DENVER, Nov. 7, 2019 /PRNewswire/ -- Jagged Peak
Energy Inc. (NYSE: JAG) ("Jagged Peak" or the "Company") today
announced financial and operating results for the third quarter
ended September 30, 2019.
Third Quarter Results
During the third quarter of 2019, the Company turned online 17
gross operated wells and reported average daily oil production for
the quarter of 30.0 MBbls per day, at the midpoint of the Company's
previously announced guidance range of 29.4 – 30.6 MBbls per day.
Total equivalent production averaged 39.3 MBoe per day for the
third quarter. Third quarter production mix was comprised of 76%
oil, 13% NGLs, and 11% natural gas, and is unchanged from the prior
quarter.
For the third quarter of 2019, the Company reported net income
of $30.6 million, or $0.14 per diluted common share. Net loss for the
third quarter of 2018 was $26.6
million, or $0.12 per diluted
common share. Adjusted net income (a non-GAAP measure) for the
third quarter of 2019, was $21.9
million, or $0.10 per diluted
common share, compared to $39.3
million, or $0.18 per diluted
common share for the same period in 2018. Adjusted net income (a
non-GAAP measure) eliminates certain non-cash and non-recurring
items such as certain equity-based compensation, non-cash
mark-to-market gains or losses on derivatives and impairment
expense, further adjusted for any associated changes in estimated
income tax expense. Adjusted EBITDAX (a non-GAAP measure) for the
third quarter of 2019 was $108.2
million, a decrease of $10.4
million from the third quarter of 2018.
Please reference the reconciliations of these non-GAAP measures
to the most directly comparable GAAP measures at the end of this
release.
Revenue for the third quarter of 2019 was $150.1 million, compared to $155.4 million in the third quarter of 2018. The
decrease in revenue for the third quarter of 2019 compared to the
same period in 2018 was primarily due to an 11% decrease in
unhedged realized pricing on a per Boe basis. Average realized
prices for the third quarter of 2019 are included in the table
below.
|
Three Months Ended
September 30, 2019
|
|
Before the Effects
of
Derivative Settlements
|
|
After the Effects
of
Derivatives Settlements
|
Oil
($/Bbl)
|
$
|
53.55
|
|
|
$
|
52.29
|
|
NGL
($/Bbl)
|
$
|
3.47
|
|
|
$
|
3.47
|
|
Gas
($/Mcf)
|
$
|
0.31
|
|
|
$
|
0.31
|
|
Boe
($/Boe)
|
$
|
41.51
|
|
|
$
|
40.54
|
|
Capital expenditures for DC&E activities were $162.6 million for the three months ended
September 30, 2019. Operated and non-operated activity during
the quarter included drilling 19 gross (15.8 net) and completing 25
gross (18.3 net) wells. A portion of the capital spent during the
third quarter relates to 20 gross (19.6 net) operated wells that
were in various stages of being drilled or completed at
September 30, 2019. Including capital expenditures for
infrastructure of $4.5 million, and
leasehold acquisition costs of $17.7
million, total capital expenditures for the quarter were
$184.8 million.
The table below provides a comparative breakout of the Company's
capital expenditures for the periods indicated:
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Acquisitions
|
|
|
|
|
|
|
|
Proved
properties
|
$
|
375
|
|
|
$
|
—
|
|
|
$
|
7,782
|
|
|
$
|
—
|
|
Unproved
properties
|
17,316
|
|
|
7,575
|
|
|
25,295
|
|
|
18,670
|
|
Drill, complete, and
equip costs
|
162,571
|
|
|
151,797
|
|
|
451,261
|
|
|
535,590
|
|
Infrastructure
costs
|
4,520
|
|
|
5,439
|
|
|
25,678
|
|
|
13,440
|
|
Exploration
costs
|
3
|
|
|
23
|
|
|
3
|
|
|
24
|
|
Total oil and gas
capital expenditures
|
$
|
184,785
|
|
|
$
|
164,834
|
|
|
$
|
510,019
|
|
|
$
|
567,724
|
|
The Company continues to drive down its DC&E costs through
continued efficiency gains. DC&E costs averaged approximately
$1,160 per lateral foot in the third
quarter of 2019. Year-to-date the Company has averaged
approximately $1,200 per lateral
foot, compared to its full-year 2019 goal of $1,250 per lateral foot.
Operational Updates
In the Company's Whiskey River asset, the Company brought online
its Coriander project. This project was the Company's first
six-well co-development project. The average lateral length of
these wells was 8,535 feet and had an average DC&E per lateral
foot cost of approximately $1,090.
