SilverBow Resources Announces Second Quarter 2023 Results
- Q2 net production at high end of guidance, with oil production exceeding guidance, a 40% YoY increase. Lowering full year 2023 capex guidance by 10%. Introducing full year 2023 Free Cash Flow guidance of $10-$30 million. Added 2,200 net acres in Webb County via leasing.
- Net unrealized loss on derivative contracts of $10 million. Gas production in Webb County limited to contracted firm capacity levels during Q2.
Second quarter equivalent net production at high end of guidance, with oil production exceeding guidance
Production increased approximately
Lowering full year 2023 capex guidance by
Introducing full year 2023 Free Cash Flow guidance of
Announcing strategic advancements in
-
Reported net production of 330 million cubic feet of natural gas equivalent per day (“MMcfe/d”) (
64% natural gas) for the second quarter of 2023, near the high end of guidance -
Second quarter net oil production of 12.5 thousand barrels of oil per day ("MBbls/d"), above high end of guidance and an increase of
184% year-over-year -
Reported net income of
, which includes a net unrealized loss on the value of the Company's derivative contracts of$25 million , including WTI contingency payouts, and Adjusted EBITDA of$10 million for the second quarter of 2023. Adjusted EBITDA is a non-GAAP measure defined and reconciled in the tables below$112 million - Drilling and completion (“D&C”) spend below planned costs year to date, driven by increased operational efficiencies and ongoing cost savings
-
Lowering full year 2023 capital budget guidance range to
, an$400 -$425 million 11% decrease at the midpoint compared to prior guidance. Full year 2023 estimated production of 325-345 MMcfe/d remains unchanged, a24% increase year-over-year and compound annual growth rate of more than20% since full year 2020 -
Two-rig program dedicated to oil development on pace to deliver 2023 oil production growth of ~
100% year-over-year. Optionality to complete up to eight previously drilled but uncompletedWebb County gas wells by year-end, contingent upon commodity prices and takeaway capacity -
Entered into gas gathering agreements to increase takeaway from
Webb County ; agreements provide for increased production deliverability by year end -
Added 2,200 net acres in
Webb County , further consolidating SilverBow's premium Dorado dry gas position -
As of July 31, 2023, gas production is
93% hedged for remainder of 2023 using midpoint of guidance
MANAGEMENT COMMENTS
Sean Woolverton, SilverBow’s Chief Executive Officer, commented, “Strong performance from our oil assets drove second quarter net oil production above our guidance range. The impact of our oil focused development program is illustrated through our second quarter revenue mix, of which approximately
Mr. Woolverton continued, “SilverBow's differentiated strategy is delivering growth while living within cash flow. We are guiding to free cash of
OPERATIONS HIGHLIGHTS
During the second quarter of 2023, SilverBow drilled 13 net wells, completed 15 net wells and brought online 15 net wells. The Company operated two drilling rigs during the quarter, primarily on its Central Oil and Eastern Extension areas, which reflect its ongoing focus on oil development in the near-term. SilverBow's team continues to increase operational efficiencies year to date in 2023, completing
In its Central Oil area, the Company completed and brought online four pads comprised of nine total wells. Three of these pads have achieved peak production rates with the other pad still increasing in rate. The three pads that have achieved peak production have 30-day pad production averages of 1,500 Boe/d (
PRODUCTION VOLUMES, OPERATING COSTS AND REALIZED PRICES
SilverBow's total net production for the second quarter of 2023 averaged 330 MMcfe/d, towards the high end of the Company's guidance range. Production mix for the second quarter of 2023 consisted of
For the second quarter, lease operating expenses (“LOE”) were
Crude oil and natural gas realizations in the second quarter were
FINANCIAL RESULTS
SilverBow reported total oil and gas sales of
For the second quarter of 2023, the Company generated Adjusted EBITDA (a non-GAAP measure) of
Capital expenditures incurred during the second quarter of 2023 totaled
GUIDANCE UPDATE
SilverBow continues to operate two drilling rigs on its oil acreage, consistent with its original budget plans detailed in March. The Company is lowering its full year 2023 capex guidance range to
For the third quarter of 2023, SilverBow is guiding to estimated production of 329-352 MMcfe/d, with expected oil volumes of 15,100-15,900 Bbls/d. For the full year 2023, the Company's guidance is unchanged with a production range of 325-345 MMcfe/d, and with expected oil volumes of 13,750-15,000 Bbls/d. Based on guidance, SilverBow's full year 2023 oil production is expected to increase roughly
Additional detail concerning the Company's third quarter and full year 2023 guidance can be found in the table included with today's news release and the Corporate Presentation in the Investor Relations section of SilverBow's website.
