Mid-Con Energy Partners, LP (NASDAQ:MCEP) ("Mid-Con Energy" or the
"Partnership") announces operating and financial results for the
first quarter ended March 31, 2017.
"We have continued to execute on reducing costs
during the first quarter of 2017," commented Jeff Olmstead,
President and CEO. "Total lease operating expenses declined
approximately 3% from the fourth quarter of 2016 and 18% from the
first quarter of 2016. Cash general & administrative
expenses declined approximately 2% from the same period in 2016.
These improvements helped partially offset lower realized prices
after hedges and production during the first quarter of this
year. Operationally, we remain focused on ongoing waterflood
developments started in the second half of 2016 at select key
projects. As expected, this resulted in lower overall
production quarter-over-quarter; however, we have already started
to see positive response from increased injection in certain areas,
which has allowed us to increase the bottom end of our production
guidance range for this year."
FIRST QUARTER 2017 SUMMARY
- Net income of $4.4 million, compared to net loss of $3.3
million both sequentially and year-over-year.
- Reduced lease operating expenses ("LOE") to $5.0 million, 2.9%
lower sequentially and 17.7% lower year-over-year.
- Reduced debt outstanding by $1.5 million to $120.5 million at
March 31, 2017.
- Average daily production of 3,622 Boe/d, a decrease of 5.6%
sequentially and 15.5% year-over-year.
- Realized prices per Boe, inclusive of cash settlements from
matured derivatives and premiums paid, averaged $42.70/Boe, a
decrease of 8.2% sequentially and 8.6% year-over-year.
The following table reflects selected unaudited
operating and financial results for the first quarter of 2017,
compared to the fourth quarter of 2016 and the first quarter of
2016. Mid-Con Energy’s unaudited condensed consolidated financial
statements are included at the end of this press release.
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
($ in thousands) |
|
2017 |
|
2016 |
|
2016 |
Average net daily
production (Boe/d)(1) |
|
3,622 |
|
|
3,837 |
|
|
4,286 |
|
Oil & natural gas
sales plus cash settlements from matured derivatives, inclusive of
premiums, net(2) |
|
$ |
13,921 |
|
|
$ |
16,412 |
|
|
$ |
18,228 |
|
Net income (loss) |
|
$ |
4,442 |
|
|
$ |
(3,311 |
) |
|
$ |
(3,313 |
) |
Adjusted EBITDA(3) |
|
$ |
6,469 |
|
|
$ |
9,002 |
|
|
$ |
13,396 |
|
Distributable Cash
Flow(3) |
|
$ |
3,593 |
|
|
$ |
6,242 |
|
|
$ |
10,444 |
|
(1)
Production volumes in Boe equivalents calculated at a Btu
conversion rate of six Mcf per Bbl. |
|
|
|
|
|
(2) Net
premiums include those incurred previously, or upon settlement,
that are attributable to instruments that settled during the
period. |
|
(3)
Non-GAAP financial measure. Please refer to the related disclosure
and reconciliation of net income (loss) to Adjusted EBITDA and
Distributable Cash Flow included in this press release. |
FIRST QUARTER 2017
RESULTSProduction - Production for the first quarter of
2017 was 326 MBoe, or 3,622 Boe/d. On a daily basis, this
represented a 5.6% decrease from the fourth quarter of 2016 and a
15.5% decrease year-over-year. The sequential decrease was
primarily related to natural declines at select Permian properties
and increasing water cuts in certain Southern Oklahoma waterflood
units. These declines were partially offset by our Cleveland Unit
in Northeastern Oklahoma, which experienced production growth from
continued waterflood response during the first quarter of 2017. The
production decline year-over-year was also negatively impacted by
the Hugoton divestiture closed in July 2016.
Price Realizations - Oil and natural gas sales
were $15.4 million in the first quarter of 2017, or $47.09/Boe. On
a per Boe basis, this represented a 6.3% increase from the fourth
quarter of 2016 and a 63.0% increase year-over-year due to higher
underlying benchmark pricing. Cash settlements for matured
derivatives, inclusive of net premiums, were negative $1.4 million
in the first quarter of 2017, or $(4.39)/Boe. Cash settlements for
matured derivatives, inclusive of net premiums, were $2.18/Boe in
the fourth quarter of 2016 and $17.85/Boe in the first quarter of
2016. The resulting realized prices, including cash settlements for
matured derivatives, inclusive of net premiums, were $42.70/Boe in
the first quarter of 2017, $46.49/Boe in the fourth quarter of
2016, and $46.74/Boe in the first quarter of 2016.
