Penn Virginia Corporation ("Penn Virginia" or the "Company")
(Nasdaq: PVAC) today announced its financial and operational
results for the second quarter 2021.
Recent Significant
Highlights
- After raising
oil guidance in the first quarter of 2021, the Company again
exceeded the high end of oil sales guidance, with 20,117 barrels of
oil per day ("bbl/d") for the second quarter of 2021. Total sales
volumes for the same period were 24,844 barrels of oil equivalent
per day ("boe/d");
- Reduced
estimated per well costs by approximately 4% compared to initial
guidance estimates for wells completed in the second quarter of
2021;
- Lowered
operating expenses per barrel of oil equivalent (“boe”) by
approximately 19% compared to the first quarter 2021;
- Announced
agreement to acquire Lonestar Resources US Inc. (“Lonestar”) in an
all-stock transaction that is expected to be highly accretive
across key metrics and significantly increase Penn Virginia’s Free
Cash Flow, production, and drilling inventory (the “Merger”). The
Merger is anticipated to close in the second half of 2021;
- The combination
with Lonestar is expected to result in over $20 million in annual
cost synergies, with incremental near-term operational synergies
from longer laterals, shared facilities, and capital efficiencies,
after the close;
- Priced inaugural
$400 million of senior unsecured notes (the “Notes”) with net
proceeds anticipated to be used to refinance Lonestar’s existing
long-term debt and Penn Virginia’s Second Lien Term Loan, creating
access to high yield capital markets and facilitating the launch of
an upsizing of the borrowing base to enhance liquidity upon closing
of the Merger;
- Generated
significant Free Cash Flow(1) for the seventh consecutive quarter,
lowering Net Debt(2) by approximately $30 million to $334 million
as of June 30, 2021;
- Generated net
income of $8 million (including a non-cash mark-to-market loss on
derivatives of $38 million); and
- Reported
adjusted EBITDAX(3)(4) of over $77 million for the second
quarter of 2021.
Darrin Henke, President and Chief Executive
Officer of Penn Virginia, commented, “I couldn’t be more proud of
our team. This quarter has been one of the best performing quarters
for the Penn Virginia team to date and could not have been achieved
without the tireless efforts of our entire employee base. It's not
often that within one month, we get to announce we significantly
exceeded production expectations, lowered our capital costs,
improved our operating costs, announced a transformational merger,
gained access to high yield capital markets, expanded liquidity,
and had one of our highest Free Cash Flow quarters in recent
history. Our commitment to continuous improvement through a
disciplined focus on cash-on-cash returns continues to produce both
operational and financial outperformance to the benefit of all of
our stakeholders.
As proud as we are of recent results, we are
even more excited about what we believe the future holds. We
continue to see ongoing operational efficiencies on our pad sites
as we consistently optimize our development program utilizing the
latest drilling and completion techniques resulting in continuous
improvement in well performance. Our latest well results in our
Northeast and Southwest portions of our acreage position have
validated our extensive inventory in these areas, and our recent
wells there have outperformed even our own expectations. Our
pending acquisition will expand our scale in both the Northeast and
Southwest areas, creating large contiguous blocks for optimized
development using longer laterals, shared facilities, and
significant cost and operating synergies. Lastly, our track record
of robust operational performance, strong Free Cash Flow position,
balance sheet strength, and access to capital markets has
positioned us as a disciplined consolidator in one of the premier
oil basins in North America.”
Second Quarter 2021 Operating
Results
Total sales volumes for the second quarter of
2021 were 2.3 million barrels of oil equivalent, or 24,844 boe/d
(81% crude oil). During the second quarter of 2021, the Company
completed and turned to sales 10 gross (8.2 net) wells(5).
Second Quarter 2021 Financial
Results
Operating expenses were $57.4 million, or $25.39
per barrel of oil equivalent ("boe"), in the second quarter of 2021
including $12.74 per boe of depreciation, depletion and
amortization expenses. Total cash direct operating expenses(6),
which consist of lease operating expenses ("LOE"), gathering,
processing, and transportation ("GPT") expenses, production and ad
valorem taxes, and cash general and administrative ("G&A")
expenses, were $27.6 million, or $12.23 per boe, in the second
quarter of 2021. Total G&A expenses for the second
quarter of 2021 were $3.09 per boe, which included $1.0 million of
non-cash share-based compensation. For the second quarter of
2021, adjusted cash G&A expenses(7), which excludes non-cash
share-based compensation, were $2.66 per boe, and LOE was $4.30 per
boe.
Net income for the second quarter of 2021 was
$7.6 million, and net income attributable to common shareholders
was $3.0 million, or $0.20 per share and per diluted share,
compared to a net loss of $94.7 million, or $6.24 per share, in the
second quarter of 2020. Adjusted net income(8) was $40.2
million, or $1.05 per diluted share, in the second quarter of 2021
versus $19.6 million, or $1.29 per diluted share in the second
quarter of 2020.
Adjusted EBITDAX(3)(4) was $77.1 million in
the second quarter of 2021, compared to $66.8 million in the second
quarter of 2020, up primarily due to higher production and higher
crude oil prices.
Balance Sheet, Liquidity and Capital
Spending
As of June 30, 2021, Penn Virginia had cash of
$49.7 million and total debt of $383.9 million, including
borrowings under its revolving credit facility of $238.9 million.
Liquidity was $160.4 million as of June 30, 2021, including cash
and $110.7 million available under the Company's revolving credit
facility. As of June 30, 2021, the Company had a Net Debt(2) to LTM
adjusted EBITDAX ratio of approximately 1.3x(9) on a standalone
basis, targeting approximately 1.0x, including the effects of the
Lonestar acquisition, in early 2022.
During the second quarter of 2021, the Company
incurred $68.7 million of capital expenditures.
- Penn Virginia
reduced estimated per well costs by approximately 4% compared to
initial guidance estimates for wells completed in the second
quarter of 2021, driven primarily by utilizing simulfrac operations
and improvements in cycle times. The more efficient operational
cadence allowed Penn Virginia to complete two additional multi-well
pads at the end of the quarter, originally scheduled for completion
in early July;
- The cycle time
improvements shifted approximately $12.2 million in capital
expenditures from the third quarter into the second quarter of
2021, resulting in total capital expenditures in the second quarter
of approximately $68.7 million (equating to the low-end of guidance
without the effect of cycle time improvements);
- Both pads were
turned to sales in the third quarter; and
- Penn Virginia is
maintaining its 2021 capital expenditure guidance for the full
year, and the Company remains focused on capital discipline with a
consistent two-rig development plan.
Senior Unsecured Notes
Following the end of the second quarter, Penn
Virginia priced $400 million of senior unsecured notes with net
proceeds anticipated to be used to refinance Lonestar’s existing
long-term debt and Penn Virginia’s Second Lien Term Loan. Upon
closing the Merger, Penn Virginia’s capitalization is expected to
include the Notes and an upsized revolving credit facility to
enhance liquidity .
Acreage
As of June 30, 2021, the Company had
approximately 102,400 gross (90,400 net) acres. Approximately
91% of Penn Virginia's acreage is held by production.
Q3 2021 Outlook
The table below sets forth the Company's
operational and financial guidance for the third quarter
2021(4):
|
|
3Q 2021 |
|
|
|
|
|
|
Oil Sales Volumes
(bbl/d) |
20,000 – 20,600 |
|
|
Realized Price
Differentials |
|
|
|
Oil (WTI, per bbl) |
$(3.00) - $(2.00) |
|
|
Natural gas (Henry Hub, per MMBtu) |
$(0.10) - $0.10 |
|
|
|
|
|
|
Direct Operating
Expenses |
|
|
|
Lease operating expenses (per boe) |
$4.65 - $4.85 |
|
|
GPT expenses (per boe) |
$2.50 - $2.70 |
|
|
Ad valorem and production taxes (percent of product revenue) |
6.3% - 6.8% |
|
|
Adjusted cash G&A expenses (per boe)(7) |
$2.90 - $3.20 |
|
|
|
|
|
|
Capital Expenditures
(millions) |
|
|
|
Drilling & Completion |
$56 - $64 |
|
|
Land, Facilities and other |
$1 |
|
Note: The Company's outlook for the
third quarter is based on maintaining a 2-rig development program.
