Montage Resources Corporation Announces Fourth Quarter and Full Year 2019 Operational and Financial Results
IRVING, Texas–(BUSINESS WIRE)–Montage Resources Corporation (NYSE:MR) (the “Company” or “Montage Resources”) today announced its fourth quarter and full year 2019 operational and financial results. In addition, the Company will be posting an updated investor presentation to its corporate website.
Fourth Quarter 2019 Highlights:
- Average net daily production was 623.4 MMcfe per day
- Average natural gas equivalent realized price was $3.01 per Mcfe, including cash settled derivatives and excluding firm transportation expenses
- Per unit cash production costs (including lease operating, transportation, gathering and compression, production and ad valorem taxes) were $1.33 per Mcfe
- Net income was $14.1 million; Income from continuing operations before income taxes was $14.0 million; Adjusted net income1 was $31.8 million; and Adjusted EBITDAX1 was $87.6 million, above of analyst consensus expectations
Full Year 2019 Highlights:
- Average net daily production was 547.8 MMcfe per day
- Average natural gas equivalent realized price was $3.06 per Mcfe, including cash settled derivatives and excluding firm transportation expense
- Per unit cash production costs (including lease operating, transportation, gathering and compression, production and ad valorem taxes) were $1.32 per Mcfe
- Net income was $31.8 million; Income from continuing operations before income taxes was $30.4 million; Adjusted net income1 was $84.9 million; and Adjusted EBITDAX1 was $311.1 million, above analyst consensus expectations.
John Reinhart, President and CEO, commented on the Company’s operational and financial results, “In 2019 the Company delivered higher production, lower operating costs, lower overhead costs, increased net income, improved adjusted EBITDAX1, and lower capital spending than initially guided, all while adding over $275 million in borrowing base capacity and keeping financial leverage2 below 2 times. I am extremely proud of the team and the numerous successes realized, all while managing through the integration since the transformational Blue Ridge merger one year ago, as well as a challenging commodity price environment. The current operating environment reinforces the importance of being a low-cost producer with high quality assets, maintaining a top performing execution team and having limited commitments.
In 2020, Montage Resources will continue its focus on the execution of a business plan that positions the company favorably with moderate scale, a low-cost structure and solid balance sheet. We remain advantaged from an operational flexibility standpoint and maintain the optionality to adjust capital expenditures during 2020 as commodity prices dictate in order to target a cash flow positive position. The Company has established a track record of realizing fundamental corporate value enhancements and will continue to evaluate a full range of strategic, tactical and operational opportunities aimed at maximizing long-term shareholder value.”
|
1 |
|
Non-GAAP measure. See reconciliation for details |
|
2 |
Based upon net debt to pro forma last twelve months EBITDAX |
Operational Discussion
The Company’s production for the three and twelve months ended December 31, 2019 and 2018 is set forth in the following table:
|
|
|
Three Months Ended |
|
|
Year Ended |
||||||||
|
|
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
||||
|
Production: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (MMcf) |
|
|
44,523.6 |
|
|
26,657.3 |
|
|
|
154,137.5 |
|
|
89,965.7 |
|
NGLs (Mbbls) |
|
|
1,271.4 |
|
|
1,010.5 |
|
|
|
4,686.3 |
|
|
3,503.1 |
|
Oil (Mbbls) |
|
|
867.5 |
|
|
748.6 |
|
|
|
2,950.8 |
|
|
2,378.0 |
|
Total (MMcfe) |
|
|
57,357.0 |
|
|
37,211.9 |
|
|
|
199,960.1 |
|
|
125,252.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily production volume: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (Mcf/d) |
|
|
483,952 |
|
|
289,753 |
|
|
|
422,295 |
|
|
246,481 |
|
NGLs (Bbls/d) |
|
|
13,820 |
|
|
10,984 |
|
|
|
12,839 |
|
|
9,598 |
|
Oil (Bbls/d) |
|
|
9,429 |
|
|
8,137 |
|
|
|
8,084 |
|
|
6,515 |
|
Total (MMcfe/d) |
|
|
623.4 |
|
|
404.5 |
|
|
|
547.8 |
|
|
343.2 |
Financial Discussion
Revenue for the three months ended December 31, 2019 totaled $174.1 million, compared to $171.2 million for the three months ended December 31, 2018. Adjusted Revenue3, which includes the impact of cash settled derivatives and excludes brokered natural gas and marketing revenue and other revenue, totaled $172.7 million for the three months ended December 31, 2019 compared to $138.7 million for the three months ended December 31, 2018. Net Income for the three months ended December 31, 2019 was $14.1 million, or $0.39 per share, compared to $36.5 million, or $1.81 per share4, for the three months ended December 31, 2018. Adjusted Net Income3 for the three months ended December 31, 2019 was $31.8 million, or $0.89 per share, compared to $24.6 million, or $1.22 per share4 for the three months ended December 31, 2018. Adjusted EBITDAX3 was $87.6 million for the three months ended December 31, 2019 compared to $80.7 million for the three months ended December 31, 2018.