HEDGING UPDATE
Hedging continues to be an important element of SilverBow's strategy to protect cash flow. The Company's hedging program is structured to provide exposure to higher commodity prices while also protecting against periods of low prices.
As of July 31, 2023, SilverBow had
Please see SilverBow's Corporate Presentation and Form 10-Q filing for the second quarter of 2023, which the Company expects to file on Thursday, August 3, 2023, for a detailed summary of its derivative contracts.
CAPITAL STRUCTURE AND LIQUIDITY
As of June 30, 2023, SilverBow had
As of July 28, 2023, SilverBow had 22.6 million total common shares outstanding.
CONFERENCE CALL AND UPDATED INVESTOR PRESENTATION
SilverBow will host a conference call for investors on Thursday, August 3, 2023, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). Investors and participants can listen to the call by dialing 1-888-415-4465 (
ABOUT SILVERBOW RESOURCES, INC.
SilverBow Resources, Inc. (NYSE: SBOW) is a
FORWARD-LOOKING STATEMENTS
This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent management's expectations or beliefs concerning future events, and it is possible that the results described in this release will not be achieved. These forward-looking statements are based on current expectations and assumptions and are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than statements of historical fact included in this press release, including those regarding our strategy, future operations, guidance and outlook, financial position, well expectations and drilling plans, estimated production levels, expected oil and natural gas pricing, long-term inventory estimates, estimated oil and natural gas reserves or the present value thereof, reserve increases, service costs, impact of inflation, future free cash flow and expected leverage ratio, capital expenditures, budget, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this report, the words “will,” “could,” “believe,” “anticipate,” “intend,” “estimate,” “budgeted,” “guidance,” “expect,” “may,” “continue,” “predict,” “potential,” “plan,” “project,” “should” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, the following risks and uncertainties: further actions by the members of the Organization of the Petroleum Exporting Countries,
All forward-looking statements speak only as of the date of this news release. You should not place undue reliance on these forward-looking statements. The Company’s capital budget, operating plan, service cost outlook and development plans are subject to change at any time. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this release are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved. The risk factors and other factors noted herein and in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.
All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the foregoing. We undertake no obligation to publicly release the results of any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, except as required by law.
(Financial Highlights to Follow)
Condensed Consolidated Balance Sheets (Unaudited) |
|||||||
SilverBow Resources, Inc. and Subsidiary (in thousands, except share amounts) |
|||||||
|
June 30, 2023 |
|
December 31, 2022 |
||||
ASSETS |
|
|
|
||||
Current Assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
1,102 |
|
|
$ |
792 |
|
Accounts receivable, net |
|
64,587 |
|
|
|
89,714 |
|
Fair value of commodity derivatives |
|
72,590 |
|
|
|
52,549 |
|
Other current assets |
|
3,935 |
|
|
|
2,671 |
|
Total Current Assets |
|
142,214 |
|
|
|
145,726 |
|
Property and Equipment: |
|
|
|
||||
