Midstates Petroleum Announces Fourth Quarter and Full Year 2018 Results TULSA, Okla.
Midstates Petroleum Company, Inc. (“Midstates” or the “Company”) (NYSE:
MPO) today announced its fourth quarter and full year 2018 results.
Fourth Quarter and Full-Year 2018 Highlights
and Recent Key Items
-
Reported net income of $49.8 million, or $1.91 per share, for the full
year 2018 and net income of $35.8 million, or $1.38 per share, in the
fourth quarter 2018
-
Announced year-end 2018 SEC proved reserves of 72.4 million barrels of
oil equivalent (MMBoe) with a net present value discounted at 10%
(PV-10) of approximately $580 million
-
Year-end 2018 SEC proved developed producing (PDP) reserves of
46.5 MMBoe with a PV-10 of approximately $425 million
-
Achieved Mississippian Lime production of 16,747 barrels of oil
equivalent per day (Boepd) for the full year 2018
-
Generated Adjusted EBITDA of $27.8 million in the fourth quarter of
2018, outpacing quarterly operational capital expenditures by
approximately $24.2 million; full-year 2018 Adjusted EBITDA totaled
$116.4 million, approximately $19.9 million higher than full-year
operational capital expenditures
-
Initiated a process pursuing all strategic and opportunistic
transactions that create significant shareholder value
-
Completed workforce reduction in January 2019 to better align general
and administrative costs (G&A) with current activity levels; reduced
Adjusted Cash G&A expense by $4 million to $5 million annually
(excluding one-time severance costs)
-
Successfully executed $50 million tender offer for outstanding capital
stock in February 2019, returning capital to shareholders
For the fourth quarter of 2018, Midstates reported net income of $35.8
million, or $1.38 per share, which included the impact of a $25.4
million gain related to the Company’s commodity derivative contracts. In
the same period in 2017, the Company reported a net loss of $121.0
million, or ($4.78) per share, including the impact of a $5.1 million
commodity derivative charge, and in the third quarter of 2018 reported
net income of $11.5 million, or $0.44 per share, including the impact of
a $6.6 million commodity derivative charge. For the full year 2018,
Midstates reported net income of $49.8 million, or $1.91 per share,
which included the impact of a $3.6 million gain related to the
Company’s commodity derivative contracts, compared to a net loss of
$85.1 million, or ($3.39) per share, including the impact of a $3.7
million gain related to the Company’s commodity derivative contracts, in
2017.
In the fourth quarter of 2018, Midstates generated Adjusted EBITDA of
$27.8 million, excluding advisory fees and costs incurred for strategic
reviews. This compares to $33.9 million for the same quarter in 2017 and
$31.9 million for the third quarter of 2018. For the full year 2018,
Midstates generated Adjusted EBITDA of $116.4 million, excluding
advisory fees and costs incurred for strategic reviews, compared to
$128.2 million, in 2017.
David Sambrooks, President and Chief Executive Officer, commented, “In
2018 we continued our strong operational results and strengthened
Midstates financially through several notable accomplishments.
Operationally, we optimized base production through a substantial
workover program and have taken actions to drive down lease operating
and overhead expenses to help maximize margins and grow value. Midstates
generated $116.4 million in Adjusted EBITDA, outpacing our operational
capex by $20 million and we monetized a portion of our portfolio by
selling our non-core Anadarko asset, using the proceeds and free cash
flow to pay down $105 million in debt during 2018. Finally, our year-end
2018 reserve report continues to demonstrate the underlying value of
Midstates.”
Mr. Sambrooks continued, “We remain focused on creating value for our
shareholders. As such, we are forecasting significant free cash flow
generation in 2019, which allowed us to successfully execute a $50
million tender offer earlier this year and affords us the opportunity to
consider multiple options moving forward, including returning a
substantial portion of our excess cash to our shareholders. As we look
to the future, we remain committed to optimizing our production,
minimizing costs and operating efficiently, as well as actively pursuing
all opportunities that enhance us financially and operationally.”
(Adjusted EBITDA, Adjusted Cash Operating Expenses, and Adjusted Cash
G&A Expenses are non-GAAP financial measures. Each measure is defined
and reconciled to the most directly comparable GAAP measure under
“Non-GAAP Financial Measures” in the tables below.)
Operational Update
Midstates ceased drilling at the end of the third quarter of 2018 in
order to further study the production results of its recent extended
lateral wells. With the erosion of commodity prices in the fourth
quarter of 2018, the Company elected to continue the pause in drilling
through mid-year 2019 to maximize free cash flow generation from its
producing properties and will evaluate future development plans as the
Company moves forward.
The Company did not bring online any new saltwater disposal injection
wells during the fourth quarter of 2018. Midstates is currently
operating 11 non-Arbuckle injection wells in Woods and Alfalfa Counties,
Oklahoma, with permitted injection capacity of approximately 240,000
barrels of water per day. The Company’s total permitted injection
capacity in all formations in Woods and Alfalfa Counties, Oklahoma,
which may differ from actual injection capacity due to operational
constraints, is approximately 372,000 barrels of water per day. The
Company’s current disposal rate into all formations is approximately
135,000 barrels of water per day. Approximately 45% of the Company’s
water injection is currently being injected into non-Arbuckle formations.
Production and Pricing
Production during the fourth quarter of 2018 totaled 16,351 Boepd,
compared with 17,996 Boepd during the third quarter of 2018. Oil volumes
comprised 27% of total production, natural gas liquids (NGLs) 26%, and
natural gas 47% during the fourth quarter of 2018. Production for the
full year 2018 totaled 20,326 Boepd, compared with 22,148 Boepd for the
full year 2017. Production from the Company’s Mississippian Lime
properties contributed approximately 82%, or 16,747 Boepd, and the
Anadarko Basin properties contributed approximately 18%, or 3,579 Boepd.
Midstates divested its Anadarko Basin properties in the second quarter
of 2018. For the total Company, oil volumes comprised 29% of total
production, natural gas liquids (NGLs) 25%, and natural gas 46% for the
full year 2018.
On January 1, 2018, Midstates adopted Accounting Standards Codification
606, Revenue from Contracts with Customers (ASC 606). As a result,
gathering and transportation and a portion of lease operating expenses
are now being presented net against oil, NGLs and natural gas revenues.
Total oil, NGLs and natural gas revenues in the fourth quarter of 2018
were approximately $43.2 million, before the impact of derivatives,
compared to $53.0 million in the third quarter of 2018. During the
fourth quarter of 2018, the Company realized a gain on derivatives of
$25.4 million, compared with a $6.6 million loss during the third
quarter of 2018. For the full year 2018, total oil, NGLs and natural gas
revenues were approximately $200.8 million, before the impact of
derivatives, compared to $220.9 million for the full year 2017. In 2018,
the Company realized a gain on derivatives of $3.6 million, compared
with a $3.7 million gain during the full year 2017.