These wells were brought online in late August and produced a
pad-average peak IP-30 of 102 Boe per day per 1,000 foot (84%
oil).
In mid-October, the Company brought online its second
co-development project, the Venom project which consisted of eight
wells in the Whiskey River area. The average lateral length of
these wells was 7,900 feet and had an average DC&E per lateral
foot cost of approximately $1,220.
Given the timing of the wells being brought online, meaningful
production information is not yet available.
Guidance Update
Due to the definitive merger agreement with Parsley Energy, Inc.
("Parsley"), Jagged Peak has discontinued providing guidance and
long-term outlook information regarding its results of operations
and does not intend to update the previously issued guidance and
long-term outlook information, including the guidance provided in
the Company's August 8, 2019 press
release announcing its second quarter 2019 financial and operating
results (the "second quarter earnings release"). Accordingly,
investors are cautioned not to rely on historical forward-looking
statements regarding guidance and long-term outlook information,
including any such information provided in the second quarter
earnings release, as those forward-looking statements were the
estimates of management only as of the date provided, have not and
will not be updated and were subject to the specific risks and
uncertainties that accompanied such forward-looking statements.
Financial Update
At the end of the third quarter of 2019, the Company had
$215.0 million drawn on its revolving
credit facility and $10.6 million of
cash on the balance sheet, resulting in total liquidity of
$335.6 million. Net debt to LTM
adjusted EBITDAX (a non-GAAP measure) was 1.7x as of the end of the
third quarter. Due to the definitive merger agreement with Parsley,
the Company has received a waiver from its bank group to postpone
its Fall borrowing base redetermination.
Since the hedging update on August 8,
2019, the Company has added to its 2020 WTI swaps, which are
now at 20,000 Bbls per day of oil. These additions are included in
the commodity hedges schedule at the end of this release.
Conference Call
Jagged Peak will host a short conference call and webcast to
discuss its third quarter 2019 financial and operating results on
November 8, 2019 at 9:00 am MT (11:00 am
ET). This call will not include a Q&A session. The call
will be webcast and accessible via the Investor Relations section
of the Company's website at www.jaggedpeakenergy.com. Dial-in
information for this call is included below:
|
Phone
Number
|
|
Conference
ID
|
Live Participant
(Domestic)
|
1-877-823-8605
|
|
9192955
|
Live Participant
(International)
|
1-647-689-5644
|
|
9192955
|
Replay(1)
(Domestic)
|
1-800-585-8367
|
|
9192955
|
Replay(1)
(International)
|
1-416-621-4642
|
|
9192955
|
|
(1) Replay available from 2:00 PM
Eastern Time on November 8, 2019 through 12:00 midnight Eastern
Time on November 15, 2019
|
Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is a non-GAAP financial measure that is used by
management and external users of our financial statements, such as
industry analysts, investors, lenders and rating agencies. We
define Adjusted EBITDAX as net income (loss) before interest
expense, net of capitalized interest, depletion, depreciation,
amortization and accretion expense, impairment of oil and natural
gas properties, exploration expenses, equity-based compensation
expense, income taxes, contract termination fees, gains or losses
on sales of assets, and net gains or losses on derivatives less net
cash from/for derivative settlements. Certain items excluded from
Adjusted EBITDAX are significant components in understanding and
assessing a company's financial performance, such as a company's
cost of capital and tax structure, as well as the historical costs
of depreciable assets and exploration expenses, none of which are
components of Adjusted EBITDAX. Our computation of Adjusted EBITDAX
may not be comparable to other similarly titled measures of other
companies.
Management believes Adjusted EBITDAX is useful because it allows
investors to more effectively evaluate our operating performance
and compare the results of our operations from period to period and
against our peers without regard to financing methods or capital
structure. We exclude the items listed above from net income in
arriving at Adjusted EBITDAX because these amounts can vary
substantially from company to company within our industry depending
upon accounting methods and book value of assets, capital
structures and the method by which the assets were acquired.
Adjusted EBITDAX should not be considered as an alternative to, or
more meaningful than, net income as determined in accordance with
GAAP or as an indicator of our operating performance.
Adjusted Net Income
Adjusted net income is a non-GAAP performance measure used by
management to evaluate financial performance, prior to non-cash
market-to-market gains or losses on derivatives, impairment
expense, exploratory dry hole costs, gain or loss on the sale of
property, certain one-time or unusual items, such as certain
equity-based compensation, contract termination fees, and the
associated changes in estimated income tax. Management believes
adjusted net income is useful because it may enhance investors'
ability to assess historical and future financial performance.