Property and equipment, full cost method, including |
|
2,756,694 |
|
|
|
2,529,223 |
|
Less – Accumulated depreciation, depletion, amortization & impairment |
|
(1,097,935 |
) |
|
|
(1,004,044 |
) |
Property and Equipment, Net |
|
1,658,759 |
|
|
|
1,525,179 |
|
Right of use assets |
|
9,435 |
|
|
|
12,077 |
|
Fair value of long-term commodity derivatives |
|
21,903 |
|
|
|
24,172 |
|
Other long-term assets |
|
8,159 |
|
|
|
9,208 |
|
Total Assets |
$ |
1,840,470 |
|
|
$ |
1,716,362 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current Liabilities: |
|
|
|
||||
Accounts payable and accrued liabilities |
$ |
60,143 |
|
|
$ |
60,200 |
|
Fair value of commodity derivatives |
|
9,711 |
|
|
|
40,796 |
|
Accrued capital costs |
|
44,047 |
|
|
|
56,465 |
|
Accrued interest |
|
2,755 |
|
|
|
2,665 |
|
Current lease liability |
|
5,966 |
|
|
|
8,553 |
|
Undistributed oil and gas revenues |
|
18,463 |
|
|
|
27,160 |
|
Total Current Liabilities |
|
141,085 |
|
|
|
195,839 |
|
Long-term debt, net |
|
722,904 |
|
|
|
688,531 |
|
Non-current lease liability |
|
3,571 |
|
|
|
3,775 |
|
Deferred tax liabilities |
|
50,073 |
|
|
|
16,141 |
|
Asset retirement obligations |
|
9,619 |
|
|
|
9,171 |
|
Fair value of long-term commodity derivatives |
|
2,032 |
|
|
|
7,738 |
|
Other long-term liabilities |
|
541 |
|
|
|
3,588 |
|
Commitments and Contingencies |
|
|
|
||||
Stockholders' Equity: |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
231 |
|
|
|
227 |
|
Additional paid-in capital |
|
578,817 |
|
|
|
576,118 |
|
Treasury stock, held at cost, 484,945 and 353,395 shares, respectively |
|
(10,600 |
) |
|
|
(7,534 |
) |
Retained earnings |
|
342,197 |
|
|
|
222,768 |
|
Total Stockholders’ Equity |
|
910,645 |
|
|
|
791,579 |
|
Total Liabilities and Stockholders’ Equity |
$ |
1,840,470 |
|
|
$ |
1,716,362 |
|
Condensed Consolidated Statements of Operations (Unaudited) |
|||||||
SilverBow Resources, Inc. and Subsidiary (in thousands, except per-share amounts) |
|||||||
|
Three Months
|
|
Three Months
|
||||
Revenues: |
|
|
|
||||
Oil and gas sales |
$ |
126,400 |
|
|
$ |
182,605 |
|
|
|
|
|
||||
Operating Expenses: |
|
|
|
||||
General and administrative, net |
|
5,318 |
|
|
|
5,710 |
|
Depreciation, depletion, and amortization |
|
49,853 |
|
|
|
26,441 |
|
Accretion of asset retirement obligations |
|
240 |
|
|
|
101 |
|
Lease operating expenses |
|
19,180 |
|
|
|
10,270 |
|
Workovers |
|
811 |
|
|
|
2 |
|
Transportation and gas processing |
|
11,771 |
|
|
|
6,769 |
|
Severance and other taxes |
|
8,771 |
|
|
|
9,838 |
|
Total Operating Expenses |
|
95,944 |
|
|
|
59,131 |
|
|
|
|
|
||||
Operating Income |
|
30,456 |
|
|
|
123,474 |
|
|
|
|
|
||||
Non-Operating Income (Expense) |
|
|
|
||||
Gain (loss) on commodity derivatives, net |
|
19,993 |
|
|
|
(22,406 |
) |
Interest expense, net |
|
(18,190 |
) |
|
|
(7,902 |
) |
Other income (expense), net |
|
29 |
|
|
|
(10 |
) |
|
|
|
|
||||
Income (Loss) Before Income Taxes |
|
32,288 |
|
|
|
93,156 |
|
|
|
|
|
||||
Provision (Benefit) for Income Taxes |
|
7,351 |
|
|
|
4,366 |
|
|
|
|
|
||||
Net Income (Loss) |
$ |
24,937 |
|
|
$ |
88,790 |
|
|
|
|
|
||||
Per Share Amounts: |
|
|
|
||||
|
|
|
|
||||
Basic Earnings (Loss) Per Share |
$ |
1.10 |
|
|
$ |
5.05 |
|
|
|
|
|
||||
Diluted Earnings (Loss) Per Share |
$ |
1.10 |
|
|
$ |
4.95 |
|
|
|
|
|
||||
Weighted-Average Shares Outstanding - Basic |
|
22,615 |
|
|
|
17,581 |
|
|
|
|
|
||||
Weighted-Average Shares Outstanding - Diluted |
|
22,674 |
|
|
|
17,938 |
|
Condensed Consolidated Statements of Operations (Unaudited) |
|||||||
SilverBow Resources, Inc. and Subsidiary (in thousands, except per-share amounts) |
