ASCENT RESOURCES UTICA HOLDINGS, LLC REPORTS SECOND QUARTER OPERATING AND FINANCIAL RESULTS AND ANNOUNCES UPDATED 2022 GUIDANCE
Second Quarter Highlights:
- Averaged net production of 2.0 bcfe per day for the quarter, while exiting June at 2.2 bcfe per day
- Realized pre-hedge natural gas equivalent price of $7.58 per mcfe, a $0.41 premium to NYMEX pricing
- Generated Adjusted EBITDAX(1) of $477 million and net cash provided by operating activities of $257 million for the quarter
- Incurred $236 million of D&C costs and $24 million of acquisition and leasehold costs during the quarter
- Generated $160 million of Adjusted Free Cash Flow(1) during the quarter
- Received MiQ Grade "A" certification on substantially all of our production in the Utica Shale
- Extended our Credit Facility through June of 2027, while increasing the borrowing base and elected commitments to $3.0 billion and $2.0 billion, respectively
- Closed on the previously announced $270 million bolt-on acquisition in early August ($27 million deposit paid during the second quarter)
- Issued our 2021 Environmental, Social and Governance Report and remain committed to reducing our environmental impact while delivering clean, affordable and responsibly sourced natural gas to the North American market
(1) A non-GAAP financial measure. See the Non-GAAP reconciliations included in this press release for the definition of, and other important information regarding, this non-GAAP financial measure. |
OKLAHOMA CITY, Aug. 10, 2022 /PRNewswire/ -- Ascent Resources Utica Holdings, LLC ("Ascent", "our" or the "Company") today reported its second quarter 2022 operating and financial results and issued updated full-year 2022 guidance. Additionally, Ascent announced a conference call with analysts and investors scheduled for 9 AM CT / 10 AM ET, Thursday, August 11, 2022. For more detailed information on Ascent, please refer to the latest investor presentation and additional information located on our website at https://www.ascentresources.com/investors.
Commenting on the quarter, Ascent's Chairman and Chief Executive Officer, Jeff Fisher said, "The second quarter was one of exceptional execution for Ascent. While production for the quarter averaged 2.0 bcfe/d, we brought online 31 wells, with nearly half of those in the month of June, and exited the quarter at 2.2 bcfe/d. The business continues to be anchored by our strong operational execution and continued improvements to our balance sheet."
Fisher continued, "We have elected to accelerate some activity from 2023 into the back half of this year in order to take advantage of service availability and a supportive macro backdrop. As a result of this change, and the continued inflationary headwinds, we are increasing our capital budget for the year while also revising our 2022 production guidance higher. We believe this change strikes the appropriate balance, allowing us to sell incremental unhedged volumes while de-risking our 2023 development plan. The prospects for the standalone business are stronger than ever as we remain well positioned to capitalize on the current macro environment."
Second Quarter 2022 Financial Results
Second quarter 2022 net production averaged 1,971 mmcfe per day, consisting of 1,828 mmcf per day of natural gas, 8,330 bbls per day of oil and 15,473 bbls per day of natural gas liquids ("NGL").
Second quarter 2022 price realizations, including the impact of settled commodity derivatives, were $4.21 per mcfe. Excluding the impact of settled commodity derivatives, price realizations were $7.58 per mcfe in the second quarter of 2022.
For the second quarter of 2022, Ascent reported net income of $285 million, Adjusted Net Income of $277 million and Adjusted EBITDAX of $477 million. Ascent incurred $272 million of total capital expenditures in the second quarter of 2022 including $236 million for well costs, $24 million for acquisition and leasehold costs, and $12 million for capitalized interest. The Company generated $160 million of Adjusted Free Cash Flow during the three months ended June 30, 2022, despite a realized hedge loss of approximately $604 million.
Year-to-Date 2022 Financial Results
Net production for the six months ended June 30, 2022 averaged 1,963 mmcfe per day, consisting of 1,825 mmcf per day of natural gas, 7,635 bbls per day of oil and 15,464 bbls per day of NGLs.
Price realizations, including the impact of settled commodity derivatives, were $3.72 per mcfe for the six months ended June 30, 2022. Excluding the impact of settled commodity derivatives, price realizations were $6.46 per mcfe for the year-to-date period.
