UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On August 5, 2021, Gulfport Energy Corporation (“Gulfport”) issued a press release reporting its financial and operational results for the second quarter ended June 30, 2021 and providing an update on its 2021 activities. A copy of the press release and supplemental financial information are attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K.
Item 7.01. Regulation FD Disclosure.
Also on August 5, 2021, Gulfport posted an updated investor presentation on its website. The presentation may be found on Gulfport’s website at http://www.gulfportenergy.com by selecting “Investors,” “Company Information” and then “Presentations.”
The information in the press release and updated investor presentation is being furnished, not filed, pursuant to Item 2.02 and Item 7.01. Accordingly, the information in the press release and updated investor presentation will not be incorporated by reference into any registration statement filed by Gulfport under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| Number |
Exhibit | |
| 99.1 | Press release dated August 5, 2021 entitled “Gulfport Energy Corporation Reports Second Quarter 2021 Financial and Operating Results.” | |
| 99.2 | Supplemental Financial Information | |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| GULFPORT ENERGY CORPORATION | ||||||
| Date: August 5, 2021 | By: | /s/ William J. Buese | ||||
| William J. Buese | ||||||
| Chief Financial Officer | ||||||
Exhibit 99.1
| Press Release |
| |
|
Gulfport Energy Corporation Reports Second Quarter 2021 Financial and Operating Results | ||
OKLAHOMA CITY (August 5, 2021) Gulfport Energy Corporation (NASDAQ: GPOR) (“Gulfport” or the “Company”) today reported financial and operating results for the three months and six months ended June 30, 2021 and provided its 2021 development plan and financial guidance.
Second Quarter 2021 Highlights(1)
| • | Emerged from restructuring process on May 17, 2021 |
| • | Right-sized firm transportation commitments and negotiated new, cost-competitive midstream agreements to better align with operating plan |
| • | Reduced total debt by more than $1.2 billion and reduced annual cash interest expense by over $90 million |
| • | Reported $87.3 million of Net Cash Provided by Operating Activities |
| • | Delivered $74.4 million of Free Cash Flow (non-GAAP measure) |
2021 Full Year Forecast
| • | Intend to invest $290 million to $310 million of capital |
| • | Expect to deliver full year net production of 975 MMcfe to 1,000 MMcfe per day |
| • | Forecast to reduce total per unit expense(2) by more than 23% when compared to 2020 |
| • | Plan to generate approximately $290 million to $310 million of Free Cash Flow (non-GAAP measure) |
“During the second quarter 2021, we emerged from our restructuring process with a continuous improvement mindset, focused on cost effective production and capital discipline, supported by a strong balance sheet. We are fully committed to safely executing in the field and improving our Environmental, Social and Governance performance. We flattened our corporate structure, reduced overhead and are focused on optimizing our development program to deliver the highest returns possible to our investors,” commented Tim Cutt, Interim CEO of Gulfport.
“We plan to develop our assets in a disciplined manner, investing approximately $300 million of capital to deliver 1.0 Bcfe per day of production and targeting sustainable cash flow generation of roughly $300 million per year. We believe that our ability to deliver substantial free cash flow, with top-quartile operating costs and leverage, provides a unique opportunity for investors.”
A company presentation to accompany the Gulfport earnings conference call can be accessed by clicking here.
| 1. | Second quarter highlights and full year outlook reflect the combination of Successor and Predecessor company results, unless otherwise noted. The Company refers to the post-emergence reorganized company as the Successor for periods subsequent to May 18, 2021, and to the pre-emergence company as the Predecessor for periods on or prior to May 17, 2021. |
| 2. | Includes lease operating expense, midstream transportation, gathering and processing expense, taxes other than income, recurring general and administrative expense and interest. |
Fresh Start Accounting and Predecessor and Successor Periods
On May 17, 2021 (“Emergence Date”), Gulfport successfully completed its restructuring process and emerged from Chapter 11 protection. In connection with the Company’s emergence from bankruptcy, the Company qualified for and applied fresh start accounting on the Emergence Date. As a result of the application of fresh start accounting, the consolidated financial statements after May 17, 2021, are not comparable with the consolidated financial statements on or prior to that date. References to “Successor” refer to the Gulfport entity after emergence from bankruptcy on the Emergence Date. References to “Predecessor” refer to the Gulfport entity prior to emergence from bankruptcy.
2020 Corporate Sustainability Report
Gulfport today released its 2020 Corporate Sustainability Report. The report highlights Gulfport’s commitment to environmental excellence, managing and reducing risks, and our commitment to the well-being of our employees and the communities in which we operate. The report is available at gulfportenergy.com/sustainability.
Operational Update
For the second quarter of 2021, the Company spud one gross operated well in the Utica with a planned lateral length of 12,100 feet and two gross operated wells in the SCOOP with planned lateral lengths of 9,700 feet. In addition, Gulfport turned-to-sales two gross operated wells in the Utica and eight gross operated wells in the SCOOP. The average lateral length for the wells turned-to-sales was approximately 13,000 feet in the Utica and 9,300 feet in the SCOOP.
Gulfport’s net daily production for the second quarter of 2021 averaged 989.1 MMcfe per day, primarily consisting of 744.3 MMcfe per day in the Utica and 244.4 MMcfe per day in the SCOOP. For the second quarter of 2021, Gulfport’s net daily production mix was comprised of approximately 91% natural gas, 6% natural gas liquids (“NGL”) and 3% oil.
| Non-GAAP Combined |
Predecessor | |||||||
| Three Months Ended June 30, 2021 |
Three Months Ended June 30, 2020 |
|||||||
| Production |
||||||||
| Natural gas (Mcf/day) |
895,101 | 933,936 | ||||||
| Oil and condensate (Bbl/day) |
4,971 | 4,577 | ||||||
| NGL (Bbl/day) |
10,687 | 10,945 | ||||||
|
|
|
|
|
|||||
| Total (Mcfe/day) |
989,053 | 1,027,065 | ||||||
|
|
|
|
|
|||||
| Average Prices |
||||||||
| Natural Gas: |
||||||||
| Average price without the impact of derivatives ($/Mcf) |
$ | 2.71 | $ | 1.66 | ||||
| Impact from settled derivatives ($/Mcf) |
(0.12 | ) | 0.99 | |||||
|
|
|
|
|
|||||
| Average price, including settled derivatives ($/Mcf) |
$ | 2.59 | $ | 2.65 | ||||
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|
|||||
| Oil: |
||||||||
| Average price without the impact of derivatives ($/Bbl) |
$ | 62.95 | $ | 20.14 | ||||
| Impact from settled derivatives ($/Bbl) |
— | 97.12 | ||||||
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|
|||||
| Average price, including settled derivatives ($/Bbl) |
$ | 62.95 | $ | 117.26 | ||||
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| NGL: |
||||||||
| Average price without the impact of derivatives ($/Bbl) |
$ | 29.89 | $ | 10.29 | ||||
| Impact from settled derivatives ($/Bbl) |
— | — | ||||||
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|
|||||
| Average price, including settled derivatives ($/Bbl) |
$ | 29.89 | $ | 10.29 | ||||
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| Total: |
||||||||
| Average price without the impact of derivatives ($/Mcfe) |
$ | 3.09 | $ | 1.70 | ||||
| Impact from settled derivatives ($/Mcfe) |
(0.11 | ) | 1.33 | |||||
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|
|||||
| Average price, including settled derivatives ($/Mcfe) |
$ | 2.98 | $ | 3.03 | ||||
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| Selected operating metrics |
||||||||
| Lease operating expenses ($/Mcfe) |
$ | 0.12 | $ | 0.14 | ||||
| Taxes other than income ($/Mcfe) |
$ | 0.10 | $ | 0.07 | ||||
| Transportation, gathering, processing and compression expense ($/Mcfe) |
$ | 1.07 | $ | 1.22 | ||||
| Recurring general and administrative expenses ($ millions) (non-GAAP) |
$ | 0.12 | $ | 0.16 | ||||
| Interest expenses ($/Mcfe) |
$ | 0.13 | $ | 0.35 | ||||
Capital Investment
Capital investment was $67.8 million (on an incurred basis) for the second quarter of 2021, of which $67.6 million related to drilling and completion (“D&C”) activity and $0.2 million related to leasehold and land investment.
