LAFAYETTE, La., May 8, 2017 /PRNewswire/ -- Stone Energy
Corporation (NYSE: SGY) ("Stone" or the "Company") today announced
financial and operational results for the three months ended
March 31, 2017. Some items of
note include:
- Gulf of Mexico production
volumes averaged 19.6 thousand barrels of oil equivalent per day
for the three months ended March 31,
2017
- Sale of Appalachia assets closed
- Emergence from Chapter 11 with reduced debt, excess cash and an
undrawn bank facility
- Implementation of Fresh Start Accounting upon emergence from
Chapter 11
Financial Results
For the three months ended March 31,
2017, Stone reported net income of $370.7 million on oil and gas revenue of
$91.0 million. The adjusted net
loss for the same period, which excludes a net gain related to
reorganization-related items of $637.9
million and impairment charges of $256.4 million, was $8.4
million. Net cash provided by operating activities for
the three months ended March 31, 2017
totaled $4.8 million, while
discretionary cash flow for the same period totaled $18.8 million. Please see "Non-GAAP
Financial Measures" and the accompanying financial statements for
reconciliations of adjusted net loss, a non-GAAP financial measure,
to net income, and discretionary cash flow, a non-GAAP financial
measure, to net cash provided by operating activities.
Net daily production during the three months ended March 31, 2017 averaged 30.4 thousand barrels of
oil equivalent ("MBoe") per day, which included approximately 19.6
MBoe per day from the Gulf of
Mexico ("GOM") basin. The GOM basin production mix for
this period was approximately 71% oil, 23% natural gas and 6%
natural gas liquids ("NGLs"). We expect production rates from
the GOM basin to range from 19 MBoe per day to 21 MBoe per day for
the second quarter of 2017.
Prices realized during the three months ended March 31, 2017 averaged $49.97 per barrel of oil, $2.68 per Mcf of natural gas and $21.60 per barrel of NGLs. Average realized
prices for the first quarter of 2016 were $36.87 per barrel of oil, $2.22 per Mcf of natural gas and $13.01 per barrel of NGLs.
Lease operating expenses during the three months ended
March 31, 2017 totaled $13.6 million ($4.96 per Boe) including lease operating expenses
for the GOM basin of approximately $11.3
million. We expect lease operating expenses for the
full year of 2017 to range from $66 million
to $72 million, which includes additional planned major
maintenance projects scheduled for the second and third quarters of
2017.
Transportation, processing and gathering ("TP&G") expenses
during the three months ended March 31,
2017 totaled $7.1 million
($2.59 per Boe), which includes
TP&G expenses for the GOM basin of approximately $0.3 million. Due to the sale of our
Appalachia properties, we expect TP&G expenses to remain under
$1 million per quarter for the
remaining quarters of 2017.
Depreciation, depletion and amortization ("DD&A") expense on
oil and gas properties for the three months ended March 31, 2017 totaled $52.3 million ($19.13 per Boe). We expect DD&A for the
GOM basin to range from $18 per Boe
to $19 per Boe for each of the
remaining quarters of 2017.
The March 31, 2017 write-down of
oil and gas properties of $256.4
million was primarily due to differences between the
trailing twelve-month average pricing assumption required by the
Securities and Exchange Commission when calculating the ceiling
test under the full cost method of accounting and the forward
prices used in fresh start accounting to estimate the fair value of
our oil and gas properties as of the fresh start reporting date of
February 28, 2017.
Salaries, general and administrative ("SG&A") expenses
(exclusive of incentive compensation) for the three months ended
March 31, 2017 were $13.0 million ($4.74 per Boe). We expect cash SG&A
expenses before capitalization for subsequent quarters in 2017 to
range from $12 million to $14 million
excluding non-recurring items, non-cash items and incentive
compensation.
Accretion expense for the three months ended March 31, 2017 was $8.3
million. As a result of the revaluation of our asset
retirement obligations in accordance with the implementation of
fresh start accounting, we expect accretion expense to approximate
$9 million in future quarters of
2017.
Interest expense for the three months ended March 31, 2017 was $1.2
million, which primarily included interest associated with
the Company's $225 million of 7.50%
Senior Second Lien Notes due 2022 that were issued on the
February 28, 2017 effective date of
Stone's plan of reorganization.
Other expense for the three months ended March 31, 2017 of $13.3
million was primarily attributable to the previously
announced break-up fee paid to TH Exploration III, LLC, an
affiliate of Tug Hill, Inc., upon the close of the sale of the
Appalachia properties to EQT Corporation, through its wholly owned
subsidiary EQT Production Company ("EQT").
Reorganization items for the three months ended March 31, 2017 generated income of $437.7 million, resulting from fresh start
accounting valuations adjustments of $235.8
million and a $230.1 million
gain on the settlement of liabilities subject to compromise, which
were partially offset by reorganization professional fees and other
expenses. Since the Company emerged from chapter 11
reorganization on February 28, 2017,
we do not expect to incur additional reorganization expenses.
