• HighPeak Energy, Inc. Announces Third Quarter 2021 Results and 2022 Outlook

    Источник: Nasdaq GlobeNewswire / 08 ноя 2021 16:01:01   America/New_York

    FORT WORTH, Texas, Nov. 08, 2021 (GLOBE NEWSWIRE) -- HighPeak Energy, Inc. (“HighPeak” or the “Company”) (NASDAQ: HPK) today announced financial and operating results for the third quarter 2021. The Company completed its business combination on August 21, 2020 and consequently, the following operational and financial data refer to the three and nine months ended September 30, 2021 and the period from August 22, 2020 through September 30, 2020 (the “Successor periods”) and the periods from July 1, 2020 through August 21, 2020 and January 1, 2020 through September 30, 2020 (the “Predecessor periods”).

    Third Quarter 2021 Highlights

    • Third quarter 2021 sales volumes of 8,168 barrels of oil equivalent per day (“Boe/d”), 94% liquids. Production volumes have averaged approximately 15,500 Boe/d since mid-October.
    • EBITDAX (a non-GAAP measure as defined and reconciled below) of $33.3 million and $91.8 million for the three and nine months ended September 30, 2021, respectively.
    • Third quarter 2021 realized price of $63.18 per Boe and realized cash operating margin of $51.88 per Boe, excluding the effects of derivatives.
    • Drilled ten (10) operated wells and one (1) operated salt-water disposal well and completed six (6) operated wells. Also participated in drilling three (3) non-operated horizontal wells.
    • Closed multiple bolt-on acquisitions comprising approximately 10,600 net acres in the aggregate.
    • Initiated a $0.025 per share quarterly dividend and paid a special dividend of $0.075 per share in July 2021. Declared a $0.025 per share quarterly dividend in September 2021 which was paid in October 2021.
    • Amended the Revolving Credit Facility to increase the borrowing base and the elected commitments to $195 million effective October 1, 2021.
    • Ended third quarter 2021 with a revolving credit facility balance of $95 million and a $12 million cash balance, or net debt of $83 million (a non-GAAP measure as defined and reconciled below).
    • Completed a public stock offering on October 20, 2021 of 2.53 million shares of common stock for aggregate gross proceeds of approximately $25.3 million.
    • Continued to realize peer leading operated all-in drill, complete, equip and facility well costs of approximately $505 per lateral foot in our Flat Top operating area.

    2022 Preliminary 4 Rig Development Outlook

    Production (Boe/d) 
    • Average production rate  26,000 – 31,000
    • Exit production rate 36,000 – 42,000
      
    Capex ($MM) 
    • Gross Operated Wells TIL 80 - 110
    • Capital Expenditures, D,C,E&F $610 - $660   
    • Capital Expenditures, Infra/Land/Other $35 - $40
    • Total Capital Expenditures  $645 - $700 
      
    Unit Measures ($/Boe) 
    • Lease Operating Expenses$4.50 - $5.25
    • Production Taxes$3.75 - $4.50
    • General & Administrative $1.00 - $1.50
    • Total Cash Costs$9.25 - $11.25

    HighPeak Chairman and Chief Executive Officer, Jack Hightower, said, “Our production growth rate continues to increase significantly based on the strong performance of our wells. Our production volumes during the second half of October averaged approximately 15,500 Boe/d. We are excited to continue the acceleration of our rapid development growth plan. In addition, due to our excellent well economics and the current strength of the commodity market, we now plan to introduce a fourth rig before the end of the year to continue to pull value forward for our investors while maintaining our philosophy of less than one turn of leverage.”

    Third Quarter Operational Update

    The Company’s production since mid-October has averaged approximately 15,500 Boe/d compared with third quarter 2021 production average of 8,168 Boe/d. The Company’s third quarter production volumes were significantly influenced by the temporary curtailment of producing wells during offset well completion operations. The temporarily shut-in wells returned to production late in the third quarter and have continued to increase to pre-shut in production levels. The Company expects the wells drilled by the second rig during the third quarter 2021 to begin contributing meaningful production early in 2022.