For the six-month period ended June 30, 2021, capital investment was $140.5 million (on an incurred basis), of which $136.2 million related to D&C activity and $4.3 million to leasehold and land investment.
Financial Position and Liquidity
As of June 30, 2021, the Company had $9.4 million of cash and cash equivalents, $105.0 million of borrowings under its revolving credit facility, $180.0 million of borrowings under its term loan, $114.8 million of letters of credit outstanding and $550 million of outstanding 2026 senior notes. The Company was in compliance with the covenants under its credit agreement.
The Company’s liquidity at June 30, 2021 totaled approximately $150 million, comprised of the $9.4 million of cash and cash equivalents and approximately $141 million of available borrowing capacity under our revolving credit facility, after adjusting for the $40 million liquidity blocker.
On June 30, 2021, the company paid dividends on its New Preferred Stock, which included 1,006 shares of New Preferred Stock paid in kind and approximately $25,000 of cash-in-lieu of fractional shares.
2021 Development Plan and Financial Guidance
Gulfport released operational guidance and outlook for the full year 2021, including full-year expense estimates and projections for production and capital expenditures. Gulfport’s 2021 guidance assumes commodity strip prices as of July 7, 2021, adjusted for applicable commodity and location differentials, and no property acquisitions or divestitures.
| Year Ending | ||||||||
| 12/31/21 | ||||||||
| Low | High | |||||||
| Production |
||||||||
| Average Daily Gas Equivalent (MMcfepd) |
975 | 1,000 | ||||||
| % Gas |
~90% | |||||||
| Realizations (before hedges) |
||||||||
| Natural Gas (Differential to NYMEX Settled Price) ($/Mcf) |
$ | (0.10 | ) | $ | (0.20 | ) | ||
| NGL (% of WTI) |
45 | % | 50 | % | ||||
| Oil (Differential to NYMEX WTI) ($/Bbl) |
$ | (3.00 | ) | $ | (4.00 | ) | ||
| Operating Costs |
||||||||
| Lease operating expense ($/Mcfe) |
$ | 0.13 | $ | 0.15 | ||||
| Taxes other than income ($/Mcfe) |
$ | 0.11 | $ | 0.13 | ||||
| Transportation, gathering, processing and compression(1) ($/Mcfe) |
$ | 0.92 | $ | 0.96 | ||||
| Recurring general and administrative(2,3) (in millions) |
$ | 45 | $ | 47 | ||||
| (1) | Assumes rejection of TC Energy & Rover firm transportation agreements. |
| (2) | Recurring G&A includes capitalization. It excludes non-cash stock compensation and expenses related to certain legal and restructuring charges. |
| Total | ||||||||
| Capital Expenditures (incurred) | (in millions) | |||||||
| D&C |
$ | 270 | $ | 290 | ||||
| Leasehold and Land |
$20 | |||||||
|
|
|
|||||||
| Total |
$ | 290 | $ | 310 | ||||
|
|
|
|||||||
| Free Cash Flow(3) |
$ | 290 | $ | 310 | ||||
| (3) | This is a non-GAAP measure. Reconciliations of these non-GAAP measures and other disclosures are provided with the supplemental financial tables available on our website at www.gulfportenergy.com. |
Derivatives
The following below details Gulfport’s hedging positions as of August 5, 2021:
| 3Q2021 | 4Q2021 | 2021(1) | 2022 | |||||||||||||
| Natural Gas Contract Summary (NYMEX): |
||||||||||||||||
| Fixed Price Swaps |
||||||||||||||||
| Volume (BBtupd) |
245 | 198 | 222 | 141 | ||||||||||||
| Weighted Average Price ($/MMBtu) |
$ | 2.75 | $ | 2.85 | $ | 2.79 | $ | 2.88 | ||||||||
| Fixed Price Collars |
||||||||||||||||
| Volume (BBtupd) |
540 | 610 | 575 | 407 | ||||||||||||
| Weighted Average Floor Price ($/MMBtu) |
$ | 2.56 | $ | 2.59 | $ | 2.58 | $ | 2.58 | ||||||||
| Weighted Average Ceiling Price ($/MMBtu) |
$ | 2.91 | $ | 3.02 | $ | 2.97 | $ | 2.91 | ||||||||
| Fixed Price Calls Sold |
||||||||||||||||
| Volume (BBtupd) |
— | — | — | 153 | ||||||||||||
| Weighted Average Price ($/MMBtu) |
$ | — | $ | — | $ | — | $ | 2.90 | ||||||||
| Rex Zone 3 Basis |
||||||||||||||||
| Volume (BBtupd) |
50 | 83 | 67 | 25 | ||||||||||||
| Differential ($/MMBtu) |
$ | (0.23 | ) | $ | (0.12 | ) | $ | (0.16 | ) | $ | (0.10 | ) | ||||
| Oil Contract Summary (WTI): |
||||||||||||||||
| Fixed Price Swaps |
||||||||||||||||
| Volume (Bblpd) |
3,500 | 3,000 | 3,250 | 2,104 | ||||||||||||
| Weighted Average Price ($/Bbl) |
$ | 57.09 | $ | 57.67 | $ | 57.35 | $ | 66.23 | ||||||||
| Fixed Price Collars |
||||||||||||||||
| Volume (Bblpd) |
— | — | — | 1,500 | ||||||||||||
| Weighted Average Floor Price ($/Bbl) |
$ | — | $ | — | $ | — | $ | 55.00 | ||||||||
| Weighted Average Ceiling Price ($/Bbl) |
$ | — | $ | — | $ | — | $ | 60.00 | ||||||||
| NGL Contract Summary: |
||||||||||||||||
| C3 Propane Fixed Price Swaps |
||||||||||||||||
| Volume (Bblpd) |
3,100 | 3,100 | 3,100 | 496 | ||||||||||||
| Weighted Average Price ($/Bbl) |
$ | 27.80 | $ | 27.80 | $ | 27.80 | $ | 27.30 | ||||||||
| (1) | July 1 - December 31, 2021 |
Second Quarter 2021 Conference Call
Gulfport will host a teleconference and webcast to discuss its second quarter of 2021 results beginning at 9:00 a.m. ET (8:00 a.m. CT) on Friday, August 6, 2021.
The conference call can be heard live through a link on the Gulfport website, www.gulfportenergy.com. In addition, you may participate in the conference call by dialing 866-373-3408 domestically or 412-902-1039 internationally. A replay of the conference call will be
available on the Gulfport website and a telephone audio replay will be available from August 6, 2021 to August 20, 2021, by calling 877-660-6853 domestically or 201-612-7415 internationally and then entering the replay passcode 13721683.
Financial Statements and Guidance Documents
Second quarter of 2021 earnings results and supplemental information regarding quarterly data such as production volumes, pricing, financial statements, and non-GAAP reconciliations are available on our website at ir.gulfportenergy.com/.
Non-GAAP Disclosures
This news release includes non-GAAP financial measures. Such non-GAAP measures should be not considered as an alternative to GAAP measures. Reconciliations of these non-GAAP measures and other disclosures are provided with the supplemental financial tables available on our website at ir.gulfportenergy.com/.
About Gulfport
Gulfport is an independent natural gas-weighted exploration and production company focused on the exploration, acquisition and production of natural gas, crude oil and NGL in the United States with primary focus in the Appalachia and Anadarko basins. Our principal properties are located in Eastern Ohio targeting the Utica formation and in central Oklahoma targeting the SCOOP Woodford and SCOOP Springer formations.
Forward Looking Statements
This press release includes “forward-looking statements” for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements other than statements of historical fact. They include statements regarding Gulfport’s current expectations, management’s outlook guidance or forecasts of future events, projected cash flow and liquidity, its ability to enhance cash flow and financial flexibility, future production and commodity mix, plans and objectives for future operations, the ability of our employees, portfolio strength and operational leadership to create long-term value, the rejection of certain midstream contracts and the assumptions on which such statements are based. Gulfport believes the expectations and forecasts reflected in the forward-looking statements are reasonable, Gulfport can give no assurance they will prove to have been correct. They can be affected by inaccurate or changed assumptions or by known or unknown risks and uncertainties. Important risks, assumptions and other important factors that could cause future results to differ materially from those expressed in the forward-looking statements are described under “Risk Factors” in Item 1A of Gulfport’s annual report on Form 10-K for the year ended December 31, 2020 and any updates to those factors set forth in Gulfport’s subsequent quarterly reports on Form 10-Q or current reports on Form 8-K (available at https://www.ir.gulfportenergy.com/all-sec-filings). Gulfport undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.