However, the Company will closely monitor commodity prices and the
service cost environment with the goal of ensuring the capital
program generates robust returns and free cash flow.
Proved Developed (“PD”)
Reserves
Penn Virginia, on a standalone basis (excluding
the acquisition of Lonestar), obtained an updated third-party
reserve report from D&M with respect to its PD reserves as of
June 30, 2021. Pursuant to such reserve report, Penn Virginia's PD
reserves as of June 30, 2021, were approximately 58.0 million
barrels of oil equivalent (“MMboe”). The PD reserves were
calculated in accordance with Securities and Exchange Commission
(“SEC”) guidelines using the pricing of $49.78 per barrel for oil
and $2.43 per million British Thermal Units (MMBtu) for natural
gas.
The table below sets forth the Company's
Standardized Measure and SEC PV-10 Value(10) of the Company’s PD
reserves as of June 30, 2021:
|
June 30, |
|
2021 |
|
(in millions) |
Standardized measure of future discounted cash flows - PD
reserves |
$ |
809 |
|
PV-10 Value(10) of PD
reserves utilizing the SEC price guidelines |
$ |
818 |
|
The table below sets forth the Company's
Standardized Measure and SEC PV-10 Value(10) using flat pricing of
$60 per barrel for oil and $2.75 per MMbtu for natural gas as of
June 30, 2021:
|
June 30, |
|
2021 |
|
(in millions) |
Standardized measure of future discounted cash flows – PD reserves
using flat pricing |
$ |
1,043 |
|
PV-10 Value(10) of PD
reserves using flat pricing |
$ |
1,055 |
|
Second Quarter 2021 Conference
Call
A conference call and webcast discussing the
second quarter 2021 financial and operational results is currently
scheduled for Wednesday, August 4, 2021, at 10:00 a.m. ET. Prepared
remarks will be followed by a question and answer period. Investors
and analysts may participate via phone by dialing (844) 707-6931
(international: (412) 317-9248) five to 10 minutes before the
scheduled start time, or via webcast by logging on to the Company's
website, www.pennvirginia.com, at least 15 minutes prior to the
scheduled start time to download supporting materials and install
any necessary audio software.
An on-demand replay of the webcast will be available on the
Company's website beginning shortly after the webcast. The replay
will also be available from August 4, 2021, through August 11,
2021, by dialing (877) 344-7529 (international (412) 317-0088) and
entering the passcode 101588815.
About Penn Virginia
Corporation
Penn Virginia Corporation is a pure-play
independent oil and gas company engaged in the development and
production of oil, natural gas liquids, or NGLs, and natural gas,
with operations in the Eagle Ford shale in south Texas. For more
information, please visit our website at www.pennvirginia.com.
The information on the Company's website is not part of this
release.
Cautionary Statements Regarding
Guidance
The estimates and guidance presented in this
release are based on assumptions of current and future capital
expenditure levels, prices for oil, NGLs, and natural gas, and
NGLs, available liquidity, indications of supply and demand for
oil, well results, and operating costs. The guidance provided in
this release does not constitute any form of guarantee or assurance
that the matters indicated will be achieved. While we believe these
estimates and the assumptions on which they are based are
reasonable as of the date on which they are made, they are
inherently uncertain and are subject to, among other things,
significant business, economic, operational, and regulatory risks,
and uncertainties, some of which are not known as of the date of
the statement. Guidance and estimates, and the assumptions on which
they are based, are subject to material revision. Actual results
may differ materially from estimates and guidance. Please read the
"Forward-Looking Statements" section below, as well as "Risk
Factors" in our annual report on Form 10-K and our quarterly
reports on Form 10-Q, which are incorporated herein.
Forward-Looking
Statements
This communication contains certain
"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. Statements that are
not historical facts are forward-looking statements, and such
statements include, words such as "anticipate," "guidance,"
"assumptions," "projects," "forward," "estimates,” "outlook,”
"expects,” "continues,” "intends,” "plans,” "believes,” "future,”
"potential,” "may,” "foresee,” "possible,” "should,” "would,”
"could," “focus” and variations of such words or similar
expressions, including the negative thereof, to identify
forward-looking statements. Because such statements include
assumptions, risks, uncertainties, and contingencies, actual
results may differ materially from those expressed or implied by
such forward-looking statements. These risks, uncertainties and
contingencies include, but are not limited to, the following: risks
related to the proposed acquisition of Lonestar, including the risk
that acquisition will not be completed on the timeline or terms
currently contemplated, that the benefits of the acquisition may
not be fully realized or may take longer to realize than expected,
and that management attention will be diverted to
transaction-related issues; risks related to the recently completed
transactions with Juniper, including the risk that the benefits of
the transactions may not be fully realized or may take longer to
realize than expected, and that management attention will be
diverted to integration-related issues; risks related to potential
and completed acquisitions, including related costs and our ability
to realize their expected benefits; the decline in, sustained
market uncertainty of, and volatility of commodity prices for crude
oil, natural gas liquids, or NGLs, and natural gas; the impact of
the COVID-19 pandemic, including reduced demand for oil and natural
gas, economic slowdown, governmental actions, stay-at-home orders,
interruptions to our operations or our customer’s operations; risks
related to and the impact of actual or anticipated other world
health events; our ability to satisfy our short-term and long-term
liquidity needs, including our ability to generate sufficient cash
flows from operations or to obtain adequate financing, including
access to the capital markets, to fund our capital expenditures and
meet working capital needs; our ability to access capital,
including through lending arrangements and the capital markets, as
and when desired; negative events or publicity adversely affecting
our ability to maintain our relationships with our suppliers,
service providers, customers, employees, and other third parties;
plans, objectives, expectations and intentions contained in this
communication that are not historical; our ability to execute our
business plan in volatile and depressed commodity price
environments; our ability to develop, explore for, acquire and
replace oil and gas reserves and sustain production; changes to our
drilling and development program our ability to generate profits or
achieve targeted reserves in our development and exploratory
drilling and well operations; our ability to meet guidance, market
expectations and internal projections, including type curves; any
impairments, write-downs or write-offs of our reserves or assets;
the projected demand for and supply of oil, NGLs and natural gas;
our ability to contract for drilling rigs, frac crews, materials,
supplies and services at reasonable costs; our ability to renew or
replace expiring contracts on acceptable terms; our ability to
obtain adequate pipeline transportation capacity or other
transportation for our oil and gas production at reasonable cost
and to sell our production at, or at reasonable discounts to,
market prices; the uncertainties inherent in projecting future
rates of production for our wells and the extent to which actual
production differs from that estimated in our proved oil and gas
reserves; use of new techniques in our development, including choke
management and longer laterals; drilling, completion and operating
risks, including adverse impacts associated with well spacing and a
high concentration of activity; our ability to compete effectively
against other oil and gas companies; leasehold terms expiring
before production can be established and our ability to replace
expired leases; environmental obligations, costs and liabilities
that are not covered by an effective indemnity or insurance; the
timing of receipt of necessary regulatory permits; the effect of
commodity and financial derivative arrangements with other parties,
and counterparty risk related to the ability of these parties to
meet their future obligations; the occurrence of unusual weather or
operating conditions, including force majeure events; our ability
to retain or attract senior management and key employees; our
reliance on a limited number of customers and a particular region
for substantially all of our revenues and production; compliance
with and changes in governmental regulations or enforcement
practices, especially with respect to environmental, health and
safety matters; physical, electronic and cybersecurity breaches;
uncertainties relating to general domestic and international
economic and political conditions; the impact and costs associated
with litigation or other legal matters; sustainability initiatives;
and other risks set forth in our filings with the SEC, including
our most recent Annual Report on Form 10-K and subsequent Quarterly
Reports on Form 10-Q. Additional Information concerning these and
other factors can be found in our press releases and public filings
with the SEC. Many of the factors that will determine our future
results are beyond the ability of management to control or predict.
