August 8, 2019 - 5:36 PM EDT
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Brigham Minerals, Inc. Reports Record Second Quarter 2019 Operating and Financial Results

AUSTIN, Texas

Brigham Minerals, Inc. (NYSE: MNRL) (“Brigham Minerals,” “Brigham,” or the “Company”), a leading mineral and royalty interest acquisition company, today announced operating and financial results for the quarter ended June 30, 2019, as well as recent developments.

OPERATING AND FINANCIAL HIGHLIGHTS AND RECENT DEVELOPMENTS

  • Record Q2 2019 daily production volumes totaling 6,768 boe/d (71% liquids, 56% oil)
    • Up 26% sequentially from Q1 2019 and up 82% from Q2 2018
  • Record Q2 2019 mineral and royalty revenues totaling $23 million
    • Up 31% sequentially from Q1 2019 and up 59% from Q2 2018
  • Q2 2019 net loss totaling $3.2 million and Adjusted Net Income(1) of $3.7 million after adding back loss on extinguishment of debt
  • Q2 2019 Adjusted EBITDA(1) totaling $18.3 million
    • Up 32% sequentially from Q1 2019 and up 33% from Q2 2018
  • Declared Company’s initial dividend of $0.33 per share of Class A common stock
    • Based on financial results for the full second quarter 2019 and payable August 29, 2019
  • Closed 46 transactions acquiring 2,700 net royalty acres for $40 million of capital
    • 71% to the Permian and 23% to the SCOOP/STACK
    • Plan to deploy $175 - $200 million of capital for acquisitions for full year 2019
  • Averaged 62 rigs running across the Company’s diversified mineral portfolio in Q2 2019
    • 28 were in the Permian and 19 in the SCOOP/STACK
  • Record 943 gross drilled but uncompleted locations (“DUCs”)
    • Despite conversion of over 200 gross DUCs to producing status during the quarter

(1) Non-GAAP measure. See “Non-GAAP Financial Measures” below.

Ben M. (“Bud”) Brigham, Executive Chairman commented, “Our diversified tier-one mineral portfolio outperformed during the second quarter with exceptional sequential growth in production volumes, revenues, and EBITDA. Further, in the second quarter, we continued our disciplined “ground game” acquisition strategy adding approximately 2,700 tier-one net royalty acres, largely in the Permian Basin and the SCOOP/STACK, and believe we can deploy approximately $175 to $200 million of capital via this approach during the full year 2019. At the same time, our acquisition team remains focused on identifying and evaluating larger, accretive transactions. I’m very excited about the number of high quality, larger scale opportunities we are evaluating while executing our disciplined technical evaluation process that, over the last six years, has consistently created long-term value in tier-one oily resource plays.”

Robert M. (“Rob”) Roosa, Chief Executive Officer, commented, “While growth through acquisition remains a key strategy, the significant rig and completion activity on our existing mineral portfolio continues to drive organic, capex-free growth with recent strong activity. At the beginning of August, in our Delaware Basin Loving County Development Area, Occidental Petroleum Corporation(1) had two rigs developing its Silvertip project, and Exxon Mobil Corporation and EOG Resources, Inc., were running four rigs just south of Silvertip. Also, at the beginning of August, in our SCOOP play, which includes Continental Resources Inc.'s SpringBoard development area in Grady County Oklahoma, Continental and other operators were running 21 rigs across our mineral position. As a result of continued development, our Loving County Development Area and Grady County production volumes and revenues already represent approximately 10% of our Company’s production and revenues, despite us being in the very early innings of development of two of the premier manufacturing mode projects in the United States. Finally, at the beginning of August, we experienced an increase in activity relative to the second quarter with 64 rigs drilling approximately 2,900 net royalty acres across the entirety of our mineral portfolio.”

