441 | 1,137 | (2,449 | ) | 30,571 | (20,856 | ) | ||||||||||||||||
Other income (expense) |
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Interest expense |
(1,202 | ) | (1,274 | ) | (218 | ) | (1,363 | ) | (3,014 | ) | (58,018 | ) | ||||||||||||
Derivatives |
(12,275 | ) | 11,061 | (4,369 | ) | 8,934 | 15,802 | (8,333 | ) | |||||||||||||||
Other |
3 | 101 | 9 | (2,154 | ) | 104 | (3,184 | ) | ||||||||||||||||
Reorganization items, net |
| | | 1,152,373 | | 1,144,993 | ||||||||||||||||||
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Income (loss) before income taxes |
(5,947 | ) | 21,329 | (3,441 | ) | 1,155,341 | 43,463 | 1,054,602 | ||||||||||||||||
Income tax benefit (expense) |
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Net income (loss) |
(5,947 | ) | 21,329 | (3,441 | ) | 1,155,341 | 43,463 | 1,054,602 | ||||||||||||||||
Preferred stock dividends |
| | | | | (5,972 | ) | |||||||||||||||||
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Net income (loss) attributable to common shareholders |
$ | (5,947 | ) | $ | 21,329 | $ | (3,441 | ) | $ | 1,155,341 | $ | 43,463 | $ | 1,048,630 | ||||||||||
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Net income (loss) per share: |
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Basic |
$ | (0.40 | ) | $ | 1.42 | $ | (0.23 | ) | $ | 12.94 | $ | 2.90 | $ | 11.91 | ||||||||||
Diluted |
$ | (0.40 | ) | $ | 1.42 | $ | (0.23 | ) | $ | 10.37 | $ | 2.89 | $ | 8.50 | ||||||||||
Weighted average shares outstanding: |
||||||||||||||||||||||||
Basic |
14,994 | 14,992 | 14,992 | 89,292 | 14,993 | 88,013 | ||||||||||||||||||
Diluted |
14,994 | 15,050 | 14,992 | 111,458 | 15,062 | 124,087 |
Successor | Successor | Successor | Predecessor | Successor | Predecessor | |||||||||||||||||||
Three Months Ended September 30, |
Three Months Ended June 30, |
September 13 Through September 30, |
July 1 Through September 12, |
Nine Months Ended September 30, |
January 1 Through September 12, |
|||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2017 | 2016 | |||||||||||||||||||
Production |
||||||||||||||||||||||||
Crude oil (MBbls) |
627 | 685 | 127 | 547 | 1,920 | 2,311 | ||||||||||||||||||
NGLs (MBbls) |
125 | 131 | 27 | 133 | 375 | 533 | ||||||||||||||||||
Natural gas (MMcf) |
676 | 653 | 174 | 695 | 2,094 | 3,012 | ||||||||||||||||||
Total (MBOE) |
864 | 925 | 183 | 796 | 2,644 | 3,346 | ||||||||||||||||||
Prices |
||||||||||||||||||||||||
Crude oil ($ per Bbl) |
$ | 47.78 | $ | 47.25 | $ | 43.35 | $ | 42.75 | $ | 48.12 | $ | 35.21 | ||||||||||||
NGLs ($ per Bbl) |
$ | 19.19 | $ | 15.59 | $ | 12.56 | $ | 12.66 | $ | 17.98 | $ | 11.37 | ||||||||||||
Natural gas ($ per Mcf) |
$ | 2.92 | $ | 2.88 | $ | 2.73 | $ | 2.72 | $ | 2.96 | $ | 2.06 | ||||||||||||
Prices - Adjusted for derivative settlements |
||||||||||||||||||||||||
Crude oil ($ per Bbl) |
$ | 49.04 | $ | 46.57 | $ | 43.35 | $ | 44.68 | $ | 47.25 | $ | 55.98 | ||||||||||||
NGLs ($ per Bbl) |
$ | 19.19 | $ | 15.59 | $ | 12.56 | $ | 12.66 | $ | 17.98 | $ | 11.37 | ||||||||||||
Natural gas ($ per Mcf) |
$ | 2.92 | $ | 2.88 | $ | 2.73 | $ | 2.72 | $ | 2.96 | $ | 2.06 | ||||||||||||
Aggregate price (excluding the effects of derivatives) |
$ | 39.72 | $ | 39.24 | $ | 34.59 | $ | 33.88 | $ | 39.84 | $ | 27.99 | ||||||||||||
% oil production |
72.5 | % | 74.1 | % | 69.6 | % | 68.8 | % | 72.6 | % | 69.1 | % |
PENN VIRGINIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS - unaudited
(in thousands)
September 30, | December 31, | |||||||
2017 | 2016 | |||||||
Assets |
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Current assets |
$ | 64,838 | $ | 38,884 | ||||
Net property and equipment |
486,060 | 247,473 | ||||||
Other assets |
11,343 | 5,329 | ||||||
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Total assets |
$ | 562,241 | $ | 291,686 | ||||
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Liabilities and shareholders equity |
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Current liabilities |
$ | 75,870 | $ | 62,629 | ||||
Other liabilities |
9,554 | 18,509 | ||||||
Total long-term debt, net |
245,055 | 25,000 | ||||||
Total shareholders equity |
231,762 | 185,548 | ||||||
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Total liabilities and shareholders equity |
$ | 562,241 | $ | 291,686 | ||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - unaudited
(in thousands)