|||||||
|
Six Months Ended
|
|
Six Months Ended
|
||||
Revenues: |
|
|
|
||||
Oil and gas sales |
$ |
266,354 |
|
|
$ |
312,261 |
|
|
|
|
|
||||
Operating Expenses: |
|
|
|
||||
General and administrative, net |
|
12,982 |
|
|
|
10,497 |
|
Depreciation, depletion, and amortization |
|
93,850 |
|
|
|
47,595 |
|
Accretion of asset retirement obligations |
|
464 |
|
|
|
200 |
|
Lease operating expenses |
|
39,740 |
|
|
|
19,395 |
|
Workovers |
|
1,590 |
|
|
|
649 |
|
Transportation and gas processing |
|
23,292 |
|
|
|
13,121 |
|
Severance and other taxes |
|
18,156 |
|
|
|
17,602 |
|
Total Operating Expenses |
|
190,074 |
|
|
|
109,059 |
|
|
|
|
|
||||
Operating Income |
|
76,280 |
|
|
|
203,202 |
|
|
|
|
|
||||
Non-Operating Income (Expense) |
|
|
|
||||
Gain (loss) on commodity derivatives, net |
|
112,243 |
|
|
|
(162,648 |
) |
Interest expense, net |
|
(34,935 |
) |
|
|
(14,459 |
) |
Other income (expense), net |
|
4 |
|
|
|
52 |
|
|
|
|
|
||||
Income (Loss) Before Income Taxes |
|
153,592 |
|
|
|
26,147 |
|
|
|
|
|
||||
Provision (Benefit) for Income Taxes |
|
34,163 |
|
|
|
1,612 |
|
|
|
|
|
||||
Net Income (Loss) |
$ |
119,429 |
|
|
$ |
24,535 |
|
|
|
|
|
||||
Per Share Amounts: |
|
|
|
||||
|
|
|
|
||||
Basic Earnings (Loss) Per Share |
$ |
5.30 |
|
|
$ |
1.43 |
|
|
|
|
|
||||
Diluted Earnings (Loss) Per Share |
$ |
5.27 |
|
|
$ |
1.40 |
|
|
|
|
|
||||
Weighted-Average Shares Outstanding - Basic |
|
22,527 |
|
|
|
17,146 |
|
|
|
|
|
||||
Weighted-Average Shares Outstanding - Diluted |
|
22,654 |
|
|
|
17,506 |
|
Condensed Consolidated Statements of Cash Flows (Unaudited) |
|||||||
SilverBow Resources, Inc. and Subsidiary (in thousands) |
|||||||
|
Six Months
|
|
Six Months
|
||||
Cash Flows from Operating Activities: |
|
|
|
||||
Net income (loss) |
$ |
119,429 |
|
|
$ |
24,535 |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities |
|
|
|
||||
Depreciation, depletion, and amortization |
|
93,850 |
|
|
|
47,595 |
|
Accretion of asset retirement obligations |
|
464 |
|
|
|
200 |
|
Deferred income taxes |
|
33,932 |
|
|
|
1,205 |
|
Share-based compensation |
|
2,575 |
|
|
|
2,714 |
|
(Gain) Loss on derivatives, net |
|
(112,243 |
) |
|
|
162,648 |
|
Cash settlement (paid) received on derivatives |
|
47,481 |
|
|
|
(90,603 |
) |
Settlements of asset retirement obligations |
|
(411 |
) |
|
|
(54 |
) |
Write down of debt issuance cost |
|
— |
|
|
|
350 |
|
Other |
|
1,312 |
|
|
|
1,668 |
|
Change in operating assets and liabilities: |
|
|
|
||||
(Increase) decrease in accounts receivable and other current assets |
|
26,297 |
|
|
|
(34,422 |
) |
Increase (decrease) in accounts payable and accrued liabilities |
|
(21,916 |
) |
|
|
(1,254 |
) |
Increase (decrease) in income taxes payable |
|
229 |
|
|
|
304 |
|
Increase (decrease) in accrued interest |
|
89 |
|
|
|
723 |
|
Net Cash Provided by (Used in) Operating Activities |
|
191,088 |
|
|
|
115,609 |
|
Cash Flows from Investing Activities: |
|
|
|
||||
Additions to property and equipment |
|
(221,464 |
) |
|
|
(93,746 |
) |
Acquisition of oil and gas properties, net of purchase price adjustments |
|
(248 |
) |
|
|
(272,225 |
) |
Proceeds from the sale of property and equipment |
|
— |
|
|
|
2,532 |
|
Payments on property sale obligations |
|
— |
|
|
|
(750 |
) |
Net Cash Provided by (Used in) Investing Activities |
|
(221,712 |
) |
|
|
(364,189 |
) |
Cash Flows from Financing Activities: |
|
|
|
||||
Proceeds from bank borrowings |
|
210,000 |
|
|
|
482,000 |
|
Payments of bank borrowings |
|
(176,000 |
) |
|
|
(215,000 |
) |
Net proceeds from stock options exercised |
