Corporate Businesses

Ascent Resources Reports Fourth Quarter And Year-End 2020 Operating And Financial Results And Announces 2021 Guidance

Ascent has successfully delivered on its operational and financial objectives in 2020,

OKLAHOMA CITY, March 10, 2021 Ascent Resources Utica Holdings, LLC (“Ascent”, “our” or the “Company”) today reported its fourth quarter and year-end 2020 operating and financial results and issued its initial 2021 guidance.  In addition, Ascent announced a conference call with analysts and investors at 9 AM CST / 10 AM EST, Thursday, March 11, 2021.  For more detailed information on Ascent, please refer to the latest investor presentation and additional information located on our website at https://www.ascentresources.com/investors.

Fourth Quarter and Full-Year 2020 Highlights:

  • Averaged net production of 1.9 bcfe per day for the quarter and 2.0 bcfe per day for the full-year 2020
  • Decreased average well cost to $549 per lateral foot during the quarter while averaging $611 per lateral foot for the full-year 2020, 5% below the low-end of our guidance range
  • Adjusted EBITDAX(1) of $214 million for the quarter and $881 million for the full-year 2020
  • Net cash provided by operating activities of $118 million for the quarter and $773 million for the full-year 2020
  • Generated $54 million of free cash flow(1) during the quarter and $114 million for the full-year 2020, 14% above the high-end of our guidance range
  • Reported year-end 2020 proved reserves of 9.0 tcfe using SEC pricing
  • Drill-bit finding and development costs for undeveloped reserves were $0.37 per mcfe in 2020
  • Initial 2021 capital guidance of $550 to $600 million maintains production of 2.0 bcfe/d while generating free cash flow of $100 to $150 million based on current market conditions

(1) 

A non-GAAP financial measure.  See the Non-GAAP reconciliations included in this press release for the definition of, and other important information regarding, this non-GAAP financial measure.

“Ascent has successfully delivered on its operational and financial objectives in 2020,” said Jeff Fisher, Chairman and Chief Executive Officer of Ascent. “Our goals coming into the year were to generate free cash flow, continue to improve on our best-in-class capital efficiencies, and access the capital markets in order to address a large, near-term debt maturity. While these goals were made more difficult by the pandemic and other macro events, we were able to successfully navigate the business through unprecedented challenges by staying disciplined, leveraging our operational capabilities and improving our balance sheet while further positioning the business for long-term success.”

Fisher continued, “Our operational and financial results were achieved while continuing to prioritize the health and safety of our employees, contractors and the communities in which we operate. We successfully delivered on our 2020 production guidance while exceeding both free cash flow and capital efficiency targets. Our team continues to execute at a high level, and we are on track to deliver another outstanding year in 2021 with a focus on capital and operational discipline, margin expansion and free cash flow generation that will drive sustainable value generation for all of our stakeholders.”

Fourth Quarter 2020 Financial Results

Fourth quarter 2020 net production averaged 1,886 mmcfe per day, which includes the impact from 9 bcfe of net curtailments. Net production during the quarter consisted of 1,705 mmcf per day of natural gas, 9,652 bbls per day of oil and 20,446 bbls per day of natural gas liquids (“NGL”).

Fourth quarter 2020 price realizations, including the impact of derivatives, were $2.80 per mcfe. Excluding the impact of derivatives, fourth quarter 2020 price realizations were $2.65 per mcfe.

For the fourth quarter of 2020, Ascent reported net income of $169 million,  adjusted net income of $15 million and adjusted EBITDAX of $214 million. Ascent incurred a total of $133 million of capital expenditures in the fourth quarter of 2020 including $104 million of drilling and completions, $11 million of acquisitions and leasehold costs and $18 million of capitalized interest. The Company generated $54 million of free cash flow in the fourth quarter of 2020.

Full-Year 2020 Financial Results

Full-year 2020 average daily production was 1,991 mmcfe per day, which includes the impact from 40 bcfe of net curtailments. Net production during the period consisted of 1,768 mmcf per day of natural gas, 11,724 bbls per day of oil and 25,421 bbls per day of NGL.

Full-year 2020 price realizations, including the impact of derivatives, were $2.71 per mcfe. Excluding the impact of derivatives, full-year 2020 price realizations were $2.08 per mcfe.