Lease Operating Expenses - LOE was $5.0 million
in the first quarter of 2017, representing a 2.9% decrease from the
fourth quarter of 2016 and a decrease of 17.7% from the first
quarter of 2016. On a per Boe basis, LOE of $15.31/Boe increased
5.2% sequentially due to lower production. Year-over-year, LOE
declined by 1.5% from $15.55/Boe as the Partnership continued to
realize increased efficiencies from various cost savings
initiatives and asset divestitures during 2016.
Production Taxes - Production taxes in the first
quarter of 2017 were $0.8 million, or $2.46/Boe, reflecting an
effective tax rate of 5.2%. Production taxes for the fourth quarter
of 2016 were $0.8 million, or $2.31/Boe, for an effective tax rate
of 5.2%. Production taxes for the first quarter of 2016 were $0.6
million, or $1.52/Boe, reflecting an effective tax rate of 5.3%.
The effective tax rate was flat sequentially and decreased
year-over-year due to a higher percentage of our production
attributable to the Permian core area, which bears the lowest
production tax rate in the portfolio.
Depreciation, Depletion and Amortization
Expenses ("DD&A") - DD&A for the first quarter of 2017 was
$4.9 million, or $14.94/Boe. On a per Boe basis, DD&A decreased
4.5% from the fourth quarter of 2016 and 4.2% from the first
quarter of 2016. The sequential and year-over-year decreases in
DD&A per Boe were largely due to lower depletion rates.
General and Administrative Expenses ("G&A")
- G&A in the first quarter of 2017 was $1.8 million, or
$5.60/Boe, and included $0.2 million, or $0.51/Boe, in non-cash
equity-based compensation expense related to the Partnership’s
Long-Term Incentive Program. G&A for the fourth quarter of 2016
was $1.6 million, or $4.56/Boe, and included $0.2 million in
non-cash equity-based compensation expense. G&A for the first
quarter of 2016 was $2.1 million, or $5.35/Boe, and included $0.4
million in non-cash equity-based compensation expense. The
sequential increase in aggregate and per Boe G&A was primarily
due to lower production and higher professional and public
reporting expenses that historically occur during the first
quarter, such as fees related to the year-end financial statements
audit and Schedule K-1 tax preparation. The year-over-year decrease
in G&A reflects lower non-cash equity-based compensation
expense, reductions in payroll expense due to headcount reductions
in the first quarter of 2016, lower rent expense due to office
space consolidation in the third quarter of 2016, and continued
reductions in discretionary-type G&A expenses.
Net Interest Expense - Net interest expense for
the first quarter of 2017 was $1.4 million, a 3.7% decrease from
the fourth quarter of 2016 and a 34.1% decrease from the first
quarter of 2016. On a per Boe basis, net interest expense was
$4.44/Boe. The average effective interest rate approximated 3.6%
for the first quarter of 2017, compared to 3.8% for the fourth
quarter of 2016 and 4.2% for the first quarter of 2016. Reduced
borrowings outstanding under the revolving credit facility resulted
in a sequential and year-over-year decrease in the effective
interest rate.
Net Income (Loss) - For the first quarter of
2017, Mid-Con Energy reported net income of $4.4 million. Net
income per limited partner unit was $0.12 (basic) and $0.11
(diluted) based on the weighted average limited partner units
outstanding during the period of 29.9 million (basic) and 41.8
million (diluted). Net loss for the fourth quarter of 2016 was $3.3
million, or $0.14 per limited partner unit (basic and diluted),
based on a weighted average of 29.9 million limited partner units
outstanding during the period. Net loss for the first quarter of
2016 was $3.3 million, or $0.11 per limited partner unit (basic and
diluted), based on a weighted average of 29.8 million limited
partner units outstanding during the period. The positive
sequential and year-over-year variance was primarily attributable
to higher benchmark pricing, a gain on unsettled derivatives, lower
operating costs and expenses, and lower interest expense.
