HighPoint Resources Provides Update on Development Program
19 March 2020 - 10:12PM
HighPoint Resources Corporation (“we”, “us”, or the “Company”)
(NYSE: HPR) announced today an update to its 2020 development
program, liquidity and hedges. Today’s update takes into account
the recent significant decrease in crude oil prices, and includes
the following:
- All drilling and completion activity that is currently in
progress will be completed, and all new planned activity will be
deferred; this will not impact first half of 2020 production
volumes
- Maintain flexibility to adjust capital program further based on
market conditions
- Strong hedge position protects 2020 cash flow and has a current
mark-to-market value of approximately $225 million
- Still anticipate generating positive free cash flow in
2020
- Anticipate reducing bank debt by approximately $45 million
during the first quarter of 2020 and have no significant debt
maturity before October 2022
Chief Executive Officer and President Scot
Woodall commented, “Given the rapidly changing dynamics of crude
oil prices our top priority is to preserve our balance sheet and
liquidity in this lower crude price environment. As such, we have
prudently decided to defer any new drilling and completion activity
as we continue to monitor the present market environment. Although
our hedge portfolio protects the returns of our 2020 investment
program, we have elected to slow down activity and preserve
liquidity. While this impacts near-term development activity, it is
not expected to adversely affect anticipated production volumes for
the first half of the year and will maintain our opportunity set
for future development. Moreover, we are well positioned
financially with a strong hedge portfolio covering over 90% of
anticipated 2020 oil volumes at a WTI price of approximately $58.00
per barrel with an estimated mark-to-market value of approximately
$225 million based on current WTI strip prices.”
The Company’s current liquidity position is
approximately $370 million. This is an increase of approximately
$35 million from December 31, 2019, as the Company has reduced
borrowings on its credit facility to approximately $115 million
with a further reduction of approximately $20 million anticipated
by the end of the first quarter of 2020.
The Company plans to provide more comprehensive
details and updated 2020 guidance as part of its first quarter
earnings conference call in May and, as such, the 2020 guidance
issued on February 26th should no longer be relied upon.
ABOUT HIGHPOINT RESOURCES
CORPORATION
HighPoint Resources Corporation (NYSE: HPR) is a
Denver, Colorado based company focused on the development of oil
and natural gas assets located in the Denver-Julesburg Basin of
Colorado. Additional information about the Company may be found on
its website www.hpres.com.
Forward-Looking Statements
All statements in this press release, other than
statements of historical fact, are 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 include,
among other things, statements regarding future development
activities, production, returns, free cash flow, debt levels and
future opportunities.
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. Please refer to our
Annual Report on Form 10-K for the year ended December 31, 2019
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.
We define free cash free cash flow, a
non-U.S. GAAP financial measure, as net cash from operating
activities, excluding changes in working capital, less oil and gas
capital investments. We are unable to present a reconciliation of
forward-looking free cash flow because components of the
calculation, including fluctuations in working capital accounts,
are inherently unpredictable. Moreover, estimating the most
directly comparable GAAP measure with the required precision
necessary to provide a meaningful reconciliation is extremely
difficult and could not be accomplished without unreasonable
effort. We believe that forward-looking estimates of free cash flow
are important to investors because they assist in the analysis of
our ability to generate cash from our operations in excess of
capital investments in crude oil and natural gas properties.
Company contact: Larry C. Busnardo, Vice
President, Investor Relations, 303-312-8514
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