For the full-year 2020, Ascent reported a net loss of $590 million, adjusted net income of $6 million and adjusted EBITDAX of $881 million. Ascent incurred a total of $657 million of capital expenditures in 2020 including $517 million of drilling and completions, $58 million of acquisition and leasehold costs and $82 million of capitalized interest. The Company generated $114 million of free cash flow for the full-year 2020.

Balance Sheet and Liquidity

As of December 31, 2020, Ascent had total debt outstanding of approximately $2.8 billion. As of December 31, 2020, the Company had $953 million of borrowings outstanding and $149 million of letters of credit issued under its revolving credit facility, resulting in $757 million of total available liquidity comprised of $748 million of available borrowing capacity and $9 million of cash on hand. Our leverage ratio at the end of the year was 3.2x.

During the quarter, the Company continued to strengthen the balance sheet, reduce near-term debt, and increase liquidity building on the success of the exchange transaction completed in October 2020.  In November 2020, the Company retired $58 million of outstanding principal of its Convertible Notes due March 1, 2021 for $88 million, a discount of approximately $2 million to the terminal value at maturity. Further, in December 2020, Ascent opportunistically accessed the capital markets and issued $300 million of Senior Notes due 2028 to repay borrowings outstanding under its revolving credit facility and to further bolster liquidity.

Operational Update

During the fourth quarter of 2020, Ascent operated 3 drilling rigs and one fracture stimulation crew. The Company spud 11 operated wells, hydraulically fractured 16 wells, and turned in line 10 wells with an average lateral length of 12,267 feet. Seven of the 10 new wells were located in the dry gas and lean gas areas while the three other wells were in the liquids-rich window. As of December 31, 2020, Ascent had 598 gross operated producing Utica wells.

During the fourth quarter of 2020, we averaged D&C costs of approximately $549 per lateral foot, a 31% reduction compared to the fourth quarter of 2019 average cost per lateral foot. These cost savings represent a significant and lasting step-change in efficiencies year-over-year, with the vast majority of the improvement due to sustainable drilling and completion efficiency gains. The improvements are reflected in reduced drilling cycle times, increased lateral feet drilled per day as well as the marked increase in the number of frac stages completed per day. The operational execution that the team has been able to achieve differentiates Ascent relative to its peers, as we continue to innovate, and leverage technology and proprietary data in order to create value through operational performance and cost reductions.

2020 Year-End Reserves

Ascent reported year-end 2020 proved reserves, under SEC guidelines, of 9.0 tcfe, of which 48% were classified as proved developed and 52% as proved undeveloped. The 2020 drill-bit F&D costs for undeveloped reserves were $0.37 per mcfe, compared to $0.48 per mcfe in 2019. A summary of the changes in Ascent’s proved reserves for the full-year 2020 is included in the table below and a detailed reconciliation can be found in our financial statements.

Year-End 2020 Proved Reserves (Bcfe)

   

Balance at December 31, 2019

 

9,252

Extensions, discoveries and other additions

 

907

Revisions of prior estimates

 

(439)

Production

 

(729)

Balance at December 31, 2020

 

8,991

Hedging Update

Ascent has significant hedges in place in 2021 and beyond to reduce exposure to volatility in commodity prices, as well as to protect our expected operating cash flow. As of December 31, 2020, Ascent had hedged 1,303,000 mmbtu per day of natural gas production for the calendar year 2021, at approximately $2.54 per mmbtu. In addition, Ascent had also hedged 2,200 bbls per day of crude oil production at an average price of $50.44 per bbl through 2021.

2021 Guidance

The Company expects its full-year 2021 capital budget to come in between $550 million to $600 million, and to be fully funded with operating cash flow generated throughout the year. A detailed summary including production, expense and operational counts is included in the table that follows:

2021 Guidance

   
     

Production

 

Full-Year 2021

Total Production (bcfe/d)

 

2.0

% Natural Gas

 

90% – 92%

     

Operating Expenses ($/mcfe)(1)

 

$1.50 – $1.55

     

Capital Expenditures Incurred ($mm)(2)

 

$550 – $600

     

Free Cash Flow ($mm)

 

$100 – $150

     

Operations / Well Counts

   

Operated Rigs

 

3 – 4

Wells Spud

 

60 – 65

Wells TIL’d

 

65 – 70

Average TIL’d Lateral Length

 

13,000′

   

(1)

Includes GP&T, LOE, Taxes and G&A

(2)

Excludes Capitalized Interest

About Ascent Resources

Ascent is the eighth largest producer of natural gas in the United States in terms of daily production and is focused on acquiring, developing, producing, and operating natural gas and oil properties located in the Utica Shale in Southern Ohio. With a continued focus on good corporate citizenship, Ascent is committed to delivering low-cost clean-burning energy to our country and the world, while reducing environmental impacts.  For more information, visit www.ascentresources.com.