Fresh Start Accounting and Hedge Accounting Changes
Upon emergence from chapter 11 reorganization, Stone adopted
fresh start accounting effective February
28, 2017. Under the principles of fresh start
accounting, a new reporting entity was created, and Stone's assets
and liabilities were recorded at their fair values as of the fresh
start reporting date. Also, effective January 1, 2017, we have elected to not designate
our 2017 and 2018 commodity derivative contracts as cash flow
hedges for accounting purposes. Accordingly, the net changes
in the mark-to-market valuations and the monthly settlements on
these derivative contracts will be recorded in earnings through
derivative income/expense. As a result, Stone's financial
statements dated on or after March 1,
2017 will not be comparable with financial statements issued
prior to that date. References to "Predecessor" refer to
Stone prior to the adoption of fresh start accounting while
references to "Successor" refer to Stone subsequent to the adoption
of fresh start accounting. Please review Stone's Quarterly
Report on Form 10-Q for the period ended March 31, 2017 for further details regarding
fresh start accounting and the financial information presented at
the end of this press release.
Capital Expenditures Update
Capital expenditures for the three months ended March 31, 2017 were approximately $37.3 million, which included approximately
$13 million associated with drilling
and completing the Mt. Bona well at the Pompano platform and
approximately $21 million of plugging
and abandonment expenditures, approximately $19 million of which were attributable to
temporary plugging and abandonment operations on the Amethyst
well. In addition, $3.3 million
of SG&A expenses and $2.9 million
of interest were capitalized during the three months ended
March 31, 2017.
Our initial capital expenditures budget for 2017 of $181 million includes approximately $27 million for exploration opportunities,
$54 million for development
activities and $100 million for the
plugging and abandonment of idle wells and platforms, and excludes
capitalized SG&A and interest expenses. Stone is
evaluating various acquisition opportunities, which, if successful,
would be additive to the current capital expenditures budget.
Liquidity Update
As of March 31, 2017, Stone's
liquidity approximated $391.8
million, which included $137.5
million of undrawn capacity under the Company's revolving
credit facility plus approximately $180.2
million in cash and cash equivalents and approximately
$74.1 million in cash being held in a
restricted account to satisfy near-term plugging and abandonment
activities. As of May 8, 2017,
Stone had cash on hand of approximately $175.6 million, and $72.3
million in cash held in the restricted abandonment
account.
As of March 31, 2017, Stone's
outstanding debt totaled approximately $235.8 million, consisting of $225 million of 7.50% Senior Second Lien Notes
due 2022 and approximately $10.8
million outstanding under a building loan. Further,
the Company had no outstanding borrowings and outstanding letters
of credit of approximately $12.5
million under its $200 million
reserve-based revolving credit facility, with available borrowings
thereunder of $150 million until
November 1, 2017.
We expect that cash flows from operating activities, cash on
hand and availability under our revolving credit facility will be
adequate to meet the current 2017 operating and capital
expenditures needs of the Company.
Sale of Appalachia Properties
As previously announced, on February 27,
2017, Stone completed the disposition of producing
properties and acreage, including approximately 86,000 net acres,
in the Appalachian regions of Pennsylvania and West Virginia (collectively, the "Properties")
to EQT, for a purchase price of $527
million, subject to customary purchase price adjustments and
an upward adjustment to the purchase price of up to $16 million in an amount equal to certain
downward adjustments. The sale of the Properties was consummated in
accordance with the terms of a purchase and sale agreement, dated
February 9, 2017, by and between the
Company and EQT.
At December 31, 2016, the
estimated proved reserves associated with the Properties
represented approximately 34% of the Predecessor Company's total
estimated proved oil and natural gas reserves on a volume
equivalent basis.
Strategic Review
As previously announced, following the successful completion of
the Company's financial restructuring and emergence from Chapter 11
reorganization, Stone's Board of Directors (the "Board") retained
Petrie Partners LLC to assist the Board in its determination of the
Company's strategic direction, including assessing its various
strategic alternatives. The Board intends to explore all
potential avenues to increase stockholder value, which may include
the acquisition of additional assets, accessing external capital, a
business combination, or another strategic transaction. No
decision has been made with regard to any alternatives, and there
can be no assurance that this assessment will result in any
transaction.
Operational Update
Pompano Platform Drilling Program (Deep Water). In January 2017, we reinitiated platform drilling
operations on the Mt. Bona prospect. We completed the well at the
end of April 2017, and it is
currently producing approximately 950 Boe per day. Stone
holds a 100% working interest in this well. We have decided
to postpone the drilling of the Providence prospect utilizing the platform
drilling rig, and will release the platform drilling rig as of
mid-summer 2017.