Blake Williams, Chief Financial Officer, added, “We are also extremely pleased to announce our first quarterly cash dividend in the amount of $0.33 per share of Class A common stock, which represents our Discretionary Cash Flow(2) for the full second quarter of 2019. The dividend, combined with our 26% sequential production growth during the quarter, underscores the Company’s ability and commitment to deliver total shareholder return. We expect this growth to continue as operators convert our current inventory of 943 highly economic DUCs into producing wells.”

(1) All Occidental statistics pro forma for announced merger with Anadarko.
(2) Non-GAAP measure. See “Non-GAAP Financial Measures” below.

OPERATIONAL UPDATE

Mineral and Royalty Interest Ownership Update

During the second quarter 2019, the Company completed 46 transactions acquiring 2,700 net royalty acres (standardized to a 1/8th royalty interest), for $40 million, in the Permian, SCOOP/STACK and Williston Basins. The acquired minerals are expected to deliver near-term production with 44 gross DUCs (0.1 net DUCs) and 30 gross permits (0.1 net permits). As of June 30, 2019, the Company owned roughly 74,100 net royalty acres, encompassing 12,085 (104 net) undeveloped horizontal locations, across 39 counties in what the Company views as the cores of the Permian Basin in West Texas and New Mexico, the SCOOP/STACK plays in the Anadarko Basin of Oklahoma, the Denver-Julesburg (“DJ”) Basin in Colorado and Wyoming and the Williston Basin in North Dakota.

The table below summarizes the Company’s mineral and royalty interest ownership at the dates indicated.

 

 

Delaware

 

Midland

 

SCOOP

 

STACK

 

DJ

 

Williston

 

Other

 

Total

Net Royalty Acres

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

21,750

 

3,500

 

10,250

 

10,050

 

15,450

 

6,900

 

6,200

 

74,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2019

 

20,550

 

3,200

 

9,750

 

9,700

 

15,450

 

6,850

 

6,000

 

71,500

Acres Added Q/Q

 

1,300

 

300

 

500

 

350

 

0

 

50

 

200

 

2,700

Acres Sold Q/Q

 

(100)

 

0

 

0

 

0

 

0

 

0

 

0

 

(100)

% Growth Q/Q

 

6%

 

9%

 

5%

 

4%

 

—%

 

1%

 

3%

 

4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

19,200

 

3,200

 

8,700

 

9,700

 

15,400

 

6,800

 

5,800

 

68,800

Acres Added YTD 2019

 

2,650

 

300

 

1,550

 

350

 

50

 

100

 

400

 

5,400

Acres Sold YTD 2019

 

(100)

 

0

 

0

 

0

 

0

 

0

 

0

 

(100)

% Growth YTD 2019

 

13%

 

9%

 

18%

 

4%

 

—%

 

1%

 

7%

 

8%

Operating Activity Update

DUC Conversions

The Company saw significant conversion of its DUC inventory during the second quarter with over 209 gross (1.8 net) horizontal wells identified that had been converted to production, which represented 24% of its gross DUC inventory (32% of net DUCs) as of Q1 2019. Thus far in 2019, the Company has converted 49% of its gross DUC inventory (57% of its net DUC) as of year-end 2018, which compares highly favorably to the 88% of net DUCs converted during 2018. Conversions of gross and net wells by status are summarized in the table below:

Q2 2019 Producing Well Conversion

 

 

Gross

 

Net

DUCs

 

209

 

70%

 

1.8

 

69%

Permits

 

4

 

1%

 

0.1

 

4%

Acquired

 

88

 

29%

 

0.7

 

27%

Total

 

301

 

 

 

2.6

 

 

Drilling Activity

During the second quarter 2019, the Company averaged approximately 62 rigs running on its mineral and royalty interests with approximately 2,284 net royalty acres under development as compared to 49 rigs and 2,687 net royalty acres under development on average over the prior five quarters. The Company had 28 rigs operating on its Permian Basin minerals and 19 rigs on its SCOOP/STACK minerals. Leading operators running rigs on Brigham’s mineral position included Continental, with 12 rigs in the SCOOP/STACK and Williston Basin; ExxonMobil, with 10 rigs in the Delaware and Williston Basins; Concho, with 5 rigs in the Delaware Basin; and Occidental, with 4 rigs in the Delaware and DJ Basins. Brigham’s rig activity over the past six quarters is summarized in the table below:

 

Q1 18

 

Q2 18

 

Q3 18

 

Q4 18

 

Q1 19

 

Q2 19

Total Rigs

25

 

31

 

51

 

64

 

73

 

62

NRA Under Development

941

 

1,326

 

3,249

 

3,820

 

3,383

 

2,284

% of Total NRA

2%

 

2%

 

5%

 

6%

 

5%

 

3%

DUC and Permit Inventory

The Company expects near-term production growth will be driven by the continued conversion of its DUC and permit inventory. Brigham’s DUC and permit inventory as of June 30, 2019 by basin is outlined in the table below:

 

 

Development Inventory by Basin (1)

 

 

Delaware

 

Midland

 

SCOOP

 

STACK

 

DJ

 

Williston

 

Other

 

Total

Gross Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DUCs

 

261

 

44

 

128

 

78

 

218

 

187

 

27

 

943

Permits

 

154

 

67

 

25

 

27

 

196

 

195

 

16

 

680

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DUCs

 

2.1

 

0.2

 

0.8

 

0.5

 

1.2

 

0.4

 

0.1

 

5.3

Permits

 

0.8

 

0.3

 

0.1

 

0.1

 

2.1

 

0.3

 

 

3.6

(1) Totals do not always foot due to rounding.

FINANCIAL UPDATE

For the three months ended June 30, 2019, crude oil, natural gas and NGL revenues, excluding the impact of settled derivatives, increased 59% to $23.0 million as compared to $14.5 million in the same prior-year period, due to an increase in sale volumes largely driven by a 184% increase in Permian Basin volumes and a 168% increase in SCOOP/STACK volumes. Further, the percentage of our production stream attributable to oil increased to 56% from 53% in Q2 2018, primarily due to higher oil cuts in the Delaware Basin and SCOOP/STACK.

Second quarter average realized prices were $55.24 per barrel of oil, $2.17 per Mcf of natural gas, and $17.42 per barrel of NGL, for a total equivalent price of $37.42 per Boe, excluding the effect of derivative instruments. This represents a 3% increase relative to first quarter 2019 and is 13% lower than year-ago levels of $42.87 per Boe.

The Company’s net loss was $3.2 million for the three months ended June 30, 2019, which included a $6.9 million expense related to the extinguishment of debt and $6.5 million of non-cash stock-based compensation expense. Adjusted EBITDA was $18.3 million for the three months ended June 30, 2019, up 33% relative to the same prior-year period. Adjusted EBITDA ex lease bonus was $16.8 million for the three months ended June 30, 2019. Adjusted EBITDA and Adjusted EBITDA ex lease bonus are non-GAAP financial measures. For a definition of Adjusted EBITDA and Adjusted EBITDA ex lease bonus and a reconciliation to our most directly comparable measure calculated and presented in accordance with GAAP, please read "Non-GAAP Financial Measures” below.

As of June 30, 2019, the Company had a cash balance of $82.7 million and an undrawn $120.0 million revolving credit facility, providing the Company with total liquidity of $202.7 million.

