IRVING, Texas--(BUSINESS WIRE)--Montage Resources Corporation (NYSE:MR) (the “Company” or “Montage” or “Montage Resources”) today announced its third quarter 2020 operational and financial results.
Third Quarter 2020 Highlights:
- Merger with Southwestern Energy Company expected to close following Montage Resources shareholder vote on November 12, 2020
- Average net daily production was 602.6 MMcfe per day, above the high end of the Company’s previously issued guidance range of 580 to 600 MMcfe per day, consisting of 82% natural gas and 18% liquids
- Average natural gas equivalent realized price was $2.30 per Mcfe, including cash settled commodity derivatives and excluding firm transportation expenses
- Per unit cash production costs (including lease operating, transportation, gathering and compression, production, and ad valorem taxes) were $1.21 per Mcfe, below the Company’s previously issued guidance range of $1.25 to $1.35 per Mcfe
- Cash operating margin of $0.93 per Mcfe, or 40%, which was a $0.17 per Mcfe improvement from the second quarter 2020 of $0.76 per Mcfe
- Capital spending for the quarter was $22.3 million, with cumulative spending for the nine months ended September 30, 2020 of $103.8 million
Operational Discussion
The Company’s net production for the three and nine months ended September 30, 2020 and 2019 is set forth in the following table:
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Production: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (MMcf) |
|
|
45,333.6 |
|
|
|
43,289.9 |
|
|
|
131,353.1 |
|
|
|
109,613.9 |
|
NGLs (Mbbls) |
|
|
1,150.6 |
|
|
|
1,401.1 |
|
|
|
3,342.7 |
|
|
|
3,414.9 |
|
Oil (Mbbls) |
|
|
533.3 |
|
|
|
916.2 |
|
|
|
1,635.1 |
|
|
|
2,083.3 |
|
Total (MMcfe) |
|
|
55,437.0 |
|
|
|
57,193.7 |
|
|
|
161,219.9 |
|
|
|
142,603.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily production volume: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (Mcf/d) |
|
|
492,757 |
|
|
|
470,542 |
|
|
|
479,391 |
|
|
|
401,516 |
|
NGLs (Bbls/d) |
|
|
12,507 |
|
|
|
15,229 |
|
|
|
12,200 |
|
|
|
12,509 |
|
Oil (Bbls/d) |
|
|
5,797 |
|
|
|
9,959 |
|
|
|
5,968 |
|
|
|
7,631 |
|
Total (MMcfe/d) |
|
|
602.6 |
|
|
|
621.7 |
|
|
|
588.4 |
|
|
|
522.4 |
|
Financial Discussion
Revenue for the three months ended September 30, 2020 totaled $115.4 million, compared to $163.3 million for the three months ended September 30, 2019. Adjusted Revenue1, which includes the impact of cash settled commodity derivatives and excludes brokered natural gas and marketing revenue and other revenue, totaled $127.3 million for the three months ended September 30, 2020 compared to $164.8 million for the three months ended September 30, 2019. Net Loss for the three months ended September 30, 2020 was ($92.2) million, or $(2.56) per share, compared to Net Income of $4.3 million, or $0.12 per share, for the three months ended September 30, 2019. Adjusted Net Income (Loss)1 for the three months ended September 30, 2020 was $(17.3) million, or $(0.48) per share, compared to $20.5 million, or $0.57 per share for the three months ended September 30, 2019. Adjusted EBITDAX1 was $51.0 million for the three months ended September 30, 2020 compared to $83.6 million for the three months ended September 30, 2019.
1 Adjusted Revenue, Adjusted Net Income and Adjusted EBITDAX are non-GAAP financial measures. Tables reconciling Adjusted Revenue, Adjusted Net Income and Adjusted EBITDAX to the most directly comparable GAAP measures can be found at the end of the financial statements included in this press release.