Investors should note that Gulfport announces financial information in SEC filings, press releases and public conference calls. Gulfport may use the Investors section of its website (www.gulfportenergy.com) to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on Gulfport’s website is not part of this filing.
Investor Contact:
Jessica Antle – Director, Investor Relations
405-252-4550
Media Contact
Reevemark
Hugh Burns / Paul Caminiti / Nicholas Leasure
212-433-4600
Exhibit 99.2
Three months and six months ended June 30, 2021
Supplemental Information of Gulfport Energy
| Table of Contents: | Page: | |||
| Production Volumes by Asset Area |
2 | |||
| Production and Pricing |
4 | |||
| Consolidated Statements of Income |
6 | |||
| Consolidated Balance Sheets |
8 | |||
| Consolidated Statement of Cash Flows |
10 | |||
| 2021E Guidance |
11 | |||
| Non-GAAP Reconciliations |
12 | |||
| Definitions |
13 | |||
| Adjusted Net Income |
14 | |||
| Adjusted EBITDA |
16 | |||
| Free Cash Flow |
18 | |||
| Recurring General and Administrative Expenses |
20 | |||
Production Volumes by Asset Area : Three months ended, June 30, 2021
Production Volumes
| Successor | Predecessor | Non-GAAP Combined |
Predecessor | |||||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from April 1, 2021 through May 17, 2021 |
Three Months Ended June 30, 2021 |
Three Months Ended June 30, 2020 |
|||||||||||||
| Natural gas (Mcf/day) |
||||||||||||||||
| Utica |
691,876 | 748,885 | 721,321 | 775,070 | ||||||||||||
| SCOOP |
194,513 | 154,224 | 173,704 | 158,813 | ||||||||||||
| Other |
127 | 29 | 76 | 53 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
886,516 | 903,138 | 895,101 | 933,936 | ||||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Oil and condensate (Bbl/day) |
||||||||||||||||
| Utica |
1,125 | 1,208 | 1,168 | 308 | ||||||||||||
| SCOOP |
4,824 | 2,757 | 3,756 | 4,186 | ||||||||||||
| Other |
71 | 24 | 47 | 83 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
6,020 | 3,989 | 4,971 | 4,577 | ||||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| NGL (Bbl/day) |
||||||||||||||||
| Utica |
2,735 | 2,586 | 2,658 | 2,532 | ||||||||||||
| SCOOP |
9,073 | 7,047 | 8,027 | 8,411 | ||||||||||||
| Other |
4 | 2 | 2 | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
11,812 | 9,635 | 10,687 | 10,945 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Combined (Mcfe/day) |
||||||||||||||||
| Utica |
715,042 | 771,649 | 744,279 | 792,106 | ||||||||||||
| SCOOP |
277,897 | 213,043 | 244,401 | 234,396 | ||||||||||||
| Other |
577 | 182 | 373 | 563 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
993,516 | 984,874 | 989,053 | 1,027,065 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Page 2
Production Volumes by Asset Area : Six months ended, June 30, 2021
Production Volumes
| Successor | Predecessor | Non-GAAP Combined |
Predecessor | |||||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from January 1, 2021 through May 17, 2021 |
Six Months Ended June 30, 2021 |
Six Months Ended June 30, 2020 |
|||||||||||||
| Natural gas (Mcf/day) |
||||||||||||||||
| Utica |
691,876 | 780,791 | 759,176 | 780,426 | ||||||||||||
| SCOOP |
194,513 | 126,294 | 142,878 | 159,349 | ||||||||||||
| Other |
127 | 63 | 78 | 46 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
886,516 | 907,148 | 902,132 | 939,821 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Oil and condensate (Bbl/day) |
||||||||||||||||
| Utica |
1,125 | 1,336 | 1,285 | 450 | ||||||||||||
| SCOOP |
4,824 | 2,508 | 3,071 | 4,680 | ||||||||||||
| Other |
71 | 35 | 44 | 81 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
6,020 | 3,879 | 4,400 | 5,211 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NGL (Bbl/day) |
||||||||||||||||
| Utica |
2,735 | 2,638 | 2,661 | 2,865 | ||||||||||||
| SCOOP |
9,073 | 6,200 | 6,899 | 8,692 | ||||||||||||
| Other |
4 | 3 | 3 | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
11,812 | 8,841 | 9,563 | 11,558 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Combined (Mcfe/day) |
||||||||||||||||
| Utica |
715,042 | 804,633 | 782,854 | 800,313 | ||||||||||||
| SCOOP |
277,897 | 178,545 | 202,697 | 239,583 | ||||||||||||
| Other |
577 | 288 | 358 | 536 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total |
993,516 | 983,466 | 985,909 | 1,040,432 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Page 3
Production and Pricing : Three months ended, June 30, 2021
The following table summarizes production and related pricing for the three months ended June 30, 2021, as compared to such data for the three months ended June 30, 2020:
| Successor | Predecessor | Non-GAAP Combined |
Predecessor | |||||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from April 1, 2021 through May 17, 2021 |
Three Months Ended June 30, 2021 |
Three Months Ended June 30, 2020 |
|||||||||||||
| Natural gas sales |
||||||||||||||||
| Natural gas production volumes (MMcf) |
39,007 | 42,448 | 81,455 | 84,988 | ||||||||||||
| Natural gas production volumes (MMcf) per day |
887 | 903 | 895 | 934 | ||||||||||||
| Total sales |
111,718 | 109,069 | 220,787 | 140,688 | ||||||||||||
| Average price without the impact of derivatives ($/Mcf) |
2.86 | 2.57 | 2.71 | 1.66 | ||||||||||||
| Impact from settled derivatives ($/Mcf) |
(0.17 | ) | (0.08 | ) | (0.12 | ) | 0.99 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Average price, including settled derivatives ($/Mcf) |
2.69 | 2.49 | 2.59 | 2.65 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Oil and condensate sales |
||||||||||||||||
| Oil and condensate production volumes (MBbl) |
265 | 187 | 452 | 417 | ||||||||||||
| Oil and condensate production volumes (MBbl) per day |
6 | 4 | 5 | 5 | ||||||||||||
| Total sales |
17,587 | 10,867 | 28,454 | 8,390 | ||||||||||||
| Average price without the impact of derivatives ($/Bbl) |
66.37 | 58.11 | 62.95 | 20.14 | ||||||||||||
| Impact from settled derivatives ($/Bbl) |
— | — | — | 97.12 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Average price, including settled derivatives ($/Bbl) |
66.37 | 58.11 | 62.95 | 117.26 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NGL sales |
||||||||||||||||
| NGL production volumes (MBbl) |
520 | 453 | 973 | 996 | ||||||||||||
| NGL production volumes (MBbl) per day |
12 | 10 | 11 | 11 | ||||||||||||
| Total sales |
16,077 | 13,004 | 29,081 | 10,252 | ||||||||||||
| Average price without the impact of derivatives ($/Bbl) |
30.92 | 28.71 | 29.89 | 10.29 | ||||||||||||
| Impact from settled derivatives ($/Bbl) |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Average price, including settled derivatives ($/Bbl) |
30.92 | 28.71 | 29.89 | 10.29 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Natural gas, oil and condensate and NGL sales |
||||||||||||||||
| Natural gas equivalents (MMcfe) |
43,715 | 46,289 | 90,004 | 93,463 | ||||||||||||
| Natural gas equivalents (MMcfe) per day |
994 | 985 | 989 | 1,027 | ||||||||||||
| Total sales |
145,382 | 132,940 | 278,322 | 159,330 | ||||||||||||
| Average price without the impact of derivatives ($/Mcfe) |
3.33 | 2.87 | 3.09 | 1.70 | ||||||||||||
| Impact from settled derivatives ($/Mcfe) |
(0.15 | ) | (0.08 | ) | (0.11 | ) | 1.33 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Average price, including settled derivatives ($/Mcfe) |