The following table sets forth information regarding average realized
sales prices for the periods indicated:
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|
|
|
|
|
|
|
|
|
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Crude Oil
|
|
|
NGLs
|
|
|
Natural Gas
|
|
|
|
|
Year
Ended
|
|
|
Year
Ended
|
|
|
Year
Ended
|
|
|
Year
Ended
|
|
|
Year
Ended
|
|
|
Year
Ended
|
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|
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|
December 31, 2018
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December 31,
2017
|
|
|
December 31, 2018
|
|
|
December 31,
2017
|
|
|
December 31, 2018
|
|
|
December 31,
2017
|
Average sales price exclusive of realized derivatives and certain
deductions from revenue
|
|
|
|
$
|
64.57
|
|
|
|
$
|
49.45
|
|
|
$
|
27.62
|
|
|
|
$
|
22.64
|
|
|
$
|
2.39
|
|
|
|
$
|
2.64
|
Realized derivatives
|
|
|
|
|
(3.72
|
)
|
|
|
|
1.47
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
(0.01
|
)
|
|
|
|
0.15
|
Average sales price with realized derivatives exclusive of certain
deductions from revenue
|
|
|
|
$
|
60.85
|
|
|
|
$
|
50.92
|
|
|
$
|
27.62
|
|
|
|
$
|
22.64
|
|
|
$
|
2.38
|
|
|
|
$
|
2.79
|
Certain deductions from revenue
|
|
|
|
|
(0.03
|
)
|
|
|
|
—
|
|
|
|
(0.04
|
)
|
|
|
|
—
|
|
|
|
(0.67
|
)
|
|
|
|
—
|
Average sales price inclusive of realized derivatives and certain
deductions from revenue
|
|
|
|
$
|
60.82
|
|
|
|
$
|
50.92
|
|
|
$
|
27.58
|
|
|
|
$
|
22.64
|
|
|
$
|
1.71
|
|
|
|
$
|
2.79
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
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Hedging Update
To reduce downside commodity price risk and protect cash flow, Midstates
has entered into a number of swaps and three-way collars to hedge a
portion of the Company’s oil and natural gas revenues through 2020. A
summary of the Company’s hedges is included in the below table.
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|
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|
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NYMEX WTI
|
|
|
|
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Fixed Swaps
|
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|
Three-Way Collars
|
|
|
|
|
Hedge Position (Bbls)
|
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|
Weighted Avg Strike Price
|
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|
Hedge Position (Bbls)
|
|
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Weighted Avg Ceiling Price
|
|
|
Weighted Avg Floor Price
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|
Weighted Avg Sub-Floor Price
|
Quarter Ended:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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December 31, 2018(1)
|
|
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|
313,720
|
|
|
$
|
58.59
|
|
|
46,000
|
|
|
$
|
56.70
|
|
|
$
|
50.00
|
|
|
$
|
40.00
|
March 31, 2019(1)
|
|
|
|
74,800
|
|
|
$
|
66.48
|
|
|
180,000
|
|
|
$
|
63.14
|
|
|
$
|
53.75
|
|
|
$
|
43.75
|
June 30, 2019(1)
|
|
|
|
57,650
|
|
|
$
|
64.69
|
|
|
182,000
|
|
|
$
|
63.14
|
|
|
$
|
53.75
|
|
|
$
|
43.75
|
September 30, 2019(1)
|
|
|
|
46,000
|
|
|
$
|
62.96
|
|
|
184,000
|
|
|
$
|
63.14
|
|
|
$
|
53.75
|
|
|
$
|
43.75
|
December 31, 2019(1)
|
|
|
|
46,000
|
|
|
$
|
61.43
|
|
|
184,000
|
|
|
$
|
63.14
|
|
|
$
|
53.75
|
|
|
$
|
43.75
|
March 31, 2020(1)
|
|
|
|
—
|
|
|
$
|
—
|
|
|
91,000
|
|
|
$
|
65.75
|
|
|
$
|
50.00
|
|
|
$
|
40.00
|
June 30, 2020(1)
|
|
|
|
—
|
|
|
$
|
—
|
|
|
91,000
|
|
|
$
|
65.75
|
|
|
$
|
50.00
|
|
|
$
|
40.00
|
September 30, 2020(1)
|
|
|
|
—
|
|
|
$
|
—
|
|
|
92,000
|
|
|
$
|
65.75
|
|
|
$
|
50.00
|
|
|
$
|
40.00
|
December 31, 2020(1)
|
|
|
|
—
|
|
|
$
|
—
|
|
|
92,000
|
|
|
$
|
65.75
|
|
|
$
|
50.00
|
|
|
$
|
40.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
NYMEX HENRY HUB
|
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|
|
Fixed Swaps
|
|
|
Three-Way Collars
|
|
|
|
|
Hedge Position (MMBtu)
|
|
|
Weighted Avg Strike Price
|
|
|
Hedge Position (MMBtu)
|
|
|
Weighted Avg Ceiling Price
|
|
|
Weighted Avg Floor Price
|
|
|
Weighted Avg Sub-Floor Price
|
Quarter Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018(1)
|
|
|
|
2,055,000
|
|
|
$
|
2.95
|
|
|
1,380,000
|
|
|
$
|
3.40
|
|
|
$
|
3.00
|
|
|
$
|
2.50
|
March 31, 2019(1)
|
|
|
|
1,980,000
|
|
|
$
|
3.01
|
|
|
1,350,000
|
|
|
$
|
3.40
|
|
|
$
|
3.00
|
|
|
$
|
2.50
|
June 30, 2019(1)
|
|
|
|
1,365,000
|
|
|
$
|
2.75
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019(1)
|
|
|
|
1,380,000
|
|
|
$
|
2.75
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019(1)
|
|
|
|
465,000
|
|
|
$
|
2.75
|
|
|
610,000
|
|
|
$
|
3.45
|
|
|
$
|
2.65
|
|
|
$
|
2.15
|
March 31, 2020(1)
|
|
|
|
|
|
|
|
|
|
910,000
|
|
|
$
|
3.45
|
|
|
$
|
2.65
|
|
|
$
|
2.15
|
_______________________
|
(1)
|
|
Positions shown represent open commodity derivative contract
positions as of December 31, 2018.
|
|
|
|
2018 Year-End Proved Reserves
Midstates’ reserves were fully engineered by its third-party independent
reserve consultant, Cawley, Gillespie & Associates, Inc. The following
table presents these results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBls)
|
|
|
Natural Gas (MMcf)
|
|
|
NGLs (MBbls)
|
|
|
Total (MBoe)
|
|
|
PV-10(1) (in millions)
|
|
|
PV-10(2) (in millions)
|
Mississippian Lime:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved developed producing
|
|
|
|
10,713
|
|
|
138,850
|
|
|
12,650
|
|
|
46,505
|
|
|
$
|
424,989
|
|
|
$
|
378,453
|
Proved developed non-producing
|
|
|
|
282
|
|
|
8,398
|
|
|
775
|
|
|
2,457
|
|
|
|
8,400
|
|
|
|
7,380
|
Proved undeveloped
|
|
|
|
7,070
|
|
|
63,265
|
|
|
5,846
|
|
|
23,460
|
|
|
|
146,261
|
|
|
|
119,829
|
Total Proved
|
|
|
|
18,065
|
|
|
210,513
|
|
|
19,271
|
|
|
72,422
|
|
|
$
|
579,650
|
|
|
$
|
505,662
|
|
|
(1)
|
|
Year-end 2018 SEC Pricing: $65.56 per barrel of oil, $29.50 per
barrel of NGLs, and $3.10 per million BTUs of gas.
|
|
|
(2)
|
|
Utilizing flat pricing of $60.00 per Bbl of oil, $27.00 per Bbl of
NGLs, and $3.00 per million BTUs of gas.
|
|
|
|
|
|
Midstates’ estimated proved reserves for year-end 2018 totaled 72.4
MMBoe, comprised of 25% oil, 27% NGLs, and 48% natural gas. The Company
elected to pause drilling in the fourth quarter of 2018 and reconfigured
its drilling program to emphasize two-mile laterals. The revised
development strategy reduced proved undeveloped (PUD) inventory to 48
locations at year-end 2018, consisting of 31 two-mile laterals and 17
one-mile laterals developed over 3 years within the SEC five-year
development window.