For the six months ended June 30, 2022, Ascent reported a net loss of $1.3 billion, Adjusted Net Income of $358 million and Adjusted EBITDAX of $757 million. Ascent incurred a total of $511 million of capital expenditures during the six months ended June 30, 2022 including $434 million for well costs, $55 million for acquisition and leasehold costs, and $22 million for capitalized interest. The Company generated $158 million of Adjusted Free Cash Flow during the six months ended June 30, 2022, despite a realized hedge loss of approximately $971 million.
Balance Sheet and Liquidity
As of June 30, 2022, Ascent had total debt of approximately $3.0 billion, with $860 million of borrowings and $169 million of letters of credit issued under the Credit Facility. Liquidity as of June 30, 2022 was $978 million, comprised of $971 million of available borrowing capacity under the revolving credit facility and $7 million of cash on hand. Our leverage ratio at the end of the quarter was 2.3x based on an LTM Adjusted EBITDAX basis, and 1.5x on an LQA Adjusted EBITDAX basis.
In June, Ascent entered into an amended and restated credit agreement with a syndicate of banks to extend the maturity of the Credit Facility to June 2027 while increasing the borrowing base and elected commitment amount to $3.0 billion and $2.0 billion, respectively. The Credit Facility will be governed by the lesser of the borrowing base and the elected commitment amount.
Operational Update
During the second quarter of 2022, we spud 22 operated wells, hydraulically fractured 22 wells, and turned in line 31 wells with an average lateral length of approximately 14,600 feet. As of June 30, 2022, Ascent had 708 gross operated producing Utica wells.
The large number of wells turned in line throughout the second quarter resulted in material production growth, as we exited the quarter at 2.2 bcfe/d. The Company continues to execute at a high level, but is experiencing many of the inflationary pressures impacting the industry and economy at large which, when coupled with the acceleration in activity, is driving the majority of the increase in our D&C capital guidance.
ESG Initiatives Update
The second quarter was again highlighted for Ascent by a number of key ESG accomplishments. As we continued to push for safe and environmentally friendly operatorship in the field, we were able to certify substantially all of our production by MiQ as Grade "A." Additionally, we entered into a multi-year agreement with Spire Marketing to provide responsibly sourced natural gas to their clients through North America and published our fourth annual ESG Report covering the 2021 calendar year.
Guidance Update
The Company has updated its full-year 2022 guidance to reflect current market conditions as well as the acceleration of activity into the back half of the year. A detailed summary including production, expense and operational counts is included in the table that follows:
Updated 2022 Guidance | ||
Production | ||
Total Production (mmcfe/d) | 2,025 - 2,125 | |
% Natural Gas | 92% - 94% | |
Differentials | ||
Natural Gas ($/mcf) | ($0.15) - ($0.05) | |
Crude Oil ($/bbl) | ($7.50) - ($7.00) | |
NGL (% of WTI) | 40% - 45% | |
Operating Expenses | ||
Total Operating Expense(a) | $1.40 - $1.45 | |
G&A(b) | $0.08 - $0.09 | |
Capital Expenditures Incurred ($mm)(c) | $920 - $950 | |
D&C | $825 - $850 | |
Land | $95 - $100 | |
Operations / Well Counts | ||
Operated Rigs | 3.75 | |
Wells Spud | 80 - 85 | |
Wells TIL'd | 85 - 90 | |
Average Lateral Length of TILs | 13,800' |
(a) Includes GP&T, LOE, and Taxes Other than Income |
(b) Excludes stock-based compensation expense and non-recurring legal benefit |
(c) Excludes Capitalized Interest |
About Ascent Resources
Ascent is one of the largest private producers of natural gas in the United States and is focused on acquiring, developing, and operating natural gas and oil properties located in the Utica Shale in southern Ohio. With a continued focus on good corporate citizenship, Ascent is committed to delivering low-cost clean-burning energy to our country and the world, while reducing environmental impacts.
Contact:
Chris Benton
Director – Finance and Investor Relations
405-252-7850
chris.benton@ascentresources.com
This news release contains forward-looking statements within the meaning of US federal securities laws. Forward-looking statements express views of Ascent regarding future plans and expectations. Forward-looking statements in this news release include, but are not limited to, statements regarding future operations, business strategy, liquidity and cash flows of Ascent. These statements are based on numerous assumptions and are subject to known and unknown risks and uncertainties, including, commodity price volatility, inherent uncertainty in estimating natural gas, oil and NGL reserves, environmental and regulatory risks, availability of capital, and the other risks described in Ascent's most recent investor presentation provided at www.ascentresources.com/investors. Actual future results may vary materially from those expressed or implied in this news release and Ascent's business, financial condition, results of operations and cash flow could be materially and adversely affected by such risks and uncertainties. As a result, forward-looking statements should be understood to be only predictions and statements of Ascent's current beliefs; they are not guarantees of performance.