Adjusted EBITDA - Adjusted EBITDA, a Non-GAAP
measure, for the first quarter of 2017 was $6.5 million, or
$19.84/Boe. Adjusted EBITDA was $25.50/Boe in the fourth quarter of
2016 and $34.35/Boe in the first quarter of 2016. On a per Boe
basis, Adjusted EBITDA for the period decreased 22.2% sequentially
and 42.2% year-over-year. The sequential and year-over-year
decreases in Adjusted EBITDA, in aggregate and per Boe, were
primarily due to lower cash settlements for matured derivatives,
inclusive of net premiums, and lower production.
Distributable Cash Flow ("DCF") - DCF, a
Non-GAAP measure, was $3.6 million for the first quarter of 2017
after subtracting $1.1 million in cash interest expense, $1.3
million in estimated maintenance capital expenditures, and $0.5
million in distributions to preferred unitholders from Adjusted
EBITDA. Relative to the fourth quarter of 2016 and the first
quarter of 2016, DCF decreased 42.5% and 65.6%, respectively.
HEDGING SUMMARYMid-Con Energy
enters into various commodity derivative contracts intended to
achieve more predictable cash flows by reducing the Partnership's
exposure to short-term fluctuations in the price of oil and natural
gas. We believe this risk management strategy will serve to secure
a baseline portion of our revenues and, by retaining some
opportunity to participate in upward price movements, may also
enable us to realize higher revenues during periods when prices
rise.
As of May 1, 2017, the following unaudited
table reflects volumes of Mid-Con Energy's production hedged
by commodity derivative contracts, with the corresponding prices at
which the production is hedged:
OIL HEDGES |
|
2Q17 |
|
3Q17 |
|
4Q17 |
|
1Q18 |
|
2Q18 |
|
3Q18 |
|
4Q18 |
|
1Q19 |
|
2Q19 |
|
3Q19 |
|
4Q19 |
Collar Volume
(Bbl/d) |
|
|
659 |
|
|
|
652 |
|
|
|
652 |
|
|
|
1,500 |
|
|
|
1,484 |
|
|
|
1,141 |
|
|
|
1,141 |
|
|
|
433 |
|
|
|
429 |
|
|
|
424 |
|
|
|
424 |
|
Call
Strike Price ($/Bbl) |
|
$ |
50.15 |
|
|
$ |
51.22 |
|
|
$ |
52.35 |
|
|
$ |
57.39 |
|
|
$ |
57.91 |
|
|
$ |
52.42 |
|
|
$ |
53.13 |
|
|
$ |
60.52 |
|
|
$ |
60.52 |
|
|
$ |
60.52 |
|
|
$ |
60.52 |
|
Put
Strike Price ($/Bbl) |
|
$ |
45.00 |
|
|
$ |
45.00 |
|
|
$ |
45.00 |
|
|
$ |
45.00 |
|
|
$ |
45.00 |
|
|
$ |
43.57 |
|
|
$ |
43.57 |
|
|
$ |
50.00 |
|
|
$ |
50.00 |
|
|
$ |
50.00 |
|
|
$ |
50.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Put Volume
(Bbl/d)(1) |
|
|
1,978 |
|
|
|
1,957 |
|
|
|
1,793 |
|
|
|
— |
|
|
|
— |
|
|
|
326 |
|
|
|
326 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Put
Strike Price ($/Bbl)(1) |
|
$ |
50.00 |
|
|
$ |
50.00 |
|
|
$ |
50.00 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
45.00 |
|
|
$ |
45.00 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Hedged Volume
(Bbl/d) |
|
|
2,637 |
|
|
|
2,609 |
|
|
|
2,446 |
|
|
|
1,500 |
|
|
|
1,484 |
|
|
|
1,467 |
|
|
|
1,467 |
|
|
|
433 |
|
|
|
429 |
|
|
|
424 |
|
|
|
424 |
|
Floor
Strike Price ($/Bbl) |
|
$ |
48.75 |
|
|
$ |
48.75 |
|
|
$ |
48.67 |
|
|
$ |
45.00 |
|
|
$ |
45.00 |
|
|
$ |
43.89 |
|
|
$ |
43.89 |
|
|
$ |
50.00 |
|
|
$ |
50.00 |
|
|
$ |
50.00 |
|
|
$ |
50.00 |
|
% Hedged(2) |
|
|
75 |
% |
|
|
74 |
% |
|
|
69 |
% |
|
|
43 |
% |
|
|
42 |
