DENVER, Sept. 28, 2015 /PRNewswire/ -- Bill Barrett
Corporation (the "Company") (NYSE: BBG) today announced the
following corporate update.
The Company announced today that its semi-annual borrowing base
review has been completed with the bank group reaffirming the
$375 million borrowing base related
to its revolving credit facility maturing in April 2020. The credit facility has $375 million of commitments and there are
currently no borrowings under the credit facility. As part of the
redetermination process, the Company and its lender group agreed to
amend the maintenance covenants in the revolving credit facility by
replacing the leverage covenant limiting the maximum total debt to
trailing twelve month EBITDAX1 ratio of 4.0x with a
covenant limiting the maximum senior secured debt to trailing
twelve month EBITDAX ratio of 2.5x through March 31, 2018, after which, the leverage
covenant reverts to a maximum total debt to trailing twelve month
EBITDAX of 4.0x, as of June 30, 2018.
In addition, an interest coverage ratio requirement was included,
pursuant to which the ratio of EBITDAX to interest expense may not
be less than 2.5 to 1.0 for each quarter through March 31, 2018.
The Company also announced that it has entered into a definitive
agreement to sell certain non-core Uinta Basin properties for
after-tax cash proceeds of approximately $27
million. The transaction is expected to close on or before
November 30, 2015, with an effective
date of September 1, 2015, and is
subject to customary closing conditions and post-closing purchase
price adjustments. The properties produced approximately 470 Boe/d
during August 2015, had estimated
proved reserves of 11 million barrels of oil equivalent ("MMBoe")
(9% proved developed) as of December 31,
2014 and included 17,632 net acres. Based on the Company's
internal estimates, the sale price amounts to over 10x estimated
2016 operating cash flow (excluding general and administrative
expense) based on current strip pricing. The sale of the properties
will not result in a reduction of the Company's borrowing base
related to its revolving credit facility.
Chief Executive Officer and President Scot Woodall commented, "We are pleased with the
support of our lender group and believe that the reaffirmation of
our borrowing base in the current commodity price environment is a
testament to the high quality nature of our XRL assets. In
addition, the sale of non-core properties at attractive metrics
enhances our already strong liquidity position and further
strengthens the balance sheet. We are well-positioned and remain
focused on the items in our control as we retain the financial and
operational flexibility to quickly adapt as conditions warrant. We
remain financially well-positioned with an undrawn credit facility,
a notable cash position, and favorable hedges that provide the
financial capacity to navigate the current macro-economic
environment."
Reflecting much improved drilling efficiencies, the Company will
accomplish its planned activities in the Northeast ("NE")
Wattenberg area for the remainder of the year with a one-rig
drilling program. The Company will reduce its operated rig count
from two rigs to one rig after completing current drilling
operations on a multi-well extended reach lateral ("XRL") pad. This
reduction is attributable to the continued improvement in XRL
drilling and completion efficiencies in the DJ Basin that also
results in realized cost savings. It is now anticipated that 2015
capital expenditures will approximate $315-$325 million, which is below the low-end of
the previous guidance range of $320-$350
million. This is primarily a result of drilling times for
XRL wells being reduced from an average of 17 days to approximately
10 days, associated cost reductions that have lowered well costs by
10% to approximately $5.6 million,
and the timing of certain well completions. It is expected that 40
gross (39 net) XRL wells will be drilled in the NE Wattenberg area
in 2015 compared to a previous estimate of 35-40 gross (28-32 net)
XRL wells. The increase is attributable to the improved drilling
efficiency and also higher working interests due to other owners in
the wells electing to go non-consent. Reflecting the efficiency
improvement, it is expected that approximately 30 XRL wells can be
drilled per rig on an annual basis compared to a previous estimate
of 20 XRL wells per rig. Based on the performance of the XRL
drilling program, 2015 production guidance is being increased to
6.3-6.5 MMBoe from 6.1-6.5 MMBoe.