Contact:

Chris Benton – Director of Finance & Investor Relations

investor.relations@ascentresources.com

This news release contains forward-looking statements within the meaning of US federal securities laws.  Forward-looking statements express views of Ascent regarding future plans and expectations.  Forward-looking statements in this news release include, but are not limited to, statements regarding future operations, business strategy, liquidity and cash flows of Ascent.  These statements are based on numerous assumptions and are subject to known and unknown risks and uncertainties, including, commodity price volatility, inherent uncertainty in estimating natural gas, oil and NGL reserves, environmental and regulatory risks, availability of capital, and the other risks described in Ascent’s most recent investor presentation provided at www.ascentresources.com/investors.  Actual future results may vary materially from those expressed or implied in this news release and Ascent’s business, financial condition, results of operations and cash flow could be materially and adversely affected by such risks and uncertainties.  As a result, forward-looking statements should be understood to be only predictions and statements of Ascent’s current beliefs; they are not guarantees of performance.

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   

Three Months Ended

 

Year Ended

   

December 31,

 

December 31,

($ in thousands)

 

2020

   

2019

   

2020

   

2019

 
                 

Revenues:

               

Natural gas

 

$

390,345

   

$

415,718

   

$

1,258,594

   

$

1,589,099

 

Oil

 

30,987

   

66,593

   

138,723

   

241,521

 

NGL

 

37,634

   

57,668

   

118,224

   

148,639

 

Commodity derivative gain (loss)

 

228,899

   

83,616

   

(19,167)

   

441,139

 

Total Revenues

 

687,865

   

623,595

   

1,496,374

   

2,420,398

 

Operating Expenses:

               

Lease operating expenses

 

20,591

   

20,327

   

78,430

   

72,606

 

Gathering, processing and transportation expenses

 

230,090

   

236,158

   

919,986

   

856,126

 

Production and ad valorem taxes

 

9,152

   

8,198

   

37,495

   

34,167

 

Exploration expenses

 

26,323

   

41,561

   

104,230

   

124,477

 

General and administrative expenses

 

13,713

   

15,322

   

63,825

   

61,027

 

Natural gas and oil depreciation, depletion and amortization

 

161,449

   

203,091

   

733,450

   

702,414

 

Depreciation and amortization of other assets

 

774

   

875

   

3,568

   

3,239

 

Total Operating Expenses

 

462,092

   

525,532

   

1,940,984

   

1,854,056

 

Income (Loss) from Operations

 

225,773

   

98,063

   

(444,610)

   

566,342

 

Other (Expense) Income:

               

Interest expense, net

 

(35,781)

   

(34,249)

   

(134,213)

   

(109,114)

 

Change in fair value of contingent payment right

 

(6,518)

   

   

(6,518)

   

 

Change in fair value of embedded derivative

 

   

622

   

   

5,026

 

Losses on purchases or exchanges of debt

 

(15,708)

   

   

(6,037)

   

 

Other income

 

843

   

819

   

1,867

   

3,711

 

Total Other Expense

 

(57,164)

   

(32,808)

   

(144,901)

   

(100,377)

 

Net Income (Loss)

 

$

168,609

   

$

65,255

   

$

(589,511)

   

$

465,965

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

   

December 31,

($ in thousands)

 

2020

   

2019

 
         

Current Assets:

       

Cash and cash equivalents

 

$

8,843

   

$

7,346

 

Accounts receivable – natural gas, oil and NGL sales

 

223,976

   

260,759

 

Accounts receivable – joint interest and other

 

8,466

   

20,425

 

Short-term derivative assets

 

8,202

   

248,118

 

Other current assets

 

8,316

   

8,468

 

Total Current Assets

 

257,803

   

545,116

 

Property and Equipment:

       

Natural gas and oil properties, based on successful efforts accounting

 