% |
|
|
42 |
% |
|
|
42 |
% |
|
|
12 |
% |
|
|
12 |
% |
|
|
12 |
% |
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Deferred premium puts include premiums that are to be paid monthly
as the contracts settle (refer to our SEC filing for additional
details). |
|
(2)
Estimated percent hedged based on the mid-point of 2017 Boe
production guidance, multiplied by an approximate 94% oil weighting
based on first quarter 2017 reported production volumes. |
LIQUIDITY AND BORROWING BASE
SUMMARYAt March 31, 2017, Mid-Con Energy had total
liquidity of $22.3 million, which consisted of $2.8 million of cash
and $19.5 million of available borrowings under its revolving
credit facility that had a conforming borrowing base of $140.0
million at quarter end. The Partnership reduced debt by $1.5
million to $120.5 million during the first quarter of 2017.
Mid-Con Energy's spring 2017 semi-annual
borrowing base redetermination is underway, with the Partnership
having delivered its most recent internal reserve estimates to the
senior lender group for their review and evaluation. Management
anticipates this process will conclude during the second quarter of
2017.
2017 GUIDANCEThe following
outlook is subject to all the cautionary statements and limitations
described under the "Forward-Looking Statements" caption at the end
of this press release. These estimates and assumptions reflect
management's best judgment based on current and anticipated market
conditions and other factors. Although we believe such estimates
and assumptions to be reasonable, they are inherently uncertain and
involve a number of risks and uncertainties that are beyond our
control.
FY2017 Guidance as of 05/01/17 |
|
2017 |
Net production
(Boe/d)(1) |
|
3,600
- 3,900 |
Lease operating
expenses per Boe |
|
$14.50
- $16.50 |
Production taxes (% of
total revenue) |
|
5.1% -
5.5% |
Estimated capital
expenditures |
|
$13.0
MM |
|
|
|
(1)
Production volumes in Boe equivalents calculated at a rate of six
Mcf per Bbl. |
FIRST QUARTER 2017 CONFERENCE
CALLAs announced on April 18, 2017, Mid-Con Energy’s
management will host a conference call on Tuesday, May 2, 2017
at 9:00 a.m. ET. Interested parties are invited to participate via
telephone by dialing 1-877-847-5946 (Conference ID: 8602107) at
least five minutes prior to the scheduled start time of the call,
or via webcast by clicking on "Events & Presentations" in the
investor relations section of the Mid-Con Energy website at
www.midconenergypartners.com.
A replay of the conference call will be
available through May 9, 2017, by dialing 1-855-859-2056
(Conference ID: 8602107). Additionally, a webcast archive will be
available at www.midconenergypartners.com.
ABOUT MID-CON ENERGY PARTNERS
LPMid-Con Energy is a publicly held Delaware limited
partnership formed in July 2011 to own, acquire, exploit and
develop producing oil and natural gas properties in North America,
with a focus on Enhanced Oil Recovery. Mid-Con Energy’s core areas
of operation are located in Southern Oklahoma, Northeastern
Oklahoma, and Texas within the Eastern Shelf of the Permian. For
more information, please visit Mid-Con Energy's website at
www.midconenergypartners.com.