    During the third quarter of 2021, the Company drilled ten (10) operated horizontal wells and one (1) operated horizontal salt-water disposal well utilizing two (2) drilling rigs. The Company completed six (6) producing wells in its Flat Top area. At the end of the third quarter, the Company was in various stages of completion on three (3) wells, had five (5) operational drilled uncompleted wells (“DUCs”) waiting on completion, and was in the process of drilling three (3) operated wells. The Company also participated in drilling three (3) non-operated horizontal wells during the third quarter 2021 and was participating in drilling two (2) non-operated horizontal wells at the end of the quarter.

    The Company added a third drilling rig in October 2021 to further delineate its Signal Peak area and to accelerate development drilling in its Flat Top operating area. The addition of the third rig will not change the Company’s capital expenditure guidance for 2021.

    Michael Hollis, HighPeak’s President, commented, “In spite of recent industry-wide inflationary pressures, we maintained our peer leading $505 per lateral foot capital cost to drill, complete, equip and provide facilities in the Flat Top area which is a testament to our team, their cost-focused attention to detail and the measures they implemented to keep our costs stable in this environment. LOE was a little hot in the third quarter. We knew it was coming and took the necessary steps, beginning last year, to initiate and build the infrastructure to solve it. We expect LOE per Boe to be significantly lower in 2022 as these projects are commissioned and as represented in our 2022 outlook projections. Margins continue to be peer leading based on our high oil and liquids production mix. We expect to maintain robust margins going forward and, although we have hedged a portion of our forward production, most of our future production will be exposed to commodity prices.”

    Third Quarter 2021 Financial Results

    HighPeak reported net income of $8.0 million for the third quarter of 2021, or $0.08 per diluted share.  EBITDAX (a non-GAAP financial measure as defined and reconciled below) was $33.3 million, or $0.33 per diluted share. 

    Third quarter average realized prices were $69.84 per barrel of oil, $35.83 per barrel of natural gas liquids and $3.69 per Mcf of natural gas, resulting in an overall price of $63.18 per Boe, excluding the effects of derivatives. HighPeak’s cash costs for the third quarter were $13.52 per Boe including lease operating expenses of $8.93 per Boe, production and ad valorem taxes of $2.37 per Boe and cash G&A expenses of $2.22 per Boe. 

    HighPeak’s third quarter 2021 capital expenditures to drill, complete, equip, provide facilities and to build water and power infrastructure were approximately $64.6 million. In addition, the Company incurred capital expenditures of approximately $51.2 million to close multiple bolt-on acquisitions.

    At September 30, 2021, the Company had $95.0 million in long-term debt and $12.0 million of cash on hand.  In October 2021, the Company’s borrowing base and bank commitments were increased to $195.0 million.

    Bolt-On Acquisitions

    During the third quarter 2021, the Company closed a series of unrelated, accretive bolt-on acquisitions from various third parties primarily located in its Signal Peak operating area. In the aggregate, the assets acquired represent approximately 10,600 net acres with estimated average production of more than 1,400 Boe/d for the remainder of 2021 and working interests in salt-water disposal wells and related infrastructure.

    Initial Dividend

    In July 2021, the Company’s Board of Directors approved its first quarterly dividend of $0.025 per share and also approved a special dividend of $0.075 per share which resulted in a total of $9.3 million in dividends paid to stockholders on July 26, 2021. In addition, in September 2021, the Company’s Board of Directors declared a dividend of $0.025 per share which resulted in a total of $2.3 million in dividends paid to stockholders on October 25, 2021.

    Updated 2021 Guidance

    HighPeak Energy increased its development drilling program from one rig to two rigs early in the third quarter with a primary focus on the co-development of its Lower Spraberry and Wolfcamp A formations in its Flat Top area. The Company added a third drilling rig in October to further delineate its Signal Peak area and to accelerate development drilling in its Flat Top area. The addition of the third rig will not change the Company’s 2021 capital expenditure guidance. Additionally, we will continue the buildout of our field infrastructure to reduce operating costs and advance our ESG objectives. The Company reiterates its 2021 capital investment guidance of approximately $245 to $270 million, excluding acquisitions.