ASCENT RESOURCES UTICA HOLDINGS, LLC | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(Unaudited) | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, | June 30, | |||||||
($ in thousands) | 2022 | 2021 | 2022 | 2021 | ||||
Revenues: | ||||||||
Natural gas | $ 1,214,653 | $ 447,479 | $ 2,027,531 | $ 877,677 | ||||
Oil | 77,603 | 50,797 | 131,969 | 92,755 | ||||
NGL | 68,058 | 52,329 | 137,555 | 107,861 | ||||
Commodity derivative loss | (584,421) | (665,763) | (2,579,981) | (764,433) | ||||
Total Revenues | 775,893 | (115,158) | (282,926) | 313,860 | ||||
Operating Expenses: | ||||||||
Lease operating expenses | 21,786 | 19,184 | 47,193 | 38,224 | ||||
Gathering, processing and transportation expenses | 242,530 | 236,911 | 476,075 | 459,696 | ||||
Taxes other than income | 10,900 | 10,348 | 21,422 | 19,388 | ||||
Exploration expenses | 12,015 | 16,539 | 30,424 | 35,032 | ||||
General and administrative expenses | 7,257 | 12,523 | 27,100 | 29,092 | ||||
Depreciation, depletion and amortization | 149,771 | 147,763 | 302,050 | 287,219 | ||||
Total Operating Expenses | 444,259 | 443,268 | 904,264 | 868,651 | ||||
Income (Loss) from Operations | 331,634 | (558,426) | (1,187,190) | (554,791) | ||||
Other Income (Expense): | ||||||||
Interest expense, net | (49,787) | (41,353) | (94,752) | (82,810) | ||||
Change in fair value of contingent payment right | 2,977 | (13,338) | (5,003) | (18,784) | ||||
Losses on purchases or exchanges of debt | — | (3,822) | — | (3,822) | ||||
Other income (expense) | 103 | (3) | 785 | 345 | ||||
Total Other Expense | (46,707) | (58,516) | (98,970) | (105,071) | ||||
Net Income (Loss) | $ 284,927 | $ (616,942) | $ (1,286,160) | $ (659,862) | ||||
ASCENT RESOURCES UTICA HOLDINGS, LLC | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(Unaudited) | ||||
June 30, | December 31, | |||
($ in thousands) | 2022 | 2021 | ||
Current Assets: | ||||
Cash and cash equivalents | $ 6,827 | $ 5,674 | ||
Accounts receivable – natural gas, oil and NGL sales | 725,879 | 453,464 | ||
Accounts receivable – joint interest and other | 12,510 | 8,309 | ||
Short-term derivative assets | 2,340 | 6,866 | ||
Other current assets | 9,639 | 9,012 | ||
Total Current Assets | 757,195 | 483,325 | ||
Property and Equipment: | ||||
Natural gas and oil properties, based on successful efforts accounting | 9,865,712 | 9,383,879 | ||
Other property and equipment | 37,800 | 36,318 | ||
Less: accumulated depreciation, depletion and amortization | (3,527,391) | (3,225,844) | ||
Property and Equipment, net | 6,376,121 | 6,194,353 | ||
Other Assets: | ||||
Long-term derivative assets | 1,235 | 522 | ||
Other long-term assets | 82,056 | 46,241 | ||
Total Assets | $ 7,216,607 | $ 6,724,441 | ||
Current Liabilities: | ||||
Accounts payable | $ 60,399 | $ 86,812 | ||
Accrued interest | 42,628 | 45,929 | ||
Short-term derivative liabilities | 1,410,519 | 648,873 | ||
Other current liabilities | 645,707 | 517,953 | ||
Total Current Liabilities | 2,159,253 | 1,299,567 | ||
Long-Term Liabilities: | ||||
Long-term debt, net | 2,960,497 | 2,588,248 | ||
Long-term derivative liabilities | 975,250 | 435,022 | ||
Other long-term liabilities | 110,062 | 104,796 | ||
Total Long-Term Liabilities | 4,045,809 | 3,128,066 | ||
Member's Equity | 1,011,545 | 2,296,808 | ||
Total Liabilities and Member's Equity | $ 7,216,607 | $ 6,724,441 | ||
ASCENT RESOURCES UTICA HOLDINGS, LLC | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, | June 30, | |||||||
($ in thousands) | 2022 | 2021 | 2022 | 2021 | ||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ 284,927 | $ (616,942) | $ (1,286,160) | $ (659,862) | ||||
Adjustments to reconcile net income (loss) to net cash provided | ||||||||
Depreciation, depletion and amortization | 149,771 | 147,763 | 302,050 | 287,219 | ||||