FORWARD-LOOKING STATEMENTSThis
press release includes "forward-looking statements" — that is,
statements related to future, not past, events within meaning of
the federal securities laws. Forward-looking statements are based
on current expectations and include any statement that does not
directly relate to a current or historical fact. In this context,
forward-looking statements often address expected future business
and financial performance, and often contain words such as
"anticipate," "believe," "estimate," "intend," "expect," "plan,"
"project," "should," "goal," "forecast," "guidance," "could,"
"may," "continue," "might," "potential," "scheduled," or "will" or
other similar words. These forward-looking statements involve
certain risks and uncertainties and ultimately may not prove to be
accurate. Actual results and future events could differ materially
from those anticipated in such statements. For further discussion
of risks and uncertainties, you should refer to Mid-Con Energy's
filings with the Securities and Exchange Commission ("SEC")
available at www.midconenergypartners.com or www.sec.gov. Mid-Con
Energy undertakes no obligation and does not intend to update these
forward-looking statements to reflect events or circumstances
occurring after this press release. You are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. All forward-looking
statements are qualified in their entirety by this cautionary
statement and our SEC filings. Please see the risks and
uncertainties detailed in the "Forward-Looking Statements" and
"Risk Factors" sections of our Annual Report on Form 10-K for the
year ended December 31, 2016, and in other documents and reports we
file from time to time with the SEC.
Mid-Con Energy Partners, LP and
subsidiaries |
Condensed Consolidated Balance
Sheets |
(in thousands, except number of units) |
(Unaudited) |
|
March 31, 2017 |
|
December 31, 2016 |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and
cash equivalents |
$ |
2,799 |
|
|
$ |
2,359 |
|
Accounts
receivable: |
|
|
|
Oil and
natural gas sales |
4,875 |
|
|
5,302 |
|
Other |
7 |
|
|
233 |
|
Derivative financial instruments |
13 |
|
|
— |
|
Prepaids
and other |
413 |
|
|
512 |
|
Total
current assets |
8,107 |
|
|
8,406 |
|
Property and
Equipment: |
|
|
|
Oil and
natural gas properties, successful efforts method: |
|
|
|
Proved
properties |
443,913 |
|
|
441,479 |
|
Other
property and equipment |
296 |
|
|
289 |
|
Accumulated depletion, depreciation, amortization and
impairment |
(181,420 |
) |
|
(176,551 |
) |
Total
property and equipment, net |
262,789 |
|
|
265,217 |
|
Derivative financial
instruments |
28 |
|
|
— |
|
Other assets |
2,327 |
|
|
2,663 |
|
Total
assets |
$ |
273,251 |
|
|
$ |
276,286 |
|
LIABILITIES,
CONVERTIBLE PREFERRED UNITS AND EQUITY |
|
|
|
Current
liabilities |
|
|
|
Accounts
payable: |
|
|
|
Trade |
$ |
808 |
|
|
$ |
256 |
|
Related
parties |
1,623 |
|
|
3,431 |
|
Derivative financial instruments |
2,974 |
|
|
5,314 |
|
Accrued
liabilities |
217 |
|
|
146 |
|
Total
current liabilities |
5,622 |
|
|
9,147 |
|
Derivative financial
instruments |
314 |
|
|
2,495 |
|
Long-term debt |
120,500 |
|
|
122,000 |
|
Other long-term
liabilities |
87 |
|
|
93 |
|
Asset retirement
obligations |
11,471 |
|
|
11,331 |
|
Commitments and
contingencies |
|
|
|
Class A convertible
preferred units - 11,627,906 issued and outstanding,
respectively |
19,798 |
|
|
19,570 |
|
Equity |
|
|
|
Partnership equity: |
|
|
|
General
partner |
(195 |
) |
|
(248 |
) |
Limited
partners - 29,944,796 and 29,912,230 units issued and outstanding,
respectively |
115,654 |
|
|
111,898 |
|
Total
equity |
115,459 |
|
|
111,650 |
|
Total
liabilities, convertible preferred units and equity |
$ |
273,251 |
|
|
$ |
276,286 |
|
Mid-Con Energy Partners, LP and
subsidiaries |
Condensed Consolidated Statements of
Operations |
(in thousands, except per unit data) |
(Unaudited) |
|
|
