Lonestar Announces Year-End 2020 Reserves

Rhea-AI Summary

Lonestar Resources US announced year-end 2020 reserves, with total proved reserves of 70.1 million barrels of oil equivalent (MMBOE), including 39.1 million barrels of crude oil and 19.5 million barrels of natural gas liquids. The PV-10 value for these reserves is $366.0 million. When applying a flat pricing deck, the proved reserves increase to 82.7 MMBOE with a PV-10 of $723.8 million. The company’s long-term debt stands at $260.0 million, indicating substantial asset value.

Overall, the company’s reserves are primarily located in the Eagle Ford Shale.

Positive

• Proved reserves increased to 70.1 MMBOE.
• PV-10 value of proved reserves is $366.0 million.
• Proved reserves at $55 Flat Deck are 82.7 MMBOE, with a PV-10 of $723.8 million.
• Long-term debt is lower than the PV-10 of proved developed producing reserves.

Negative

• Crude oil prices decreased by 29% year-over-year.
• Natural gas prices decreased by 23% year-over-year.

Lonestar Resources US Inc. (OTCQX: LONE) (together with its subsidiaries, "Lonestar," "our" or the "Company") announced its year-end 2020 reserves. All of the Company’s reserves are located in the Eagle Ford Shale.

Lonestar’s proved reserves as of December 31, 2020 were 70.1 million barrels of oil equivalent (“MMBOE”), which is comprised of 39.1 million barrels of crude oil and condensate, 19.5 million barrels of natural gas liquids (“NGLs”), and 124.1 billion cubic feet (Bcf) of natural gas. By energy content, using a standard 6:1 conversion ratio, Lonestar’s proved reserves are weighted 74% to crude oil, condensate and NGLs. Using the guidelines of the U.S. Securities and Exchange Commission (the “SEC”) for pricing, the PV-10 for Lonestar’s proved reserves was $366.0 million. Please see Table 1 for details.

The tables below summarize Lonestar’s year-end reserves and PV-10 by category as determined by the Company’s independent petroleum engineers, W.D. Von Gonten & Co. Petroleum Engineers. Based on SEC guidelines, for the year ended December 31, 2020, Lonestar’s reserves were estimated using the 12-month average price calculated as the unweighted arithmetic average of the spot price on the first day of each month preceding the 12 months prior to the end of the reporting period. This methodology resulted in an average NYMEX West Texas Intermediate oil price of $39.57 per barrel and an average NYMEX Henry Hub natural gas price of $1.99 per million British Thermal Units (“MMBTU”). These prices equate to a decrease of 29% for crude oil and a decrease of 23% for natural gas from Lonestar’s proved reserves for the year ended December 31, 2019, as compared to an average of oil price of $55.69 per barrel and an average natural gas price of $2.58 per MMBTU used to estimate our 2019 proved reserves.

Based on SEC guidelines, Lonestar’s proved & probable reserves as of December 31, 2020 totaled 86.9 MMBOE, comprised of 45.1 million barrels of crude oil and condensate, 20.2 million barrels of natural gas liquids, and 128.9 billion cubic feet of natural gas. Using SEC guidelines, PV-10 for proved & probable reserves was $377.0 million. Lonestar’s proved & probable reserves included 240 drilling locations which were assigned reserves by the Company’s independent petroleum engineers.

Because the pricing utilized in the SEC methodology is lower than current benchmark market prices for crude oil and natural gas, Lonestar has also calculated the PV-10 of its reserves at a flat pricing deck of $55.00 for the WTI crude oil benchmark and $2.75 for Henry Hub natural gas price benchmark (“$55 Flat Deck”). On this basis, the Company's proved reserves were 82.7 MMBOE and PV-10 was $723.8 million. Based on this price deck, Lonestar’s proved & probable reserves were 113.5 MMBOE, which is comprised of 61.8 million barrels of crude oil and condensate, 25.4 million barrels of NGLs, and 158 billion cubic feet of natural gas. On the $55 Flat Deck, PV-10 for proved & probable reserves was $817.0 million. Please see Table 2 for details.