At year-end 2018, Midstates’ proved reserves, as prepared utilizing SEC
pricing, had a net PV-10 of approximately $579.7 million. The Company’s
estimated reserves at year-end 2018 were based on the average oil, NGL,
and natural gas prices for each month, which were $65.56 per barrel
(“Bbl”), $29.50 per Bbl, and $3.10 per million BTUs.
Utilizing flat pricing of $60.00 per Bbl of oil, $27.00 per Bbl of NGLs,
and $3.00 per million BTUs, the Company’s year-end 2018 proved reserves
had a PV-10 value of approximately $506 million.
Costs and Expenses
Adjusted Cash Operating Expenses (which excludes debt restructuring and
advisory fees, as well as severance costs) for the fourth quarter of
2018 were $16.6 million, or $11.02 per Boe, compared with $18.6 million,
or $11.21 per Boe, in the third quarter of 2018. Full year 2018 Adjusted
Cash Operating Expenses were $79.7 million, or $11.97 per Boe, compared
with $103.5 million, or $12.80 per Boe in 2017. The decrease in Adjusted
Cash Operating Expenses for full year 2018 compared to the full year
2017 was due primarily to the sale of the Company’s Anadarko Basin
producing properties in May 2018, resulting in lower lease operating and
Adjusted Cash G&A expenses.
Lease operating expenses (LOE) and workover expenses combined totaled
$10.6 million, or $7.05 per Boe, in the fourth quarter of 2018, compared
with $11.9 million, or $7.16 per Boe, in the third quarter of 2018. Full
year 2018 combined LOE and workover expenses were $54.2 million, or
$8.14 per Boe, compared with $63.3 million, or $7.83 per Boe in 2017.
LOE per Boe decreased by $0.38 for the full year 2018 compared to the
full year 2017 primarily due to the sale of the Company’s Anadarko Basin
producing properties in May 2018, which had higher LOE per Boe. Full
year 2018 workover expenses increased $0.69 per Boe from the full year
2017 due to the Company’s expanded Mississippian Lime workover program
during 2018.
Severance and other taxes for the fourth quarter of 2018 were $2.7
million, or $1.78 per Boe (6.2% of oil, NGL and natural gas sales
revenue), compared to $3.4 million, or $2.03 per Boe (6.2% of oil, NGL
and natural gas sales revenue) in the third quarter of 2018. Full year
2018 severance and other taxes were $11.7 million, or $1.75 per Boe
(5.8% of oil, NGL and natural gas sales revenue), compared with $8.9
million, or $1.10 per Boe (4.0% of oil, NGL and natural gas sales
revenue) in 2017. Severance and other tax rates have increased from
prior quarters due to legislation that was signed into law in Oklahoma
that increased the 4.0% incentive tax rate to 7.0% effective with
December 2017 production. Additionally, new legislation was signed into
law in March 2018 in Oklahoma to further amend the gross production
incentive tax rate for wells drilled beginning July 1, 2015 from 2.0% to
5.0% effective July 2018.
In January 2019, to better align Midstates’ general and administrative
(G&A) expense with its current activity levels, the Company completed a
workforce reduction that will result in annualized Adjusted Cash G&A
expense savings of $4 million to $5 million (excluding one-time
severance costs). G&A expenses for the fourth quarter of 2018 totaled
$4.8 million, or $3.20 per Boe, compared to $4.7 million, or $2.84 per
Boe, in the third quarter of 2018. Fourth quarter 2018 and third quarter
2018 G&A expenses included net non-cash share-based compensation expense
of $1.1 million, or $0.72 per Boe, and $0.9 million, or $0.55 per Boe,
respectively. Full year 2018 G&A expenses total $24.5 million, or $3.68
per Boe, compared to $29.4 million, or $3.63 per Boe, for the full year
2017. Full year 2018 and full year 2017 G&A expenses included net
non-cash share-based compensation expense of $5.4 million, or $0.81 per
Boe, and $9.2 million, or $1.14 per Boe, respectively. Adjusted Cash G&A
expense, which excludes non-cash share-based compensation and certain
non-recurring items, but includes capitalized general and administrative
costs, totaled $3.3 million, or $2.17 per Boe for the fourth quarter of
2018, compared to $3.9 million, or $2.33 per Boe, in the third quarter
of 2018. Fourth quarter 2018 Adjusted Cash G&A expenses decreased
compared to third quarter of 2018 primarily due to lower employee costs.
Full year 2018 Adjusted Cash G&A expense totaled $15.5 million, or $2.32
per Boe, compared to $20.1 million, or $2.48 per Boe, for the full year
2017. Full year 2018 Adjusted Cash G&A expenses decreased compared to
full year 2017 primarily due to lower employee costs.
Depreciation, depletion and amortization expense for the fourth quarter
of 2018 totaled $14.8 million, or $9.85 per Boe, compared to $15.5
million, or $9.36 per Boe in the third quarter of 2018. Full year 2018
Depreciation, depletion and amortization expense total $62.0 million, or
$9.31 per Boe, compared to $65.8 million, or $8.14 per Boe, for the full
year 2017.
Interest expense totaled $0.7 million (net of amounts capitalized) for
the fourth quarter of 2018, compared to $0.7 million in the third
quarter of 2018. The Company capitalized $0.2 million in interest to
unproved properties in the fourth quarter of 2018 and 0.1 million in
third quarter of 2018. Full year 2018 interest expense total $4.5
million (net of amounts capitalized), compared to $5.6 million for the
full year 2017. The Company capitalized $0.5 million in interest to
unproved properties in 2018 and $2.4 million in 2017. The decrease in
interest expenses for full year 2018 compared to the full year 2017 was
the result of the Company making $105 million in pay-downs during 2018
to the outstanding credit facility balance with proceeds from the sale
of the Anadarko Basin producing properties and cash on hand.
The Company had an effective tax rate of 0% and did not record an income
tax expense or benefit for both the fourth quarter or full year 2018.
Capital Expenditures
In the fourth quarter of 2018, the Company invested $3.6 million of
operating capital in the Mississippian Lime.
The following table provides operational capital spending by area as
well as a reconciliation to total capital expenditures for the three
months and full year ended December 31, 2018 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31,
2018
|
|
|
For the Year Ended December 31, 2018
|
Drilling and completion activities
|
|
|
|
$
|
2,636
|
|
|
$
|
90,220
|
Acquisition of acreage and seismic data
|
|
|
|
|
967
|
|
|
|
6,246
|
Operational capital expenditures incurred
|
|
|
|
$
|
3,603
|
|
|
$
|
96,466
|
Capitalized G&A, office, ARO & other
|
|
|
|
|
395
|
|
|
|
3,744
|
Capitalized interest
|
|
|
|
|
153
|
|
|
|
466
|
Total capital expenditures incurred
|
|
|
|
$
|
4,151
|
|
|
$
|
100,676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31,
2018
|
|
|
For the Year Ended December 31, 2018
|
Mississippian Lime
|
|
|
|
$
|
3,603
|
|
|
$
|
96,530
|
|
Anadarko Basin
|
|
|
|
|
—
|
|
|
|
(64
|
)
|
Total operational capital expenditures incurred
|
|
|
|
$
|
3,603
|
|
|
$
|
96,466
|
|
|
|
|
|
|
|
|
|
Balance Sheet and Liquidity
On December 31, 2018, the Company’s liquidity was approximately $156.3
million, consisting of cash and cash equivalents of $11.3 million and
$145.0 million available under its credit facility. Its long-term debt
was $23.1 million, resulting in net debt of approximately $11.8 million.