Average realized price calculations for the three and nine months ended September 30, 2020 and 2019 are set forth in the table below:
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Average realized price (excluding cash settled
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
$ |
1.61 |
|
|
$ |
2.03 |
|
|
$ |
1.66 |
|
|
$ |
2.41 |
|
NGLs ($/Bbl) |
|
|
16.03 |
|
|
|
14.42 |
|
|
|
13.45 |
|
|
|
17.82 |
|
Oil ($/Bbl) |
|
|
32.16 |
|
|
|
49.09 |
|
|
|
32.36 |
|
|
|
49.64 |
|
Total average prices ($/Mcfe) |
|
|
1.96 |
|
|
|
2.68 |
|
|
|
1.96 |
|
|
|
3.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including cash settled
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
$ |
1.92 |
|
|
$ |
2.28 |
|
|
$ |
2.02 |
|
|
$ |
2.49 |
|
NGLs ($/Bbl) |
|
|
16.00 |
|
|
|
14.92 |
|
|
|
13.70 |
|
|
|
18.19 |
|
Oil ($/Bbl) |
|
|
40.76 |
|
|
|
49.53 |
|
|
|
40.32 |
|
|
|
50.15 |
|
Total average prices ($/Mcfe) |
|
|
2.30 |
|
|
|
2.88 |
|
|
|
2.34 |
|
|
|
3.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including firm transportation,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
$ |
1.18 |
|
|
$ |
1.60 |
|
|
$ |
1.20 |
|
|
$ |
1.94 |
|
NGLs ($/Bbl) |
|
|
16.03 |
|
|
|
14.42 |
|
|
|
13.45 |
|
|
|
17.82 |
|
Oil ($/Bbl) |
|
|
32.16 |
|
|
|
49.09 |
|
|
|
32.36 |
|
|
|
49.64 |
|
Total average prices ($/Mcfe) |
|
|
1.61 |
|
|
|
2.35 |
|
|
|
1.59 |
|
|
|
2.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including cash settled
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
$ |
1.50 |
|
|
$ |
1.85 |
|
|
$ |
1.57 |
|
|
$ |
2.02 |
|
NGLs ($/Bbl) |
|
|
16.00 |
|
|
|
14.92 |
|
|
|
13.70 |
|
|
|
18.19 |
|
Oil ($/Bbl) |
|
|
40.76 |
|
|
|
49.53 |
|
|
|
40.32 |
|
|
|
50.15 |
|
Total average prices ($/Mcfe) |
|
|
1.95 |
|
|
|
2.56 |
|
|
|
1.97 |
|
|
|
2.72 |
|
*rounded to the nearest penny |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company’s cash production costs (which include lease operating, transportation, gathering and compression, production and ad valorem taxes) are shown in the table below. Per unit cash production costs, which include $0.35 per Mcfe of firm transportation expense, were $1.21 per Mcfe for the third quarter of 2020, a decrease of approximately 2% compared to the third quarter of 2019.
General and administrative expense (including one-time merger-related expenses and severance) was $12.1 million and $14.6 million for the three months ended September 30, 2020 and 2019, respectively, and is shown in the table below. Cash general and administrative expense2 (excluding merger-related expenses, severance and stock-based compensation expense) was $8.7 million and $10.2 million for the three months ended September 30, 2020 and 2019, respectively. General and administrative expense per Mcfe (including one-time merger-related expenses and severance) was $0.22 in the three months ended September 30, 2020 compared to $0.25 in the three months ended September 30, 2019. Cash general and administrative expense2 per Mcfe (excluding merger-related expenses, severance and stock-based compensation expense) decreased approximately 11% to $0.16 in the three months ended September 30, 2020 compared to $0.18 in the three months ended September 30, 2019.
2 Cash general and administrative expense is a non-GAAP financial measure. A table reconciling cash general and administrative expense to the most directly comparable GAAP measure can be found under “Cash General and Administrative Expense” in this press release.