Revenue for the year ended December 31, 2019 totaled $634.4 million, compared to $515.1 million for the year ended December 31, 2018. Adjusted Revenue3, which includes the impact of cash settled derivatives and excludes brokered natural gas and marketing revenue and other revenue, totaled $612.0 million for the year ended December 31, 2019 compared to $471.6 million for the year ended December 31, 2018. Net Income for the year ended December 31, 2019 was $31.8 million, or $0.96 per share, compared to $18.8 million, or $0.94 per share4 for the year ended December 31, 2018. Adjusted Net Income3 for the year ended December 31, 2019 was $84.9 million, or $2.56 per share, compared to $51.4 million, or $2.57 per share4 for the year ended December 31, 2018. Adjusted EBITDAX3 was $311.1 million for the year ended December 31, 2019 compared to $261.6 million for the year ended December 31, 2018.
|
3 |
Adjusted Revenue, Adjusted Net Income and Adjusted EBITDAX are non-GAAP financial measures. Tables reconciling Adjusted Revenue, Adjusted Net Income and Adjusted EBITDAX to the most directly comparable GAAP measures can be found at the end of the financial statements included in this press release. |
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|
4 |
Retroactively reflects the 15-to-1 reverse stock split that took place at the close of the merger with Blue Ridge Mountain Resources, Inc. (“Blue Ridge”) on February 28, 2019. |
Average realized price calculations for the three and twelve months ended December 31, 2019 and 2018 are set forth in the table below:
|
|
|
Three Months Ended |
|
Year Ended |
||||||||
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
|
Average realized price (excluding cash settled derivatives and firm transportation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
$ |
2.19 |
|
$ |
3.59 |
|
$ |
2.34 |
|
$ |
3.05 |
|
NGLs ($/Bbl) |
|
|
18.65 |
|
|
22.40 |
|
|
18.04 |
|
|
24.59 |
|
Oil ($/Bbl) |
|
|
48.90 |
|
|
53.10 |
|
|
49.42 |
|
|
58.12 |
|
Total average prices ($/Mcfe) |
|
|
2.85 |
|
|
4.25 |
|
|
2.96 |
|
|
3.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including cash settled derivatives, excluding firm transportation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
$ |
2.36 |
|
$ |
3.05 |
|
$ |
2.45 |
|
$ |
2.96 |
|
NGLs ($/Bbl) |
|
|
19.14 |
|
|
22.40 |
|
|
18.45 |
|
|
24.32 |
|
Oil ($/Bbl) |
|
|
49.67 |
|
|
46.44 |
|
|
50.01 |
|
|
50.47 |
|
Total average prices ($/Mcfe) |
|
|
3.01 |
|
|
3.73 |
|
|
3.06 |
|
|
3.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including firm transportation, excluding cash settled derivatives) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
$ |
1.74 |
|
$ |
3.03 |
|
$ |
1.88 |
|
$ |
2.50 |
|
NGLs ($/Bbl) |
|
|
18.65 |
|
|
22.40 |
|
|
18.04 |
|
|
24.59 |
|
Oil ($/Bbl) |
|
|
48.90 |
|
|
53.10 |
|
|
49.42 |
|
|
58.12 |
|
Total average prices ($/Mcfe) |
|
|
2.50 |
