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Bonanza Creek Provides an Operational Update, Issues First Quarter 2021 Guidance, and Announces 4th Quarter 2020 Conference Call
Highlights for the fourth quarter and full year 2020 include:
- Average sales volumes are expected to be 25.0 thousand barrels of oil equivalent per day (“MBoe/d”) for the fourth quarter, with oil representing 54% of total volumes
- Average sales volumes are expected to be 25.2 MBoe/d for the full year (54% oil), up 8% over full year 2019; at the mid-point of the most recent annual 2020 guidance range of 25.0 to 25.5 MBoe/d
- Total capital expenditures for the fourth quarter are estimated at
$3.2 million, bringing the total 2020 capital expenditures to approximately $67.7 million; within the most recent annual guidance range of $60to $70 million
- Lease operating expenses (“LOE”) are expected to be
$2.20per Boe for the fourth quarter; down slightly from the third quarter of 2020, and down 27% from the fourth quarter of 2019
- Full year 2020 LOE of approximately
$2.38per Boe is down 19% from 2019; below our most recent annual guidance range of $2.40to $2.60per Boe
- Rocky Mountain Infrastructure (“RMI”) net effective cost is expected to be
$1.01per Boe for the fourth quarter, which is comprised of approximately $1.57per Boe of operating expenses, offset by $0.56per Boe of RMI operating revenue from working interest partners
- For the year, RMI’s net effective cost is expected to be
$1.03per Boe, with operating expenses of $1.62per Boe versus the most recent annual guidance range of $1.50to $1.80per Boe
- The Company exited 2020 with no debt and approximately
$25 millionin cash
- Year-end 2020 total proved reserves are estimated to be 118.2 million BOE, and proved developed producing reserves are estimated to be 56.4 million BOE, in both cases using commodity prices required by
Greager continued, “In November, we announced a transformative and highly compelling transaction with HighPoint Resources. We’re planning for a shareholder vote later this quarter, and we continue to make steady progress toward closing the transaction.”
First Quarter 2021 Bonanza Creek Guidance
The Company is providing guidance for the first quarter of 2021 for Bonanza Creek as a stand-alone company. Additional guidance for 2021 on a combined basis will be provided after the closing of the HighPoint transaction.
The Company’s stand-alone 2021 capital plan assumes the completion of 30 gross (25.8 net) drilled, uncompleted (“DUC”) wells. Completion activities for these wells started in early January and are expected to continue through the second quarter with the first wells turned to sales during the second quarter. Total capital expenditure guidance for the first quarter of 2021 is
Average quarterly production was expected to begin declining following the third quarter of 2020, and is expected to continue to decline until production from DUC wells begin to offset the base decline during the second quarter of 2021. First quarter production guidance is a range of 22.0 to 24.0 MBoe/d with the mid-point of 23.0 MBoe/d representing an 8% decline from the fourth quarter of 2020.
The table below outlines the Company’s full guidance for the first quarter of 2021.
|1Q 2021 Guidance||Low||High|
|Capital Expenditures ($MM)||--|
|Lease Operating Expenses ($MM)||--|
|RMI Operating Expenses ($MM)||--|
|Recurring Cash G&A ($MM)||--|
|Production Taxes (% of revenue)||5%||--||6%|
|Oil Differential ($/Bbl)||--|
Note: Guidance is forward-looking information that is subject to considerable change and numerous risks and uncertainties, many of which are beyond the Company’s control. See “Forward-Looking Statements” below.
Conference Call to Discuss Fourth Quarter and Full Year 2020 Results
The Company is scheduled to release its fourth quarter and full year 2020 operating and financial results after market close on
|Live participant||877-793-4362||784 8187|
No Offer or Solicitation
This communication relates to a proposed business combination transaction (the “Merger”) between
Important Additional Information
In connection with the Transaction, BCEI and HPR have filed or intend to file materials with the
Investors will be able to obtain free copies of the Registration Statements, Joint Proxy Statement and Exchange Prospectus, as each may be amended from time to time, and other relevant documents filed by BCEI and HPR with the
Participants in the Solicitation
BCEI, HPR and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under
Forward-Looking Statements and Cautionary Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by the Company based on management’s experience, perception of historical trends and technical analyses, current conditions, anticipated future developments and other factors believed to be appropriate and reasonable by management. When used in this press release, the words “will,” “potential,” “believe,” “estimate,” “intend,” “expect,” “may,” “should,” “anticipate,” “could,” “plan,” “predict,” “project,” “profile,” “model” or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These statements include statements regarding development and completion expectations and strategy; decreasing operating and capital costs; and 2021 guidance. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, that may cause actual results to differ materially from those implied or expressed by the forward-looking statements, including the following: changes in natural gas, oil and NGL prices; general economic conditions, including the performance of financial markets and interest rates; drilling results; shortages of oilfield equipment, services and personnel; operating risks such as unexpected drilling conditions; ability to acquire adequate supplies of water; risks related to derivative instruments; access to adequate gathering systems and pipeline take-away capacity; and pipeline and refining capacity constraints. Further information on such assumptions, risks and uncertainties is available in the Company’s SEC filings. We refer you to the discussion of risk factors in our Annual Report on Form 10-K for the year ended December 31, 2019, our subsequently filed Quarterly Reports on Form 10-Q, and other filings submitted by us to the Securities Exchange Commission. The Company’s SEC filings are available on the Company’s website at www.bonanzacrk.com and on the SEC’s website at www.sec.gov. All of the forward-looking statements made in this press release are qualified by these cautionary statements.
Certain statements in this document concerning the Transaction, including any statements regarding the expected timetable for completing the Transaction, the results, effects, benefits and synergies of the Transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding BCEI’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are “forward-looking” statements based on assumptions currently believed to be valid. Specific forward-looking statements include statements regarding BCEI plans and expectations with respect to the Transaction and the anticipated impact of the Transaction on the combined company’s results of operations, financial position, growth opportunities and competitive position. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, the possibility that shareholders of BCEI may not approve the issuance of new shares of BCEI common stock in the Transaction or that shareholders of HPR may not approve the Merger Agreement; the risk that a condition to closing of the Transaction may not be satisfied, that either party may terminate the Merger Agreement or that the closing of the Transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of BCEI and HPR; the effects of the business combination of BCEI and HPR, including the combined company’s future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; the risks of oil and gas activities; the risk that the requisite amount of HPR debt does not participate in the Exchange Offer and that HPR may need to reorganize in bankruptcy as a result; the risks and unpredictability inherent in the bankruptcy process; and the fact that operating costs and business disruption may be greater than expected following the public announcement or consummation of the Transaction. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. BCEI does not assume any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
For further information, please contact:
Senior Director, Finance & Investor Relations and Treasurer
Schedule 1: Rocky Mountain Infrastructure (“RMI”) Net Effective Cost
(in thousands, unaudited)
RMI net effective cost is a supplemental non-GAAP financial measure that is used by management to assess only the net cash impact the Company’s wholly owned subsidiary,
The following table presents a reconciliation of the GAAP financial measures of midstream operating expense and RMI working interest partner revenue to the non-GAAP financial measure of RMI net effective cost.
|Three Months Ended||Twelve Months Ended|
|Midstream operating expense|
|RMI working interest partner revenue||(1,279)||(5,430)|
|RMI net effective cost|
Source: Bonanza Creek Energy, Inc.