8,791,061

   

8,233,964

 

Other property and equipment

 

31,565

   

30,818

 

Less: accumulated depreciation, depletion and amortization

 

(2,627,213)

   

(1,890,506)

 

Property and Equipment, net

 

6,195,413

   

6,374,276

 

Other Assets:

       

Long-term derivative assets

 

2,401

   

70,778

 

Other long-term assets

 

16,232

   

20,248

 

Total Assets

 

$

6,471,849

   

$

7,010,418

 
         

Current Liabilities:

       

Accounts payable

 

$

36,736

   

$

68,364

 

Revenue payable

 

84,142

   

99,300

 

Accrued interest

 

31,287

   

36,787

 

Current portion of long-term debt, net

 

12,498

   

 

Short-term derivative liabilities

 

54,144

   

 

Other current liabilities

 

257,495

   

280,841

 

Total Current Liabilities

 

476,302

   

485,292

 

Long-Term Liabilities:

       

Long-term debt, net of current portion

 

2,707,382

   

2,838,676

 

Long-term derivative liabilities

 

113,160

   

 

Other long-term liabilities

 

73,010

   

5,067

 

Total Long-Term Liabilities

 

2,893,552

   

2,843,743

 

Member’s Equity

 

3,101,995

   

3,681,383

 

Total Liabilities and Member’s Equity

 

$

6,471,849

   

$

7,010,418

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

($ in thousands)

2020

   

2019

   

2020

   

2019

 
               

Cash Flows from Operating Activities:

             

Net income (loss)

$

168,609

   

$

65,255

   

$

(589,511)

   

$

465,965

 

Adjustments to reconcile net income (loss) to net cash provided

by operating activities:

             

Depreciation, depletion and amortization

162,223

   

203,966

   

737,018

   

705,653

 

Change in fair value of commodity derivatives

(202,620)

   

(3,077)

   

475,027

   

(249,457)

 

Change in fair value of interest rate derivatives

41

   

   

569

   

 

Impairment of unproved natural gas and oil properties

25,201

   

36,450

   

100,207

   

115,802

 

Non-cash interest expense

5,953

   

6,535

   

25,347

   

27,305

 

Change in fair value of contingent payment right

6,518

   

   

6,518

   

 

Change in fair value of embedded derivative

   

(622)

   

   

(5,026)

 

Losses (gains) on purchases or exchanges of debt

1,803

   

   

(11,500)

   

 

Stock-based compensation

1,065

   

   

1,775

   

 

Other

(13)

   

(360)

   

(1,577)

   

148

 

Changes in operating assets and liabilities

(50,306)

   

(87,239)

   

29,148

   

79,728

 

Net Cash Provided by Operating Activities

118,474

   

220,908

   

773,021

   

1,140,118

 

Cash Flows from Investing Activities:

             

Drilling and completion costs

(99,627)

   

(235,338)

   

(571,860)

   

(1,125,216)

 

Acquisitions of natural gas and oil properties

(27,607)

   

(55,860)

   

(139,106)

   

(258,001)

 

Proceeds from divestitures of natural gas and oil properties

   

(2,067)

   

   

12,474

 

Additions to other property and equipment

(48)

   

(583)

   

(1,509)

   

(3,547)

 

Net Cash Used in Investing Activities

(127,282)

   

(293,848)

   

(712,475)

   

(1,374,290)

 

Cash Flows from Financing Activities:

             

Proceeds from credit facility borrowings

370,000

   

355,000

   

1,065,000

   

1,270,000

 

Repayment of credit facility borrowings

(585,000)

   

(272,000)

   

(1,300,000)

   

(1,030,000)

 

Proceeds from issuance of long-term debt, net

300,000

   

   

300,000

   

 

Repayment of long-term debt

(87,769)

   

   

(138,764)

   

 

Proceeds from the exchange

20,000

   

   

20,000

   

 

Cash paid for debt issuance costs

(4,548)

   

(9,512)

   

(6,842)

   

(9,512)

 

Other

   

   

1,557

   

 

Net Cash Provided by (Used in) Financing Activities

12,683

   

73,488

   

(59,049)

   

230,488

 

Net Increase (Decrease) in Cash and Cash Equivalents

3,875

   

548

   

1,497

   

(3,684)

 

