November 14, 2018

Harvest Oil & Gas Announces Third Quarter 2018 Results


HOUSTON, Nov. 14, 2018 (GLOBE NEWSWIRE) -- Harvest Oil & Gas Corp. (OTCQX: HRST) (“Harvest” or the “Company”) today announced results for the third quarter of 2018 and the filing of its Form 10-Q with the Securities and Exchange Commission (“SEC”) on November 14, 2018. Harvest is the successor reporting company to EV Energy Partners, L.P., its predecessor. Key Highlights

  • Generated Adjusted EBITDAX of $28.9 million and a net loss of $9.8 million, or $(0.97) per basic and diluted weighted average share outstanding for the third quarter of 2018

  • Average daily production was 175.5 MMcfe for the third quarter of 2018, which was at the high end of the guidance range of 167 to 176 MMcfe

  • Completed the sale of certain interests in its Central Texas and Karnes County, Texas properties to Magnolia Oil & Gas Corporation (“Magnolia”) for a total consideration of $133.3 million in cash (net of preliminary purchase price adjustments) and 4.2 million shares of Magnolia common stock (NYSE: MGY)

  • Completed the sale of certain Eagle Ford formation rights and existing production in Lee County, Texas for $3.5 million

  • Common stock and warrants commenced trading on the OTCQX® Best Market on September 20, 2018 under the tickers HRST and HRSTW, respectively

Third Quarter 2018 Financial Results

For the third quarter of 2018, Harvest reported a net loss of $9.8 million, compared to a net loss of $595.6 million for the second quarter of 2018, which reflects the combined results of two months ended May 31, 2018 (Predecessor) and one month ended June 30, 2018 (Successor). For the third quarter of 2017, Harvest’s predecessor reported a net loss of $17.9 million. Included in the 2018 third quarter net loss were the following items:

  • $1.1 million of non-cash costs contained in general and administrative expenses,

  • $1.0 million of reorganization items, net,

  • $2.6 million of impairment of oil and natural gas properties,

  • $4.8 million of gain on equity securities, and

  • $24.6 million of non-cash losses on commodity derivatives.

Production for the third quarter of 2018 was 10.4 Bcf of natural gas, 341 MBbls of oil and 611 MBbls of natural gas liquids (NGLs), or 175.5 million cubic feet equivalent per day (MMcfe/d). This represents a 3 percent decrease from the second quarter of 2018 production of 181.8 MMcfe/d and a 5 percent increase from the third quarter of 2017 production of 167.1 MMcfe/d. The decrease in production from the second quarter of 2018 was primarily due to the divestiture of the Central Texas and Karnes County, Texas properties that closed on August 31, 2018. The increase in production from the third quarter of 2017 was primarily due to increased drilling activity and the adoption of a new revenue recognition standard in 201


Adjusted EBITDAX for the third quarter of 2018 was $28.9 million, a 3 percent increase from the second quarter of 2018 and a 70 percent increase from the third quarter of 2017. The increase in Adjusted EBITDAX from the second quarter of 2018 was primarily attributable to higher realized oil, natural gas and natural gas liquids prices and lower cash general and administrative expenses, partially offset by decreased oil, natural gas and natural gas liquids production and higher lease operating expenses. The increase in Adjusted EBITDAX from the third quarter of 2017 was primarily attributable to higher realized oil and natural gas liquids prices, increased oil, natural gas and natural gas liquids production and lower cash general and administrative expenses, partially offset by higher lease operating expenses. 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 November 14, 2018, Harvest’s borrowing base under its credit facility was $264.6 million of which $125 million was drawn. Liquidity from borrowing base capacity and cash on hand is currently over $140 million. For more information regarding Harvest's debt and liquidity, please review Harvest's Quarterly Report on Form 10-Q filed on November 14, 2018 with the Securities and Exchange Commission.

Quarterly Report on Form 10-Q

Harvest financial statements and related footnotes are available in the Form 10-Q, which was filed on November 14, 2018, 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 San Juan Basin, 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 and Section 21E of the Exchange Act. 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 and its Quarterly Reports on Form 10-Q and, if applicable, its Current Reports on Form 8-K, 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. 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.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise. Operating Statistics

Condensed Consolidated Balance Sheets (In $ thousands, except number of shares/units)

Condensed Consolidated Statements of Operations (In thousands, except per share/unit data)

Condensed Consolidated Statements of Cash Flows (In $ thousands)

Non-GAAP Measures

The Company defines Adjusted EBITDAX as net loss plus income taxes, interest expense, net, depreciation, depletion and amortization, accretion expense on obligations, (gain) loss 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 other income, net. 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 to Adjusted EBITDAX (In $ thousands)

Total Current Hedge Position

Harvest Oil & Gas Corp., Houston, TX Ryan Stash 713-651-1144 hvstog.com