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Operating expenses (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
11,494 |
|
|
$ |
11,986 |
|
|
$ |
33,436 |
|
|
$ |
29,651 |
|
Transportation, gathering and compression |
|
|
51,961 |
|
|
|
57,027 |
|
|
|
157,472 |
|
|
|
150,065 |
|
Production and ad valorem taxes |
|
|
3,677 |
|
|
|
1,660 |
|
|
|
10,146 |
|
|
|
8,519 |
|
Total cash production costs |
|
$ |
67,132 |
|
|
$ |
70,673 |
|
|
$ |
201,054 |
|
|
$ |
188,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion |
|
|
53,153 |
|
|
|
45,456 |
|
|
|
140,058 |
|
|
|
113,950 |
|
General and administrative1 |
|
|
12,144 |
|
|
|
14,580 |
|
|
|
33,594 |
|
|
|
57,074 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses per Mcfe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
0.21 |
|
|
$ |
0.21 |
|
|
$ |
0.21 |
|
|
$ |
0.21 |
|
Transportation, gathering and compression |
|
|
0.93 |
|
|
|
0.99 |
|
|
|
0.98 |
|
|
|
1.04 |
|
Production and ad valorem taxes |
|
|
0.07 |
|
|
|
0.03 |
|
|
|
0.06 |
|
|
|
0.06 |
|
Total cash production costs |
|
$ |
1.21 |
|
|
$ |
1.23 |
|
|
$ |
1.25 |
|
|
$ |
1.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion |
|
|
0.96 |
|
|
|
0.79 |
|
|
|
0.87 |
|
|
|
0.80 |
|
General and administrative2 |
|
|
0.22 |
|
|
|
0.25 |
|
|
|
0.21 |
|
|
|
0.40 |
|
- Includes stock-based compensation, merger-related expenses and severance of $ 3.5 million and $ 4.4 million for the three months ended September 30, 2020 and 2019, respectively, and $ 9.0 million and $ 29.4 million for the nine months ended September 30, 2020 and 2019, respectively
- Includes stock-based compensation, merger-related expenses and severance of $ 0.06 per Mcfe and $ 0.07 per Mcfe for the three months ended September 30, 2020 and 2019, respectively, and $ 0.06 per Mcfe and $ 0.20 per Mcfe for the nine months ended September 30, 2020 and 2019, respectively
Cash Margins
The Company’s cash margins are detailed in the table below:
|
|
Three Months Ended |
|
|
Three Months
|
|
||||||
|
|
September 30,
|
|
|
September 30,
|
|
|
June 30, 2020 |
|
|||
(per Mcfe) |
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including cash settled commodity
|
|
$ |
2.30 |
|
|
$ |
2.88 |
|
|
$ |
2.15 |
|
Total cash production costs1 |
|
|
1.21 |
|
|
|
1.23 |
|
|
|
1.25 |
|
Cash production margin |
|
$ |
1.09 |
|
|
$ |
1.65 |
|
|
$ |
0.90 |
|
Cash production margin % |
|
|
47 |
% |
|
|
57 |
% |
|
|
42 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash production margin |
|
$ |
1.09 |
|
|
$ |
1.65 |
|
|
$ |
0.90 |
|
Cash general and administrative expenses2 |
|
|
0.16 |
|
|
|
0.18 |
|
|
|
0.14 |
|
Cash operating margin |
|
$ |
0.93 |
|
|
$ |
1.47 |
|
|
$ |
0.76 |
|
Cash operating margin % |
|
|
40 |
% |
|
|
51 |
% |
|
|
35 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating margin |
|
$ |
0.93 |
|
|
$ |
1.47 |
|
|
$ |
0.76 |
|
Interest expense |
|
|
0.26 |
|
|
|
0.27 |
|
|
|
0.30 |
|
Corporate cash operating margin3 |
|
$ |
0.67 |
|
|
$ |
1.20 |
|
|
$ |
0.46 |
|
Corporate cash operating margin % |
|
|
29 |
% |
|
|
42 |
% |
|
|
22 |
% |
- Includes lease operating, transportation, gathering and compression, and production and ad valorem taxes
- Cash general and administrative expense is a non-GAAP financial measure which excludes stock-based compensation expense, merger related expenses and severance. See reconciliation to the most comparable GAAP measure under “Cash General and Administrative Expense” in this press release
- Includes lease operating, transportation, gathering and compression, production and ad valorem taxes, cash general & administrative expense and interest expense. Cash general and administrative expense is a non-GAAP financial measure which excludes stock-based compensation expense, merger related expenses and severance See reconciliation to the most comparable GAAP measure under “Cash General and Administrative Expense” in this press release
Capital Expenditures
Third quarter 2020 capital expenditures were $22.3 million, including $20.2 million for drilling and completions and $2.1 million for land-related expenditures.