Adjusted net income should not be considered an alternative to net
income, operating income, or any other measure of financial
performance presented in accordance with GAAP or as an indicator of
our operating performance.
Net Debt to LTM Adjusted EBITDAX
Net debt to LTM adjusted EBITDAX is a non-GAAP measure, which is
defined as the face value of the Company's long-term debt,
including its senior unsecured notes and amounts drawn on its
credit facility, less cash and cash equivalents at quarter end,
divided by the Company's last twelve month adjusted EBITDAX, as
defined above.
No Offer or Solicitation
This release includes information related to a proposed business
combination transaction (the "Transaction") between Jagged Peak and
Parsley. This release is for informational purposes only and does
not constitute an offer to sell or the solicitation of an offer to
buy any securities or a solicitation of any vote or approval, in
any jurisdiction, pursuant to the Transaction or otherwise, nor
shall there be any sale, issuance, exchange or transfer of the
securities referred to in this release in any jurisdiction in
contravention of applicable law. 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.
Important Additional Information
In connection with the Transaction, Parsley has filed with the
U.S. Securities and Exchange Commission ("SEC") a registration
statement on Form S-4, that will include a joint proxy statement of
Jagged Peak and Parsley and a prospectus of Parsley. The
Transaction will be submitted to Jagged Peak's stockholders and
Parsley's stockholders for their consideration. Jagged Peak and
Parsley may also file other documents with the SEC regarding the
Transaction. The definitive joint proxy statement/prospectus will
be sent to the stockholders of Parsley and Jagged Peak. This
release is not a substitute for the registration statement and
joint proxy statement/prospectus that will be filed with the SEC or
any other documents that Parsley or Jagged Peak may file with the
SEC or send to stockholders of Parsley or Jagged Peak in connection
with the Transaction. INVESTORS AND SECURITY HOLDERS OF JAGGED
PEAK AND PARSLEY ARE URGED TO READ THE REGISTRATION STATEMENT AND
THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION WHEN
IT BECOMES AVAILABLE AND ALL OTHER RELEVANT DOCUMENTS THAT ARE
FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
TRANSACTION AND RELATED MATTERS.
Investors and security holders will be able to obtain free
copies of the registration statement and the joint proxy
statement/prospectus (when available) and all other documents filed
or that will be filed with the SEC by Parsley or Jagged
Peak through the website maintained by the SEC at
http://www.sec.gov. Copies of documents filed with the SEC by
Jagged Peak will be made available free of charge on Jagged
Peak's website at http://www.jaggedpeakenergy.com, under the
heading "SEC Filings," or by directing a request to Investor
Relations, Jagged Peak Energy Inc., 1401 Lawrence Street, Suite
1800, Denver, CO 80202, Tel. No.
(720) 215-3754. Copies of documents filed with the SEC by Parsley
will be made available free of charge on Parsley's website at
http://www.parsleyenergy.com/investors or by directing a request to
Investor Relations, Parsley Energy, Inc., 303 Colorado Street,
Suite 3000, Austin, TX 78701, Tel.
No. (512) 505-5199.
Participants in the Solicitation
Parsley, Jagged Peak and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies in respect to the Transaction.
Information regarding Jagged Peak's directors and executive
officers is contained in the proxy statement for Jagged Peak's 2019
Annual Meeting of Stockholders filed with the SEC on April 10,
2019, and certain of its Current Reports on Form 8-K. You can
obtain a free copy of this document at the SEC's website at
http://www.sec.gov or by accessing Jagged Peak's website at
http://www.jaggedpeakenergy.com. Information regarding Parsley's
executive officers and directors is contained in the proxy
statement for the Parsley's 2019 Annual Meeting of Stockholders
filed with the SEC on April 8, 2019 and certain of its Current
Reports on Form 8-K. You can obtain a free copy of this release at
the SEC's website at www.sec.gov or by accessing the Parsley's
website at http://www.parsleyenergy.com/investors.
Investors may obtain additional information regarding the
interests of those persons and other persons who may be deemed
participants in the Transaction by reading the joint proxy
statement/prospectus regarding the Transaction when it becomes
available. You may obtain free copies of this release as described
above.
Forward-Looking Statements and Cautionary Statements
The foregoing contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. All statements, other
than statements of historical fact, included in this release that
address activities, events or developments that Parsley or Jagged
Peak expects, believes or anticipates will or may occur in the
future are forward-looking statements. Words such as "estimate,"
"project," "predict," "believe," "expect," "anticipate,"
"potential," "create," "intend," "could," "may," "foresee," "plan,"
"will," "guidance," "look," "outlook," "goal," "future," "assume,"
"forecast," "build," "focus," "work," "continue" or the negative of
such terms or other variations thereof and words and terms of
similar substance used in connection with any discussion of future
plans, actions, or events identify forward-looking statements.