Mississippi Canyon 26 – No. 1 Amethyst Well (Deep Water). As previously reported,
on November 30, 2016, we performed a
routine shut in of the Amethyst well to record pressures and
determined that pressure communication existed between the
production tubing and production casing strings, resulting from a
suspected tubing leak. In late April
2017, we completed temporary abandonment operations and are
evaluating the well for potential sidetrack operations, assuming we
can secure an appropriate partner.
Mississippi Canyon 117 - Rampart Deep and Rampart
Shallow (Deep
Water). The Rampart exploration
prospects (Deep and Shallow) target the Miocene interval and are
expected to be tied back to the Pompano platform, if
successful. Stone currently holds a 100% working interest in
the prospect, but has been in discussions with deep water operators
to reduce its working interest to 50% or less. The prospects
are located nine miles from Stone's Pompano platform, and each well
is estimated to take three months to drill.
Mississippi Canyon 72 - Derbio (Deep
Water). The Derbio prospect is
located five miles from Stone's Pompano platform and targets the
Miocene interval. If successful, a tie-back to the Pompano
platform is likely. Stone currently holds a 100% working
interest in the prospect, but has been in discussions with other
deep water operators to reduce its working interest to 50% or
less. The well is estimated to take three months to
drill.
Hedge Position
The following table illustrates our derivative positions for
2017 and 2018 as of May 8,
2017:
|
Oil Hedging
Contracts
|
|
NYMEX
|
|
Put
Contracts
|
|
Swap
Contracts
|
|
Daily
Volume
(Bbls/d)
|
|
Put
Price
($ per
Bbl)
|
|
Daily
Volume
(Bbls/d)
|
|
Swap
Price
($ per
Bbl)
|
|
|
|
|
|
|
|
|
Feb 2017 – Dec
2017
|
2,000
|
|
$50.00
|
Mar 2017 – Dec
2017
|
1,000
|
|
$53.90
|
Jan 2018 – Dec
2018
|
1,000
|
|
$54.00
|
Jan 2018 – Dec
2018
|
1,000
|
|
$52.50
|
Jan 2018 – Dec
2018
|
1,000
|
|
$45.00
|
|
|
Collar
Contracts
|
|
Daily
Volume
(Bbls/d)
|
Put
Price
($ per
Bbl)
|
Call
Price
($ per
Bbl)
|
|
|
|
|
Mar 2017 – Dec
2017
|
1,000
|
$50.00
|
$56.45
|
Apr 2017 – Dec
2017
|
1,000
|
$50.00
|
$56.75
|
Other Information
Stone Energy will not be hosting a conference call to discuss
the operational and financial results for the three months ended
March 31, 2017.
Non-GAAP Financial Measures
In this press release, we refer to non-GAAP financial measures
we call "discretionary cash flow" and "adjusted net loss."
Management believes adjusted net loss is useful to investors
because it is widely used by professional research analysts in the
valuation, comparison, rating and investment recommendations of
companies in the oil and gas exploration and production
industry. Discretionary cash flow equals cash flows from
operating activities before changes in operating assets and
liabilities. Management believes discretionary cash flow is a
financial indicator of our company's ability to internally fund
capital expenditures and service debt. Management also
believes this non-GAAP financial measure of cash flow is useful
information to investors because it is widely used by professional
research analysts in the valuation, comparison, rating and
investment recommendations of companies in the oil and gas
exploration and production industry. Discretionary cash flow should
not be considered an alternative to net cash provided by (used in)
operating activities or net income (loss), as defined by
GAAP. Please see the "Reconciliation of Non-GAAP Financial
Measure" schedules for a reconciliation of adjusted net loss to net
income (loss) and a reconciliation of discretionary cash flow to
net cash provided by (used in) operating activities.
Forward-Looking Statements
Certain statements in this press release are forward-looking and
are based upon Stone's current belief as to the outcome and timing
of future events. All statements, other than statements of
historical facts, that address activities that Stone plans,
expects, believes, projects, estimates or anticipates will, should
or may occur in the future, including future production of oil and
gas, future capital expenditures and drilling of wells and future
financial or operating results are forward-looking
statements. Important factors that could cause actual results
to differ materially from those in the forward-looking statements
herein include, but are not limited to, the timing and extent of
changes in commodity prices for oil and gas; operating risks;
liquidity risks, including risks relating to our bank credit
facility and the Company's ability to access the capital markets;
political and regulatory developments and legislation, including
developments and legislation relating to our operations in the
Gulf of Mexico basin; and other
risk factors and known trends and uncertainties as described in
Stone's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K as filed with the Securities and
Exchange Commission. For a more detailed discussion of risk
factors, please see Part I, Item 1A, "Risk Factors" of the
Company's most recent Annual Report on Form 10-K and Part II, Item
1A of the Company's Quarterly Report on Form 10-Q for the period
ended March 31, 2017. Should
one or more of these risks or uncertainties occur, or should
underlying assumptions prove incorrect, Stone's actual results and
plans could differ materially from those expressed in the
forward-looking statements. Stone assumes no obligation and
expressly disclaims any duty to update the information contained
herein, except as required by law.
