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Ranger Oil Third Quarter 2021 Results

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   |    Thursday,November 04,2021

Ranger Oil Corp. announced its financial and operational results for the third quarter 2021.

Recent Significant Highlights:

The operational and financial results below do not include the Lonestar Resources US Inc. ("Lonestar") acquisition which closed October 5, 2021, unless otherwise noted.

  • Rebranded the Company as Ranger Oil Corporation;
  • Ranger's Board Member Tiffany ("TJ") Thom Cepak Named to Savoy Magazine's 2021 List of "Most Influential Black Corporate Directors";
  • Sold 20,429 barrels of oil per day ("bbl/d") for the third quarter of 2021, slightly exceeding the mid-point of guidance. Total sales volumes for the third quarter of 2021 were 25,483 barrels of oil equivalent per day ("boe/d");
  • Generated significant free cash flow(1) for the eighth consecutive quarter, lowering net debt(2) by approximately $29 million to $305 million as of September 30, 2021;
  • Generated net income of $43 million for the third quarter of 2021; and
  • Reported adjusted EBITDAX(3) of over $88 million for the third quarter of 2021.

Darrin Henke, President and Chief Executive Officer of Ranger, said: "The last several months have marked an incredible period of positive transformation. I'm so proud of the many accomplishments we've made - closing our Lonestar acquisition, strengthening our balance sheet with our unsecured notes offering, outperforming the midpoint of our guidance for both production and capital, and generating our eighth consecutive quarter of free cash flow(1). To mark the success of our strategic transformation, we rebranded the Company to Ranger Oil Corporation. I want to thank the entire Ranger team for their continued hard work and dedication, without which this transformation would not have been possible. We are also proud of TJ's accomplishment of being named to Savoy Magazine's 2021 List of Most Influential Black Corporate Directors. TJ is a valued and key member of our Board, and we thank her for her continued commitment and dedication to Ranger."

Mr. Henke continued, "While we celebrate our successes, we never stop pursuing continuous improvement. Turning to the fourth quarter, we are focused on engineering our next phase of operational and financial outperformance. First, we are executing on previously identified G&A and operating synergies in connection with the Lonestar acquisition. We continue to expect more than $20 million of annual synergies, with significant incremental development synergies through the drilling of longer lateral wells, increased wells per pad, and shared facilities and infrastructure. In anticipation of these larger, more capital-efficient pads, we are diligently working with our midstream partners to invest in field infrastructure. The plan calls for field compression upgrades and optimization of other infrastructure as we prepare for this next phase of development. We expect this plan to result in consistent production for the fourth quarter relative to this quarter for our legacy Ranger assets; however, the recent closing of the Lonestar acquisition grows our overall production base by approximately 50% on a barrel of oil equivalent basis. Our investments in field infrastructure combined with our continued two-rig drilling program provide momentum for a highly capital efficient 2022, with mid to high single-digit production growth year-over-year."

Mr. Henke added, "With our focus on capital discipline and operational efficiencies, combined with current commodity prices, we expect the Company's free cash flow(1) profile to significantly accelerate in 2022, producing well in excess of $200 million for the calendar year. Our growing EBITDAX and strong free cash flow generation are expected to result in a leverage(4) ratio of 1.0x or less in the first half of next year. As we approach this goal, we continue to review all potential options for accretive uses of our free cash flow for the benefit of our shareholders while maintaining our strong balance sheet. Lastly, we continue to see a significant opportunity for us to be the basin consolidator of choice. As in the past, our strategy will remain squarely focused on long-term shareholder accretion, rigorous capital discipline, balance sheet strength, strong cash-on-cash returns, and a commitment to operating in an environmentally and socially responsible manner."

Third Quarter 2021 Operating Results

Total sales volumes for the third quarter of 2021 were 2.3 million barrels of oil equivalent, or 25,483 boe/d (80% crude oil). During the third quarter of 2021, the Company completed and turned in line 10 gross (9.2 net) wells.

Third Quarter 2021 Financial Results

Operating expenses were $65.8 million, or $28.06 per barrel of oil equivalent ("boe"), in the third quarter of 2021 including $13.21 per boe of depreciation, depletion and amortization expenses. Total cash direct operating expenses(5), which consist of lease operating expenses ("LOE"), gathering, processing, and transportation ("GPT") expenses, production and ad valorem taxes, and cash general and administrative ("G&A") expenses, were $33.8 million, or $14.43 per boe, in the third quarter of 2021. Total G&A expenses for the third quarter of 2021 were $4.66 per boe, which includes $2.7 million of non-recurring transaction costs and $1.0 million of non-cash share-based compensation. For the third quarter of 2021, adjusted cash G&A expenses(6), which exclude non-cash share-based compensation and non-recurring transaction costs, were $3.11 per boe, and LOE was $4.54 per boe.

Net income for the third quarter of 2021 was $43.1 million, and net income attributable to common shareholders was $17.4 million, or $1.11 per share and per diluted share, compared to a net loss of $243.4 million, or $16.03 loss per share, in the third quarter of 2020. Adjusted net income(7) was $44.1 million, or $1.15 per diluted share, in the third quarter of 2021 versus $17.3 million, or $1.14 per diluted share in the third quarter of 2020.

Adjusted EBITDAX(3) was $88.1 million in the third quarter of 2021, compared to $63.7 million in the third quarter of 2020, up primarily due to higher production and higher crude oil prices.

Balance Sheet and Liquidity

As of October 29, 2021, Ranger had long-term debt of $662.9 million (net debt of $603.7 million), which is comprised of $400 million of senior unsecured notes and $203.7 million under its revolving credit facility, net of cash. The Company has a borrowing base of $600 million with elected commitments of $400 million. Ranger's liquidity under its revolving credit facility was $195.9 million as of October 29, 2021.


As of October 5, 2021, the Company (including the Lonestar acquisition) had approximately 174,600 gross (142,600 net) acres. Approximately 93% of Ranger's acreage is held by production.

Q4 2021 Outlook

The table below sets forth the Company's operational and financial guidance for the fourth quarter 2021:

    4Q 2021    
Reported Oil Sales Volumes (bbl/d)   25,700 27,700    
Realized Price Differentials        
Oil (WTI, per bbl)   $(3.00) - $(2.00)    
Natural gas (Henry Hub, per MMBtu)   $(0.10) - $0.10    
Direct Operating Expenses        
Lease operating expenses (per boe)   $4.75 - $4.95    
GPT expenses (per boe)   $2.55 - $2.85    
Ad valorem and production taxes (percent of product revenue)   6.3% - 6.8%    
Adjusted cash G&A expenses (per boe)(6)   $2.85 - $3.15    
Capital Expenditures (millions)        
Drilling & Completion   $65 - $75    
Land, Facilities and other   $1    

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