During the third quarter of 2020, the Company commenced drilling 2 gross (1.7 net) operated wells and turned to sales 4 gross (2.4 net) operated wells.
Financial Position and Liquidity
As of September 30, 2020, the Company’s liquidity was $279.8 million, consisting of $4.0 million in cash and cash equivalents and $275.8 million in available borrowing capacity under the Company’s revolving credit facility (after giving effect to outstanding letters of credit issued by the Company of $29.2 million and $170.0 million in outstanding borrowings).
Commodity Derivatives
The Company engages in a number of different commodity trading program strategies as a risk management tool to attempt to mitigate the potential negative impact on cash flows caused by price fluctuations in natural gas, NGL and oil prices. Below is a table that illustrates the Company’s hedging activities as of September 30, 2020:
Natural Gas Derivatives:
Description |
|
Volume
|
|
|
Production Period |
|
Weighted Average
|
|
||
Natural Gas Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
130,000 |
|
|
October 2020 – December 2020 |
|
$ |
2.42 |
|
|
|
|
145,000 |
|
|
October 2020 – March 2021 |
|
$ |
2.58 |
|
|
|
|
50,000 |
|
|
January 2021 – March 2022 |
|
$ |
2.51 |
|
|
|
|
25,000 |
|
|
April 2021 – March 2022 |
|
$ |
2.47 |
|
Natural Gas Collars: |
|
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
25,000 |
|
|
January 2021 – December 2021 |
|
$ |
2.15 |
|
Ceiling sold price (call) |
|
|
25,000 |
|
|
January 2021 – December 2021 |
|
$ |
3.03 |
|
Floor purchase price (put) |
|
|
30,000 |
|
|
April 2021 – March 2022 |
|
$ |
2.40 |
|
Ceiling sold price (call) |
|
|
30,000 |
|
|
April 2021 – March 2022 |
|
$ |
3.05 |
|
Floor purchase price (put) |
|
|
15,000 |
|
|
August 2021 – December 2021 |
|
$ |
2.55 |
|
Ceiling sold price (call) |
|
|
15,000 |
|
|
August 2021 – December 2021 |
|
$ |
3.13 |
|
Floor purchase price (put) |
|
|
15,000 |
|
|
September 2021 – November 2021 |
|
$ |
2.52 |
|
Ceiling sold price (call) |
|
|
15,000 |
|
|
September 2021 – November 2021 |
|
$ |
3.12 |
|
Floor purchase price (put) |
|
|
5,000 |
|
|
August 2021 |
|
$ |
2.50 |
|
Ceiling sold price (call) |
|
|
5,000 |
|
|
August 2021 |
|
$ |
3.05 |
|
Floor purchase price (put) |
|
|
10,000 |
|
|
September 2021 |
|
$ |
2.50 |
|
Ceiling sold price (call) |
|
|
10,000 |
|
|
September 2021 |
|
$ |
3.03 |
|
Natural Gas Three-way Collars: |
|
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
80,000 |
|
|
October 2020 – December 2020 |
|
$ |
2.60 |
|
Floor sold price (put) |
|
|
80,000 |
|
|
October 2020 – December 2020 |
|
$ |
1.90 |
|
Ceiling sold price (call) |
|
|
80,000 |
|
|
October 2020 – December 2020 |
|
$ |
2.94 |
|
Floor purchase price (put) |
|
|
45,000 |
|
|
January 2021 – December 2021 |
|
$ |
2.55 |
|
Floor sold price (put) |
|
|
45,000 |
|
|
January 2021 – December 2021 |
|
$ |
2.25 |
|
Ceiling sold price (call) |
|
|
45,000 |
|
|
January 2021 – December 2021 |
|
$ |
2.81 |
|
Floor purchase price (put) |
|
|
20,000 |
|
|
April 2021 – March 2022 |
|
$ |
2.62 |
|
Floor sold price (put) |
|
|
20,000 |
|
|
April 2021 – March 2022 |
|
$ |
2.20 |
|
Ceiling sold price (call) |
|
|
20,000 |
|
|
April 2021 – March 2022 |
