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Bonanza Creek Energy Third Quarter 2021 Results

Share Print Bookmark    |    Friday,October 29,2021

Bonanza Creek Energy, Inc. announced its third quarter 2021 financial results.

Highlights include:

• Average sales volumes for the third quarter of 43.7 thousand barrels of oil equivalent per day ("MBoe/d") with oil representing 51% of total volumes
• Total capital expenditures of $54.8 million for the third quarter
• Lease operating expense ("LOE") of $2.87 per Boe for the third quarter
• Rocky Mountain Infrastructure ("RMI") operating expense was $0.79 per Boe for the third quarter
• RMI net effective cost⁽¹⁾ for the third quarter was $0.38 per Boe, which offsets RMI operating expense with $0.41 per Boe of RMI operating revenue from working interest partners
• General and administrative ("G&A") expenses were $11.7 million for the third quarter of 2021, which included $2.3 million in non-cash stock-based compensation and $0.1 million of other non-recurring G&A
• Recurring cash G&A⁽¹⁾ expense, which excludes non-recurring and non-cash items, was $9.3 million for the third quarter or $2.31 per Boe
• GAAP net income for the third quarter of $40.7 million
• Adjusted EBITDAX⁽¹⁾ of $116.5 million, or $3.74 per diluted share

Eric Greager, President and Chief Executive Officer of Bonanza Creek, commented, "We're proud to have delivered a strong quarter ahead of the closing of the pending mergers to form Civitas Resources. The team has consistently delivered results, while integrating the HighPoint assets, and I'm confident in continued strong performance under the Civitas brand. Subject to stockholder approval and satisfaction of customary closing conditions, we expect to communicate more information on Civitas in the coming days."

Third Quarter 2021 Results

During the third quarter of 2021, the Company reported average daily sales of 43.7 MBoe/d. The Company's production guidance for the third quarter 2021 had been a range of 41 to 44 MBoe/d with oil representing 48% to 52% of total volumes.

Product mix for the third quarter was 51% oil, 22% NGLs, and 27% residue natural gas. The table below provides sales volumes, product mix, and average sales prices for the third quarter 2021 and 2020.

Capital expenditures were $54.8 million for the third quarter of 2021. During the quarter, the Company completed 20 gross (16.5 net) wells, and turned to sales 11 gross (10.1 net) wells, 10 of which were standard reach lateral ("SRL") wells. Year-to-date capital expenditures through the third quarter were $128.5 million versus previously provided full year guidance of $150 million to $170 million.

Net oil and gas revenue for the third quarter of 2021 was $190.0 million compared to $156.0 million for the second quarter of 2021. The increase was a result of higher oil, natural gas, and NGL realized prices. Crude oil accounted for approximately 69% of total revenue for the quarter. Differentials for the Company's oil production increased during the quarter to approximately $6.19 per barrel off NYMEX WTI versus approximately $5.28 per barrel during the second quarter of 2021, due to strengthening oil prices.

LOE for the third quarter of 2021 on a per unit basis decreased 3% to $2.87 per Boe from $2.95 per Boe in the second quarter of 2021. The Company's LOE guidance for the third quarter 2021 had been a range of $2.85 to $3.00 per Boe.

RMI net effective cost for the third quarter 2021 was $0.38 per Boe, which consists of $0.79 per Boe of RMI operating expense offset by $0.41 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 RMI operating expense guidance for the third quarter was a range of $0.85 to $1.15 per Boe.

The Company's general and administrative ("G&A") expenses were $11.7 million for the third quarter of 2021, which included $2.3 million in non-cash stock-based compensation and $0.1 million of other non-recurring G&A. Recurring cash G&A, which excludes non-recurring and non-cash items, was $9.3 million for the third quarter versus a guidance range of $8.0 million to $9.5 million. On a per-unit basis, recurring cash G&A was $2.31 per Boe for the quarter.

RMI net effective cost and recurring cash G&A are non-GAAP measures. Please see Schedule 6 and Schedule 7 at the end of this release for a reconciliation to the most comparable GAAP measure.

Guidance Summary

The table below summarizes the Company's performance versus guidance for the third quarter. The Company expects to provide additional guidance for the fourth quarter 2021 following the closing of the mergers that will form Civitas Resources, Inc.

Civitas Update

As previously announced, the Company will hold a special meeting of Bonanza Creek stockholders on October 29th, 2021 to consider approval of the XOG Merger and the Crestone Merger (as defined below).

The table below outlines certain operating and financial results for the third quarter of 2021 for the three companies separately, that when merged will constitute Civitas Resources, Inc. The mergers are subject to stockholder approval and other customary closing conditions. The information for Extraction Oil & Gas, Inc. ("Extraction") and Crestone Peak Resources ("Crestone Peak") was provided to the Company by Extraction and Crestone Peak, respectively, and has not been independently verified by the Company.