Successor | Successor | Successor | Predecessor | Successor | Predecessor | |||||||||||||||||||
Three Months Ended September 30, |
Three Months Ended June 30, |
September 13 Through September 30, |
July 1 Through September 12, |
Nine Months Ended September 12, |
January 1 Through September 12, |
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2017 | 2017 | 2016 | 2016 | 2017 | 2016 | |||||||||||||||||||
Cash flows from operating activities |
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Net income (loss) |
$ | (5,947 | ) | $ | 21,329 | $ | (3,441 | ) | $ | 1,155,341 | $ | 43,463 | $ | 1,054,602 | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
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Non-cash reorganization items |
| | | (1,178,302 | ) | | (1,178,302 | ) | ||||||||||||||||
Depreciation, depletion and amortization |
10,659 | 11,076 | 2,029 | 8,024 | 31,545 | 33,582 | ||||||||||||||||||
Accretion of firm transportation obligation |
| | | | | 317 | ||||||||||||||||||
Derivative contracts: |
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Net losses (gains) |
12,275 | (11,061 | ) | 4,369 | (8,934 | ) | (15,802 | ) | 8,333 | |||||||||||||||
Cash settlements, net |
788 | (466 | ) | | 1,056 | (1,670 | ) | 48,008 | ||||||||||||||||
(Gain) loss on sales of assets, net |
(9 | ) | 134 | | (504 | ) | 60 | (1,261 | ) | |||||||||||||||
Non-cash exploration expense |
| | | 4,325 | | 6,038 | ||||||||||||||||||
Non-cash interest expense |
374 | 800 | 38 | | 1,362 | 22,189 | ||||||||||||||||||
Share-based compensation (equity-classified) |
1,013 | 848 | | 147 | 2,707 | 1,511 | ||||||||||||||||||
Other, net |
21 | 20 | | | 59 | (13 | ) | |||||||||||||||||
Changes in operating assets and liabilities |
(4,897 | ) | 4,195 | 585 | 3,321 | (11,430 | ) | 35,243 | ||||||||||||||||
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Net cash provided by (used in) operating activities |
14,277 | 26,875 | 3,580 | (15,526 | ) | 50,294 | 30,247 | |||||||||||||||||
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Cash flows from investing activities |
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Acquisition, net |
(200,162 | ) | | | | (200,162 | ) | | ||||||||||||||||
Capital expenditures |
(24,261 | ) | (25,842 | ) | | (784 | ) | (67,844 | ) | (15,359 | ) | |||||||||||||
Proceeds from sales of assets, net |
| | | 98 | | 224 | ||||||||||||||||||
Other, net |
| | | | | 1,186 | ||||||||||||||||||
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Net cash used in investing activities |
(224,423 | ) | (25,842 | ) | | (686 | ) | (268,006 | ) | (13,949 | ) | |||||||||||||
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Cash flows from financing activities |
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Proceeds from credit facility borrowings |
25,000 | 7,000 | | 75,350 | 39,000 | 75,350 | ||||||||||||||||||
Repayment of credit facility borrowings |
(5,000 | ) | | (21,000 | ) | (113,653 | ) | (7,000 | ) | (119,121 | ) | |||||||||||||
Proceeds from second lien loans, net |
196,000 | | | | 196,000 | | ||||||||||||||||||
Debt issuance costs paid |
(8,472 | ) | (1,090 | ) | | (3,011 | ) | (9,562 | ) | (3,011 | ) | |||||||||||||
Proceeds received from rights offering, net |
| 55 | | 49,943 | 55 | 49,943 | ||||||||||||||||||
Other, net |
| (25 | ) | | | (55 | ) | | ||||||||||||||||
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Net cash provided by (used in) financing activities |
207,528 | 5,940 | (21,000 | ) | 8,629 | 218,438 | 3,161 | |||||||||||||||||
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Net (decrease) increase in cash and cash equivalents |
(2,618 | ) | 6,973 | (17,420 | ) | (7,583 | ) | 726 | 19,459 | |||||||||||||||
Cash and cash equivalents - beginning of period |
10,105 | 3,132 | 31,414 | 38,997 | 6,761 | 11,955 | ||||||||||||||||||
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Cash and cash equivalents - end of period |
$ | 7,487 | $ | 10,105 | $ | 13,994 | $ | 31,414 | $ | 7,487 | $ | 31,414 | ||||||||||||
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PENN VIRGINIA CORPORATION
CERTAIN NON-GAAP FINANCIAL MEASURES - unaudited
(in thousands, except per unit amounts)
Readers are reminded that non-GAAP measures are merely a supplement to, and not a replacement for, or superior to financial measures prepared according to GAAP. They should be evaluated in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.