|
|
3.85 |
|
|
2.60 |
|
|
3.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including cash settled derivatives and firm transportation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
$ |
1.92 |
|
$ |
2.50 |
|
$ |
1.99 |
|
$ |
2.41 |
|
NGLs ($/Bbl) |
|
|
19.14 |
|
|
22.40 |
|
|
18.45 |
|
|
24.32 |
|
Oil ($/Bbl) |
|
|
49.67 |
|
|
46.44 |
|
|
50.01 |
|
|
50.47 |
|
Total average prices ($/Mcfe) |
|
|
2.66 |
|
|
3.33 |
|
|
2.70 |
|
|
3.37 |
|
*rounded to the nearest penny |
|
|
|
|
|
|
|
|
|
|
|
|
The Company’s cash production costs (which include lease operating, transportation, gathering and compression, production and ad valorem taxes) are shown in the table below. Per unit cash production costs, which include $0.35 per Mcfe of firm transportation expense, were $1.33 per Mcfe for the fourth quarter of 2019, a decrease of approximately 1% compared to the fourth quarter of 2018. For the year ended December 31, 2019 per unit cash production costs, which include $0.36 per Mcfe of firm transportation expense, were $1.32 per Mcfe, a decrease of approximately 6% compared to the year ended December 31, 2018.
General and administrative expense (including one-time merger-related expenses) was $13.9 million and $11.0 million for the three months ended December 31, 2019 and 2018, respectively, and is shown in the table below. Cash general and administrative expense5 (excluding merger-related expenses and stock-based compensation expense) was $9.0 million and $8.2 million for the three months ended December 31, 2019 and 2018, respectively. General and administrative expense per Mcfe (including one-time merger-related expenses) was $0.24 in the three months ended December 31, 2019 compared to $0.30 in the three months ended December 31, 2018. Cash general and administrative expense5 per Mcfe (excluding merger-related expenses and stock-based compensation expense) declined approximately 27% to $0.16 in the three months ended December 31, 2019 compared to $0.22 in the three months ended December 31, 2018.
General and administrative expense (including one-time merger-related expense) was $70.9 million and $44.4 million for the years ended December 31, 2019 and 2018, respectively, and is shown in the table below. Cash general and administrative expense5 (excluding merger-related expenses and stock-based compensation expense) was $36.6 million and $32.5 million for the years ended December 31, 2019 and 2018, respectively. General and administrative expense per Mcfe (including one-time merger-related expenses) was $0.35 in the year ended December 31, 2019 compared to $0.35 in the year ended December 31, 2018. Cash general and administrative expense5 per Mcfe (excluding merger-related expenses and stock-based compensation expense) declined approximately 31% to $0.18 in the year ended December 31, 2019 compared to $0.26 in the year ended December 31, 2018.