In addition, readers should not place undue reliance on
forward-looking statements, which reflect management's views only
as of the date hereof. The statements in this communication speak
only as of the date of the communication. We undertake no
obligation to revise or update any forward-looking statements, or
to make any other forward-looking statements, whether as a result
of new information, future events or otherwise, except as may be
required by applicable law. Expected results of the completed
period are preliminary and subject to change until published in our
Quarterly Report on Form 10-Q filed with the SEC.
Additional Information and Where To Find It
In connection with the proposed merger (the
“Proposed Transaction”) between Penn Virginia Corporation (“Penn
Virginia” or “PVAC”) and Lonestar Resources US Inc. (“Lonestar” or
“LONE”), Penn Virginia intends to file with the Securities and
Exchange Commission (the “SEC”) a registration statement on Form
S-4 (the “Registration Statement”) to register the shares of Penn
Virginia’s common stock to be issued in connection with the
Proposed Transaction. The Registration Statement will include a
document that serves as a prospectus and proxy statement of Penn
Virginia and a consent solicitation statement of Lonestar (the
“proxy statement/consent solicitation statement/prospectus”), and
each party will file other documents regarding the Proposed
Transaction with the SEC. INVESTORS AND SECURITY HOLDERS OF PENN
VIRGINIA AND LONESTAR ARE URGED TO CAREFULLY AND THOROUGHLY READ,
WHEN THEY BECOME AVAILABLE, THE REGISTRATION STATEMENT, THE PROXY
STATEMENT/CONSENT SOLICITATION STATEMENT/PROSPECTUS, AS EACH MAY BE
AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT
DOCUMENTS FILED BY PENN VIRGINIA AND LONESTAR WITH THE SEC BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PENN VIRGINIA AND
LONESTAR, THE PROPOSED TRANSACTION, THE RISKS RELATED THERETO AND
RELATED MATTERS.
After the Registration Statement has been
declared effective, a definitive proxy statement/consent
solicitation statement/prospectus will be mailed to shareholders of
each of Penn Virginia and Lonestar. Investors will be able to
obtain free copies of the Registration Statement and the proxy
statement/consent solicitation statement/prospectus, as each may be
amended from time to time, and other relevant documents filed by
Penn Virginia and Lonestar with the SEC (when they become
available) through the website maintained by the SEC at
www.sec.gov. Copies of documents filed with the SEC by Penn
Virginia, including the proxy statement/consent solicitation
statement/prospectus (when available), will be available free of
charge from Penn Virginia’s website at www.pennvirginia.com under
the “Investors” tab. Copies of documents filed with the SEC by
Lonestar will be available free of charge from Lonestar’s website
at www.lonestarresources.com under the “Investor Relations”
tab.
Participants in the Solicitation
Penn Virginia, Lonestar and certain of their
respective directors, executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies from Penn Virginia’s shareholders and the
solicitation of written consents from Lonestar’s shareholders, in
each case with respect to the Proposed Transaction. Information
about Penn Virginia’s directors and executive officers is available
in Penn Virginia’s Annual Report on Form 10-K for the 2020 fiscal
year filed with the SEC on March 9, 2021, and its definitive proxy
statement for the 2021 annual meeting of shareholders filed with
the SEC on April 7, 2021. Information about Lonestar’s directors
and executive officers is available in Lonestar’s Annual Report on
Form 10-K for the 2020 fiscal year, as amended, filed with the SEC
on April 30, 2021. Other information regarding the participants in
the solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the Registration Statement, the proxy statement/consent
solicitation statement/prospectus and other relevant materials to
be filed with the SEC regarding the Proposed Transaction when they
become available. Stockholders, potential investors and other
readers should read the proxy statement/consent solicitation
statement/prospectus carefully when it becomes available before
making any voting or investment decisions.
No Offer or Solicitation
This communication is not intended to and shall
not constitute an offer to sell or the solicitation of an offer to
sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval, nor shall there be any sale
of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
Footnotes
1) |
Free Cash Flow is a non-GAAP financial measure. Definitions of
non-GAAP financial measures and reconciliations of non-GAAP
financial measures to the closest GAAP-based financial measures
appear at the end of this release. |
|
|
2) |
Net Debt is a non-GAAP financial measure. Definitions of non-GAAP
financial measures and reconciliations of non-GAAP financial
measures to the closest GAAP-based financial measures appear at the
end of this release. |
|
|
3) |
Adjusted EBITDAX is a non-GAAP financial measure. Definitions of
non-GAAP financial measures and reconciliations of non-GAAP
financial measures to the closest GAAP-based financial measures
appear at the end of this release. |
|
|
4) |
The Company currently expects adjusted EBITDAX to be reduced by
$2.2 million in the third quarter of 2021 and $0.6 million in the
fourth of 2021 for option premiums paid in current and prior
periods related to current period production and prior period
settlements of early-terminated derivatives originally designated
to settle against current period production. |
|
|
5) |
During the second quarter of 2021, 11 gross (9.2 net) wells were
turned in line, but one gross well did not produce commercial sales
until the third quarter of 2021. |
|
|
6) |
Total cash direct operating expenses is a non-GAAP financial
measure. Definitions of non-GAAP financial measures and
reconciliations of non-GAAP financial measures to the closest
GAAP-based financial measures appear at the end of this
release. |
|
|
7) |
Adjusted cash G&A expense is a non-GAAP financial measure.