Reconciliation of GAAP Net income (loss) to Non-GAAP Adjusted EBITDAX
Adjusted EBITDAX represents net income (loss) before interest expense, income tax expense (benefit), depreciation, depletion and amortization expense, exploration, and share-based compensation expense, further adjusted to exclude the effects of gains and losses on sales of assets, accretion of firm transportation obligation, non-cash changes in the fair value of derivatives, and special items including acquisition transaction costs, reorganization items, strategic and financial advisory costs, restructuring expenses and account write-offs and reserves prior to our emergence from bankruptcy. We believe this presentation is commonly used by investors and professional research analysts for the valuation, comparison, rating, and investment recommendations of companies within the oil and gas exploration and production industry. We use this information for comparative purposes within our industry. Adjusted EBITDAX is not a measure of financial performance under GAAP and should not be considered as a measure of liquidity or as an alternative to net income (loss). Adjusted EBITDAX as defined by Penn Virginia may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net income (loss) and other measures prepared in accordance with GAAP, such as operating income or cash flows from operating activities. Adjusted EBITDAX should not be considered in isolation or as a substitute for an analysis of Penn Virginias results as reported under GAAP.
Successor | Successor | Successor | Predecessor | Successor | Predecessor | |||||||||||||||||||
Three Months Ended September 30, |
Three Months Ended June 30, |
September 13 Through September 30, |
July 1 Through September 12, |
Nine Months Ended September 30, |
January 1 Through September 12, |
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2017 | 2017 | 2016 | 2016 | 2017 | 2016 | |||||||||||||||||||
Net income (loss) |
$ | (5,947 | ) | $ | 21,329 | $ | (3,441 | ) | $ | 1,155,341 | $ | 43,463 | $ | 1,054,602 | ||||||||||
Adjustments to reconcile to Adjusted EBITDAX: |
||||||||||||||||||||||||
Interest expense |
1,202 | 1,274 | 218 | 1,363 | 3,014 | 58,018 | ||||||||||||||||||
Income tax (benefit) expense |
| | | | | | ||||||||||||||||||
Depreciation, depletion and amortization |
10,659 | 11,076 | 2,029 | 8,024 | 31,545 | 33,582 | ||||||||||||||||||
Exploration |
| | | 4,641 | | 10,288 | ||||||||||||||||||
Share-based compensation expense (equity-classified) |
1,013 | 848 | | 147 | 2,707 | 1,511 | ||||||||||||||||||
Loss (gain) on sale of assets, net |
(9 | ) | 134 | | (504 | ) | 60 | (1,261 | ) | |||||||||||||||
Accretion of firm transportation obligation |
| | | | | 317 | ||||||||||||||||||
Adjustments for derivatives: |
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Net losses (gains) |
12,275 | (11,061 | ) | 4,369 | (8,934 | ) | (15,802 | ) | 8,333 | |||||||||||||||
Cash settlements, net |
788 | (466 | ) | | 1,056 | (1,670 | ) | 48,008 | ||||||||||||||||
Adjustment for special items: |
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Acquisition transaction costs |
1,505 | | | | 1,505 | | ||||||||||||||||||
Reorganization items, net |
| | | (1,152,373 | ) | | (1,144,993 | ) | ||||||||||||||||
Strategic and financial advisory costs |
| | | | | 18,036 | ||||||||||||||||||
Restructuring expenses |
| | 18 | 2,722 | (20 | ) | 3,821 | |||||||||||||||||
Account write-offs and reserves prior to emergence from bankruptcy |
| | | 3,123 | | 3,123 | ||||||||||||||||||
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Adjusted EBITDAX |
$ | 21,486 | $ | 23,134 | $ | 3,193 | $ | 14,606 | $ | 64,802 | $ | 93,385 | ||||||||||||
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Adjusted EBITDAX per BOE |
$ | 24.85 | $ | 25.02 | $ | 17.49 | $ | 18.36 | $ | 24.51 | $ | 27.91 | ||||||||||||
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Reconciliation of GAAP General administrative expenses to Non-GAAP Adjusted cash-based general and administrative expenses
Adjusted cash-based general and administrative expense (Adjusted G&A) is a supplemental non-GAAP financial measure that excludes certain non-recurring expenses and non-cash share-based compensation expense. We believe that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.