3.18 | 2.79 | 2.98 | 3.03 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Production Costs: |
||||||||||||||||
| Average lease operating expenses ($/Mcfe) |
$ | 0.09 | $ | 0.15 | $ | 0.12 | $ | 0.14 | ||||||||
| Average taxes other than income ($/Mcfe) |
$ | 0.12 | $ | 0.08 | $ | 0.10 | $ | 0.07 | ||||||||
| Average transportation, gathering, processing and compression ($/Mcfe) |
$ | 0.95 | $ | 1.19 | $ | 1.07 | $ | 1.22 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total lease operating expenses, midstream costs and production taxes ($/Mcfe) |
1.16 | 1.42 | 1.29 | 1.43 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Page 4
Production and Pricing : Six months ended, June 30, 2021
The following table summarizes production and related pricing for the six months ended June 30, 2021, as compared to such data for the six months ended June 30, 2020:
| Successor | Predecessor | Non-GAAP Combined |
Predecessor | |||||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from January 1, 2021 through May 17, 2021 |
Six Months Ended June 30, 2021 |
Six Months Ended June 30, 2020 |
|||||||||||||
| Natural gas sales |
||||||||||||||||
| Natural gas production volumes (MMcf) |
39,007 | 124,279 | 163,286 | 171,047 | ||||||||||||
| Natural gas production volumes (MMcf) per day |
887 | 907 | 902 | 940 | ||||||||||||
| Total sales |
111,718 | 344,390 | 456,108 | 301,696 | ||||||||||||
| Average price without the impact of derivatives ($/Mcf) |
2.86 | 2.77 | 2.79 | 1.76 | ||||||||||||
| Impact from settled derivatives ($/Mcf) |
(0.17 | ) | (0.03 | ) | (0.06 | ) | 0.85 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Average price, including settled derivatives ($/Mcf) |
2.69 | 2.74 | 2.73 | 2.61 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Oil and condensate sales |
||||||||||||||||
| Oil and condensate production volumes (MBbl) |
265 | 531 | 796 | 948 | ||||||||||||
| Oil and condensate production volumes (MBbl) per day |
6 | 4 | 4 | 5 | ||||||||||||
| Total sales |
17,587 | 29,106 | 46,693 | 31,541 | ||||||||||||
| Average price without the impact of derivatives ($/Bbl) |
66.37 | 54.81 | 58.66 | 33.26 | ||||||||||||
| Impact from settled derivatives ($/Bbl) |
— | — | — | 52.67 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Average price, including settled derivatives ($/Bbl) |
66.37 | 54.81 | 58.66 | 85.93 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NGL sales |
||||||||||||||||
| NGL production volumes (MBbl) |
520 | 1,211 | 1,731 | 2,103 | ||||||||||||
| NGL production volumes (MBbl) per day |
12 | 9 | 10 | 12 | ||||||||||||
| Total sales |
16,077 | 36,780 | 52,857 | 27,165 | ||||||||||||
| Average price without the impact of derivatives ($/Bbl) |
30.92 | 30.37 | 30.54 | 12.92 | ||||||||||||
| Impact from settled derivatives ($/Bbl) |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Average price, including settled derivatives ($/Bbl) |
30.92 | 30.37 | 30.54 | 12.92 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Natural gas, oil and condensate and NGL sales |
||||||||||||||||
| Natural gas equivalents (MMcfe) |
43,715 | 134,735 | 178,450 | 189,359 | ||||||||||||
| Natural gas equivalents (MMcfe) per day |
994 | 983 | 986 | 1,040 | ||||||||||||
| Total sales |
145,382 | 410,276 | 555,658 | 360,402 | ||||||||||||
| Average price without the impact of derivatives ($/Mcfe) |
3.33 | 3.05 | 3.11 | 1.90 | ||||||||||||
| Impact from settled derivatives ($/Mcfe) |
(0.15 | ) | (0.02 | ) | (0.06 | ) | 1.03 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Average price, including settled derivatives ($/Mcfe) |
3.18 | 3.03 | 3.05 | 2.93 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Production Costs: |
||||||||||||||||
| Average lease operating expenses ($/Mcfe) |
$ | 0.09 | $ | 0.14 | $ | 0.13 | $ | 0.15 | ||||||||
| Average taxes other than income ($/Mcfe) |
$ | 0.12 | $ | 0.09 | $ | 0.10 | $ | 0.07 | ||||||||
| Average transportation, gathering, processing and compression ($/Mcfe) |
$ | 0.95 | $ | 1.20 | $ | 1.13 | $ | 1.18 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total lease operating expenses, midstream costs and production taxes ($/Mcfe) |
1.16 | 1.43 | 1.36 | 1.40 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Page 5
Consolidated Statements of Income: Three months ended, June 30, 2021
(In thousands, except per share data)
(Unaudited)
| Successor | Predecessor | |||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from April 1, 2021 through May 17, 2021 |
Three Months Ended June 30, 2020 |
||||||||||
| REVENUES: |
||||||||||||
| Natural gas sales |
$ | 111,718 | $ | 109,069 | $ | 140,688 | ||||||
| Oil and condensate sales |
17,587 | 10,867 | 8,390 | |||||||||
| Natural gas liquid sales |
16,077 | 13,004 | 10,252 | |||||||||
| Net (loss) gain on natural gas, oil and NGL derivatives |
(139,658 | ) | (107,261 | ) | 26,971 | |||||||
|
|
|
|
|
|
|
|||||||
| Total Revenues |
5,724 | 25,679 | 186,301 | |||||||||
|
|
|
|
|
|
|
|||||||
| OPERATING EXPENSES: |
||||||||||||
| Lease operating expenses |
4,116 | 6,871 | 13,078 | |||||||||
| Taxes other than income |
5,056 | 3,645 | 6,300 | |||||||||
| Transportation, gathering, processing and compression |
41,376 | 55,219 | 113,865 | |||||||||
| Depreciation, depletion and amortization |
32,362 | 21,617 | 64,790 | |||||||||
| Impairment of oil and natural gas properties |
117,813 | — | 532,880 | |||||||||
| General and administrative expenses |
6,518 | 6,418 | 9,766 | |||||||||
| Restructuring and liability management expenses |
— | — | 617 | |||||||||
| Accretion expense |
226 | 424 | 755 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Operating Expenses |
207,467 | 94,194 | 742,051 | |||||||||
|
|
|
|
|
|
|
|||||||
| (LOSS) INCOME FROM OPERATIONS |
(201,743 | ) | (68,515 | ) | (555,750 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| OTHER EXPENSE (INCOME): |
||||||||||||
| Interest expense |
8,894 | 898 | 32,366 | |||||||||
| Gain on debt extinguishment |
— | — | (34,257 | ) | ||||||||
| Loss from equity method investments, net |
— | — | 45 | |||||||||
| Reorganization items, net |
— | (305,617 | ) | — | ||||||||
| Other expense |
(1,051 | ) | 1,958 | 7,164 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total Other Expense |
7,843 | (302,761 | ) | 5,318 | ||||||||
|
|
|
|
|
|
|
|||||||
| (LOSS) INCOME BEFORE INCOME TAXES |
(209,586 | ) | 234,246 | (561,068 | ) | |||||||
| Income tax benefit |
— | (7,968 | ) | — | ||||||||
|
|
|
|
|
|
|
|||||||
| NET (LOSS) INCOME |
$ | (209,586 | ) | $ | 242,214 | $ | (561,068 | ) | ||||
|
|
|
|
|
|
|
|||||||
| Dividends on New Preferred Stock |
$ | (1,031 | ) | $ | — | $ | — | |||||
|
|
|
|
|
|
|
|||||||
| NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS |
$ | (210,617 | ) | $ | 242,214 | $ | (561,068 | ) | ||||
|
|
|
|
|
|
|
|||||||
| NET INCOME (LOSS) PER COMMON SHARE: |
||||||||||||
| Basic |
$ | (10.36 | ) | $ | 1.51 | $ | (3.51 | ) | ||||
| Diluted |
$ | (10.36 | ) | $ | 1.51 | $ | (3.51 | ) | ||||
| Weighted average common shares outstanding—Basic |
20,321 | $ | 160,887 | 159,934 | ||||||||
| Weighted average common shares outstanding—Diluted |
20,321 | 160,887 | 159,934 | |||||||||
Page 6
Consolidated Statements of Income: Six months ended, June 30, 2021
(In thousands, except per share data)
(Unaudited)