Second Quarter 2019 Results

Unaudited Financial and Operational Results

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2019

 

2018

 

2019

 

2018

($ in thousands, except per unit of production data)

 

 

 

 

 

 

 

 

Operating Revenues

 

 

 

 

 

 

 

 

Oil sales

 

$

19,140

 

 

$

11,498

 

 

$

32,715

 

 

$

20,455

 

Natural gas sales

 

2,309

 

 

1,687

 

 

4,896

 

 

3,309

 

NGL sales

 

1,600

 

 

1,337

 

 

3,028

 

 

2,622

 

Total mineral and royalty revenue

 

$

23,049

 

 

$

14,522

 

 

$

40,639

 

 

$

26,386

 

Lease bonus and other revenue

 

1,480

 

 

2,367

 

 

2,155

 

 

4,586

 

Total Revenue

 

$

24,529

 

 

$

16,889

 

 

$

42,794

 

 

$

30,972

 

 

 

 

 

 

 

 

 

 

Production

 

 

 

 

 

 

 

 

Oil (MBbls)

 

346

 

 

181

 

 

613

 

 

332

 

Natural Gas (MMcf)

 

1,066

 

 

617

 

 

1,935

 

 

1,172

 

NGLs (MBbls)

 

92

 

 

55

 

 

165

 

 

104

 

Total Net Production (MBoe)

 

616

 

 

339

 

 

1,100

 

 

631

 

Total Net Daily Production (Boe/d)

 

6,768

 

 

3,723

 

 

6,079

 

 

3,489

 

 

 

 

 

 

 

 

 

 

Realized Prices ($/Boe)

 

 

 

 

 

 

 

 

Oil ($/Bbl)

 

$

55.24

 

 

$

63.69

 

 

$

53.34

 

 

$

61.61

 

Natural gas ($/Mcf)

 

2.17

 

 

2.73

 

 

2.53

 

 

2.82

 

NGLs ($/Bbl)

 

17.42

 

 

24.13

 

 

18.41

 

 

25.17

 

Average Realized Price excluding Derivatives

 

$

37.42

 

 

$

42.87

 

 

$

36.93

 

 

$

41.79

 

Average Realized Price including Derivatives

 

$

37.49

 

 

$

42.14

 

 

$

37.15

 

 

$

41.21

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

Gathering, transporting and marketing

 

$

1,523

 

 

$

912

 

 

$

2,637

 

 

$

2,007

 

Severance and ad valorem taxes

 

1,450

 

 

882

 

 

2,829

 

 

1,642

 

Depreciation, depletion and amortization

 

6,760

 

 

3,213

 

 

11,876

 

 

5,758

 

General and administrative (excluding share-based compensation)

 

3,267

 

 

1,318

 

 

5,216

 

 

2,782

 

Total Operating Expenses (before share-based compensation)

 

$

13,000

 

 

$

6,325

 

 

$

22,558

 

 

$

12,189

 

General and administrative, share-based compensation

 

6,495

 

 

 

 

6,495

 

 

 

Total Operating Expenses

 

$

19,495

 

 

$

6,325

 

 

$

29,053

 

 

$

12,189

 

Income From Operations

 

$

5,034

 

 

$

10,564

 

 

$

13,741

 

 

$

18,783

 

Income (loss) on derivative instruments, net

 

73

 

 

(555

)

 

(612

)

 

(914

)

Interest expense, net

 

(1,270

)

 

(652

)

 

(5,095

)

 

(1,126

)

Loss on extinguishment of debt

 

(6,933

)

 

 

 

(6,933

)

 

 

Gain on sale and distribution of equity securities

 

 

 

 

 

 

 

823

 

Other income, net

 

6

 

 

6

 

 

35

 

 

10

 

(Loss) Income Before Taxes

 

$

(3,090

)

 

$

9,363

 

 

$

1,136

 

 

$

17,576

 

Income tax expense

 

117

 

 

12

 

 

307

 

 

28

 

Net (Loss) Income

 

$

(3,207

)

 

$

9,351

 

 

$

829

 

 

$

17,548

 

Less: net income attributable to predecessor

 

(1,590

)

 

(9,351

)

 

(5,092

)

 

(17,548

)

Less: net loss attributable to temporary equity

 

2,941

 

 

 

 

2,941

 

 

 

Net Loss Attributable to Brigham Minerals, Inc. Stockholders

 

$

(1,856

)

 

 

 

$

(1,322

)

 

 

 

 

 

 

 

 

 

 

 

