PR Newswire
DENVER, Feb. 27, 2018
DENVER, Feb. 27, 2018 /PRNewswire/ --
Bill Barrett Corporation (the "Company") (NYSE: BBG) today reported fourth quarter and full year 2017 financial and operating results and provides first quarter of 2018 outlook on its legacy properties.
Chief Executive Officer and President Scot Woodall commented, "Reflecting on the past year, I'm proud of our accomplishments as we delivered excellent operating and financial results, and executed on strategic goals as well. Our strong execution was highlighted by 2017 production growth of 20%, further improvement in per unit operating costs and lower oil price differentials that translated into industry leading operating margins relative to our DJ Basin peers. Our operations team did an excellent job of executing an efficient capital program that resulted in strong reserve and production growth from our legacy DJ Basin asset. We are also seeing positive results from our enhanced completion program. During the fourth quarter, we completed the sale of our remaining Uinta Basin assets, a transaction that further streamlines our operations and cost structure, while strengthening our balance sheet. We have generated significant operating momentum and entered 2018 with $314 million of cash and an undrawn credit facility of $300 million, providing strong liquidity to support anticipated 2018 activity levels."
Mr. Woodall continued, "In December, we announced a strategic combination with Fifth Creek Energy that creates a premier DJ Basin company. This transaction significantly expands our footprint by providing a large, derisked acreage position with a significant inventory of drilling locations, while materially improving our leverage metrics. We continue to integrate the two organizations and expect to provide a combined 2018 operating plan and guidance following the anticipated March closing."
For the fourth quarter of 2017, the Company reported a net loss of $77.8 million, or $0.94 per diluted share. Adjusted net income (non-GAAP) for the fourth quarter of 2017 was $1.1 million, or $0.01 per diluted share. EBITDAX for the fourth quarter of 2017 was $57.3 million. For 2017 as a whole, the Company reported a net loss of $138.2 million, or $1.80 per diluted share. Adjusted net income (non-GAAP) for 2017 was a net loss of $29.2 million, or $0.38 per diluted share. EBITDAX for 2017 was $178.0 million. Adjusted net income (loss) and EBITDAX are non-GAAP (Generally Accepted Accounting Principles) measures. Please reference the reconciliations to GAAP financial statements at the end of this release.
Strategic Combination with Fifth Creek Energy
On December 5, 2017, the Company announced a strategic combination with Fifth Creek Energy that materially expands its DJ Basin footprint and, coupled with other strategic steps taken in the fourth quarter of 2017, significantly strengthens the Company's balance sheet. The Company has established a record date of February 13, 2018, and a date of March 16, 2018, for a special meeting of its shareholders to vote on, among other items, the strategic business combination with Fifth Creek Energy pursuant to the Agreement and Plan of Merger. The combination is expected to close in March 2018.
OPERATING AND FINANCIAL RESULTS
Proved Reserves
Total estimated proved reserves at year-end 2017 were 85.8 MMBoe compared to 54.9 MMBoe at year-end 2016, an increase of 56%. All-sources reserve replacement totaled 541%(1). The increase in estimated proved reserves compared to year-end 2016 is primarily the result of extensions and discoveries of 35.9 MMBoe, and positive commodity price-related and other revisions totaling 8.8 MMBoe, partially offset by sale of properties of 11.2 MMBoe. Additions to extensions and discoveries were driven by positive drilling results in the DJ Basin, which resulted in a 100% increase in DJ Basin proved reserves. The Company maintained a conservative approach to adding proved undeveloped ("PUD") locations by limiting the PUD inventory to only two rig years of planned drilling activity. Sale of properties primarily consisted of the sale of Uinta Basin assets, which was completed in December 2017. Positive price-related revisions were primarily a result of a 20% increase in both the average WTI oil price and the average Henry Hub natural gas price used to calculate the 2017 proved reserves compared to 2016.
