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Reported Adjusted EBITDA in excess of capital expenditures
QEP Resources, Inc. (NYSE:QEP) today reported second quarter 2015 financial and operating results. The Company reported a net loss from continuing operations of $76.3 million, or $0.43 per diluted share, for the second quarter 2015 compared with a net loss from continuing operations of $106.1 million, or $0.59 per diluted share, in the second quarter 2014.
Net income or loss includes non-cash gains and losses associated with the change in the fair value of derivative instruments, gains and losses from asset sales, a non-cash pension curtailment expense and impairment charges. Excluding these items, the Company’s second quarter 2015 Adjusted Net Income (a non-GAAP measure) was $16.0 million, or $0.09 per diluted share, compared with Adjusted Net Income from continuing operations of $54.1 million, or $0.30 per diluted share, for the comparable 2014 period. The decrease in Adjusted Net Income was due primarily to significantly lower average field-level prices for crude oil, natural gas and NGL, partially offset by higher crude oil volumes, lower production taxes and higher proceeds from realized commodity derivatives.
Adjusted EBITDA (a non-GAAP measure) for the second quarter 2015 was $279.4 million, compared with $368.2 million on a continuing operations basis in the second quarter 2014, a 24% decrease. The definitions and reconciliations of Adjusted EBITDA and Adjusted Net Income to net income are provided within the financial tables of this release.
“Our second quarter operational performance demonstrates our ability to quickly adjust to the challenging and volatile commodity price environment. By increasing operating efficiencies and capturing lower service and supply costs, we have significantly reduced well costs in our core plays and under-spent Adjusted EBITDA in the quarter,” commented Chuck Stanley, Chairman, President and CEO of QEP Resources. “We delivered strong oil production growth in the quarter, up 9% sequentially from the first quarter 2015, primarily from better completed well performance in the Williston and Permian basins.
“We are excited by the early performance of our first set of high-density infill development wells at South Antelope in the Williston Basin. The high-density infill wells are exceeding the performance of the original parent wells drilled on the acreage. With these encouraging results, we believe we have in excess of 400 future development locations in the Middle Bakken and Three Forks formations at South Antelope. We continue to evaluate enhanced completions and infill potential across our remaining Williston Basin acreage.
“We have a proven track-record of increasing operating efficiency, reducing well costs and improving well productivity, as exemplified by our second quarter results. We are well positioned in the current market, with our superior E&P asset portfolio, solid balance sheet, unsecured credit facility and substantial cash balance, to deliver long-term growth and profitability,” concluded Stanley.