|
5 |
Cash general and administrative expense is a non-GAAP financial measure. A table reconciling cash general and administrative expense to the most directly comparable GAAP measure can be found under “Cash General and Administrative Expense” in this press release. |
|
|
|
Three Months Ended |
|
Year Ended |
||||||||
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
|
Operating expenses (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
13,708 |
|
$ |
6,263 |
|
$ |
43,359 |
|
$ |
28,289 |
|
Transportation, gathering and compression |
|
|
58,761 |
|
|
40,640 |
|
|
208,826 |
|
|
138,766 |
|
Production and ad valorem taxes |
|
|
3,622 |
|
|
2,915 |
|
|
12,141 |
|
|
10,141 |
|
Total cash production costs |
|
$ |
76,091 |
|
$ |
49,818 |
|
$ |
264,326 |
|
$ |
177,196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion |
|
|
42,052 |
|
|
36,268 |
|
|
156,003 |
|
|
134,940 |
|
General and administrative1 |
|
|
13,867 |
|
|
10,998 |
|
|
70,941 |
|
|
44,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses per Mcfe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
0.24 |
|
$ |
0.17 |
|
$ |
0.22 |
|
$ |
0.23 |
|
Transportation, gathering and compression |
|
|
1.03 |
|
|
1.09 |
|
|
1.04 |
|
|
1.10 |
|
Production and ad valorem taxes |
|
|
0.06 |
|
|
0.08 |
|
|
0.06 |
|
|
0.08 |
|
Total cash production costs |
|
$ |
1.33 |
|
$ |
1.34 |
|
$ |
1.32 |
|
$ |
1.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion |
|
|
0.72 |
|
|
0.97 |
|
|
0.77 |
|
|
1.07 |
|
General and administrative2 |
|
|
0.24 |
|
|
0.30 |
|
|
0.35 |
|
|
0.35 |
|
1 |
Includes stock-based compensation and merger-related expenses of $ 4.9 million and $ 2.8 million for the three months ended December 31, 2019 and 2018, respectively, and $ 34.3 million and $ 11.9 million for the twelve months ended December 31, 2019 and 2018, respectively |
|
|
2 |
Includes stock-based compensation and merger-related expenses of $ 0.08 per Mcfe and $ 0.08 per Mcfe for the three months ended December 31, 2019 and 2018, respectively, and $ 0.17 per Mcfe and $ 0.09 per Mcfe for the twelve months ended December 31, 2019 and 2018, respectively |
Cash Margins
The Company’s cash margins are detailed in the table below:
|
|
|
Three Months Ended |
|
Three Months |
||||||||
|
|
|
December 31, |
|
December 31, |
|
September 30, |
||||||
|
(per Mcfe) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including cash settled derivatives, excluding firm transportation) |
|
$ |
3.01 |
|
|
$ |
3.73 |
|
|
$ |
2.88 |
|
|
Total cash production costs1 |
|
|
1.33 |
|
|
|
1.34 |
|
|
|
1.23 |
|
|
Cash production margin |
|
$ |
1.68 |
|
|
$ |
2.39 |
|
|
$ |
1.65 |
|
|
Cash production margin % |
|
|
56 |
% |
|
|
64 |
% |
|
|
57 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash production margin |
|
$ |
1.68 |
|
|
$ |
2.39 |
|
|
$ |
1.65 |
|
|
Cash general and administrative expenses2 |
|
|
0.16 |
|
|
|
0.22 |
|
|
|
0.18 |
|
|
Cash operating margin |
|
$ |
1.52 |
|
|
$ |
2.17 |
|
|
$ |
1.47 |
|
|
Cash operating margin % |
|
|
50 |
% |
|
|
58 |
% |
|
|
51 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating margin |
|
$ |
1.52 |
|
|
$ |
2.17 |
|
|
$ |
1.47 |
|
|
Interest expense |
|
|
0.26 |
|
|
|
0.38 |
|
|
|
0.27 |
|
|
Corporate cash operating margin3 |
|
$ |
1.26 |
|
|
$ |
1.79 |
|
|
$ |
1.20 |
|
|
Corporate cash operating margin % |
|
|
42 |
% |
|
|
48 |
% |
|
|
42 |
% |
|
1 |
Includes lease operating, transportation, gathering and compression, production and ad valorem taxes |
|
|
2 |
Cash general and administrative expense is a non-GAAP financial measure which excludes stock-based compensation expense and merger related expenses, see reconciliation to the most comparable GAAP measure under “Cash General and Administrative Expense” in this press release |
|
|
3 |
Includes lease operating, transportation, gathering and compression, production and ad valorem taxes, cash general & administrative expense and interest expense. Cash general and administrative expense is a non-GAAP financial measure which excludes stock-based compensation expense and merger related expenses, see reconciliation to the most comparable GAAP measure under “Cash General and Administrative Expense” in this press release |
Capital Expenditures
Fourth quarter 2019 capital expenditures were $81.6 million, including $65.1 million for drilling and completions and $16.5 million for land-related expenditures.
