Actionable news
0
All posts from Actionable news
Actionable news in QEP: QEP RESOURCES Inc,

Qep Resources Reports Fourth Quarter And Full Year FINANCIAL AND OPERATIONAL RESULTS AND ANNOUNCES 2016 GUIDANCE Full Year Highlights

The following excerpt is from the company's SEC filing.

Reduced year-over-year capital expenditures by 41%, excluding acquisitions, while delivering record total production

Increased year-over-year crude oil production by more than 14%

Maintained strong liquidity, including $376 million of cash at year-end and undrawn revolving credit facility

Achieved record estimated year-end proved crude oil reserves

2016 Capital Investment Plan

Investing capital of $450 to $500 million, matched to forecasted cash flow

Maintaining three to four QEP-operated rigs during 2016, with one each in Williston, Permian and Pinedale

Forecasti ng flat crude oil production and a slight reduction in natural gas production compared with 2015

Suspending dividend payments to preserve cash and provide additional financial flexibility

DENVER

— February 24, 2016 — QEP Resources, Inc. (NYSE: QEP) (QEP or the Company) today reported fourth quarter and full year

financial and operating results. The Company reported a net loss of

$38.6 million

for the fourth quarter

per diluted share, compared with net

income

$665.9 million

per diluted share, in the fourth quarter

. For the year ended

December 31, 2015

, QEP reported a net

$149.4 million

per diluted share, compared with net income of

$784.4 million

per diluted share, for the comparable

period.

Net income or loss includes non-cash gains and losses associated with the change in the fair value of derivative instruments, gains and losses from asset sales, costs associated with the early extinguishment of debt, asset impairments and certain other non-cash and/or non-recurring items. Excluding these items, the Company's fourth quarter

Adjusted Net Loss (a non-GAAP measure) was

$1.8 million

per diluted share, compared with Adjusted Net Income of

, the Company’s Adjusted Net Income was

$1.9 million

$239.1 million

Adjusted EBITDA (a non-GAAP measure) for the fourth quarter

$254.0 million

$386.3 million

. For the year ended

, the Company reported Adjusted EBITDA of

$1,029.3 million

compared with $1,483.3 million from continuing operations for

. The definition and reconciliations of Adjusted EBITDA and Adjusted Net Income to net income are provided within the financial tables of this release.

“Our high-quality, diversified E&P asset portfolio, combined with a year-end 2015 cash position of $376 million and an undrawn revolving credit facility, places QEP in an enviable position in today's challenging commodity price environment,” commented Chuck Stanley, Chairman, President and CEO of QEP Resources. “In the fourth quarter we continued to optimize production, increase operating efficiencies, reduce costs and allocate capital to the highest return assets in our portfolio."

“As a testament to our asset quality, we reported estimated 2015 year-end proved reserves of 3.6 trillion cubic feet of gas equivalent, an 8% decline from year-end 2014, despite a 47% and 40% decline in SEC year-end 2015 prices of crude oil and natural gas, respectively, from year-end 2014. We also achieved record estimated year-end proved crude oil reserves, and replaced 236% of total 2015 production, excluding price-related revisions."

“As we enter 2016, capital discipline remains the cornerstone of our corporate strategy. In response to current commodity prices, we have set a capital investment budget of $450 to $500 million, designed to match forecasted 2016 cash flow. The capital investment budget anticipates ramping down from nine QEP-operated rigs at the end of 2015 to three to four operated rigs for the remainder of the year, with one each on our Williston, Permian and Pinedale acreage. The budget also anticipates funding the completion of a portion of our inventory of drilled but not completed wells carried over from last year and provides flexibility for the addition of a fourth rig later in 2016

While we are reducing our 2016 capital program by over 50% compared with 2015, the combined benefits of lower well costs, continued improvements in new well productivity, and the quality of our assets should allow us to keep year-over-year oil production essentially flat, with natural gas production down slightly. In addition, we are suspending our $0.02 per quarter dividend to further bolster our liquidity. While the impact on our cash position is relatively small, we believe this is a prudent decision in this commodity price environment."

“Moving forward, we remain keenly focused on creating shareholder value through operational excellence, solid execution, technical innovation, and financial discipline. We will continue to actively manage our capital program to preserve our balance sheet, so we are in position to capitalize on our portfolio of top-tier assets when the commodity market improves,” concluded Stanley.

The “4Q 2015 Operations Update” presentation, which includes slides containing maps and other supporting materials referred to in this release, is posted on the Company’s website

www.qepres.com

QEP Financial Results Summary

Adjusted EBITDA by Operating Segment

Three Months Ended

Year Ended

December 31,

Change

(in millions)

QEP Energy

1,027.1

1,437.0

QEP Marketing and Other

Adjusted EBITDA from continuing operations

1,438.3

Adjusted EBITDA from discontinued operations

1,582.7

See attached financial tables of this release for a reconciliation of Adjusted EBITDA to net income.

Adjusted EBITDA for the fourth quarter

$254.1 million

decrease from the fourth quarter

, primarily due to decreased average realized prices for crude oil, natural gas and NGL, partially offset by an increase in natural gas production.

