|Bill Barrett Corporation Reports Fourth Quarter and Year-End 2017 Financial and Operating Results; Highlighted by Quarterly Production of 2.12 MMBoe, 42% Growth in DJ Basin Volumes and 56% Increase in Proved Reserves|
Chief Executive Officer and President
Mr. Woodall continued, "In December, we announced a strategic combination with Fifth Creek Energy that creates a premier
For the fourth quarter of 2017, the Company reported a net loss of
Strategic Combination with Fifth Creek Energy
OPERATING AND FINANCIAL RESULTS
Total estimated proved reserves at year-end 2017 were 85.8 MMBoe compared to 54.9 MMBoe at year-end 2016, an increase of 56%. All-sources reserve replacement totaled 541%(1). The increase in estimated proved reserves compared to year-end 2016 is primarily the result of extensions and discoveries of 35.9 MMBoe, and positive commodity price-related and other revisions totaling 8.8 MMBoe, partially offset by sale of properties of 11.2 MMBoe. Additions to extensions and discoveries were driven by positive drilling results in the
2017 Production and Financial Results
Oil, natural gas and natural gas liquids production totaled 7.0 MMBoe for 2017, at the mid-point of the Company's guidance range of 6.9-7.1 MMBoe.
Production sales volumes for the fourth quarter of 2017 totaled 2.12 MMBoe, above the mid-point of the Company's guidance range of 2.0-2.2 MMBoe, representing a 37% increase from the fourth quarter of 2016.
For 2017, West Texas Intermediate ("WTI") oil prices averaged
For the fourth quarter of 2017, WTI oil prices averaged
For the fourth quarter of 2017, the Company had derivative commodity swaps in place for 8,125 barrels of oil per day tied to WTI pricing at
Cash operating costs (LOE, gathering, transportation and processing costs, and production tax expense) averaged
DJ Basin LOE improved to
The following table summarizes certain operating and financial results for the fourth quarter of 2017 and 2016 and the full years 2017 and 2016:
Capital expenditures of
Capital expenditures for the fourth quarter of 2017 totaled
During 2017, production sales volumes from the
During 2017, the
Completion activity was recently highlighted by DSU 5-63-32 and DSU 5-63-30, which are located within the western area of NE Wattenberg and include 5 XRL and 6 XRL wells, respectively. Initial flowback began in the third quarter of 2017 and production is tracking above the base type-curve. DSU 5-61-20 is located within the central area of NE Wattenberg and includes 8 XRL wells. Initial flowback began in the fourth quarter of 2017 and the wells are performing consistent with the base type-curve.
Two drilling rigs are currently operating in the NE Wattenberg field with drilling activity focused on the southern portion of the acreage position within DSU 4-62-28, which includes 10 XRL wells, and within DSU 4-62-33, which includes 10 XRL wells. In addition, completion operations continue at DSU 3-62-4, which includes 10 XRL wells and is expected to be placed on initial flowback in the first quarter 2018.
The drilling program continues to exceed expectations as XRL well drilling days to rig release averaged approximately 6.9 days per well in 2017, including a best-in-class XRL well that was drilled in approximately 5.6 days. This represents a 15% improvement from the average of 2016.
Drilling and completion efficiencies continue to be achieved within the XRL well program that have resulted in an approximate 30% average year-over-year improvement in 2017 cycle times leading to an increased number of stages being completed and in the amount of sand that is pumped on a daily basis.
Drilling and completion costs for XRL wells averaged approximately
Uinta Oil Program
Production sales volumes averaged 1,965 Boe/d (91% oil) during the fourth quarter of 2017.
The Company completed the sale of its
FIRST QUARTER 2018 OUTLOOK
The Company is providing its outlook for the first quarter of 2018 for its legacy properties and anticipates issuing full year 2018 guidance following the closing of the Fifth Creek Energy transaction in
COMMODITY HEDGES UPDATE
Generally, it is the Company's strategy to hedge 50%-70% of production on a forward 12-month to 18-month basis to reduce the risks associated with unpredictable future commodity prices, to provide certainty for a portion of its cash flow and to support its capital expenditure program.
