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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Legacy Reserves Inc. (MM) | NASDAQ:LGCY | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0395 | 0.0341 | 0.035 | 0 | 01:00:00 |
MIDLAND, Texas, May 9, 2019 /PRNewswire/ -- Legacy Reserves Inc. ("Legacy") (NASDAQ:LGCY) today announced 2019 first quarter results including the following highlights:
As previously announced, Legacy is evaluating and exploring potential strategic alternatives. These alternatives include, among others, a sale or other business combination transaction, sales of assets, financing transactions, or some combination of these.
Financial and Operating Results - Three-Month Period Ended March 31, 2019 Compared to Three-Month Period Ended March 31, 2018
Quarterly Report on Form 10-Q
Financial results contained herein are preliminary and subject to the final, unaudited financial statements and related footnotes included in Legacy's Form 10-Q which will be filed on or about May 10, 2019.
About Legacy Reserves Inc.
Legacy is an independent energy company engaged in the development, production and acquisition of oil and natural gas properties in the United States. Its current operations are focused on the horizontal development of unconventional plays in the Permian Basin and the cost-efficient management of shallow-decline oil and natural gas wells in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions. Additional information is available at www.LegacyReserves.com.
LEGACY RESERVES INC. | |||||
SELECTED FINANCIAL AND OPERATING DATA | |||||
Three Months Ended | |||||
March 31, | |||||
2019 | 2018 | ||||
(In thousands, except per unit data) | |||||
Revenues: | |||||
Oil sales | $ | 77,761 | $ | 93,411 | |
Natural gas liquids (NGL) sales | 4,515 | 7,396 | |||
Natural gas sales | 36,221 | 36,672 | |||
Total revenue | $ | 118,497 | $ | 137,479 | |
Expenses: | |||||
Oil and natural gas production, excluding ad valorem taxes | $ | 44,964 | $ | 45,585 | |
Ad valorem taxes | 2,513 | 2,382 | |||
Total oil and natural gas production | $ | 47,477 | $ | 47,967 | |
Production and other taxes | $ | 6,149 | $ | 7,326 | |
General and administrative, excluding transaction costs and LTIP | $ | 9,705 | $ | 9,502 | |
Transaction costs | 2,669 | 1,782 | |||
LTIP expense | 4,156 | 12,806 | |||
Total general and administrative | $ | 16,530 | $ | 24,090 | |
Depletion, depreciation, amortization and accretion | $ | 42,549 | $ | 36,547 | |
Commodity derivative cash settlements: | |||||
Oil derivative cash settlements (paid) received | $ | 7,045 | $ | (4,894) | |
Natural gas derivative cash settlements received | $ | 2,534 | $ | 2,099 | |
Production: | |||||
Oil (MBbls) | 1,613 | 1,547 | |||
Natural gas liquids (MGal) | 10,020 | 9,244 | |||
Natural gas (MMcf) | 13,938 | 14,280 | |||
Total (MBoe) | 4,175 | 4,147 | |||
Average daily production (Boe/d) | 46,389 | 46,078 | |||
Average sales price per unit (excluding derivative cash settlements): | |||||
Oil price (per Bbl) | $ | 48.21 | $ | 60.38 | |
Natural gas liquids price (per Gal) | $ | 0.45 | $ | 0.80 | |
Natural gas price (per Mcf) | $ | 2.60 | $ | 2.57 | |
Combined (per Boe) | $ | 28.38 | $ | 33.15 | |
Average sales price per unit (including derivative cash settlements): | |||||
Oil price (per Bbl) | $ | 52.58 | $ | 57.22 | |
Natural gas liquids price (per Gal) | $ | 0.45 | $ | 0.80 | |
Natural gas price (per Mcf) | $ | 2.78 | $ | 2.72 | |
Combined (per Boe) | $ | 30.68 | $ | 32.48 | |
Average WTI oil spot price (per Bbl) | $ | 54.82 | $ | 62.91 | |
Average Henry Hub natural gas index price (per MMbtu) | $ | 2.92 | $ | 3.08 | |
Average unit costs per Boe: | |||||
Oil and natural gas production, excluding ad valorem taxes | $ | 10.77 | $ | 10.99 | |
Ad valorem taxes | $ | 0.60 | $ | 0.57 | |
Production and other taxes | $ | 1.47 | $ | 1.77 | |
General and administrative excluding transaction costs and LTIP | $ | 2.32 | $ | 2.29 | |
Total general and administrative | $ | 3.96 | $ | 5.81 | |
Depletion, depreciation, amortization and accretion | $ | 10.19 | $ | 8.81 |
LEGACY RESERVES INC. | |||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
(UNAUDITED) | |||||
Three Months Ended | |||||