Capital investment (on an accrual basis) for the fourth quarter 2015, was $218.6 million, down $15.4 million from the third quarter 2015, excluding acquisitions. Capital investment (on an accrual basis) for the year ended

$1,007.4 million

, down 41% compared with the full year 2014, excluding acquisitions.

Net equivalent production decreased by

Bcfe in the fourth quarter

. This decrease was primarily due to decreased crude oil and NGL production in the Williston Basin, partially offset by increased crude oil, NGL and natural gas production in the Permian Basin and increased natural gas production at Pinedale.

Crude oil and NGL production decreased

, respectively, while natural gas production increased

compared with the fourth quarter

. Fourth quarter 2015 crude oil volumes were impacted by completion related shut-ins in the Williston Basin, while NGL volumes were lower due to operating in ethane rejection.

Crude oil and NGL production accounted for

of field-level revenues in the fourth quarter 2015. Field-level revenues decreased

in the fourth quarter 2015 compared with the fourth quarter

due to lower crude oil and NGL prices and lower NGL volumes.

During the full year 2015, the Company invested nearly $100 million to acquire various oil and gas properties, including additional interests in QEP-operated wells, in several of its core areas of operation. These acquisitions were partially offset by the sale of certain non-core assets.

The Company has entered into additional crude oil and natural gas derivative contracts for 2016, 2017 and 2018 to help mitigate commodity price risk. See tables provided in this release for further details.

QEP Marketing & Other

esources ended the fourth quarter

with cash and cash equivalents o

$376.1 million

borrowings under its unsecured revolving credit facility. The credit facility was amended in the fourth quarter 2015. QEP's credit facility is not subject to semi-annual borrowing base redeterminations.

General and administrative expense for the fourth quarter 2015 was

$40.4 million

, a decrease of

compared with the fourth quarter 2014. For the year ended December 31, 2015, general and administrative expense was

$181.1 million

, a decrease of over

compared with the prior year. Full year 2015 general and administrative expense reflects one time charges of $2.7 million related to workforce reductions, $5.0 million related to the closure of our Tulsa, Oklahoma office and $11.2 million related to a pension curtailment.

Effective January 1, 2016, QEP terminated its contracts for resale and marketing transactions between its wholly owned subsidiaries, QEP Marketing and QEP Energy. QEP Energy will market its own gas, oil and NGL production. In addition, substantially all of QEP Marketing's third-party purchase and sale agreements and gathering, processing and transportation contracts have been assigned to QEP Energy, except those contracts related to natural gas storage activities and the Haynesville gathering system in Northwest Louisiana. As a result, a majority of intercompany transactions will be eliminated, and the Company will have one reportable segment. The change in affiliate transactions will simplify our business processes and financial statements.

QEP Resources suspended its cash dividend indefinitely in response to significant declines in crude oil, NGL and natural gas prices. The suspension of the dividend will allow the Company to preserve cash in the current commodity environment.

Guidance

In response to the current commodity price environment QEP intends to reduce its capital budget for drilling and completions by over 50% compared with 2015. Due to efficiency gains, strong well performance and ongoing cost reduction initiatives, the Company expects to see essentially flat year-over-year crude oil production in

. The Company's guidance anticipates that its working rig count will decline from nine at year-end 2015 to approximately three to four rigs, with one each in the Williston and Permian basins and Pinedale, respectively, by the beginning of the second quarter 2016.

QEP Resources initial full year

guidance and related assumptions are shown below. The Company’s guidance assumes no asset acquisitions or divestitures, and that QEP will not recover ethane from its produced gas for the entire year.

Initial 2016 Guidance

Current Forecast

Oil production (MMBbl)

18.5 - 20.5

NGL production (MMBbl)

Natural gas production (Bcf)

165 - 175

Total equivalent production (Bcfe)

300 - 328

Lease operating and transportation expense (per Mcfe)

$1.60 - $1.70

Depletion, depreciation and amortization (per Mcfe)

$3.00 - $3.30

Production and property taxes, % of field-level revenue

Figures below in millions

$150 - $160

Capital investment (excluding acquisitions)

$450 - $500

Forecasted general and administrative expense includes approximately $35.0 million of non-cash expenses primarily related to share based compensation.

Estimated Proved Reserves

QEP Energy's estimated proved reserves totaled

Tcfe at December 31, 2015, down

, primarily due to the net impact of lower crude oil, natural gas and NGL prices. Approximately

of total proved reserves at year-end

were crude oil and NGL compared with

. Proved developed reserves were

Tcfe, or

, of total estimated proved reserves at year-end 2015. Extensions and discoveries were

Tcfe, driven primarily by the Company's development activities in the Williston, Permian and Uinta basins. A reconciliation of reported quantities of estimated proved reserves is summarized in the table below:

Natural Gas

Natural Gas Equivalents

(MMbbl)

Balance at December 31, 2014

2,317.2

3,931.9

Revisions of previous estimates

(463.8

(1,077.9

Extensions and...


More