    Mr. Hollis, continued, “Due to robust well results, high operating margins and our ability to keep capital costs flat at $505 per lateral foot, we intend to lean into this high commodity price environment by further accelerating our development program in the fourth quarter. We look forward to a year of substantial production and cash flow growth for HighPeak in 2022.”

    Conference Call

    HighPeak Energy will host a conference call and webcast on Tuesday, November 9, 2021 at 10:00 a.m. Central Time for investors and analysts to discuss its results for the third quarter of 2021 as well as provide an overview of recent activities and its remaining 2021 operating plan. Conference call participants may call (833) 362-0226 (United States/Canada) or (914) 987-7683 (International) and enter confirmation code 3399526. A live broadcast of the earnings conference call will also be available on the HighPeak Energy website at www.highpeakenergy.com under the “Investors” section of the website. A replay will also be available on the website following the call. 

    When available, a copy of the Company’s earnings release, investor presentation and Quarterly Report on Form 10-Q may be found on its website at www.highpeakenergy.com.

    About HighPeak Energy, Inc.

    HighPeak Energy, Inc. is a publicly traded independent oil and natural gas company, headquartered in Fort Worth, Texas, focused on the acquisition, development, exploration and exploitation of unconventional oil and natural gas reserves in the Midland Basin in West Texas. For more information, please visit our website at www.highpeakenergy.com.

    Cautionary Note Regarding Forward-Looking Statements

    The information in this press release contains forward-looking statements that involve risks and uncertainties. When used in this document, the words "believes," "plans," "expects," "anticipates," "forecasts," "intends," "continue," "may," "will," "could," "should," "future," "potential," "estimate" or the negative of such terms and similar expressions as they relate to HighPeak Energy, Inc. ("HighPeak Energy," the "Company" or the “Successor”) are intended to identify forward-looking statements, which are generally not historical in nature. The forward-looking statements are based on the Company's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond the Company's control.

    These risks and uncertainties include, among other things, volatility of commodity prices, product supply and demand, the impact of a widespread outbreak of an illness, such as the coronavirus disease (“COVID-19”) pandemic, on global and U.S. economic activity, competition, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, the ability to obtain approvals from third parties and negotiate agreements with third parties on mutually acceptable terms, litigation, the costs and results of drilling and operations, availability of equipment, services, resources and personnel required to perform the Company's drilling and operating activities, access to and availability of transportation, processing, fractionation, refining and storage facilities, HighPeak Energy's ability to replace reserves, implement its business plans or complete its development activities as scheduled, access to and cost of capital, the financial strength of counterparties to any credit facility and derivative contracts entered into by HighPeak Energy, if any, and purchasers of HighPeak Energy's oil, natural gas liquids and natural gas production, uncertainties about estimates of reserves, identification of drilling locations and the ability to add proved reserves in the future, the assumptions underlying forecasts, including forecasts of production, expenses, cash flow from sales of oil and gas and tax rates, quality of technical data, environmental and weather risks, including the possible impacts of climate change, cybersecurity risks and acts of war or terrorism. These and other risks are described in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K and other filings with the SEC. The Company undertakes no duty to publicly update these statements except as required by law.

    HighPeak Energy, Inc.
    Summary Balance Sheet Data (Unaudited)
    (In thousands)
     
     September 30, 
    2021
      December 31, 
    2020
     
    Cash and cash equivalents$11,966  $19,552 
    Other current assets 30,453   13,743 
    Oil and natural gas properties, net 664,831   502,636 
    Other noncurrent assets 6,325   1,999 
    Total assets $713,575  $537,930 
            
    Current liabilities$77,014  $22,435 
    Long-term debt, net 93,102    
    Other long-term liabilities 53,551   41,269 
            
    Stockholders' equity       
    Common stock 9   9 
    Additional paid-in capital 591,360   581,426 
    Accumulated deficit (101,461)  (107,209)
    Total stockholders' equity 489,908   474,226 
    Total liabilities and stockholders' equity $713,575  $537,930 