For the year ended December 31, 2019 capital expenditures were $366.2 million, including $339.7 million for drilling and completions, $25.9 million for land-related expenditures, and $0.6 million for corporate-related expenditures.
During the fourth quarter of 2019, the Company commenced drilling 6 gross (5.1 net) operated wells, commenced completions of 5 gross (4.5 net) operated wells and turned to sales 4 gross (3.4 net) operated wells.
During the year ended December 31, 2019, the Company commenced drilling 32 gross (28.2 net) operated wells, commenced completions of 36 gross (30.0 net) operated wells and turned to sales 39 gross (30.8 net) operated wells.
Financial Position and Liquidity
As of December 31, 2019, the Company’s liquidity was $352.9 million, consisting of $12.1 million in cash and cash equivalents and $340.8 million in available borrowing capacity under the Company’s revolving credit facility (after giving effect to outstanding letters of credit issued by the Company of $29.2 million and $130.0 million in outstanding borrowings).
Michael Hodges, Executive Vice President and Chief Financial Officer, commented, “We are very proud of the financial results in 2019 that have allowed Montage to increase its financial strength despite a weakening commodity price environment throughout the year. In 2019, we increased our net income by approximately 69%, increased our adjusted EBITDAX by approximately 19%, lowered our financial leverage by about 10% and more than doubled our year-end available liquidity as compared to 2018. We believe the votes of confidence we have received in 2019 from our lending group (an increase in our borrowing base of $275 million) and from the credit ratings agencies (our credit ratings have been reaffirmed or upgraded while many Appalachian peers have been downgraded) provide objective third-party evidence of the financial strength of Montage. Given our ample liquidity, low leverage and no debt maturities for more than three years, we believe we are uniquely positioned to navigate the current commodity price landscape.
Our gas marketing team’s ability to optimize our production stream continues to allow the Company to achieve an uplift relative to in-basin Appalachian pricing and, when coupled with our highly advantaged Marcellus processing contract, allows the Company to realize one of the best all-in product prices in Appalachia. Moving forward, we believe that Montage’s conservative 2020 operating plan, which incorporates significantly less near-term activity and a capital budget of approximately $200 million (based upon the midpoint of guidance) continues to protect our balance sheet with over 56% of our produced natural gas and 52% of our produced oil hedged at an average of price $2.64 per MMbtu and $57.13 per Bbl, respectively, for 2020.”
Commodity Derivatives
The Company engages in a number of different commodity trading program strategies as a risk management tool to attempt to mitigate the potential negative impact on cash flows caused by price fluctuations in natural gas, NGL and oil prices. Below is a table that illustrates the Company’s hedging activities as of December 31, 2019:
|
Natural Gas Derivatives: |
|||||||||
|