|
$ |
3.10 |
|
Natural Gas Call/Put Options: |
|
|
|
|
|
|
|
|
|
|
Floor sold price (put) |
|
|
50,000 |
|
|
October 2020 – December 2020 |
|
$ |
2.30 |
|
Swaption sold price (call) |
|
|
50,000 |
|
|
January 2021 – December 2021 |
|
$ |
2.75 |
|
Swaption sold price (call) |
|
|
50,000 |
|
|
January 2022 – December 2022 |
|
$ |
3.00 |
|
Ceiling sold price (call) |
|
|
50,000 |
|
|
January 2022 – December 2022 |
|
$ |
3.00 |
|
Floor sold price (put) |
|
|
50,000 |
|
|
January 2021 – March 2022 |
|
$ |
2.00 |
|
Ceiling sold price (call) |
|
|
80,000 |
|
|
January 2023 – December 2023 |
|
$ |
3.00 |
|
Basis Swaps: |
|
|
|
|
|
|
|
|
|
|
Appalachia - Dominion |
|
|
42,500 |
|
|
October 2020 |
|
$ |
(0.51 |
) |
Appalachia - Dominion |
|
|
20,000 |
|
|
October 2020 – December 2020 |
|
$ |
(0.59 |
) |
Oil Derivatives:
Description |
|
Volume
|
|
|
Production Period |
|
Weighted Average
|
|
||
Oil Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,500 |
|
|
October 2020 – December 2020 |
|
$ |
57.41 |
|
|
|
|
250 |
|
|
October 2020 – March 2021 |
|
$ |
53.20 |
|
|
|
|
250 |
|
|
January 2021 – March 2021 |
|
$ |
53.00 |
|
|
|
|
100 |
|
|
January 2021 |
|
$ |
43.60 |
|
Oil Collars: |
|
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
1,000 |
|
|
October 2020 – December 2020 |
|
$ |
51.00 |
|
Ceiling sold price (call) |
|
|
1,000 |
|
|
October 2020 – December 2020 |
|
$ |
62.00 |
|
Floor purchase price (put) |
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
37.50 |
|
Ceiling sold price (call) |
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
45.50 |
|
Floor purchase price (put) |
|
|
300 |
|
|
April 2021 |
|
$ |
40.00 |
|
Ceiling sold price (call) |
|
|
300 |
|
|
April 2021 |
|
$ |
47.25 |
|
Floor purchase price (put) |
|
|
200 |
|
|
May 2021 |
|
$ |
40.00 |
|
Ceiling sold price (call) |
|
|
200 |
|
|
May 2021 |
|
$ |
47.55 |
|
Floor purchase price (put) |
|
|
100 |
|
|
June 2021 |
|
$ |
40.00 |
|
Ceiling sold price (call) |
|
|
100 |
|
|
June 2021 |
|
$ |
47.75 |
|
Oil Three-way Collars: |
|
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
31.25 |
|
Floor sold price (put) |
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
22.50 |
|
Ceiling sold price (call) |
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
45.00 |
|
Oil Call/Put Options: |
|
|
|
|
|
|
|
|
|
|
Floor sold price (put) |
|
|
500 |
|
|
October 2020 – December 2020 |
|
$ |
45.00 |
|
Swaption sold price (call) |
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
42.50 |
|
NGL Derivatives:
Description |
|
Volume
|
|
|
Production Period |
|
Weighted Average
|
|
||
Propane Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000 |
|
|
October 2020 – December 2020 |
|
$ |
20.94 |
|
|
|
|
1,000 |
|
|
January 2021 – December 2021 |
|
$ |
18.87 |
|
MONTAGE RESOURCES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
|
|
September 30,
|
|
|
December 31,
|
|
||
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,013 |
|
|
$ |
12,056 |
|
Accounts receivable |
|
|
63,483 |
|
|
|
77,402 |
|
Assets held for sale |
|
|
1,544 |
|
|
|
1,047 |
|
Other current assets |
|
|
8,984 |
|
|
|
35,509 |
|
Total current assets |
|
|
78,024 |
|
|
|
126,014 |
|
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT |
|
|
|
|
|
|
|
|
Oil and natural gas properties, successful efforts method: |
|
|
|
|
|
|
|
|
Unproved properties |
|
|
478,644 |
|
|
|
508,576 |
|
Proved oil and gas properties, net |
|
|
1,216,836 |
|
|
|
1,251,105 |
|
Other property and equipment, net |
|
|
10,311 |
|
|
|
11,226 |
|
Total property and equipment, net |
|
|
1,705,791 |
|
|
|
1,770,907 |
|
|
|
|
|
|
|
|
|
|
OTHER NONCURRENT ASSETS |
|
|
|
|
|
|
|
|
Other assets |
|
|
5,353 |
|
|
|
7,616 |
|
Operating lease right-of-use assets |
|
|
30,830 |
|
|
|
36,975 |
|
Assets held for sale |
|
|
3,403 |
|
|
|
9,665 |
|
TOTAL ASSETS |
|
$ |
1,823,401 |
|
|
$ |
1,951,177 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
120,785 |
|
|
$ |
119,907 |
|
Accrued capital expenditures |
|
|
11,933 |
|
|
|
43,500 |
|
Accrued liabilities |
|
|
61,963 |
|
|
|
53,866 |
|
Accrued interest payable |
|
|
9,921 |
|
|
|
21,308 |
|
Liabilities associated with assets held for sale |
|
|
3,711 |
|
|
|
2,815 |
|
Operating lease liability |
|
|
12,773 |
|
|
|
12,666 |
|
Total current liabilities |
|
|
221,086 |
|
|
|
254,062 |
|
|
|
|
|
|
|
|
|
|
NONCURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Debt, net of unamortized discount and debt issuance costs |
|
|
502,622 |
|
|
|
500,541 |
|
Revolving credit facility |
|
|
170,000 |
|
|
|
130,000 |
|
Asset retirement obligations |
|
|
30,336 |
|
|
|
29,877 |
|
Other liabilities |
|
|
31,421 |
|
|
|
8,029 |
|
Operating lease liability |
|
|
18,805 |
|
|
|
24,569 |
|
Liabilities associated with assets held for sale |
|
|
7,150 |
|
|
|
7,013 |
|
Total liabilities |
|
|
981,420 |
|
|
|
954,091 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Preferred stock, 50,000,000 authorized, no shares issued and outstanding |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value, 1,000,000,000 authorized, 36,034,837
|
|
|
386 |
|
|
|
383 |
|
Additional paid in capital |
|
|
2,355,890 |
|
|
|
2,352,309 |
|
Treasury stock, shares at cost; 2,600,672 and 2,508,485 shares, respectively |
|
|
(10,511 |
) |
|
|
(10,049 |
) |
Accumulated deficit |
|
|
(1,503,784 |
) |
|
|
(1,345,557 |
) |
Total stockholders’ equity |
|
|
841,981 |
|
|
|
997,086 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
1,823,401 |
|
|
$ |
1,951,177 |
|
MONTAGE RESOURCES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share data)
(Unaudited)
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas, oil and natural gas liquids sales |
|
$ |
108,518 |
|
|
$ |
153,021 |
|
|
$ |
315,471 |
|
|
$ |
428,278 |
|
Brokered natural gas and marketing revenue |
|
|
6,831 |
|
|
|
10,228 |
|
|
|
23,859 |
|
|
|
31,747 |
|
Other revenue |
|
|
56 |
|
|
|
46 |
|
|
|
183 |
|
|
|
307 |
|
Total revenues |
|
|
115,405 |
|
|
|
163,295 |
|
|
|
339,513 |
|
|
|
460,332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
|
11,494 |
|
|
|
11,986 |
|
|
|
33,436 |
|
|
|
29,651 |
|
Transportation, gathering and compression |
|
|
51,961 |
|
|
|
57,027 |
|
|
|
157,472 |
|
|
|
150,065 |
|
Production and ad valorem taxes |
|
|
3,677 |
|
|
|
1,660 |
|
|
|
10,146 |
|
|
|
8,519 |
|
Brokered natural gas and marketing expense |
|
|
7,345 |
|
|
|
10,574 |
|
|
|
24,349 |
|
|
|
32,017 |
|
Depreciation, depletion, amortization and accretion |