Definitions of non-GAAP financial measures and reconciliations of
non-GAAP financial measures to the closest GAAP-based financial
measures appear at the end of this release. |
|
|
8) |
Adjusted net income is a non-GAAP financial measure. Definitions of
non-GAAP financial measures and reconciliations of non-GAAP
financial measures to the closest GAAP-based financial measures
appear at the end of this release. |
|
|
9) |
Leverage Ratio is defined as Net Debt to LTM Adjusted EBITDAX. Net
Debt and Adjusted EBITDAX are non-GAAP measures defined and
reconciled at the end of this release. |
|
|
10) |
PV-10 Value is a non-GAAP measure. Definitions of non-GAAP
financial measures and reconciliations of non-GAAP financial
measures to the closest GAAP-based financial measures appear at the
end of this release. |
PENN VIRGINIA
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONSand SELECTED OPERATING STATISTICS -
unaudited(in thousands, except per share, production and
price data)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues and
other |
|
|
|
|
|
|
|
|
|
|
Crude oil |
|
$ |
116,314 |
|
|
$ |
81,913 |
|
|
$ |
41,197 |
|
|
$ |
198,227 |
|
|
$ |
127,505 |
|
Natural gas liquids (NGLs) |
|
4,388 |
|
|
3,562 |
|
|
1,578 |
|
|
7,950 |
|
|
3,471 |
|
Natural gas |
|
3,087 |
|
|
2,833 |
|
|
2,020 |
|
|
5,920 |
|
|
4,710 |
|
Total product revenues |
|
123,789 |
|
|
88,308 |
|
|
44,795 |
|
|
212,097 |
|
|
135,686 |
|
Other operating income, net |
|
910 |
|
|
247 |
|
|
687 |
|
|
1,157 |
|
|
1,175 |
|
Total revenues and other |
|
124,699 |
|
|
88,555 |
|
|
45,482 |
|
|
213,254 |
|
|
136,861 |
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
9,728 |
|
|
8,825 |
|
|
9,094 |
|
|
18,553 |
|
|
19,626 |
|
Gathering, processing and transportation |
|
5,173 |
|
|
4,674 |
|
|
5,593 |
|
|
9,847 |
|
|
11,037 |
|
Production and ad valorem taxes |
|
6,721 |
|
|
5,513 |
|
|
2,630 |
|
|
12,234 |
|
|
8,784 |
|
General and administrative |
|
6,985 |
|
|
13,177 |
|
|
7,986 |
|
|
20,162 |
|
|
15,216 |
|
Depreciation, depletion and amortization |
|
28,795 |
|
|
23,884 |
|
|
37,135 |
|
|
52,679 |
|
|
77,853 |
|
Impairments of oil and gas properties |
|
— |
|
|
1,811 |
|
|
35,509 |
|
|
1,811 |
|
|
35,509 |
|
Total operating expenses |
|
57,402 |
|
|
57,884 |
|
|
97,947 |
|
|
115,286 |
|
|
168,025 |
|
Operating income (loss) |
|
67,297 |
|
|
30,671 |
|
|
(52,465 |
) |
|
97,968 |
|
|
(31,164 |
) |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(5,303 |
) |
|
(5,397 |
) |
|
(8,536 |
) |
|
(10,700 |
) |
|
(16,716 |
) |
Loss on extinguishment of debt |
|
— |
|
|
(1,231 |
) |
|
— |
|
|
(1,231 |
) |
|
— |
|
Derivatives |
|
(54,227 |
) |
|
(44,368 |
) |
|
(34,349 |
) |
|
(98,595 |
) |
|
116,770 |
|
Other, net |
|
— |
|
|
(6 |
) |
|
(55 |
) |
|
(6 |
) |
|
(63 |
) |
Income (loss) before income
taxes |
|
7,767 |
|
|
(20,331 |
) |
|
(95,405 |
) |
|
(12,564 |
) |
|
68,827 |
|
Income tax (expense) benefit |
|
(171 |
) |
|
310 |
|
|
690 |
|
|
139 |
|
|
(448 |
) |
Net income
(loss) |
|
7,596 |
|
|
(20,021 |
) |
|
(94,715 |
) |
|
(12,425 |
) |
|
68,379 |
|
Net (income) loss attributable to Noncontrolling interest |
|
(4,551 |
) |
|
6,449 |
|
|
— |
|
|
1,898 |
|
|
— |
|
Net income (loss)
attributable to common shareholders |
|
$ |
3,045 |
|
|
$ |
(13,572 |
) |
|
$ |
(94,715 |
) |
|
$ |
(10,527 |
) |
|
$ |
68,379 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.20 |
|
|
$ |
(0.89 |
) |
|
$ |
(6.24 |
) |
|
$ |
(0.69 |
) |
|
$ |
4.51 |
|
Diluted |
|
$ |
0.20 |
|
|
$ |
(0.89 |
) |
|
$ |
(6.24 |
) |
|
$ |
(0.69 |
) |
|
$ |
4.48 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
15,311 |
|
|
15,263 |
|
|
15,167 |
|
|
15,287 |
|
|
15,159 |
|
Diluted |
|
38,372 |
|
|
15,263 |
|
|
15,167 |
|
|
15,287 |
|
|
15,268 |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Sales
Volumes |
|
|
|
|
|
|
|
|
|
|
Crude oil (Mbbls) |
|
1,831 |
|
|
1,469 |
|
|
1,719 |
|
|
3,300 |
|
|
3,599 |
|
NGLs (Mbbls) |
|
240 |
|
|
210 |
|
|
303 |
|
|
450 |
|
|
610 |
|
Natural gas (MMcf) |
|
1,143 |
|
|
1,013 |
|
|
1,311 |
|
|
2,156 |
|
|
2,784 |
|
Total
(Mboe) |
|
2,261 |
|
|
1,848 |
|
|
2,240 |
|
|
4,109 |
|
|
4,674 |
|
Average sales volumes
(boe/d) |
|
24,844 |
|
|
20,534 |
|
|
24,617 |
|
|
22,701 |
|
|
25,679 |
|
|
|
|
|
|
|
|
|
|
|
|
Realized
Prices |
|
|
|
|
|
|
|
|
|
|
Crude oil ($/bbl) |
|
$ |
63.54 |
|
|
$ |
55.76 |
|
|
$ |
23.97 |
|
|
$ |
60.07 |
|
|
$ |
35.42 |
|
NGLs ($/bbl) |
|
$ |
18.31 |
|
|
$ |
16.95 |
|
|
$ |
5.21 |
|
|
$ |
17.68 |
|
|
$ |
5.69 |
|
Natural gas ($/Mcf) |
|
$ |
2.70 |
|
|
$ |
2.80 |
|
|
$ |
1.54 |
|
|
$ |
2.75 |
|
|
$ |
1.69 |
|
Aggregate ($/boe) |
|
$ |
54.75 |
|
|
$ |
47.79 |
|
|
$ |
20.00 |
|
|
$ |
51.62 |
|
|
$ |
29.03 |
|
|
|
|
|
|
|
|
|
|
|
|
Realized Prices,
including effects of derivatives, net
1 |
|
|
|
|
|
|
|
|
|
|
Crude oil ($/bbl) |
|
$ |
52.70 |
|
|
$ |
44.80 |
|
|
$ |
50.37 |
|
|
$ |
49.18 |
|
|
$ |
52.34 |
|
NGLs ($/bbl) |
|
$ |
17.87 |
|
|
$ |
16.95 |
|
|
$ |
5.21 |
|
|
$ |
17.44 |
|
|
$ |
5.69 |
|
Natural gas ($/Mcf) |
|
$ |
2.71 |
|
|
$ |
2.84 |
|
|
$ |
1.79 |
|
|
$ |
2.77 |
|
|
$ |
1.85 |
|
Aggregate ($/boe) |
|
$ |
45.93 |
|
|
$ |
39.10 |
|
|
$ |
40.41 |
|
|
$ |
42.86 |
|
|
$ |
42.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Realized prices, including effects of
derivatives, net are non-GAAP measures. Definitions of non-GAAP
financial measures and reconciliations of non-GAAP financial
measures appear at the end of this release.
