HOUSTON, Aug. 4, 2017 /PRNewswire/ -- Goodrich Petroleum
Corporation (NYSE American: GDP) (the "Company") today announced
financial results and an operational update for the second quarter
ended June 30, 2017.
FINANCIAL RESULTS
Production
Production for the quarter totaled 3.3 Bcfe, with average daily
production of approximately 36,300 Mcfe per day (85% natural gas)
growing sequentially by 40%, versus 2.3 Bcfe, or an average of
26,000 Mcfe per day in the prior quarter. Since the end of the
second quarter, July production averaged approximately 44,000 Mcfe
per day.
Revenues
Revenues for the quarter totaled $12.5
million, with 67% of our oil and gas revenue attributable to
natural gas. The average realized price was $3.67 per Mcfe ($2.89 per Mcf of natural gas and $47.96 per barrel of oil).
Cash Flow
Adjusted EBITDA increased significantly to $5.1 million in the quarter versus $0.7 million in the prior quarter.
Discretionary cash flow ("DCF"), defined as net cash provided by
operating activities before changes in working capital, was
$4.8 million in the quarter.
(See accompanying tables at the end of this press release that
reconcile Adjusted EBITDA and DCF, each of which are non-US GAAP
financial measures, to their most directly comparable US GAAP
financial measure.)
Operating Expenses
Lease operating expense ("LOE") was $3.0
million in the quarter, or $0.89 per Mcfe. LOE for the quarter
included $0.7 million, or
$0.22 per Mcfe, for
workovers. Lease operating expense excluding workovers
was $2.2 million, or $0.67 per Mcfe, versus $0.94 per Mcfe in the first quarter. Per unit LOE
will continue to fall as new Haynesville wells are added, as these wells
carry very low operating costs per unit of production.
Production and other taxes were $0.4
million in the quarter, or $0.13 per Mcfe versus $0.28 per Mcfe in the first quarter.
Haynesville wells drilled in North
Louisiana have severance tax abatement until the earlier of
payout or two years, and therefore the Company's production and
other taxes per unit of production is expected to continue to fall
in the near term as new Haynesville wells are added.
Transportation and processing expense was $1.9 million in the quarter, or $0.57 per Mcfe versus $0.51 per Mcfe in the first quarter.
Transportation and processing expense for the quarter includes
transportation fees incurred on non-operated natural gas volumes
that we take in-kind and approximately $0.1
million of a gathering line amortization fee associated with
the Company's Wurtsbaugh 25&24 No. 1 well, which is expected to
be fully amortized by the end of August 2017. We expect per
unit transportation and processing expense to fall this year as we
add operated Haynesville
production which carries a lower per unit cost.
Depreciation, depletion and amortization ("DD&A") expense
was $3.1 million in the quarter, or
$0.93 per Mcfe versus $0.99 per Mcfe in the first quarter. The
Company's DD&A rate is expected to decrease over time as the
Company adds new Haynesville wells
to the full cost pool and reserves, as finding costs for these new
wells are expected to be lower than the current DD&A
rate.
General and Administrative expense was $3.8 million in the quarter, which includes
$1.0 million of stock based
compensation, $0.7 million for
potential performance bonuses to be compensated in common stock and
$0.1 million in non-cash amortization
of office rent. G&A payable in cash for the quarter was
$2.0 million, or $0.59 per Mcfe. Per unit G&A payable in cash
will continue to fall in 2017 as costs are expected to remain
relatively flat and production volumes are expected to grow
materially.
Operating Income
Operating income, defined as revenues minus operating expenses,
totaled $0.4 million in the quarter
versus an operating loss of $3.5
million in the prior quarter.
Interest Expense
Interest expense totaled $2.4
million in the quarter, which includes cash interest of
$0.3 million incurred on the
Company's first lien term loan and non-cash interest of
$2.1 million incurred on the
Company's second lien notes, which includes $1.4 million paid in-kind interest and
$0.7 million amortization of debt
discount.
Net Income (Loss)
The Company announced a net loss of $1.2
million in the quarter, or ($0.13) per basic share versus a net loss of
$5.7 million in the prior quarter, or
($0.63) per basic share.