As of March 6, 2019, the Company’s liquidity was approximately $109.0
million, consisting of cash and cash equivalents of $3.0 million and
$106.0 million available under its credit facility. Its long-term debt
was $62.1 million, resulting in net debt of approximately $59.1 million.
On October 24, 2018, the Company’s borrowing base under its revolving
credit facility was reaffirmed at $170 million. The next scheduled
borrowing base redetermination will occur during the second quarter of
2019.
Strategic Update
Midstates is committed to pursuing all strategic and opportunistic
transactions that create significant shareholder value, including a sale
of the Company or mergers and acquisitions that provide for greater
scale and operational synergies to enhance bottom line profitability. To
aid in this pursuit, the Company has retained Houlihan Lokey, Inc as its
financial advisor.
Conference Call Information
The Company will host a conference call to discuss fourth quarter and
year-end 2018 results on Thursday, March 14, at 9:00 a.m. Eastern time
(8:00 a.m. Central time). Participants may join the conference call by
dialing (877) 645-4610 (for U.S. and Canada) or (707) 595-2723
(International). The conference call access code is 5358516 for all
participants. To listen via live web cast, please visit the Investor
Relations section of the Company’s website, www.midstatespetroleum.com.
An audio replay of the conference call will be available approximately
two hours after the conclusion of the call. The audio replay will remain
available for approximately 30 days and can be accessed by dialing (855)
859-2056 (for U.S. and Canada) or (404) 537-3406 (International). The
conference call audio replay access code is 5358516 for all
participants. The audio replay will also be available in the Investors
section of the Company’s website approximately two hours after the
conclusion of the call and remain available for approximately 30
calendar days.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. All statements that are not
statements of historical fact, including statements regarding the
Company’s strategy, future operations, financial position, estimated
revenues and losses, projected costs, resource potential, drilling
locations, prospects and plans and objectives of management, are
considered forward-looking statements. Without limiting the generality
of the foregoing, these statements are based on certain assumptions made
by the Company based on management's experience, expectations and
perception of historical trends, current conditions, anticipated future
developments and other factors believed to be appropriate. Although the
Company believes that its plans, intentions and expectations reflected
in or suggested by the forward-looking statements made in this press
release are reasonable, the Company gives no assurance that these plans,
intentions or expectations will be achieved when anticipated or at all.
Moreover, such statements are subject to a number of factors, 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 factors include, but are not limited
to variations in the market demand for, and prices of, oil and natural
gas; uncertainties about the Company’s estimated quantities of oil and
natural gas reserves, resource potential and drilling locations; the
adequacy of the Company’s capital resources and liquidity; general
economic and business conditions; weather-related downtime; failure to
realize expected value creation from property acquisitions;
uncertainties about the Company’s ability to replace reserves and
economically develop its current reserves; risks related to the
concentration of the Company’s operations; drilling results; and
potential financial losses or earnings reductions from the Company’s
commodity derivative positions.
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.
About Midstates Petroleum Company, Inc.
Midstates Petroleum Company, Inc. is an independent exploration and
production company focused on the application of modern drilling and
completion techniques in oil and liquids-rich basins in the onshore U.S.
The Company’s operations are currently focused on oilfields in the
Mississippian Lime play in Oklahoma.
|
|
|
|
|
|
|
|
MIDSTATES PETROLEUM COMPANY, INC.
|
CONSOLIDATED BALANCE SHEETS
|
|
(In thousands, except share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
|
|
December 31, 2017
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
11,341
|
|
|
|
$
|
68,498
|
|
Accounts receivable:
|
|
|
|
|
|
|
|
Oil and gas sales
|
|
|
|
|
22,165
|
|
|
|
|
32,455
|
|
Joint interest billing
|
|
|
|
|
2,474
|
|
|
|
|
3,297
|
|
Other
|
|
|
|
|
1,374
|
|
|
|
|
166
|
|
Commodity derivative contracts
|
|
|
|
|
6,940
|
|
|
|
|
762
|
|
Other current assets
|
|
|
|
|
1,684
|
|
|
|
|
1,510
|
|
Total current assets
|
|
|
|
|
45,978
|
|
|
|
|
106,688
|
|
PROPERTY AND EQUIPMENT:
|
|
|
|
|
|
|
|
Oil and gas properties, on the basis of full-cost accounting
|
|
|
|
|
|
|
|
Proved properties
|
|
|
|
|
809,272
|
|
|
|
|
765,308
|
|
Unproved properties not being amortized
|
|
|
|
|
4,050
|
|
|
|
|
7,065
|
|
Other property and equipment
|
|
|
|
|
6,345
|
|
|
|
|
6,508
|
|
Less accumulated depreciation, depletion and amortization
|
|
|
|
|
(266,198
|
)
|
|
|
|
(204,419
|
)
|
Net property and equipment
|
|
|
|
|
553,469
|
|
|
|
|
574,462
|
|
OTHER NONCURRENT ASSETS:
|
|
|
|
|
|
|
|
Commodity derivative assets
|
|
|
|
|
791
|
|
|
|
|
—
|
|
Other noncurrent assets
|
|
|
|
|
5,257
|
|
|
|
|
6,978
|
|
Total other noncurrent assets
|
|
|
|
|
6,048
|
|
|
|
|
6,978
|
|
TOTAL
|
|
|
|
$
|
605,495
|
|
|
|
$
|
688,128
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
6,511
|
|
|
|
$
|
11,547
|
|
Accrued liabilities
|
|
|
|
|
25,521
|
|
|
|
|
42,842
|
|
Commodity derivative contracts
|
|
|
|
|
—
|
|
|
|
|
3,433
|
|
Total current liabilities
|
|
|
|
|
32,032
|
|
|
|
|
57,822
|
|
LONG-TERM LIABILITIES:
|
|
|
|
|
|
|
|
Asset retirement obligations
|
|
|
|
|
8,087
|
|
|
|
|
15,506
|
|
Commodity derivative contracts
|
|
|
|
|
80
|
|
|
|
|
562
|
|
Long-term debt
|
|
|
|
|
23,059
|
|
|
|
|
128,059
|
|
Other long-term liabilities
|
|
|
|
|
560
|
|
|
|
|
592
|
|
Total long-term liabilities
|
|
|
|
|
31,786
|
|
|
|
|
144,719
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY:
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value, 50,000,000 shares authorized
|
|
|
|
|
—
|
|
|
|
|
—
|
|
Warrants, 6,625,554 warrants outstanding
|
|
|
|
|
37,329
|
|
|
|
|
37,329
|
|
Common stock, $0.01 par value, 250,000,000 shares authorized
|
|
|
|
|
255
|
|
|
|
|
253
|
|
Treasury stock
|
|
|
|
|
(2,455
|
)
|
|
|
|
(1,603
|
)
|
Additional paid-in-capital
|
|
|
|
|
531,911
|
|
|
|
|
524,755
|
|
Retained deficit
|
|
|
|
|
(25,363
|
)
|
|
|
|
(75,147
|
)
|
Total stockholders’ equity
|
|
|
|
|
541,677
|
|
|
|
|
485,587
|
|
TOTAL
|
|
|
|
$
|
605,495
|
|
|
|
$
|
688,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDSTATES PETROLEUM COMPANY, INC.
