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

 

August 7, 2014

Date of Report (Date of earliest event reported)

 

Bonanza Creek Energy, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-35371

 

61-1630631

(State or other jurisdiction of
incorporation or organization)

 

(Commission File No.)

 

(I.R.S. employer identification
number)

 

410 17th Street, Suite 1400

Denver, Colorado 80202

(Address of principal executive offices, including zip code)

 

(720) 440-6100

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

 

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

 

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.02                   Results of Operations and Financial Condition.

 

On August 7, 2014, Bonanza Creek Energy, Inc. (the “Company”) announced its results for the fiscal quarter ended June 30, 2014.  A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.  The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01                   Financial Statements and Exhibits.

 

(d)           Exhibits

 

99.1                        Press release issued August 7, 2014 announcing financial and operational results for the fiscal quarter ended June 30, 2014.

 

2



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Bonanza Creek Energy, Inc.

 

 

Date: August 7, 2014

By:

/s/ Christopher I. Humber

 

 

Christopher I. Humber

 

 

Executive Vice President, General Counsel and Secretary

 

3



 

INDEX TO EXHIBITS

 

Exhibit Number

 

Description

99.1

 

Press release issued August 7, 2014 announcing financial and operational results for the fiscal quarter ended June 30, 2014.

 

4



Exhibit 99.1

 

Bonanza Creek Energy Announces Second Quarter 2014 Operational and Financial Results

 

DENVER, August 7, 2014 — Bonanza Creek Energy, Inc. (NYSE: BCEI) today reported its second quarter 2014 operating and financial results.

 

Key highlights for second quarter 2014, as compared to results from continuing operations for second quarter 2013(1), include:

 

·                  69% increase in sales volumes to 22,849 Boe/d; 70% crude oil and liquids

·                  79% increase in revenue to $151.7 million

·                  75% increase in adjusted net income(2) to $18.9 million, or $0.48 per share

·                  Adjusted net income(2) of $20.7 million, or $0.52 per share, when executive departure costs are excluded

·                  75% increase in adjusted EBITDAX(2) to $94.5 million

·                  Adjusted EBITDAX(2) of $97.4 million when executive departure costs are excluded

 


(1)         Bonanza Creek began the divestiture process of its California properties in second quarter 2012 and sold its remaining property, the Midway Sunset Field, on March 21, 2014. Under generally accepted accounting principles, the results of operations for second quarter 2013 are presented as continuing operations.

 

(2)         Non-GAAP measure, see attached Reconciliation Schedules.

 

Operational highlights for second quarter 2014 include:

 

·                  40-acre spaced Niobrara B bench pad incorporating two wells with 28-stage fracs declined only 3% to 463 Boe/d after 60 days of initial production and all four wells are performing above the Company’s target type curve

·                  Codell step-out well targeting six feet of net pay thickness initial 30-day production rate of 426 Boe/d

·                  Three extended reach laterals drilled and completed successfully; initial 30-day production rates were 809 Boe/d for a 9,000’ lateral in the Niobrara B bench, 600 Boe/d for a 9,000’ lateral in the Niobrara C bench and 746 Boe/d for a 7,500’ lateral in the Codell

 

Marvin Chronister, Bonanza Creek’s Interim President and Chief Executive Officer, commented, “Second quarter’s results reflect Bonanza Creek’s unwavering focus on execution and operational excellence. Production and the pace of drilling and completions are right on plan. Furthermore, as a result of our catalyst testing program in the Wattenberg Field we are becoming increasingly confident in 40-acre spacing, optimal lateral lengths and well configuration, and the primary recoveries achievable in the Niobrara and Codell. With over 70,000 largely contiguous net acres in the Wattenberg Field we are well positioned for top tier production growth far into the future.”

 

Second Quarter 2014 Financial Results

 

Average realized prices for second quarter 2014, before the effect of commodity derivatives, were $92.60 per Bbl of oil, $5.34 per Mcf of natural gas and $51.89 per Bbl of NGLs, compared to $89.41 per Bbl of oil, $4.47 per Mcf of natural gas and $49.03 per Bbl of NGLs for second quarter 2013.