Capital Expenditures
Capital expenditures totaled $14.1
million in the quarter, with the majority of the
expenditures being spent on drilling and completion costs for the
Company's recent Haynesville
operated wells. The Company's capital expenditure budget for 2017
is being reduced to $35–45 million from $40-50 million due to savings and efficiencies
gained from drilling two 7,500 foot laterals from a two well pad
versus two individual 10,000 foot laterals originally planned.
Balance Sheet
The Company exited the quarter with $35
million of cash (including $0.6
million in restricted cash) and $61
million of funded debt.
Crude Oil and Natural Gas Derivatives
The Company had a gain of $0.8
million on its derivatives not designated as hedges in the
quarter, representing the change in fair value of our natural gas
derivative contracts and a small realized gain on derivative
settlements.
The Company currently has 2017 natural gas swaps on a total of
6,000 MMBtu/day at a fixed price of $3.20 and natural gas costless collars on 12,000
MMBtu/day at a price range of $3.00-$3.60, as well as 2018 natural gas swaps on
a total of 20,000 MMBtu/day at an average fixed price of
$3.00. As volumes grow, the Company
anticipates adding hedges for additional downside
protection.
OPERATIONAL UPDATE
Haynesville Shale
The Company is currently drilling its Franks 25&24 No. 1
well (69% WI, 50% NRI), which is planned as a 10,000 foot lateral
with a completion design utilizing 5,000 lbs of proppant per
foot. Following the Franks well, the Company's full year
budget includes drilling and completing the Wurtsbaugh 25&24
Nos. 2 & 3 (67%WI, 49% NRI) wells from the same pad. The
Wurtsbaugh 25&24 Nos. 2 & 3 wells are expected to be 7,500
foot laterals to optimize the geographic configuration and provide
maximum reserve recovery for the Company's operated acreage.
Due to the change in drilling schedule in order to take
advantage of the two well pad and competitive service cost bids,
the Company is now guiding to a year-end production exit
rate of 55,000 – 60,000 Mcfe per day.
Well results continue to perform at or above the Company's type
curves. The ROTC 1&2 wells, the Company's initial two
10,000 foot laterals in which it participated, have now produced
approximately 11 Bcf in seven months under a choke management
program designed to minimize drawdown. The Company has
instituted a similar program for its two recent operated wells, the
Wurtsbaugh 26 No. 1 and Wurtsbaugh 25&24 No. 1.
The Company's Haynesville
acreage comprises approximately 50,000 gross (26,000 net) acres in
Caddo and DeSoto Parishes,
Louisiana and Angelina and Nacogdoches Counties, Texas. We estimate approximately 250 gross
(100 net) locations prospective for the Haynesville on our core North Louisiana acreage, where the Company is
allocating the vast majority of its capital expenditures in
2017.
THE COMPANY HAS POSTED A NEW PRESENTATION ON THE COMPANY'S
WEBSITE WHICH WILL BE REVIEWED ON THE EARNINGS CONFERENCE
CALL. INVESTORS CAN ACCESS THE SLIDES AT:
http://goodrichpetroleum.investorroom.com/events-and-presentations
OTHER INFORMATION
In this press release, the Company refers to several non-US GAAP
financial measures, including Adjusted EBITDA, DCF, Adjusted
revenues, Adjusted operating income (loss), Adjusted net loss and
Cash operating margin. Management believes Adjusted EBITDA,
DCF, Adjusted Revenues, Adjusted operating income (loss), Adjusted
net loss and Cash operating margin are good financial indicators of
the Company's performance and ability to internally generate
operating funds. Neither DCF nor Cash operating margin,
should be considered an alternative to net cash provided by
operating activities, as defined by US GAAP. Adjusted
revenues should not be considered an alternative to total revenues,
as defined by US GAAP. Adjusted operating income (loss)
should not be considered an alternative to operating income (loss),
as defined by US GAAP. Adjusted net loss and Adjusted
EBITDA should not be considered an alternative to net loss, as
defined by US GAAP. Management believes that all of these
non-US GAAP financial measures provide useful information to
investors because they are monitored and used by Company management
and widely used by professional research analysts in the valuation
and investment recommendations of companies within the oil and gas
exploration and production industry.