Estimates for Stone's future production volumes are based on
assumptions of capital expenditures levels and the assumption that
market demand and prices for oil and gas will continue at levels
that allow for economic production of these products. The
production, transportation and marketing of oil and gas are subject
to disruption due to transportation and processing availability,
mechanical failure, human error, hurricanes and numerous other
factors. Stone's estimates are based on certain other
assumptions, such as well performance and uptime estimates, which
may vary significantly from those assumed. Delays experienced in
well permitting could affect the timing of drilling and production.
Lease operating expenses, which include major maintenance costs,
vary in response to changes in prices of services and materials
used in the operation of our properties and the amount of
maintenance activity required. Estimates of DD&A rates
can vary according to reserve additions, capital expenditures,
future development costs, and other factors. Therefore, we can give
no assurance that our future production volumes, lease operating
expenses or DD&A rates, if provided, will be as estimated.
Stone Energy is an independent oil and natural gas
exploration and production company headquartered in Lafayette,
Louisiana with additional offices in New Orleans and
Houston. Stone is engaged in
the acquisition, exploration, development and production of
properties in the Gulf of Mexico
basin. For additional information, contact Kenneth H.
Beer, Chief Financial Officer, at 337-521-2210 phone, 337-521-9880
fax or via e-mail at CFO@StoneEnergy.com
STONE ENERGY
CORPORATION
SUMMARY
STATISTICS
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
|
2017 (1)
(2)
|
|
2016
|
PRODUCTION
QUANTITIES
|
|
|
|
|
Oil
(MBbls)
|
|
1,318
|
|
|
1,635
|
|
Natural gas
(MMcf)
|
|
5,855
|
|
|
6,846
|
|
Natural gas liquids
(MBbls)
|
|
439
|
|
|
364
|
|
Oil, natural gas and
NGLs (MBoe)
|
|
2,733
|
|
|
3,140
|
|
AVERAGE DAILY
PRODUCTION
|
|
|
|
|
Oil
(MBbls)
|
|
14.6
|
|
|
18.2
|
|
Natural gas
(MMcf)
|
|
65.1
|
|
|
76.1
|
|
Natural gas liquids
(MBbls)
|
|
4.9
|
|
|
4.0
|
|
Oil, natural gas and
NGLs (MBoe)
|
|
30.4
|
|
|
34.9
|
|
REVENUE DATA
(in thousands)(3)
|
|
|
|
|
Oil
revenue
|
|
|
$65,864
|
|
|
|
$60,275
|
|
Natural gas
revenue
|
|
15,686
|
|
|
15,173
|
|
Natural gas liquids
revenue
|
|
9,483
|
|
|
4,735
|
|
Total oil, natural
gas and NGLs revenue
|
|
|
$91,033
|
|
|
|
$80,183
|
|
AVERAGE
REALIZED PRICES (3)
|
|
|
|
|
Oil (per
Bbl)
|
|
|
$49.97
|
|
|
|
$36.87
|
|
Natural gas (per
Mcf)
|
|
2.68
|
|
|
2.22
|
|
Natural gas liquids
(per Bbl)
|
|
21.60
|
|
|
13.01
|
|
Oil, natural gas and
NGLs (per Boe)
|
|
33.31
|
|
|
25.54
|
|
AVERAGE
COSTS
|
|
|
|
|
Lease operating
expenses (per Boe)
|
|
|
$4.96
|
|
|
|
$6.23
|
|
Salaries, general and
administrative expenses (per Boe)
|
|
4.74
|
|
|
4.06
|
|
DD&A expense on
oil and gas properties (per Boe)
|
|
19.13
|
|
|
19.25
|
|
|
|
|
|
|
(1)
|
Results include
operational and financial results from the Appalachia basin through
the close of the sale of Appalachia properties on February 27,
2017.
|
(2)
|
For illustrative
purposes, the Company has combined the Successor and Predecessor
results to derive combined results for the three month period ended
March 31, 2017. The combination was generated by addition of
comparable financial statement line items. However, because of
various adjustments to the consolidated financial statements in
connection with the application of fresh start accounting,
including asset valuation adjustments and liability adjustments,
the results of operations for the Successor will not be comparable
to those of the Predecessor. The financial information in the
Consolidated Statement of Operations and Reconciliations of
Non-GAAP Financial Measures on the following pages provides the
Successor's and the Predecessor's GAAP results for the applicable
periods. The Company believes that subject to consideration of the
impact of fresh start accounting, combining the results of the
Predecessor and Successor provides meaningful information about
production, revenues, commodity prices and costs that assists a
reader in understanding the Company's financial results for the
applicable period.
|
(3)
|
Through December 31,
2016, we designated our commodity derivatives as cash flow hedges
for accounting purposes upon entering into the contracts.