Description |
|
Volume |
|
Production Period |
|
Weighted Average |
|||
|
Natural Gas Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
January 2020 – December 2020 |
|
$ |
2.67 |
|
|
|
|
|
20,000 |
|
January 2020 – March 2020 |
|
$ |
2.80 |
|
|
|
|
|
80,000 |
|
January 2020 – June 2020 |
|
$ |
2.67 |
|
|
|
|
|
20,000 |
|
April 2020 – June 2020 |
|
$ |
2.75 |
|
|
|
|
|
30,000 |
|
July 2020 – December 2020 |
|
$ |
2.60 |
|
|
|
|
|
25,000 |
|
January 2020 – March 2021 |
|
$ |
2.60 |
|
|
|
|
|
20,000 |
|
July 2020 – March 2021 |
|
$ |
2.58 |
|
|
Natural Gas Collars: |
|
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
50,000 |
|
January 2020 – December 2020 |
|
$ |
2.49 |
|
|
Ceiling sold price (call) |
|
|
50,000 |
|
January 2020 – December 2020 |
|
$ |
2.88 |
|
|
Floor purchase price (put) |
|
|
30,000 |
|
January 2020 – March 2020 |
|
$ |
2.65 |
|
|
Ceiling sold price (call) |
|
|
30,000 |
|
January 2020 – March 2020 |
|
$ |
2.98 |
|
|
Floor purchase price (put) |
|
|
15,000 |
|
April 2020 – June 2020 |
|
$ |
2.50 |
|
|
Ceiling sold price (call) |
|
|
15,000 |
|
April 2020 – June 2020 |
|
$ |
2.80 |
|
|
Natural Gas Three-way Collars: |
|
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
30,000 |
|
January 2020 – December 2020 |
|
$ |
2.70 |
|
|
Floor sold price (put) |
|
|
30,000 |
|
January 2020 – December 2020 |
|
$ |
2.40 |
|
|
Ceiling sold price (call) |
|
|
30,000 |
|
January 2020 – December 2020 |
|
$ |
3.05 |
|
|
Floor purchase price (put) |
|
|
30,000 |
|
January 2020 – March 2020 |
|
$ |
2.72 |
|
|
Floor sold price (put) |
|
|
30,000 |
|
January 2020 – March 2020 |
|
$ |
2.25 |
|
|
Ceiling sold price (call) |
|
|
30,000 |
|
January 2020 – March 2020 |
|
$ |
3.15 |
|
|
Floor purchase price (put) |
|
|
50,000 |
|
January 2020 – June 2020 |
|
$ |
2.82 |
|
|
Floor sold price (put) |
|
|
50,000 |
|
January 2020 – June 2020 |
|
$ |
2.40 |
|
|
Ceiling sold price (call) |
|
|
50,000 |
|
January 2020 – June 2020 |
|
$ |
3.11 |
|
|
Floor purchase price (put) |
|
|
45,000 |
|
January 2021 – December 2021 |
|
$ |
2.55 |
|
|
Floor sold price (put) |
|
|
45,000 |
|
January 2021 – December 2021 |
|
$ |
2.25 |
|
|
Ceiling sold price (call) |
|
|
45,000 |
|
January 2021 – December 2021 |
|
$ |
2.81 |
|
|
Natural Gas Call/Put Options: |
|
|
|
|
|
|
|
|
|
|
Floor sold price (put) |
|
|
50,000 |
|
January 2020 – December 2020 |
|
$ |
2.30 |
|
|
Floor sold price (put) |
|
|
50,000 |
|
January 2020 – June 2020 |
|
$ |
2.25 |
|
|
Swaption sold price (call) |
|
|
50,000 |
|
January 2021 – December 2021 |
|
$ |
2.75 |
|
|
Swaption sold price (call) |
|
|
50,000 |
|
January 2022 – December 2022 |
|
$ |
3.00 |
|
|
Basis Swaps: |
|
|
|
|
|
|
|
|
|
|
Appalachia – Dominion |
|
|
12,500 |
|
April 2020 – October 2020 |
|
$ |
(0.52 |
) |
|
Appalachia – Dominion |
|
|
20,000 |
|
January 2020 – December 2020 |
|
$ |
(0.59 |
) |
|
Appalachia – Dominion |
|
|
20,000 |
|
January 2020 – March 2020 |
|
$ |
(0.39 |
) |
|
Oil Derivatives: |
||||||||
|
Description |
|
Volume |
|
Production Period |
|
Weighted Average |
||
|
Oil Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
1,500 |
|
January 2020 – December 2020 |
|
$ |
57.07 |
|
|
|
|
1,000 |
|
July 2020 – December 2020 |
|
$ |
56.53 |