 



 

Net revenue for second quarter 2014 was $151.7 million, compared to $84.5 million for second quarter 2013. Crude oil and liquids revenue accounted for approximately 87% of total revenue.

 

Lease operating expense (“LOE”) for second quarter 2014 was $18.0 million, or $8.67 per Boe, compared to $12.9 million, or $10.50 per Boe, for second quarter 2013.

 

General and administrative expense (“G&A”) for second quarter 2014 was $24.5 million, or $11.81 per Boe, compared to $13.3 million, or $10.82 per Boe, for second quarter 2013. Cash G&A(2) was $17.1 million, or $8.27 per Boe, compared to $10.6 million, or $8.63 per Boe, for second quarter 2013. G&A was impacted by executive departure costs of approximately $6.6 million, of which $2.9 million was cash. Not including departure costs, cash G&A for second quarter 2014 was $14.3 million, or $6.86 per Boe.

 

Severance and ad valorem taxes for second quarter 2014 were $16.3 million, or $7.82 per Boe, compared to $5.4 million, or $4.36 per Boe, for second quarter 2013. Colorado has higher severance and ad valorem tax rates than Arkansas and contributed a greater percentage of production for second quarter 2014 when compared to the same period in 2013. In addition, our increase in new production during 2013 in the Wattenberg Field resulted in a higher than expected lag in the amount of ad valorem tax credits eligible for deduction against severance taxes generated in the current year because ad valorem taxes are not eligible for deduction in the year a well is completed.

 

Net income for second quarter 2014 was $1.2 million, or $0.03 per diluted share, compared to $14.7 million, or $0.36 per diluted share for second quarter 2013. Adjusted net income(2) for second quarter 2014 was $18.9 million, or $0.48 per diluted share, compared to adjusted net income of $10.8 million, or $0.27 per diluted share for second quarter 2013. Excluding cash severance costs associated with executive departures resulted in adjusted net income during the quarter of approximately $20.7 million, or $0.52 per diluted share.

 

Operations Update

 

During second quarter 2014, the Company achieved an average production rate of 22,849 Boe/d, comprised of 66% crude oil, 4% NGLs, and 30% natural gas.

 

Rocky Mountain Region — Wattenberg Horizontal Development

 

The Rocky Mountain region contributed 17,061 Boe/d, or 75% of total Company net sales volumes for the quarter, comprised of 71% crude oil and 29% liquids-rich natural gas. Approximately 95% of second quarter sales volumes were from horizontal wells. Sales volumes increased by approximately 104% over second quarter 2013.

 

During the quarter, the Company spud 32 gross (28.7 net) wells and placed 38 gross (31.9 net) operated wells into sales.

 

Catalyst Drilling Program

 

The Company’s four well pad spaced at 40-acres in the Niobrara B bench, in which the two internal wells were completed with 28 stages, reported a four well average initial 60-day production rate of 463 Boe/d, only a 3% decline compared to the average initial 30-day production rate of 477 Boe/d. All four wells are currently tracking above the Company’s 313

 



 

MBoe target type curve. The Company plans to drill a five well pad, completed with 28-stages per well, testing 40-acre spacing in the Niobrara B and C benches in the third quarter.

 

The Company completed its most eastern Codell well to date and reported an initial 30-day production rate of 426 Boe/d. The Codell well was drilled and completed in an area with just six feet of net pay that meets a 10% porosity threshold. The Company plans to drill a second eastern step-out well in the fourth quarter 2014. No current 3P inventory or reserves are associated with Codell net pay thickness of less than eight feet.