Loss on commodity derivatives | 584,421 | 665,763 | 2,579,981 | 764,433 | ||||
Cash settlements of commodity derivatives | (547,520) | (35,649) | (914,683) | (53,204) | ||||
Impairment of unproved natural gas and oil properties | 11,649 | 15,987 | 29,507 | 33,381 | ||||
Non-cash interest expense | 4,981 | 4,672 | 8,102 | 9,219 | ||||
Stock-based compensation | 4,176 | 902 | 5,051 | 1,985 | ||||
Change in fair value of contingent payment right | (2,977) | 13,338 | 5,003 | 18,784 | ||||
Losses on purchases or exchanges of debt | — | 3,810 | — | 3,810 | ||||
Other | (28) | (27) | (28) | (20) | ||||
Changes in operating assets and liabilities | (232,110) | (15,713) | (189,503) | (11,495) | ||||
Net Cash Provided by Operating Activities | 257,290 | 183,904 | 539,320 | 394,250 | ||||
Cash Flows from Investing Activities: | ||||||||
Drilling and completion costs | (218,220) | (129,882) | (426,830) | (240,433) | ||||
Acquisitions of natural gas and oil properties | (33,765) | (18,536) | (71,000) | (39,137) | ||||
Deposits on natural gas and oil property acquisition | (27,000) | — | (27,000) | — | ||||
Additions to other property and equipment | (406) | (42) | (995) | (135) | ||||
Net Cash Used in Investing Activities | (279,391) | (148,460) | (525,825) | (279,705) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from credit facility borrowings | 1,235,000 | 385,000 | 2,080,000 | 710,000 | ||||
Repayment of credit facility borrowings | (835,000) | (730,000) | (1,715,000) | (1,120,000) | ||||
Proceeds from issuance of long-term debt | — | 400,000 | — | 400,000 | ||||
Repayment of long-term debt | — | (71,392) | — | (84,173) | ||||
Cash paid for debt issuance costs | (16,731) | (6,361) | (16,731) | (6,808) | ||||
Cash settlements of commodity derivatives | (56,035) | (5,354) | (56,035) | (8,810) | ||||
Cash paid to restructure commodity derivatives | (300,000) | — | (300,000) | — | ||||
Other | (4,360) | (3,353) | (4,576) | (3,579) | ||||
Net Cash Provided by (Used in) Financing Activities | 22,874 | (31,460) | (12,342) | (113,370) | ||||
Net Increase in Cash and Cash Equivalents | 773 | 3,984 | 1,153 | 1,175 | ||||
Cash and Cash Equivalents, Beginning of Period | 6,054 | 6,034 | 5,674 | 8,843 | ||||
Cash and Cash Equivalents, End of Period | $ 6,827 | $ 10,018 | $ 6,827 | $ 10,018 | ||||
ASCENT RESOURCES UTICA HOLDINGS, LLC | ||||||||
NATURAL GAS, OIL AND NGL PRODUCTION AND PRICES | ||||||||
(Unaudited) | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, | June 30, | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Net Production Volumes: | ||||||||
Natural gas (mmcf) | 166,367 | 160,886 | 330,253 | 304,853 | ||||
Oil (mbbls) | 758 | 857 | 1,382 | 1,697 | ||||
NGL (mbbls) | 1,408 | 1,830 | 2,799 | 3,858 | ||||
Natural Gas Equivalents (mmcfe) | 179,359 | 177,014 | 355,339 | 338,185 | ||||
Average Daily Net Production Volumes: | ||||||||
Natural gas (mmcf/d) | 1,828 | 1,768 | 1,825 | 1,684 | ||||
Oil (mbbls/d) | 8 | 9 | 8 | 9 | ||||
NGL (mbbls/d) | 15 | 20 | 15 | 21 | ||||
Natural Gas Equivalents (mmcfe/d) | 1,971 | 1,945 | 1,963 | 1,868 | ||||
% Natural Gas | 92 % | 91 % | 93 % | 90 % | ||||
% Liquids | 8 % | 9 % | 7 % | 10 % | ||||
Average Sales Prices: | ||||||||
Natural gas ($/mcf) | $ 7.30 | $ 2.78 | $ 6.14 | $ 2.88 | ||||
Oil ($/bbl) | $ 102.34 | $ 59.27 | $ 95.48 | $ 54.66 | ||||
NGL ($/bbl) | $ 48.34 | $ 28.60 | $ 49.14 | $ 27.95 | ||||
Natural Gas Equivalents ($/mcfe) | $ 7.58 | $ 3.11 | $ 6.46 | $ 3.19 | ||||
Settlements of commodity derivatives ($/mcfe)(a) | (3.37) | (0.23) | (2.74) | (0.18) | ||||
Average sales price, after effects of settled derivatives ($/mcfe) | $ 4.21 | $ 2.88 | $ 3.72 | $ 3.01 | ||||