However, the absence of these words does not mean that the
statements are not forward-looking. These forward-looking
statements include, but are not limited to, statements regarding
the Transaction, pro forma descriptions of the combined company and
its operations, integration and transition plans, synergies,
opportunities and anticipated future performance. There are a
number of risks and uncertainties that could cause actual results
to differ materially from the forward-looking statements included
in this release. These include the expected timing and likelihood
of completion of the Transaction, including the timing, receipt and
terms and conditions of any required governmental and regulatory
approvals of the Transaction that could reduce anticipated benefits
or cause the parties to abandon the Transaction, the ability to
successfully integrate the businesses, the occurrence of any event,
change or other circumstances that could give rise to the
termination of the merger agreement, the possibility that
stockholders of Parsley may not approve the issuance of new shares
of common stock in the Transaction or that stockholders of Jagged
Peak may not approve the merger agreement, the risk that the
parties may not be able to satisfy the conditions to the
Transaction in a timely manner or at all, risks related to
disruption of management time from ongoing business operations due
to the Transaction, the risk that any announcements relating to the
Transaction could have adverse effects on the market price of
Parsley's common stock or Jagged Peak's common stock, the risk that
the Transaction and its announcement could have an adverse effect
on the ability of Parsley and Jagged Peak to retain customers and
retain and hire key personnel and maintain relationships with their
suppliers and customers and on their operating results and
businesses generally, the risk the pending Transaction could
distract management of both entities and they will incur
substantial costs, the risk that problems may arise in successfully
integrating the businesses of the companies, which may result in
the combined company not operating as effectively and efficiently
as expected, the risk that the combined company may be unable to
achieve synergies or it may take longer than expected to achieve
those synergies and other important factors that could cause actual
results to differ materially from those projected. All such factors
are difficult to predict and are beyond Parsley's or Jagged Peak's
control, including those detailed in Parsley's annual reports on
Form 10-K, quarterly reports on Form 10-Q and current reports on
Form 8-K that are available on its website at
http://www.parsleyenergy.com/investors and on the SEC's website at
http://www.sec.gov, and those detailed in Jagged Peak's annual
reports on Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K that are available on Jagged Peak's website at
http://www.jaggedpeakenergy.com and on the SEC's website at
http://www.sec.gov. All forward-looking statements are based on
assumptions that Parsley or Jagged Peak believe to be
reasonable but that may not prove to be accurate. Any
forward-looking statement speaks only as of the date on which such
statement is made, and Parsley and Jagged Peak undertake no
obligation to correct or update any forward-looking statement,
whether as a result of new information, future events or otherwise,
except as required by applicable law. Readers are cautioned not to
place undue reliance on these forward-looking statements that speak
only as of the date hereof.
About Jagged Peak Energy Inc.
Jagged Peak Energy Inc. is an independent oil and natural gas
company focused on the acquisition and development of
unconventional oil and associated liquids-rich natural gas reserves
in the southern Delaware Basin, a
sub-basin of the Permian Basin of West
Texas.
Jagged Peak Energy
Inc.