For 2018, 10,067 barrels per day of oil is hedged at an average WTI price of
For 2019, 5,246 barrels per day of oil is hedged at an average WTI price of
Realized sales prices will reflect basis differentials from the index prices to the sales location.
The Company plans to host a conference call on Wednesday, February 28, 2018, to discuss the results and other items presented in this press release. The call is scheduled at
Members of management are scheduled to participate in the following investor event:
Presentation materials will be posted to the Company's website at www.billbarrettcorp.com in the Investor Relations section prior to the start of the conference.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed transaction with Fifth Creek Energy, the Company and Fifth Creek Energy caused the newly formed company ("Holdco") to file with the
PARTICIPANTS IN THE SOLICITATION
Holdco, the Company, and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the proposed Fifth Creek Energy transaction. Information about the Company's directors and executive officers is set forth in the Company's public filings with the
NO OFFER OR SOLICITATION
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the "Securities Act").
All statements in this press release, other than statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Words such as expects, forecast, guidance, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements herein; however, these are not the exclusive means of identifying forward-looking statements. In particular, the Company is providing "First Quarter 2018 Outlook," which contains projections for certain first quarter 2018 operational metrics. Additional forward-looking statements in this release relate to, among other things, the closing and effect of the Fifth Creek Energy transaction, future capital expenditures, projects, costs, operational improvements and opportunities.
These and other forward-looking statements in this press release are based on management's judgment as of the date of this release and are subject to numerous risks and uncertainties. Actual results may vary significantly from those indicated in the forward-looking statements due to, among other things: oil, NGL and natural gas price volatility, including regional price differentials; changes in operational and capital plans; changes in capital costs, operating costs, availability and timing of build-out of third-party facilities for gathering, processing, refining and transportation; delays or other impediments to drilling and completing wells arising from political or judicial developments at the local, state or federal level, including voter initiatives related to hydraulic fracturing; development drilling and testing results; the potential for production decline rates to be greater than expected; regulatory delays, including seasonal or other wildlife restrictions on federal lands; exploration risks such as drilling unsuccessful wells; higher than expected costs and expenses, including the availability and cost of services and materials, and our potential inability to achieve expected cost savings; unexpected future capital expenditures; economic and competitive conditions; debt and equity market conditions, including the availability and costs of financing to fund the Company's operations; the ability to obtain industry partners to jointly explore certain prospects, and the willingness and ability of those partners to meet capital obligations when requested; declines in the values of our oil and gas properties resulting in impairments; changes in estimates of proved reserves; compliance with environmental and other regulations, including new emission control requirements; derivative and hedging activities; risks associated with operating in one major geographic area; the success of the Company's risk management activities; unexpected obstacles to closing anticipated transactions, including the Fifth Creek Energy transaction, or unfavorable purchase price adjustments; title to properties; litigation; and environmental liabilities; and potential failure to achieve the anticipated benefits of the Fifth Creek Energy transaction. Please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2016 filed with the
Discretionary cash flow and adjusted net income (loss) are non-GAAP measures. These measures are presented because management believes that they provide useful additional information to investors for analysis of the Company's ability to internally generate funds for exploration, development and acquisitions as well as adjusting net income (loss) for certain items to allow for a more consistent comparison from period to period. In addition, the Company believes that these measures are widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry, and that many investors use the published research of industry research analysts in making investment decisions.
These measures should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, profitability, cash flow or liquidity measures prepared in accordance with GAAP. The definition of these measures may vary among companies, and, therefore, the amounts presented may not be comparable to similarly titled measures of other companies.
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Larry C. Busnardo, Vice President, Investor Relations, 303-312-8514
Vice President, Investor Relations