(a) | Excludes the one-time payment of $300 million in April 2022 to restructure a portion of our May through December 2022 natural gas swaps, resulting in an increase of our weighted average strike prices for these periods. |
ASCENT RESOURCES UTICA HOLDINGS, LLC | ||||||||
CAPITAL EXPENDITURES INCURRED | ||||||||
(Unaudited) | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, | June 30, | |||||||
($ in thousands) | 2022 | 2021 | 2022 | 2021 | ||||
Capital Expenditures Incurred: | ||||||||
Drilling and completion costs incurred | $ 235,509 | $ 133,926 | $ 433,887 | $ 260,417 | ||||
Acquisition and leasehold costs incurred(a) | 23,919 | 9,478 | 55,155 | 17,880 | ||||
Capitalized interest incurred | 12,299 | 12,671 | 22,298 | 25,974 | ||||
Total Capital Expenditures Incurred | $ 271,727 | $ 156,075 | $ 511,340 | $ 304,271 | ||||
(a) | Excludes the $27 million deposit paid in June 2022 for the bolt-on acquisition. |
ASCENT RESOURCES UTICA HOLDINGS, LLC | ||||||||
RECONCILIATIONS OF ADJUSTED NET INCOME (LOSS) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, | June 30, | |||||||
($ in thousands) | 2022 | 2021 | 2022 | 2021 | ||||
Net Income (Loss) (GAAP) | $ 284,927 | $ (616,942) | $ (1,286,160) | $ (659,862) | ||||
Adjustments to reconcile net income (loss) to Adjusted Net Income: | ||||||||
Impairment of unproved natural gas and oil properties | 11,649 | 15,987 | 29,507 | 33,381 | ||||
Loss on commodity derivatives | 584,421 | 665,763 | 2,579,981 | 764,433 | ||||
Commodity derivative settlements(a) | (603,555) | (41,003) | (970,718) | (62,014) | ||||
Unrealized loss on interest rate derivatives | (1,837) | (57) | (3,575) | (196) | ||||
Change in fair value of contingent payment right | (2,977) | 13,338 | 5,003 | 18,784 | ||||
Non-recurring legal benefit | (10,564) | — | (10,564) | — | ||||
Stock-based compensation | 4,176 | 902 | 5,051 | 1,985 | ||||
Losses on purchases or exchanges of debt | — | 3,822 | — | 3,822 | ||||
Other | 10,976 | — | 9,192 | — | ||||
Adjusted Net Income (Non-GAAP)(b)(c) | $ 277,216 | $ 41,810 | $ 357,717 | $ 100,333 | ||||
(a) | Excludes the one-time payment of $300 million in April 2022 to restructure a portion of our May through December 2022 natural gas swaps, resulting in an increase of our weighted average strike prices for these periods. | |
(b) | As shown above and on the following pages, Ascent uses Adjusted Net Income (Loss), Adjusted EBITDAX, Last Twelve Months ("LTM") Adjusted EBITDAX, Last Quarter Annualized ("LQA") Adjusted EBITDAX, Net Debt, and Adjusted Free Cash Flow (non-GAAP measures) as supplemental measures to evaluate the performance of its assets. Ascent believes these non-GAAP measures provide meaningful information to our investors and lenders, as discussed below. These non-GAAP measures, as used and defined by Ascent, are not measures of performance as determined by United States generally accepted accounting principles (US GAAP) and may not be comparable to similarly titled measures employed by other companies. | |
Non-GAAP measures should not be considered in isolation or as substitutes for operating income, net income or loss, cash flows provided by or used in operating, investing and financing activities or other income or cash flow statement data prepared in accordance with GAAP. Non-GAAP measures provide no information regarding a company's capital structure, borrowings, interest costs, capital expenditures and working capital movement. Non-GAAP measures do not represent funds available for discretionary use because those funds may be required for debt service, capital expenditures, working capital, exploration expenses and other commitments and obligations. However, Ascent's management team believes these non-GAAP measures are useful to an investor in evaluating Ascent's financial performance because these measures: | ||