 

The Company successfully drilled and completed two 9,000’ laterals in the Niobrara B and C benches and one 7,500’ lateral in the Codell. The Niobrara B bench well achieved an average 30-day production rate of 809 Boe/d, the Niobrara C bench well reported an average 30-day production rate of 600 Boe/d and average 60-day rate of 592 Boe/d, while the 7,500’ Codell lateral averaged 746 Boe/d and 679 Boe/d over its first 30 and 60 days of production, respectively. The Company plans to drill a total of 11 medium and extended reach laterals in 2014.

 

Midstream Update

 

A recent Federal Energy Regulatory Commission ruling indirectly voided the Company’s privately negotiated agreement with a midstream partner to secure up to 18,000 Bbl/d (gross) through 2020 on the White Cliffs pipeline. As a part of the ruling, the FERC mandated that a new open season be conducted on the uncommitted volumes associated with the expansion project slated to come on line in late August. The Company will continue to seek firm transportation opportunities to bring its crude oil volumes to market via the White Cliffs expansion and other pipeline projects under consideration. Crude oil differentials to the West Texas Intermediate benchmark in the DJ Basin currently range from $11 to $14.

 

Mid-Continent Cotton Valley Program

 

The Mid-Continent region contributed 5,788 Boe/d, or 25% of total Company net sales volumes for second quarter 2014, comprised of 51% crude oil, 16% natural gas liquids and 33% natural gas. Sales volumes increased by approximately 13% over second quarter 2013. During the quarter, Bonanza Creek spud 12 gross (9.0 net) wells, performed 33 recompletions and tied 15 gross (10.8 net) wells into sales.

 

2014 Annual Guidance Update

 

The Company updated its 2014 annual guidance to incorporate the acquisition of approximately 34,000 net acres in the Wattenberg Field and its associated production.

 

Average production (Boe/d)

 

23,200 – 25,200

 

 

 

 

 

Operating costs and expenses (per Boe):

 

 

 

Lease operating

$

8.00 – 8.60

 

Cash general and administrative

$

6.25 – 7.00

 

Production taxes (% of pre-hedge realizations):

%

 9.5-10.0

 

 

 

 

 

Capital expenditures (in millions):

$

575 – 625

 

 



 

The Company has adjusted its forecast for production taxes for 2014 from 6.5 to 7.0 percent of pre-hedge revenue to a range of 9.5 to 10.0 percent as a result of a loss of ad valorem tax credits related to low rate vertical well production.

 

Financial and Risk Management Update

 

As of June 30, 2014, the Company had a $1.0 billion revolving credit facility with a borrowing base of $525 million. The Company had a letter of credit totaling $36.0 million and cash totaling $36.6 million, resulting in total liquidity of $525.6 million. Concurrent with our $300 million offering of 5.75% senior notes which was completed on July 18th, our borrowing base was reduced by $75 million to $450 million.

 

Commodity Derivatives Positions

 

The following table summarizes the Company’s crude oil and natural gas commodity derivative positions as of August 1, 2014 and settling quarterly thereafter:

 

Settlement

 

Swap

 

Fixed

 

Collar

 

Average

 

Average

 

Average

 

Period

 

Volume

 

Price

 

Volume

 

Short Floor

 

Floor

 

Ceiling

 

Oil

 

Bbl/d

 

$

 

Bbl/d

 

$

 

$

 

$

 

Q3 2014

 

5,870

 

96.09

 

4,326

 

 

 

86.16

 

96.57

 

Q4 2014

 

6,370

 

95.62

 

4,326

 

 

 

86.16

 

96.57

 

Q3-Q4 2014

 

 

 

 

 

2,000

 

65.00

 

87.68

 

99.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1 2015

 

6,000

 

95.39

 

6,500

 

68.08

 

84.32

 

95.90

 

Q2 2015

 

5,000

 

94.21

 

5,500

 

67.73

 

84.09

 

95.16

 

Q3-Q4 2015

 

2,000

 

93.43

 

6,500

 

68.46

 

84.62

 

95.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FY 2016

 

 

 

 

 

5,500

 

70.00

 

85.00

 

96.83

 

 

Gas

 

MMBtu/d

 