Lonestar’s Chief Executive Officer, Frank D. Bracken, III, commented, “the PV-10 of Lonestar’s proved reserves at a $55 Flat Deck is $723.8 million, which I believe implies a substantial asset value to the Company. I think equally important is that the PV-10 of our Proved Developed Producing reserves alone based on the $55 Flat Deck is $358.0 million, which is substantially higher than our long-term debt at March 31, 2021, which stands at $260.0 million.”

Table 1: Reserves and PV-10 @ SEC Pricing
(As of December 31, 2020)

		Crude Oil		NGLs		Natural Gas		Total		PV-10
December 31,2020		(MMBbls)		(MMBbls)		(Bcf)		(MMBoe)		($MM)
Proved Developed Producing		14.3		7.2		45.9		29.1		$222.0
Proved Developed Non-Producing		0.2		0.1		1.1		0.6		$0.7
Proved Developed		14.5		7.3		47.1		29.7		$222.7
Proved Undeveloped		24.6		12.1		77.0		49.5		$143.2
Total Proved		39.1		19.5		124.1		79.2		$366.0
Probable Undeveloped		6.1		0.8		4.8		7.6		$11.0
Total Proved & Probable		45.1		20.2		128.9		86.9		$377.0

Table 2: Proved Reserves and PV-10 @ $55.00 oil/$2.75 gas flat pricing
(As of December 31, 2020)

		Crude Oil		NGLs		Natural Gas		Total		PV-10
December 31,2020		(MMBbls)		(MMBbls)		(Bcf)		(MMBoe)		($MM)
Proved Developed Producing		15.2		7.5		47.6		30.6		$358.0
Proved Developed Non-Producing		0.2		0.2		1.2		0.6		$2.9
Proved Developed		15.4		7.6		48.8		31.2		$360.9
Proved Undeveloped		25.6		12.6		79.7		51.5		$362.9
Total Proved		41.0		20.3		128.4		82.7		$723.8
Probable Undeveloped		20.8		5.1		29.6		30.8		$93.2
Total Proved & Probable		61.8		25.4		158.0		113.5		$817.0

About Lonestar

Lonestar is an independent oil and natural gas company based in Fort Worth, Texas, focused on the development, production and acquisition of unconventional oil, natural gas liquids and natural gas properties in the Eagle Ford Shale in Texas.

Cautionary Note Regarding Forward Looking Statements

Disclosures in this press release contain certain forward-looking statements within the meaning of the federal securities laws. Statements that do not relate strictly to historical or current facts are forward-looking. These statements contain words such as “possible,” “if,” “will,” “expect” and “assuming” and involve risks and uncertainties including, among others that our business plans may change as circumstances warrant and securities of the Company may not ultimately be offered to the public because of general market conditions or other factors. Accordingly, readers should not place undue reliance on forward-looking statements as a prediction of actual results. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, please refer to the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2021 and any subsequently filed quarterly reports on Form 10-Q. Any forward-looking statements in this press release are made as of the date of this press release and the Company undertakes no obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or of which the Company becomes aware, after the date hereof, unless required by law.

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FAQ

What are Lonestar Resources' proved reserves as of December 31, 2020?

Lonestar Resources' proved reserves as of December 31, 2020, are 70.1 million barrels of oil equivalent (MMBOE).

What is the PV-10 value of Lonestar's proved reserves based on SEC pricing?

The PV-10 value of Lonestar's proved reserves based on SEC pricing is $366.0 million.

How do Lonestar's reserves change with a flat pricing deck?

With a flat pricing deck of $55 for WTI crude oil and $2.75 for natural gas, Lonestar's proved reserves increase to 82.7 MMBOE.

What was the year-over-year price decrease for crude oil and natural gas for Lonestar Resources?

Crude oil prices decreased by 29%, while natural gas prices decreased by 23% year-over-year.

How does Lonestar's long-term debt compare to its asset values?

Lonestar's long-term debt is $260.0 million, which is lower than the PV-10 value of its proved developed producing reserves.