Quarterly / Earnings Reports | Second Quarter (2Q) Update

Bonanza Creek Talks Q2 2019 Results

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Bonanza Creek Energy, Inc. reported its second quarter 2019 financial results and operating outlook.

Highlights of the Q2 2019 include:

• Increasing 2019 annual production guidance to a range of 22.0 to 24.0 MBoe/d following strong second quarter 2019 sales volumes of 24.4 MBoe/d, up 18% over first quarter 2019 and 38% over fourth quarter 2018
• The Whitetail A-4 well in the Company's Northern acreage is performing consistent with the Company's Legacy East XRL type curve
• Net oil and gas revenue of $85.8 million, an increase of 18% over first quarter 2019
• GAAP net income of $41.0 million, or $1.99 per diluted share, inclusive of $0.42 non-cash gain on derivatives
• Adjusted EBITDAX⁽¹⁾ of $56.2 million, or $2.72 per diluted share, an increase of 14% sequentially
• Lease operating expenses of $2.87 per Boe, a decrease of 1% over first quarter 2019
• Total general and administrative ("G&A") expense, including non-cash, stock-based compensation, of $9.8 million. Cash G&A⁽¹⁾, excluding stock-based compensation, was $8.0 million for the quarter or $3.61 per Boe, down 24% from first quarter 2019
• Combined cash costs of LOE, Rocky Mountain Infrastructure ("RMI") operating expenses, gathering, transportation and processing ("GT&P"), and cash G&A totaled $9.65 per Boe for the quarter, down 13% from first quarter 2019
• Total capital expenditures of $81.7 million for the quarter and $126.5 million year to date, in line with Company's full year 2019 guidance of $230.0 to $255.0 million

Eric Greager, President and Chief Executive Officer of Bonanza Creek, commented, "We're encouraged with our development performance to date, and are raising our annual production guidance to a range of 22 to 24 MBoe per day with this release. Our capex in the first quarter was light versus our plan, but we paced ahead of schedule in the second quarter. Our capex year-to-date is in line with our full year expectations, having invested approximately 52% of the mid-point of our annual guidance. We're also excited to share results from our Whitetail well, which we drilled on our Northern acreage in late 2018. The well has been performing in line with our Eastern XRL type curve, and along with the Pronghorn B-28 pad, continues to demonstrate the quality of our acreage."

Second Quarter 2019 Results

During the second quarter of 2019, the Company reported average daily sales of 24.4 MBoe/d. Product mix for the quarter was 62% oil, 16% NGLs, and 22% residue natural gas. During the second quarter of 2019, the Company drilled 17 gross (11.2 net) operated wells, seven of which were extended reach lateral ("XRL") wells, and completed 19 gross (17.0 net) operated wells. As planned, there were no wells turned to sales during the second quarter. The company expects to turn 23 gross (20.4 net) wells to sales during the third quarter.

The table below provides operating statistics for our Wattenberg assets.

(2) Results for three months ended are for Wattenberg only. Please see tables in the back of this press release and our Quarterly Report on Form 10-Q filed on August 7, 2019 for total Company operating statistics for the 2018 period.

Net oil and gas revenue for the second quarter of 2019 was $85.8 million compared to $72.6 million for the first quarter of 2019. The increase was primarily a result of increased production and higher oil realizations, partially offset by lower natural gas and NGL realized prices. Crude oil accounted for approximately 87% of total revenue for the quarter. Differentials for the Company's oil production during the quarter averaged approximately $5.90 per barrel off of NYMEX WTI.

LOE for the second quarter of 2019 on a unit basis decreased by 1% to $2.87 per Boe from $2.91 per Boe in the first quarter of 2019 and is in line with full year 2019 guidance of $2.75 to $3.25 per Boe. Additionally, RMI operating expenses for the second quarter were $1.22 per Boe compared to $1.24 per Boe in first quarter of 2019, also in line with the Company's expectations and full year guidance of $1.10 to $1.40 per Boe.

The Company's general and administrative ("G&A") expenses were $9.8 million for the second quarter of 2019, which included $1.8 million in non-cash stock-based compensation. Cash G&A, which excludes stock-based compensation, of $8.0 million for the second quarter was down from $8.9 million in the first quarter of 2019. On a per unit basis, the Company's Cash G&A decreased 24% sequentially from $4.77 per Boe in the first quarter to $3.61 per Boe in the second quarter.

Cash G&A is a non-GAAP measure. Please see Schedule 7 at the end of this release for a reconciliation from GAAP G&A to cash G&A.

Oil began flowing through the Company's new oil gathering line to the Riverside Terminal in late July. The Company's oil differential will benefit from a $1.25 to $1.50 reduction for barrels flowing through the line. The first oil sales from the line occurred in early August. Oil volumes flowing through the line will build through the remainder of 2019, but not all of the Company's oil sales will flow through the new line. The Company's oil differential guidance of $4.25 to $5.25 per barrel for the year contemplates the improved differential and expectations of oil sales through the line for the remainder of the year.

Guidance Summary

(1) Oil differential guidance based on WTI pricing through June 30, 2019, strip pricing as of August 6th, and includes the benefit of oil flowing through the company's new oil gathering line.