Roan Resources, Inc. (NYSE: ROAN) (“Roan” or the “Company”)
today announced its fourth quarter 2018 highlights and provided an
initial overview of its 2019 development plan:
Fourth Quarter 2018 Highlights:
- Completed combination and corporate
reorganization in October 2018 and successfully uplisted to the New
York Stock Exchange in November 2018;
- Production expected to be in-line with
the mid-point of guidance at 54.1 thousand barrels of oil
equivalent per day (MBoe/d) (27% oil and 58% liquids), representing
110% growth from the fourth quarter of 2017 and 17%
quarter-over-quarter growth;
- 2018 annual production expected to be
43.7 MBoe/d;
- Capital expenditures expected to be
within guidance, at $217MM;
- Last quarter annualized (LQA) leverage
expected to be approximately 1.4x; and
- Average 30-day initial production (IP)
rate of the 20 wells turned online in the fourth quarter was
approximately 1,080 Boe/d (53% oil and 73% total liquids,
normalized to 10,000 lateral feet) and average 60-day IP rate of
the same set of wells was approximately 975 Boe/d (54% oil and 74%
total liquids, normalized to 10,000 lateral feet).
2019 Updated Development Plan:
- The updated development plan projects
positive free cash flow by the end of 2019 versus previous guidance
targeting 2020. While focusing on generating free cash flow by the
end of this year, the Company expects to still be able to grow
production by approximately 30% year-over-year, approximately 20%
from fourth quarter 2018 to fourth quarter 2019 and target a 1.5x
LQA leverage ratio by the end of the year.
- Capital expenditures are expected to be
more heavily weighted to the first half of the year, as a result of
increased completion activity as the Company develops its inventory
of drilled, uncompleted wells from 2018 drilling activity.
- The Company anticipates production to
be approximately flat on a sequential basis in the first quarter of
2019, as a result of a slowdown in completions activity during late
fourth quarter and early first quarter. The Company reduced
completion activity in order to allow for a resetting of service
pricing, in recognition of the declining commodity price
environment.
- The Company also expects to be able to
generate continued double-digit production growth within cash flow
in 2020.
- Projections assume commodity prices of
$55 oil and $2.75 gas and current service costs.
“Roan had a strong fourth quarter, with both production and
capital expenditures within our guidance targets,” said Tony
Maranto, Roan’s Chairman and Chief Executive Officer. “We have also
achieved our objectives of building a best-in-class staff and
becoming a NYSE-listed public company. Execution on these
objectives position us well as we begin 2019.”
Mr. Maranto added, “Capital discipline remains at the forefront
of our strategy as we plan for 2019, and as such, we are adjusting
our development activity to limit outspend and allow for free cash
generation by the end of the year, while still materially growing
production year over year. Roan is a company uniquely focused on
its shareholders and will modulate its activity levels to balance
aggregate outspend, allowing for free cash generation by the end of
the year. We are afforded this potential due to the strength of our
asset quality, position of our credit profile and imbedded
flexibility in our development activity. The fourth quarter results
are a continued demonstration of the quality of our Merge acreage
and the type of results we have been working towards all year.”
2019 Guidance
Low High
Production (MBoe/d) 56.0
59.0 4Q 2019 Production (MBoe/d) 64.0
66.0 Oil Mix 26%
28% Liquids Mix 58%
60% LOE ($/Boe) $2.50
$2.80 Production Taxes (% of Production Revenues)
5.2% 5.4% Cash G&A ($/Boe)
$1.80 $2.00 Gross
Operated Spuds 57 62
Gross Operated Completions 70
75 Capital Expenditures ($MM)
$520 $570
Note: Assumes ethane recovery in the
second quarter of 2019 through the fourth quarter of 2019.
Fourth Quarter Release and Call Information
Roan will release fourth quarter 2018 and full-year 2018 results
after the market close on Monday, March 18th, and host a conference
call on Tuesday, March 19, 2019 at 11:00 a.m. ET (10:00 a.m. CT).
Interested parties may listen to the conference call via webcast on
the Company’s website at www.RoanResources.com under the “Investor
Relations” section of the site or by phone:
Dial-in: 866-393-4306International dial-in:
734-385-2616Conference ID: 4598253
A replay of the webcast will be available on the Company’s
website and a replay of the call will be available for two weeks by
phone:
Replay dial-in: 855-859-2056 or 404-537-3406International replay
dial-in: 800-585-8367Conference ID: 4598253
About Roan Resources
Roan is an independent oil and natural gas company headquartered
in Oklahoma City, OK focused on the development, exploration and
acquisition of unconventional oil and natural gas reserves in the
Merge, SCOOP and STACK plays of the Anadarko Basin in Oklahoma. For
more information, please visit www.RoanResources.com, where we
routinely post announcements, updates, events, investor
information, presentations and recent news releases.
Forward-Looking Statements
This press 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. All statements, other than statements of historical fact,
are forward-looking statements which contain our current
expectations about future results. These forward-looking statements
are based on certain assumptions and expectations made by the
Company, which reflect management’s experience, estimates and
perception of historical trends, current conditions and anticipated
future developments. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of the Company, which may cause actual results to differ
materially from those implied or anticipated in the forward-looking
statements. When considering these forward-looking statements, you
should keep in mind the risk factors and other cautionary
statements found in the Company’s filings with the Securities and
Exchange Commission, including its Current Report on Form 8-K,
filed September 24, 2018 and any subsequently filed quarterly
reports on Form 10-Q or current reports on Form 8-K.
We caution you that these forward-looking statements are subject
to all of the risks and uncertainties, most of which are difficult
to predict and many of which are beyond our control, or incidental
to the development, production, gathering and sale of oil, natural
gas and NGLs. These risks include, but are not limited to,
commodity price volatility, inflation, lack of availability of
drilling and production equipment and services, environmental
risks, drilling and other operating risks, regulatory changes, the
uncertainty inherent in estimating reserves and in projecting
future rates of production, cash flow and access to capital, the
timing of development expenditures and the other risks.
Reserve engineering is a process of estimating underground
accumulations of oil, natural gas and NGLs that cannot be measured
in an exact way. The accuracy of any reserve estimate depends on
the quality of available data, the interpretation of such data and
price and cost assumptions made by reserve engineers. In addition,
the results of drilling, testing and production activities may
justify revisions of estimates that were made previously. If
significant, such revisions would change the schedule of any
further production and development drilling. Accordingly, reserve
estimates may differ significantly from the quantities of oil,
natural gas and NGLs that are ultimately recovered.
Should one or more of the risks or uncertainties described
occur, or should underlying assumptions prove incorrect, our actual
results and plans could differ materially from those expressed in
any forward-looking statements.
All forward-looking statements, expressed or implied, included
in this release are expressly qualified in their entirety by this
cautionary statement. This cautionary statement should also be
considered in connection with any subsequent written or oral
forward-looking statements that we or persons acting on our behalf
may issue.
Except as otherwise required by applicable law, we disclaim any
duty to update any forward-looking statements, all of which are
expressly qualified by the statements in this section, to reflect
events or circumstances after the date of this release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190219005559/en/
Alyson GilbertInvestor Relations
Manager405-896-3767IR@RoanResources.com
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