• | are widely used by investors in the natural gas and oil industry to measure a company's operating performance without regard to items excluded from the calculation of such terms, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired, among other factors; | |
• | are more comparable to estimates used by analysts; | |
• | help investors to more meaningfully evaluate and compare the results of Ascent's operations from period to period by removing the effect of its capital structure from its operating structure; | |
• | excludes one-time items, non-cash items or items whose timing or amount cannot be reasonably estimated; and | |
• | are used by Ascent's management team for various purposes, including as a measure of operating performance, in presentations to its Board of Managers and as a basis for strategic planning and forecasting. | |
There are significant limitations to using non-GAAP measures as measures of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect Ascent's net income or loss, the lack of comparability of results of operations of different companies, and the different methods of calculating non-GAAP measures reported by different companies. | ||
(c) | Ascent defines "Adjusted Net Income (Loss)" as net income (loss) before impairment of unproved natural gas and oil properties; the revenue impact of changes in the fair value of commodity derivative instruments prior to settlement; unrealized gain (loss) on interest rate derivatives; change in fair value of contingent payment right; non-recurring legal expense (benefit); stock-based compensation; (gains) losses on purchases or exchanges of debt; and other non-recurring items. Adjusted Net Income is a supplemental measure of operating performance monitored by management that is not defined under GAAP and does not represent, and should not be considered as, an alternative to net income (loss), as determined by GAAP. | |
ASCENT RESOURCES UTICA HOLDINGS, LLC | ||||||||
RECONCILIATIONS OF ADJUSTED EBITDAX AND NET DEBT | ||||||||
(Unaudited) | ||||||||
Adjusted EBITDAX | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, | June 30, | |||||||
($ in thousands) | 2022 | 2021 | 2022 | 2021 | ||||
Net Income (Loss) (GAAP) | $ 284,927 | $ (616,942) | $ (1,286,160) | $ (659,862) | ||||
Adjustments to reconcile net income (loss) to Adjusted | ||||||||
Exploration expenses | 12,015 | 16,539 | 30,424 | 35,032 | ||||
Depreciation, depletion and amortization | 149,771 | 147,763 | 302,050 | 287,219 | ||||
Interest expense, net | 49,787 | 41,353 | 94,752 | 82,810 | ||||
Loss on commodity derivatives | 584,421 | 665,763 | 2,579,981 | 764,433 | ||||
Commodity derivative settlements(a) | (603,555) | (41,003) | (970,718) | (62,014) | ||||
Change in fair value of contingent payment right | (2,977) | 13,338 | 5,003 | 18,784 | ||||
Non-recurring legal benefit | (10,564) | — | (10,564) | — | ||||
Stock-based compensation | 4,176 | 902 | 5,051 | 1,985 | ||||
Losses on purchases or exchanges of debt | — | 3,822 | — | 3,822 | ||||
Other | 8,999 | — | 7,215 | — | ||||
Adjusted EBITDAX (Non-GAAP)(b)(c) | $ 477,000 | $ 231,535 | $ 757,034 | $ 472,209 | ||||
(a) | Excludes the one-time payment of $300 million in April 2022 to restructure a portion of our May through December 2022 natural gas swaps, resulting in an increase of our weighted average strike prices for these periods. |
(b) | See footnote (a) on the Reconciliations of Adjusted Net Income (Loss) for a discussion of our uses of non-GAAP measures. |
