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DENVER, Aug. 15, 2018 (GLOBE NEWSWIRE) -- Sundance Energy Australia Limited (ASX: SEA) (NASDAQ: SNDE) (“Sundance” or the “Company”), a U.S. onshore oil and gas exploration and production company focused in the Eagle Ford in South Texas, reported its second quarter 2018 financial and operations results.
Second Quarter 2018 Financial Results
Operational Highlights
The table below provides an overview of the Company’s operational activity for the quarter and year-to-date:
Well Name | County |
Spud
Date |
Frac Start
Date |
IP Date | Completed Lat Length |
30-Day
IP Rate (boe/d) |
% Oil | |
Paloma Ranch 7H | McMullen | 18-Jan-18 | 17-May-18 | 2-Jun-18 | 7,690' | 1,345 | 62 | % |
Peeler Ranch 8HC | Atascosa | 1-Mar-18 | 28-May-18 | 26-Jun-18 | 5,642' | 484 | 92 | % |
Peeler Ranch 9HC | Atascosa | 24-Mar-18 | 28-May-18 | 26-Jun-18 | 5,820' | 446 | 93 | % |
Allen MCM 1HA | McMullen | 21-Apr-18 | 6-Jul-18 | 14-Aug-18 | 8,015' | - | - | |
Allen MCM 2HA | McMullen | 13-May-18 | 6-Jul-18 | 14-Aug-18 | 8,234' | - | - | |
Harlan Bethune 25H | Live Oak | 7-May-18 | 24-Jul-18 | 13-Aug-18 | 4,973' | - | - | |
Harlan Bethune 26H | Live Oak | 11-May-18 | 22-Jul-18 | 13-Aug-18 | 4,161' | - | - | |
Harlan Bethune 27H | Live Oak | 13-May-18 | 22-Jul-18 | 13-Aug-18 | 3,469' | - | - | |
Justin Tom 05H | Atascosa | 17-Jun-18 | 12-Aug-18 | - | - | - | - | |
Justin Tom 06H | Atascosa | 14-Jun-18 | 12-Aug-18 | - | - | - | - | |
Harlan Bethune 34H | Live Oak | 25-Jun-18 | 3-Aug-18 | 16-Aug-18(1) | - | - | - | |
Harlan Bethune 35H | Live Oak | 22-Jun-18 | 3-Aug-18 | 16-Aug-18(1) | - | - | - | |
James Keith Esse 06H | Live Oak | 26-Jul-18 | - | - | - | - | - | |
James Keith Esse 07H | Live Oak | 22-Jul-18 | - | - | - | - | - | |
James Keith Esse 08H | Live Oak | 24-Jul-18 | - | - | - | - | - | |
James Keith Esse 09H | Live Oak | 20-Jul-18 | - | - | - | - | - | |
Idylwood 04H | Live Oak | 3-Aug-18 | - | - | - | - | - | |
Idylwood 05H | Live Oak | 3-Aug-18 | - | - | - | - | - |
(1) As per Internal Company Estimate.
Acquisition of Pioneer Natural Resources Joint Venture
Company Guidance
The tables below set forth the Company’s hedge position as of the date of this report:
HEDGE POSITION OVERVIEW
Total Oil Derivative Contracts | Gas Derivative Contracts | |||||||||
Weighted Average | Weighted Average | |||||||||
Year | Units (Bbls) | Floor | Ceiling | Units (Mcf) | Floor | Ceiling | ||||
2018 | 810,500 | $64.77 | $68.73 | 1,055,000 | $2.84 | $3.08 | ||||
2019 | 1,937,000 | $59.74 | $65.91 | 1,932,000 | $2.75 | $3.18 | ||||
2020 | 1,266,000 | $53.36 | $59.09 | 1,536,000 | $2.65 | $2.70 | ||||
2021 | 612,000 | $48.49 | $59.23 | 1,200,000 | $2.66 | $2.66 | ||||
2022 | 528,000 | $45.68 | $60.83 | 1,080,000 | $2.69 | $2.69 | ||||
2023 | 160,000 | $40.00 | $63.10 | 240,000 | $2.64 | $2.64 | ||||
Total | 5,313,500 | $ 55.70 | $ 63.36 | 7,043,000 | $ 2.71 | $ 2.88 |
CRUDE OIL HEDGE POSITION BY BASIS
LLS Derivative Contracts | Brent Derivative Contracts | WTI Derivative Contracts | |||||||||
Weighted Average | Weighted Average | Weighted Average | |||||||||
Year | Units (Bbls) | Floor | Ceiling | Units (Bbls) | Floor | Ceiling | Units (Bbls) | Floor | Ceiling | ||
2018 | 95,000 | $52.29 | $65.51 | 595,500 | $66.21 | $69.49 | 120,000 | $67.50 | $67.50 | ||
2019 | 168,000 | $52.51 | $52.51 | 989,000 | $61.89 | $69.17 | 780,000 | $58.57 | $64.65 | ||
2020 | - | - | - | - | - | - | 1,266,000 | $53.36 | $59.09 | ||