|
|
|
|
250 |
|
July 2020 – March 2021 |
|
$ |
53.20 |
|
|
|
|
250 |
|
January 2021 – March 2021 |
|
$ |
53.00 |
|
Oil Collars: |
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
500 |
|
January 2020 – December 2020 |
|
$ |
50.00 |
|
Ceiling sold price (call) |
|
|
500 |
|
January 2020 – December 2020 |
|
$ |
64.00 |
|
Floor purchase price (put) |
|
|
500 |
|
July 2020 – December 2020 |
|
$ |
52.00 |
|
Ceiling sold price (call) |
|
|
500 |
|
July 2020 – December 2020 |
|
$ |
60.00 |
|
Floor purchase price (put) |
|
|
500 |
|
January 2020 – March 2020 |
|
$ |
60.00 |
|
Ceiling sold price (call) |
|
|
500 |
|
January 2020 – March 2020 |
|
$ |
67.00 |
|
Oil Three-way Collars: |
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
2,000 |
|
January 2020 – June 2020 |
|
$ |
62.50 |
|
Floor sold price (put) |
|
|
2,000 |
|
January 2020 – June 2020 |
|
$ |
55.00 |
|
Ceiling sold price (call) |
|
|
2,000 |
|
January 2020 – June 2020 |
|
$ |
74.00 |
|
Oil Call/Put Options: |
|
|
|
|
|
|
|
|
|
Swaption sold price (call) |
|
|
500 |
|
January 2021 – December 2021 |
|
$ |
56.80 |
|
Floor sold price (put) |
|
|
500 |
|
July 2020 – December 2020 |
|
$ |
45.00 |
|
NGL Derivatives: |
||||||||
|
Description |
|
Volume |
|
Production Period |
|
Weighted Average |
||
|
Propane Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
750 |
|
January 2020 – December 2020 |
|
$ |
21.46 |
Guidance
The Company is reiterating first quarter and full year 2020 guidance as set forth in the table below:
|
|
|
Q1 2020 |
|
FY 2020 |
|
Production MMcfe/d |
|
585 – 600 |
|
570 – 590 |
|
% Gas |
|
79% – 81% |
|
79% – 81% |
|
% NGL |
|
11% – 13% |
|
11% – 13% |
|
% Oil |
|
7% – 9% |
|
7% – 9% |
|
Gas Price Differential ($/Mcf)1,2 |
|
$(0.10) – $(0.20) |
|
$(0.20) – $(0.30) |
|
Oil Differential ($/Bbl)1 |
|
$(7.75) – $(8.75) |
|
$(7.75) – $(8.75) |
|
NGL Prices (% of WTI)1 |
|
30% – 35% |
|
30% – 35% |
|
Cash Production Costs ($/Mcfe)3 |
|
$1.25 – $1.35 |
|
$1.25 – $1.35 |
|
Cash G&A ($mm)4 |
|
$9 – $11 |
|
$33 – $37 |
|
CAPEX ($mm) |
|
|
|
$190 – $210 |
|
1 |
Excludes impact of hedges |
|
|
2 |
Excludes the cost of firm transportation |
|
|
3 |
Includes lease operating, transportation, gathering and compression, production and ad valorem taxes |
|
|
4 |
Non-GAAP financial measure which excludes stock-based compensation expense and merger related expenses, see reconciliation to the most comparable GAAP measure under “Cash General and Administrative Expense” in this press release |
Conference Call
A conference call to review the Company’s fourth quarter and full year 2019 financial and operational results is scheduled for Friday March 6, 2020, at 10:00 a.m. Eastern Time. To participate in the call, please dial 877-709-8150 or 201-689-8354 for international callers and reference Montage Resources Full Year 2019 Earnings Call. A replay of the call will be available through May 6, 2020. To access the phone replay, dial 877-660-6853 or 201-612-7415 for international callers. The conference ID is 13699118. A live webcast of the call may be accessed through the Investor Center on the Company’s website at www.montageresources.com. The webcast will be archived for replay on the Company’s website for six months.