| Successor | Predecessor | |||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from January 1, 2021 through May 17, 2021 |
Six Months Ended June 30, 2020 |
||||||||||
| REVENUES: |
||||||||||||
| Natural gas sales |
$ | 111,718 | $ | 344,390 | $ | 301,696 | ||||||
| Oil and condensate sales |
17,587 | 29,106 | 31,541 | |||||||||
| Natural gas liquid sales |
16,077 | 36,780 | 27,165 | |||||||||
| Net (loss) gain on natural gas, oil and NGL derivatives |
(139,658 | ) | (137,239 | ) | 125,237 | |||||||
|
|
|
|
|
|
|
|||||||
| Total Revenues |
5,724 | 273,037 | 485,639 | |||||||||
|
|
|
|
|
|
|
|||||||
| OPERATING EXPENSES: |
||||||||||||
| Lease operating expenses |
4,116 | 19,524 | 27,773 | |||||||||
| Taxes other than income |
5,056 | 12,349 | 12,937 | |||||||||
| Transportation, gathering, processing and compression |
41,376 | 161,086 | 224,222 | |||||||||
| Depreciation, depletion and amortization |
32,362 | 62,764 | 142,818 | |||||||||
| Impairment of oil and natural gas properties |
117,813 | — | 1,086,225 | |||||||||
| Impairment of other property and equipment |
— | 14,568 | — | |||||||||
| General and administrative expenses |
6,518 | 19,175 | 25,388 | |||||||||
| Restructuring and liability management expenses |
— | — | 617 | |||||||||
| Accretion expense |
226 | 1,229 | 1,496 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Operating Expenses |
207,467 | 290,695 | 1,521,476 | |||||||||
|
|
|
|
|
|
|
|||||||
| (LOSS) INCOME FROM OPERATIONS |
(201,743 | ) | (17,658 | ) | (1,035,837 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| OTHER EXPENSE (INCOME): |
||||||||||||
| Interest expense |
8,894 | 4,159 | 65,356 | |||||||||
| Gain on debt extinguishment |
— | — | (49,579 | ) | ||||||||
| Loss from equity method investments, net |
— | 342 | 10,834 | |||||||||
| Reorganization items, net |
— | (266,898 | ) | — | ||||||||
| Other expense |
(1,051 | ) | 1,711 | 8,868 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total Other Expense (Income) |
7,843 | (260,686 | ) | 35,479 | ||||||||
|
|
|
|
|
|
|
|||||||
| (LOSS) INCOME BEFORE INCOME TAXES |
(209,586 | ) | 243,028 | (1,071,316 | ) | |||||||
| Income tax (benefit) expense |
— | (7,968 | ) | 7,290 | ||||||||
|
|
|
|
|
|
|
|||||||
| NET (LOSS) INCOME |
$ | (209,586 | ) | $ | 250,996 | $ | (1,078,606 | ) | ||||
|
|
|
|
|
|
|
|||||||
| Dividends on New Preferred Stock |
$ | (1,031 | ) | $ | — | $ | — | |||||
|
|
|
|
|
|
|
|||||||
| NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS |
$ | (210,617 | ) | $ | 250,996 | $ | (1,078,606 | ) | ||||
|
|
|
|
|
|
|
|||||||
| NET (LOSS) INCOME PER COMMON SHARE: |
||||||||||||
| Basic |
$ | (10.36 | ) | $ | 1.56 | $ | (6.75 | ) | ||||
| Diluted |
$ | (10.36 | ) | $ | 1.56 | $ | (6.75 | ) | ||||
| Weighted average common shares outstanding—Basic |
20,321 | 160,834 | 159,847 | |||||||||
| Weighted average common shares outstanding—Diluted |
20,321 | 160,834 | 159,847 | |||||||||
Page 7
Consolidated Balance Sheets
(In thousands, except share data)
| Successor | Predecessor | |||||||
| June 30, 2021 | December 31, 2020 |
|||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 9,389 | $ | 89,861 | ||||
| Restricted cash |
29,135 | — | ||||||
| Accounts receivable—oil and natural gas sales |
140,663 | 119,879 | ||||||
| Accounts receivable—joint interest and other |
10,695 | 12,200 | ||||||
| Prepaid expenses and other current assets |
24,737 | 160,664 | ||||||
| Short-term derivative instruments |
2,223 | 27,146 | ||||||
|
|
|
|
|
|||||
| Total current assets |
216,842 | 409,750 | ||||||
|
|
|
|
|
|||||
| Property and equipment: |
||||||||
| Oil and natural gas properties, full-cost method |
||||||||
| Proved oil and natural gas properties |
1,737,778 | 9,359,866 | ||||||
| Unproved properties |
224,214 | 1,457,043 | ||||||
| Other property and equipment |
6,914 | 88,538 | ||||||
| Total property and equipment |
1,968,906 | 10,905,447 | ||||||
| Less: accumulated depletion, depreciation and amortization |
(150,175 | ) | (8,819,178 | ) | ||||
|
|
|
|
|
|||||
| Total property and equipment, net |
1,818,731 | 2,086,269 | ||||||
|
|
|
|
|
|||||
| Other assets: |
||||||||
| Equity investments |
— | 24,816 | ||||||
| Long-term derivative instruments |
3,014 | 322 | ||||||
| Operating lease assets |
44 | 342 | ||||||
| Other assets |
27,557 | 18,372 | ||||||
|
|
|
|
|
|||||
| Total other assets |
30,615 | 43,852 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 2,066,188 | $ | 2,539,871 | ||||
|
|
|
|
|
|||||
Page 8
Consolidated Balance Sheets
(In thousands, except share data)
| Successor | Predecessor | |||||||
| June 30, 2021 | December 31, 2020 |
|||||||
| (Unaudited) | ||||||||
| Liabilities, Mezzanine Equity and Stockholders’ Equity (Deficit) | ||||||||
| Current liabilities: |
||||||||
| Accounts payable and accrued liabilities |
$ | 397,800 | $ | 244,903 | ||||
| Short-term derivative instruments |
192,730 | 11,641 | ||||||
| Current portion of operating lease liabilities |
39 | — | ||||||
| Current maturities of long-term debt |
60,000 | 253,743 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
650,569 | 510,287 | ||||||
|
|
|
|
|
|||||
| Non-current liabilities: |
||||||||
| Long-term derivative instruments |
113,470 | 36,604 | ||||||
| Asset retirement obligation |
19,347 | — | ||||||
| Non-current operating lease liabilities |
5 | — | ||||||
| Long-term debt, net of current maturities |
773,847 | — | ||||||
|
|
|
|
|
|||||
| Total non-current liabilities |
906,669 | 36,604 | ||||||
|
|
|
|
|
|||||
| Liabilities subject to compromise |
— | 2,293,480 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
$ | 1,557,238 | $ | 2,840,371 | ||||
| Mezzanine Equity: |
||||||||
| New Preferred Stock - $0.0001 par value; 110 thousand shares authorized, 55.9 thousand issued and outstanding at June 30, 2021 |
55,860 | — | ||||||
| Stockholders’ equity (deficit): |
||||||||
| Predecessor common stock - $0.01 par value, 200.0 million shares authorized, 160.8 million at December 31, 2020 |
— | 1,607 | ||||||
| Predecessor accumulated other comprehensive loss |
— | (43,000 | ) | |||||
| New Common Stock - $0.0001 par value, 42.0 million shares authorized, 20.6 million issued and outstanding at June 30, 2021 |
2 | — | ||||||
| Additional paid-in capital |
693,919 | 4,213,752 | ||||||
| New Common Stock held in reserve, 937 thousand shares |
(30,216 | ) | — | |||||
| Accumulated deficit |
(210,615 | ) | (4,472,859 | ) | ||||
|
|
|
|
|
|||||
| Total stockholders’ equity (deficit) |
$ | 453,090 | $ | (300,500 | ) | |||
|
|
|
|
|
|||||
| Total liabilities, mezzanine equity and stockholders’ equity (deficit) |
$ | 2,066,188 | $ | 2,539,871 | ||||
|
|
|
|
|
|||||
Page 9
Consolidated Statement of Cash Flows: Six months ended, June 30, 2021
(In thousands)
(Unaudited)
| Successor | Predecessor | |||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from January 1, 2021 through May 17, 2021 |
Six Months Ended June 30, 2020 |
||||||||||
| Cash flows from operating activities: |
||||||||||||
| Net income (loss) |
$ | (209,586 | ) | $ | 250,996 | $ | (1,078,606 | ) | ||||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||||||
| Depletion, depreciation and amortization |
32,362 | 62,764 | 142,818 | |||||||||
| Impairment of oil and natural gas properties |
117,813 | — | 1,086,225 | |||||||||
| Impairment of other property and equipment |
— | 14,568 | — | |||||||||