2021 | - | - | - | - | - | - | 612,000 | $48.49 | $59.23 | ||
2022 | - | - | - | - | - | - | 528,000 | $45.68 | $60.83 | ||
2023 | - | - | - | - | - | - | 160,000 | $40.00 | $63.10 | ||
Total | 263,000 | $ 52.43 | $ 57.21 | 1,584,500 | $ 63.52 | $ 69.29 | 3,466,000 | $ 52.38 | $ 61.11 |
The following unaudited tables present certain production, per unit metrics and Adjusted EBITDAX that compare results of the corresponding quarterly and six month reporting periods:
Three Months Ended June 30, | Six Months Ended June 30, | % Change | ||||||||||||||||
Unaudited | 2018 | 2017 | 2018 | 2017 | Qtr.-over-Qtr | Yr.-over-Yr. | ||||||||||||
Net Sales Volumes | ||||||||||||||||||
Oil (Bbls) | 370,549 | 373,746 | 735,790 | 772,381 | (0.9 | %) | (4.7 | %) | ||||||||||
Natural gas (Mcf) | 1,265,199 | 891,148 | 2,149,622 | 1,661,993 | 42.0 | % | 29.3 | % | ||||||||||
NGL (Bbls) | 121,611 | 83,242 | 201,124 | 151,288 | 46.1 | % | 32.9 | % | ||||||||||
Total sales (Boe) (1) | 703,027 | 605,513 | 1,295,184 | 1,200,668 | 16.1 | % | 7.9 | % | ||||||||||
Total flared gas (Boe) | 15,172 | 22,281 | 53,202 | 28,758 | (31.9 | %) | 85.0 | % | ||||||||||
Total production (Boe) | 718,199 | 627,794 | 1,348,386 | 1,229,426 | 14.4 | % | 9.7 | % | ||||||||||
Average Daily Volumes | ||||||||||||||||||
Average daily production (Boe), including flared gas (1) | 7,892 | 6,899 | 7,450 | 6,792 | 14.4 | % | 9.7 | % | ||||||||||
Product Price Received | ||||||||||||||||||
Total price received (per Boe) | $43.47 | $35.06 | $44.88 | $37.03 | 24.0 | % | 21.2 | % | ||||||||||
Total realized price (per Boe)(1)(2) | $35.69 | $35.20 | $36.71 | $36.64 | 1.4 | % | 0.2 | % | ||||||||||
Total price received - Oil (per Bbl) | $67.61 | $47.51 | $66.22 | $48.56 | 42.3 | % | 36.4 | % | ||||||||||
Total price realized - Oil (per Bbl)(1) | $52.61 | $48.00 | $51.71 | $48.20 | 9.6 | % | 7.3 | % | ||||||||||
Total price received - Natural gas (per Mcf) | $2.21 | $2.24 | $2.31 | $2.50 | 1.3 | % | (7.6 | %) | ||||||||||
Total price realized - Natural gas (per Mcf)(2) | $2.27 | $2.14 | $2.35 | $2.39 | 6.4 | % | (1.7 | %) | ||||||||||
Total price received/realized - NGL (per Bbl) | $22.37 | $17.65 | $22.06 | $18.52 | 26.7 | % | 19.1 | % | ||||||||||
(1) Includes realized losses on oil derivatives of $2.4 million and a gain of $0.2 million for the three months ended June 30, 2018 and 2017, respectively, and realized losses of $4.0 million and $0.3 million for the six months ended June 30, 2018 and 2017, respectively. Also includes the impact of a fixed price delivery contract of $8.54/bbl and $9.09/bbl for the three and six months ended June 30, 2018, respectively. | ||||||||||||||||||
(2) Includes a realized gain on natural gas derivatives of $0.1 million and a loss of $0.1 million for the three months ended June 30, 2018 and 2017, respectively, and a realized gain of $0.1 million and a loss of $0.2 million for the six months ended June 30, 2018 and 2017, respectively. |
UNIT COST ANALYSIS | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
Unaudited | 2018 | 2017 |
% Change |
2018 | 2017 |
% Change |
||||||||||||||
Revenue/Boe* | $43.47 | $35.06 | 24.0 % | $39.71 | $37.03 | 7.2 % | ||||||||||||||
Lease operating expenses/Boe* | (10.95 | ) | (6.55 | ) | 67.3 % | (10.15 | ) | (6.27 | ) | 61.9 % | ||||||||||
Workover expense/Boe | (1.85 | ) | (3.70 | ) | (49.8 %) | (1.94 | ) | (2.42 | ) | (19.7 %) | ||||||||||