|
Selected Operating
Highlights
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Production
volumes:
|
|
|
|
|
|
|
|
Oil
(MBbls)
|
2,758
|
|
|
2,531
|
|
|
7,937
|
|
|
6,947
|
|
Natural gas
(MMcf)
|
2,331
|
|
|
2,139
|
|
|
6,834
|
|
|
6,025
|
|
NGLs
(MBbls)
|
469
|
|
|
436
|
|
|
1,320
|
|
|
1,001
|
|
Total
(MBoe)
|
3,616
|
|
|
3,323
|
|
|
10,396
|
|
|
8,952
|
|
Average daily
production volumes:
|
|
|
|
|
|
|
Oil
(Bbls/d)
|
29,980
|
|
|
27,507
|
|
|
29,073
|
|
|
25,447
|
|
Natural gas
(Mcf/d)
|
25,339
|
|
|
23,245
|
|
|
25,034
|
|
|
22,069
|
|
NGLs
(Bbls/d)
|
5,096
|
|
|
4,738
|
|
|
4,836
|
|
|
3,665
|
|
Total
(Boe/d)
|
39,299
|
|
|
36,118
|
|
|
38,081
|
|
|
32,790
|
|
|
|
|
|
|
|
|
|
Average Sales
Prices Excluding Realized Hedge Settlements:
|
Oil (per
Bbl)
|
$
|
53.55
|
|
|
$
|
55.95
|
|
|
$
|
52.52
|
|
|
$
|
59.15
|
|
Natural gas (per
Mcf)
|
$
|
0.31
|
|
|
$
|
1.19
|
|
|
$
|
0.13
|
|
|
$
|
1.29
|
|
NGLs (per
Bbl)
|
$
|
3.47
|
|
|
$
|
24.81
|
|
|
$
|
6.58
|
|
|
$
|
23.71
|
|
Combined (per
Boe)
|
$
|
41.51
|
|
|
$
|
46.64
|
|
|
$
|
41.02
|
|
|
$
|
49.42
|
|
|
|
|
|
|
|
|
|
Average Sales
Prices Including Realized Hedge Settlements:
|
|
|
|
|
Oil (per
Bbl)
|
$
|
52.29
|
|
|
$
|
53.45
|
|
|
$
|
50.67
|
|
|
$
|
54.30
|
|
Natural gas (per
Mcf)
|
$
|
0.31
|
|
|
$
|
1.19
|
|
|
$
|
0.13
|
|
|
$
|
1.29
|
|
NGLs (per
Bbl)
|
$
|
3.47
|
|
|
$
|
24.81
|
|
|
$
|
6.58
|
|
|
$
|
23.71
|
|
Combined (per
Boe)
|
$
|
40.54
|
|
|
$
|
44.73
|
|
|
$
|
39.61
|
|
|
$
|
45.66
|
|
|
|
|
|
|
|
|
|
Average Operating
Costs (per Boe):
|
|
|
|
|
|
|
Lease operating
expenses
|
$
|
4.85
|
|
|
$
|
3.37
|
|
|
$
|
4.50
|
|
|
$
|
3.51
|
|
Production and ad
valorem tax expenses
|
$
|
3.11
|
|
|
$
|
2.86
|
|
|
$
|
3.09
|
|
|
$
|
2.95
|
|
Depletion,
depreciation, amortization and accretion
|
$
|
18.27
|
|
|
$
|
17.35
|
|
|
$
|
17.93
|
|
|
$
|
17.93
|
|
General and
administrative expense (before equity-based compensation
expense)
|
$
|
2.65
|
|
|
$
|
2.92
|
|
|
$
|
2.80
|
|
|
$
|
3.22
|
|
Jagged Peak Energy
Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2019
|
|
December 31,
2018
|
|
|
|
|
|
|
|
(in
thousands)
|
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
10,603
|
|
|
$
|
35,229
|
|
|
Other current
assets
|
113,226
|
|
|
165,905
|
|
|
Property and
equipment, net
|
1,818,187
|
|
|
1,530,285
|
|
|
Other noncurrent
assets
|
64,729
|
|
|
35,722
|
|
|
Total
assets
|
$
|
2,006,745
|
|
|
$
|
1,767,141
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity:
|
|
|
|
|
Current
liabilities
|
$
|
224,387
|
|
|
$
|
187,982
|
|
|
Long-term
debt
|
705,269
|
|
|
489,239
|
|
|
Deferred income
taxes
|
118,432
|
|
|
124,418
|
|
|
Other long-term
liabilities
|
22,787
|
|
|
17,552
|
|
|
Stockholders'
equity
|
935,870
|
|
|
947,950
|
|
|
Total liabilities
and stockholders' equity
|
$
|
2,006,745
|
|
|
$
|
1,767,141
|
|
Jagged Peak Energy
Inc.