|
|
53,153 |
|
|
|
45,456 |
|
|
|
140,058 |
|
|
|
113,950 |
|
Exploration |
|
|
11,767 |
|
|
|
16,621 |
|
|
|
34,112 |
|
|
|
48,602 |
|
General and administrative |
|
|
12,144 |
|
|
|
14,580 |
|
|
|
33,594 |
|
|
|
57,074 |
|
Rig termination and standby |
|
|
303 |
|
|
|
1,221 |
|
|
|
303 |
|
|
|
1,221 |
|
Gain on sale of assets |
|
|
(62 |
) |
|
|
(733 |
) |
|
|
(1,419 |
) |
|
|
(731 |
) |
Other expense |
|
|
87 |
|
|
|
2 |
|
|
|
121 |
|
|
|
40 |
|
Total operating expenses |
|
|
151,869 |
|
|
|
158,394 |
|
|
|
432,172 |
|
|
|
440,408 |
|
OPERATING INCOME (LOSS) |
|
|
(36,464 |
) |
|
|
4,901 |
|
|
|
(92,659 |
) |
|
|
19,924 |
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on derivative instruments |
|
|
(40,535 |
) |
|
|
15,812 |
|
|
|
(11,329 |
) |
|
|
40,620 |
|
Interest expense, net |
|
|
(14,402 |
) |
|
|
(15,192 |
) |
|
|
(44,166 |
) |
|
|
(44,140 |
) |
Other income |
|
|
2 |
|
|
|
— |
|
|
|
19 |
|
|
|
8 |
|
Total other income (expense), net |
|
|
(54,935 |
) |
|
|
620 |
|
|
|
(55,476 |
) |
|
|
(3,512 |
) |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
|
|
(91,399 |
) |
|
|
5,521 |
|
|
|
(148,135 |
) |
|
|
16,412 |
|
Income tax benefit (expense) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
INCOME (LOSS) FROM CONTINUING OPERATIONS |
|
|
(91,399 |
) |
|
|
5,521 |
|
|
|
(148,135 |
) |
|
|
16,412 |
|
Income (loss) from discontinued operations, net of income tax |
|
|
(801 |
) |
|
|
(1,237 |
) |
|
|
(10,092 |
) |
|
|
1,286 |
|
NET INCOME (LOSS) |
|
$ |
(92,200 |
) |
|
$ |
4,284 |
|
|
$ |
(158,227 |
) |
|
$ |
17,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) PER SHARE OF COMMON STOCK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding |
|
|
36,035 |
|
|
|
35,684 |
|
|
|
35,889 |
|
|
|
32,343 |
|
Income (loss) from continuing operations |
|
$ |
(2.54 |
) |
|
$ |
0.15 |
|
|
$ |
(4.13 |
) |
|
$ |
0.51 |
|
Income (loss) from discontinued operations |
|
|
(0.02 |
) |
|
|
(0.03 |
) |
|
|
(0.28 |
) |
|
|
0.04 |
|
Net income (loss) |
|
$ |
(2.56 |
) |
|
$ |
0.12 |
|
|
$ |
(4.41 |
) |
|
$ |
0.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding |
|
|
36,035 |
|
|
|
35,697 |
|
|
|
35,889 |
|
|
|
32,471 |
|
Income (loss) from continuing operations |
|
$ |
(2.54 |
) |
|
$ |
0.15 |
|
|
$ |
(4.13 |
) |
|
$ |
0.51 |
|
Income (loss) from discontinued operations |
|
|
(0.02 |
) |
|
|
(0.03 |
) |
|
|
(0.28 |
) |
|
|
0.04 |
|
Net income (loss) |
|
$ |
(2.56 |
) |
|
$ |
0.12 |
|
|
$ |
(4.41 |
) |
|
$ |
0.55 |
|
Adjusted Revenue
Adjusted revenue is a non-GAAP financial measure. The Company defines adjusted revenue as follows: total revenues plus or minus net cash receipts or payments on settled commodity derivative instruments less brokered natural gas and marketing revenue and other revenue. The Company believes adjusted revenue provides investors with helpful information with respect to the performance of the Company’s operations and management uses adjusted revenue to evaluate its ongoing operations and for internal planning and forecasting purposes. See the table below, which reconciles adjusted revenue and total revenues for the three and nine months ended September 30, 2020 and 2019.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