Production taxes/Boe | (2.61 | ) | (2.39 | ) | 9.1 % | (2.84 | ) | (2.37 | ) | 20.0 % | ||||||||||
Cash G&A/Boe(1) | (6.87 | ) | (7.82 | ) | (12.2 %) | (5.78 | ) | (6.63 | ) | (12.8 %) | ||||||||||
Net per Boe | $ 21.19 | $ 14.60 | 45.1 % | $ 19.00 | $ 19.34 | (1.8 %) | ||||||||||||||
Adjusted EBITDAX(2) | 9,360 | 8,722 | 7.3 % | 20,721 | 22,549 | (8.1 %) | ||||||||||||||
Adjusted EBITDAX Margin (3) | 34.2 | % | 41.1 | % | (16.9 %) | 40.3 | % | 50.7 | % | (20.6 %) | ||||||||||
* The Company is in the process of finalizing the accounting treatment of the fees charged under the marketing, transportation and processing agreements associated with the newly acquired Eagle Ford assets under IFRS 15 - Contracts with Customers. The Company anticipates there will be a reclassification of certain fees, resulting in an increase to LOE with a corresponding increase to revenue (no impact to Adjusted EBITDAX). | ||||||||||||||||||||
(1) Cash G&A represents general and administrative expenses (non transaction-related) incurred less equity-settled share based compensation expense, which | ||||||||||||||||||||
totaled income of $0.2 million, and expense of $0.6 million for the three months ended June 30, 2018 and 2017, respectively, and expense of $0.2 million | ||||||||||||||||||||
and $1.1 million for the six months ended June 30, 2018 and 2017, respectively. | ||||||||||||||||||||
(2) See reconciliation of income (loss) attributable to owners of the Company to Adjusted EBITDAX included at end of release. | ||||||||||||||||||||
(3) Adjusted EBITDAX Margin represents Adjusted EBITDAX as a percentage of revenue during the period. | ||||||||||||||||||||
Condensed Consolidated Financial Statements
The Company’s unaudited condensed consolidated financial statements are included below.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Unaudited (US$000s) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Revenue | $ | 27,400 | $ | 21,226 | $ | 51,436 | 44,460 | ||||||||
Lease operating, workover and production tax expense | (10,835 | ) | (7,649 | ) | (19,350 | ) | (13,289 | ) | |||||||
Depreciation and amortisation expense | (15,027 | ) | (14,256 | ) | (27,214 | ) | (28,415 | ) | |||||||
General and administrative expenses | (4,644 | ) | (5,245 | ) | (7,675 | ) | (9,015 | ) | |||||||
Transaction-related expenses | (11,351 | ) | - | (12,377 | ) | - | |||||||||
Gain (loss) on commodity hedging, net | (16,496 | ) | 4,238 | (23,180 | ) | 10,818 | |||||||||
Finance costs, net of amounts capitalized | (6,363 | ) | (2,872 | ) | (10,345 | ) | (5,979 | ) | |||||||
Loss on debt extinguishment | (2,428 | ) | - | (2,428 | ) | - | |||||||||
Impairment expense | (18,936 | ) | (38 | ) | (21,893 | ) | (29 | ) | |||||||
Other items income (expense), net | 5,222 | (3,193 | ) | 6,287 | (3,201 | ) | |||||||||
Loss before income tax | (53,458 | ) | (7,789 | ) | (66,739 | ) | (4,650 | ) | |||||||
Income tax expense | (7,552 | ) | (442 | ) | (9,855 | ) | (1,094 | ) | |||||||
Loss attributable to owners of the Company | $ | (61,010 | ) | $ | (8,231 | ) | $ | (76,594 | ) | $ | (5,744 | ) | |||
* The Company is in the process of finalizing the accounting treatment of the fees charged under the marketing, transportation and processing agreements associated with the newly acquired Eagle Ford assets under IFRS 15 - Contracts with Customers. The Company anticipates there will be a reclassification of certain fees, resulting in an increase to LOE with a corresponding increase to revenue (no impact to Adjusted EBITDAX). |