|
— |
|
|
|
39 |
|
Purchase of treasury shares |
|
(3,066 |
) |
|
|
(2,965 |
) |
Payments of debt issuance costs |
|
— |
|
|
|
(7,207 |
) |
Net Cash Provided by (Used in) Financing Activities |
|
30,934 |
|
|
|
256,867 |
|
|
|
|
|
||||
Net Increase (Decrease) in Cash and Cash Equivalents |
|
310 |
|
|
|
8,287 |
|
Cash and Cash Equivalents at Beginning of Period |
|
792 |
|
|
|
1,121 |
|
Cash and Cash Equivalents at End of Period |
$ |
1,102 |
|
|
$ |
9,408 |
|
Supplemental Disclosures of Cash Flow Information: |
|
|
|
||||
Cash paid during period for interest, net of amounts capitalized |
$ |
33,340 |
|
|
$ |
12,228 |
|
Non-cash Investing and Financing Activities: |
|
|
|
||||
Changes in capital accounts payable and capital accruals |
$ |
3,485 |
|
|
$ |
20,882 |
|
Non-cash equity consideration for acquisitions |
$ |
— |
|
|
$ |
(156,259 |
) |
Definition of Non-GAAP Measures as Calculated by the Company (Unaudited)
The following non-GAAP measures are presented in addition to financial statements as SilverBow believes these metrics and performance measures are widely used by the investment community, including investors, research analysts and others, to evaluate and useful in comparing investments among upstream oil and gas companies in making investment decisions or recommendations. These measures, as presented, may have differing calculations among companies and investment professionals and may not be directly comparable to the same measures provided by others. A non-GAAP measure should not be considered in isolation or as a substitute for the related GAAP measure or any other measure of a company's financial or operating performance presented in accordance with GAAP. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure or measures is presented below. These measures may not be comparable to similarly titled measures of other companies.
Adjusted EBITDA: The Company presents Adjusted EBITDA attributable to common stockholders in addition to reported net income (loss) in accordance with GAAP. Adjusted EBITDA is calculated as net income (loss) plus (less) depreciation, depletion and amortization, accretion of asset retirement obligations, interest expense, net losses (gains) on commodity derivative contracts, amounts collected (paid) for commodity derivative contracts held to settlement, income tax expense (benefit); and share-based compensation expense. Adjusted EBITDA excludes certain items that SilverBow believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDA is used by the Company's management and by external users of SilverBow's financial statements, such as investors, commercial banks and others, to assess the Company's operating performance as compared to that of other companies, without regard to financing methods, capital structure or historical cost basis. It is also used to assess SilverBow's ability to incur and service debt and fund capital expenditures. Adjusted EBITDA should not be considered an alternative to net income (loss), operating income (loss), cash flows provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA is important as it is considered among the financial covenants under the Company's First Amended and Restated Senior Secured Revolving Credit Agreement with JPMorgan Chase Bank, National Association, as administrative agent, and certain lenders party thereto (as amended, the “Credit Agreement” and the borrowing facility provided thereby, the “Credit Facility”), a material source of liquidity for SilverBow. Please reference the Annual Report and subsequent 8-Ks for discussion of the Credit Agreement and its covenants.