Reconciliation of GAAP “Realized prices”
to Non-GAAP “Realized prices, including effects of derivatives,
net”We present our realized prices for crude oil and
natural gas, as adjusted for the effects of derivatives, net as we
believe these measures are useful to management and stakeholders in
determining the effectiveness of our price-risk management program
that is designed to reduce the volatility associated with our
operations. Realized prices for crude oil and natural gas, as
adjusted for the effects of derivatives, net, are supplemental
financial measures that are not prepared in accordance with
generally accepted accounting principles (“GAAP”). The following
table presents the calculation of our non-GAAP realized prices for
crude oil and natural gas, as adjusted for the effects of
derivatives, net and reconciles to realized prices for crude oil
and natural gas determined in accordance with GAAP:
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
Realized crude oil prices ($/bbl) |
|
$ |
63.54 |
|
|
$ |
55.76 |
|
|
$ |
23.97 |
|
|
$ |
60.07 |
|
|
$ |
35.42 |
|
Effects of derivatives
($/bbl) |
|
(10.84 |
) |
|
(10.96 |
) |
|
26.40 |
|
|
(10.89 |
) |
|
16.92 |
|
Crude oil realized prices,
including effects of derivatives, net ($/bbl) |
|
$ |
52.70 |
|
|
$ |
44.80 |
|
|
$ |
50.37 |
|
|
$ |
49.18 |
|
|
$ |
52.34 |
|
|
|
|
|
|
|
|
|
|
|
|
Realized natural gas liquid
prices ($/bbl) |
|
$ |
18.31 |
|
|
$ |
16.95 |
|
|
$ |
5.21 |
|
|
$ |
17.68 |
|
|
$ |
5.69 |
|
Effects of derivatives
($/bbl) |
|
(0.44 |
) |
|
— |
|
|
— |
|
|
(0.24 |
) |
|
$ |
— |
|
Natural gas liquid realized
prices, including effects of derivatives, net ($/bbl) |
|
$ |
17.87 |
|
|
$ |
16.95 |
|
|
$ |
5.21 |
|
|
$ |
17.44 |
|
|
$ |
5.69 |
|
|
|
|
|
|
|
|
|
|
|
|
Realized natural gas prices
($/Mcf) |
|
$ |
2.70 |
|
|
$ |
2.80 |
|
|
$ |
1.54 |
|
|
$ |
2.75 |
|
|
$ |
1.69 |
|
Effects of derivatives
($/Mcf) |
|
0.01 |
|
|
0.04 |
|
|
0.25 |
|
|
0.02 |
|
|
0.16 |
|
Natural gas realized prices,
including effects of derivatives, net ($/Mcf) |
|
$ |
2.71 |
|
|
$ |
2.84 |
|
|
$ |
1.79 |
|
|
$ |
2.77 |
|
|
$ |
1.85 |
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate realized prices
($/boe) |
|
$ |
54.75 |
|
|
$ |
47.79 |
|
|
$ |
20.00 |
|
|
$ |
51.62 |
|
|
$ |
29.03 |
|
Effects of derivatives
($/boe) |
|
(8.82 |
) |
|
(8.69 |
) |
|
20.41 |
|
|
(8.76 |
) |
|
13.13 |
|
Aggregate realized prices, including effects of derivatives, net
($/boe) |
|
$ |
45.93 |
|
|
$ |
39.10 |
|
|
$ |
40.41 |
|
|
$ |
42.86 |
|
|
$ |
42.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effects of derivatives includes, as applicable
to the period presented: (i) current period commodity derivative
settlements; (ii) the impact of option premiums paid or received in
prior periods related to current period production; (iii) the
impact of prior period cash settlements of early-terminated
derivatives originally designated to settle against current period
production; (iv) the exclusion of option premiums paid or received
in current period related to future period production; and (v) the
exclusion of the impact of current period cash settlements for
early-terminated derivatives originally designated to settle
against future period production.
PENN VIRGINIA
CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS -
unaudited(in thousands)
|
|
June 30, |
|
December 31, |
|
|
2021 |
|
2020 |
Assets |
|
|
|
|
Current assets |
|
$ |
148,084 |
|
|
$ |
153,420 |
|
Net property and equipment |
|
833,723 |
|
|
723,549 |
|
Other noncurrent assets |
|
8,071 |
|
|
30,357 |
|
Total assets |
|
$ |
989,878 |
|
|
$ |
907,326 |
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
Current liabilities |
|
204,997 |
|
|
148,195 |
|
Other noncurrent liabilities |
|
30,169 |
|
|
36,796 |
|
Total long-term debt, net |
|
372,049 |
|
|
509,497 |
|
Equity |
|
|
|
|
Common shareholders’ equity |
|
154,939 |
|
|
212,838 |
|
Noncontrolling interest |
|
227,724 |
|
|
— |
|
Total equity |
|
382,663 |
|
|
212,838 |
|
Total liabilities and equity |
|
$ |
989,878 |
|
|
$ |
907,326 |
|
|
|
|
|
|
|
|
|
|
PENN VIRGINIA
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS - unaudited(in thousands)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Cash flows from
operating activities |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
7,596 |
|
|
$ |
(20,021 |
) |
|
$ |
(94,715 |
) |
|
$ |
(12,425 |
) |
|
$ |
68,379 |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
Loss on exchange of debt |
|
— |
|
|
1,231 |
|
|
— |
|
|
1,231 |
|
|
— |
|
Depreciation, depletion and amortization |
|
28,795 |
|
|
23,884 |
|
|
37,135 |
|
|
52,679 |
|
|
77,853 |
|
Impairments of oil and gas properties |
|
— |
|
|
1,811 |
|
|
35,509 |
|
|
1,811 |
|
|
35,509 |
|
Derivative contracts: |
|
|
|
|
|
|
|
|
|
|
Net (gains) losses |
|
54,227 |
|
|
44,368 |
|
|
34,349 |
|
|
98,595 |
|
|
(116,770 |
) |
Cash settlements and premiums received (paid), net |
|
(16,634 |
) |
|
(7,169 |
) |
|
59,146 |
|
|
(23,803 |
) |
|
58,877 |
|
Deferred income tax expense (benefit) |
|
61 |
|
|
(310 |
) |
|
(786 |
) |
|
(249 |
) |
|
1,534 |
|
Gain on sales of assets, net |
|
— |
|
|
(4 |
) |
|
(8 |
) |
|
(4 |
) |
|
(14 |
) |
Non-cash interest expense |
|
568 |
|
|
611 |
|
|
1,714 |
|
|
1,179 |
|
|
2,537 |
|
Share-based compensation |
|
962 |
|
|
2,246 |
|
|
951 |
|
|
3,208 |
|
|
1,807 |
|
Other, net |
|
7 |
|
|
6 |
|
|
6 |
|
|
13 |
|
|
14 |
|
Changes in operating assets and liabilities, net |
|
14,918 |
|
|
(14,442 |
) |
|
(16,879 |
) |
|
476 |
|
|
(831 |
) |
Net cash provided by operating activities |
|
90,500 |
|
|
32,211 |
|
|
56,422 |
|
|
122,711 |
|
|
128,895 |
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
(60,948 |
) |
|
(34,758 |
) |
|
(50,812 |
) |
|
(95,706 |
) |
|
(112,827 |
) |
Proceeds from sales of assets, net |
|
149 |
|
|
4 |
|
|
8 |
|
|
153 |
|
|
83 |
|
Net cash used in investing activities |
|
(60,799 |
) |
|
(34,754 |
) |
|
(50,804 |
) |
|
(95,553 |
) |
|
(112,744 |
) |
Cash flows from
financing activities |
|
|
|
|
|
|
|
|
|
|
Proceeds from credit facility borrowings |
|
20,000 |
|
|
— |
|
|
— |
|
|
20,000 |
|
|
46,000 |
|
Repayment of credit facility borrowings |
|
(10,000 |
) |
|
(85,500 |
) |
|
(40,000 |
) |
|
(95,500 |
) |
|
(49,000 |
) |
Repayment of second lien term loan |
|
(1,875 |
) |
|
(53,140 |
) |
|
— |
|
|
(55,015 |
) |
|
— |
|
Proceeds from redeemable common units |
|
— |
|
|
151,160 |
|
|
— |
|
|
151,160 |
|
|
— |
|
Proceeds from redeemable preferred stock |
|
— |
|
|
2 |
|
|
— |
|
|
2 |
|
|
— |
|
Transaction costs paid on behalf of Noncontrolling interest |
|
— |
|
|
(5,543 |
) |
|
— |
|
|
(5,543 |
) |
|
— |
|
Issue costs paid for Noncontrolling interest securities |
|
— |
|
|
(3,758 |
) |
|
— |
|
|
(3,758 |
) |
|
— |
|
Debt issuance costs paid |
|
— |
|
|
(1,830 |
) |
|
(72 |
) |
|
(1,830 |
) |
|
(72 |
) |
Other, net |
|
— |
|
|
— |
|
|
1,068 |
|
|
— |
|
|
1,068 |
|
Net cash provided by (used in) financing activities |
|
8,125 |
|
|
1,391 |
|
|
(39,004 |
) |
|
9,516 |
|
|
(2,004 |
) |
Net increase (decrease) in
cash and cash equivalents |
|
37,826 |
|
|
(1,152 |
) |
|
(33,386 |
) |
|
36,674 |
|
|
14,147 |
|
Cash and cash equivalents -
beginning of period |
|
11,868 |
|
|
13,020 |
|
|
55,331 |
|
|
13,020 |
|
|
7,798 |
|
Cash and cash equivalents -
end of period |
|
$ |
49,694 |
|
|
$ |
11,868 |
|
|
$ |
21,945 |
|
|
$ |
49,694 |
|
|
$ |
21,945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PENN VIRGINIA
CORPORATIONCERTAIN NON-GAAP FINANCIAL MEASURES -
unaudited
Readers are reminded that non-GAAP measures are
merely a supplement to, and not a replacement for, or superior to
financial measures prepared according to GAAP. They should be
evaluated in conjunction with the GAAP financial measures. It
should be noted as well that our non-GAAP information may be
different from the non-GAAP information provided by other
companies.