Initial production rates are subject to decline over time and
should not be regarded as reflective of sustained production
levels. In particular, production from horizontal drilling in
shale oil and natural gas resource plays and tight natural gas
plays that are stimulated with extensive pressure fracturing are
typically characterized by significant early declines in production
rates.
Unless otherwise stated, oil production volumes include
condensate.
Certain statements in this news release regarding future
expectations and plans for future activities may be regarded as
"forward looking statements" within the meaning of the Securities
Litigation Reform Act. They are subject to various risks,
such as financial market conditions, changes in commodities prices
and costs of drilling and completion, operating hazards, drilling
risks, and the inherent uncertainties in interpreting engineering
data relating to underground accumulations of oil and gas, as well
as other risks discussed in detail in the Company's Annual Report
on Form 10-K for the year ended December 31,
2016 and other subsequent filings with the Securities and
Exchange Commission. Although the Company believes that the
expectations reflected in such forward looking statements are
reasonable, it can give no assurance that such expectations will
prove to be correct.
Goodrich Petroleum is an independent oil and natural gas
exploration and production company listed on the NYSE American
under the symbol "GDP".
GOODRICH PETROLEUM
CORPORATION
|
SELECTED INCOME AND
PRODUCTION DATA
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2017
|
|
June 30,
2017
|
|
Volumes
|
|
|
|
|
|
|
Natural gas
(MMcf)
|
|
2,795
|
|
4,628
|
|
|
Oil and condensate
(MBbls)
|
|
84
|
|
166
|
|
|
Mmcfe -
Total
|
|
3,299
|
|
5,623
|
|
|
|
|
|
|
|
|
|
Mcfe per
day
|
|
36,253
|
|
31,066
|
|
|
|
|
|
|
|
|
Oil and natural gas
revenues
|
|
$
12,115
|
|
$
21,526
|
|
Other
|
|
350
|
|
352
|
|
|
|
|
$
12,465
|
|
$
21,878
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
Lease operating
expense (LOE excluding workovers - $2,221 and $4,384,
respectively)
|
|
2,950
|
|
7,261
|
|
|
Production and other
taxes
|
|
424
|
|
1,083
|
|
|
Transportation and
processing
|
|
1,868
|
|
3,044
|
|
|
Depreciation,
depletion and amortization
|
|
3,083
|
|
5,377
|
|
|
General and
administrative (payable in cash - $1,950 and $4,559,
respectively)
|
|
3,772
|
|
8,235
|
|
Operating income
(loss)
|
|
368
|
|
(3,122)
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
Interest expense
(payable in cash - $279 and $531, respectively)
|
|
(2,360)
|
|
(4,539)
|
|
|
Interest income and
other
|
|
12
|
|
21
|
|
|
Gain on derivatives
not designated as hedges
|
|
766
|
|
506
|
|
|
|
|
(1,582)
|
|
(4,012)
|
|
|
|
|
|
|
|
|
Reorganization items,
net
|
|
-
|
|
195
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(1,214)
|
|
(6,939)
|
|
Income tax
benefit
|
|
-
|
|
-
|
|
Net
loss
|
|
$
(1,214)
|
|
$
(6,939)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discretionary cash
flow (see non-US GAAP reconciliation) (1)
|
|
$
4,837
|
|
$
5,282
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (see
calculation and non-US GAAP reconciliation)( 2)
|
|
$
5,106
|
|
$
5,781
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
9,670
|
|
9,381
|
|
Weighted average
common shares outstanding - diluted (3)
|
|
9,670
|
|
9,381
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
Net loss -
basic
|
|
$
(0.13)
|
|
$
(0.74)
|
|
|
Net loss -
diluted
|
|
$
(0.13)
|
|
$
(0.74)
|
|
|
(1)
|
Discretionary cash
flow is defined as net cash provided by operating activities before
changes in operating assets and liabilities. Management believes
that the non-US GAAP measure of discretionary cash flow is useful
as an indicator of an oil and natural gas exploration and
production company's ability to internally fund exploration and
development activities and to service or incur additional debt. The
company has also included this information because changes in
operating assets and liabilities relate to the timing of cash
receipts and disbursements which the company may not control and
may not relate to the period in which the operating activities
occurred. Operating cash flow should not be considered in isolation
or as a substitute for net cash provided by operating activities
prepared in accordance with US GAAP.