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(US$000s) | June 30, 2018 | December 31, 2017 | |||
(Unaudited) | (Audited) | ||||
Cash | $ | 6,257 | $ | 5,761 | |
Trade and other receivables | 11,103 | 4,006 | |||
Other current assets | 4,670 | 3,855 | |||
Assets held for sale(1) | 40,980 | 61,064 | |||
Total current assets | 63,010 | 74,686 | |||
Oil and gas properties | 615,320 | 375,021 | |||
Other assets | 5,748 | 4,911 | |||
Total assets | $ | 684,078 | $ | 454,618 | |
Current liabilities | $ | 67,206 | $ | 73,072 | |
Liabilities held for sale(1) | 980 | 1,064 | |||
Total current liabilities | 68,186 | 74,136 | |||
Credit facilities, net of financing fees | 233,940 | 189,310 | |||
Other non current liabilities | 37,479 | 13,821 | |||
Total liabilities | $ | 339,605 | $ | 277,267 | |
Net Assets | $ | 344,473 | $ | 177,351 | |
Equity | $ | 344,473 | $ | 177,351 | |
(1) The Company's Dimmit County Eagle Ford assets (and related liabilities) were classified as held for sale as of June 30, 2018 and December 31, 2017. |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||
Six Months Ended June 30, | |||||||
Unaudited (US$000s) | 2018 | 2017 | |||||
Operating | |||||||
Receipts from sales | $ | 48,918 | $ | 48,875 | |||
Payments for operating and administrative expenses | (40,500 | ) | (17,919 | ) | |||
Payments for commodity derivative settlements | (3,667 | ) | (1,042 | ) | |||
Other, net (1) | (2,330 | ) | 3,658 | ||||
Net cash provided by operating activities | 2,421 | 33,572 | |||||
Investing | |||||||
Payments for development expenditures | (40,770 | ) | (47,681 | ) | |||
Payments for exploration expenditures | (1,911 | ) | (7,589 | ) | |||
Payment for Eagle Ford acquisition | (220,132 | ) | - | ||||
Sale of non current assets | - | 14,478 | |||||
Other | (101 | ) | (399 | ) | |||
Net cash used in investing activities | (262,914 | ) | (41,191 | ) | |||
Financing | |||||||
Proceeds from the issuance of shares, net | 243,304 | - | |||||
Proceeds from foreign currency derivatives | 6,849 | - | |||||
Interest paid, net of capitalized portion | (12,437 | ) | (5,272 | ) | |||
Deferred financing costs capitalized | (16,680 | ) | - | ||||
Proceeds from borrowings, net | 58,000 | (250 | ) | ||||
Repayment of production loan | (18,194 | ) | - | ||||
Net cash used in financing activities | 260,842 | (5,522 | ) | ||||
Cash beginning of period | 5,761 | 17,463 | |||||
FX effect | 147 | (4 | ) | ||||
Cash at end of period | $ | 6,257 | $ | 4,318 | |||
(1) Includes $2.3 million of income tax payments and $3.9 million of income tax refund (net) for the six months ended June 30, 2018 and 2017, respectively. | |||||||
Conference Call
The Company will host a conference call for investors on Wednesday, August 15, 2018, at 4 p.m. Mountain Time (Thursday, August 16, 2018 at 8 a.m. AEDT).
Interested investors can listen to the call via webcast at http://www.sundanceenergy.net/events.cfm. The webcast will also be available for replay on the Company’s website.
Additional Information
We define “Adjusted EBITDAX” as earnings before interest expense, income taxes, depreciation, depletion and amortization, property impairments, gain/(loss) on sale of non-current assets, exploration expense, share based compensation and income, gains and losses on commodity hedging, net of settlements of commodity hedging and items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or items that are non-recurring.