$

 

MMBtu/d

 

$

 

$

 

$

 

Q3-Q4 2014

 

 

 

 

 

30,000

 

3.63

 

4.21

 

4.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FY 2015

 

 

 

 

 

15,000

 

3.50

 

4.00

 

4.75

 

 

Conference Call Information

 

Bonanza Creek will host a conference call on Friday, August 8, 2014 at 8:00 a.m. Mountain Time (10:00 a.m. Eastern Time). To access the live interactive call, please dial (866) 825-1709 or (617) 213-8060 and use the passcode 82982957. This call is being webcast and can be accessed at Bonanza Creek’s website www.bonanzacrk.com for one year after the event.

 

About Bonanza Creek Energy, Inc.

 

Bonanza Creek Energy, Inc. is an independent oil and natural gas company engaged in the acquisition, exploration, development and production of onshore oil and associated liquids-rich natural gas in the United States. The Company’s assets and operations are concentrated primarily in the Rocky Mountains in the Wattenberg Field, focused on the Niobrara oil shale, and in southern Arkansas, focused on the oil-rich Cotton Valley sands. The Company’s common shares are listed for trading on the NYSE under the symbol: “BCEI.” For more information about

 



 

the Company, please visit www.bonanzacrk.com. Please note that the Company routinely posts important information about the Company under the Investor Relations section of its website.

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Company based on management’s experience, perception of historical trends and technical analyses, current conditions, anticipated future developments and other factors believed to be appropriate and reasonable by management. When used in this press release, the words “will,” “potential,” “believe,” “estimate,” “intend,” “expect,” “may,” “should,” “anticipate,” “could,” “plan,” “predict,” “project,” “profile,” “model” or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These statements include statements regarding the Company’s capital program, drilling and development program, downspacing results and ability to secure firm transportation. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, that may cause actual results to differ materially from those implied or expressed by the forward-looking statements, including the following: changes in natural gas, oil and NGL prices; general economic conditions, including the performance of financial markets and interest rates; drilling results; shortages of oilfield equipment, services and personnel; operating risks such as unexpected drilling conditions; ability to acquire adequate supplies of water; risks related to derivative instruments; and access to adequate gathering systems and pipeline take-away capacity. Further information on such assumptions, risks and uncertainties is available in the Company’s SEC filings. We refer you to the discussion of risk factors in our Annual Report on Form 10-K for the year ended December 31, 2013 and other filings submitted by us to the Securities Exchange Commission. The Company’s SEC filings are available on the Company’s website at www.bonanzacrk.com and on the SEC’s website at www.sec.gov. All of the forward-looking statements made in this press release are qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, including guidance, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

 

For further information, please contact:

 

Mr. Ryan Zorn

Vice President — Finance & Treasurer

720-440-6172

 

Mr. James Masters

Investor Relations Manager

720-440-6121

 



 

Schedule 1: Condensed Statements of Operations

(in thousands, expect for per share data, unaudited)

 

 

 

Three Months Ended

 

 

 

June 30

 

 

 

2014

 

2013

 

NET REVENUES

 

 

 

 

 

Oil and gas sales

 

$

151,682

 

$

84,517

 

OPERATING EXPENSES

 

 

 

 

 

Lease operating

 

18,018

 

12,898

 

Severance and ad valorem taxes

 

16,263

 

5,352

 

Exploration

 

96

 

862

 

Depreciation, depletion and amortization

 

54,117

 

29,517

 

General and administrative (including $7,353 and $2,685 in 2014 and 2013, respectively, of stock compensation)

 

24,547

 

13,283

 

Total operating expenses

 

113,041

 

61,912

 

INCOME FROM OPERATIONS

 

38,641

 

22,605

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

Derivative gain (loss)

 

(27,307

)

7,562

 

Interest expense

 

(9,434

)

(5,870

)

Other income (loss)

 

167

 

(86

)

Total other income (expense)

 

(36,574

)

1,606

 

