Lonestar Reports Second Quarter 2021 Results: Operational Momentum Is Accelerating
- Aug 11, 2021
- Business Wire
FORT WORTH, Texas--(BUSINESS WIRE)--Lonestar Resources US Inc. (OTCQX: LONE) (including its subsidiaries, “Lonestar,” “we,” “us,” “our” or the “Company”) today reported financial and operating results for the three months ended June 30, 2021.
Lonestar’s Chief Executive Officer, Frank D. Bracken, III commented, “Our 2021 capital program continues to generate robust growth in production and cash flow, and the front-end loaded nature of that program is expected to yield significant Free Cash Flow in the second half of the year.”
In our Western Region, which encompasses Dimmit and LaSalle Counties, production for 2Q21 averaged approximately 6,604 BOE per day, a 29% increase from 1Q21 production. Production consisted of 2,550 barrels of oil per day (39%), 1,607 barrels of NGL’s per day (24%) and 14,668 Mcf of natural gas per day (37%). The Western region accounted for 56% of the Company’s production during the quarter.
Lonestar recently completed drilling operations on 2.0 gross / 2.0 net wells on its Horned Frog South property, Lonestar has a 100% WI / 77.96% NRI in the Horned Frog Alderman #1H and #2H. These wells commenced flowback in June, and to date, have registered max 30-day production rates averaging 2,306 BOE/d. Production is currently comprised of 59% crude oil and NGL’s on an equivalent basis.
In our Central Region, which principally includes Gonzales, Karnes, Lavaca and Fayette Counties, 2Q21 production averaged approximately 4,991 BOE/d, a slight decrease over 1Q21 rates. Production consisted of 3,536 barrels of oil per day (71%), 733 barrels of NGL’s per day (15%), and 4,330 Mcf of natural gas per day (14%). The Central region accounted for 42% of the Company’s production during the quarter.
As part of its Joint Venture with Marathon Oil Corporation, Lonestar, as operator, has permitted a three-well pad on its Hawkeye asset. To date, Lonestar has completed drilling operations on three wells, the Hawkeye #9H, #10H and #11H, with designed perforated intervals exceeding 11,000 feet.
In our Eastern Region, 1Q22 production averaged approximately 260 BOE/d, a 10% increase over 1Q21 rates. Production consisted of 138 barrels of oil per day (53%), 67 barrels of NGL’s per day (26%), and 334 Mcf of natural gas per day (21%).
Lonestar is an independent oil and natural gas company based in Fort Worth, Texas, focused on the development, production, and acquisition of unconventional oil, NGLs, and natural gas properties in the Eagle Ford Shale in Texas, where we have accumulated approximately 72,569 gross (52,565 net) acres in what we believe to be the formation’s crude oil and condensate windows, as of June 30, 2021. For more information, please visit www.lonestarresources.com.
Cautionary Note Regarding Forward Looking Statements
Disclosures in this press release contain certain forward-looking statements within the meaning of the federal securities laws. Statements that do not relate strictly to historical or current facts are forward-looking. These statements contain words such as “possible,” “if,” “will,” “expect” and “assuming” and involve risks and uncertainties including, among others that our business plans may change as circumstances warrant and securities of the Company may not ultimately be offered to the public because of general market conditions or other factors. Accordingly, readers should not place undue reliance on forward-looking statements as a prediction of actual results. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, please refer to the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2021 and any subsequently filed quarterly reports on Form 10-Q. Any forward-looking statements in this press release are made as of the date of this press release and the Company undertakes no obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or of which the Company becomes aware, after the date hereof, unless required by law.
*References to “Successor” refer to the new Lonestar reporting entity after the Company’s emergence from bankruptcy on November 30, 2020, and references to “Predecessor” refer to the Lonestar entity prior to emergence from bankruptcy.*
Oil and gas properties, using the successful efforts method of accounting
Less accumulated depreciation, depletion and amortization
Oil, natural gas liquid and natural gas sales payable
Common stock, $0.001 par value, 90,000,000 shares authorized, 10,107,081 and 10,000,149 shares issued and outstanding, respectively
Unaudited Condensed Consolidated Statements of Operations
Loss on sale and disposal of oil and gas properties
Net loss income attributable to common stockholders
Unaudited Condensed Consolidated Statements of Cash Flows
Adjustments to reconcile net loss to net cash provided by operating activities:
Cash and cash equivalents, beginning of the period
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net (loss) income attributable to common stockholders before depreciation, depletion, amortization and accretion, exploration costs, non-recurring costs, loss (gain) on sales of oil and natural gas properties, impairment of oil and gas properties, stock-based compensation, interest expense, income tax (benefit) expense, rig standby expense, other income (expense), unrealized (gain) loss on derivative financial instruments and unrealized (gain) loss on warrants.
Management believes Adjusted EBITDAX provides useful information to investors because it assists investors in the evaluation of the Company’s operating performance and comparison of the results of the Company’s operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net (loss) income attributable to common stockholders in arriving at Adjusted EBITDAX to eliminate the impact of certain non-cash items or because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net (loss) income attributable to common stockholders as determined in accordance with GAAP. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company’s computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net loss attributable to common stockholders for each of the periods indicated.
Unrealized loss on derivative financial instruments
Adjusted net (loss) income comparable to analysts’ estimates as set forth in this release represents income or loss before income taxes adjusted for certain non-cash items (detailed in the accompanying table) less income taxes. We believe adjusted net (loss) income is calculated on the same basis as analysts’ estimates and that many investors use this published research in making investment decisions and evaluating operational trends of the Company and its performance relative to other oil and gas producing companies.
The following table presents a reconciliation of Adjusted Net (Loss) Income to the GAAP financial measure of net loss before taxes for each of the periods indicated.
Unaudited Reconciliation of Loss Before Taxes As Reported To Income (Loss) Before Taxes Excluding Certain Items, a non-GAAP measure (Adjusted Net Income (Loss))
Net income excluding certain items, a non-GAAP measure
Discretionary cash flow is defined as net cash provided by operating activities before changes in operating assets and liabilities. Management believes that the non-US GAAP measure of discretionary cash flow is useful as an indicator of an oil and natural gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. The company has also included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the company may not control and may not relate to the period in which the operating activities occurred. Operating cash flow should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with US GAAP.
1 Cash interest is presented on an accrual basis and excludes non-cash amortization expense
Total oil equivalent, excluding the effect from commodity derivatives ($ per BOE)
Total oil equivalent, including the effect from commodity derivatives ($ per BOE)