Accordingly, they were recorded as either an asset or liability
measured at fair value and subsequent changes in the derivative's
fair value were recognized in stockholders' equity through other
comprehensive income (loss), net of related taxes, to the extent
the hedge was considered effective. Monthly settlements of
effective hedges were reflected in revenue from oil and natural gas
production. With respect to our 2017 and 2018 commodity derivative
contracts, we have elected to not designate these contracts as cash
flow hedges for accounting purposes. Accordingly, the net
changes in the mark-to-market valuations and the monthly
settlements on these derivative contracts will be recorded in
earnings through derivative income/expense. As a result of
these mark-to-market adjustments, we will likely experience
volatility in earnings from time to time due to commodity price
volatility. Further, this change in accounting method effects
the comparability of 2017 revenues, average realized prices and
derivative income/expense to 2016 revenues, average realized prices
and derivative income/expense, respectively.
|
STONE ENERGY
CORPORATION
CONSOLIDATED
STATEMENT OF OPERATIONS
(In thousands, except
per share amounts)
(Unaudited)
|
|
|
|
Successor
|
|
|
Predecessor
|
|
|
Predecessor
|
|
|
Combined
Three Months
Ended
March 31, 2017
(1) (2)
|
|
Period from
March 1, 2017
through
March 31, 2017
|
|
|
Period from
January 1, 2017
through
February 28, 2017(1)
|
|
|
Three Months
Ended
March 31, 2016
|
|
Operating
revenue:(3)
|
|
|
|
|
|
|
|
|
|
Oil
production
|
|
$65,864
|
|
|
|
$20,027
|
|
|
|
|
$45,837
|
|
|
|
|
$60,275
|
|
Natural gas
production
|
15,686
|
|
|
2,210
|
|
|
|
13,476
|
|
|
|
15,173
|
|
Natural gas liquids
production
|
9,483
|
|
|
777
|
|
|
|
8,706
|
|
|
|
4,735
|
|
Other operational
income
|
1,052
|
|
|
149
|
|
|
|
903
|
|
|
|
356
|
|
Derivative income,
net
|
2,646
|
|
|
2,646
|
|
|
|
—
|
|
|
|
138
|
|
Total operating
revenue
|
94,731
|
|
|
25,809
|
|
|
|
68,922
|
|
|
|
80,677
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
13,560
|
|
|
4,740
|
|
|
|
8,820
|
|
|
|
19,547
|
|
Transportation,
processing and gathering expenses
|
7,077
|
|
|
144
|
|
|
|
6,933
|
|
|
|
841
|
|
Production
taxes
|
747
|
|
|
65
|
|
|
|
682
|
|
|
|
481
|
|
Depreciation,
depletion and amortization
|
53,276
|
|
|
15,847
|
|
|
|
37,429
|
|
|
|
61,558
|
|
Write-down of oil and
gas properties
|
256,435
|
|
|
256,435
|
|
|
|
—
|
|
|
|
129,204
|
|
Accretion
expense
|
8,348
|
|
|
2,901
|
|
|
|
5,447
|
|
|
|
9,983
|
|
Salaries, general and
administrative expenses
|
12,951
|
|
|
3,322
|
|
|
|
9,629
|
|
|
|
12,754
|
|
Incentive
compensation expense
|
2,008
|
|
|
—
|
|
|
|
2,008
|
|
|
|
4,979
|
|
Restructuring
fees
|
288
|
|
|
288
|
|
|
|
—
|
|
|
|
953
|
|
Other operational
expenses
|
1,191
|
|
|
661
|
|
|
|
530
|
|
|
|
12,527
|
|
Derivative expense,
net
|
1,778
|
|
|
—
|
|
|
|
1,778
|
|
|
|
—
|
|
Total operating
expenses
|
357,659
|
|
|
284,403
|
|
|
|
73,256
|
|
|
|
252,827
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on Appalachia
Properties divestiture
|
213,453
|
|
|
—
|
|
|
|
213,453
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
(49,475)
|
|
|
(258,594)
|
|
|
|
209,119
|
|
|
|
(172,150)
|
|
Other (income)
expenses:
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
1,190
|
|
|
1,190
|
|
|
|
—
|
|
|
|
15,241
|
|
Interest
income
|
(85)
|
|
|
(40)
|
|
|
|
(45)
|
|
|
|
(114)
|
|
Other
income
|
(446)
|
|
|
(131)
|
|
|
|
(315)
|
|
|
|
(298)
|
|
Other
expense
|
13,336
|
|
|
—
|
|
|
|
13,336
|
|
|
|
2
|
|
Reorganization items,
net
|
(437,744)
|
|
|
—
|
|
|
|
(437,744)
|
|
|
|
—
|
|
Total other
(income) expense
|
(423,749)
|
|
|
1,019
|
|
|
|
(424,768)
|
|
|
|
14,831
|
|
Income (loss)
before income taxes
|
374,274
|
|
|
(259,613)
|
|
|
|
633,887
|
|
|
|
(186,981)
|
|
Provision
(benefit) for income taxes:
|
|
|
|
|
|
|
|
|
|
|
Current
|
3,570
|
|
|
—
|
|
|
|
3,570
|
|
|
|
(1,074)
|
|
Deferred
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
2,877
|
|
Total income
taxes
|
3,570
|
|
|
—
|
|
|
|
3,570
|
|
|
|
1,803
|
|
Net income
(loss)
|
|
$370,704
|
|
|
|
($259,613)
|
|
|
|
|
$630,317
|
|
|
|
|
($188,784)
|
|
Net income (loss)
per share
|
|
|
|
|
|
($12.98)
|
|
|
|
|
$110.99
|
|
|
|
|
($33.89)
|
|
Average shares
outstanding - diluted
|
|
|
|
19,997
|
|
|
|
|
5,634
|
|
|
|
|
5,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Results include
operational and financial results from the Appalachia basin through
the close of the sale of Appalachia properties on February 27,
2017.