Cash and Cash Equivalents, Beginning of Period

4,968

   

6,798

   

7,346

   

11,030

 

Cash and Cash Equivalents, End of Period

$

8,843

   

$

7,346

   

$

8,843

   

$

7,346

 
 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC

NATURAL GAS, OIL AND NGL PRODUCTION AND PRICES

(Unaudited)

 

   

Three Months Ended

 

Year Ended

   

December 31,

 

December 31,

   

2020

 

2019

 

2020

 

2019

                 

Net Production Volumes:

               

Natural gas (mmcf)

 

156,874

   

182,913

   

646,982

   

638,243

 

Oil (mbbls)

 

888

   

1,348

   

4,291

   

4,794

 

NGL (mbbls)

 

1,881

   

3,002

   

9,304

   

8,685

 

Natural Gas Equivalents (mmcfe)

 

173,484

   

209,016

   

728,553

   

719,113

 
                 

Average Daily Net Production Volumes:

               

Natural gas (mmcf/d)

 

1,705

   

1,988

   

1,768

   

1,749

 

Oil (mbbls/d)

 

10

   

15

   

12

   

13

 

NGL (mbbls/d)

 

20

   

33

   

25

   

24

 

Natural Gas Equivalents (mmcfe/d)

 

1,886

   

2,272

   

1,991

   

1,970

 

% Natural Gas

 

90

%

 

88

%

 

89

%

 

89

%

% Liquids

 

10

%

 

12

%

 

11

%

 

11

%

                 

Average Sales Prices:

               

Natural gas ($/mcf)

 

$

2.49

   

$

2.27

   

$

1.95

   

$

2.49

 

Oil ($/bbl)

 

$

34.90

   

$

49.40

   

$

32.33

   

$

50.38

 

NGL ($/bbl)

 

$

20.01

   

$

19.21

   

$

12.71

   

$

17.11

 
                 

Natural Gas Equivalents ($/mcfe)

 

$

2.65

   

$

2.58

   

$

2.08

   

$

2.75

 

Settlements of commodity derivatives ($/mcfe)

 

0.15

   

0.39

   

0.63

   

0.27

 

Average sales price, after effects of settled derivatives ($/mcfe)

 

$

2.80

   

$

2.97

   

$

2.71

   

$

3.02

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC

CAPITAL EXPENDITURES INCURRED

(Unaudited)

 

   

Three Months Ended

 

Year Ended

   

December 31,

 

December 31,

($ in thousands)

 

2020

   

2019

   

2020

   

2019

 
                 

Capital Expenditures Incurred:

               

Drilling and completion costs incurred

 

$

104,342

   

$

149,821

   

$

517,079

   

$

1,030,294

 

Acquisition and leasehold costs incurred

 

10,852

   

30,483

   

58,018

   

141,631

 

Capitalized interest incurred

 

18,089

   

24,474

   

82,208

   

123,370

 

Total Capital Expenditures Incurred

 

$

133,283

   

$

204,778

   

$

657,305

   

$

1,295,295

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC

RECONCILIATIONS OF ADJUSTED NET INCOME (LOSS)

(Unaudited)

 

   

Three Months Ended

 

Year Ended

   

December 31,

 

December 31,

($ in thousands)

 

2020

   

2019

   

2020

   

2019

 
                 

Net Income (Loss)

 

$

168,609

   

$

65,255

   

$

(589,511)

   

$

465,965

 

Adjustments to reconcile net income (loss) to adjusted net

income:

               

Impairment of unproved natural gas and oil properties

 

25,201

   

36,450

   

100,207

   

115,802

 

Change in fair value of commodity derivatives

 

(202,620)

   

(3,077)

   

475,027

   

(249,457)

 

Change in fair value of interest rate derivatives

 

41

   

   

569

   

 

Change in fair value of contingent payment right

 

6,518

   

   

6,518

   

 

Losses on purchases or exchanges of debt

 

15,708

   

   

6,037

   

 

Stock-based compensation

 

1,065

   

   

1,775

   

 

Non-recurring legal expense

 

   

   

5,572

   

 

Change in fair value of embedded derivative

 

   

(622)

   

   

(5,026)

 

Other

 

   

61

   

   

375

 

Adjusted Net Income (Non-GAAP)(a)(b)

 

$

14,522

   

$

98,067

   

$

6,194

   

$

327,659

 

(a) 

As shown above and on the following pages, Ascent uses adjusted net income (loss), EBITDAX, adjusted EBITDAX, discretionary cash flow and free cash flow (non-GAAP measures) as supplemental measures to evaluate the performance of its assets.  Ascent believes these non-GAAP measures provide meaningful information to our investors, as discussed below.  These non-GAAP measures, as used and defined by Ascent, are not measures of performance as determined by United States generally accepted accounting principles (US GAAP) and may not be comparable to similarly titled measures employed by other companies.