Unit Expenses ($/Boe)

 

 

 

 

 

 

 

 

Gathering, transportation and marketing

 

$

2.47

 

 

$

2.69

 

 

$

2.40

 

 

$

3.18

 

Severance and ad valorem taxes

 

2.35

 

 

2.60

 

 

2.57

 

 

2.60

 

Depreciation, depletion and amortization

 

10.98

 

 

9.48

 

 

10.79

 

 

9.12

 

General and administrative (before share-based compensation)

 

5.30

 

 

3.89

 

 

4.74

 

 

4.41

 

General and administrative, share-based compensation

 

10.55

 

 

 

 

5.90

 

 

 

Interest expense, net

 

2.06

 

 

1.93

 

 

4.63

 

 

1.78

 

QUARTERLY CASH DIVIDEND

The Company’s Board of Directors (the “Board”) has declared a quarterly cash dividend incorporating results for the full second quarter 2019 (without proration for the initial public offering date of April 23, 2019) of $0.33 per share of Class A common stock, to be paid on August 29, 2019 to holders of record as of August 22, 2019. An amount equal to the cash dividend per share will also be set aside for each outstanding RSU and PSU granted under the long-term incentive plan for payment upon the vesting of such awards in accordance with their terms.

Future declarations of dividends are subject to approval by the Board and to the Board’s continuing determination that the declarations of dividends are in the best interests of the Company and its stockholders. Future dividends may be adjusted at the Board’s discretion based on market conditions and capital availability.

BRIGHAM MINERALS SECOND QUARTER 2019 EARNINGS CONFERENCE CALL

  • Friday, August 9, 2019 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time)
  • Pre-register by visiting http://dpregister.com/10133812
  • Listen to a live audio webcast of the call by visiting the Company’s website
  • A recording of the webcast will be available on the Company’s website after the call

Additionally, Brigham Minerals plans to participate in the following events and conferences

  • August 11-14: EnerCom: The Oil & Gas Conference - Denver
    • The Company is presenting on August 13 at 10:30 a.m. Mountain Time
  • August 26-27: Seaport Global Oil & Gas Conference - Chicago
  • August 30: Closing bell ringing at the NYSE

NON-GAAP FINANCIAL MEASURES

Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, and Discretionary Cash Flow are non-GAAP supplemental financial measures used by our management and by external users of our financial statements such as investors, research analysts and others to assess the financial performance of our assets and their ability to sustain dividends over the long term without regard to financing methods, capital structure or historical cost basis.

We define Adjusted Net Income as net income (loss) before loss on extinguishment of debt. We define Adjusted EBITDA as adjusted net income (loss) before depreciation, depletion and amortization, share based compensation expense, interest expense, gain or loss on sale and distribution of equity securities, gain or loss on derivative instruments and income tax expense, less other income and gain or loss on sale of oil and gas properties. We define Adjusted EBITDA ex lease bonus as Adjusted EBITDA further adjusted to eliminate the impacts of lease bonus revenue we receive due to the unpredictability of timing and magnitude of the revenue. We define Discretionary Cash Flow as Adjusted EBITDA, less cash interest expense and cash taxes.

Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, and Discretionary Cash Flow do not represent and should not be considered alternatives to, or more meaningful than, net income, income from operations, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of our financial performance. Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, and Discretionary Cash Flow have important limitations as analytical tools because they exclude some but not all items that affect net income, the most directly comparable GAAP financial measure. Our computation of Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, and Discretionary Cash Flow may differ from computations of similarly titled measures of other companies.

The following tables present a reconciliation of Adjusted net income, Adjusted EBITDA, Adjusted EBITDA ex lease bonus, and Discretionary Cash Flow to the most directly comparable GAAP financial measure for the periods indicated.