|
(2)
|
For
illustrative purposes, the Company has combined the Successor and
Predecessor results to derive combined results for the three month
period ended March 31, 2017. The combination was generated by
addition of comparable financial statement line items. However,
because of various adjustments to the consolidated financial
statements in connection with the application of fresh start
accounting, including asset valuation adjustments and liability
adjustments, the results of operations for the Successor will not
be comparable to those of the Predecessor. The Company believes
that subject to consideration of the impact of fresh start
accounting, combining the results of the Predecessor and Successor
provides meaningful information that assists a reader in
understanding the Company's financial results for the applicable
period.
|
(3)
|
Through December 31,
2016, we designated our commodity derivatives as cash flow hedges
for accounting purposes upon entering into the contracts.
Accordingly, they were recorded as either an asset or liability
measured at fair value and subsequent changes in the derivative's
fair value were recognized in stockholders' equity through other
comprehensive income (loss), net of related taxes, to the extent
the hedge was considered effective. Monthly settlements of
effective hedges were reflected in revenue from oil and natural gas
production. With respect to our 2017 and 2018 commodity derivative
contracts, we have elected to not designate these contracts as cash
flow hedges for accounting purposes. Accordingly, the net
changes in the mark-to-market valuations and the monthly
settlements on these derivative contracts will be recorded in
earnings through derivative income/expense. As a result of
these mark-to-market adjustments, we will likely experience
volatility in earnings from time to time due to commodity price
volatility. Further, this change in accounting method effects
the comparability of 2017 revenues, average realized prices and
derivative income/expense to 2016 revenues, average realized prices
and derivative income/expense, respectively.
|
STONE ENERGY
CORPORATION
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURE
DISCRETIONARY CASH
FLOW to NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES
(In
thousands)
(Unaudited)
|
|
|
|
Successor
|
|
|
Predecessor
|
|
Predecessor
|
|
Combined Three
Months Ended
March 31, 2017 (1) (2)
|
|
Period from
March 1, 2017
through
March 31, 2017
|
|
|
Period from
January 1, 2017
through
February 28, 2017(1)
|
|
Three Months
Ended
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) as
reported
|
|
$370,704
|
|
|
|
($259,613)
|
|
|
|
|
$630,317
|
|
|
|
|
($188,784)
|
|
Reconciling
items:
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
53,276
|
|
|
15,847
|
|
|
|
37,429
|
|
|
|
61,558
|
|
Write-down of oil and
gas properties
|
256,435
|
|
|
256,435
|
|
|
|
—
|
|
|
|
129,204
|
|
Deferred income tax
provision
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
2,877
|
|
Accretion
expense
|
8,348
|
|
|
2,901
|
|
|
|
5,447
|
|
|
|
9,983
|
|
Gain on sale of oil
and gas properties
|
(213,453)
|
|
|
—
|
|
|
|
(213,453)
|
|
|
|
—
|
|
Non-cash stock
compensation expense
|
2,662
|
|
|
17
|
|
|
|
2,645
|
|
|
|
2,312
|
|
Non-cash interest
expense
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
4,635
|
|
Non-cash derivative
(income) expense (3)
|
(706)
|
|
|
(2,484)
|
|
|
|
1,778
|
|
|
|
192
|
|
Non-cash
reorganization items
|
(458,677)
|
|
|
—
|
|
|
|
(458,677)
|
|
|
|
—
|
|
Other non-cash
expense
|
172
|
|
|
—
|
|
|
|
172
|
|
|
|
6,081
|
|
Discretionary cash
flow
|
18,761
|
|
|
13,103
|
|
|
|
5,658
|
|
|
|
28,058
|
|
Change in income taxes
payable
|
3,570
|
|
|
—
|
|
|
|
3,570
|
|
|
|
(1,074)
|
|
Settlement of asset
retirement obligations
|
(21,241)
|
|
|
(17,600)
|
|
|
|
(3,641)
|
|
|
|
(4,667)
|
|
Investment in
derivative contracts
|
(5,876)
|
|
|
(2,140)
|
|
|
|
(3,736)
|
|
|
|
—
|
|
Other working capital
changes
|
9,548
|
|
|
17,283
|
|
|
|
(7,735)
|
|
|
|
7,122
|
|
Net cash provided
by (used in) operating
activities
|
|
$4,762
|
|
|
|
$10,646
|
|
|
|
|
($5,884)
|
|
|
|
|
$29,439
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Results include
operational and financial results from the Appalachia basin through
the close of the sale of Appalachia properties on February 27,
2017.