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Year
Ended
|
|
|
For the Three
Months Ended
|
|
|
For the Year
Ended
|
|
|
For the Three
Months Ended
|
|
|
|
|
December 31,
2018
|
|
|
December 31,
2018
|
|
|
December 31,
2017
|
|
|
December 31, 2017
|
|
|
September 30, 2018
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil sales
|
|
|
|
$
|
24,111
|
|
|
|
$
|
123,945
|
|
|
|
$
|
31,586
|
|
|
|
$
|
117,083
|
|
|
|
$
|
33,218
|
|
Natural gas liquid sales
|
|
|
|
|
9,096
|
|
|
|
|
44,747
|
|
|
|
|
12,532
|
|
|
|
|
44,112
|
|
|
|
|
12,720
|
|
Natural gas sales
|
|
|
|
|
9,993
|
|
|
|
|
32,138
|
|
|
|
|
13,387
|
|
|
|
|
59,708
|
|
|
|
|
7,026
|
|
Other revenue
|
|
|
|
|
1,018
|
|
|
|
|
4,252
|
|
|
|
|
947
|
|
|
|
|
4,191
|
|
|
|
|
1,384
|
|
Total revenues from contracts with customers
|
|
|
|
|
44,218
|
|
|
|
|
205,082
|
|
|
|
|
58,452
|
|
|
|
|
225,094
|
|
|
|
|
54,348
|
|
Gains (losses) on commodity derivative contracts—net
|
|
|
|
|
25,425
|
|
|
|
|
3,555
|
|
|
|
|
(5,108
|
)
|
|
|
|
3,659
|
|
|
|
|
(6,583
|
)
|
Total revenues
|
|
|
|
|
69,643
|
|
|
|
|
208,637
|
|
|
|
|
53,344
|
|
|
|
|
228,753
|
|
|
|
|
47,765
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating and workover
|
|
|
|
|
10,608
|
|
|
|
|
54,229
|
|
|
|
|
15,223
|
|
|
|
|
63,287
|
|
|
|
|
11,861
|
|
Gathering and transportation
|
|
|
|
|
63
|
|
|
|
|
241
|
|
|
|
|
3,480
|
|
|
|
|
14,507
|
|
|
|
|
54
|
|
Severance and other taxes
|
|
|
|
|
2,682
|
|
|
|
|
11,680
|
|
|
|
|
2,701
|
|
|
|
|
8,869
|
|
|
|
|
3,360
|
|
Asset retirement accretion
|
|
|
|
|
152
|
|
|
|
|
846
|
|
|
|
|
267
|
|
|
|
|
1,100
|
|
|
|
|
147
|
|
Depreciation, depletion, and amortization
|
|
|
|
|
14,818
|
|
|
|
|
62,000
|
|
|
|
|
19,361
|
|
|
|
|
65,832
|
|
|
|
|
15,485
|
|
Impairment in carrying value of oil and gas properties
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
125,300
|
|
|
|
|
125,300
|
|
|
|
|
—
|
|
General and administrative
|
|
|
|
|
4,805
|
|
|
|
|
24,540
|
|
|
|
|
6,250
|
|
|
|
|
29,352
|
|
|
|
|
4,688
|
|
Advisory fees
|
|
|
|
|
—
|
|
|
|
|
850
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
Total expenses
|
|
|
|
|
33,128
|
|
|
|
|
154,386
|
|
|
|
|
172,582
|
|
|
|
|
308,247
|
|
|
|
|
35,595
|
|
OPERATING INCOME (LOSS)
|
|
|
|
|
36,515
|
|
|
|
|
54,251
|
|
|
|
|
(119,238
|
)
|
|
|
|
(79,494
|
)
|
|
|
|
12,170
|
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
5
|
|
|
|
|
33
|
|
|
|
|
9
|
|
|
|
|
9
|
|
|
|
|
4
|
|
Interest expense—net
|
|
|
|
|
(713
|
)
|
|
|
|
(4,500
|
)
|
|
|
|
(1,738
|
)
|
|
|
|
(5,592
|
)
|
|
|
|
(658
|
)
|
Total other expense
|
|
|
|
|
(708
|
)
|
|
|
|
(4,467
|
)
|
|
|
|
(1,729
|
)
|
|
|
|
(5,583
|
)
|
|
|
|
(654
|
)
|
INCOME (LOSS) BEFORE TAXES
|
|
|
|
|
35,807
|
|
|
|
|
49,784
|
|
|
|
|
(120,967
|
)
|
|
|
|
(85,077
|
)
|
|
|
|
11,516
|
|
Income tax benefit
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
NET INCOME (LOSS)
|
|
|
|
$
|
35,807
|
|
|
|
$
|
49,784
|
|
|
|
$
|
(120,967
|
)
|
|
|
$
|
(85,077
|
)
|
|
|
$
|
11,516
|
|
Participating securities—non-vested restricted stock
|
|
|
|
|
(940
|
)
|
|
|
|
(1,394
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(351
|
)
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
|
|
|
$
|
34,867
|
|
|
|
$
|
48,390
|
|
|
|
$
|
(120,967
|
)
|
|
|
$
|
(85,077
|
)
|
|
|
$
|
11,165
|
|
Basic and diluted net income (loss) per share attributable to common
shareholders
|
|
|
|
$
|
1.38
|
|
|
|
$
|
1.91
|
|
|
|
$
|
(4.78
|
)
|
|
|
$
|
(3.39
|
)
|
|
|
$
|
0.44
|
|
Basic and diluted weighted average number of common shares
outstanding
|
|
|
|
|
25,385
|
|
|
|
|
25,337
|
|
|
|
|
25,253
|
|
|
|
|
25,119
|
|
|
|
|
25,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDSTATES PETROLEUM COMPANY, INC.
