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Ranger Oil Corp. First Quarter 2022 Results

Share Print Bookmark    |    Monday,May 09,2022

Ranger Oil Corp. announced financial and operational results for the first quarter of 2022.

First Quarter Highlights:

• Achieved upper end of quarterly sales guidance with oil sales of 26,980 barrels per day ("bbl/d") and total sales of 37,752 barrels of oil equivalent per day ("boe/d")
• Posted a net loss of $20.7 million and adjusted net income¹ of $98.7 million
• Generated Free Cash Flow¹ of $64.8 million and $160.9 million of Adjusted EBITDAX¹
• Drilling and Completion ("D&C") capital expenditures were $82.8 million, below the mid-point of guidance
• Strong first quarter sales volumes allowed Company to increase mid-point of full-year 2022 oil and total sales volumes outlook while maintaining annual D&C capital investment guidance of $375 - $425 million
• Maintained strong capital structure with a Net debt/LTM EBITDAX¹ ratio <1.0x at quarter-end

Shareholder Return and Free Cash Flow Initiatives

• Authorized $100 million share repurchase program
• Announced accretive "bolt-on" acquisitions in the prolific Eagle Ford shale (Ranger Oil to Acquire Strategic Eagle Ford Assets) totaling approximately $64 million; transactions to be funded with Free Cash Flow
• Plan to initiate annualized dividend of $0.25 per share ($0.0625 per share quarterly) beginning third quarter 2022

Ranger President and CEO, Darrin Henke said: "We are off to a great start in 2022 as we continue to execute our business strategy, generate Free Cash Flow and deliver returns for shareholders. Our strong balance sheet, disciplined capital investments, and exceptional operational performance continues, yielding significant Free Cash Flow and allowing us to strengthen our high-margin inventory through recently announced accretive acquisitions."

First Quarter 2022 Financial and Operating Results

Ranger reported a first quarter 2022 net loss of $20.7 million primarily related to derivative losses of $167.9 million. Adjusted net income¹ was $98.7 million for the first quarter of 2022, primarily due to non-cash derivative loss adjustments of $118.9 million. Benefitting from higher commodity prices and disciplined investments, Ranger posted Adjusted EBITDAX¹ of $160.9 million and generated quarterly Free Cash Flow of $64.8 million during the quarter.

Total operating expenses for the first quarter of 2022 were $101.0 million, or $29.71 per boe. Adjusted direct operating expenses¹, which consist of lease operating expenses ("LOE"), gathering, processing and transportation expenses ("GPT"), production and ad valorem taxes, and adjusted cash general and administrative expenses¹ ("G&A"), excluding depreciation, depletion and amortization ("DD&A") and significant special charges, were $47.4 million, or $13.95 per boe, in the first quarter of 2022. A breakdown of operating expenses, as well as guidance for the remainder of the year, can be found in additional tables included in this release.

Oil sales during the quarter were 26,980 bbl/d, at the upper end of Ranger's previous guidance (25.8 - 27.0 Mbbl/d). Total sales volumes for the first quarter of 2022 exceeded the mid-point of guidance and were 37,752 boe/d (71% crude oil/86% liquids).

2022 Outlook

Following outperformance in the first quarter, Ranger today increased expectations for the mid-point of its 2022 annual oil and total sales volumes. Ranger's recent shift to longer lateral wells (full-year 2022E/2023E avg: ~11,000') is expected to allow for a significant increase in sales volumes in the second half of 2022.

Full-year sales guidance excludes the positive impact from recently announced bolt-on transactions, expected to close early in the third quarter of 2022, subject to customary closing conditions. The Company plans to update full-year guidance following their close.

Ranger reiterated its previously announced D&C capital investment outlook for 2022 of $375 - $425 million.

Henke added, "We are committed to preserving the strength of our balance sheet, making disciplined capital investments, and generating Free Cash Flow to strengthen our business and allow for the return of cash to shareholders. Today, we increased the mid-point of our 2022 outlook for sales volumes while maintaining our original capital guidance. This further demonstrates the fruits of our strategy and confidence in our future."

Share Repurchase and Dividend Programs

As previously announced on April 13, 2022, the Board of Directors authorized a $100 million share repurchase program through March 31, 2023.

The Company plans to initiate an annualized dividend of $0.25 per share (0.0625 per share quarterly) beginning in the third quarter of 2022.

Current Balance Sheet and Liquidity

As of April 30, 2022, Ranger had $400 million of senior unsecured notes and approximately $94 million drawn, net of cash, on its revolving credit facility. The Company has a borrowing base of $725 million under its revolving credit facility with elected commitments of $400 million and is currently undergoing its regularly scheduled spring borrowing base redetermination.