Adjusted EBITDA for Leverage Ratio: In accordance with the Leverage Ratio calculation for the Credit Facility, the Company makes certain adjustments to its calculation of Adjusted EBITDA. Adjusted EBITDA for Leverage Ratio is calculated as Adjusted EBITDA (defined above) plus pro forma EBITDA contributions related to closed acquisitions. The Company believes that Adjusted EBITDA for Leverage Ratio is useful to investors because it reflects the last twelve months EBITDA used by the administrative agent for the Credit Facility in the calculation of its leverage ratio covenant.
Cash General and Administrative Expenses: Cash G&A expenses is a non-GAAP measure calculated as net general and administrative costs less share-based compensation. The Company reports cash G&A expenses because it believes this measure is commonly used by management, analysts and investors as an indicator of cost management and operating efficiency on a comparable basis from period to period. In addition, SilverBow believes cash G&A expenses are used by analysts and others in valuation, comparison and investment recommendations of companies in the oil and gas industry to allow for analysis of G&A spend without regard to stock-based compensation which can vary substantially from company to company. Cash G&A expenses should not be considered as an alternative to, or more meaningful than, total G&A expenses. The Company has provided forward-looking Cash G&A expenses estimates; however, SilverBow is unable to provide a quantitative reconciliation of these forward-looking non-GAAP measures to the most directly comparable forward-looking GAAP measure because the items necessary to estimate such forward-looking GAAP measure are not accessible or estimable at this time without unreasonable efforts. The reconciling items in future periods could be significant.
Free Cash Flow: Free cash flow is calculated as Adjusted EBITDA (defined above) plus (less) cash interest expense and bank fees, capital expenditures and current income tax (expense) benefit. The Company believes that free cash flow is useful to investors and analysts because it assists in evaluating SilverBow's operating performance, and the valuation, comparison, rating and investment recommendations of companies within the oil and gas industry. SilverBow uses this information as one of the bases for comparing its operating performance with other companies within the oil and gas industry. Free cash flow should not be considered an alternative to net income (loss), operating income (loss), cash flows provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. From time to time the Company provides forward-looking free cash flow and free cash flow yield estimates or targets; however, SilverBow is unable to provide a quantitative reconciliation of these forward-looking non-GAAP measures to the most directly comparable forward-looking GAAP measure because the items necessary to estimate such forward-looking GAAP measure are not accessible or estimable at this time without unreasonable efforts. The reconciling items in future periods could be significant.
Total Debt to Adjusted EBITDA (Leverage Ratio): Leverage Ratio is calculated as total debt, defined as long-term debt excluding unamortized discount and debt issuance costs, divided by Adjusted EBITDA (defined above) for the most recently completed 12-month period.
Net Debt: Net debt is calculated as the total principal amount of second lien notes plus borrowings on the Company's Credit Facility less cash and cash equivalents.