|
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A Preferred Stock
|
|
|
Common Stock
|
|
|
Warrants
|
|
|
Treasury Stock
|
|
|
Additional Paid-in-Capital
|
|
|
Retained Earnings (Deficit)
|
|
|
Total Stockholders’ Equity (Deficit)
|
Balance as of December 31, 2015 (Predecessor)
|
|
|
|
$
|
—
|
|
|
$
|
110
|
|
|
|
$
|
—
|
|
|
$
|
(3,081
|
)
|
|
|
$
|
888,247
|
|
|
|
$
|
(2,211,342
|
)
|
|
|
$
|
(1,326,066
|
)
|
Share-based compensation
|
|
|
|
|
—
|
|
|
|
(6
|
)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
3,045
|
|
|
|
|
—
|
|
|
|
|
3,039
|
|
Acquisition of treasury stock
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
(53
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(53
|
)
|
Net income
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1,323,079
|
|
|
|
|
1,323,079
|
|
Balance as of October 21, 2016 (Predecessor)
|
|
|
|
$
|
—
|
|
|
$
|
104
|
|
|
|
$
|
—
|
|
|
$
|
(3,134
|
)
|
|
|
$
|
891,292
|
|
|
|
$
|
(888,263
|
)
|
|
|
$
|
(1
|
)
|
Cancellation of predecessor equity
|
|
|
|
|
—
|
|
|
|
(104
|
)
|
|
|
|
—
|
|
|
|
3,134
|
|
|
|
|
(891,292
|
)
|
|
|
|
888,263
|
|
|
|
|
1
|
|
Balance as of October 21, 2016 (Predecessor)
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
Issuance of successor common stock
|
|
|
|
|
—
|
|
|
|
247
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
510,905
|
|
|
|
|
—
|
|
|
|
|
511,152
|
|
Issuance of successor warrants
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
37,329
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
37,329
|
|
Balance as of October 21, 2016 (Successor)
|
|
|
|
$
|
—
|
|
|
$
|
247
|
|
|
|
$
|
37,329
|
|
|
$
|
—
|
|
|
|
$
|
510,905
|
|
|
|
$
|
—
|
|
|
|
$
|
548,481
|
|
Issuance of successor common stock
|
|
|
|
|
—
|
|
|
|
3
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
3
|
|
Share-based compensation
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
3,400
|
|
|
|
|
—
|
|
|
|
|
3,400
|
|
Net income
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
9,930
|
|
|
|
|
9,930
|
|
Balance as of December 31, 2016 (Successor)
|
|
|
|
$
|
—
|
|
|
$
|
250
|
|
|
|
$
|
37,329
|
|
|
$
|
—
|
|
|
|
$
|
514,305
|
|
|
|
$
|
9,930
|
|
|
|
$
|
561,814
|
|
Issuance of successor common stock
|
|
|
|
|
—
|
|
|
|
3
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
10,450
|
|
|
|
|
—
|
|
|
|
|
10,453
|
|
Share-based compensation
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
(1,603
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,603
|
)
|
Net loss
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(85,077
|
)
|
|
|
|
(85,077
|
)
|
Balance as of December 31, 2018 (Successor)
|
|
|
|
$
|
—
|
|
|
$
|
253
|
|
|
|
$
|
37,329
|
|
|
$
|
(1,603
|
)
|
|
|
$
|
524,755
|
|
|
|
$
|
(75,147
|
)
|
|
|
$
|
485,587
|
|
Share-based compensation
|
|
|
|
|
—
|
|
|
|
2
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
7,156
|
|
|
|
|
—
|
|
|
|
|
7,158
|
|
Acquisition of treasury stock
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
(852
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(852
|
)
|
Net income
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
49,784
|
|
|
|
|
49,784
|
|
Balance as of December 31, 2018 (Successor)
|
|
|
|
$
|
—
|
|
|
$
|
255
|
|
|
|
$
|
37,329
|
|
|
$
|
(2,455
|
)
|
|
|
$
|
531,911
|
|
|
|
$
|
(25,363
|
)
|
|
|
$
|
541,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDSTATES PETROLEUM COMPANY, INC.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended
|
|
|
For the Year Ended
|
|
|
|
|
December 31, 2018
|
|
|
December 31, 2017
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
|
$
|
49,784
|
|
|
|
$
|
(85,077
|
)
|
Adjustments to reconcile net income/(loss) to net cash provided
by operating activities:
|
|
|
|
|
|
|
|
(Gains) on commodity derivative contracts—net
|
|
|
|
|
(3,555
|
)
|
|
|
|
(3,659
|
)
|
Net cash received (paid) for commodity derivative contracts not
designated as hedging instruments
|
|
|
|
|
(7,328
|
)
|
|
|
|
6,891
|
|
Asset retirement accretion
|
|
|
|
|
846
|
|
|
|
|
1,100
|
|
Depreciation, depletion, and amortization
|
|
|
|
|
62,000
|
|
|
|
|
65,832
|
|
Impairment in carrying value of oil and gas properties
|
|
|
|
|
—
|
|
|
|
|
125,300
|
|
Share-based compensation, net of amounts capitalized to oil and gas
properties
|
|
|
|
|
5,407
|
|
|
|
|
9,196
|
|
Amortization of deferred financing costs
|
|
|
|
|
476
|
|
|
|
|
385
|
|
Change in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable—oil and gas sales
|
|
|
|
|
8,690
|
|
|
|
|
2,766
|
|
Accounts receivable—JIB and other
|
|
|
|
|
(744
|
)
|
|
|
|
3,362
|
|
Other current and noncurrent assets
|
|
|
|
|
537
|
|
|
|
|
283
|
|
Accounts payable
|
|
|
|
|
(1,779
|
)
|
|
|
|
2,961
|
|
Accrued liabilities
|
|
|
|
|
(7,145
|
)
|
|
|
|
(8,973
|
)
|
Other
|
|
|
|
|
(34
|
)
|
|
|
|
(765
|
)
|
Net cash provided by operating activities
|
|
|
|
$
|
107,155
|
|
|
|
$
|
119,602
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Investment in property and equipment
|
|
|
|
$
|
(112,398
|
)
|
|
|
$
|
(130,199
|
)
|
Proceeds from the sale of oil and gas properties
|
|
|
|
|
54,091
|
|
|
|
|
2,885
|
|
Proceeds from the sale of oil and gas equipment
|
|
|
|
|
355
|
|
|
|
|
1,350
|
|
Net cash used in investing activities
|
|
|
|
$
|
(57,952
|
)
|
|
|
$
|
(125,964
|
)
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds from revolving credit facility
|
|
|
|
$
|
1,000
|
|
|
|
$
|
—
|
|
Repayment of revolving credit facility
|
|
|
|
|
(106,000
|
)
|
|
|
|
—
|
|
Deferred financing costs
|
|
|
|
|
(508
|
)
|
|
|
|
(375
|
)
|
Repurchase of restricted stock for tax withholdings
|
|
|
|
|
(852
|
)
|
|
|
|
(1,603
|
)
|
Net cash used in financing activities
|
|
|
|
$
|
(106,360
|
)
|
|
|
$
|
(1,978
|
)
|
NET (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
|
$
|
(57,157
|
)
|
|
|
$
|
(8,340
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
|
|
68,498
|
|
|
|
|
76,838
|
|
Cash and cash equivalents, end of period
|
|
|
|
$
|
11,341
|
|
|
|
$
|
68,498
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
|
|
|
Non-cash transactions — investments in property and equipment
accrued — not paid
|
|
|
|
$
|
6,092
|
|
|
|
$
|
17,164
|
|
Cash paid for interest, net
|
|
|
|
$
|
4,128
|
|
|
|
$
|
5,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDSTATES PETROLEUM COMPANY, INC.