$ thousands |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Total revenues |
|
$ |
115,405 |
|
|
$ |
163,295 |
|
|
$ |
339,513 |
|
|
$ |
460,332 |
|
Net cash receipts (payments) on settled commodity derivatives |
|
|
18,806 |
|
|
|
11,818 |
|
|
|
61,829 |
|
|
|
11,072 |
|
Brokered natural gas and marketing revenue |
|
|
(6,831 |
) |
|
|
(10,228 |
) |
|
|
(23,859 |
) |
|
|
(31,747 |
) |
Other revenue |
|
|
(56 |
) |
|
|
(46 |
) |
|
|
(183 |
) |
|
|
(307 |
) |
Adjusted revenue |
|
$ |
127,324 |
|
|
$ |
164,839 |
|
|
$ |
377,300 |
|
|
$ |
439,350 |
|
Adjusted Net Income (Loss)
Adjusted net income (loss) represents income (loss) from continuing operations before income taxes adjusted for certain non-cash items as set forth in the table below. We believe adjusted net income (loss) is used by many investors and published research in making investment decisions and evaluating operational trends of the Company and its performance relative to other oil and gas producing companies. Adjusted net income (loss) is not a measure of net income (loss) from continuing operations as determined by GAAP. See the table below for a reconciliation of adjusted net income (loss) and net income (loss) from continuing operations before income taxes for the three and nine months ended September 30, 2020 and 2019.
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
$ thousands |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Income (loss) from continuing operations before income taxes,
|
|
$ |
(91,399 |
) |
|
$ |
5,521 |
|
|
$ |
(148,135 |
) |
|
$ |
16,412 |
|
(Gain) loss on derivative instruments |
|
|
40,535 |
|
|
|
(15,812 |
) |
|
|
11,329 |
|
|
|
(40,620 |
) |
Net cash receipts (payments) on settled derivatives |
|
|
18,785 |
|
|
|
11,818 |
|
|
|
61,877 |
|
|
|
11,072 |
|
Rig termination and standby |
|
|
303 |
|
|
|
1,221 |
|
|
|
303 |
|
|
|
1,221 |
|
Dry hole and other |
|
|
135 |
|
|
|
— |
|
|
|
143 |
|
|
|
163 |
|
Stock-based compensation |
|
|
961 |
|
|
|
1,061 |
|
|
|
3,585 |
|
|
|
7,614 |
|
Impairment of unproved properties |
|
|
10,952 |
|
|
|
14,114 |
|
|
|
30,311 |
|
|
|
36,157 |
|
Gain on sale of assets |
|
|
(62 |
) |
|
|
(733 |
) |
|
|
(1,419 |
) |
|
|
(731 |
) |
Merger-related expenses |
|
|
2,520 |
|
|
|
3,291 |
|
|
|
2,696 |
|
|
|
21,812 |
|
Severance |
|
|
— |
|
|
|
— |
|
|
|
2,681 |
|
|
|
— |
|
Income (loss) before income taxes, as adjusted |
|
|
(17,270 |
) |
|
|
20,481 |
|
|
|
(36,629 |
) |
|
|
53,100 |
|
Adjusted net income (loss) |
|
$ |
(17,270 |
) |
|
$ |
20,481 |
|
|
$ |
(36,629 |
) |
|
$ |
53,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(2.56 |
) |
|
$ |
0.12 |
|
|
$ |
(4.41 |
) |
|
$ |
0.55 |
|
Diluted |
|
$ |
(2.56 |
) |
|
$ |
0.12 |
|
|
$ |
(4.41 |
) |
|
$ |
0.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.48 |
) |
|
$ |
0.57 |
|
|
$ |
(1.02 |
) |
|
$ |
1.64 |
|
Diluted |
|
$ |
(0.48 |
) |
|
$ |
0.57 |
|
|
$ |
(1.02 |
) |
|
$ |
1.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
36,035 |
|
|
|
35,684 |
|
|
|
35,889 |
|
|
|
32,343 |
|
Diluted |
|
|
36,035 |
|
|
|
35,697 |
|
|
|
35,889 |
|
|
|
32,471 |
|
Contacts
Montage Resources Corporation
Douglas Kris, Investor Relations
469-444-1736
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