Extraction Oil & Gas, Inc. Announces Third-Quarter 2017 Results; Exceeds Third Quarter Production Guidance and Increases Full-Year 2017 Crude Oil and Equivalent Volume Guidance
Third-Quarter 2017 Highlights
- Average net sales volumes of 62,884 barrels of oil equivalent per day (BOE/d) including 34,607 barrels per day (Bbl/d) of oil. Production volumes exceeded the high end of the Company’s crude oil and total equivalent volume ranges;
- Net loss of
$29.8 million , or$0.20 per basic and diluted share1, compared to a net loss of$37.3 million for the same period in 2016 and net income of$7.2 million for the second quarter of 2017. Adjusted EBITDAX, Unhedged2 was$125.6 million for the third quarter, up 189% year-over-year and up 68% sequentially. Adjusted EBITDAX was$128.4 million , up 167% year-over-year and up 72% sequentially; - Turned to sales 30 gross (27 net) operated wells with an average lateral length of approximately 7,900 feet, and completed 51 gross (34 net) wells with an average lateral length of approximately 10,300 feet;
- The Company expects fourth-quarter 2017 average net sales volumes to be 65-67 MBoe/d with 32-34 MBbl/d of crude oil and increases its full year crude oil production guidance to 25.5-26.5 MBbl/d and total equivalent volumes to 51.5-52.0 MBoe/d; and
- Expected total investment in its New Acquisition Area (Hawkeye Area) in
Arapahoe andAdams Counties to be approximately$450 million for roughly 60,000 net acres.
Commenting on third-quarter 2017 results, Extraction's Chairman and CEO
"We expect to exit the year with a large amount of flush production coming online, which will set us up nicely for hitting our plan to fund our corporate expenditures inside of cash flow during the second half of 2018 while still being able to maintain our previously disclosed production guidance.”
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1 | For further information on the earnings per share, refer to the Consolidated Statement of Operations |
2 | Adjusted EBITDAX and Adjusted EBITDAX, Unhedged are non-GAAP financial measures. For a definition of Adjusted EBITDAX and Adjusted EBITDAX, Unhedged and a reconciliation to our most directly comparable financial measure calculated and presented in accordance with GAAP, read “-Reconciliation of Adjusted EBITDAX and Adjusted EBITDAX, Unhedged.” |
Financial Results
Third quarter average net sales volumes were 62,884 BOE/d, an increase of 117% year-over-year and 42% sequentially. Crude oil volumes of 34,607 Bbl/d increased 147% year-over-year and 50% sequentially. Both crude oil and total equivalent volumes exceeded the high end of the Company’s previously disclosed guidance ranges while crude oil accounted for approximately 73% of the Company’s total revenues recorded during the third quarter of 2017.
For the third quarter, Extraction reported oil, natural gas and NGL sales revenue of
Extraction reported a net loss of
Lease operating expenses (LOE) excluding transportation and gathering expenses for the third quarter were in-line with the Company’s guidance range and totaled
The following table provides a summary of our sales volumes, average prices and certain operating expenses on a per BOE basis for the three and nine months ended September 30, 2017 and 2016 respectively:
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales (MBoe)(1): | 5,785 | 2,663 | 12,809 | 7,429 | |||||||||||
Oil sales (MBbl) | 3,184 | 1,290 | 6,496 | 3,808 | |||||||||||
Natural gas sales (MMcf) | 8,953 | 4,792 | 21,713 | 12,851 | |||||||||||
NGL sales (MBbl) | 1,109 | 574 | 2,695 | 1,479 | |||||||||||
Sales (BOE/d)(1): | 62,884 | 28,948 | 46,921 | 27,114 | |||||||||||
Oil sales (Bbl/d) | 34,607 | 14,025 | 23,794 | 13,899 | |||||||||||
Natural gas sales (Mcf/d) | 97,311 | 52,083 | 79,536 | 46,902 | |||||||||||
NGL sales (Bbl/d) | 12,059 | 6,242 | 9,871 | 5,397 | |||||||||||
Average sales prices(2): | |||||||||||||||
Oil sales (per Bbl) | $ | 41.48 | $ | 40.11 | $ | 41.50 | $ | 35.68 | |||||||
Oil sales with derivative settlements (per Bbl) | 42.14 | 42.73 | 40.61 | 41.93 | |||||||||||
Differential ($/Bbl) to Average NYMEX WTI | (6.72 | ) | (4.83 | ) | (7.86 | ) | (5.85 | ) | |||||||
Natural gas sales (per Mcf) | 2.76 | 2.67 | 2.91 | 2.16 | |||||||||||
Natural gas sales with derivative settlements (per Mcf) | 2.84 | 2.94 | 2.90 | 2.84 | |||||||||||
Differential ($/Mcf) to Average NYMEX Henry Hub | (0.49 | ) | (0.40 | ) | (0.45 | ) | (0.43 | ) | |||||||
NGL sales (per Bbl) | 21.74 | 14.54 | 21.36 | 13.37 | |||||||||||