SUPPLEMENTAL SCHEDULES

 

Reconciliation of Adjusted net income, Adjusted EBITDA and Adjusted EBITDA ex Lease Bonus

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

($ In thousands)

 

2019

 

2018

 

2019

 

2018

Net Income (Loss)

 

$

(3,207

)

 

$

9,351

 

 

$

829

 

 

$

17,548

 

Add:

 

 

 

 

 

 

 

 

Loss on extinguishment of debt

 

6,933

 

 

 

 

6,933

 

 

 

Adjusted Net Income (Loss)

 

$

3,726

 

 

$

9,351

 

 

$

7,762

 

 

$

17,548

 

Add:

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

6,760

 

 

3,213

 

 

11,876

 

 

5,758

 

Share based compensation expense

 

6,495

 

 

 

 

6,495

 

 

 

Interest expense

 

1,270

 

 

652

 

 

5,095

 

 

1,126

 

Loss on derivative instruments, net

 

 

 

555

 

 

612

 

 

914

 

Income tax expense

 

117

 

 

12

 

 

307

 

 

28

 

Less:

 

 

 

 

 

 

 

 

Gain on derivative instruments, net

 

73

 

 

 

 

 

 

 

Other income, net

 

6

 

 

6

 

 

35

 

 

10

 

Gain on sale and distribution of equity securities

 

 

 

 

 

 

 

823

 

Adjusted EBITDA

 

$

18,289

 

 

$

13,777

 

 

$

32,112

 

 

$

24,541

 

Less:

 

 

 

 

 

 

 

 

Lease bonus

 

1,480

 

 

2,367

 

 

2,155

 

 

4,586

 

Adjusted EBITDA ex Lease Bonus

 

$

16,809

 

 

$

11,410

 

 

$

29,957

 

 

$

19,955

 

Reconciliation of Discretionary Cash Flow

($ In thousands)

 

Three Months Ended June 30, 2019

Adjusted EBITDA (1)

 

$

18,289

 

Less:

 

 

Adjusted EBITDA attributable to non-controlling interest

 

(10,366

)

Adjusted EBITDA attributable to Class A Common Stock

 

$

7,923

 

Less:

 

 

Cash interest expense

 

550

 

Cash taxes

 

117

 

Dividend equivalent rights

 

 

Retained cash flow

 

 

Discretionary cash flow to Class A Common Stock

 

$

7,256

 

Shares of Class A Common Stock

 

21,997

 

Discretionary cash flow available per share of Class A Common Stock

 

$

0.33

 

(1) Refer to Reconciliation of Adjusted EBITDA from Net Income (Loss) above.

UNAUDITED CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS

($ In thousands, except share amounts)

 

June 30,

 

December 31,

ASSETS

 

2019

 

2018

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

82,727

 

 

$

31,985

 

Restricted cash

 

 

 

474

 

Accounts receivable

 

20,262

 

 

20,695

 

Prepaid expenses and other

 

2,208

 

 

7,103

 

Short-term derivative assets

 

162

 

 

1,057

 

Total current assets

 

105,359

 

 

61,314

 

Oil and gas properties, at cost, using the full cost method of accounting

 

 

 

 

Unevaluated property

 

244,755

 

 

228,151

 

Evaluated property

 

355,563

 

 

289,851

 

Less accumulated depreciation, depletion and amortization

 

(41,214

)

 

(27,628

)

Oil and gas properties - net

 

559,104

 

 

490,374

 

Other property and equipment

 

5,521

 

 

5,408

 

Less accumulated depreciation

 

(3,406

)

 

(3,115

)

Other property and equipment - net

 

2,115

 

 

2,293

 

Deferred tax asset

 

9,913

 

 

 

Other assets, net

 

1,151

 

 

45

 

Total assets

 

$

677,642

 

 

$

554,026

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’/MEMBERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued liabilities

 

$

7,173

 

 

$

5,662

 

Current portion of debt

 

 

 

2,188

 

Total current liabilities

 

7,173

 

 

7,850

 

Long-term debt

 

 

 

168,517

 

Deferred tax liability

 

 

 

3,684

 