   
 

Non-GAAP measures should not be considered in isolation or as substitutes for operating income, net income or loss, cash flows provided by operating, investing and financing activities or other income or cash flow statement data prepared in accordance with US GAAP.  Non-GAAP measures provide no information regarding a company’s capital structure, borrowings, interest costs, capital expenditures and working capital movement.  Non-GAAP measures do not represent funds available for discretionary use because those funds may be required for debt service, capital expenditures, working capital, exploration expenses and other commitments and obligations.  However, Ascent’s management team believes these non-GAAP measures are useful to an investor in evaluating Ascent’s financial performance because these measures:

   
 
  • Are widely used by investors in the natural gas and oil industry to measure a company’s operating performance without regard to items excluded from the calculation of such term, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure, and the method by which assets were acquired, among other factors;
 
  • Are more comparable to estimates used by analysts;
 
  • Help investors to more meaningfully evaluate and compare the results of Ascent’s operations from period to period by removing the effect of its capital structure from its operating structure;
 
  • Excludes one-time items, non-cash items or items whose timing cannot be reasonably estimated; and
 
  • Are used by Ascent’s management team for various purposes, including as a measure of operating performance, in presentations to its Board of Managers and as a basis for strategic planning and forecasting.
 

There are significant limitations to using non-GAAP measures as measures of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect Ascent’s net income or loss, the lack of comparability of results of operations of different companies, and the different methods of calculating non-GAAP measures reported by different companies.

   

(b) 

Ascent defines “adjusted net (loss) income” as net income (loss) before impairment of unproved natural gas and oil properties;  changes in fair value of commodity derivatives;  change in fair value of interest rate derivatives; change in fair value of contingent payment right; (gains) losses on purchases or exchanges of debt; stock-based compensation; non-recurring legal expense (benefit); change in fair value of embedded derivative; acquisition expenses; impairment of other property and equipment; and other non-recurring items.  

 

ASCENT RESOURCES UTICA HOLDINGS, LLC

RECONCILIATIONS OF EBITDAX, ADJUSTED EBITDAX AND NET DEBT

(Unaudited)

 

EBITDAX and Adjusted EBITDAX

   

Three Months Ended

 

Year Ended

   

December 31,

 

December 31,

($ in thousands)

 

2020

   

2019

   

2020

   

2019

 
                 

Net Income (Loss)

 

$

168,609

   

$

65,255

   

$

(589,511)

   

$

465,965

 

Adjustments to reconcile net income (loss) to EBITDAX:

               

Exploration expenses

 

26,323

   

41,561

   

104,230

   

124,477

 

Natural gas and oil depreciation, depletion and amortization

 

161,449

   

203,091

   

733,450

   

702,414

 

Depreciation and amortization of other assets

 

774

   

875

   

3,568

   

3,239

 

Interest expense, net

 

35,781

   

34,249

   

134,213

   

109,114

 

EBITDAX (Non-GAAP)(a)(b)

 

392,936

   

345,031

   

385,950

   

1,405,209

 

Adjustments to reconcile EBITDAX to Adjusted EBITDAX:

               

Change in fair value of commodity derivatives

 

(202,620)

   

(3,077)

   

475,027

   

(249,457)

 

Change in fair value of contingent payment right

 

6,518

   

   

6,518

   

 

Losses on purchases or exchanges of debt

 

15,708

   

   

6,037

   

 

Stock-based compensation

 

1,065

   

   

1,775

   

 

Non-recurring legal expense

 

   

   

5,572

   

 

Change in fair value of embedded derivative

 

   

(622)

   

   

(5,026)

 

Other

 

   

61

   

   

375

 

Adjusted EBITDAX (Non-GAAP)(b)(c)

 

$

213,607

   

$

341,393

   

$

880,879

   

$

1,151,101

 
   

(a) 

Ascent defines “EBITDAX” as net income (loss) before exploration expenses; depreciation, depletion and amortization; and interest expense, net. 