Below is a reconciliation from the net income (loss) attributable to owners of the Company to Adjusted EBITDAX:
IFRS Income (Loss) Attributable to Owners of Sundance Reconciliation to Adjusted EBITDAX | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Unaudited (US$000s) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Loss attributable to owners of Sundance | $ | (61,010 | ) | $ | (8,231 | ) | $ | (76,594 | ) | $ | (5,744 | ) | |||
Income tax expense | 7,552 | 442 | 9,855 | 1,094 | |||||||||||
Finance costs, net of amounts capitalized | 6,363 | 2,872 | 10,345 | 5,979 | |||||||||||
Loss on debt extinguishment | 2,428 | - | 2,428 | - | |||||||||||
Loss on interest swap | 438 | - | 438 | - | |||||||||||
Loss (gain) on derivative financial instruments, net | 16,496 | (4,238 | ) | 23,180 | (10,818 | ) | |||||||||
Settlement of commodity hedging | (2,311 | ) | 88 | (3,894 | ) | (464 | ) | ||||||||
Depreciation and amortization | 15,027 | 14,256 | 27,214 | 28,415 | |||||||||||
Impairment expense | 18,936 | 38 | 21,893 | 29 | |||||||||||
Noncash share-based compensation | (184 | ) | 509 | 186 | 1,060 | ||||||||||
Acquisition-related costs included in general and admin expenses(1) | 11,351 | - | 12,377 | - | |||||||||||
Loss on sale of noncurrent assets | - | 1,278 | - | 1,278 | |||||||||||
Gain on foreign currency derivatives | (5,847 | ) | - | (6,838 | ) | - | |||||||||
Other income, net | 120 | 1,708 | 130 | 1,720 | |||||||||||
Adjusted EBITDAX | $ | 9,360 | $ | 8,722 | $ | 20,721 | $ | 22,549 | |||||||
(1) Professional fees included in general and administrative expense related to the Company's Eagle Ford acquisition, which closed April 23, 2018. | |||||||||||||||
The Company reports under International Financial Reporting Standards (IFRS). All amounts are reported in US dollars unless otherwise noted.
The Company’s full Unaudited Activities Report as filed with the Australian Securities Exchange (ASX) and Securities and Exchange Commission on Form 6-K for the Quarter Ended June 30, 2018 can be found at www.sundanceenergy.net.
The Company’s 2017 Annual Report as filed with the ASX and Form 20-F as filed with the SEC can be found at www.sundanceenergy.net.
About Sundance Energy Australia Limited
Sundance Energy Australia Limited (“Sundance” or the “Company”) is an Australian-based, independent energy exploration company, with a wholly owned US subsidiary, Sundance Energy Inc., located in Denver, Colorado, USA. The Company is focused on the acquisition and development of large, repeatable oil and natural gas resource plays in North America. Current activities are focused in the Eagle Ford. A comprehensive overview of the Company can be found on Sundance’s website at www.sundanceenergy.net
Summary Information
The following disclaimer applies to this document and any information contained in it. The information in this release is of general background and does not purport to be complete. It should be read in conjunction with Sundance’s periodic and continuous disclosure announcements lodged with ASX Limited that are available at www.asx.com.au and Sundance’s filings with the Securities and Exchange Commission available at www.sec.gov .
Forward Looking Statements
This release may contain forward-looking statements. These statements relate to the Company’s expectations, beliefs, intentions or strategies regarding the future. These statements can be identified by the use of words like “anticipate”, “believe”, “intend”, “estimate”, “expect”, “may”, “plan”, “project”, “will”, “should”, “seek” and similar words or expressions containing same.
These forward-looking statements reflect the Company’s views and assumptions with respect to future events as of the date of this release and are subject to a variety of unpredictable risks, uncertainties, and other unknowns. Actual and future results and trends could differ materially from those set forth in such statements due to various factors, many of which are beyond our ability to control or predict. These include, but are not limited to, risks or uncertainties associated with the discovery and development of oil and natural gas reserves, cash flows and liquidity, business and financial strategy, budget, projections and operating results, oil and natural gas prices, amount, nature and timing of capital expenditures, including future development costs, availability and terms of capital and general economic and business conditions. Given these uncertainties, no one should place undue reliance on any forward looking statements attributable to Sundance, or any of its affiliates or persons acting on its behalf. Although every effort has been made to ensure this release sets forth a fair and accurate view, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For more information, please contact:
United States: John Roberts VP Finance & Investor Relations Tel: +1 (720) 638-2400 |
Eric McCrady CEO and Managing Director Tel: +1 (303) 543-5703 |
|
Australia: Mike Hannell Chairman Tel: +61 8 8363 0388 |