Other non-current liabilities

 

51

 

 

27

 

Temporary equity

 

611,962

 

 

 

Shareholders’ and members’ equity:

 

 

 

 

Members’ contributed capital

 

 

 

208,728

 

Preferred stock, $0.01 par value; 50,000,000 authorized; no shares issued and outstanding

 

 

 

 

Class A common stock, $0.01 par value; 400,000,000 authorized, 21,997,198 shares issued and outstanding at June 30, 2019

 

220

 

 

 

Class B common stock, $0.01 par value; 150,000,000 authorized, 28,777,802 shares issued and outstanding at June 30, 2019

 

 

 

 

Additional paid-in capital

 

57,719

 

 

(3,057

)

Retained earnings

 

517

 

 

168,277

 

Total shareholders’ equity attributable to Brigham Minerals, Inc. and members’ equity

 

58,456

 

 

373,948

 

Total liabilities and shareholders’ and members’ equity

 

$

677,642

 

 

$

554,026

 

UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

(In thousands, except per share data)

 

2019

 

2018

 

2019

 

2018

REVENUES

 

 

 

 

 

 

 

 

Mineral and royalty revenues

 

$

23,049

 

 

$

14,522

 

 

$

40,639

 

 

$

26,386

 

Lease bonus and other revenues

 

1,480

 

 

2,367

 

 

2,155

 

 

4,586

 

Total revenues

 

24,529

 

 

16,889

 

 

42,794

 

 

30,972

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

Gathering, transportation and marketing

 

1,523

 

 

912

 

 

2,637

 

 

2,007

 

Severance and ad valorem taxes

 

1,450

 

 

882

 

 

2,829

 

 

1,642

 

Depreciation, depletion and amortization

 

6,760

 

 

3,213

 

 

11,876

 

 

5,758

 

General and administrative (excluding share-based compensation)

 

3,267

 

 

1,318

 

 

5,216

 

 

2,782

 

Total operating expenses (excluding share-based compensation)

 

13,000

 

 

6,325

 

 

22,558

 

 

12,189

 

General and administrative, share-based compensation

 

6,495

 

 

 

 

6,495

 

 

 

Total operating expenses

 

19,495

 

 

6,325

 

 

29,053

 

 

12,189

 

INCOME FROM OPERATIONS

 

5,034

 

 

10,564

 

 

13,741

 

 

18,783

 

Gain (loss) on derivative instruments, net

 

73

 

 

(555

)

 

(612

)

 

(914

)

Interest expense, net

 

(1,270

)

 

(652

)

 

(5,095

)

 

(1,126

)

Loss on extinguishment of debt

 

(6,933

)

 

 

 

(6,933

)

 

 

Gain on sale and distribution of equity securities

 

 

 

 

 

 

 

823

 

Other income, net

 

6

 

 

6

 

 

35

 

 

10

 

(Loss) income before income taxes

 

(3,090

)

 

9,363

 

 

1,136

 

 

17,576

 

Income tax expense

 

117

 

 

12

 

 

307

 

 

28

 

NET (LOSS) INCOME

 

$

(3,207

)

 

$

9,351

 

 

$

829

 

 

$

17,548

 

Less: net income attributable to Predecessor

 

(1,590

)

 

(9,351

)

 

(5,092

)

 

(17,548

)

Less: net loss attributable to temporary equity

 

2,941

 

 

 

 

2,941

 

 

 

Net loss attributable to Brigham Minerals, Inc. shareholders

 

$

(1,856

)

 

$

 

 

$

(1,322

)

 

$

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF CASH FLOWS

 

 

Six Months Ended June 30,

(In thousands)

 

2019

 

2018

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

Net income

 

$

829

 

 

$

17,548

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation, depletion and amortization

 

11,876

 

 

5,758

 

Share-based compensation expense

 

6,495

 

 

 

Loss on extinguishment of debt

 

6,933

 

 

 

Amortization of debt issue costs

 

