Chaparral Announces Third Quarter 2015 Financial and Operational Results
OKLAHOMA CITY, Okla., Nov. 16, 2015 (GLOBE NEWSWIRE) -- Chaparral Energy, Inc. announced its third quarter 2015 financial results and provided an update on its operations today. Highlights included:
Average production of 26.7 Mboe/d during the third quarter, of which 54 percent was oil, 15 percent NGLs and 31 percent gas
Continued EOR production growth, highlighted by increases within its North Burbank Unit with a more than 47 percent year over year increase
Fourth consecutive quarter of decreases associated with lease operating expenses (LOE), with a per BOE cost of $10.15
An adjusted EBITDA of $92 million
Reaffirmation of its $550 million borrowing base
Ceiling test impairment on oil and gas properties of $737.8 million
“Chaparral continues to prove our ability to reduce costs associated with CAPEX, LOE and G&A, improve operational efficiency and live within our cash flow,” said Chief Executive Officer Mark Fischer. “We believe these efforts coupled with our commitment to add value by focusing primarily on developing the core of the core of our STACK and Miss Lime assets and our ability to realize solid production growth from our CO2 EOR operations with minimal capital investment has us well positioned for the future. A belief that was echoed by the reaffirmation of our $550 million borrowing base.”
Operations Summary For the quarter, Chaparral produced 26.7 Boe/d of which 54 percent was oil, 15 percent NGLs and 31 percent gas. While this accounts for an almost 11 percent year over year decrease in production, and a slightly more than 10 percent decline on a pro-forma basis, taking into account properties associated with the company’s 2014 Ark-La-Tx sale. This decline was a direct result of the planned reduction in its drilling rig program, as well as a strategic delay of completion activities until the second half of this year.
Chaparral realized reductions in its total LOE and LOE/Boe for the fourth consecutive quarter, reducing total LOE spend by approximately $2.5 million, more than nine percent compared to the previous quarter and by $14 million or slightly more than 36 percent compared to the third quarter of 2014. LOE/Boe was $10.15 during the third quarter, which was a more than four percent reduction compared to the previous quarter and an almost 28 percent year over year decrease.
The company also reported continued decreases associated with its drilling and completion costs, with its last seven operated wells averaging a cost of slightly less than $2.7 million per well.
As of September 30, Chaparral had drilled 24 gross operated E&P wells during the year, with 13 in the STACK, nine in the Mississippi Lime and two in the Marmaton. The company’s EOR Business Unit also continues to record increased production, despite having reduced its capital budget by more than 70 percent compared to 2014. Its North Burbank Unit grew production by 47 percent on a year over year basis.
Financial Summary Chaparral recently concluded the fall redetermination of its borrowing base with its credit facility. The company saw no change, with the reaffirmation of its previous borrowing base of $550 million.
The company’s adjusted EBITDA at the end of the third quarter was $92 million compared to $95.4 million during the previous quarter. While its adjusted EBITDA decreased on a quarter over quarter basis, this decline was in line with the company’s expectations for the year based on the timing of its 2015 drilling program and scheduled delay of completions activity.
Chaparral has a robust hedging program, with 1.5 million barrels of oil hedged for the remainder of 2015, as well as 4.4 million barrels in 2016 and almost 500,000 barrels hedged in 2017. From a gas standpoint, it has 3.9 Bcf of gas hedged for the remainder of 2015, 14 Bcf hedged in 2016, 12.7 Bcf in 2017 and 8.3 Bcf hedged in 2018.
Revenues, before the effects of hedging activities, were down from $94.2 million in the previous quarter to $74.5 million in the third quarter. This decline was due primarily to a 17 percent decrease in average prices during the quarter, as well as a decline in production resulting from Chaparral’s strategic delay of completions toward the latter part of this year and the natural decline of its wells.
As expected, due to a decline in average commodity prices, Chaparral was required to record ceiling test impairment on oil and gas properties of $737.8 million in the third quarter.
Chaparral’s third quarter financial and operating results call will be held at 9 a.m. Central, Monday, November 16. Interested parties may access the call toll-free at 888-359-3624 and ask for the Chaparral Energy conference call 10 minutes prior to the start time. The conference ID number is 2438379.
In addition, a live webcast of the call will be available through the Investor section of the company’s website. For those who cannot listen to the live call, a telephonic replay will be available through Monday, November 30, by calling 888-203-1112. The replay passcode is 2438379. An archive of the call will also be available shortly after its conclusion on the Investor section of the company’s website.
Chaparral’s 10-K and 10-Q are available on the Investor section of the company’s website at chaparralenergy.com/investors or the Securities and Exchange Commission’s website at sec.gov. Statements made in this release contain “forward-looking statements.” These statements are based on certain assumptions and expectations made by Chaparral which reflect management’s experience, estimates and perception of historical trends, current conditions, anticipated future developments, potential for reserves and drilling, completion of current and future acquisitions, and growth, benefits of acquisitions, future competitive position and other factors believed to be appropriate. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are our ability to find oil and natural gas reserves that are economically recoverable, the volatility of oil and natural gas prices, the uncertain economic conditions in the United States and globally, the decline in the reserve values of our properties that may result in ceiling test write-downs, our ability to replace reserves and sustain production, our estimate of the sufficiency of our existing capital sources, our ability to raise additional capital to fund cash requirements for future operations, the uncertainties involved in prospect development and property acquisitions or dispositions and in projecting future rates of production or future reserves, the timing of development expenditures and drilling of wells, the impact of natural disasters on our present and future operations, the impact of government regulation and the operating hazards attendant to the oil and natural gas business. Please read “Risk Factors” in our annual reports on form 10-K and other public filings. We undertake no duty to update or revise these forward-looking statements.
About Chaparral Founded in 1988 and headquartered in Oklahoma City, Chaparral is a pure play Mid-Continent independent oil and natural gas exploration and production company. The company has capitalized on its sustained success in the Mid-Continent area in recent years by expanding its holdings to become a leading player in the liquids-rich Mississippi Lime and STACK, which is home to multiple oil-rich reservoirs including the Oswego, Meramec, Osage, Woodford and Hunton formations. Chaparral is also the nation’s third-largest carbon dioxide enhanced oil recovery producer based on number of active projects. This position is underscored by its activity in the world-class North Burbank Unit in Osage County, Oklahoma, which is the largest oil recovery unit in the state. For more information, please visit chaparralenergy.com.
Chief Financial Officer
Manager – Corporate Communications
(November 16, 2015 - 9:01 AM EST)
Hedging programs that E&Ps have in place in 2016 vary considerably. The chart below shows the range of oil and gas production for several E&Ps covered by hedging contracts. Pioneer Natural Resources (ticker: PXD) and Cimarex Energy (ticker: XEC) have hedged the largest portions of their remaining production at 85/75 and 80/90 percent, respectively, for oil and gas. This chart[Read More…]
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