    HighPeak Energy, Inc.
    Condensed Consolidated and Combined Statements of Operations (Unaudited)
    (in thousands, except per share data)
     
     Three
    Months
    Ended
    September 30,
    2021
     August 22,
    2020
    through
    September 30,
    2020
     July 1, 2020
    through
    August 21,
    2020
     Nine Months
    Ended
    September 30,
    2021
     August 22,
    2020
    through
    September 30,
    2020
     January 1,
    2020
    through
    August 21,
    2020

     Successor Successor Predecessor Successor Successor Predecessor
    Operating Revenues:                 
    Crude oil sales$44,785  $4,787  $2,607  $116,640  $4,787  $8,069 
    Natural gas and NGL sales 2,687   47   49   4,819   47   154 
    Total operating revenues 47,472   4,834   2,656   121,459   4,834   8,223 
    Operating Costs and Expenses:                 
    Oil and natural gas production 6,710   671   667   13,629   671   4,870 
    Production and ad valorem taxes 1,783   257   164   5,990   257   566 
    Exploration and abandonments 488   66      1,142   66   4 
    Depletion, depreciation and amortization 13,917   2,327   1,294   43,737   2,327   6,385 
    Accretion of discount 44   15   20   116   15   89 
    General and administrative 1,666   816   567   5,042   816   4,840 
    Stock-based compensation 905   14,508      2,894   14,508    
    Total operating costs and expenses 25,513   18,660   2,712   72,550   18,660   16,754 
    Income (loss) from operations 21,959   (13,826)  (56)  48,909   (13,826)  (8,531)
    Interest income    1      1   1    
    Interest expense (947)        (1,153)      
    Derivative loss, net (10,820)        (24,416)      
    Other expense          (127)     (76,503)
    Income (loss) before income taxes 10,192   (13,825)  (56)  23,214   (13,825)  (85,034)
    Income tax expense (benefit) 2,145   (2,309)     2,535   (2,309)   
    Net income (loss)$8,047  $(11,516) $(56) $20,679  $(11,516) $(85,034)
                      
    Earnings (loss) per share:                 
    Basic net income (loss)$0.07  $(0.13)    $0.18  $(0.13)   
    Diluted net income (loss)$0.08  $(0.13)    $0.18  $(0.13)   
                      
    Weighted average shares outstanding:                 
    Basic 92,676   91,592      92,648   91,592    
    Diluted 92,678   91,592      92,715   91,592    
                      
    Dividends declared per share$0.125  $     $0.125  $    


    HighPeak Energy, Inc.  
    Condensed Consolidated and Combined Statements of Cash Flows (Unaudited)  
    (in thousands)
     
        Nine Months Ended September 30, 2020
     Nine Months
    Ended
    September 30,
    2021
     August 22,
    2020 through
    September 30,
    2020
     January 1,
    2020 through
    August 21,
    2020
     Successor Successor Predecessor
    CASH FLOWS FROM OPERATING ACTIVITIES:         
    Net income (loss)$18,534  $(11,516) $(85,034)
    Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:        
    Exploration and abandonment expense 698   14   4 
    Depletion, depreciation and amortization expense 43,737   2,327   6,385 
    Accretion expense 116   15   89 
    Stock based compensation expense 2,894   14,508    
    Amortization of debt issuance costs 259       
    Derivative-related activity 19,402       
    Loss on terminated acquisition       76,500 
    Deferred income taxes 4,680   (3)   
    Changes in operating assets and liabilities:        
    Accounts receivable (16,168)  (3,404)  844 
    Prepaid expenses, inventory and other assets (7,816)  (357)  (196)
    Accounts payable, accrued liabilities and other current liabilities 21,401   9,109   (2,694)
    Net cash provided by (used in) operating activities 87,737   10,693   (4,102)
    CASH FLOWS FROM INVESTING ACTIVITIES:         
    Additions to oil and natural gas properties (154,599)  (17,908)  (49,364)
    Changes in working capital associated with oil and natural gas property additions 15,995   (23,421)  7,348 
    Acquisitions of oil and natural gas properties (53,276)  (704)  (3,338)
    Proceeds from sales of properties 3,234      (50)
    Other property additions (453)     (50)
    Issuance of notes receivable       (7,482)
    Extension payment on acquisition       (15,000)
    Net cash used in investing activities (189,099)  (42,033)  (67,886)
    CASH FLOWS FROM FINANCING ACTIVITIES:         
    Borrowings under revolving credit facility 95,000       
    Proceeds from exercises of warrants 5,466       
    Proceeds from subscription receivable from exercise of warrants 3,596       
    Proceeds from exercises of stock options 1,574       
    Debt issuance costs (1,757)      
    Dividends paid (9,274)      
    Dividend equivalents paid (829)      
    Proceeds from stock offering    92,554    
    Stock offering costs    (8,383)   
    Cash acquired from non-successors in HighPeak business combination    100    
    Contributions from partners       54,000 
    Distributions to partners       (2,780)
    Net cash provided by financing activities 93,776   84,271   51,220 
    Net (decrease) increase in cash and cash equivalents (7,586)  52,931   (20,768)
    Cash and cash equivalents, beginning of period 19,552   1,943   22,711 
    Cash and cash equivalents, end of period$11,966  $54,874  $1,943 
             