Special Note About Presentation
Effective with our reporting for the period ended September 30,
2020, and for future periods, the Company changed the manner in
which settlements from interest rate swap derivatives are presented
in the non-GAAP financial measure “Adjusted EBITDAX.” Previously,
our presentation of such interest rate swap settlements were
commingled with commodity derivative settlements in the caption
titled “Realized settlements, net.” Because these interest rate
swap derivative financial instruments represent hedges of the
interest expense attributable to our variable-rate debt
instruments, we believe that the related gain or loss on our
Consolidated Statements of Operations should be treated similarly
to the exclusion of interest expense in the determination of
“Adjusted EBITDAX.” In order to mitigate the potential for any
confusion and to align our reporting with what we believe to be the
dominant presentation methodology regarding such non-GAAP financial
measures in our industry, which is also consistent with the
treatment afforded such derivative financial instruments in our
debt agreements, we will exclude the effect of such settlements in
our non-GAAP financial measure “Adjusted EBITDAX”. We have applied
the aforementioned presentation methodology to all prior periods
presented herein.
Reconciliation of GAAP “Net income
(loss)” to Non-GAAP “Adjusted net income”Adjusted net
income is a non-GAAP financial measure that represents net income
(loss) adjusted to include net realized settlements of derivatives
and exclude the effects, net of income taxes, of non-cash changes
in the fair value of derivatives, impairments of oil and gas
properties, net gains and losses on the sales of assets, loss on
extinguishment of debt, strategic transaction costs, organizational
restructuring, including severance and income tax effect of
adjustments. We believe that non-GAAP adjusted net income and
non-GAAP adjusted net income per share amounts provide meaningful
supplemental information regarding our operational performance.
This information facilitates management’s internal comparisons to
the Company’s historical operating results as well as to the
operating results of our competitors. Since management finds this
measure to be useful, the Company believes that our investors can
benefit by evaluating both non-GAAP and GAAP results. Adjusted net
income is not a measure of financial performance under GAAP and
should not be considered as a measure of liquidity or as an
alternative to net income (loss).
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
(in thousands, except per share amounts) |
Net income (loss) |
|
$ |
7,596 |
|
|
$ |
(20,021 |
) |
|
$ |
(94,715 |
) |
|
$ |
(12,425 |
) |
|
$ |
68,379 |
|
Adjustments for
derivatives: |
|
|
|
|
|
|
|
|
|
|
Net losses (gains) |
|
54,227 |
|
|
44,368 |
|
|
34,349 |
|
|
98,595 |
|
|
(116,770 |
) |
Realized settlements, net 1 |
|
(20,900 |
) |
|
(16,982 |
) |
|
45,285 |
|
|
(37,882 |
) |
|
60,984 |
|
Impairments of oil and gas
properties |
|
— |
|
|
1,811 |
|
|
35,509 |
|
|
1,811 |
|
|
35,509 |
|
Gain on sales of assets,
net |
|
— |
|
|
(4 |
) |
|
(8 |
) |
|
(4 |
) |
|
(14 |
) |
Loss on extinguishment of
debt |
|
— |
|
|
1,231 |
|
|
— |
|
|
1,231 |
|
|
— |
|
Strategic transaction
costs |
|
— |
|
|
4,655 |
|
|
— |
|
|
4,655 |
|
|
— |
|
Organizational restructuring,
including severance |
|
— |
|
|
239 |
|
|
— |
|
|
239 |
|
|
— |
|
Income tax effect of
adjustments |
|
(735 |
) |
|
(539 |
) |
|
(833 |
) |
|
(761 |
) |
|
132 |
|
Adjusted net
income |
|
$ |
40,188 |
|
|
$ |
14,758 |
|
|
$ |
19,587 |
|
|
$ |
55,459 |
|
|
$ |
48,220 |
|
Net income (loss), per
diluted share |
|
$ |
0.20 |
|
|
$ |
(0.89 |
) |
|
$ |
(6.24 |
) |
|
$ |
(0.69 |
) |
|
$ |
4.48 |
|
Adjusted net income,
per diluted share 2 |
|
$ |
1.05 |
|
|
$ |
0.39 |
|
|
$ |
1.29 |
|
|
$ |
1.47 |
|
|
$ |
3.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Realized settlements, net includes, as
applicable to the period presented: (i) current period commodity
and interest rate derivative settlements; (ii) the impact of option
premiums paid or received in prior periods related to current
period production; (iii) the impact of prior period cash
settlements of early-terminated derivatives originally designated
to settle against current period production; (iv) the exclusion of
option premiums paid or received in current period related to
future period production; and (v) the exclusion of the impact of
current period cash settlements for early-terminated derivatives
originally designated to settle against future period
production.
2 Adjusted net income per diluted share is
calculated based on diluted shares of 38.4 million (assumes the
exchange of Series A Preferred stock and 22.5 million Common units
held by Juniper for common shares), 37.9 million (assumes the
exchange of Series A Preferred stock and 22.5 million Common units
held by Juniper for common shares) and 15.2 million for the three
months ended June 30, 2021, March 31, 2021 and June 30, 2020,
respectively, and 38.1 million (assumes the exchange of Series A
Preferred stock and 22.5 million Common units held by Juniper for
common shares) and 15.3 million for the six months ended June 30,
2021 and 2020, respectively.