Calculation of Adjusted EBITDA and Free Cash Flow (Unaudited) |
|||||||
SilverBow Resources, Inc. and Subsidiary (in thousands, except share amounts) |
|||||||
The below tables provide the calculation of Adjusted EBITDA and Free Cash Flow for the following periods (in thousands). |
|||||||
|
Three Months Ended
|
Three Months Ended
|
|||||
Net Income (Loss) |
$ |
24,937 |
|
$ |
88,790 |
|
|
Plus: |
|
|
|||||
Depreciation, depletion and amortization |
|
49,853 |
|
|
26,441 |
|
|
Accretion of asset retirement obligations |
|
240 |
|
|
101 |
|
|
Interest expense |
|
18,190 |
|
|
7,902 |
|
|
Loss (gain) on commodity derivatives, net |
|
(19,993 |
) |
|
22,406 |
|
|
Derivative cash settlements collected/(paid) (1) |
|
29,669 |
|
|
(66,233 |
) |
|
Income tax expense/(benefit) |
|
7,351 |
|
|
4,366 |
|
|
Share-based compensation expense |
|
1,451 |
|
|
1,667 |
|
|
Adjusted EBITDA |
$ |
111,698 |
|
$ |
85,440 |
|
|
Plus: |
|
|
|||||
Cash interest expense and bank fees, net |
|
(16,906 |
) |
|
(13,448 |
) |
|
Capital expenditures(2) |
|
(117,428 |
) |
|
(74,469 |
) |
|
Current income tax (expense)/benefit |
|
(31 |
) |
|
(258 |
) |
|
Free Cash Flow |
$ |
(22,667 |
) |
$ |
(2,735 |
) |
|
(1) Amounts relate to settled contracts covering the production months during the period. |
|||||||
(2) Excludes proceeds/(payments) related to the divestiture/(acquisition) of oil and gas properties and equipment, outside of regular way land and leasing costs. |
|
Last Twelve Months
|
Last Twelve Months
|
|||||
Net Income (Loss) |
$ |
435,330 |
|
$ |
102,866 |
|
|
Plus: |
|
|
|||||
Depreciation, depletion and amortization |
|
180,238 |
|
|
86,793 |
|
|
Accretion of asset retirement obligations |
|
799 |
|
|
357 |
|
|
Interest expense |
|
62,424 |
|
|
29,133 |
|
|
Loss (gain) on commodity derivatives, net |
|
(201,006 |
) |
|
221,340 |
|
|
Derivative cash settlements collected/(paid) (1) |
|
(68,446 |
) |
|
(154,848 |
) |
|
Income tax expense/(benefit) |
|
42,151 |
|
|
8,010 |
|
|
Share-based compensation expense |
|
4,948 |
|
|
5,100 |
|
|
Adjusted EBITDA |
$ |
456,438 |
|
$ |
298,751 |
|
|
Plus: |
|
|
|||||
Cash interest expense and bank fees, net |
|
(58,114 |
) |
|
(34,506 |
) |
|
Capital expenditures(2) |
|
(438,138 |
) |
|
(186,212 |
) |
|
Current income tax (expense)/benefit |
|
201 |
|
|
(593 |
) |
|
Free Cash Flow |
$ |
(39,613 |
) |
$ |
77,440 |
|
|
|
|
|
|||||
Adjusted EBITDA |
$ |
456,438 |
|
$ |
298,751 |
|
|
Pro forma contribution from closed acquisitions |
|
10,375 |
|
|
154,172 |
|
|
Adjusted EBITDA for Leverage Ratio (3) |
$ |
466,813 |
|
$ |
452,923 |
|
|
(1) Amounts relate to settled contracts covering the production months during the period. |
|||||||
(2) Excludes proceeds/(payments) related to the divestiture/(acquisition) of oil and gas properties and equipment, outside of regular way land and leasing costs. |
|||||||
(3) Adjusted EBITDA for Leverage Ratio, which is calculated in accordance with SilverBow's Credit Facility, includes pro forma EBITDA contributions reflecting the results of acquired assets' operations for referenced time periods preceding the acquired assets' close date. Leverage Ratio is calculated as total debt, defined as Credit Facility borrowings plus Second Lien notes, divided by Adjusted EBITDA for Leverage Ratio for the most recently completed twelve month period. The below table provides the calculation for Leverage Ratio for the following periods: |