|
Condensed
Consolidated Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
(in thousands,
except per share amounts)
|
Revenues
|
|
|
|
|
|
|
|
Oil, natural gas and
NGL sales
|
$
|
150,065
|
|
|
$
|
154,964
|
|
|
$
|
426,408
|
|
|
$
|
442,421
|
|
Other operating
revenues
|
—
|
|
|
414
|
|
|
9
|
|
|
686
|
|
Total
revenues
|
150,065
|
|
|
155,378
|
|
|
426,417
|
|
|
443,107
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
Lease operating
expenses
|
17,554
|
|
|
11,184
|
|
|
46,758
|
|
|
31,390
|
|
Production and ad
valorem taxes
|
11,263
|
|
|
9,517
|
|
|
32,100
|
|
|
26,437
|
|
Exploration
|
3
|
|
|
23
|
|
|
3
|
|
|
24
|
|
Depletion,
depreciation, amortization and accretion
|
66,069
|
|
|
57,660
|
|
|
186,365
|
|
|
160,552
|
|
Impairment of
unproved oil and natural gas properties
|
31,817
|
|
|
—
|
|
|
32,763
|
|
|
53
|
|
Other operating
expenses
|
—
|
|
|
19
|
|
|
3,206
|
|
|
65
|
|
General and
administrative (before equity-based compensation)
|
9,571
|
|
|
9,707
|
|
|
29,116
|
|
|
28,800
|
|
General and
administrative, equity-based compensation
|
4,098
|
|
|
2,614
|
|
|
11,025
|
|
|
80,671
|
|
Total operating
expenses
|
140,375
|
|
|
90,724
|
|
|
341,336
|
|
|
327,992
|
|
Income (Loss) from
Operations
|
9,690
|
|
|
64,654
|
|
|
85,081
|
|
|
115,115
|
|
Other Income and
Expense
|
|
|
|
|
|
|
|
Gain (loss) on
commodity derivatives
|
39,421
|
|
|
(96,516)
|
|
|
(85,702)
|
|
|
(110,426)
|
|
Gain on sale of
assets
|
—
|
|
|
6,225
|
|
|
—
|
|
|
6,225
|
|
Interest expense and
other
|
(9,956)
|
|
|
(8,244)
|
|
|
(27,788)
|
|
|
(17,065)
|
|
Total other income
(loss)
|
29,465
|
|
|
(98,535)
|
|
|
(113,490)
|
|
|
(121,266)
|
|
Income (Loss)
before Income Taxes
|
39,155
|
|
|
(33,881)
|
|
|
(28,409)
|
|
|
(6,151)
|
|
Income tax expense
(benefit)
|
8,597
|
|
|
(7,315)
|
|
|
(5,986)
|
|
|
14,737
|
|
Net Income
(Loss)
|
$
|
30,558
|
|
|
$
|
(26,566)
|
|
|
$
|
(22,423)
|
|
|
$
|
(20,888)
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per common share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.14
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.10)
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.10)
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
213,403
|
|
|
213,180
|
|
|
213,349
|
|
|
213,109
|
|
Diluted
|
213,700
|
|
|
213,180
|
|
|
213,349
|
|
|
213,109
|
|
Jagged Peak Energy
Inc.
|
Consolidated
Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
Cash Flows from
Operating Activities
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
30,558
|
|
|
$
|
(26,566)
|
|
|
$
|
(22,423)
|
|
|
$
|
(20,888)
|
|
Adjustments to
reconcile to net cash provided by operating activities:
|
|
|
|
|
|
|
|
Depletion,
depreciation, amortization and accretion
|
66,069
|
|
|
57,660
|
|
|
186,365
|
|
|
160,552
|
|
Impairment of
unproved oil and natural gas properties
|
31,817
|
|
|
—
|
|
|
32,763
|
|
|
53
|
|
Amortization of debt
issuance costs
|
594
|
|
|
732
|
|
|
1,770
|
|
|
1,753
|
|
Deferred income
taxes
|
8,597
|
|
|
(7,315)
|
|
|
(5,986)
|
|
|
14,737
|
|
Equity-based
compensation
|
4,098
|
|
|
2,614
|
|
|
11,025
|
|
|
80,671
|
|
(Gain) Loss on
commodity derivatives
|
(39,421)
|
|
|
96,516
|
|
|
85,702
|
|
|
110,426
|
|
Net cash receipts
(payments) on settled derivatives
|
(3,484)
|
|
|
(6,347)
|
|
|
(14,651)
|
|
|
(33,705)
|
|
Gain on sale of oil
and natural gas properties
|
—
|
|
|
(6,225)
|
|
|
—
|
|
|
(6,225)
|