Changes in Proved Reserves (MMBoe) | ||
Proved reserves as of December 31, 2016 | 54.9 | |
Extensions and discoveries | 35.9 | |
Production sales volumes | (7.0) | |
Purchases of oil and gas reserves in place | 4.4 | |
Sale of properties | (11.2) | |
Pricing revisions and other | 8.8 | |
Proved reserves as of December 31, 2017 | 85.8 |
|
1 All-sources reserve replacement defined as the sum of the year-over-year net additions in provided reserves from extensions and discoveries, pricing revisions, sale of properties, divided by 2017 production sales volumes |
2017 Production and Financial Results
Oil, natural gas and natural gas liquids production totaled 7.0 MMBoe for 2017, at the mid-point of the Company's guidance range of 6.9-7.1 MMBoe. DJ Basin production sales volumes totaled 6.2 MMBoe for 2017 or an increase of 21% compared to 2016. Production sales volumes for 2017 were weighted 60% oil, 21% natural gas and 19% natural gas liquids.
Production sales volumes for the fourth quarter of 2017 totaled 2.12 MMBoe, above the mid-point of the Company's guidance range of 2.0-2.2 MMBoe, representing a 37% increase from the fourth quarter of 2016. DJ Basin production sales volumes totaled 1.94 MMBoe, an increase of 42% compared to the fourth quarter of 2016. DJ Basin oil volumes totaled 1.1 MMBbls, an increase of 38% compared to the fourth quarter of 2016. Production sales volumes for the fourth quarter of 2017 were weighted 60% oil, 23% natural gas and 17% NGLs.
| Three Months Ended | | Twelve Months Ended | ||||||||
| 2017 | | 2016 | | 2017 | | 2016 | ||||
Production Data (1) | | | | | | | | ||||
Oil (MBbls) | 1,274 | | | 960 | | | 4,203 | | | 3,885 | |
Natural gas (MMcf) | 2,868 | | | 1,866 | | | 8,952 | | | 7,170 | |
NGLs (MBbls) | 371 | | | 279 | | | 1,307 | | | 1,010 | |
Combined volumes (MBoe) | 2,123 | | | 1,550 | | | 7,002 | | | 6,090 | |
Daily combined volumes (Boe/d) | 23,076 | | | 16,848 | | | 19,184 | | | 16,639 | |
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(1) Includes legacy DJ Basin and Uinta Basin production only |
For 2017, West Texas Intermediate ("WTI") oil prices averaged $50.95 per barrel, NWPL natural gas prices averaged $2.71 per MMBtu and NYMEX natural gas prices averaged $3.11 per MMBtu. Commodity price differentials to benchmark pricing for 2017 were oil less $2.75 per barrel versus WTI; and natural gas less $0.27 per Mcf compared to NWPL. The DJ Basin oil price differential averaged $2.40 per barrel. The NGL price averaged approximately 39% of the WTI price per barrel.
For the fourth quarter of 2017, WTI oil prices averaged $55.40 per barrel, NWPL natural gas prices averaged $2.60 per MMBtu and NYMEX natural gas prices averaged $2.93 per MMBtu. Fourth quarter of 2017 commodity price differentials to benchmark pricing were oil less $2.44 per barrel versus WTI; and natural gas less $0.28 per Mcf compared to NWPL. The DJ Basin oil price differential averaged $2.51 per barrel. The NGL price averaged approximately 44% of the WTI price per barrel.
For the fourth quarter of 2017, the Company had derivative commodity swaps in place for 8,125 barrels of oil per day tied to WTI pricing at $57.69 per barrel, 10,000 MMBtu of natural gas per day tied to NWPL regional pricing at $2.96 per MMBtu and no hedges in place for NGLs.
| Three Months Ended | | Twelve Months Ended | ||||||||||||
| 2017 | | 2016 | | 2017 | | 2016 | ||||||||
Average Sales Prices (before the effects of realized hedges): | |||||||||||||||
Oil (per Bbl) | $ | 52.63 | | | $ | 44.76 | | | $ | 48.37 | | | $ | 38.83 | |
Natural gas (per Mcf) | 2.32 | | | 2.47 | | | 2.43 | | | 1.98 | | ||||
NGLs (per Bbl) | 24.09 | | | 16.04 | | | 20.01 | | | 13.15 | | ||||
Combined (per Boe) | 38.94 | | | 33.57 | | | 35.88 | | | 29.28 | | ||||
| | | | | | | | ||||||||
Average Realized Sales Prices (after the effects of realized hedges): | |||||||||||||||
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