|
SELECTED FINANCIAL AND OPERATING STATISTICS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31,
|
|
|
For the Year Ended December 31,
|
|
|
For the Three Months Ended September 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
Operating Data – Mississippian Lime:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net production volumes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (Bbls/day)
|
|
|
|
|
4,463
|
|
|
|
4,960
|
|
|
|
4,768
|
|
|
|
5,108
|
|
|
|
5,249
|
NGLs (Bbls/day)
|
|
|
|
|
4,194
|
|
|
|
3,903
|
|
|
|
4,014
|
|
|
|
4,273
|
|
|
|
4,257
|
Natural gas (Mcf/day)
|
|
|
|
|
46,161
|
|
|
|
50,787
|
|
|
|
47,791
|
|
|
|
52,797
|
|
|
|
50,939
|
Total oil equivalents (MBoe)
|
|
|
|
|
1,505
|
|
|
|
1,594
|
|
|
|
6,113
|
|
|
|
6,636
|
|
|
|
1,656
|
Average daily production (Boe/day)
|
|
|
|
|
16,351
|
|
|
|
17,327
|
|
|
|
16,747
|
|
|
|
18,181
|
|
|
|
17,996
|
Operating Data – Anadarko Basin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net production volumes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (Bbls/day)
|
|
|
|
|
—
|
|
|
|
1,347
|
|
|
|
1,168
|
|
|
|
1,379
|
|
|
|
—
|
NGLs (Bbls/day)
|
|
|
|
|
—
|
|
|
|
1,065
|
|
|
|
1,017
|
|
|
|
1,066
|
|
|
|
—
|
Natural gas (Mcf/day)
|
|
|
|
|
—
|
|
|
|
8,867
|
|
|
|
8,365
|
|
|
|
9,135
|
|
|
|
—
|
Total oil equivalents (MBoe)
|
|
|
|
|
—
|
|
|
|
358
|
|
|
|
540
|
|
|
|
1,448
|
|
|
|
—
|
Average daily production (Boe/day)
|
|
|
|
|
—
|
|
|
|
3,890
|
|
|
|
3,579
|
|
|
|
3,967
|
|
|
|
—
|
Operating Data - Combined:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net production volumes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (Bbls/day)
|
|
|
|
|
4,463
|
|
|
|
6,307
|
|
|
|
5,936
|
|
|
|
6,487
|
|
|
|
5,249
|
NGLs (Bbls/day)
|
|
|
|
|
4,194
|
|
|
|
4,968
|
|
|
|
5,031
|
|
|
|
5,339
|
|
|
|
4,257
|
Natural gas (Mcf/day)
|
|
|
|
|
46,161
|
|
|
|
59,654
|
|
|
|
56,156
|
|
|
|
61,932
|
|
|
|
50,939
|
Total oil equivalents (MBoe)
|
|
|
|
|
1,505
|
|
|
|
1,952
|
|
|
|
6,663
|
|
|
|
8,084
|
|
|
|
1,656
|
Average daily production (Boe/day)
|
|
|
|
|
16,351
|
|
|
|
21,217
|
|
|
|
20,326
|
|
|
|
22,148
|
|
|
|
17,996
|
Average Sales Prices:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil, without realized derivatives (per Bbl)
|
|
|
|
$
|
58.73
|
|
|
$
|
54.43
|
|
|
$
|
64.54
|
|
|
$
|
49.45
|
|
|
$
|
68.79
|
Oil, with realized derivatives (per Bbl)
|
|
|
|
$
|
63.64
|
|
|
$
|
53.49
|
|
|
$
|
60.82
|
|
|
$
|
50.92
|
|
|
$
|
60.68
|
Natural gas liquids, without realized derivatives (per Bbl)
|
|
|
|
$
|
23.57
|
|
|
$
|
27.42
|
|
|
$
|
27.58
|
|
|
$
|
22.64
|
|
|
$
|
32.48
|
Natural gas liquids, with realized derivatives (per Bbl)
|
|
|
|
$
|
23.57
|
|
|
$
|
27.42
|
|
|
$
|
27.58
|
|
|
$
|
22.64
|
|
|
$
|
32.48
|
Natural gas, without realized derivatives (per Mcf)
|
|
|
|
$
|
2.35
|
|
|
$
|
2.44
|
|
|
$
|
1.72
|
|
|
$
|
2.64
|
|
|
$
|
1.49
|
Natural gas, with realized derivatives (per Mcf)
|
|
|
|
$
|
1.93
|
|
|
$
|
2.67
|
|
|
$
|
1.71
|
|
|
$
|
2.79
|
|
|
$
|
1.51
|
Costs and Expenses (per Boe of production):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
|
|
|
|
$
|
6.27
|
|
|
$
|
7.02
|
|
|
$
|
6.35
|
|
|
$
|
6.73
|
|
|
$
|
5.81
|
Workover
|
|
|
|
$
|
0.78
|
|
|
$
|
0.78
|
|
|
$
|
1.79
|
|
|
$
|
1.10
|
|
|
$
|
1.35
|
Gathering and transportation
|
|
|
|
$
|
0.04
|
|
|
$
|
1.78
|
|
|
$
|
0.04
|
|
|
$
|
1.79
|
|
|
$
|
0.03
|
Severance and other taxes
|
|
|
|
$
|
1.78
|
|
|
$
|
1.38
|
|
|
$
|
1.75
|
|
|
$
|
1.10
|
|
|
$
|
2.03
|
Asset retirement accretion
|
|
|
|
$
|
0.10
|
|
|
$
|
0.14
|
|
|
$
|
0.13
|
|
|
$
|
0.14
|
|
|
$
|
0.09
|
Depreciation, depletion and amortization
|
|
|
|
$
|
9.85
|
|
|
$
|
9.92
|
|
|
$
|
9.31
|
|
|
$
|
8.14
|
|
|
$
|
9.36
|
Impairment of oil and gas properties
|
|
|
|
$
|
—
|
|
|
$
|
64.19
|
|
|
$
|
—
|
|
|
$
|
15.50
|
|
|
$
|
—
|
General and administrative
|
|
|
|
$
|
3.20
|
|
|
$
|
3.20
|
|
|
$
|
3.68
|
|
|
$
|
3.63
|
|
|
$
|
2.84
|
Advisory fees
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDSTATES PETROLEUM COMPANY, INC.
|
ADJUSTED EBITDA
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31,
|
|
|
For the Year Ended December 31,
|
|
|
For the Three Months Ended September 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
Adjusted EBITDA to net income (loss) reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
|
$
|
35,807
|
|
|
|
$
|
(120,967
|
)
|
|
|
$
|
49,784
|
|
|
|
$
|
(85,077
|
)
|
|
|
$
|
11,516
|
|
Depreciation, depletion and amortization
|
|
|
|
|
14,818
|
|
|
|
|
19,361
|
|
|
|
|
62,000
|
|
|
|
|
65,832
|
|
|
|
|
15,485
|
|
Impairment in carrying value of oil and gas properties
|
|
|
|
|
—
|
|
|
|
|
125,300
|
|
|
|
|
—
|
|
|
|
|
125,300
|
|
|
|
|
—
|
|
Losses (gains) on commodity derivative contracts—net
|
|
|
|
|
(25,425
|
)
|
|
|
|
5,108
|
|
|
|
|
(3,555
|
)
|
|
|
|
(3,659
|
)
|
|
|
|
6,583
|
|
Net cash received (paid) for commodity derivative contracts not
designated as hedging instruments
|
|
|
|
|
203
|
|
|
|
|
742
|
|
|
|
|
(7,328
|
)
|
|
|
|
6,891
|
|
|
|
|
(3,854
|
)
|
Income tax expense
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
Interest income
|
|
|
|
|
(5
|
)
|
|
|
|
(9
|
)
|
|
|
|
(33
|
)
|
|
|
|
(9
|
)
|
|
|
|
(4
|
)
|
Interest expense, net of amounts capitalized
|
|
|
|
|
713
|
|
|
|
|
1,738
|
|
|
|
|
4,500
|
|
|
|
|
5,592
|
|
|
|
|
658
|
|
Asset retirement obligation accretion
|
|
|
|
|
152
|
|
|
|
|
267
|
|
|
|
|
846
|
|
|
|
|
1,100
|
|
|
|
|
147
|
|
Share-based compensation, net of amounts capitalized
|
|
|
|
|
1,078
|
|
|
|
|
2,094
|
|
|
|
|
5,407
|
|
|
|
|
9,196
|
|
|
|
|
905
|
|
Adjusted EBITDA
|
|
|
|
$
|
27,341
|
|
|
|
$
|
33,634
|
|
|
|
$
|
111,621
|
|
|
|
$
|
125,166
|
|
|
|
$
|
31,436
|
|
Lagging costs associated with restructuring
|
|
|
|
|
208
|
|
|
|
|
—
|
|
|
|
|
543
|
|
|
|
|
—
|
|
|
|
|
—
|
|
Costs incurred for strategic reviews
|
|
|
|
|
280
|
|
|
|
|
—
|
|
|
|
|
3,402
|
|
|
|
|
—
|
|
|
|
|
489
|
|
Advisory costs
|
|
|
|
|
—
|
|
|
|
|
300
|
|
|
|
|
850
|
|
|
|
|
3,030
|
|
|
|
|
—
|
|
Adjusted EBITDA before restructuring and advisory costs
|
|
|
|
$
|
27,829
|
|
|
|
$
|
33,934
|
|
|
|
$
|
116,416
|
|
|
|
$
|
128,196
|
|
|
|
$
|
31,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDSTATES PETROLEUM COMPANY, INC.