|
(2)
|
For illustrative
purposes, the Company has combined the Successor and Predecessor
results to derive combined results for the three month period ended
March 31, 2017. The combination was generated by addition of
comparable financial statement line items. However, because of
various adjustments to the consolidated financial statements in
connection with the application of fresh start accounting,
including asset valuation adjustments and liability adjustments,
the results of operations for the Successor will not be comparable
to those of the Predecessor. The Company believes that subject to
consideration of the impact of fresh start accounting, combining
the results of the Predecessor and Successor provides meaningful
information that assists a reader in understanding the Company's
financial results for the applicable period.
|
(3)
|
Through December 31,
2016, we designated our commodity derivatives as cash flow hedges
for accounting purposes upon entering into the contracts.
Accordingly, they were recorded as either an asset or liability
measured at fair value and subsequent changes in the derivative's
fair value were recognized in stockholders' equity through other
comprehensive income (loss), net of related taxes, to the extent
the hedge was considered effective. Monthly settlements of
effective hedges were reflected in revenue from oil and natural gas
production. With respect to our 2017 and 2018 commodity derivative
contracts, we have elected to not designate these contracts as cash
flow hedges for accounting purposes. Accordingly, the net
changes in the mark-to-market valuations and the monthly
settlements on these derivative contracts will be recorded in
earnings through derivative income/expense. As a result of
these mark-to-market adjustments, we will likely experience
volatility in earnings from time to time due to commodity price
volatility. Further, this change in accounting method effects
the comparability of 2017 revenues, average realized prices and
derivative income/expense to 2016 revenues, average realized prices
and derivative income/expense, respectively.
|
STONE ENERGY
CORPORATION
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURE
ADJUSTED NET LOSS
to NET INCOME (LOSS)
(In
thousands)
(Unaudited)
|
|
|
|
Successor
|
|
|
Predecessor
|
|
|
Predecessor
|
|
Combined Three
Months Ended
March 31, 2017(2) (3)
|
|
Period from
March 1, 2017
through
March 31, 2017
|
|
|
Period from
January 1, 2017
through
February 28, 2017(2)
|
|
|
Three Months
Ended
March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
as reported
|
|
$370,704
|
|
|
|
($259,613)
|
|
|
|
|
$630,317
|
|
|
|
|
($188,784)
|
|
Reconciling
items:
|
|
|
|
|
|
|
|
|
|
Reorganization-related items
(1)
|
(637,861)
|
|
|
—
|
|
|
|
(637,861)
|
|
|
|
—
|
|
Tax effect
|
240,953
|
|
|
—
|
|
|
|
240,953
|
|
|
|
—
|
|
Write-down of oil and
gas properties
|
256,435
|
|
|
256,435
|
|
|
|
—
|
|
|
|
129,204
|
|
Tax effect
|
(90,393)
|
|
|
(90,393)
|
|
|
|
—
|
|
|
|
(45,544)
|
|
Valuation allowance
on deferred tax assets
|
(148,260)
|
|
|
91,543
|
|
|
(239,803)
|
|
|
|
61,067
|
|
Total reconciling
items
|
(379,126)
|
|
|
257,585
|
|
|
|
(636,711)
|
|
|
|
144,727
|
|
Adjusted net
loss
|
|
($8,422)
|
|
|
|
($2,028)
|
|
|
|
|
($6,394)
|
|
|
|
|
($44,057)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share as reported
|
|
|
|
($12.98)
|
|
|
|
|
$110.99
|
|
|
|
|
($33.89)
|
|
Per share effect of
impairment charges and reorganization-related items
|
|
|
|
$12.88
|
|
|
|
|
($112.12)
|
|
|
|
|
$25.98
|
|
Net loss per share
before impairment charges and reorganization-related
items
|
|
|
|
($0.10)
|
|
|
|
|
($1.13)
|
|
|
|
|
($7.91)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Reorganization-related
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reorganization
items
|
|
|
($437,744)
|
|
|
|
—
|
|
|
|
|
($437,744)
|
|
|
|
|
—
|
|
Break-up fee and
expense reimbursements to Tug Hill (Other expense)
|
|
|
13,336
|
|
|
|
—
|
|
|
|
|
13,336
|
|
|
|
|
—
|
|
Gain on Appalachia
Properties divestiture
|
|
|
(213,453)
|
|
|
|
—
|
|
|
|
|
(213,453)
|
|
|
|
|
—
|
|
|
|
|
($637,861)
|
|
|
|
—
|
|
|
|
|
($637,861)
|
|
|
|
|
—
|
|
|
|
(2)
|
Results include
operational and financial results from the Appalachia basin through
the close of the sale of Appalachia properties on February 27,
2017.