March 31, | |||||
2019 | 2018 | ||||
(In thousands, except per share / unit data) | |||||
Revenues: | |||||
Oil sales | $ | 77,761 | $ | 93,411 | |
Natural gas liquids (NGL) sales | 4,515 | 7,396 | |||
Natural gas sales | 36,221 | 36,672 | |||
Total revenues | 118,497 | 137,479 | |||
Expenses: | |||||
Oil and natural gas production | 47,477 | 47,967 | |||
Production and other taxes | 6,149 | 7,326 | |||
General and administrative | 16,530 | 24,090 | |||
Depletion, depreciation, amortization and accretion | 42,549 | 36,547 | |||
Impairment of long-lived assets | 7,398 | — | |||
(Gains) losses on disposal of assets | 1,034 | (20,395) | |||
Total expenses | 121,137 | 95,535 | |||
Operating income (loss) | (2,640) | 41,944 | |||
Other income (expense): | |||||
Interest income | 6 | 12 | |||
Interest expense | (37,119) | (27,368) | |||
Gain on extinguishment of debt | 13,105 | 51,693 | |||
Equity in income (loss) of equity method investees | — | 17 | |||
Net gains (losses) on commodity derivatives | (51,460) | (1,704) | |||
Other | (270) | 275 | |||
Loss before income taxes | (78,378) | 64,869 | |||
Income tax expense | — | (487) | |||
Net loss | $ | (78,378) | $ | 64,382 | |
Loss per share / unit - basic & diluted | $ | (0.70) | $ | 0.62 | |
Weighted average number of shares / units used in computing net loss per share / unit - | |||||
Basic | 111,225 | 103,994 | |||
Diluted | 111,225 | 104,301 |
LEGACY RESERVES INC. | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(UNAUDITED) | ||||||
ASSETS | ||||||
March 31, 2019 | December 31, 2018 | |||||
(In thousands) | ||||||
Current assets: | ||||||
Cash | $ | 1,491 | $ | 1,098 | ||
Accounts receivable, net: | ||||||
Oil and natural gas | 63,542 | 56,615 | ||||
Joint interest owners | 16,142 | 15,370 | ||||
Other | 283 | — | ||||
Fair value of derivatives | 9,708 | 66,662 | ||||
Prepaid expenses and other current assets | 13,335 | 11,347 | ||||
Total current assets | 104,501 | 151,092 | ||||
Oil and natural gas properties using the successful efforts method, at cost: | ||||||
Proved properties | 3,507,534 | 3,471,456 | ||||
Unproved properties | 19,680 | 19,863 | ||||
Accumulated depletion, depreciation, amortization and impairment | (2,221,624) | (2,177,006) | ||||
1,305,590 | 1,314,313 | |||||
Other property and equipment, net of accumulated depreciation and amortization of $2,432 and $2,464, respectively (Note 11) | 6,743 | 2,456 | ||||
Operating rights, net of amortization of $806 and $894, respectively | ||||||
Fair value of derivatives | — | 3,135 | ||||
Other assets | 3,304 | 3,935 | ||||
Total assets | $ | 1,420,138 | $ | 1,474,931 | ||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||
Current liabilities: | ||||||
Current debt, net | $ | 883,092 | $ | 856,646 | ||
Accounts payable | 28,658 | 11,227 | ||||
Accrued oil and natural gas liabilities | 76,284 | 98,886 | ||||
Fair value of derivatives | 2,207 | — | ||||
Asset retirement obligation | 3,938 | 3,938 | ||||
Other | 18,455 | 13,953 | ||||
Total current liabilities | 1,012,634 | 984,650 | ||||
Long-term debt, net | 416,328 | 432,923 | ||||
Asset retirement obligation | 250,867 | 248,796 | ||||
Fair value of derivatives | — | 550 | ||||
Other long-term liabilities | 3,190 | 643 | ||||
Total liabilities | 1,683,019 | 1,667,562 | ||||
Commitments and contingencies | ||||||
Partners' deficit | ||||||
Common stock, $0.01 par value; 945,000,000 shares authorized, 114,810,671 and 109,442,278 shares outstanding at March 31, 2019 and December 31, 2018, respectively | 1,148 | 1,094 | ||||
Additional paid-in capital | 32,571 | 24,752 | ||||
Accumulated deficit | (296,600) | (218,477) | ||||
Total stockholders' deficit | (262,881) | (192,631) | ||||
Total liabilities and stockholders' / partners' deficit | $ | 1,420,138 | $ | 1,474,931 |
Non-GAAP Financial Measures
"Adjusted EBITDA" is a non-generally accepted accounting principles ("non-GAAP") measure which may be used periodically by management when discussing our financial results with investors and analysts. The following presents a reconciliation of this non-GAAP financial measure to its nearest comparable generally accepted accounting principles ("GAAP") measure.