| Loss from equity investments |
— | 342 | 10,834 | |||||||||
| Gain on debt extinguishment |
— | — | (49,579 | ) | ||||||||
| Net loss (gain) on derivative instruments |
139,658 | 137,239 | (125,237 | ) | ||||||||
| Net cash receipts on settled derivative instruments |
(6,689 | ) | (3,361 | ) | 195,232 | |||||||
| Non-cash reorganization items, net |
— | (446,012 | ) | — | ||||||||
| Deferred income tax expense |
— | — | 7,290 | |||||||||
| Other, net |
(397 | ) | 1,725 | 9,844 | ||||||||
| Changes in operating assets and liabilities, net |
(34,796 | ) | 153,894 | 48,401 | ||||||||
|
|
|
|
|
|
|
|||||||
| Net cash provided by operating activities |
38,365 | 172,155 | 247,222 | |||||||||
|
|
|
|
|
|
|
|||||||
| Cash flows from investing activities: |
||||||||||||
| Additions to oil and natural gas properties |
(40,424 | ) | (102,330 | ) | (274,851 | ) | ||||||
| Proceeds from sale of oil and natural gas properties |
225 | 15 | 45,185 | |||||||||
| Other, net |
(77 | ) | 4,484 | (424 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Net cash used in investing activities |
(40,276 | ) | (97,831 | ) | (230,090 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Cash flows from financing activities: |
||||||||||||
| Principal payments on pre-petition revolving credit facility |
— | (318,961 | ) | (323,000 | ) | |||||||
| Borrowings on pre-petition revolving credit facility |
— | 26,050 | 326,000 | |||||||||
| Borrowings on exit credit facility |
113,249 | 302,751 | — | |||||||||
| Principal payments on exit credit facility |
(131,000 | ) | — | — | ||||||||
| Principal payments on DIP credit facility |
— | (157,500 | ) | — | ||||||||
| Debt issuance costs and loan commitment fees |
(1,206 | ) | (7,100 | ) | — | |||||||
| Repurchase of senior notes |
— | — | (22,827 | ) | ||||||||
| Proceeds from issuance of New Preferred Stock |
— | 50,000 | — | |||||||||
| Other, net |
(25 | ) | (8 | ) | (548 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net cash used in financing activities |
(18,982 | ) | (104,768 | ) | (20,375 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net decrease in cash, cash equivalents and restricted cash |
(20,893 | ) | (30,444 | ) | (3,243 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Cash, cash equivalents and restricted cash at beginning of period |
59,417 | 89,861 | 6,060 | |||||||||
|
|
|
|
|
|
|
|||||||
| Cash, cash equivalents and restricted cash at end of period |
$ | 38,524 | $ | 59,417 | $ | 2,817 | ||||||
|
|
|
|
|
|
|
|||||||
Page 10
2021E Guidance
Gulfport’s 2021 guidance assumes commodity strip prices as of July 7, 2021, adjusted for applicable commodity and location differentials, and no property acquisitions or divestitures.
| Year Ending | ||||||||
| 12/31/21 | ||||||||
| Low | High | |||||||
| Production |
||||||||
| Average Daily Gas Equivalent (MMcfepd) |
975 | 1,000 | ||||||
| % Gas |
~90% | |||||||
| Realizations (before hedges) |
||||||||
| Natural Gas (Differential to NYMEX Settled Price) ($/Mcf) |
$ | (0.10 | ) | $ | (0.20 | ) | ||
| NGL (% of WTI) |
45 | % | 50 | % | ||||
| Oil (Differential to NYMEX WTI) ($/Bbl) |
$ | (3.00 | ) | $ | (4.00 | ) | ||
| Operating Costs |
||||||||
| Lease operating expense ($/Mcfe) |
$ | 0.13 | $ | 0.15 | ||||
| Taxes other than income ($/Mcfe) |
$ | 0.11 | $ | 0.13 | ||||
| Transportation, gathering, processing and compression(1) ($/Mcfe) |
$ | 0.92 | $ | 0.96 | ||||
| Recurring general and administrative(2,3) (in millions) |
$ | 45.0 | $ | 47.0 | ||||
| (1) | Assumes rejection of TC Energy & Rover firm transportation agreements. |
| (2) | Recurring G&A includes capitalization. It excludes non-cash stock compensation and expenses related to certain legal and restructuring charges. |
| Total | ||||||||
| Capital Expenditures (incurred) | (in millions) | |||||||
| D&C |
$ | 270 | $ | 290 | ||||
| Leasehold and Land |
$20 | |||||||
|
|
|
|||||||
| Total |
$ | 290 | $ | 310 | ||||
|
|
|
|||||||
| Free Cash Flow(3) |
$ | 290 | $ | 310 | ||||
| (3) | This is a non-GAAP measure. Reconciliations of these non-GAAP measures and other disclosures are provided with the supplemental financial tables available on our website at www.gulfportenergy.com. |
Page 11
Non-GAAP Reconciliations
Gulfport’s management uses certain non-GAAP financial measures for planning, forecasting and evaluating business and financial performance, and believes that they are useful tool to assess Gulfport’s operating results. Although these are not measures of performance calculated in accordance with generally accepted accounting principles (GAAP), management believes that these financial measures are useful to an investor in evaluating Gulfport because (i) analysts utilize these metrics when evaluating company performance and have requested this information as of a recent practicable date, (ii) these metrics are widely used to evaluate a company’s operating performance, and (iii) we want to provide updated information to investors. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with GAAP. In addition, because all companies do not calculate these measures identically, these measures may not be comparable to similarly titled measures of other companies.
These non-GAAP financial measures include Adjusted Net Income, Adjusted EBITDA, Free Cash Flow, and Recurring General and Administrative Expense Before Capitalization. A reconciliation of each financial measure to its most directly comparable GAAP financial measure is included in the tables below. These non-GAAP measure should be considered in addition to, but not instead of, the financial statements prepared in accordance with GAAP.
Page 12
Definitions
Adjusted Net Income is a non-GAAP financial measure equal to (loss) income before income taxes less reorganization items, non-cash derivative loss, impairments of oil and gas properties, property and equipment, contractual charges on midstream disputes, non-recurring general and administrative expenses, gain on debt extinguishment, loss from equity method investments and other items which include rig termination fees, stock-based compensation and other non-material expenses.
Adjusted EBITDA is a non-GAAP financial measure equal to net (loss) income, the most directly comparable GAAP financial measure, plus interest expense, income tax expense, depreciation, depletion and amortization and impairment of oil and gas properties, property and equipment, reorganization items, non-cash derivative loss, contractual charges on midstream disputes, non-recurring general and administrative expenses, gain on debt extinguishment, loss from equity method investments and other items which include rig termination fees, stock-based compensation and other non-material expenses.
Free Cash Flow is a non-GAAP measure defined as Adjusted EBITDA plus certain non-cash items that are included in Net Cash Provided by (Used in) Operating Activities but excluded from Adjusted EBITDA less interest expense, capital expenses incurred and capital expenditures incurred. Gulfport includes a Free Cash Flow estimate for 2021. We are unable, however, to provide a quantitative reconciliation of the forward-looking non-GAAP measure to its most directly comparable forward-looking GAAP measure because management cannot reliably quantify certain of the necessary components of such forward-looking GAAP measure.