Three Months Ended March
31, |
|
2017 |
|
2016 |
Revenues |
|
|
|
Oil
sales |
$ |
14,955 |
|
|
$ |
11,106 |
|
Natural
gas sales |
396 |
|
|
163 |
|
Gain on
derivatives, net |
3,132 |
|
|
2,568 |
|
Total
revenues |
18,483 |
|
|
13,837 |
|
Operating costs and
expenses |
|
|
|
Lease
operating expenses |
4,992 |
|
|
6,065 |
|
Oil and
natural gas production taxes |
802 |
|
|
592 |
|
Depreciation, depletion and amortization |
4,869 |
|
|
6,085 |
|
Accretion
of discount on asset retirement obligations |
108 |
|
|
157 |
|
General
and administrative |
1,826 |
|
|
2,088 |
|
Total
operating costs and expenses |
12,597 |
|
|
14,987 |
|
Income (loss) from
operations |
5,886 |
|
|
(1,150 |
) |
Other (expense)
income |
|
|
|
Interest
income |
3 |
|
|
3 |
|
Interest
expense |
(1,450 |
) |
|
(2,199 |
) |
Other
income |
— |
|
|
33 |
|
Gain on
settlement of ARO |
3 |
|
|
— |
|
Total
other expense |
(1,444 |
) |
|
(2,163 |
) |
Net income (loss) |
4,442 |
|
|
(3,313 |
) |
Less:
Distributions to preferred unitholders |
798 |
|
|
— |
|
Less:
General partner's interest in net income (loss) |
53 |
|
|
(39 |
) |
Limited partners'
interest in net income (loss) |
$ |
3,591 |
|
|
$ |
(3,274 |
) |
|
|
|
|
Limited partners' net
income (loss) per unit: |
|
|
|
Basic |
$ |
0.12 |
|
|
$ |
(0.11 |
) |
Diluted |
$ |
0.11 |
|
|
$ |
(0.11 |
) |
Weighted average
limited partner units outstanding: |
|
|
|
Limited
partner units (basic) |
29,927 |
|
|
29,768 |
|
Limited
partner units (diluted) |
41,837 |
|
|
29,768 |
|
Mid-Con Energy Partners, LP and
subsidiaries |
Condensed Consolidated Statements of Cash
Flows |
(in thousands) |
(Unaudited) |
|
|
Three Months Ended March
31, |
|
2017 |
|
2016 |
Cash Flows from
Operating Activities |
|
|
|
Net
income (loss) |
$ |
4,442 |
|
|
$ |
(3,313 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
Depreciation, depletion and amortization |
4,869 |
|
|
6,085 |
|
Debt
issuance costs amortization |
336 |
|
|
337 |
|
Accretion
of discount on asset retirement obligations |
108 |
|
|
157 |
|
Gain on
settlement of ARO |
(3 |
) |
|
— |
|
Cash paid
for settlement of ARO |
(9 |
) |
|
— |
|
Mark to
market on derivatives: |
|
|
|
Gain on
derivatives, net |
(3,132 |
) |
|
(2,568 |
) |
Cash
settlements (paid) received for matured derivatives, net |
(156 |
) |
|
11,094 |
|
Cash
premiums paid for derivatives, net |
(1,274 |
) |
|
(646 |
) |
Non-cash
equity-based compensation |
165 |
|
|
390 |
|
Changes in operating
assets and liabilities |
|
|
|
Accounts
receivable |
427 |
|
|
416 |
|
Other
receivables |
233 |
|
|
2,177 |
|
Prepaids
and other |
99 |
|
|
63 |
|
Accounts
payable - trade and accrued liabilities |
617 |
|
|
192 |
|
Accounts
payable - related parties |
(1,904 |
) |
|
(2,280 |
) |
Net
cash provided by operating activities |
4,818 |
|
|
12,104 |
|
Cash Flows from
Investing Activities |
|
|
|
Additions
to oil and natural gas properties |
(2,167 |
) |
|
(1,598 |
) |
Acquisitions of oil and natural gas properties |
(134 |
) |
|
— |
|
Additions
to other property and equipment |
(7 |
) |
|
— |
|
Net
cash used in investing activities |
(2,308 |
) |
|
(1,598 |
) |
Cash Flows from
Financing Activities |
|
|
|
Payments
on line of credit |
(1,500 |
) |
|
(11,000 |
) |
Offering
costs |
(70 |
) |
|
(16 |
) |
Distributions to preferred units |
(500 |
) |
|
— |
|
Net
cash used in financing activities |
(2,070 |
) |
|
(11,016 |
) |
Net
increase (decrease) in cash and cash equivalents |
440 |
|
|
(510 |
) |
Beginning cash and cash
equivalents |
2,359 |
|
|
615 |
|
Ending cash and cash
equivalents |
$ |
2,799 |
|
|
$ |
105 |
|
NON-GAAP FINANCIAL MEASURES
This press release, financial tables and other
supplemental information include "Adjusted EBITDA" and
"Distributable Cash Flow," each of which are non-generally accepted
accounting principles ("Non-GAAP") measures used by our management
to describe financial performance with external users of our
financial statements.