Mr. Woodall further stated, "We have worked diligently this year
to reduce costs, increase our operational efficiency and improve
returns in a challenging macro-economic environment and our
operational team has responded to this challenge. Our focus on
operational execution has resulted in a reduction of the time to
drill an XRL well by 40%, including a recent best-in-class well
that was drilled in 7.5 days. This operational focus results in
improved capital efficiency, decreased capital expenditures for
this year and lower operating costs, while allowing us to increase
our 2015 production guidance range. As we look ahead to 2016, we
are running a variety of operating plan scenarios and considering a
range of commodity price assumptions to determine the appropriate
level of capital spending as we look to preserve liquidity given
the outlook for commodity prices."
Capital expenditures for the remainder of 2015 are expected to
be funded internally through operating cash flow, cash on hand,
non-core asset divestitures and borrowings under the revolving
credit facility.
The Company has not issued any shares under its previously
announced "at-the-market" equity offering program and does not
anticipate currently utilizing it due to market conditions.
The Company also plans to participate in the following investor
events:
- September 29, 2015 – Chief
Financial Officer and Treasurer, Robert W.
Howard, will participate in investor meetings at the
Deutsche Bank Energy 1x1 Corporate Days Conference. This event will
not be webcast.
- September 30, 2015 – Mr. Howard
will present at the Deutsche Bank Leveraged Finance Conference.
This event will not be webcast.
An updated corporate presentation to be used at these events
will be posted on the Company's website at www.billbarrettcorp.com
prior to market open on Tuesday, September
29, 2015.
Forward-Looking Statements
All statements in this press release, other than historical
financial information, may be deemed to be 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.
Words such as expects, forecast, guidance, anticipates, intends,
plans, believes, seeks, estimates and similar expressions or
variations of such words are intended to identify forward-looking
statements herein; however, these are not the exclusive means of
identifying forward-looking statements. Forward looking statements
in this release include statements relating to production guidance,
the nature and amount of expected capital expenditures in 2015 and
the sources of funding for those expenditures, the number of wells
expected to be drilled, and the closing of the Uinta Basin property
transaction.
These and other forward-looking statements in this press release
are based on management's judgment as of the date of this release
and are subject to numerous risks and uncertainties. Actual results
may vary significantly from those indicated in the forward-looking
statements due to, among other things: oil, NGL and natural gas
price volatility, including regional price differentials; changes
in operational and capital plans; changes in capital costs,
operating costs, availability and timing of build-out of third
party facilities for gathering, processing, refining and
transportation; delays or other impediments to drilling and
completing wells arising from political or judicial developments at
the local, state or federal level, including voter initiatives
related to hydraulic fracturing; development drilling and testing
results; the potential for production decline rates to be greater
than expected; regulatory delays, including seasonal or other
wildlife restrictions on federal lands; exploration risks such as
drilling unsuccessful wells; higher than expected costs and
expenses, including the availability and cost of services and
materials; unexpected future capital expenditures; economic and
competitive conditions; debt and equity market conditions,
including the availability and costs of financing to fund the
Company's operations; the ability to obtain industry partners to
jointly explore certain prospects, and the willingness and ability
of those partners to meet capital obligations when requested;
declines in the values of our oil and gas properties resulting in
impairments; changes in estimates of proved reserves; compliance
with environmental and other regulations, including new emission
control requirements; derivative and hedging activities; risks
associated with operating in one major geographic area; the success
of the Company's risk management activities; title to properties;
litigation; and environmental liabilities. Please refer to the
Company's Annual Report on Form 10-K for the year ended
December 31, 2014 filed with the SEC
and other filings, including our Current Reports on Form 8-K and
Quarterly Reports on Form 10-Q, all of which are incorporated by
reference herein, for further discussion of risk factors that may
affect the forward-looking statements. The Company encourages you
to consider the risks and uncertainties associated with projections
and other forward-looking statements and to not place undue
reliance on any such statements. In addition, the Company assumes
no obligation to publicly revise or update any forward-looking
statements based on future events or circumstances.
ABOUT BILL BARRETT CORPORATION
Bill Barrett Corporation (NYSE: BBG), headquartered in
Denver, Colorado, develops oil and
natural gas in the Rocky Mountain region of the United States. Additional information
about the Company may be found on its website
www.billbarrettcorp.com.
1Earnings before interest expense, income taxes,
depreciation, depletion, amortization, exploration expenses and
other non-cash charges as defined in the credit facility
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SOURCE Bill Barrett Corporation