   

(b) 

See footnote (a) on page 10 for a discussion around our uses of non-GAAP measures.

   

(c) 

Ascent defines “adjusted EBITDAX” as EBITDAX before changes in fair value of commodity derivatives; change in fair value of contingent payment right; (gains) losses on purchases or exchanges of debt; stock-based compensation; non-recurring legal expense (benefit); change in fair value of embedded derivative; and other non-recurring items.

ASCENT RESOURCES UTICA HOLDINGS, LLC

RECONCILIATIONS OF EBITDAX, ADJUSTED EBITDAX AND NET DEBT (CONTINUED)

(Unaudited)

 

Last Twelve Months (“LTM”) EBITDAX and Adjusted EBITDAX

   

Three Months

Ended

 

Twelve Months Ended

   

December 31,

   

September 30,

 

June 30,

 

March 31,

 

December 31,

($ in thousands)

 

2020

   

2020

   

2020

   

2020

   

2020

 
                     

Net Income (Loss)

 

$

168,609

   

$

(552,432)

   

$

(291,050)

   

$

85,362

   

$

(589,511)

 

Adjustments to reconcile net income (loss) to

EBITDAX:

                   

Exploration expenses

 

26,323

   

28,096

   

22,858

   

26,953

   

104,230

 

Natural gas and oil depreciation, depletion

and amortization

 

161,449

   

195,120

   

201,331

   

175,550

   

733,450

 

Depreciation and amortization of other assets

 

774

   

928

   

942

   

924

   

3,568

 

Interest expense, net

 

35,781

   

33,279

   

31,233

   

33,920

   

134,213

 

EBITDAX (Non-GAAP)(a)(b)

 

392,936

   

(295,009)

   

(34,686)

   

322,709

   

385,950

 

Adjustments to reconcile EBITDAX to Adjusted

EBITDAX:

                   

Change in fair value of commodity

derivatives

 

(202,620)

   

500,175

   

239,847

   

(62,375)

   

475,027

 

Change in fair value of contingent payment

right

 

6,518

   

   

   

   

6,518

 

(Gains) losses on purchases or exchanges of

debt

 

15,708

   

3,632

   

190

   

(13,493)

   

6,037

 

Stock-based compensation

 

1,065

   

710

   

   

   

1,775

 

Non-recurring legal expense

 

   

   

5,572

   

   

5,572

 

Adjusted EBITDAX (Non-GAAP)(b)(c)

 

$

213,607

   

$

209,508

   

$

210,923

   

$

246,841

   

$

880,879

 
   

(a) 

Ascent defines “EBITDAX” as net income (loss) before exploration expenses; depreciation, depletion and amortization; and interest expense, net. 

   

(b)

See footnote (a) on page 10 for a discussion around our uses of non-GAAP measures.

   

(c)

Ascent defines “adjusted EBITDAX” as EBITDAX before changes in fair value of commodity derivatives; change in fair value of contingent payment right; (gains) losses on purchases or exchanges of debt; stock-based compensation; non-recurring legal expense (benefit); change in fair value of embedded derivative; and other non-recurring items.

ASCENT RESOURCES UTICA HOLDINGS, LLC

RECONCILIATIONS OF EBITDAX, ADJUSTED EBITDAX AND NET DEBT (CONTINUED)

(Unaudited)

 

Net Debt and Net Debt to LTM Adjusted EBITDAX

   

December 31,

($ in thousands)

 

2020

   

2019

 
         

Net Debt:

       

Total debt(a)

 

$

2,827,418

   

$

2,840,336

 

Less: cash and cash equivalents

 

8,843

   

7,346

 

Net Debt(b)

 

$

2,818,575

   

$

2,832,990

 
         

Net Debt to LTM Adjusted EBITDAX:

       

Net Debt(b)

 

$

2,818,575

   

$

2,832,990

 

LTM Adjusted EBITDAX(c)

 

$

880,879

   

$

1,151,101

 

Net Debt to LTM Adjusted EBITDAX

 

3.2

x

 

2.5

x

   

(a) 

Total debt represents outstanding principal balances and includes the current portion of our long-term debt.