(c) | Ascent defines "Adjusted EBITDAX" as net income (loss) before exploration expenses; depreciation, depletion and amortization; interest expense, net; the revenue impact of changes in the fair value of commodity derivative instruments prior to settlement; change in fair value of contingent payment right; non-recurring legal expense (benefit); stock-based compensation; (gains) losses on purchases or exchanges of debt; and other non-recurring items. Adjusted EBITDAX is a supplemental measure of operating performance monitored by management that is not defined under GAAP and does not represent, and should not be considered as, an alternative to net income (loss), as determined by GAAP. |
ASCENT RESOURCES UTICA HOLDINGS, LLC | ||||||||||
RECONCILIATIONS OF ADJUSTED EBITDAX AND NET DEBT (CONTINUED) | ||||||||||
(Unaudited) | ||||||||||
LTM Adjusted EBITDAX | ||||||||||
Three Months Ended | Twelve Months | |||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||
($ in thousands) | 2022 | 2022 | 2021 | 2021 | 2022 | |||||
Net Income (Loss) (GAAP) | $ 284,927 | $ (1,571,087) | $ 1,110,012 | $ (1,256,435) | $ (1,432,583) | |||||
Adjustments to reconcile net income (loss) to Adjusted EBITDAX: | ||||||||||
Exploration expenses | 12,015 | 18,409 | 26,061 | 22,274 | 78,759 | |||||
Depreciation, depletion and amortization | 149,771 | 152,279 | 159,286 | 151,902 | 613,238 | |||||
Interest expense, net | 49,787 | 44,965 | 47,034 | 44,996 | 186,782 | |||||
(Gain) loss on commodity derivatives | 584,421 | 1,995,560 | (532,585) | 1,512,044 | 3,559,440 | |||||
Commodity derivative settlements(a) | (603,555) | (367,163) | (534,216) | (227,286) | (1,732,220) | |||||
Change in fair value of contingent payment right | (2,977) | 7,980 | (407) | 1,544 | 6,140 | |||||
Non-recurring legal expense (benefit) | (10,564) | — | 1,372 | — | (9,192) | |||||
Stock-based compensation | 4,176 | 875 | 815 | 816 | 6,682 | |||||
Other | 8,999 | (1,784) | 5,847 | — | 13,062 | |||||
Adjusted EBITDAX (Non-GAAP)(b)(c) | $ 477,000 | $ 280,034 | $ 283,219 | $ 249,855 | $ 1,290,108 | |||||
Three Months Ended | Twelve Months | |||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||
($ in thousands) | 2021 | 2021 | 2020 | 2020 | 2021 | |||||
Net Income (Loss) (GAAP) | $ (616,942) | $ (42,920) | $ 168,636 | $ (552,389) | $ (1,043,615) | |||||
Adjustments to reconcile net income (loss) to Adjusted EBITDAX: | ||||||||||
Exploration expenses | 16,539 | 18,493 | 26,323 | 28,096 | 89,451 | |||||
Depreciation, depletion and amortization | 147,763 | 139,456 | 162,431 | 196,232 | 645,882 | |||||
Interest expense, net | 41,353 | 41,457 | 35,791 | 33,292 | 151,893 | |||||
(Gain) loss on commodity derivatives | 665,763 | 98,670 | (228,899) | 386,020 | 921,554 | |||||
Commodity derivative settlements | (41,003) | (21,011) | 26,279 | 114,155 | 78,420 | |||||
Change in fair value of contingent payment right | 13,338 | 5,446 | 6,518 | — | 25,302 | |||||
Losses on purchases or exchanges of debt | 3,822 | — | 15,708 | 3,632 | 23,162 | |||||
Stock-based compensation | 902 | 1,083 | 1,065 | 710 | 3,760 | |||||
Adjusted EBITDAX (Non-GAAP)(b)(c) | $ 231,535 | $ 240,674 | $ 213,852 | $ 209,748 | $ 895,809 | |||||
(a) | Excludes the one-time payment of $300 million in April 2022 to restructure a portion of our May through December 2022 natural gas swaps, resulting in an increase of our weighted average strike prices for these periods. |
(b) | See footnote (a) on the Reconciliations of Adjusted Net Income (Loss) for a discussion of our uses of non-GAAP measures. |
(c) | Ascent defines "Adjusted EBITDAX" as net income (loss) before exploration expenses; depreciation, depletion and amortization; interest expense, net; the revenue impact of changes in the fair value of commodity derivative instruments prior to settlement; change in fair value of contingent payment right; non-recurring legal expense (benefit); stock-based compensation; (gains) losses on purchases or exchanges of debt; and other non-recurring items. Adjusted EBITDAX is a supplemental measure of operating performance monitored by management that is not defined under GAAP and does not represent, and should not be considered as, an alternative to net income (loss), as determined by GAAP. |