Reconciliation of GAAP “Net income
(loss)” to Non-GAAP “Adjusted EBITDAX”Adjusted EBITDAX
represents net income (loss) before loss on extinguishment of debt,
interest expense, income taxes, impairments of oil and gas
properties, depreciation, depletion and amortization expense and
share-based compensation expense, further adjusted to include the
net commodity realized settlements of derivatives and exclude the
effects of gains and losses on sales of assets, non-cash changes in
the fair value of derivatives, and special items including
strategic transaction costs, and organizational restructuring,
including severance. We believe this presentation is commonly used
by investors and professional research analysts for the valuation,
comparison, rating, investment recommendations of companies within
the oil and gas exploration and production industry. We use this
information for comparative purposes within our industry. Adjusted
EBITDAX is not a measure of financial performance under GAAP and
should not be considered as a measure of liquidity or as an
alternative to net income (loss). Adjusted EBITDAX as defined by
Penn Virginia may not be comparable to similarly titled measures
used by other companies and should be considered in conjunction
with net income (loss) and other measures prepared in accordance
with GAAP, such as operating income or cash flows from operating
activities. Adjusted EBITDAX should not be considered in isolation
or as a substitute for an analysis of Penn Virginia’s results as
reported under GAAP.
|
|
Three Months Ended |
|
LTM Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
|
(in thousands, except per unit amounts) |
Net income (loss) |
|
$ |
7,596 |
|
|
$ |
(20,021 |
) |
|
$ |
(94,715 |
) |
|
$ |
(391,361 |
) |
Adjustments to reconcile to
Adjusted EBITDAX: |
|
|
|
|
|
|
|
|
Loss on extinguishment of debt |
|
— |
|
|
1,231 |
|
|
— |
|
|
1,231 |
|
Interest expense, net |
|
5,303 |
|
|
5,397 |
|
|
8,536 |
|
|
25,241 |
|
Income tax (benefit) expense |
|
171 |
|
|
(310 |
) |
|
(690 |
) |
|
(2,890 |
) |
Impairments of oil and gas properties |
|
— |
|
|
1,811 |
|
|
35,509 |
|
|
358,151 |
|
Depreciation, depletion and amortization |
|
28,795 |
|
|
23,884 |
|
|
37,135 |
|
|
115,499 |
|
Share-based compensation expense |
|
962 |
|
|
2,246 |
|
|
951 |
|
|
4,685 |
|
Gain on sales of assets, net |
|
— |
|
|
(4 |
) |
|
(8 |
) |
|
(8 |
) |
Adjustments for derivatives: |
|
|
|
|
|
|
|
|
Net losses (gains) |
|
54,227 |
|
|
44,368 |
|
|
34,349 |
|
|
126,943 |
|
Realized commodity settlements, net 1 |
|
(19,944 |
) |
|
(16,059 |
) |
|
45,721 |
|
|
(3,925 |
) |
Adjustment for special items: |
|
|
|
|
|
|
|
|
Strategic transaction costs |
|
— |
|
|
4,655 |
|
|
— |
|
|
9,628 |
|
Organizational restructuring, including severance |
|
— |
|
|
239 |
|
|
— |
|
|
1,685 |
|
Adjusted
EBITDAX |
|
$ |
77,110 |
|
|
$ |
47,437 |
|
|
$ |
66,788 |
|
|
$ |
244,879 |
2 |
Net income (loss) per
boe |
|
$ |
3.36 |
|
|
$ |
(10.83 |
) |
|
$ |
(42.28 |
) |
|
$ |
(47.03 |
) |
Adjusted EBITDAX per
boe |
|
$ |
34.11 |
|
|
$ |
25.67 |
|
|
$ |
29.81 |
|
|
$ |
29.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Realized commodity settlements, net
includes, as applicable to the period presented: (i) current period
commodity derivative settlements; (ii) the impact of option
premiums paid or received in prior periods related to current
period production; (iii) the impact of prior period cash
settlements of early-terminated derivatives originally designated
to settle against current period production; (iv) the exclusion of
option premiums paid or received in current period related to
future period production; and (v) the exclusion of the impact of
current period cash settlements for early-terminated derivatives
originally designated to settle against future period
production.
2 Excludes Adjusted EBITDAX adjustments of
approximately $3.5 million attributable to oil and gas properties
contributed by Rocky Creek Resources/Juniper.
Reconciliation of GAAP “Operating
expenses” to Non-GAAP “Adjusted direct operating expenses and
Adjusted direct operating expenses per boe”Adjusted direct
operating expenses and adjusted direct operating expenses per boe
are supplemental non-GAAP financial measure that exclude certain
non-recurring expenses and non-cash expenses. We believe that the
non-GAAP measure of Adjusted total direct operating expense per boe
is useful to investors because it provides readers with a
meaningful measure of our cost profile and provides for greater
comparability period-over-period.
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
(in thousands, except per unit amounts) |
Operating expenses - GAAP |
|
$ |
57,402 |
|
|
$ |
57,884 |
|
|
$ |
97,947 |
|
|
$ |
115,286 |
|
|
$ |
168,025 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
(962 |
) |
|
(2,246 |
) |
|
(951 |
) |
|
(3,208 |
) |
|
(1,807 |
) |
Impairment of oil and gas properties |
|
— |
|
|
(1,811 |
) |
|
(35,509 |
) |
|
(1,811 |
) |
|
(35,509 |
) |
Depreciation, depletion and amortization |
|
(28,795 |
) |
|
(23,884 |
) |
|
(37,135 |
) |
|
(52,679 |
) |
|
(77,853 |
) |
Total cash direct
operating expenses |
|
27,645 |
|
|
29,943 |
|
|
24,352 |
|
|
57,588 |
|
|
52,856 |
|
Significant special
charges: |
|
|
|
|
|
|
|
|
|
|
Strategic transaction costs |
|
— |
|
|
(4,655 |
) |
|
— |
|
|
(4,655 |
) |
|
— |
|
Organizational restructuring, including severance |
|
— |
|
|
(239 |
) |
|
— |
|
|
(239 |
) |
|
— |
|
Non-GAAP Adjusted
direct operating expenses |
|
$ |
27,645 |
|
|
$ |
25,049 |
|
|
$ |
24,352 |
|
|
$ |
52,694 |
|
|
$ |
52,856 |
|
Operating expenses per boe |
|
$ |
25.39 |
|
|
$ |
31.32 |
|
|
$ |
43.72 |
|
|
$ |
28.06 |
|
|
$ |
35.95 |
|
Total cash direct operating expenses per boe |
|
$ |
12.23 |
|
|
$ |
16.20 |
|
|
$ |
10.87 |
|
|
$ |
14.02 |
|
|
$ |
11.31 |
|
Non-GAAP Adjusted direct operating expenses per
boe |
|
$ |
12.23 |
|
|
$ |
13.55 |
|
|
$ |
10.87 |
|
|
$ |
12.82 |
|
|
$ |
11.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP “General and
administrative expenses” to Non-GAAP “Adjusted cash general and
administrative expenses”Adjusted cash general and
administrative expenses is a supplemental non-GAAP financial
measure that excludes certain non-recurring expenses and non-cash
share-based compensation expense. We believe that the non-GAAP
measure of Adjusted cash general and administrative expenses is
useful to investors because it provides readers with a meaningful
measure of our recurring G&A expense and provides for greater
comparability period-over-period.