|
Other
|
(91)
|
|
|
(78)
|
|
|
(98)
|
|
|
(234)
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
and other current assets
|
(1,688)
|
|
|
(11,305)
|
|
|
(2,407)
|
|
|
(29,854)
|
|
Accounts payable and
accrued liabilities
|
7,405
|
|
|
18,247
|
|
|
641
|
|
|
40,461
|
|
Net cash provided by
operating activities
|
104,454
|
|
|
117,933
|
|
|
272,701
|
|
|
317,747
|
|
Cash Flows from
Investing Activities
|
|
|
|
|
|
|
|
Leasehold and
acquisitions costs
|
(17,364)
|
|
|
(7,801)
|
|
|
(32,931)
|
|
|
(18,854)
|
|
Development of oil
and natural gas properties
|
(165,816)
|
|
|
(158,091)
|
|
|
(477,681)
|
|
|
(551,059)
|
|
Other capital
expenditures
|
(385)
|
|
|
(1,364)
|
|
|
(837)
|
|
|
(3,245)
|
|
Proceeds from sale of
oil and natural gas properties
|
—
|
|
|
8,377
|
|
|
—
|
|
|
8,377
|
|
Net cash used in
investing activities
|
(183,565)
|
|
|
(158,879)
|
|
|
(511,449)
|
|
|
(564,781)
|
|
Cash Flows from
Financing Activities
|
|
|
|
|
|
|
|
Proceeds from senior
notes
|
—
|
|
|
—
|
|
|
—
|
|
|
500,000
|
|
Proceeds from senior
secured revolving credit facility
|
65,000
|
|
|
—
|
|
|
215,000
|
|
|
165,000
|
|
Repayment of senior
secured revolving credit facility
|
—
|
|
|
—
|
|
|
—
|
|
|
(320,000)
|
|
Debt issuance
costs
|
(56)
|
|
|
(607)
|
|
|
(197)
|
|
|
(13,350)
|
|
Employee tax
withholding for settlement of equity compensation awards
|
(26)
|
|
|
—
|
|
|
(681)
|
|
|
(200)
|
|
Net cash provided by
financing activities
|
64,918
|
|
|
(607)
|
|
|
214,122
|
|
|
331,450
|
|
Net Change in Cash
and Cash Equivalents
|
(14,193)
|
|
|
(41,553)
|
|
|
(24,626)
|
|
|
84,416
|
|
Cash and Cash
Equivalents, Beginning of Period
|
24,796
|
|
|
135,492
|
|
|
35,229
|
|
|
9,523
|
|
Cash and Cash
Equivalents, End of Period
|
$
|
10,603
|
|
|
$
|
93,939
|
|
|
$
|
10,603
|
|
|
$
|
93,939
|
|
Jagged Peak Energy
Inc.
|
Commodity
Hedges
|
|
The Company hedges
its oil production to reduce cash flow volatility and to support
funding of its capital expenditure program. The schedule below
summarizes the hedges the Company has in place to hedge the price
of WTI and the differential between the Cushing and Midland oil
prices.
|
|
As of November 6,
2019, the Company had the following commodity hedges in place for
future production:
|
|
Production
Period
|
Volumes
|
|
Weighted
Average
Price
|
|
(MBbls)
|
|
($/Bbl)
|
Oil
Swaps:
|
|
|
|
Fourth Quarter
2019
|
1,932
|
|
|
$
|
59.95
|
|
First Quarter
2020
|
1,820
|
|
|
$
|
58.25
|
|
Second Quarter
2020
|
1,820
|
|
|
$
|
58.25
|
|
Third Quarter
2020
|
1,840
|
|
|
$
|
58.25
|
|
Fourth Quarter
2020
|
1,840
|
|
|
$
|
58.25
|
|
Full Year
2020
|
7,320
|
|
|
$
|
58.25
|
|
|
|
|
|
Oil Basis
Swaps:
|
|
|
|
Fourth Quarter
2019
|
2,300
|
|
|
$
|
(4.79)
|
|
First Quarter
2020
|
2,366
|
|
|
$
|
(1.31)
|
|
Second Quarter
2020
|
2,366
|
|
|
$
|
(1.31)
|
|
Third Quarter
2020
|
2,392
|
|
|
$
|
(1.31)
|
|
Fourth Quarter
2020
|
2,392
|
|
|
$
|
(1.31)
|
|
Full Year
2020
|
9,516
|
|
|
$
|
(1.31)
|
|
Jagged Peak Energy
Inc.
|
Reconciliation of
Adjusted Net Income, Adjusted EBITDAX and Adjusted EBITDAX
Margin
|
(Unaudited)
|
|
|
|
|
|
|
|
|
The following tables
provide reconciliations of the GAAP financial measure of Net Income
(Loss) to the non-GAAP financial measures of Adjusted Net Income
(Loss) and Adjusted EBITDAX. A description of the reconciliations
is included in the section titled "Reconciliation of Non-GAAP
Financial Measures."