|
|
(2)
|
Adjusted EBITDA is
earnings before interest expense, income tax, DD&A, and
impairment of oil and natural gas properties. In calculating
adjusted EBITDA, gains/losses on derivatives, less net cash
received or paid in settlement of commodity derivatives, are
excluded from Adjusted EBITDA. Other excluded items include
Interest income, Stock compensation expense, Reorganization items
and Other expense.
|
|
(3)
|
Fully diluted shares
excludes approximately 4.7 million potentially dilutive instruments
that were anti-dilutive due to the net loss for the three and six
months ended June 30, 2017. We report our financial results
in accordance with US GAAP. However, management believes certain
non-US GAAP performance measures may provide users of this
financial information with additional meaningful comparisons
between current results and the results of our peers.
|
GOODRICH PETROLEUM
CORPORATION
|
Per Unit Sales Prices
and Costs
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
June 30,
2017
|
|
June 30,
2017
|
|
|
|
|
|
|
Average sales price
per unit:
|
|
|
|
|
|
Oil (per
Bbl)
|
|
|
|
|
|
Including net cash received
from/paid to settle oil derivatives
|
|
$
47.96
|
|
$
49.03
|
|
Excluding net cash received
from/paid to settle oil derivatives
|
|
$
47.96
|
|
$
49.03
|
|
Natural gas (per
Mcf)
|
|
|
|
|
|
Including net cash received
from/paid to settle natural gas derivatives
|
|
$
2.89
|
|
$
2.92
|
|
Excluding net cash received
from/paid to settle natural gas derivatives
|
|
$
2.89
|
|
$
2.89
|
|
Oil and natural gas
(per Mcfe)
|
|
|
|
|
|
Including net cash received
from/paid to settle oil and natural gas derivatives
|
|
$
3.67
|
|
$
3.86
|
|
Excluding net cash received
from/paid to settle oil and natural gas derivatives
|
|
$
3.67
|
|
$
3.83
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Per
Mcfe
|
|
|
|
|
|
Lease operating
expense ($0.67 and $0.78 Per Mcfe excluding Workovers,
respectively)
|
|
$
0.89
|
|
$
1.29
|
|
Production and other
taxes
|
|
$
0.13
|
|
$
0.19
|
|
Transportation and
processing
|
|
$
0.57
|
|
$
0.54
|
|
Depreciation,
depletion and amortization
|
|
$
0.93
|
|
$
0.96
|
|
General and
administrative (payable in cash - $0.59 and $0.81,
respectively)
|
|
$
1.14
|
|
$
1.46
|
|
|
|
$
3.67
|
|
$
4.45
|
|
|
|
|
|
|
Note: Amounts on a
per Mcfe basis may not total due to rounding.
|
|
|
|
|
GOODRICH PETROLEUM
CORPORATION
|
Selected Cash Flow
Data (In Thousands):
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
discretionary cash flow and net cash provided by operating
activities (unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2017
|
|
June 30,
2017
|
|
|
|
|
Net cash provided by
operating activities (US GAAP)
|
10,863
|
|
15,528
|
Net changes in
working capital
|
6,026
|
|
10,246
|
Discretionary cash
flow
|
$
4,837
|
|
$
5,282
|
|
|
|
|
|
Supplemental
Balance Sheet Data (unaudited)
|
|
|
|
|
|
As of
|
|
|
|
|
June 30,
2017
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents (including restricted cash)
|
$
35,011
|
|
|
|
|
|
|
|
|
Long-term
debt
|
51,180
|
|
|
|
|
|
|
|
Reconciliation of
Net loss to Adjusted EBITDA
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2017
|
|
|
|
|
|
|
Net loss (US
GAAP)
|
$
(1,214)
|
|
$
(6,939)
|
|
Depreciation,
depletion and amortization ("DD&A")
|
3,083
|
|
5,377
|
|
Stock compensation
expense
|
1,651
|
|
3,379
|
|
Interest
expense
|
2,360
|
|
4,539
|
|
Gain on derivatives
not designated as hedges
|
(766)
|
|
(506)
|
|
Net cash received in
settlement of derivative instruments
|
4
|
|
147
|
|
Other excluded items
*
|
(12)
|
|
(216)
|
|
Adjusted
EBITDA
|
$
5,106
|
|
$
5,781
|
|
|
|
|
|
|
* Other
excluded items include Interest income and Reorganization items,
net.
