HOUSTON, May 15, 2019 (GLOBE NEWSWIRE) -- Harvest Oil & Gas Corp. (OTCQX: HRST) (“Harvest” or the “Company”) today announced results for the first quarter of 2019 and the filing of its Form 10-Q with the Securities and Exchange Commission (“SEC”) on May 15, 2019. Harvest is the successor reporting company to EV Energy Partners, L.P. Key Highlights
Generated a net loss of $35.8 million, or $(3.56) per basic and diluted weighted average share outstanding, and Adjusted EBITDAX of $12.4 million for the first quarter of 2019
Average daily production was 137.2 MMcfe for the first quarter of 2019
Completed the sale of oil and gas properties in the San Juan Basin in New Mexico and Colorado for $37.2 million in April 2019, net of purchase price adjustments
Completed the sale of certain assets in the Mid-Continent area for $4.1 million, net of purchase price adjustments, in January and April 2019, which included $0.9 million of preferential rights to purchase expected to close during the second quarter of 2019
Borrowing base re-determined at $110 million on May 2, 2019
Reduced outstanding borrowings under the credit facility to $8 million, as of May 14, 2019
First Quarter 2019 Financial Results
For the first quarter of 2019, Harvest reported a net loss of $35.8 million, or $(3.56) per basic and diluted weighted average share outstanding compared to a net income of $34.3 million, or $3.41 per basic and diluted weighted average share outstanding, for the fourth quarter of 2018. For the first quarter of 2018, Harvest’s predecessor reported a net loss of $15.4 million, or $(0.31) per basic and diluted weighted average limited partner unit outstanding. Included in the 2019 first quarter net loss were the following items:
$26.1 million of impairment of oil and natural gas properties related to the San Juan Basin and Mid-Continent divestitures,
$17.5 million of non-cash losses on commodity derivatives,
$4.6 million of gain on equity securities,
$0.6 million of divestiture related expense contained in general and administrative expenses, and
$0.1 million of non-cash costs contained in general and administrative expenses.
Production for the first quarter of 2019 was 8.4 Bcf of natural gas, 178 MBbls of oil and 484 MBbls of natural gas liquids (NGLs), or 137.2 million cubic feet equivalent per day (MMcfe/d). This represents a 5 percent decrease from the fourth quarter of 2018 production of 144.9 MMcfe/d and a 24 percent decrease from the first quarter of 2018 production of 180.0 MMcfe/d. The decrease in production from the fourth quarter of 2018 was due to the divestiture of oil and gas properties in Central Texas and the Mid-Continent areas which closed in December 2018, a divestiture in the Mid-Continent area which closed in January 2019 and natural production declines. The decrease in production from the first quarter of 2018 was primarily due to the divestiture of the Central Texas and Karnes County, Texas properties, which closed in August 2018 and the Central Texas and the Mid-Continent area divestitures which closed in December 2018 and January 2019. Adjusted EBITDAX for the first quarter of 2019 was $12.4 million, a 38 percent increase from the fourth quarter of 2018 and a 53 percent decrease from the first quarter of 2018. The increase in Adjusted EBITDAX from the fourth quarter of 2018 was primarily due to a fourth quarter royalty adjustment, realized hedge gains compared to realized hedge losses in the previous period, and a decrease in lease operating expenses, partially offset by a decrease in realized oil, natural gas, and natural gas liquids prices and the Central Texas and Mid-Continent area divestitures which closed in December 2018 and January 2019. The decrease in Adjusted EBITDAX from the first quarter of 2018 was primarily due to the divestitures which closed in 2018 and January 2019, a decrease in realized oil and natural gas liquids prices and a decrease in realized commodity hedge gains, partially offset by a decrease in restructuring costs and an increase in realized natural gas prices. Adjusted EBITDAX is a Non-GAAP financial measures and is described in the attached table under “Non-GAAP Measures.”
Revolving Credit Facility and Liquidity
As of May 14, 2019, Harvest’s borrowing base under its credit facility was $110 million, of which $8 million was drawn. Liquidity from borrowing base capacity and cash on hand is currently approximately $115 million. The decrease in the borrowing base during the Spring 2019 semi-annual redetermination was primarily a result of the divestitures of the San Juan Basin and Mid-Continent assets in April 2019 as well as a decline in bank commodity price assumptions. Harvest's next semi-annual borrowing base redetermination is scheduled for October 2019.