The Partnership believes the Non-GAAP financial
measures described above are useful to investors because these
measurements are used by many companies in its industry as a
measurement of financial performance and are commonly employed by
financial analysts and others to evaluate the financial performance
of the Partnership and to compare the financial performance of the
Partnership with the performance of other publicly traded
partnerships within its industry.
Adjusted EBITDA and Distributable Cash Flow
should not be considered an alternative to net income, net cash
provided by operating activities or any other measure of financial
performance or liquidity presented in accordance with GAAP.
Adjusted EBITDA is defined as net income (loss)
plus:• Interest expense, net;•
Depreciation, depletion and amortization;•
Accretion of discount on asset retirement
obligations; • (Gain) loss on derivatives,
net; • Cash settlements received (paid)
for matured derivatives, net;• Cash
settlements received for early terminations of derivatives, net;•
Cash premiums received (paid) for
derivatives, net;• Cash premiums paid at
inception of derivatives, net;• Impairment
of proved oil and natural gas properties; •
Non-cash equity-based compensation; and•
(Gain) loss on sales of oil and natural
gas properties, net.
Distributable Cash Flow is defined as Adjusted
EBITDA less:
- Cash interest expense;
- Estimated maintenance capital expenditures;
- Other non-operating cash (income) expense; and
- Distributions to preferred unitholders.
Mid-Con Energy Partners, LP and
subsidiaries |
Reconciliation of Net Income to Adjusted
EBITDA and Distributable Cash Flow |
(in thousands) |
(Unaudited) |
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2017 |
|
2016 |
|
2016 |
Net income (loss) |
|
$ |
4,442 |
|
|
$ |
(3,311 |
) |
|
$ |
(3,313 |
) |
Interest
expense, net |
|
1,447 |
|
|
1,502 |
|
|
2,197 |
|
Depreciation, depletion and amortization |
|
4,869 |
|
|
5,524 |
|
|
6,085 |
|
Accretion
of discount on asset retirement obligations |
|
108 |
|
|
134 |
|
|
157 |
|
(Gain)
loss on derivatives, net |
|
(3,132 |
) |
|
4,238 |
|
|
(2,568 |
) |
Cash
settlements (paid) received for matured derivatives, net |
|
(156 |
) |
|
2,044 |
|
|
11,094 |
|
Cash
premiums paid for derivatives, net |
|
(1,274 |
) |
|
(1,274 |
) |
|
(646 |
) |
Cash
premiums paid at inception of derivatives, net |
|
— |
|
|
(121 |
) |
|
— |
|
Non-cash
equity-based compensation |
|
165 |
|
|
223 |
|
|
390 |
|
Loss on
sales of oil and natural gas properties, net |
|
— |
|
|
43 |
|
|
— |
|
Adjusted EBITDA |
|
6,469 |
|
|
9,002 |
|
|
13,396 |
|
Less: |
|
|
|
|
|
|
Cash
interest expense |
|
1,118 |
|
|
1,135 |
|
|
1,936 |
|
Estimated
maintenance capital expenditures |
|
1,258 |
|
|
1,123 |
|
|
982 |
|
Distributions to preferred unitholders |
|
500 |
|
|
502 |
|
|
— |
|
Other
non-operating cash income |
|
— |
|
|
— |
|
|
34 |
|
Distributable Cash
Flow |
|
$ |
3,593 |
|
|
$ |
6,242 |
|
|
$ |
10,478 |
|
|
|
|
|
|
|
|
INVESTOR RELATIONS CONTACT
IR@midcon-energy.com
(918) 743-7575
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