|
CASH OPERATING EXPENSES
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31,
|
|
|
For the Year Ended December 31,
|
|
|
For the Three Months Ended September 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses – GAAP
|
|
|
|
$
|
33,128
|
|
|
$
|
172,582
|
|
|
$
|
154,386
|
|
|
$
|
308,247
|
|
|
$
|
35,595
|
Adjustments for certain non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset retirement accretion
|
|
|
|
|
152
|
|
|
|
267
|
|
|
|
846
|
|
|
|
1,100
|
|
|
|
147
|
Share-based compensation, net
|
|
|
|
|
1,078
|
|
|
|
2,094
|
|
|
|
5,407
|
|
|
|
9,196
|
|
|
|
905
|
Depreciation, depletion and amortization
|
|
|
|
|
14,818
|
|
|
|
19,360
|
|
|
|
62,000
|
|
|
|
65,832
|
|
|
|
15,485
|
Impairment of oil and gas properties
|
|
|
|
|
—
|
|
|
|
125,300
|
|
|
|
—
|
|
|
|
125,300
|
|
|
|
—
|
Cash Operating Expenses – Non-GAAP
|
|
|
|
$
|
17,080
|
|
|
$
|
25,561
|
|
|
$
|
86,133
|
|
|
$
|
106,819
|
|
|
$
|
19,058
|
Cash Operating Expenses – Non-GAAP per Boe
|
|
|
|
$
|
11.35
|
|
|
$
|
13.09
|
|
|
$
|
12.93
|
|
|
$
|
13.21
|
|
|
$
|
11.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory fees
|
|
|
|
$
|
—
|
|
|
$
|
300
|
|
|
$
|
850
|
|
|
$
|
3,030
|
|
|
$
|
—
|
Advisory fees, per Boe
|
|
|
|
$
|
—
|
|
|
$
|
0.15
|
|
|
$
|
0.13
|
|
|
$
|
0.37
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lagging costs associated with restructuring
|
|
|
|
$
|
208
|
|
|
$
|
—
|
|
|
$
|
543
|
|
|
$
|
—
|
|
|
$
|
—
|
Lagging costs associated with restructuring, per Boe
|
|
|
|
$
|
0.14
|
|
|
$
|
—
|
|
|
$
|
0.08
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance costs
|
|
|
|
$
|
—
|
|
|
$
|
331
|
|
|
$
|
1,621
|
|
|
$
|
331
|
|
|
$
|
—
|
Severance costs, per Boe
|
|
|
|
$
|
—
|
|
|
$
|
0.17
|
|
|
$
|
0.24
|
|
|
$
|
0.04
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs incurred for strategic reviews
|
|
|
|
$
|
280
|
|
|
$
|
—
|
|
|
$
|
3,402
|
|
|
$
|
—
|
|
|
$
|
489
|
Costs incurred for strategic reviews, per Boe
|
|
|
|
$
|
0.19
|
|
|
$
|
—
|
|
|
$
|
0.51
|
|
|
$
|
—
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Cash Operating Expenses – Non-GAAP
|
|
|
|
$
|
16,592
|
|
|
$
|
24,930
|
|
|
$
|
79,717
|
|
|
$
|
103,458
|
|
|
$
|
18,569
|
Adjusted Cash Operating Expenses – Non-GAAP per Boe
|
|
|
|
$
|
11.02
|
|
|
$
|
12.77
|
|
|
$
|
11.97
|
|
|
$
|
12.80
|
|
|
$
|
11.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDSTATES PETROLEUM COMPANY, INC.
|
ADJUSTED CASH GENERAL AND ADMINISTRATIVE EXPENSES
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 31,
|
|
|
For the Year Ended December 31,
|
|
|
For the Three Months Ended September 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative Expenses – GAAP
|
|
|
|
$
|
4,805
|
|
|
|
$
|
6,250
|
|
|
|
$
|
24,540
|
|
|
|
$
|
29,352
|
|
|
|
$
|
4,688
|
|
Adjustments for certain non-cash and non-recurring items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation, net
|
|
|
|
|
(1,078
|
)
|
|
|
|
(2,094
|
)
|
|
|
|
(5,407
|
)
|
|
|
|
(9,196
|
)
|
|
|
|
(905
|
)
|
Capitalized general and administrative expenses
|
|
|
|
|
29
|
|
|
|
|
606
|
|
|
|
|
1,900
|
|
|
|
|
3,270
|
|
|
|
|
571
|
|
Severance costs
|
|
|
|
|
—
|
|
|
|
|
(331
|
)
|
|
|
|
(1,621
|
)
|
|
|
|
(331
|
)
|
|
|
|
—
|
|
Costs incurred for strategic reviews
|
|
|
|
|
(280
|
)
|
|
|
|
—
|
|
|
|
|
(3,402
|
)
|
|
|
|
—
|
|
|
|
|
(489
|
)
|
Advisory costs included in general and administrative expenses
|
|
|
|
|
(208
|
)
|
|
|
|
(300
|
)
|
|
|
|
(543
|
)
|
|
|
|
(3,030
|
)
|
|
|
|
—
|
|
Adjusted Cash General and Administrative Expenses –
Non-GAAP
|
|
|
|
$
|
3,268
|
|
|
|
$
|
4,131
|
|
|
|
$
|
15,467
|
|
|
|
$
|
20,065
|
|
|
|
$
|
3,865
|
|
Adjusted Cash General and Administrative Expenses –
Non-GAAP per Boe
|
|
|
|
$
|
2.17
|
|
|
|
$
|
2.12
|
|
|
|
$
|
2.32
|
|
|
|
$
|
2.48
|
|
|
|
$
|
2.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDSTATES PETROLEUM COMPANY, INC. Reconciliation of
PV-10 to the Standardized Measure
We refer to PV-10 as the present value of estimated future net cash
flows of estimated proved reserves as calculated in the respective
reserves report using a discount rate of 10%. This amount includes
projected revenues, estimated production costs, estimated future
development costs and estimated cash flows related to future asset
retirement obligations (“ARO”). PV-10 is a financial measure not defined
under US GAAP. Accordingly, the following table reconciles total PV-10
to the standardized measure of discounted future net cash flows, which
is the most directly comparable US GAAP financial measure. We believe
the presentation of PV-10 provides useful information because it is
widely used by investors in evaluating oil and natural gas companies
without regard to specific income tax characteristics of such entities.
PV-10 is not a measure of financial or operating performance under US
GAAP, nor is it intended to represent the current market value of our
estimated proved reserves. PV-10 should not be considered in isolation
or as a substitute for the standardized measure of discounted future net
cash flows as defined under US GAAP.
The following table provides a reconciliation of PV-10 to the
standardized measure of discounted cash flows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2018
|
|
|
As of December 31, 2017(1)
|
PV-10
|
|
|
|
$ 579,650
|
|
|
$ 558,133
|
Present value of future income tax, discounted at 10%
|
|
|
|
(13,374)
|
|
|
(8,890)
|
Standardized measure of discounted future net cash flows
|
|
|
|
$ 566,276
|
|
|
$ 549,243
|
(1)
|
|
The PV-10 and standardized measure of discounted future net cash
flows as of December 31, 2017 includes our Anadarko Basin assets,
which were divested on May 31, 2018.
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190313005831/en/ Copyright Business Wire 2019
Source: Business Wire
(March 13, 2019 - 4:30 PM EDT)
News by QuoteMedia
www.quotemedia.com
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