291

 

 

74

 

Deferred income taxes

 

66

 

 

31

 

Loss on derivative instruments, net

 

612

 

 

914

 

Net cash received (paid) for derivative settlements

 

238

 

 

(365

)

Gain on sale of equity securities

 

 

 

(823

)

Bad debt expense

 

293

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

Decrease (increase) in accounts receivable

 

185

 

 

(6,146

)

Decrease (increase) in other current assets

 

1,268

 

 

(496

)

Increase in other deferred charges

 

 

 

(427

)

Increase (decrease) in accounts payable and accrued liabilities

 

481

 

 

(1,169

)

Net cash provided by operating activities

 

$

29,567

 

 

$

14,899

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

Acquisitions of oil and gas properties

 

(81,053

)

 

(105,041

)

Additions to other fixed assets

 

(113

)

 

(334

)

Proceeds from sale of oil and gas properties, net

 

2,001

 

 

125

 

Changes in restricted cash held in escrow for acquisitions

 

33

 

 

(3,953

)

Net cash used in investing activities

 

$

(79,132

)

 

$

(109,203

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

Repayments of short-term debt

 

(4,596

)

 

 

Repayments of long-term debt

 

(195,404

)

 

 

Borrowings of long-term debt

 

25,000

 

 

43,000

 

Payment of debt extinguishment fees

 

(2,090

)

 

 

Proceeds from issuance of Class A common stock sold in initial public offering, net of offering costs

 

278,541

 

 

 

Capital contributions

 

 

 

46,011

 

Loan closing costs

 

(1,144

)

 

(3

)

Net cash provided by financing activities

 

$

100,307

 

 

$

89,008

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

50,742

 

 

(5,296

)

Cash and cash equivalents, beginning of period

 

31,985

 

 

6,886

 

Cash and cash equivalents, end of period

 

82,727

 

 

1,590

 

Supplemental disclosure of non-cash activity:

 

 

 

 

Equity securities distributed

 

$

 

 

$

4,246

 

Accrued capital expenditures

 

1,679

 

 

43

 

Capitalized share-based compensation expense

 

1,010

 

 

 

Increase (decrease) in temporary equity for adjustment to fair value, with offsetting decrease (increase) in additional paid-in capital

 

97,344

 

 

 

 

 

 

 

 

ABOUT BRIGHAM MINERALS, INC.

Brigham Minerals is an Austin, Texas-based company that acquires and actively manages a portfolio of mineral and royalty interests in the core of some of the most active, highly economic, liquids-rich resource basins across the continental United States. Brigham Minerals’ assets are located in the Permian Basin in Texas and New Mexico, the SCOOP and STACK plays in the Anadarko Basin of Oklahoma, the DJ Basin in Colorado and Wyoming, and the Williston Basin in North Dakota. The Company’s primary business objective is to maximize risk-adjusted total return to its shareholders by both capturing organic growth in its existing assets as well as leveraging its highly experienced technical evaluation team to continue acquiring minerals.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including the Company’s capital expenditure levels and other guidance included in this press release. These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include, but are not limited to, downturns in operator activity due to commodity price fluctuations, the Company’s ability to integrate acquisitions into its existing business, changes in oil, natural gas and NGL prices, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, operational factors affecting the commencement or maintenance of producing wells on the Company’s properties, the condition of the capital markets generally, as well as the Company’s ability to access them, the proximity to and capacity of transportation facilities, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Company’s business and other important factors. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company’s actual results and plans could differ materially from those expressed in any forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes 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.

SOURCE Brigham Minerals, Inc.

At the Company:
Brigham Minerals, Inc.
Blake C. Williams
Chief Financial Officer
(512) 220-6350

Or

For Investor and Media Inquiries:
Lincoln Churchill Advisors
Julie D. Baughman
(512) 220-1500
InvestorRelations@brighamminerals.com


Source: Business Wire (August 8, 2019 - 5:36 PM EDT)

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