Exploration & Production | Quarterly / Earnings Reports | Third Quarter (3Q) Update
LRR Cuts Spending, Guidance for Full-Year 2014
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LRR Energy, L.P. reported its operating and financial results for the three and nine months ended September 30, 2014.
Eric Mullins, Chairman and Co-Chief Executive Officer, commented, "Overall we are pleased with our third quarter 2014 results. Despite slightly lower production volumes during the quarter, adjusted EBITDA, distributable cash flow and distribution coverage ratio increased as compared to the second quarter of 2014."
LRR Energy's average net production for the three and nine months ended September 30, 2014 was negatively impacted by flaring at our Red Lake field of approximately 25 Boe/d and 40 Boe/d, respectively. During the third quarter, production at our non-operated Putnam field was approximately 85 Boe/d below our expectations because of delayed drilling activity and new well production performance. Due to flooding, production at our Corral Canyon field was negatively impacted by approximately 25 Boe/d during the third quarter. Finally, production at our non-operated Corral Canyon field was approximately 20 Boe/d below our third quarter expectations because of the deferment of drilling a well. Normal operations at our Corral Canyon field resumed on October 9, 2014. LRR Energy's October 2014 average net production through October 24, 2014 was approximately 6,525 Boe/d.
Recent Events
As of October 30, 2014, LRR Energy had $233 million of outstanding borrowings under its revolving credit facility and $50 million of outstanding borrowings under its term loan. LRR Energy's current liquidity position is approximately $39 million consisting of $27 million of availability under our revolving credit facility and approximately $12 million of available cash on hand. Management believes cash flow from operations, the capacity under the revolving credit facility and the proceeds from its current At-the-Market Offering Program will provide ample financial flexibility to execute its 2014 capital program and distribution strategy.
On October 17, 2014, LRR Energy announced that the Board of Directors of its general partner declared an increased cash distribution for the third quarter of 2014 of $0.4975 per outstanding unit, or $1.99 on an annualized basis. The distribution will be paid on November 14, 2014 to all unitholders of record as of the close of business on October 31, 2014. The declaration represents the ninth consecutive increase to LRR Energy's quarterly distribution.
Revised 2014 Guidance
LRR Energy has revised its full year 2014 guidance based on actual results for the nine months ended September 30, 2014 and a decreased capital development program for the second half of 2014. The majority of the $2.5 million capital decrease is due to expected lower non-operated development activity at our Putnam and Corral Canyon fields. Based on current estimates, and assuming no future acquisitions, LRR Energy's revised full year 2014 guidance is as follows:
