Ascent Resources Reports Fourth Quarter And Year-End 2020 Operating And Financial Results And Announces 2021 Guidance

OKLAHOMA CITY, March 10, 2021 /PRNewswire/ —

Fourth Quarter and Full-Year 2020 Highlights:

  • Averaged net production of 1.9 bcfe per day for the quarter and 2.0 bcfe per day for the full-year 2020
  • Decreased average well cost to $549 per lateral foot during the quarter while averaging $611 per lateral foot for the full-year 2020, 5% below the low-end of our guidance range
  • Adjusted EBITDAX(1) of $214 million for the quarter and $881 million for the full-year 2020
  • Net cash provided by operating activities of $118 million for the quarter and $773 million for the full-year 2020
  • Generated $54 million of free cash flow(1) during the quarter and $114 million for the full-year 2020, 14% above the high-end of our guidance range
  • Reported year-end 2020 proved reserves of 9.0 tcfe using SEC pricing
  • Drill-bit finding and development costs for undeveloped reserves were $0.37 per mcfe in 2020
  • Initial 2021 capital guidance of $550 to $600 million maintains production of 2.0 bcfe/d while generating free cash flow of $100 to $150 million based on current market conditions

(1) 

A non-GAAP financial measure.  See the Non-GAAP reconciliations included in this press release for the definition of, and other important information regarding, this non-GAAP financial measure.

Ascent Resources Utica Holdings, LLC (“Ascent”, “our” or the “Company”) today reported its fourth quarter and year-end 2020 operating and financial results and issued its initial 2021 guidance.  In addition, Ascent announced a conference call with analysts and investors at 9 AM CST / 10 AM EST, Thursday, March 11, 2021.  For more detailed information on Ascent, please refer to the latest investor presentation and additional information located on our website at https://www.ascentresources.com/investors.

“Ascent has successfully delivered on its operational and financial objectives in 2020,” said Jeff Fisher, Chairman and Chief Executive Officer of Ascent. “Our goals coming into the year were to generate free cash flow, continue to improve on our best-in-class capital efficiencies, and access the capital markets in order to address a large, near-term debt maturity. While these goals were made more difficult by the pandemic and other macro events, we were able to successfully navigate the business through unprecedented challenges by staying disciplined, leveraging our operational capabilities and improving our balance sheet while further positioning the business for long-term success.”

Fisher continued, “Our operational and financial results were achieved while continuing to prioritize the health and safety of our employees, contractors and the communities in which we operate. We successfully delivered on our 2020 production guidance while exceeding both free cash flow and capital efficiency targets. Our team continues to execute at a high level, and we are on track to deliver another outstanding year in 2021 with a focus on capital and operational discipline, margin expansion and free cash flow generation that will drive sustainable value generation for all of our stakeholders.”

Fourth Quarter 2020 Financial Results

Fourth quarter 2020 net production averaged 1,886 mmcfe per day, which includes the impact from 9 bcfe of net curtailments. Net production during the quarter consisted of 1,705 mmcf per day of natural gas, 9,652 bbls per day of oil and 20,446 bbls per day of natural gas liquids (“NGL”).

Fourth quarter 2020 price realizations, including the impact of derivatives, were $2.80 per mcfe. Excluding the impact of derivatives, fourth quarter 2020 price realizations were $2.65 per mcfe.

For the fourth quarter of 2020, Ascent reported net income of $169 million,  adjusted net income of $15 million and adjusted EBITDAX of $214 million. Ascent incurred a total of $133 million of capital expenditures in the fourth quarter of 2020 including $104 million of drilling and completions, $11 million of acquisitions and leasehold costs and $18 million of capitalized interest. The Company generated $54 million of free cash flow in the fourth quarter of 2020.

Full-Year 2020 Financial Results

Full-year 2020 average daily production was 1,991 mmcfe per day, which includes the impact from 40 bcfe of net curtailments. Net production during the period consisted of 1,768 mmcf per day of natural gas, 11,724 bbls per day of oil and 25,421 bbls per day of NGL.

Full-year 2020 price realizations, including the impact of derivatives, were $2.71 per mcfe. Excluding the impact of derivatives, full-year 2020 price realizations were $2.08 per mcfe.

For the full-year 2020, Ascent reported a net loss of $590 million, adjusted net income of $6 million and adjusted EBITDAX of $881 million. Ascent incurred a total of $657 million of capital expenditures in 2020 including $517 million of drilling and completions, $58 million of acquisition and leasehold costs and $82 million of capitalized interest. The Company generated $114 million of free cash flow for the full-year 2020.

Balance Sheet and Liquidity

As of December 31, 2020, Ascent had total debt outstanding of approximately $2.8 billion. As of December 31, 2020, the Company had $953 million of borrowings outstanding and $149 million of letters of credit issued under its revolving credit facility, resulting in $757 million of total available liquidity comprised of $748 million of available borrowing capacity and $9 million of cash on hand. Our leverage ratio at the end of the year was 3.2x.

During the quarter, the Company continued to strengthen the balance sheet, reduce near-term debt, and increase liquidity building on the success of the exchange transaction completed in October 2020.  In November 2020, the Company retired $58 million of outstanding principal of its Convertible Notes due March 1, 2021 for $88 million, a discount of approximately $2 million to the terminal value at maturity. Further, in December 2020, Ascent opportunistically accessed the capital markets and issued $300 million of Senior Notes due 2028 to repay borrowings outstanding under its revolving credit facility and to further bolster liquidity.

Operational Update

During the fourth quarter of 2020, Ascent operated 3 drilling rigs and one fracture stimulation crew. The Company spud 11 operated wells, hydraulically fractured 16 wells, and turned in line 10 wells with an average lateral length of 12,267 feet. Seven of the 10 new wells were located in the dry gas and lean gas areas while the three other wells were in the liquids-rich window. As of December 31, 2020, Ascent had 598 gross operated producing Utica wells.

During the fourth quarter of 2020, we averaged D&C costs of approximately $549 per lateral foot, a 31% reduction compared to the fourth quarter of 2019 average cost per lateral foot. These cost savings represent a significant and lasting step-change in efficiencies year-over-year, with the vast majority of the improvement due to sustainable drilling and completion efficiency gains. The improvements are reflected in reduced drilling cycle times, increased lateral feet drilled per day as well as the marked increase in the number of frac stages completed per day. The operational execution that the team has been able to achieve differentiates Ascent relative to its peers, as we continue to innovate, and leverage technology and proprietary data in order to create value through operational performance and cost reductions.

2020 Year-End Reserves

Ascent reported year-end 2020 proved reserves, under SEC guidelines, of 9.0 tcfe, of which 48% were classified as proved developed and 52% as proved undeveloped. The 2020 drill-bit F&D costs for undeveloped reserves were $0.37 per mcfe, compared to $0.48 per mcfe in 2019. A summary of the changes in Ascent’s proved reserves for the full-year 2020 is included in the table below and a detailed reconciliation can be found in our financial statements.

Year-End 2020 Proved Reserves (Bcfe)

Balance at December 31, 2019

9,252

Extensions, discoveries and other additions

907

Revisions of prior estimates

(439)

Production

(729)

Balance at December 31, 2020

8,991

Hedging Update

Ascent has significant hedges in place in 2021 and beyond to reduce exposure to volatility in commodity prices, as well as to protect our expected operating cash flow. As of December 31, 2020, Ascent had hedged 1,303,000 mmbtu per day of natural gas production for the calendar year 2021, at approximately $2.54 per mmbtu. In addition, Ascent had also hedged 2,200 bbls per day of crude oil production at an average price of $50.44 per bbl through 2021.

2021 Guidance

The Company expects its full-year 2021 capital budget to come in between $550 million to $600 million, and to be fully funded with operating cash flow generated throughout the year. A detailed summary including production, expense and operational counts is included in the table that follows:

2021 Guidance

Production

Full-Year 2021

Total Production (bcfe/d)

2.0

% Natural Gas

90% – 92%

Operating Expenses ($/mcfe)(1)

$1.50 – $1.55

Capital Expenditures Incurred ($mm)(2)

$550 – $600

Free Cash Flow ($mm)

$100 – $150

Operations / Well Counts

Operated Rigs

3 – 4

Wells Spud

60 – 65

Wells TIL’d

65 – 70

Average TIL’d Lateral Length

13,000′

(1)

Includes GP&T, LOE, Taxes and G&A

(2)

Excludes Capitalized Interest

About Ascent Resources

Ascent is the eighth largest producer of natural gas in the United States in terms of daily production and is focused on acquiring, developing, producing, and operating natural gas and oil properties located in the Utica Shale in Southern Ohio. With a continued focus on good corporate citizenship, Ascent is committed to delivering low-cost clean-burning energy to our country and the world, while reducing environmental impacts.  For more information, visit www.ascentresources.com.

Contact:

Chris Benton – Director of Finance & Investor Relations

[email protected]

This news release contains forward-looking statements within the meaning of US federal securities laws.  Forward-looking statements express views of Ascent regarding future plans and expectations.  Forward-looking statements in this news release include, but are not limited to, statements regarding future operations, business strategy, liquidity and cash flows of Ascent.  These statements are based on numerous assumptions and are subject to known and unknown risks and uncertainties, including, commodity price volatility, inherent uncertainty in estimating natural gas, oil and NGL reserves, environmental and regulatory risks, availability of capital, and the other risks described in Ascent’s most recent investor presentation provided at www.ascentresources.com/investors.  Actual future results may vary materially from those expressed or implied in this news release and Ascent’s business, financial condition, results of operations and cash flow could be materially and adversely affected by such risks and uncertainties.  As a result, forward-looking statements should be understood to be only predictions and statements of Ascent’s current beliefs; they are not guarantees of performance.

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 

Three Months Ended

Year Ended

December 31,

December 31,

($ in thousands)

2020

2019

2020

2019

Revenues:

Natural gas

$

390,345

$

415,718

$

1,258,594

$

1,589,099

Oil

30,987

66,593

138,723

241,521

NGL

37,634

57,668

118,224

148,639

Commodity derivative gain (loss)

228,899

83,616

(19,167)

441,139

Total Revenues

687,865

623,595

1,496,374

2,420,398

Operating Expenses:

Lease operating expenses

20,591

20,327

78,430

72,606

Gathering, processing and transportation expenses

230,090

236,158

919,986

856,126

Production and ad valorem taxes

9,152

8,198

37,495

34,167

Exploration expenses

26,323

41,561

104,230

124,477

General and administrative expenses

13,713

15,322

63,825

61,027

Natural gas and oil depreciation, depletion and amortization

161,449

203,091

733,450

702,414

Depreciation and amortization of other assets

774

875

3,568

3,239

Total Operating Expenses

462,092

525,532

1,940,984

1,854,056

Income (Loss) from Operations

225,773

98,063

(444,610)

566,342

Other (Expense) Income:

Interest expense, net

(35,781)

(34,249)

(134,213)

(109,114)

Change in fair value of contingent payment right

(6,518)

(6,518)

Change in fair value of embedded derivative

622

5,026

Losses on purchases or exchanges of debt

(15,708)

(6,037)

Other income

843

819

1,867

3,711

Total Other Expense

(57,164)

(32,808)

(144,901)

(100,377)

Net Income (Loss)

$

168,609

$

65,255

$

(589,511)

$

465,965

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC
CONSOLIDATED BALANCE SHEETS
(Unaudited)

 

December 31,

($ in thousands)

2020

2019

Current Assets:

Cash and cash equivalents

$

8,843

$

7,346

Accounts receivable – natural gas, oil and NGL sales

223,976

260,759

Accounts receivable – joint interest and other

8,466

20,425

Short-term derivative assets

8,202

248,118

Other current assets

8,316

8,468

Total Current Assets

257,803

545,116

Property and Equipment:

Natural gas and oil properties, based on successful efforts accounting

8,791,061

8,233,964

Other property and equipment

31,565

30,818

Less: accumulated depreciation, depletion and amortization

(2,627,213)

(1,890,506)

Property and Equipment, net

6,195,413

6,374,276

Other Assets:

Long-term derivative assets

2,401

70,778

Other long-term assets

16,232

20,248

Total Assets

$

6,471,849

$

7,010,418

Current Liabilities:

Accounts payable

$

36,736

$

68,364

Revenue payable

84,142

99,300

Accrued interest

31,287

36,787

Current portion of long-term debt, net

12,498

Short-term derivative liabilities

54,144

Other current liabilities

257,495

280,841

Total Current Liabilities

476,302

485,292

Long-Term Liabilities:

Long-term debt, net of current portion

2,707,382

2,838,676

Long-term derivative liabilities

113,160

Other long-term liabilities

73,010

5,067

Total Long-Term Liabilities

2,893,552

2,843,743

Member’s Equity

3,101,995

3,681,383

Total Liabilities and Member’s Equity

$

6,471,849

$

7,010,418

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

Three Months Ended

Year Ended

December 31,

December 31,

($ in thousands)

2020

2019

2020

2019

Cash Flows from Operating Activities:

Net income (loss)

$

168,609

$

65,255

$

(589,511)

$

465,965

Adjustments to reconcile net income (loss) to net cash provided
by operating activities:

Depreciation, depletion and amortization

162,223

203,966

737,018

705,653

Change in fair value of commodity derivatives

(202,620)

(3,077)

475,027

(249,457)

Change in fair value of interest rate derivatives

41

569

Impairment of unproved natural gas and oil properties

25,201

36,450

100,207

115,802

Non-cash interest expense

5,953

6,535

25,347

27,305

Change in fair value of contingent payment right

6,518

6,518

Change in fair value of embedded derivative

(622)

(5,026)

Losses (gains) on purchases or exchanges of debt

1,803

(11,500)

Stock-based compensation

1,065

1,775

Other

(13)

(360)

(1,577)

148

Changes in operating assets and liabilities

(50,306)

(87,239)

29,148

79,728

Net Cash Provided by Operating Activities

118,474

220,908

773,021

1,140,118

Cash Flows from Investing Activities:

Drilling and completion costs

(99,627)

(235,338)

(571,860)

(1,125,216)

Acquisitions of natural gas and oil properties

(27,607)

(55,860)

(139,106)

(258,001)

Proceeds from divestitures of natural gas and oil properties

(2,067)

12,474

Additions to other property and equipment

(48)

(583)

(1,509)

(3,547)

Net Cash Used in Investing Activities

(127,282)

(293,848)

(712,475)

(1,374,290)

Cash Flows from Financing Activities:

Proceeds from credit facility borrowings

370,000

355,000

1,065,000

1,270,000

Repayment of credit facility borrowings

(585,000)

(272,000)

(1,300,000)

(1,030,000)

Proceeds from issuance of long-term debt, net

300,000

300,000

Repayment of long-term debt

(87,769)

(138,764)

Proceeds from the exchange

20,000

20,000

Cash paid for debt issuance costs

(4,548)

(9,512)

(6,842)

(9,512)

Other

1,557

Net Cash Provided by (Used in) Financing Activities

12,683

73,488

(59,049)

230,488

Net Increase (Decrease) in Cash and Cash Equivalents

3,875

548

1,497

(3,684)

Cash and Cash Equivalents, Beginning of Period

4,968

6,798

7,346

11,030

Cash and Cash Equivalents, End of Period

$

8,843

$

7,346

$

8,843

$

7,346

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC

NATURAL GAS, OIL AND NGL PRODUCTION AND PRICES

(Unaudited)

 

Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

Net Production Volumes:

Natural gas (mmcf)

156,874

182,913

646,982

638,243

Oil (mbbls)

888

1,348

4,291

4,794

NGL (mbbls)

1,881

3,002

9,304

8,685

Natural Gas Equivalents (mmcfe)

173,484

209,016

728,553

719,113

Average Daily Net Production Volumes:

Natural gas (mmcf/d)

1,705

1,988

1,768

1,749

Oil (mbbls/d)

10

15

12

13

NGL (mbbls/d)

20

33

25

24

Natural Gas Equivalents (mmcfe/d)

1,886

2,272

1,991

1,970

% Natural Gas

90

%

88

%

89

%

89

%

% Liquids

10

%

12

%

11

%

11

%

Average Sales Prices:

Natural gas ($/mcf)

$

2.49

$

2.27

$

1.95

$

2.49

Oil ($/bbl)

$

34.90

$

49.40

$

32.33

$

50.38

NGL ($/bbl)

$

20.01

$

19.21

$

12.71

$

17.11

Natural Gas Equivalents ($/mcfe)

$

2.65

$

2.58

$

2.08

$

2.75

Settlements of commodity derivatives ($/mcfe)

0.15

0.39

0.63

0.27

Average sales price, after effects of settled derivatives ($/mcfe)

$

2.80

$

2.97

$

2.71

$

3.02

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC

CAPITAL EXPENDITURES INCURRED

(Unaudited)

 

Three Months Ended

Year Ended

December 31,

December 31,

($ in thousands)

2020

2019

2020

2019

Capital Expenditures Incurred:

Drilling and completion costs incurred

$

104,342

$

149,821

$

517,079

$

1,030,294

Acquisition and leasehold costs incurred

10,852

30,483

58,018

141,631

Capitalized interest incurred

18,089

24,474

82,208

123,370

Total Capital Expenditures Incurred

$

133,283

$

204,778

$

657,305

$

1,295,295

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC
RECONCILIATIONS OF ADJUSTED NET INCOME (LOSS)
(Unaudited)

 

Three Months Ended

Year Ended

December 31,

December 31,

($ in thousands)

2020

2019

2020

2019

Net Income (Loss)

$

168,609

$

65,255

$

(589,511)

$

465,965

Adjustments to reconcile net income (loss) to adjusted net
income:

Impairment of unproved natural gas and oil properties

25,201

36,450

100,207

115,802

Change in fair value of commodity derivatives

(202,620)

(3,077)

475,027

(249,457)

Change in fair value of interest rate derivatives

41

569

Change in fair value of contingent payment right

6,518

6,518

Losses on purchases or exchanges of debt

15,708

6,037

Stock-based compensation

1,065

1,775

Non-recurring legal expense

5,572

Change in fair value of embedded derivative

(622)

(5,026)

Other

61

375

Adjusted Net Income (Non-GAAP)(a)(b)

$

14,522

$

98,067

$

6,194

$

327,659

 

(a) 

As shown above and on the following pages, Ascent uses adjusted net income (loss), EBITDAX, adjusted EBITDAX, discretionary cash flow and free cash flow (non-GAAP measures) as supplemental measures to evaluate the performance of its assets.  Ascent believes these non-GAAP measures provide meaningful information to our investors, as discussed below.  These non-GAAP measures, as used and defined by Ascent, are not measures of performance as determined by United States generally accepted accounting principles (US GAAP) and may not be comparable to similarly titled measures employed by other companies.

Non-GAAP measures should not be considered in isolation or as substitutes for operating income, net income or loss, cash flows provided by operating, investing and financing activities or other income or cash flow statement data prepared in accordance with US GAAP.  Non-GAAP measures provide no information regarding a company’s capital structure, borrowings, interest costs, capital expenditures and working capital movement.  Non-GAAP measures do not represent funds available for discretionary use because those funds may be required for debt service, capital expenditures, working capital, exploration expenses and other commitments and obligations.  However, Ascent’s management team believes these non-GAAP measures are useful to an investor in evaluating Ascent’s financial performance because these measures:

  • Are widely used by investors in the natural gas and oil industry to measure a company’s operating performance without regard to items excluded from the calculation of such term, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure, and the method by which assets were acquired, among other factors;
  • Are more comparable to estimates used by analysts;
  • Help investors to more meaningfully evaluate and compare the results of Ascent’s operations from period to period by removing the effect of its capital structure from its operating structure;
  • Excludes one-time items, non-cash items or items whose timing cannot be reasonably estimated; and
  • Are used by Ascent’s management team for various purposes, including as a measure of operating performance, in presentations to its Board of Managers and as a basis for strategic planning and forecasting.

There are significant limitations to using non-GAAP measures as measures of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect Ascent’s net income or loss, the lack of comparability of results of operations of different companies, and the different methods of calculating non-GAAP measures reported by different companies.

(b) 

Ascent defines “adjusted net (loss) income” as net income (loss) before impairment of unproved natural gas and oil properties;  changes in fair value of commodity derivatives;  change in fair value of interest rate derivatives; change in fair value of contingent payment right; (gains) losses on purchases or exchanges of debt; stock-based compensation; non-recurring legal expense (benefit); change in fair value of embedded derivative; acquisition expenses; impairment of other property and equipment; and other non-recurring items.  

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC
RECONCILIATIONS OF EBITDAX, ADJUSTED EBITDAX AND NET DEBT
(Unaudited)

EBITDAX and Adjusted EBITDAX

Three Months Ended

Year Ended

December 31,

December 31,

($ in thousands)

2020

2019

2020

2019

Net Income (Loss)

$

168,609

$

65,255

$

(589,511)

$

465,965

Adjustments to reconcile net income (loss) to EBITDAX:

Exploration expenses

26,323

41,561

104,230

124,477

Natural gas and oil depreciation, depletion and amortization

161,449

203,091

733,450

702,414

Depreciation and amortization of other assets

774

875

3,568

3,239

Interest expense, net

35,781

34,249

134,213

109,114

EBITDAX (Non-GAAP)(a)(b)

392,936

345,031

385,950

1,405,209

Adjustments to reconcile EBITDAX to Adjusted EBITDAX:

Change in fair value of commodity derivatives

(202,620)

(3,077)

475,027

(249,457)

Change in fair value of contingent payment right

6,518

6,518

Losses on purchases or exchanges of debt

15,708

6,037

Stock-based compensation

1,065

1,775

Non-recurring legal expense

5,572

Change in fair value of embedded derivative

(622)

(5,026)

Other

61

375

Adjusted EBITDAX (Non-GAAP)(b)(c)

$

213,607

$

341,393

$

880,879

$

1,151,101

(a) 

Ascent defines “EBITDAX” as net income (loss) before exploration expenses; depreciation, depletion and amortization; and interest expense, net. 

(b) 

See footnote (a) on page 10 for a discussion around our uses of non-GAAP measures.

(c) 

Ascent defines “adjusted EBITDAX” as EBITDAX before changes in fair value of commodity derivatives; change in fair value of contingent payment right; (gains) losses on purchases or exchanges of debt; stock-based compensation; non-recurring legal expense (benefit); change in fair value of embedded derivative; and other non-recurring items.

 

ASCENT RESOURCES UTICA HOLDINGS, LLC
RECONCILIATIONS OF EBITDAX, ADJUSTED EBITDAX AND NET DEBT (CONTINUED)
(Unaudited)

Last Twelve Months (“LTM”) EBITDAX and Adjusted EBITDAX

Three Months
Ended

Twelve Months Ended

December 31,

September 30,

June 30,

March 31,

December 31,

($ in thousands)

2020

2020

2020

2020

2020

Net Income (Loss)

$

168,609

$

(552,432)

$

(291,050)

$

85,362

$

(589,511)

Adjustments to reconcile net income (loss) to
EBITDAX:

Exploration expenses

26,323

28,096

22,858

26,953

104,230

Natural gas and oil depreciation, depletion
and amortization

161,449

195,120

201,331

175,550

733,450

Depreciation and amortization of other assets

774

928

942

924

3,568

Interest expense, net

35,781

33,279

31,233

33,920

134,213

EBITDAX (Non-GAAP)(a)(b)

392,936

(295,009)

(34,686)

322,709

385,950

Adjustments to reconcile EBITDAX to Adjusted
EBITDAX:

Change in fair value of commodity
derivatives

(202,620)

500,175

239,847

(62,375)

475,027

Change in fair value of contingent payment
right

6,518

6,518

(Gains) losses on purchases or exchanges of
debt

15,708

3,632

190

(13,493)

6,037

Stock-based compensation

1,065

710

1,775

Non-recurring legal expense

5,572

5,572

Adjusted EBITDAX (Non-GAAP)(b)(c)

$

213,607

$

209,508

$

210,923

$

246,841

$

880,879

(a) 

Ascent defines “EBITDAX” as net income (loss) before exploration expenses; depreciation, depletion and amortization; and interest expense, net. 

(b)

See footnote (a) on page 10 for a discussion around our uses of non-GAAP measures.

(c)

Ascent defines “adjusted EBITDAX” as EBITDAX before changes in fair value of commodity derivatives; change in fair value of contingent payment right; (gains) losses on purchases or exchanges of debt; stock-based compensation; non-recurring legal expense (benefit); change in fair value of embedded derivative; and other non-recurring items.

 

ASCENT RESOURCES UTICA HOLDINGS, LLC
RECONCILIATIONS OF EBITDAX, ADJUSTED EBITDAX AND NET DEBT (CONTINUED)
(Unaudited)

Net Debt and Net Debt to LTM Adjusted EBITDAX

December 31,

($ in thousands)

2020

2019

Net Debt:

Total debt(a)

$

2,827,418

$

2,840,336

Less: cash and cash equivalents

8,843

7,346

Net Debt(b)

$

2,818,575

$

2,832,990

Net Debt to LTM Adjusted EBITDAX:

Net Debt(b)

$

2,818,575

$

2,832,990

LTM Adjusted EBITDAX(c)

$

880,879

$

1,151,101

Net Debt to LTM Adjusted EBITDAX

3.2

x

2.5

x

(a) 

Total debt represents outstanding principal balances and includes the current portion of our long-term debt.

(b) 

Ascent defines “Net Debt” as total debt less cash and cash equivalents. Management uses Net Debt to determine our outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand.

(c) 

Adjusted EBITDAX for the LTM ended December 31, 2020 and 2019, respectively.

 

 

ASCENT RESOURCES UTICA HOLDINGS, LLC
RECONCILIATIONS OF DISCRETIONARY CASH FLOW AND FREE CASH FLOW
(Unaudited)

 

Three Months Ended

Year Ended

December 31,

December 31,

($ in thousands)

2020

2019

2020

2019

Net Cash Provided by Operating Activities

$

118,474

$

220,908

$

773,021

$

1,140,118

Adjustments to reconcile Net Cash Provided by Operating
Activities to Discretionary Cash Flow:

Changes in operating assets and liabilities

50,306

87,239

(29,148)

(79,728)

Discretionary Cash Flow (Non-GAAP)(a)(b)

168,780

308,147

743,873

1,060,390

Adjustments to reconcile Discretionary Cash Flow to Free Cash
Flow:

Drilling and completion costs incurred

(104,342)

(149,821)

(517,079)

(1,030,294)

Acquisition and leasehold costs incurred

(10,852)

(30,483)

(58,018)

(141,631)

Capitalized interest incurred

(18,089)

(24,474)

(82,208)

(123,370)

Non-recurring legal expense

5,572

Debt Exchange Fees

13,905

17,537

Other

4,271

4,271

Free Cash Flow (Non-GAAP)(b)(c)

$

53,673

$

103,369

$

113,948

$

(234,905)

(a) 

Discretionary cash flow is widely accepted as a financial indicator of a natural gas and oil company’s ability to generate cash which is used to internally fund exploration and development activities and service debt.  Ascent defines “discretionary cash flow” as net cash provided by operating activities before changes in operating assets and liabilities. 

(b) 

See footnote (a) on page 10 for a discussion around our uses of non-GAAP measures.

(c) 

Free cash flow is an indicator of a company’s ability to generate funding to maintain or expand its asset base, make distributions and repurchase or extinguish debt.  Ascent defines “free cash flow” as discretionary cash flow less incurred drilling and completion costs, acquisitions of natural gas and oil properties, capitalized interest, debt exchange fees and certain non-recurring items.   

 

Roll-Forward of Proved Reserves
(Unaudited)

Year Ended

December 31,

(in mmcfe)

2020

Proved Reserves at December 31, 2019

9,251,715

Extensions, discoveries and other additions

907,393

Revisions

(439,680)

Production

(728,553)

Proved Reserves at December 31, 2020

8,990,875

Proved developed reserves

4,275,548

Proved developed reserves percentage

48

%

Standardized Measure of Discounted Future Net Cash Flows ($ in thousands)(GAAP)

$

1,265,100

Add: Present value of future income taxes discounted at 10% per annum(a)

PV-10 ($ in thousands) (Non-GAAP)(a)

$

1,265,100

 

(a) 

Reserve volumes and PV-10 were estimated using SEC reserve recognition standards and pricing assumptions based on the unweighted arithmetic average of the prices on the first day of each month within the 12-month period ended  December 31, 2020.  The prices used in Ascent’s reserve reports were $1.99 per mcf of natural gas and $39.54 per bbl of oil and condensate, before basis differential adjustments. PV-10 is a non-GAAP measure that typically differs from the standardized measure, because the former does not include the effects of estimated future income tax expense.  However, because Ascent is a disregarded entity for income tax purposes, it has estimated no future income tax expense and the two measures are the same as of December 31, 2020, as calculated in the reconciliation above.  PV-10 can be used within the industry and by creditors and securities analysts to evaluate estimated net cash flows from proved reserves on a more comparable basis.

 

Cision View original content:http://www.prnewswire.com/news-releases/ascent-resources-reports-fourth-quarter-and-year-end-2020-operating-and-financial-results-and-announces-2021-guidance-301245029.html

SOURCE Ascent Resources, LLC

Ascent Resources Reports Fourth Quarter And Year-End 2020 Operating And Financial Results And Announces 2021 Guidance WeeklyReviewer

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Ascent Resources Reports Fourth Quarter And Year-End 2020 Operating And Financial Results And Announces 2021 Guidance WeeklyReviewer
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