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Bonanza Creek Energy Inc. Second Quarter 2020 Results

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   |    Thursday,August 06,2020

Bonanza Creek Energy, Inc. reported its Q2 2020 results.

Highlights of the second quarter 2020 include:

  • Average sales volumes of 24.9 thousand barrels of oil equivalent per day ("MBoe/d"), with oil representing 56% of total volumes
  • Increasing annual production guidance to a range of 24.0 to 25.0 MBoe/d following YTD average sales volumes of 24.8 MBoe/d
  • Capital expenditures of $21.7 million for the second quarter bringing YTD capital expenditures to $62.8 million, at the lower end of annual guidance as expected
  • Lease operating expense ("LOE") of $2.56 per Boe for the second quarter; up less than 2% from first quarter 2020, and down 13% from full year 2019
  • Recurring cash general and administrative ("G&A")(1) expense, which excludes stock-based compensation and cash severance costs, was $6.1 million for the quarter or $2.72 per Boe, down 21% from first quarter 2020, and down 27% from full year 2019 on a unit basis
  • Rocky Mountain Infrastructure ("RMI") second quarter 2020 net effective cost(1) was $0.97 per Boe, which consists of approximately $1.48 per Boe of RMI operating expense offset by $0.51 per Boe of RMI operating revenue from working interest partners
  • Exited the quarter with $58 million of debt and a leverage ratio of 0.3x with the continued expectation to fully repay outstanding debt by the end of the year
  • GAAP net loss of $38.9 million, or $1.87 net loss per diluted share, including a $2.30 non-cash loss on derivatives
  • Adjusted EBITDAX(1) of $36.2 million, or $1.74 per diluted share

Eric Greager, President and Chief Executive Officer of Bonanza Creek, commented, "We're grateful that our team remains healthy and productive. We're pleased with the strong performance of our assets, and the progress we're making toward our full-year objectives. We're increasing our annual production guidance range to a mid-point of 24.5 MBoe/d, and reiterating all other guidance ranges for 2020. We expect 3Q volumes to be flat to 2Q, and our capex to be minimal for the balance of the year. Prior to filing our 10-Q for the second quarter, we paid down our revolver to $53 million, and our cash flow projections continue to support our exiting 2020 with no debt."

Second Quarter 2020 Results

During the second quarter of 2020, the Company reported average daily sales of 24.9 MBoe/d. Product mix for the quarter was 56% oil, 20% NGLs, and 24% residue natural gas. Oil mix was up from 54% in the first quarter of 2020 and fluctuates due to the timing of wells turned to sales. The table below provides sales volumes, product mix, and average sales prices for the second quarter 2020 and 2019.

Capital expenditures were $21.7 million for the second quarter of 2020. During the quarter, the Company completed 1 gross (0.6 net) standard reach lateral ("SRL") well. There were 8 gross (7.7 net) wells turned to sales, 3 of which were SRL wells.

Net oil and gas revenue for the second quarter of 2020 was $36.2 million compared to $60.4 million for the first quarter of 2020. The decrease was a result of lower oil, natural gas, and NGL realized prices. Crude oil accounted for approximately 79% of total revenue for the quarter. Differentials for the Company's oil production during the quarter averaged approximately $5.53 per barrel off NYMEX WTI, and the Company expects its oil differential to average between $4.75 and $5.25 per barrel for full-year 2020.

LOE for the second quarter of 2020 on a unit basis increased less than 2% to $2.56 per Boe from $2.52 per Boe in the first quarter of 2020. The Company has begun successfully implementing the previously-identified $8 million in LOE and RMI operating expense savings relative to original 2020 plans, and is reaffirming both its LOE and RMI operating expense guidance ranges for the year.

RMI second quarter 2020 net effective cost was $0.97 per Boe, which consists of approximately $1.48 per Boe of RMI operating expense offset by $0.51 per Boe of RMI operating revenue from working interest partners. RMI operating revenue from working interest partners is based on production volumes, and the fees are not tied to oil or natural gas prices.

The Company's general and administrative ("G&A") expenses were $8.4 million for the second quarter of 2020, which included $1.5 million in non-cash stock-based compensation and $0.8 million related to one-time cash severance costs. Recurring cash G&A, which excludes stock-based compensation and cash severance, of $6.1 million for the second quarter of 2020 decreased by $1.6 million or 21% from first quarter 2020 as a result of implemented cost reductions. On a per unit basis, the Company's recurring cash G&A decreased 21% to $2.72 per Boe in the second quarter of 2020 from $3.44 per Boe in the first quarter of 2020.

Guidance Summary

 


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