|
MONTAGE RESOURCES CORPORATION |
||||||||
|
CONSOLIDATED BALANCE SHEETS |
||||||||
|
(In thousands, except share and per share amounts) |
||||||||
|
|
|
December 31, |
|
|
December 31, |
|||
|
ASSETS |
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
12,056 |
|
|
$ |
5,959 |
|
|
Accounts receivable |
|
|
77,402 |
|
|
|
119,332 |
|
|
Assets held for sale |
|
|
1,047 |
|
|
|
— |
|
|
Other current assets |
|
|
35,509 |
|
|
|
8,639 |
|
|
Total current assets |
|
|
126,014 |
|
|
|
133,930 |
|
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT |
|
|
|
|
|
|
|
|
|
Oil and natural gas properties, successful efforts method: |
|
|
|
|
|
|
|
|
|
Unproved properties |
|
|
508,576 |
|
|
|
482,475 |
|
|
Proved oil and gas properties, net |
|
|
1,251,105 |
|
|
|
807,583 |
|
|
Other property and equipment, net |
|
|
11,226 |
|
|
|
6,300 |
|
|
Total property and equipment, net |
|
|
1,770,907 |
|
|
|
1,296,358 |
|
|
|
|
|
|
|
|
|
|
|
|
OTHER NONCURRENT ASSETS |
|
|
|
|
|
|
|
|
|
Other assets |
|
|
7,616 |
|
|
|
3,481 |
|
|
Operating lease right-of-use assets |
|
|
36,975 |
|
|
|
— |
|
|
Assets held for sale |
|
|
9,665 |
|
|
|
— |
|
|
TOTAL ASSETS |
|
$ |
1,951,177 |
|
|
$ |
1,433,769 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
119,907 |
|
|
$ |
116,735 |
|
|
Accrued capital expenditures |
|
|
43,500 |
|
|
|
12,979 |
|
|
Accrued liabilities |
|
|
53,866 |
|
|
|
56,909 |
|
|
Accrued interest payable |
|
|
21,308 |
|
|
|
21,661 |
|
|
Liabilities associated with assets held for sale |
|
|
2,815 |
|
|
|
— |
|
|
Operating lease liability |
|
|
12,666 |
|
|
|
— |
|
|
Total current liabilities |
|
|
254,062 |
|
|
|
208,284 |
|
|
|
|
|
|
|
|
|
|
|
|
NONCURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
Debt, net of unamortized discount and debt issuance costs |
|
|
500,541 |
|
|
|
497,778 |
|
|
Revolving credit facility |
|
|
130,000 |
|
|
|
32,500 |
|
|
Asset retirement obligations |
|
|
29,877 |
|
|
|
7,110 |
|
|
Other liabilities |
|
|
8,029 |
|
|
|
611 |
|
|
Operating lease liability |
|
|
24,569 |
|
|
|
— |
|
|
Liabilities associated with assets held for sale |
|
|
7,013 |
|
|
|
— |
|
|
Total liabilities |
|
|
954,091 |
|
|
|
746,283 |
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Preferred stock, 50,000,000 authorized, no shares issued and outstanding |
|
|
— |
|
|
|
— |
|
|
Common stock, $0.01 par value, 1,000,000,000 authorized, 35,770,934 and 20,169,063 shares issued and outstanding, respectively |
|
|
383 |
|
|
|
3,043 |
|
|
Additional paid in capital |
|
|
2,352,309 |
|
|
|
2,065,119 |
|
|
Treasury stock, shares at cost; 2,508,485 and 1,747,624 shares, respectively |
|
|
(10,049 |
) |
|
|
(3,357 |
) |
|
Accumulated deficit |
|
|
(1,345,557 |
) |
|
|
(1,377,319 |
) |
|
Total stockholders’ equity |
|
|
997,086 |
|
|
|
687,486 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
1,951,177 |
|
|
$ |
1,433,769 |
|
Contacts
Montage Resources Corporation
Douglas Kris, Investor Relations
469-444-1736
[email protected]