Adjusted EBITDA is presented as management believes it provides additional information concerning the performance of our business and is used by investors and financial analysts to analyze and compare our current operating and financial performance relative to past performance and such performances relative to that of other exploration and production companies. Adjusted EBITDA may not be comparable to similarly titled measures of other exploration and production companies because all companies may not calculate such measures in the same manner.
Certain factors impacting Adjusted EBITDA may be viewed as temporary, one-time in nature, or being offset by reserves from past performance or near-term future performance. Financial results are also driven by various factors that do not typically occur evenly throughout the year that are difficult to predict, including rig availability, weather, well performance, the timing of drilling and completions and near-term commodity price changes.
"Adjusted EBITDA" should not be considered as an alternative to GAAP measures, such as net income, operating income, cash flow from operating activities, or any other GAAP measure of financial performance.
The following table presents a reconciliation of our consolidated net loss to Adjusted EBITDA:
Three Months Ended | ||||||
March 31, | ||||||
2019 | 2018 | |||||
(In thousands) | ||||||
Net (loss) income | $ | (78,378) | $ | 64,382 | ||
Plus: | ||||||
Interest expense | $ | 37,119 | $ | 27,368 | ||
Gain on extinguishment of debt | (13,105) | (51,693) | ||||
Income tax expense | — | 487 | ||||
Depletion, depreciation, amortization and accretion | 42,549 | 36,547 | ||||
Impairment of long-lived assets | 7,398 | — | ||||
(Gain) loss on disposal of assets | 1,034 | (20,395) | ||||
Equity in (income) loss of equity method investees | — | (17) | ||||
Share-based compensation expense | 4,156 | 12,806 | ||||
Minimum payments received in excess of overriding royalty interest earned(1) | (543) | 522 | ||||
Net (gains) losses on commodity derivatives | 51,460 | 1,704 | ||||
Net cash settlements (paid) received on commodity derivatives | 9,579 | (2,795) | ||||
Transaction costs | 2,669 | 1,782 | ||||
Adjusted EBITDA | $ | 63,938 | $ | 70,698 |
(1) | Minimum payments received in excess of overriding royalties earned under a contractual agreement expiring December 31, 2019. The remaining amount of the minimum payments is recognized in net income. |
Commodity Derivative Contracts
We enter into oil and natural gas derivative contracts to help mitigate the risk of changing commodity prices. As of May 8, 2019, we had entered into derivative agreements to receive average prices as summarized below.
NYMEX WTI Crude Oil Swaps: | ||||||||
Time Period | Volumes (Bbls) | Average Price per | Price Range per Bbl | |||||
April-December 2019 | 2,475,000 | $61.33 | $57.15 | - | $67.65 | |||
Midland-to-Cushing WTI Crude Oil Differential Swaps: | ||||||||
Time Period | Volumes (Bbls) | Average Price per | Price Range per Bbl | |||||
April-December 2019 | 1,743,000 | $(3.61) | $(1.15) | - | $(5.60) | |||
Midland-to-Cushing WTI Crude Oil Differential Enhanced Swaps | ||||||||
Time Period | Volumes (Bbls) | Average Short Price | Average Swap Price | |||||
April-December 2019 | 1,100,000 | $70.00 | $(2.91) | |||||
NYMEX Natural Gas Swaps (Henry Hub): | ||||||||
Average | Price Range per | |||||||
Time Period | Volumes (MMBtu) | Price per MMBtu | MMBtu | |||||
April-December 2019 | 26,225,000 | $3.30 | $3.05 | - | $3.39 |
Location and quality differentials attributable to our properties are not reflected in the above prices. The agreements provide for monthly settlement based on the difference between the agreement fixed price and the actual reference oil and natural gas index prices.
Cautionary Statement Relevant to Forward-Looking Information
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, the evaluation of financial transactions and other strategic alternatives, statements regarding the expected future growth and dividends of the company, and plans and objectives of management for future operations. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Legacy expects, believes or anticipates will or may occur in the future, are forward-looking statements. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "schedules," "estimated," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside the control of Legacy, which could cause results to differ materially from those expected by management of Legacy. Such risks and uncertainties include, but are not limited to, the structure and timing of any financial, transactional, or other strategic alternative and whether any such financial, transactional, or other strategic alternative will be completed; whether Legacy will be able to receive extension of it revolving credit facility; realized oil and natural gas prices; production volumes, lease operating expenses, general and administrative costs and finding and development costs; future operating results; and the factors set forth under the heading "Risk Factors" in Legacy's filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Legacy undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACT: | Legacy Reserves Inc. |
Robert L. Norris | |
Chief Financial Officer | |
(432) 689-5200 |
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SOURCE Legacy Reserves Inc.
Copyright 2019 PR Newswire
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