ASCENT RESOURCES UTICA HOLDINGS, LLC | ||||
RECONCILIATIONS OF ADJUSTED EBITDAX AND NET DEBT (CONTINUED) | ||||
(Unaudited) | ||||
Net Debt, Net Debt to LTM Adjusted EBITDAX and Net Debt to LQA Adjusted EBITDAX | ||||
June 30, | ||||
($ in thousands) | 2022 | 2021 | ||
Net Debt: | ||||
Total debt | $ 2,960,497 | $ 2,629,269 | ||
Less: cash and cash equivalents | 6,827 | 10,018 | ||
Net Debt(a) | $ 2,953,670 | $ 2,619,251 | ||
Net Debt to LTM Adjusted EBITDAX: | ||||
Net Debt(a) | $ 2,953,670 | $ 2,619,251 | ||
LTM Adjusted EBITDAX (Non-GAAP)(b) | $ 1,290,108 | $ 895,809 | ||
Net Debt to LTM Adjusted EBITDAX | 2.3 x | 2.9 x | ||
Net Debt to LQA Adjusted EBITDAX: | ||||
Net Debt(a) | $ 2,953,670 | $ 2,619,251 | ||
LQA Adjusted EBITDAX (Non-GAAP) | $ 1,908,000 | $ 926,140 | ||
Net Debt to LQA Adjusted EBITDAX | 1.5 x | 2.8 x | ||
(a) | Ascent defines "Net Debt" as total debt less cash and cash equivalents. Management uses Net Debt to determine our outstanding debt obligations that would not be readily satisfied by our cash and cash equivalents on hand. Net Debt does not represent, and should not be considered as, an alternative to total debt, as determined by GAAP. |
(b) | Adjusted EBITDAX for the LTM ended June 30, 2022 and 2021, respectively. Refer to our Reconciliations of Adjusted EBITDAX and Net Debt for more details regarding our LTM Adjusted EBITDAX calculations. |
ASCENT RESOURCES UTICA HOLDINGS, LLC | ||||||||
RECONCILIATIONS OF ADJUSTED FREE CASH FLOW | ||||||||
(Unaudited) | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, | June 30, | |||||||
($ in thousands) | 2022 | 2021 | 2022 | 2021 | ||||
Net Cash Provided by Operating Activities (GAAP) | $ 257,290 | $ 183,904 | $ 539,320 | $ 394,250 | ||||
Adjustments to reconcile Net Cash Provided by Operating | ||||||||
Changes in operating assets and liabilities | 232,110 | 15,713 | 189,503 | 11,495 | ||||
Drilling and completion costs incurred | (235,509) | (133,926) | (433,887) | (260,417) | ||||
Acquisition and leasehold costs incurred | (23,919) | (9,478) | (55,155) | (17,880) | ||||
Capitalized interest incurred | (12,299) | (12,671) | (22,298) | (25,974) | ||||
Financing commodity derivative settlements | (56,035) | (5,354) | (56,035) | (8,810) | ||||
Non-recurring legal benefit | (10,564) | — | (10,564) | — | ||||
Other | 8,999 | 12 | 7,215 | 12 | ||||
Adjusted Free Cash Flow (Non-GAAP)(a)(b) | $ 160,073 | $ 38,200 | $ 158,099 | $ 92,676 | ||||
(a) | See footnote (a) on the Reconciliations of Adjusted Net Income (Loss) for a discussion of our uses of non-GAAP measures. |
(b) | Adjusted Free Cash Flow is an indicator of a company's ability to generate funding to maintain or expand its asset base, make distributions and repurchase or extinguish debt. Ascent defines "Adjusted Free Cash Flow" as net cash provided by operating activities adjusted for changes in operating assets and liabilities; drilling and completion costs incurred; acquisition and leasehold costs incurred; capitalized interest incurred; financing commodity derivative settlements; non-recurring legal expense (benefit); and certain other non-recurring items. Adjusted Free Cash Flow is a supplemental measure of liquidity monitored by management that is not defined under GAAP and that does not represent, and should not be considered as, an alternative to net cash provided by operating activities, as determined by GAAP. |
SOURCE Ascent Resources Utica Holdings, LLC
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