INCOME FROM CONTINUING OPERATIONS BEFORE TAXES

 

2,067

 

24,211

 

Income tax expense

 

(796

)

(9,328

)

INCOME FROM CONTINUING OPERATIONS

 

$

1,271

 

$

14,883

 

DISCONTINUED OPERATIONS

 

 

 

 

 

Loss from operations associated with oil and gas properties held for sale

 

 

(274

)

Loss on sale of oil and gas properties

 

(184

)

 

Income tax benefit

 

71

 

106

 

Loss from discontinued operations

 

(113

)

(168

)

NET INCOME

 

$

1,158

 

$

14,715

 

DILUTED INCOME PER SHARE

 

 

 

 

 

Income from continuing operations

 

$

0.03

 

$

0.37

 

Income (loss) from discontinued operations

 

$

0.00

 

$

(0.01

)

Net income per common share

 

$

0.03

 

$

0.36

 

WEIGHTED AVERAGE NUMBER OF SHARES OF OUTSTANDING COMMON STOCK

 

 

 

 

 

Basic

 

39,758

 

39,336

 

Diluted

 

39,857

 

39,350

 

 


*     The Company follows the two-class method when computing the basic and diluted income (loss) per share, which allocates earnings between common shareholders and participating securities. Please refer to Note 11 — Earnings per Share in the Form 10-Q, for a detailed calculation.

 



 

Schedule 2: Condensed Statements of Cash Flows

(in thousands, unaudited)

 

 

 

Six Months Ended

 

 

 

June 30

 

 

 

2014

 

2013

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net income

 

$

14,689

 

$

25,971

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation, depletion and amortization

 

95,316

 

53,084

 

Deferred income taxes

 

9,095

 

16,270

 

Stock-based compensation

 

14,150

 

7,063

 

Amortization of deferred financing costs

 

1,156

 

665

 

Amortization of premium on Senior Notes

 

(614

)

 

Accretion of contractual obligation for land acquisition

 

381

 

381

 

Derivative (gain) loss

 

36,085

 

(2,447

)

Gain on sale of oil and gas properties

 

(6,330

)

 

Other

 

(14

)

 

Changes in current assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(32,385

)

(9,343

)

Prepaid expenses and other assets

 

(2,575

)

634

 

Accounts payable and accrued liabilities

 

29,114

 

(1,377

)

Settlement of asset retirement obligations

 

(99

)

(73

)

Net cash provided by operating activities

 

157,969

 

90,828

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Acquisition of oil and gas properties

 

(3,091

)

(8,352

)

Proceeds from sale of oil and gas properties

 

6,000

 

 

Exploration and development of oil and gas properties

 

(275,890

)

(162,689

)

Natural gas plant capital expenditures

 

(271

)

(3,987

)

Derivative cash settlements

 

(8,142

)

(2,993

)

(Increase) decrease in restricted cash

 

(11,280

)

79

 

Additions to property and equipment - non oil and gas

 

(3,989

)

(2,626

)

Net cash used in investing activities

 

(296,663

)

(180,568

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Proceeds from credit facility

 

 

33,500

 

Payments to credit facility

 

 

(191,500

)

Proceeds from sale of Senior Notes

 

 

300,000

 

Offering costs related to sale of senior subordinated notes

 

(277

)

(7,270

)

Net share settlement from issuance of stock awards

 

(4,766

)

(3,127

)

Deferred financing costs

 

(290

)

(46

)

Net cash (used in) provided by financing activities

 

(5,333

)

131,557

 

Net change in cash and cash equivalents

 

(144,027

)

41,817

 

Cash and cash equivalents, beginning of period

 

180,582

 

4,268

 

Cash and cash equivalents, end of period

 

$

36,555

 

$

46,085

 

 



 

Schedule 3: Condensed Balance Sheet

(in thousands, unaudited)

 

 

 

June 30,

 

December 31,

 

 

 

2014

 

2013

 

Assets

 

 

 

 

 

Current assets

 

