Current REN Stock Info

Resolute Energy presents at EnerCom’s The Oil & Gas Conference®

 During Resolute Energy’s breakout session, management was asked the following questions:

  •  With the sale of the midstream assets, what is that going to do to your LOE’s out of the Permian? What should we model for your LOE’s or operating costs out of the Permian?
  •  How do you think about the opportunity set in Reeves County as you move west, because it seems like it gets risky, particularly as you get closer to Carrizo’s acreage which may be spottier and shallower?
  •  With all that information, what is the difference between the Wolfcamp A and B in terms of rock properties?
  • On the longer extended well histories that you said the 90 day rate is 90% of the 30 day rate, how do you explain that?
  • Are you guys feeling any impact from the increase in rig count in the Permian?
  •  On the sand front, what are your thoughts on the Texas Brown vs Northern White from an economics standpoint?
  • What are long term plans for Aneth?
  • When will we get data on the upper and lower Wolfcamp A from the wells you plan to drill?
  •  Could you talk a little about balance sheet strategy, capital management plans, and especially your comfort level with the amount of debt on the balance sheet?
  • Is there any opportunity to block anything else in terms of acreage positions?
  • You mentioned you were pleased to have the acreage to turn two-thirds of your position into 10,000 ft laterals. Do you have plans to take advantage of taking any swaps on the remaining third of undrilled acreage?
  • What is the cost per transaction on acreage in your area?
  • When you think about intrinsic value, do you think the economics is supported by the prices you are seeing?
  • Is anybody testing more downsizing in your area, perhaps 40 or 60 acre spacing?

You can listen to Resolute’s presentation by clicking here.

For the company’s second quarter results, click here.

Resolute Energy (ticker: REN) is an unconventional U.S. operator focused on domestic hydrocarbons, namely crude oil. The company has two primary operating regions with assets in the Permian Basin of Texas and Aneth Field of Colorado/Utah. Resolute holds 17,600 net acres in the Permian Basin and 28,300 net acres in Aneth Field.

The company’s backbone is acreage in the Aneth Field, which utilizes carbon dioxide flood to recover hydrocarbons. The CO2 enhanced recovery allows Aneth Field to experience near-flat production rates while requiring minimum capital expenditures to develop and maintain.

The company has been focused on reducing lease operating costs in its Aneth Field, reducing LOE per barrel by 28% and G&A by 17%. These operational efficiencies are expected to remain intact for the foreseeable future.

In the Permian, the company resumed its drilling operations in the Delaware Basin in November 2015 with a nine well program. Two wells were planned in the Mustang area and seven in the Appaloosa area, all focused on the Wolfcamp A bench (with an expected 1-1.2 MMBoe gross estimated ultimate recovery). The company has 77 gross operated surface drilling locations across 17,600 net acres in the Permian, each with stacked pay potential. In the second quarter 2016 earnings release, Resolute said the plan has been successful with seven of the nine wells already drilled and five of the wells have established initial production above expectations. The company also plans to expand the 2016 drilling program to include five more wells.

In 2015, Resolute Energy sold three property packages which generated $269 million worth of proceeds. The company divested the Gardendale assets in the Midland Basin for $172 million, the Howard and Martin County properties in the Permian Basin for $42 million, and the Highlight Filed interest in Powder River Basin for $55 million. These proceeds were used to pay off outstanding bank balances. As of June 30, 2016, the company has $547.1 million of long term debt ($396.6 million of senior notes and $120.5 million of the second lien term loan) and a $105 million borrowing base with $30 million drawn.

On August 1, 2016, the company closed on the divestiture of midstream assets in Reeves County, TX. This transaction provided approximately $36 million of net proceeds to Resolute, with $2 million paid into a short-term escrow account. Proceeds of the transaction were used to repay all debt outstanding under our revolving credit facility and for general corporate purposes. If the company pays down the $30 million outstanding on the borrowing base, that would reduce Resolute’s debt to $517.1 million.

Resolute Energy released operating and financial results for the second quarter 2016 on August 8, 2016, and the results for the quarter were “particularly strong” according to Resolute’s Chief Executive Officer, Nicholas Sutton. Resolute increased production to 11,865 Boe/d, a 32% increase in production over sequential quarters.

The exit rate of production for June 2016 was 15,400 Boe/d, which is an all-time record for Resolute.

Resolute reported adjusted EBITDA for the second quarter 2016 of $28.4 million, with a net loss of $36.9 million of ($2.44) per share. Operating income for the period was ($4,377), a dramatic improvement from ($80,461) during the second quarter of 2015.

Production in the Permian Basin gained steam during the second quarter. As of June 30 exit rate production had increased to 8,600 Boe/d from approximately 4,500 Boe/d on March 31, a 48% increase through the quarter. At the end of June, with the Permian producing at a rate of 8,600 Boe/d, assets in Texas now account for more than half of the company’s production.

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