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|
2021 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
(in thousands, except per unit amounts) |
General and administrative expenses - direct |
|
$ |
6,023 |
|
|
$ |
10,931 |
|
|
$ |
7,035 |
|
|
$ |
16,954 |
|
|
$ |
13,409 |
|
Share-based compensation |
|
962 |
|
|
2,246 |
|
|
951 |
|
|
3,208 |
|
|
1,807 |
|
GAAP General and
administrative expenses |
|
6,985 |
|
|
13,177 |
|
|
7,986 |
|
|
20,162 |
|
|
15,216 |
|
Less: Share-based
compensation |
|
(962 |
) |
|
(2,246 |
) |
|
(951 |
) |
|
(3,208 |
) |
|
(1,807 |
) |
Significant special
charges: |
|
|
|
|
|
|
|
|
|
|
Strategic transaction costs |
|
— |
|
|
(4,655 |
) |
|
— |
|
|
(4,655 |
) |
|
— |
|
Organizational restructuring, including severance |
|
— |
|
|
(239 |
) |
|
— |
|
|
(239 |
) |
|
— |
|
Adjusted cash-based
general and administrative expenses |
|
$ |
6,023 |
|
|
$ |
6,037 |
|
|
$ |
7,035 |
|
|
$ |
12,060 |
|
|
$ |
13,409 |
|
GAAP General and
administrative expenses per boe |
|
$ |
3.09 |
|
|
$ |
7.13 |
|
|
$ |
3.56 |
|
|
$ |
4.91 |
|
|
$ |
3.26 |
|
Adjusted cash general
and administrative expenses per boe |
|
$ |
2.66 |
|
|
$ |
3.27 |
|
|
$ |
3.14 |
|
|
$ |
2.94 |
|
|
$ |
2.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Definition and Explanation of Free Cash
FlowFree Cash Flow is a non-GAAP financial measure that
management believes illustrates our ability to generate cash flows
from our business that are available to be returned to our
providers of financing capital represented primarily by our debt
holders as we do not currently have a dividend or share repurchase
program. We present Free Cash Flow as the excess (deficiency) of
Discretionary cash flow over Capital additions, net. Discretionary
cash flow is defined as Adjusted EBITDAX (non-GAAP measure defined
and reconciled to GAAP net income above) less interest expense,
debt issue costs, other, net and adjustments for income taxes
refunded and changes for working capital. Capital additions
represent our committed capital expenditure and acquisition
transactions, net of any proceeds from the sales or disposition of
assets. We believe Free Cash Flow is commonly used by investors and
professional research analysts for the valuation, comparison,
rating, investment recommendations of companies in many industries.
Free Cash Flow should be considered as a supplement to net income
as a measure of performance and net cash provided by operating
activities as a measure of our liquidity.
|
|
Three Months Ended |
|
Six Months Ended |
|
Twelve Months Ended |
|
|
June 30, 2021 |
|
June 30, 2021 |
|
June 30, 2021 |
|
|
(in thousands) |
Adjusted EBITDAX, as reported |
|
$ |
77,110 |
|
|
$ |
124,547 |
|
|
$ |
244,879 |
|
Interest expense, as reported,
less non-cash interest |
|
(5,533 |
) |
|
(11,165 |
) |
|
(25,447 |
) |
Income taxes refunded
(paid) |
|
(360 |
) |
|
(360 |
) |
|
(360 |
) |
Debt issue costs paid |
|
— |
|
|
(1,830 |
) |
|
(1,836 |
) |
Working capital and other,
net |
|
27,034 |
|
|
47,054 |
|
|
17,750 |
|
Discretionary cash flow |
|
98,251 |
|
|
158,246 |
|
|
234,986 |
|
|
|
|
|
|
|
|
Capital expenditures, as
reported |
|
(68,731 |
) |
|
(122,853 |
) |
|
(163,522 |
) |
Proceeds from asset sales |
|
149 |
|
|
153 |
|
|
157 |
|
Sales and use tax refunds
applied to capital additions |
|
32 |
|
|
457 |
|
|
457 |
|
Capital additions, net |
|
(68,550 |
) |
|
(122,243 |
) |
|
(162,908 |
) |
Non-GAAP Free cash
flow |
|
$ |
29,701 |
|
|
$ |
36,003 |
|
|
$ |
72,078 |
|
|
|
|
|
|
|
|
As adjusted net debt at
beginning of period 1 |
|
$ |
363,892 |
|
|
$ |
370,194 |
|
|
$ |
406,269 |
|
Less: Historical net debt at
end of period |
|
(334,191 |
) |
|
(334,191 |
) |
|
(334,191 |
) |
Non-GAAP Free cash
flow |
|
$ |
29,701 |
|
|
$ |
36,003 |
|
|
$ |
72,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Net debt at the beginning of the period
has been adjusted for the net cash effects of the Transaction and
debt amendments. See the following table for adjustments attributed
to the Juniper transaction and debt amendments.
Net DebtNet debt, excluding
unamortized discount and debt issuance costs is a non-GAAP
financial measure that is defined as total principal amount of
long-term debt less cash and cash equivalents. Net debt, as
adjusted, calculated on a pro forma basis as of December 31, 2020
and June 30, 2020 to adjust for related impacts of the Juniper
Transaction (refer to footnote 1 below). The most comparable
financial measure to net debt, excluding unamortized discount and
debt issuance costs under GAAP is principal amount of long-term
debt. Net debt is used by management as a measure of our financial
leverage. Net debt, excluding unamortized discount and debt
issuance costs should not be used by investors or others as the
sole basis in formulating investment decisions as it does not
represent the Company’s actual indebtedness.
|
|
June 30, 2021 |
|
March 31, 2021 |
|
December 31, 2020 |
|
June 30, 2020 |
|
|
|
|
|
|
Actual |
|
Pro Forma Adjusted 1 |
|
Actual |
|
Pro Forma Adjusted 1 |
|
|
(in thousands) |
Credit Facility |
|
$ |
238,900 |
|
|
$ |
228,900 |
|
|
$ |
314,400 |
|
|
$ |
233,900 |
|
|
$ |
359,400 |
|
|
$ |
278,900 |
|
Second lien facility,
excluding unamortized discount and issue costs |
|
144,985 |
|
|
146,860 |
|
|
200,000 |
|
|
148,735 |
|
|
200,000 |
|
|
148,735 |
|
Cash and cash equivalents |
|
(49,694 |
) |
|
(11,868 |
) |
|
(13,020 |
) |
|
(12,441 |
) |
|
(21,945 |
) |
|
(21,366 |
) |
Net Debt |
|
$ |
334,191 |
|
|
$ |
363,892 |
|
|
$ |
501,380 |
|
|
$ |
370,194 |
|
|
$ |
537,455 |
|
|
$ |
406,269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Adjustments attributable to the Juniper
Transaction and debt amendments include (i) prepayments of $80.5
million under the Credit Facility; (ii) prepayments of $51.3
million under the Second Lien Facility and (iii) transaction
expenses of $0.6 million paid in excess of the $150 million
received as a capital contribution from Juniper used to fund the
prepayments and transaction expenses.
Reconciliation of GAAP “Standardized
Measure of Discounted Future Net Cash Flows” to Non-GAAP
“PV-10”Non-GAAP PV-10 value is the estimated future net
cash flows from estimated proved reserves discounted at an annual
rate of 10 percent before giving effect to income taxes. The
standardized measure of discounted future net cash flows is the
after-tax estimated future cash flows from estimated proved
reserves discounted at an annual rate of 10 percent, determined in
accordance with GAAP. We use non-GAAP PV-10 value as one measure of
the value of our estimated proved reserves and to compare relative
values of proved reserves amount exploration and production
companies without regard to income taxes. We believe that
securities analysts and rating agencies use PV-10 value in similar
ways. Our management believes PV-10 value is a useful measure for
comparison of proved reserve values among companies because, unlike
standardized measure, it excludes future income taxes that often
depend principally on the characteristics of the owner of the
reserves rather than on the nature, location and quality of the
reserves themselves.
|
|
June 30. |
|
|
2021 |
|
|
(in millions) |
Standardized measure of future discounted cash flows of proved
developed reserves |
|
$ |
809 |
|
Present value of future income
taxes discounted at 10% |
|
|
9 |
|
PV-10 of proved developed
reserves |
|
$ |
818 |
|
Add: Adjustment using flat
pricing of $60/bbl WTI, $2.75/MMbtu and NGLs as 23% of WTI.
Differentials of ($3.78) off WTI and ($0.05) off natural gas. |
|
|
237 |
|
Adjusted PV-10 of proved
developed producing reserves adjusted for pricing and
differentials |
|
$ |
1,055 |
|
|
|
|
|
|
ContactClay JeansonneInvestor RelationsPh:
(713) 722-6540E-Mail: invest@pennvirginia.com
Penn Virginia (NASDAQ:PVAC)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Penn Virginia (NASDAQ:PVAC)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024