$

152,319

 

$

264,174

 

Oil and gas properties and gas plant, net

 

1,470,248

 

1,267,249

 

Other assets

 

24,548

 

14,152

 

Oil and gas properties held for sale, less accumulated depreciation, depletion, and amortization

 

 

360

 

Total Assets

 

$

1,647,115

 

$

1,545,935

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities

 

236,537

 

175,226

 

Long-term debt

 

530,647

 

530,880

 

Deferred taxes

 

161,776

 

152,681

 

Other long-term liabilities

 

38,055

 

31,120

 

Total Liabilities

 

$

967,015

 

$

889,907

 

Stockholders’ Equity

 

680,100

 

656,028

 

Total Liabilities and Stockholders’ Equity

 

$

1,647,115

 

$

1,545,935

 

 



 

Schedule 4: Volumes and Realized Prices

(unaudited)

 

 

 

Three Months Ended

 

 

 

June 30

 

 

 

2014

 

2013

 

Wellhead Volumes and Prices

 

 

 

 

 

Crude Oil and Condensate Sales Volumes (Bbl/d)

 

 

 

 

 

Rocky Mountains

 

12,163

 

5,902

 

Mid-Continent

 

2,962

 

2,845

 

Total

 

15,125

 

8,747

 

Crude Oil and Condensate Realized Prices ($/Bbl)

 

 

 

 

 

Rocky Mountains

 

$

90.59

 

$

86.02

 

Mid-Continent

 

100.84

 

96.44

 

Composite (before derivatives)

 

$

92.60

 

$

89.41

 

Composite (after derivatives)

 

$

88.31

 

$

87.41

 

Natural Gas Liquids Sales Volumes (Bbl/d)

 

 

 

 

 

Rocky Mountains

 

35

 

30

 

Mid-Continent

 

919

 

842

 

Total

 

954

 

872

 

Natural Gas Liquids Realized Prices ($/Bbl)

 

 

 

 

 

Rocky Mountains

 

$

28.72

 

$

37.93

 

Mid-Continent

 

52.79

 

49.42

 

Composite (before derivatives)

 

$

51.89

 

$

49.03

 

Composite (after derivatives)

 

$

51.89

 

$

49.03

 

Natural Gas Sales Volumes (Mcf/d)

 

 

 

 

 

Rocky Mountains

 

29,183

 

14,547

 

Mid-Continent

 

11,445

 

8,688

 

Total

 

40,628

 

23,235

 

Natural Gas Realized Prices ($/Mcf)

 

 

 

 

 

Rocky Mountains

 

$

5.53

 

$

4.62

 

Mid-Continent

 

4.84

 

4.21

 

Composite (before derivatives)

 

$

5.34

 

$

4.47

 

Composite (after derivatives)

 

$

5.33

 

$

4.52

 

Crude Oil Equivalent Sales Volumes (Boe/d)

 

 

 

 

 

Rocky Mountains

 

17,061

 

8,357

 

Mid-Continent

 

5,788

 

5,136

 

Total

 

22,849

 

13,493

 

Crude Oil Equivalent Sales Prices ($/Boe)

 

 

 

 

 

Rocky Mountains

 

$

74.10

 

$

68.95

 

Mid-Continent

 

69.55

 

68.66

 

Composite (before derivatives)

 

$

72.95

 

$

68.83

 

Composite (after derivatives)

 

$

70.10

 

$

67.62

 

Total Sales Volumes (MBoe)

 

2,079.3

 

1,227.8

 

 



 

Schedule 5: Adjusted Net Income

(in thousands, except per share amounts, unaudited)

 

Adjusted Net Income is a supplemental non-GAAP financial measure that is used by management and external users of the Company’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted Net Income as net income after adjusting first for (1) the impact of certain non-cash items, including changes in unrealized gains and losses on unsettled derivative instruments, loss on sale of oil and gas properties and stock-based compensation, and then (2) these items’ impact on taxes based on a tax rate of 38.5%, which approximates our effective tax rate. Adjusted Net Income is not a measure of net income as determined by GAAP.