Recurring General and Administrative Expense is a non-GAAP financial measure equal to general and administrative expense (GAAP) plus capitalized general and administrative expense, less non-recurring general and administrative expense. Gulfport includes a Recurring General and Administrative Expense estimate for 2021. We are unable, however, to provide a quantitative reconciliation of the forward-looking non-GAAP measure to its most directly comparable forward-looking GAAP measure because management cannot reliably quantify certain of the necessary components of such forward-looking GAAP measure.
Page 13
Adjusted Net Income: Three months ended, June 30, 2021
(In thousands)
(Unaudited)
| Successor | Predecessor | Non-GAAP Combined |
Predecessor | |||||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from April 1, 2021 through May 17, 2021 |
Three Months Ended June 30, 2021 |
Three Months Ended June 30, 2020 |
|||||||||||||
| Pre-Tax Net (Loss) Income |
$ | (209,586 | ) | $ | 234,246 | $ | 24,660 | $ | (561,068 | ) | ||||||
| Adjustments: |
||||||||||||||||
| Reorganization items, net |
— | (305,617 | ) | (305,617 | ) | — | ||||||||||
| Non-cash derivative loss |
132,969 | 103,775 | 236,744 | 97,529 | ||||||||||||
| Impairments |
117,813 | — | 117,813 | 532,880 | ||||||||||||
| Contractual charges on midstream disputes |
— | 10,843 | 10,843 | — | ||||||||||||
| Non-recurring general and administrative expense |
4,045 | 2,438 | 6,483 | 3,201 | ||||||||||||
| Gain on debt extinguishment |
— | — | — | (34,257 | ) | |||||||||||
| Loss from equity method investments |
— | — | — | 45 | ||||||||||||
| Other, net |
(1,051 | ) | 2,332 | 1,281 | 8,979 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted Net Income (Non-GAAP) |
$ | 44,190 | $ | 48,017 | $ | 92,207 | $ | 47,309 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Dividends on New Preferred Stock |
$ | (1,031 | ) | $ | — | $ | (1,031 | ) | $ | — | ||||||
| Participating Securities - New Preferred Stock(1) |
$ | (8,115 | ) | $ | — | $ | (15,995 | ) | $ | — | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted Net Income Attributable to Common Stockholders (Non-GAAP) |
$ | 35,044 | $ | 48,017 | $ | 75,181 | $ | 47,309 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted Net Income Per Common Share, Diluted (Non-GAAP)(2) |
$ | 1.72 | $ | 0.30 | $ | 3.70 | $ | 0.29 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | For the Non-GAAP combined period, the Company calculated the impact of participating securities using the Adjusted Net Income amount of the Non-GAAP combined period. |
| (2) | For the Non-GAAP combined period, the Company used the Successor’s diluted weighted average share count to calculate per share amounts. |
Page 14
Adjusted Net Income: Six months ended, June 30, 2021
(In thousands)
(Unaudited)
| Successor | Predecessor | Non-GAAP Combined |
Predecessor | |||||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from January 1, 2021 through May 17, 2021 |
Six Months Ended June 30, 2020 |
Six Months Ended June 30, 2020 |
|||||||||||||
| Pre-Tax Net (Loss) Income |
$ | (209,586 | ) | $ | 243,028 | $ | 33,442 | $ | (1,071,316 | ) | ||||||
| Adjustments: |
||||||||||||||||
| Reorganization items, net |
— | (266,898 | ) | (266,898 | ) | — | ||||||||||
| Non-cash derivative loss |
132,969 | 133,878 | 266,847 | 68,615 | ||||||||||||
| Impairments |
117,813 | — | 117,813 | 1,086,225 | ||||||||||||
| Contractual charges on midstream disputes |
— | 30,351 | 30,351 | — | ||||||||||||
| Non-recurring general and administrative expense |
4,045 | 8,923 | 12,968 | 7,723 | ||||||||||||
| Gain on debt extinguishment |
— | — | — | (49,579 | ) | |||||||||||
| Loss from equity method investments |
— | 342 | 342 | 10,834 | ||||||||||||
| Other, net |
(1,051 | ) | 3,207 | 2,156 | 14,673 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted Net Income (Non-GAAP) |
$ | 44,190 | $ | 152,831 | $ | 197,021 | $ | 67,175 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Dividends on New Preferred Stock |
$ | (1,031 | ) | $ | — | $ | (1,031 | ) | $ | — | ||||||
| Participating Securities - New Preferred Stock(1) |
$ | (8,115 | ) | $ | — | $ | (33,198 | ) | $ | — | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted Net Income Attributable to Common Stockholders (Non-GAAP) |
$ | 35,044 | $ | 152,831 | $ | 162,792 | $ | 67,175 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted Net Income Per Common Share, Diluted (Non-GAAP)(2) |
$ | 1.72 | $ | 0.95 | $ | 8.01 | $ | 0.42 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | For the Non-GAAP combined period, the Company calculated the impact of participating securities using the Adjusted Net Income amount of the Non-GAAP combined period. |
| (2) | For the Non-GAAP combined period, the Company used the Successor’s diluted weighted average share count to calculate per share amounts. |
Page 15
Adjusted EBITDA: Three months ended, June 30, 2021
(In thousands)
(Unaudited)
| Successor | Predecessor | Non-GAAP Combined |
Predecessor | |||||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from April 1, 2021 through May 17, 2021 |
Three Months Ended June 30, 2021 |
Three Months Ended June 30, 2020 |
|||||||||||||
| Net (loss) income (GAAP) |
$ | (209,586 | ) | $ | 242,214 | $ | 32,628 | $ | (561,068 | ) | ||||||
| Adjustments: |
||||||||||||||||
| Interest expense |
8,894 | 898 | 9,792 | 32,366 | ||||||||||||
| Income tax (benefit) expense |
— | (7,968 | ) | (7,968 | ) | — | ||||||||||
| DD&A and impairment |
150,401 | 22,041 | 172,442 | 598,425 | ||||||||||||
| Reorganization items, net |
— | (305,617 | ) | (305,617 | ) | — | ||||||||||
| Non-cash derivative loss |
132,969 | 103,775 | 236,744 | 97,529 | ||||||||||||
| Contractual charges on midstream disputes |
— | 10,843 | 10,843 | — | ||||||||||||
| Non-recurring general and administrative expenses |
4,045 | 2,438 | 6,483 | 3,201 | ||||||||||||
| Gain on debt extinguishment |
— | — | — | (34,257 | ) | |||||||||||
| Loss from equity method investments |
— | — | — | 45 | ||||||||||||
| Other, net |
(1,051 | ) | 2,332 | 1,281 | 8,979 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA (Non-GAAP) |
$ | 85,672 | $ | 70,956 | $ | 156,628 | $ | 145,220 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Page 16
Adjusted EBITDA: Six months ended, June 30, 2021
(In thousands)
(Unaudited)
| Successor | Predecessor | Non-GAAP Combined |
Predecessor | |||||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from January 1, 2021 through May 17, 2021 |
Six Months Ended June 30, 2021 |
Six Months Ended June 30, 2020 |
|||||||||||||
| Net (loss) income (GAAP) |
$ | (209,586 | ) | $ | 250,996 | $ | 41,410 | $ | (1,078,606 | ) | ||||||
| Adjustments: |
||||||||||||||||
| Interest expense |
8,894 | 4,159 | 13,053 | 65,356 | ||||||||||||
| Income tax (benefit) expense |
— | (7,968 | ) | (7,968 | ) | 7,290 | ||||||||||
| DD&A and impairment |
150,401 | 78,561 | 228,962 | 1,230,539 | ||||||||||||
| Reorganization items, net |
— | (266,898 | ) | (266,898 | ) | — | ||||||||||
| Non-cash derivative loss |
132,969 | 133,878 | 266,847 | 68,615 | ||||||||||||
| Contractual charges on midstream disputes |
— | 30,351 | 30,351 | — | ||||||||||||
| Non-recurring general and administrative expenses |