|
|
|
|
|
|
|
|
Other Information
and Reconciliations
|
|
|
|
|
|
|
|
|
|
Derivative
Activity
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2017
|
|
Change in fair value
of derivatives not designated as hedges
|
$
762
|
|
$
359
|
|
Net cash received in
settlement of derivative instruments
|
4
|
|
147
|
|
Net gain on
derivatives not designated as hedges
|
$
766
|
|
$
506
|
|
|
|
|
|
Reconciliation of
interest payable in cash to interest expense
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2017
|
|
|
|
|
|
|
Interest expense
(GAAP)
|
$
2,360
|
|
$
4,539
|
|
Amortization of debt
discount and paid-in-kind interest
|
(2,081)
|
|
(4,008)
|
|
Interest payable in
cash
|
$
279
|
|
$
531
|
|
|
|
|
|
GOODRICH PETROLEUM
CORPORATION
|
Other Information and
reconciliations continued (In Thousands):
|
|
|
|
|
|
Reconciliation of
adjusted revenues and total revenues (unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2017
|
|
June 30,
2017
|
Total revenues (US
GAAP)
|
$
12,465
|
|
$
21,878
|
Net cash received in
settlement of derivative instruments
|
4
|
|
147
|
Adjusted
revenues
|
$
12,469
|
|
$
22,025
|
|
|
|
|
|
Reconciliation of
capital expenditures (unaudited)
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
June 30,
2017
|
|
|
Net cash used in
investing activities (US GAAP)
|
$
(17,519)
|
|
|
Cash calls
utilized
|
(415)
|
|
|
Inventory
utilized
|
(574)
|
|
|
Capitalized asset
retirement obligation
|
(64)
|
|
|
Cost incurred in 2016
and paid in 2017
|
648
|
|
|
Capital accrual at
June 30, 2017
|
(2,505)
|
|
|
Total capital
expenditures
|
$
(20,429)
|
|
|
|
Reconciliation of
adjusted operating loss and operating loss
(unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2017
|
|
June 30,
2017
|
Operating income
(loss) (US GAAP)
|
$
368
|
|
$
(3,122)
|
Net cash received in
settlement of derivative instruments
|
4
|
|
147
|
Adjusted operating
income (loss)
|
$
372
|
|
$
(2,975)
|
|
|
|
|
|
Reconciliation of
general & administrative expense payable in cash to general
and administrative expense (unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
June 30,
2017
|
General &
administrative expense (GAAP)
|
$
3,772
|
|
$
8,235
|
Share based
compensation
|
(975)
|
|
(1,983)
|
Bonus share based
compensation
|
(698)
|
|
(1,395)
|
Non-cash rent
expense
|
(149)
|
|
(298)
|
General &
administrative expense payable in cash
|
$
1,950
|
|
$
4,559
|
|
|
|
|
|
Calculation of
cash operating margin (unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2017
|
|
June 30,
2017
|
|
|
|
|
Adjusted EBITDA (see
calculation and non-US GAAP reconciliation) (3)
|
$
5,106
|
|
$
5,781
|
Adjusted revenues
(see non-US GAAP reconciliation)
|
$
12,469
|
|
$
22,025
|
Cash operating
margin
|
41%
|
|
26%
|
View original
content:http://www.prnewswire.com/news-releases/goodrich-petroleum-announces-second-quarter-2017-financial-results-and-operational-update-300499546.html
SOURCE Goodrich Petroleum Corporation