|
June 30, 2023 |
June 30, 2022 |
|||
Credit Facility Borrowings due 2026 |
$ |
576,000 |
$ |
494,000 |
|
Second Lien Notes due 2026 |
|
150,000 |
|
150,000 |
|
Total debt |
$ |
726,000 |
$ |
644,000 |
|
Adjusted EBITDA for Leverage Ratio (3) |
|
466,813 |
|
452,923 |
|
Leverage Ratio |
1.56x |
1.42x |
Production Volumes & Pricing (Unaudited) |
|||||||
SilverBow Resources, Inc. and Subsidiary |
|||||||
|
|
Three Months Ended
|
Three Months Ended
|
||||
Production volumes: |
|
|
|
||||
Oil (MBbl) (1) |
|
|
1,137 |
|
400 |
|
|
Natural gas (MMcf) |
|
|
19,124 |
|
16,918 |
|
|
Natural gas liquids (MBbl) (1) |
|
|
677 |
|
387 |
|
|
Total (MMcfe) |
|
|
30,004 |
|
21,643 |
|
|
|
|
|
|
||||
Oil, natural gas and natural gas liquids sales (in thousands): |
|
|
|
||||
Oil |
|
$ |
80,151 |
$ |
44,014 |
|
|
Natural gas |
|
|
33,805 |
|
123,296 |
|
|
Natural gas liquids |
|
|
12,443 |
|
15,295 |
|
|
Total |
|
$ |
126,400 |
$ |
182,605 |
|
|
|
|
|
|
||||
Average realized price before impact of cash-settled derivatives: |
|
|
|
||||
Oil (per Bbl) |
|
$ |
70.51 |
$ |
109.94 |
|
|
Natural gas (per Mcf) |
|
|
1.77 |
|
7.29 |
|
|
Natural gas liquids (per Bbl) |
|
|
18.39 |
|
39.51 |
|
|
Average per Mcfe |
|
$ |
4.21 |
$ |
8.44 |
|
|
|
|
|
|
||||
Price impact of cash-settled derivatives: |
|
|
|
||||
Oil (per Bbl) |
|
$ |
1.59 |
$ |
(42.96 |
) |
|
Natural gas (per Mcf) |
|
|
1.26 |
|
(2.75 |
) |
|
Natural gas liquids (per Bbl) |
|
|
5.46 |
|
(6.38 |
) |
|
Average per Mcfe |
|
$ |
0.99 |
$ |
(3.06 |
) |
|
|
|
|
|
||||
Average realized price including impact of cash-settled derivatives: |
|
|
|
||||
Oil (per Bbl) |
|
$ |
72.11 |
$ |
66.99 |
|
|
Natural gas (per Mcf) |
|
|
3.03 |
|
4.54 |
|
|
Natural gas liquids (per Bbl) |
|
|
23.85 |
|
33.13 |
|
|
Average per Mcfe |
|
$ |
5.20 |
$ |
5.38 |
|
|
|
|
|
|
||||
(1) Oil and NGLs are converted at the rate of one barrel to six Mcfe. Bbl refers to barrels, and MBbl refers to one thousand barrels. MMcf refers to one million cubic feet. |
Third Quarter 2023 & Full Year 2023 Guidance
|
|
Guidance |
|||
|
|
3Q 2023 |
|
FY 2023 |
|
Production Volumes: |
|
|
|
|
|
|
Oil (Bbls/d) |
|
15,100 - 15,900 |
|
13,750 - 15,000 |
|
Natural Gas (MMcf/d) |
|
195 - 210 |
|
195 - 205 |
|
NGLs (Bbls/d) |
|
7,300 - 7,700 |
|
7,900 - 8,400 |
Total Reported Production (MMcfe/d) |
|
329 - 352 |
|
325 - 345 |
|
|
|
|
|
|
|
Product Pricing: |
|
|
|
|
|
|
Crude Oil NYMEX Differential ($/Bbl) |
|
( |
|
N/A |
|
Natural Gas NYMEX Differential ($/Mcf) |
|
( |
|
N/A |
|
Natural Gas Liquids (% of WTI) |
|
|
|
N/A |
|
|
|
|
|
|
Operating Costs & Expenses: |
|
|
|
|
|
|
Lease Operating Expenses ($/Mcfe) |
|
|
|
|
|
Transportation & Processing ($/Mcfe) |
|
|
|
|
|
Production Taxes (% of Revenue) |
|
|
|
|
|
Cash G&A, net ($MM) |
|
|
|
|
A forward-looking estimate of net G&A expenses is not provided with the forward-looking estimate of cash G&A (a non-GAAP measure) because the items necessary to estimate net G&A expenses are not accessible or estimable at this time without unreasonable efforts. Such items could have a significant impact on net G&A expenses. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230802824234/en/
Jeff Magids
Vice President of Finance & Investor Relations
(281) 874-2700, (888) 991-SBOW
Source: SilverBow Resources, Inc.
FAQ
What were the highlights of SilverBow Resources' Q2 2023 results?
What is the company's guidance for full year 2023?