4,045 | 8,923 | 12,968 | 7,723 | ||||||||||||
| Gain on debt extinguishment |
— | — | — | (49,579 | ) | |||||||||||
| Loss from equity method investments |
— | 342 | 342 | 10,834 | ||||||||||||
| Other, net |
(1,051 | ) | 3,207 | 2,156 | 14,673 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA (Non-GAAP) |
$ | 85,672 | $ | 235,551 | $ | 321,223 | $ | 276,845 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Page 17
Free Cash Flow: Three months ended, June 30, 2021
(In thousands)
(Unaudited)
| Successor | Predecessor | Non-GAAP Combined |
Predecessor | |||||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from April 1, 2021 through May 17, 2021 |
Three Months Ended June 30, 2021 |
Three Months Ended June 30, 2020 |
|||||||||||||
| Net cash provided by operating activity (GAAP) |
$ | 38,365 | $ | 48,980 | $ | 87,345 | $ | 116,384 | ||||||||
| Adjustments: |
||||||||||||||||
| Interest expense |
8,894 | 898 | 9,792 | 32,366 | ||||||||||||
| Current Income tax benefit |
— | (7,968 | ) | (7,968 | ) | — | ||||||||||
| Cash reorganization items, net |
— | 140,395 | 140,395 | — | ||||||||||||
| Non-recurring general and administrative expenses |
4,045 | 2,438 | 6,483 | 3,201 | ||||||||||||
| Contractual charges on midstream disputes |
— | 10,843 | 10,843 | — | ||||||||||||
| Other, net |
(428 | ) | 2,603 | 2,175 | 3,114 | |||||||||||
| Changes in operating assets and liabilities, net |
34,796 | (127,233 | ) | (92,437 | ) | (9,845 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA (non-GAAP) |
$ | 85,672 | $ | 70,956 | $ | 156,628 | $ | 145,220 | ||||||||
| Interest expense |
(8,894 | ) | (898 | ) | (9,792 | ) | (32,366 | ) | ||||||||
| Capitalized expenses incurred(1) |
(2,176 | ) | (2,498 | ) | (4,674 | ) | (8,685 | ) | ||||||||
| Capital expenditures incurred(2) |
(32,116 | ) | (35,696 | ) | (67,812 | ) | (53,988 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Free cash flow (non-GAAP) |
$ | 42,486 | $ | 31,864 | $ | 74,350 | $ | 50,181 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | Includes incurred capitalized general and administrative expense and incurred capitalized interest expenses. |
| (2) | Incurred capital expenditures and cash capital expenditures may vary from period to period due to the cash payment cycle. |
Page 18
Free Cash Flow: Six months ended, June 30, 2021
(In thousands)
(Unaudited)
| Successor | Predecessor | Non-GAAP Combined |
Predecessor | |||||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from January 1, 2021 through May 17, 2021 |
Six Months Ended June 30, 2021 |
Six Months Ended June 30, 2020 |
|||||||||||||
| Net cash provided by operating activity (GAAP) |
$ | 38,365 | $ | 172,155 | $ | 210,520 | $ | 247,222 | ||||||||
| Adjustments: |
||||||||||||||||
| Interest expense |
8,894 | 4,159 | 13,053 | 65,356 | ||||||||||||
| Current Income tax benefit |
— | (7,968 | ) | (7,968 | ) | — | ||||||||||
| Cash reorganization items, net |
— | 179,114 | 179,114 | — | ||||||||||||
| Non-recurring general and administrative expenses |
4,045 | 8,923 | 12,968 | 7,723 | ||||||||||||
| Contractual charges on midstream disputes |
— | 30,351 | 30,351 | — | ||||||||||||
| Other, net |
(428 | ) | 2,711 | 2,283 | 4,945 | |||||||||||
| Changes in operating assets and liabilities, net |
34,796 | (153,894 | ) | (119,098 | ) | (48,401 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA (non-GAAP) |
$ | 85,672 | $ | 235,551 | $ | 321,223 | $ | 276,845 | ||||||||
| Interest expense |
(8,894 | ) | (4,159 | ) | (13,053 | ) | (65,356 | ) | ||||||||
| Capitalized expenses incurred(1) |
(2,176 | ) | (8,020 | ) | (10,196 | ) | (14,302 | ) | ||||||||
| Capital expenditures incurred(2) |
(32,116 | ) | (108,408 | ) | (140,524 | ) | (189,293 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Free cash flow (non-GAAP) |
$ | 42,486 | $ | 114,964 | $ | 157,450 | $ | 7,894 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | Includes incurred capitalized general and administrative expense and incurred capitalized interest expenses. |
| (2) | Incurred capital expenditures and cash capital expenditures may vary from period to period due to the cash payment cycle. |
Page 19
Recurring General and Administrative Expenses:
Three and Six months ended, June 30, 2021
(In thousands)
(Unaudited)
| Successor | Predecessor | Non-GAAP Combined | Predecessor | |||||||||||||||||||||||||||||||||||||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from April 1, 2021 through May 17, 2021 |
Three Months Ended June 30, 2021 |
Three Months Ended June 30, 2020 |
|||||||||||||||||||||||||||||||||||||||||||||
| Cash | Non- Cash |
Total | Cash | Non- Cash |
Total | Cash | Non- Cash |
Total | Cash | Non- Cash |
Total | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||
| General and administrative expense (GAAP) |
$ | 6,518 | $ | — | $ | 6,518 | $ | 6,039 | $ | 379 | $ | 6,418 | $ | 12,557 | $ | 379 | $ | 12,936 | $ | 8,568 | $ | 1,198 | $ | 9,766 | ||||||||||||||||||||||||
| Capitalized general and administrative expense |
2,177 | — | 2,177 | 2,200 | 298 | 2,498 | $ | 4,377 | $ | 298 | $ | 4,675 | 7,205 | 957 | 8,162 | |||||||||||||||||||||||||||||||||
| Non-recurring general and administrative expense(1) |
(4,045 | ) | — | (4,045 | ) | (2,438 | ) | — | (2,438 | ) | $ | (6,483 | ) | $ | — | $ | (6,483 | ) | (3,201 | ) | — | (3,201 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||
| Recurring general and administrative before capitalization |
$ | 4,650 | $ | — | $ | 4,650 | $ | 5,801 | $ | 677 | $ | 6,478 | $ | 10,451 | $ | 677 | $ | 11,128 | $ | 12,572 | $ | 2,155 | $ | 14,727 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||
| (1) | Includes non-recurring general and administrative expenses related to certain legal and restructuring charges. |
| Successor | Predecessor | Non-GAAP Combined | Predecessor | |||||||||||||||||||||||||||||||||||||||||||||
| Period from May 18, 2021 through June 30, 2021 |
Period from January 1, 2021 through May 17, 2021 |
Six Months Ended June 30, 2021 |
Six Months Ended June 30, 2020 |
|||||||||||||||||||||||||||||||||||||||||||||
| Cash | Non- Cash |
Total | Cash | Non- Cash |
Total | Cash | Non- Cash |
Total | Cash | Non- Cash |
Total | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||
| General and administrative expense (GAAP) |
$ | 6,518 | $ | — | $ | 6,518 | $ | 18,002 | $ | 1,173 | $ | 19,175 | $ | 24,520 | $ | 1,173 | $ | 25,693 | $ | 23,020 | $ | 2,368 | $ | 25,388 | ||||||||||||||||||||||||
| Capitalized general and administrative expense |
2,177 | — | 2,177 | 7,097 | 922 | 8,019 | $ | 9,274 | $ | 922 | $ | 10,196 | 11,701 | 1,891 | 13,592 | |||||||||||||||||||||||||||||||||
| Non-recurring general and administrative expense(1) |
(4,045 | ) | — | (4,045 | ) | (8,923 | ) | — | (8,923 | ) | $ | (12,968 | ) | $ | — | $ | (12,968 | ) | (7,723 | ) | — | (7,723 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||
| Recurring general and administrative before capitalization |
$ | 4,650 | $ | — | $ | 4,650 | $ | 16,176 | $ | 2,095 | $ | 18,271 | $ | 20,826 | $ | 2,095 | $ | 22,921 | $ | 26,998 | $ | 4,259 | $ | 31,257 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||
| (1) | Includes non-recurring general and administrative expenses related to certain legal and restructuring charges. |
Page 20