Successor | Successor | Successor | Predecessor | Successor | Predecessor | |||||||||||||||||||
Three Months Ended September 30, |
Three Months Ended June 30, |
September 13 Through September 30, |
July 1 Through September 12, |
Nine Months Ended September 30, |
January 1 Through September 12, |
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2017 | 2017 | 2016 | 2016 | 2017 | 2016 | |||||||||||||||||||
General and administrative expenses - direct |
$ | 5,939 | $ | 2,873 | $ | 1,476 | $ | 6,748 | $ | 12,093 | $ | 37,434 | ||||||||||||
Share-based compensation - equity-classified awards |
1,013 | 848 | | 147 | 2,707 | 1,511 | ||||||||||||||||||
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GAAP General and administrative expenses |
6,952 | 3,721 | 1,476 | 6,895 | 14,800 | 38,945 | ||||||||||||||||||
Less: Share-based compensation - equity-classified awards |
(1,013 | ) | (848 | ) | | (147 | ) | (2,707 | ) | (1,511 | ) | |||||||||||||
Significant special charges: |
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Acquisition transaction costs |
(1,505 | ) | | | | (1,505 | ) | | ||||||||||||||||
Strategic and financial advisory costs |
| | | | | (18,036 | ) | |||||||||||||||||
Restructuring expenses |
| | (18 | ) | (2,722 | ) | 20 | (3,821 | ) | |||||||||||||||
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Adjusted cash-based general and administrative expenses |
$ | 4,434 | $ | 2,873 | $ | 1,458 | $ | 4,026 | $ | 10,608 | $ | 15,577 | ||||||||||||
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Reconciliation of GAAP Net income (loss) to Non-GAAP Adjusted net income (loss) attributable to common shareholders
Adjusted net income (loss) is a non-GAAP financial measure that represents net income (loss) adjusted to exclude the effects, net of income taxes, of non-cash changes in the fair value of derivatives, net gains and losses on the sales of assets, acquisition transaction costs, reorganization items, strategic and financial advisory costs, restructuring expenses and account write-offs and reserves prior to our emergence from bankruptcy. We believe that Non-GAAP adjusted net income (loss) and non-GAAP adjusted net income (loss) per share amounts provide meaningful supplemental information regarding our operational performance. This information facilitates managements internal comparisons to the Companys historical operating results as well as to the operating results of our competitors. Since management finds this measure to be useful, the Company believes that our investors can benefit by evaluating both non-GAAP and GAAP results. Adjusted net income (loss) non-GAAP is not a measure of financial performance under GAAP and should not be considered as a measure of liquidity or as an alternative to net income (loss).
Successor | Successor | Successor | Predecessor | Successor | Predecessor | |||||||||||||||||||
Three Months Ended September 30, |
Three Months Ended June 30, |
September 13 Through September 30, |
July 1 Through September 12, |
Nine Months Ended September 30, |
January 1 Through September 12, |
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2017 | 2017 | 2016 | 2016 | 2017 | 2016 | |||||||||||||||||||
Net income (loss) |
$ | (5,947 | ) | $ | 21,329 | $ | (3,441 | ) | $ | 1,155,341 | $ | 43,463 | $ | 1,054,602 | ||||||||||
Adjustments for derivatives: |
||||||||||||||||||||||||
Net losses (gains) |
12,275 | (11,061 | ) | 4,369 | (8,934 | ) | (15,802 | ) | 8,333 | |||||||||||||||
Cash settlements, net |
788 | (466 | ) | | 1,056 | (1,670 | ) | 48,008 | ||||||||||||||||
Loss (gain) on sale of assets, net |
(9 | ) | 134 | | (504 | ) | 60 | (1,261 | ) | |||||||||||||||
Acquisition transaction costs |
1,505 | | | | 1,505 | | ||||||||||||||||||
Reorganization items, net |
| | | (1,152,373 | ) | | (1,144,993 | ) | ||||||||||||||||
Strategic and financial advisory costs |
| | | | | 18,036 | ||||||||||||||||||
Restructuring expenses |
| | 18 | 2,722 | (20 | ) | 3,821 | |||||||||||||||||
Account write-offs and reserves prior to emergence from bankruptcy |
| | | 3,123 | | 3,123 | ||||||||||||||||||
Impact of adjustment on income taxes |
| | | | | | ||||||||||||||||||
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Adjusted net income (loss) |
$ | 8,612 | $ | 9,936 | $ | 946 | $ | 431 | $ | 27,536 | $ | (10,331 | ) | |||||||||||
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Adjusted net income (loss) attributable to common shareholders, per diluted share |
$ | 0.57 | $ | 0.66 | $ | 0.06 | $ | 0.00 | $ | 1.83 | $ | (0.08 | ) | |||||||||||
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