For more information regarding Harvest's debt and liquidity, please review Harvest's Quarterly Report on Form 10-Q filed on May 15, 2019 with the Securities and Exchange Commission.
Since March 31, 2019, Harvest entered into the following commodity hedges.
Also, in April 2019 and in connection with the San Juan and Mid-Continent asset divestitures, Harvest terminated the following hedge positions at a net gain of $45 thousand.
Details regarding Harvest’s total current hedge position may be found in the Total Current Hedge Position table at the end of this press release. Quarterly Report on Form 10-Q
Harvest’s financial statements and related footnotes are available in its Quarterly Report on Form 10-Q, which was filed on May 15, 2019, and is available through the Investor Relations/SEC Filings section of the Harvest website at http://www.hvstog.com.
About Harvest Oil & Gas Corp.
Harvest is an independent oil and gas company engaged in the efficient operation and development of onshore oil and gas properties in the continental United States. The Company’s assets consist primarily of producing and non-producing properties in the Barnett Shale, the Appalachian Basin (which includes the Utica Shale), Michigan, the Mid-Continent areas in Oklahoma, Texas, Arkansas, Kansas, the Permian Basin, and the Monroe Field in Northern Louisiana. More information about Harvest is available on the internet at https://www.hvstog.com.
Forward Looking Statements
This press release contains certain statements that are, or may be deemed to be, “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, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends affecting the financial condition of its business. These forward-looking statements are subject to a number of risks and uncertainties, most of which are difficult to predict and many of which are beyond its control. Please read the Company’s filings with the Securities and Exchange Commission, including “Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2018 and other public filings and press releases for a discussion of risks and uncertainties that could cause actual results to differ from those in such forward-looking statements. These risks include, but are not limited to, our inability to control our contract operator, EnerVest Operating, L.L.C., outside of the parameters of the Services Agreement, our ability to obtain needed capital or financing on satisfactory terms, fluctuations in prices of oil, natural gas and natural gas liquids and the length of time commodity prices remain depressed, our ability to maintain production levels through development drilling, risks associated with drilling and operating wells, the availability of drilling and production equipment, changes in applicable laws and regulations that adversely affect our operations and general economic conditions. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “expect,” “indicate” and similar expressions are intended to identify forward-looking statements. All statements other than statements of current or historical fact contained in this press release are forward-looking statements. Although the Company believes that the forward-looking statements contained in this press release are based upon reasonable assumptions, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.
You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.
Condensed Consolidated Balance Sheets ($ in thousands, except number of shares)
Condensed Consolidated Statements of Operations ($ in thousands, except per share/unit data)
Condensed Consolidated Statements of Cash Flows ($ in thousands)
The Company defines Adjusted EBITDAX as net (loss) income plus income taxes; interest expense, net; depreciation, depletion and amortization; accretion expense on obligations; loss (gain) on derivatives, net; cash settlements of matured commodity derivative contracts; non-cash equity-based compensation; impairment of oil and natural gas properties; non-cash oil inventory adjustment; dry hole and exploration costs; gain on sales of oil and natural gas properties; reorganization items, net; and (gain) loss on equity securities.
Adjusted EBITDAX is used by the Company’s management to provide additional information and statistics relative to the performance of the business, including (prior to the creation of any reserves) the cash return on investment. The Company believes this financial measure may indicate to investors whether or not it is generating cash flow at a level that can support or sustain quarterly interest expense and capital expenditures. Adjusted EBITDAX should not be considered as an alternative to net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDAX excludes some, but not all, items that affect net income and operating income and this measure may vary among companies. Therefore, Harvest’s Adjusted EBITDAX may not be comparable to similarly titled measures of other companies.
Reconciliation of Net (Loss) Income to Adjusted EBITDAX ($ in thousands)
Total Current Hedge Position
Harvest Oil & Gas Corp., Houston, TX Ryan Stash 713-651-1144 hvstog.com