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
(in thousands,
except for per share and Boe metrics)
|
Adjusted Net
Income (Loss)
|
|
|
|
|
Net income
(loss)
|
$
|
30,558
|
|
|
$
|
(26,566)
|
|
|
$
|
(22,423)
|
|
|
$
|
(20,888)
|
|
Adjustments to
reconcile to adjusted net income
|
|
|
|
|
|
|
|
Impairment of
unproved oil and natural gas properties
|
31,817
|
|
|
—
|
|
|
32,763
|
|
|
53
|
|
(Gain) loss on
commodity derivatives, net, less net cash for/from derivative
settlements
|
(42,905)
|
|
|
90,169
|
|
|
71,051
|
|
|
76,721
|
|
Equity-based
compensation expense related to allocated management incentive
units (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
74,470
|
|
Contract termination
fee (2)
|
—
|
|
|
—
|
|
|
3,200
|
|
|
—
|
|
Gain on sale of
assets
|
—
|
|
|
(6,225)
|
|
|
—
|
|
|
(6,225)
|
|
|
|
|
|
|
|
|
|
Income tax effect for
the above items
|
2,435
|
|
|
(18,124)
|
|
|
(22,549)
|
|
|
(15,218)
|
|
Adjusted net
income
|
$
|
21,905
|
|
|
$
|
39,254
|
|
|
$
|
62,042
|
|
|
$
|
108,913
|
|
|
|
|
|
|
|
|
|
Adjusted net income
per basic common share
|
$
|
0.10
|
|
|
$
|
0.18
|
|
|
$
|
0.29
|
|
|
$
|
0.51
|
|
Adjusted net income
per diluted common share
|
$
|
0.10
|
|
|
$
|
0.18
|
|
|
$
|
0.29
|
|
|
$
|
0.51
|
|
|
|
|
|
|
|
|
|
Basic common
shares
|
213,403
|
|
|
213,180
|
|
|
213,349
|
|
|
213,109
|
|
Diluted common shares
(3)
|
213,700
|
|
|
213,675
|
|
|
213,458
|
|
|
213,192
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDAX
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
30,558
|
|
|
$
|
(26,566)
|
|
|
$
|
(22,423)
|
|
|
$
|
(20,888)
|
|
Adjustments to
reconcile to adjusted EBITDAX
|
|
|
|
|
|
|
|
Interest expense, net
of capitalized
|
9,974
|
|
|
8,256
|
|
|
27,683
|
|
|
17,095
|
|
Income tax expense
(benefit)
|
8,597
|
|
|
(7,315)
|
|
|
(5,986)
|
|
|
14,737
|
|
Depletion,
depreciation, amortization and accretion
|
66,069
|
|
|
57,660
|
|
|
186,365
|
|
|
160,552
|
|
Impairment of
unproved oil and natural gas properties
|
31,817
|
|
|
—
|
|
|
32,763
|
|
|
53
|
|
Contract termination
fee (2)
|
—
|
|
|
—
|
|
|
3,200
|
|
|
—
|
|
Exploration
expenses
|
3
|
|
|
23
|
|
|
3
|
|
|
24
|
|
(Gain) loss on
commodity derivatives, net, less net cash from derivative
settlements
|
(42,905)
|
|
|
90,169
|
|
|
71,051
|
|
|
76,721
|
|
Equity-based
compensation expense
|
4,098
|
|
|
2,614
|
|
|
11,025
|
|
|
80,671
|
|
Gain on sale of
assets
|
—
|
|
|
(6,225)
|
|
|
—
|
|
|
(6,225)
|
|
Adjusted
EBITDAX
|
$
|
108,211
|
|
|
$
|
118,616
|
|
|
$
|
303,681
|
|
|
$
|
322,740
|
|
|
|
|
|
|
|
|
|
Total production
(MBoe)
|
3,616
|
|
|
3,323
|
|
|
10,396
|
|
|
8,952
|
|
Adjusted EBITDAX
margin per Boe (4)
|
$
|
29.93
|
|
|
$
|
35.70
|
|
|
$
|
29.21
|
|
|
$
|
36.05
|
|
|
|
(1)
|
In connection with
the IPO, management incentive units were converted to common stock.
A portion of this common stock was transferred to JPE Management
Holdings LLC and became subject to the terms and conditions of the
amended and restated JPE Management Holdings LLC limited liability
company agreement (the "Holdco Agreement"). The compensation
expense related to these shares was primarily recognized ratably as
they vested according to the terms of the Holdco Agreement.
However, in February 2018, the Company incurred $71.3 million in
accelerated compensation expense related to the modification of
service requirements. Only compensation expense related to
management incentive units allocated at the time of the IPO is
excluded from the calculation of adjusted net income.
|
(2)
|
Contract termination
fee relates to the early termination of a frac fleet contract.
These amounts are included as a part of Other operating expenses on
the Condensed Consolidated Statements of Operations.
|
(3)
|
Reflects the
weighted-average number of common shares outstanding during the
period as adjusted for the dilutive effects of outstanding
restricted stock unit and performance stock unit awards.
|
(4)
|
Adjusted EBITDAX
margin is calculated as Adjusted EBITDAX divided by total
production, expressed as adjusted EBITDAX per Boe.
|
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SOURCE Jagged Peak Energy Inc.