 

The following table provides a reconciliation of net income (GAAP) to Adjusted Net Income (non-GAAP):

 

 

 

Three Months Ended

 

 

 

June 30

 

 

 

2014

 

2013

 

Net Income

 

$

1,158

 

$

14,715

 

Derivative loss (gain)

 

27,307

 

(7,562

)

Derivative cash settlements

 

(5,915

)

(1,486

)

Loss on sale of oil and gas properties

 

184

 

 

Stock-based compensation

 

7,353

 

2,685

 

Total adjustments before tax

 

28,929

 

(6,363

)

Adjustment of income tax effect

 

11,138

 

(2,450

)

Adjusted for income tax effects

 

17,791

 

(3,913

)

Adjusted Net Income

 

$

18,949

 

$

10,802

 

Adjusted Net Income per diluted share

 

$

0.48

 

$

0.27

 

 

The Company also included a supplementary adjusted net income calculation to reflect exclusion of cash severance costs recorded during the quarter due to executive departures.

 

 

 

Three Months Ended

 

 

 

June 30

 

 

 

2014

 

2013

 

Net Income

 

$

1,158

 

$

14,715

 

Derivative loss (gain)

 

27,307

 

(7,562

)

Derivative cash settlements

 

(5,915

)

(1,486

)

Loss on sale of oil and gas properties

 

184

 

 

Severance costs

 

2,922

 

 

Stock-based compensation

 

7,353

 

2,685

 

Total adjustments before tax

 

31,851

 

(6,363

)

Adjustment of income tax effect

 

12,263

 

(2,450

)

Adjusted for income tax effects

 

19,588

 

(3,913

)

Adjusted Net Income

 

$

20,746

 

$

10,802

 

Adjusted Net Income per diluted share

 

$

0.52

 

$

0.27

 

 



 

Schedule 6: Adjusted EBITDAX

(in thousands, unaudited)

 

Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as earnings before interest expense, income taxes, depreciation, depletion, amortization, exploration expenses and other similar non-cash charges. Adjusted EBITDAX is not a measure of net income or cash flows as determined by United States Generally Accepted Accounting Principles, or GAAP.

 

The following table presents a reconciliation of the GAAP financial measure of net income to the non-GAAP financial measure of Adjusted EBITDAX.

 

 

 

Three Months Ended

 

 

 

June 30

 

 

 

2014

 

2013

 

Net Income

 

$

1,158

 

$

14,715

 

Exploration

 

96

 

870

 

Depreciation, depletion and amortization

 

54,117

 

29,617

 

Stock-based compensation

 

7,353

 

2,685

 

Loss on sale of oil and gas properties

 

184

 

 

Interest expense

 

9,434

 

5,870

 

Derivative loss (gain)

 

27,307

 

(7,562

)

Derivative cash settlements

 

(5,915

)

(1,486

)

Income tax expense

 

725

 

9,222

 

Adjusted EBITDAX

 

$

94,459

 

$

53,931

 

 

The Company also included a supplementary adjusted EBITDAX calculation to reflect exclusion of cash severance costs recorded during the quarter due to executive departures.

 

 

 

Three Months Ended

 

 

 

June 30

 

 

 

2014

 

2013

 

Net Income

 

$

1,158

 

$

14,715

 

Exploration

 

96

 

870

 

Depreciation, depletion and amortization

 

54,117

 

29,617

 

Severance costs

 

2,922

 

 

Non-cash stock-based compensation

 

7,353

 

2,685

 

Loss on sale of oil and gas properties

 

184

 

 

Interest expense

 

9,434

 

5,870

 

Derivative loss (gain)

 

27,307

 

(7,562

)

Derivative cash settlements

 

(5,915

)

(1,486

)

Income tax expense

 

725

 

9,222

 

Adjusted EBITDAX

 

$

97,381

 

$

53,931