    HighPeak Energy, Inc.
     Operating Highlights (Unaudited) 
     
         Three Months Ended September 30, 2020
     Three Months
    Ended
    September 30,
    2021
     August 22,
    2020 through
    September 30,
    2020

     July 1,
    2020 through
    August 21,
    2020

      Successor   Successor
      Predecessors
    Sales Volumes:         
    Oil (Bbls) 641,238   124,168   64,493 
    NGLs (Bbls) 61,949   1,749   3,150 
    Natural gas (Mcf) 289,520   12,466   21,283 
    Total (Boe) 751,440   127,995   71,189 
             
    Daily Sales Volumes:         
    Oil (Bbls/d) 6,970   3,104   1,240 
    NGLs (Bbls/d) 673   44   61 
    Natural gas (Mcf/d) 3,147   312   409 
    Total (Boe/d) 8,168   3,200   1,369 
             
    Revenues (in thousands):         
    Crude oil sales$44,785  $4,787  $2,607 
    Crude oil derivative settlements (3,976)      
    NGL and natural gas sales 2,687   47   49 
    Total Revenues, including derivative settlements$43,496  $4,834  $2,656 
             
    Average sales prices:         
    Crude oil (per Bbl)$69.84  $38.55  $40.43 
    Crude oil derivative settlements (per Bbl) (6.20)      
    NGL (per Bbl) 35.83   16.43   4.91 
    Natural gas (per Mcf) 3.69   2.30   2.04 
    Total, including derivative contract settlements (per Boe)$57.88  $37.77  $37.30 
             
    Weighted Average NYMEX WTI ($/Bbl) $70.70  $40.20  $42.12 
    Weighted Average NYMEX Henry Hub ($/Mcf)  4.07   2.33   1.64 
    Realization to benchmark         
    Crude oil (per Bbl) 99%  96%  96%
    Natural gas (per Mcf) 91%  99%  124%
             
    Operating Costs and Expenses (in thousands):         
    Lease operating expenses$6,710  $671  $667 
    Production and ad valorem taxes 1,783   257   164 
    General and administrative expenses 1,666   816   567 
    Depletion, depreciation and amortization 13,917   2,327   1,294 
             
    Operating costs per Boe:         
    Lease operating expenses$8.93  $5.24  $9.38 
    Production and ad valorem taxes 2.37   2.01   2.30 
    General and administrative expenses 2.22   6.38   7.96 
    Depletion, depreciation and amortization 18.52   18.18   18.17 



    HighPeak Energy, Inc.
     Operating Highlights (Unaudited) 
     
         Nine Months Ended September 30, 2020
     Nine Months Ended
    September 30, 2021