   

(b) 

Ascent defines “Net Debt” as total debt less cash and cash equivalents. Management uses Net Debt to determine our outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand.

   

(c) 

Adjusted EBITDAX for the LTM ended December 31, 2020 and 2019, respectively.

 

ASCENT RESOURCES UTICA HOLDINGS, LLC

RECONCILIATIONS OF DISCRETIONARY CASH FLOW AND FREE CASH FLOW

(Unaudited)

 

   

Three Months Ended

 

Year Ended

   

December 31,

 

December 31,

($ in thousands)

 

2020

 

2019

 

2020

 

2019

                 

Net Cash Provided by Operating Activities

 

$

118,474

   

$

220,908

   

$

773,021

   

$

1,140,118

 

Adjustments to reconcile Net Cash Provided by Operating

Activities to Discretionary Cash Flow:

               

Changes in operating assets and liabilities

 

50,306

   

87,239

   

(29,148)

   

(79,728)

 

Discretionary Cash Flow (Non-GAAP)(a)(b)

 

168,780

   

308,147

   

743,873

   

1,060,390

 

Adjustments to reconcile Discretionary Cash Flow to Free Cash

Flow:

               

Drilling and completion costs incurred

 

(104,342)

   

(149,821)

   

(517,079)

   

(1,030,294)

 

Acquisition and leasehold costs incurred

 

(10,852)

   

(30,483)

   

(58,018)

   

(141,631)

 

Capitalized interest incurred

 

(18,089)

   

(24,474)

   

(82,208)

   

(123,370)

 

Non-recurring legal expense

 

   

   

5,572

   

 

Debt Exchange Fees

 

13,905

   

   

17,537

   

 

Other

 

4,271

   

   

4,271

   

 

Free Cash Flow (Non-GAAP)(b)(c)

 

$

53,673

   

$

103,369

   

$

113,948

   

$

(234,905)

 
   

(a) 

Discretionary cash flow is widely accepted as a financial indicator of a natural gas and oil company’s ability to generate cash which is used to internally fund exploration and development activities and service debt.  Ascent defines “discretionary cash flow” as net cash provided by operating activities before changes in operating assets and liabilities. 

   

(b) 

See footnote (a) on page 10 for a discussion around our uses of non-GAAP measures.

   

(c) 

Free cash flow is an indicator of a company’s ability to generate funding to maintain or expand its asset base, make distributions and repurchase or extinguish debt.  Ascent defines “free cash flow” as discretionary cash flow less incurred drilling and completion costs, acquisitions of natural gas and oil properties, capitalized interest, debt exchange fees and certain non-recurring items.   

Roll-Forward of Proved Reserves

(Unaudited)

   
     

Year Ended

 
     

December 31,

 

(in mmcfe)

   

2020

 
         

Proved Reserves at December 31, 2019

   

9,251,715

 

Extensions, discoveries and other additions

   

907,393

 

Revisions

   

(439,680)

 

Production

   

(728,553)

 

Proved Reserves at December 31, 2020

   

8,990,875

 
         

Proved developed reserves

   

4,275,548

 

Proved developed reserves percentage

   

48

%

Standardized Measure of Discounted Future Net Cash Flows ($ in thousands)(GAAP)

 

$

1,265,100

   

Add: Present value of future income taxes discounted at 10% per annum(a)

   

   

PV-10 ($ in thousands) (Non-GAAP)(a)

 

$

1,265,100

   

(a) 

Reserve volumes and PV-10 were estimated using SEC reserve recognition standards and pricing assumptions based on the unweighted arithmetic average of the prices on the first day of each month within the 12-month period ended  December 31, 2020.  The prices used in Ascent’s reserve reports were $1.99 per mcf of natural gas and $39.54 per bbl of oil and condensate, before basis differential adjustments. PV-10 is a non-GAAP measure that typically differs from the standardized measure, because the former does not include the effects of estimated future income tax expense.  However, because Ascent is a disregarded entity for income tax purposes, it has estimated no future income tax expense and the two measures are the same as of December 31, 2020, as calculated in the reconciliation above.  PV-10 can be used within the industry and by creditors and securities analysts to evaluate estimated net cash flows from proved reserves on a more comparable basis.

This article was shared to Prittle Prattle News as a Press Release.

By PR Newswire

 

WhatsApp us

Skip to toolbar