Bonanza Creek Provides an Operational Update, Issues First Quarter 2021 Guidance, and Announces 4th Quarter 2020 Conference Call

Rhea-AI Summary

Bonanza Creek Energy (NYSE: BCEI) announced preliminary results for Q4 and full year 2020, reporting average sales volumes of 25.0 MBoe/d for Q4, up 8% YOY for the full year. They achieved a low lease operating expense of $2.20 per Boe in Q4, a 27% decrease YOY. The company exited 2020 with no debt and $25 million in cash. Q1 2021 guidance predicts production to be 22.0 to 24.0 MBoe/d, reflecting an 8% decline from Q4 2020. For Q1 2021, capital expenditures are estimated at $35-$40 million as Bonanza Creek prepares for its transformative transaction with HighPoint Resources.

Positive

• Exited 2020 with no debt and $25 million in cash.
• Achieved average sales volumes of 25.0 MBoe/d for Q4, up 8% from 2019.
• Reduced lease operating expenses to $2.20 per Boe, down 27% YOY.

Negative

• Q1 2021 production forecast represents an 8% decline from Q4 2020.
• Projected capital expenditures of $35-$40 million for Q1 2021.

DENVER, Jan. 27, 2021 (GLOBE NEWSWIRE) -- Bonanza Creek Energy, Inc. (NYSE: BCEI) (the "Company" or "Bonanza Creek") today issued preliminary results for the fourth quarter and full year 2020, and provided guidance for the first quarter of 2021. The Company also announced the date of its conference call to discuss fourth quarter and full year 2020 results.

Highlights for the fourth quarter and full year 2020 include:

• Average sales volumes are expected to be 25.0 thousand barrels of oil equivalent per day (“MBoe/d”) for the fourth quarter, with oil representing 54% of total volumes
• Average sales volumes are expected to be 25.2 MBoe/d for the full year (54% oil), up 8% over full year 2019; at the mid-point of the most recent annual 2020 guidance range of 25.0 to 25.5 MBoe/d
• Total capital expenditures for the fourth quarter are estimated at $3.2 million, bringing the total 2020 capital expenditures to approximately $67.7 million; within the most recent annual guidance range of $60 to $70 million
• Lease operating expenses (“LOE”) are expected to be $2.20 per Boe for the fourth quarter; down slightly from the third quarter of 2020, and down 27% from the fourth quarter of 2019
• Full year 2020 LOE of approximately $2.38 per Boe is down 19% from 2019; below our most recent annual guidance range of $2.40 to $2.60 per Boe
• Rocky Mountain Infrastructure (“RMI”) net effective cost is expected to be $1.01 per Boe for the fourth quarter, which is comprised of approximately $1.57 per Boe of operating expenses, offset by $0.56 per Boe of RMI operating revenue from working interest partners
• For the year, RMI’s net effective cost is expected to be $1.03 per Boe, with operating expenses of $1.62 per Boe versus the most recent annual guidance range of $1.50 to $1.80 per Boe
• The Company exited 2020 with no debt and approximately $25 million in cash
• Year-end 2020 total proved reserves are estimated to be 118.2 million BOE, and proved developed producing reserves are estimated to be 56.4 million BOE, in both cases using commodity prices required by SEC regulations
  

Eric Greager, President and Chief Executive Officer, commented, “We turned in a strong fourth quarter to successfully finish a challenging year. This is a cost and margin business, and I couldn’t be more proud of the BCEI team’s discipline. We quickly reacted to the deteriorating conditions in March by halting capital activity, paying-off our credit facility, and exiting the year with no debt and $25 million in cash. The team’s focus drove unit costs to all-time lows, and despite minimal investment, delivered a stable production profile that exceeded expectations. The productivity, professionalism, and dedication of our employees is second to none.”

Greager continued, “In November, we announced a transformative and highly compelling transaction with HighPoint Resources. We’re planning for a shareholder vote later this quarter, and we continue to make steady progress toward closing the transaction.”

First Quarter 2021 Bonanza Creek Guidance

The Company is providing guidance for the first quarter of 2021 for Bonanza Creek as a stand-alone company. Additional guidance for 2021 on a combined basis will be provided after the closing of the HighPoint transaction.

The Company’s stand-alone 2021 capital plan assumes the completion of 30 gross (25.8 net) drilled, uncompleted (“DUC”) wells. Completion activities for these wells started in early January and are expected to continue through the second quarter with the first wells turned to sales during the second quarter. Total capital expenditure guidance for the first quarter of 2021 is $35 to $40 million.

Average quarterly production was expected to begin declining following the third quarter of 2020, and is expected to continue to decline until production from DUC wells begin to offset the base decline during the second quarter of 2021. First quarter production guidance is a range of 22.0 to 24.0 MBoe/d with the mid-point of 23.0 MBoe/d representing an 8% decline from the fourth quarter of 2020.

The table below outlines the Company’s full guidance for the first quarter of 2021.

1Q 2021 Guidance	Low		High
Capital Expenditures ($MM)	$35	--	$40
Production (MBoe/d)	22.0	--	24.0
% Oil	45%	--	50%
Lease Operating Expenses

FAQ

What were Bonanza Creek Energy's Q4 2020 sales volumes?

Bonanza Creek Energy reported average sales volumes of 25.0 MBoe/d for Q4 2020.

How did Bonanza Creek's lease operating expenses change in 2020?

The lease operating expenses were $2.20 per Boe in Q4 2020, down 27% from Q4 2019.

What is Bonanza Creek's production guidance for Q1 2021?

The company expects production for Q1 2021 to be between 22.0 to 24.0 MBoe/d.

How much capital did Bonanza Creek plan for Q1 2021?

Bonanza Creek's capital expenditures for Q1 2021 are estimated to be between $35 million and $40 million.