PDC Energy, Inc. Reports Unaudited Consolidated Financial and Operating Results for the Second Quarter and Six Months Ended June 30, 2015; Revises Production Guidance for the Year 2015; Provides Production Guidance for the Year 2016 and 2017; Provides Earnings Guidance for the Year 2015 and Cash Flow Guidance for the Year 2016 and 2017; Announces Impairment Charges for the Second Quarter Ended June 30, 2015
Aug 10 15
PDC Energy, Inc. reported unaudited consolidated financial and operating results for the second quarter and six months ended June 30, 2015. For the quarter, net loss was $46.9 million, or $1.17 per diluted share, compared to a net loss of $28.2 million, or $0.79 per diluted share, in the second quarter of 2014. Adjusted net income was $10.8 million or $0.27 per diluted share compared to an adjusted net loss of $1.5 million or $0.04 per diluted share in the comparable period of 2014. Net cash from operating activities was $64.6 million compared to net cash from operating activities of $51.1 million in the second quarter of 2014. Adjusted cash flow was $96.9 million or $2.42 per diluted share compared to $55 million or $1.54 per diluted share for the second quarter 2014. Capital expenditures excluding carry-over of expenses related to prior period were $176.4 million compared to $161.9 million for the same 2014 period. The company's drilling and completion schedule for 2015 has accelerated due to improve drilling times in the Wattenberg Field. Total revenue was $50,960,000 compared to $101,303,000 a year ago. Loss from operations was $66,554,000 compared to $35,916,000 a year ago. Loss from continuing operations before income taxes was $76,986,000 compared to $48,028,000 a year ago. Loss from continuing operations was $46,870,000 or $1.17 per diluted share compared to $29,378,000 or $0.82 per diluted share a year ago. Adjusted EBITDA was $101.0 million compared to $62.7 million a year ago. Adjusted EBITDA per diluted share of $2.52 was also up significantly year-over-year from $1.75.
For the six months, total revenue was $195,592,000 compared to $223,960,000 a year ago. Loss from operations was $28,157,000 compared to $26,222,000 a year ago. Loss from continuing operations before income taxes was $49,201,000 compared to $50,330,000 a year ago. Loss from continuing operations was $29,808,000 or $0.78 per diluted share compared to $30,786,000 or $0.86 per diluted share a year ago. Net loss was $29,808,000 or $0.78 per diluted share compared to $30,314,000 or $0.85 per diluted share a year ago. Net cash from operating activities was $146.5 million compared to $131.6 million a year ago. Adjusted cash flow from operations was $170.8 million compared to $124.7 million a year ago. Adjusted net income was $17.9 million or $0.47 per diluted share compared to $8.1 million or $0.23 per diluted share a year ago. Adjusted EBITDA was $183.0 million compared to $139.2 million a year ago.
Second quarter 2015 production increased 46% to 3.4 million barrels of oil equivalent, or 37,001 barrels of oil equivalent per day, compared to 2.3 MMBoe, or 25,366 Boe per day, from continuing operations in the second quarter of 2014. Second quarter 2015 production increased 16% compared to 32,162 Boe per day in the first quarter of 2015. The increase in production over second quarter 2014 was primarily due to the addition of a fifth drilling rig in the Wattenberg Field in June 2014 and improved well performance. The increase in production over the first quarter 2015 was due to successful horizontal development in the Wattenberg Field and Utica Shale. The company turned-in-line 40 gross operated wells in the Wattenberg Field during the second quarter of 2015 and average production from the field increased approximately 15% to 33,716 Boe per day compared to the first quarter of 2015. PDC's average wellhead oil differential in Wattenberg was less than $10 per barrel for the second quarter of 2015. In the Utica Shale, second quarter 2015 production was 3,285 Boe per day, an 11% increase compared with the first quarter of 2015. Average wellhead oil differentials were approximately $7 per barrel in the Utica during the second quarter of 2015.
For the six months of 2015 production increased 43.6% to 6.26 million barrels of oil equivalent, compared to 4.36 million barrels of oil equivalent a year ago.
The company increased its full-year 2015 production guidance from previous guidance provided on April 9, 2015 to reflect the impact of both increased working interests and increased drilling efficiencies in the Wattenberg Field. Production guidance increased to a range of 14.7 to 15.0 MMBoe, or 40,275 to 41,100 Boe per day, from the previous range of 13.5 to 14.5 MMBoe. The 2015 production exit rate is expected to exceed 48,000 Boe per day. The increase in expected production is primarily attributable to the company's ability to reduce drilling time on wells, resulting in an increase in wells spud and turned-in-line to approximately 155 and 125 respectively, from previous expectations of 119 and 114. Production is now forecasted at 14.85 million barrels equivalent. That is a 60% increase from 2014 levels.
The company anticipates approximately 35% production growth in 2016 with the capital spending equal approximately to cash flow based upon current assumptions.
In 2017, the company still projects the midpoint production of approximately 60,000 barrels of oil equivalent per day net.
For the year 2015, total revenue is expected to be between $600 and $620 million. Adjusted cash flows from operations is expected to be between $400 million and $420 million, an increase of $45 million compared to the previous mid-point guidance of approximately $365 million. Due to the continued improvement in rig efficiencies, the company plans to reduce its rig count from five to four in late 2015 and expects to be cash flow neutral over the second half of 2015 using NYMEX strip pricing as of July 27, 2015 of $48.98 per barrel of oil, $2.87 per Mcf of natural gas with realizations of $8.57 per barrel of NGLs. Total capital expenditures are expected to range from $520 to $550 million and are reflective of the increased drilling and completion activity, the current per well costs of approximately $3.1 million for standard length laterals and $4.1 million for extended reach laterals in Wattenberg, as well as the rig count reduction in late 2015. Total capital also reflects the impact of additional capital for non-consent interests incurred in the first half and a reduction of non-operated drilling activity in Wattenberg.
Based on the current commodity price outlook, the company targets operating in a cash flow neutral environment in 2016, while operating four drilling rigs and delivering approximately 35% production growth over 2015 levels.
Its updated 2017 cash flow is projected to be approximately $75 million.
For the second quarter, impairment of crude oil and natural gas properties was $2,773,000 compared to $848,000 a year ago.