     August 22, 2020
    through September 30,
    2020

     January 1, 2020
    through August 21,
    2020

      Successor   Successor   Predecessors
    Sales Volumes:         
    Oil (Bbls) 1,791,002   124,168   235,557 
    NGLs (Bbls) 134,110   1,749   20,024 
    Natural gas (Mcf) 610,114   12,466   87,258 
    Total (Boe) 2,026,798   127,995   270,123 
             
    Daily Sales Volumes:         
    Oil (Bbls/d) 6,560   3,104   1,007 
    NGLs (Bbls/d) 491   44   86 
    Natural gas (Mcf/d) 2,235   312   373 
    Total (Boe/d) 7,424   3,200   1,154 
             
    Revenues (in thousands):         
    Crude oil sales$116,640  $4,787  $8,069 
    Crude oil derivative settlements (5,014)      
    NGL and natural gas sales 4,819   47   154 
    Total Revenues, including derivative settlements$116,445  $4,834  $8,223 
             
    Average sales prices:         
    Crude oil (per Bbl)$65.13  $38.55  $34.26 
    Crude oil derivative settlements (per Bbl) (2.80)      
    NGL (per Bbl) 31.16   16.43   9.31 
    Natural gas (per Mcf) 3.09   2.30   0.52 
    Total, including derivative contract settlements (per Boe)$57.45  $37.77  $30.44 
             
    Weighted Average NYMEX WTI ($/Bbl) $65.92  $40.20  $35.17 
    Weighted Average NYMEX Henry Hub ($/Mcf)  3.40   2.33   1.76 
    Realization to benchmark         
    Crude oil (per Bbl) 99%  96%  97%
    Natural gas (per Mcf) 91%  99%  30%
             
    Operating Costs and Expenses (in thousands):         
    Lease operating expenses$13,629  $671  $4,870 
    Production and ad valorem taxes 5,990   257   566 
    General and administrative expenses 5,042   816   4,840 
    Depletion, depreciation and amortization 43,737   2,327   6,385 
             
    Operating costs per Boe:         
    Lease operating expenses$6.72  $5.24  $18.03 
    Production and ad valorem taxes 2.96   2.01   2.10 
    General and administrative expenses 2.49   6.38   17.92 
    Depletion, depreciation and amortization 21.58   18.18   23.64 


    HighPeak Energy, Inc.
    Reconciliation of Net Income (Loss) to EBITDAX (Unaudited)  
    (in thousands)
     
        Three Months Ended
    September 30, 2020
        Nine Months Ended
    September 30, 2020
     Three
    Months
    Ended
    September 30,
    2021
     August 22,
    2020
    through
    September 30,
    2020
     July 1,
    2020
    through
    August 21,
    2020
     Nine
    Months
    Ended
    September 30,
    2021
     August 22,
    2020
    through
    September 30,
    2020
     January 1,
    2020
    through
    August 21,
    2020
     Successor Successor Predecessor Successor Successor Predecessor
    Net income (loss)$8,047 $(11,516) $(56) $18,534  $(11,516) $(85,034)
    Interest expense 947        1,153       
    Interest income   (1)     (1)  (1)   
    Income tax expense (benefit) 2,145  (2,309)     4,680   (2,309)   
    Depletion, depreciation and amortization 13,917  2,327   1,294   43,737   2,327   6,385 
    Accretion of discount 44  15   20   116   15   89 
    Exploration and abandonment expense 488  66      1,142   66   4 
    Stock based compensation 905  14,508      2,894   14,508    
    Derivative related noncash activity 6,844        19,402       
    Other expense         127      76,503 
    EBITDAX$33,337 $3,090  $1,258  $91,784  $3,090  $(2,053)
                      


    HighPeak Energy, Inc.
    Net Debt (Unaudited)
    (In thousands)
       
     September 30, 2021
    Outstanding borrowings on Revolving Credit Facility$95,000
    Cash and cash equivalents 11,966
    Net debt $83,034
       

    Investor Contact:

    Ryan Hightower
    Vice President, Business Development
    817.850.9204
    rhightower@highpeakenergy.com

    Source: HighPeak Energy, Inc.


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