|
(3)
|
For illustrative
purposes, the Company has combined the Successor and Predecessor
results to derive combined results for the three month period ended
March 31, 2017. The combination was generated by addition of
comparable financial statement line items. However, because of
various adjustments to the consolidated financial statements in
connection with the application of fresh start accounting,
including asset valuation adjustments and liability adjustments,
the results of operations for the Successor will not be comparable
to those of the Predecessor. The Company believes that subject to
consideration of the impact of fresh start accounting, combining
the results of the Predecessor and Successor provides meaningful
information that assists a reader in understanding the Company's
financial results for the applicable period.
|
STONE ENERGY
CORPORATION
CONSOLIDATED
BALANCE SHEET
(In
thousands)
(Unaudited)
|
|
|
Successor
|
|
|
Predecessor
|
|
|
March
31,
|
|
|
December
31,
|
|
|
2017
|
|
|
2016
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$180,239
|
|
|
|
|
$190,581
|
|
Restricted
cash
|
|
|
74,068
|
|
|
|
|
—
|
|
Accounts
receivable
|
|
35,380
|
|
|
|
48,464
|
|
Fair value of
derivative contracts
|
|
3,398
|
|
|
|
—
|
|
Current income tax
receivable
|
|
22,516
|
|
|
|
26,086
|
|
Other current
assets
|
|
11,150
|
|
|
|
10,151
|
|
Total
current assets
|
|
326,751
|
|
|
|
275,282
|
|
Oil and gas
properties, full cost method of accounting:
|
|
|
|
|
|
Proved
|
|
677,977
|
|
|
|
9,616,236
|
|
Less: accumulated
depreciation, depletion and amortization
|
|
(271,960)
|
|
|
|
(9,178,442)
|
|
Net proved oil and
gas properties
|
|
406,017
|
|
|
|
437,794
|
|
Unevaluated
|
|
97,617
|
|
|
|
373,720
|
|
Other property and
equipment, net
|
|
20,741
|
|
|
|
26,213
|
|
Fair value of
derivative contracts
|
|
3,185
|
|
|
|
—
|
|
Other assets,
net
|
|
16,993
|
|
|
|
26,474
|
|
Total
assets
|
|
|
$871,304
|
|
|
|
|
$1,139,483
|
|
Liabilities
and Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable to
vendors
|
|
|
$26,033
|
|
|
|
|
$19,981
|
|
Undistributed oil and
gas proceeds
|
|
1,428
|
|
|
|
15,073
|
|
Accrued
interest
|
|
1,649
|
|
|
|
809
|
|
Asset retirement
obligations
|
|
85,498
|
|
|
|
88,000
|
|
Current portion of
long-term debt
|
|
412
|
|
|
|
408
|
|
Other current
liabilities
|
|
17,500
|
|
|
|
18,602
|
|
Total
current liabilities
|
|
132,520
|
|
|
|
142,873
|
|
Bank credit
facility
|
|
—
|
|
|
|
341,500
|
|
7.5% Senior Second
Lien Notes due 2022
|
|
225,000
|
|
|
|
—
|
|
4.2% Building
Loan
|
|
10,813
|
|
|
|
10,876
|
|
Asset retirement
obligations
|
|
189,870
|
|
|
|
154,019
|
|
Other long-term
liabilities
|
|
17,557
|
|
|
|
17,315
|
|
Total
liabilities not subject to compromise
|
|
575,760
|
|
|
|
666,583
|
|
Liabilities subject
to compromise
|
|
—
|
|
|
|
1,110,182
|
|
Total
liabilities
|
|
575,760
|
|
|
|
1,776,765
|
|
Predecessor common
stock
|
|
—
|
|
|
|
56
|
|
Predecessor treasury
stock
|
|
—
|
|
|
|
(860)
|
|
Predecessor
additional paid-in capital
|
|
—
|
|
|
|
1,659,731
|
|
Successor common
stock
|
|
200
|
|
|
|
—
|
|
Successor
additional paid-in capital
|
|
554,957
|
|
|
|
—
|
|
Accumulated
deficit
|
|
(259,613)
|
|
|
|
(2,296,209)
|
|
Total
stockholders' equity
|
|
295,544
|
|
|
|
(637,282)
|
|
Total
liabilities and stockholders' equity
|
|
|
$871,304
|
|
|
|
|
$1,139,483
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/stone-energy-corporation-announces-results-for-the-three-months-ended-march-31-2017-300453533.html
SOURCE Stone Energy Corporation