Average price per BOE | 31.26 | 27.38 | 30.47 | 24.69 | |||||||||||
Average price per BOE with derivative settlements | 31.76 | 29.12 | 30.00 | 29.06 | |||||||||||
Expense per BOE: | |||||||||||||||
Lease operating expenses | $ | 5.06 | $ | 5.81 | $ | 5.91 | $ | 5.49 | |||||||
Operating expenses | 2.67 | 3.57 | 3.25 | 3.46 | |||||||||||
Transportation and gathering | 2.39 | 2.24 | 2.66 | 2.03 | |||||||||||
General and administrative expenses | 4.97 | 7.54 | 6.08 | 4.74 | |||||||||||
Cash general and administrative expenses | 1.84 | 2.92 | 2.43 | 2.73 | |||||||||||
Unit and stock-based compensation | 3.13 | 4.62 | 3.65 | 2.01 | |||||||||||
Production taxes as a % of Revenue | 9.01 | % | 8.49 | % | 8.52 | % | 9.23 | % |
(1) | One BOE is equal to six thousand cubic feet (“Mcf”) of natural gas or one barrel (“Bbl”) of oil or NGL based on an approximate energy equivalency. This is an energy content correlation and does not reflect a value or price relationship between the commodities. |
(2) | Average prices shown in the table reflect prices both before and after the effects of our settlements of our commodity derivative contracts. Our calculation of such effects includes both gains and losses on settlements for commodity derivatives and amortization of premiums paid or received on options that settled during the period. |
Update on New Acquisition Area in the
To date Extraction has invested approximately
To date, over 30 wells have been drilled in this area, and many of which have exhibited some of the highest oil production rates in the
The Hawkeye Area is some of Extraction's most rural acreage, and as such, has allowed the Company to quickly secure permits. Extraction currently has over 100 permits approved and over 110 more in process. The Company is currently negotiating with multiple third parties for gas gathering & processing and oil gathering solutions and expects competitive rates similar to our other operating areas.
Commenting on the Company’s new acquisition area,
With the inclusion of the Hawkeye Area, Extraction now has approximately 160,000 net acres in the core of the
Operational Results
During the third quarter, the Company’s aggregate drilling, completion, leasehold and midstream capital expenditures totaled approximately
Commenting on the third quarter, Extraction’s Chairman and CEO
Extraction reached total depth on 53 gross (35 net) wells with an average lateral length of approximately 8,300 feet, completed 51 gross (34 net) wells with an average lateral length of approximately 10,300 feet and turned to sales 30 gross (27 net) wells with an average lateral length of approximately 7,900 feet during the third quarter. The Company completed 3,053 total stages during the third quarter while pumping approximately 965 million pounds of proppant.
Fourth Quarter and Full-Year 2017 Outlook
For the fourth quarter of 2017, Extraction expects its average net sales volumes to be 65-67 MBoe/d, which represents a five percent increase over its third-quarter 2017 volumes at the midpoint. The Company’s crude oil production in the fourth quarter of 2017 is expected to average 32-34 MBbl/d. For the full-year 2017, we are revising our expected crude oil production guidance to 25.5-26.5 MBbl/d from our previously revised guidance range of 24-27 MBbl/d. We now expect our full-year 2017 net sales to average between 51.5-52.0 MBoe/d.
The Company expects its fourth quarter LOE excluding transportation and gathering expense to be between
Extraction now expects its full-year 2017 operated and non-operated drilling and completion forecast to be between
Driven by these additional wells turned to sales near the end of 2017 along with continued better-than-expected well performance, Extraction now expects its 2017 exit rate to be approximately 73 MBoe/d. This represents an eight percent increase from the midpoint of its previous 65-70 MBoe/d exit rate guidance range. As this incremental capital is going to impact 2018 production rather than 2017, Extraction continues to maintain its ability to meet its previously disclosed 2018 growth guidance target with less drilling and completion capital than in 2017. Extraction plans to issue official 2018 capital and production guidance sometime in December.
Commenting on the capital forecast,
“While navigating the high line pressures on DCP’s system in the northern portion of the Wattenberg field has been difficult, we are benefiting from plans made early in the year to proactively install pad sales compression enabling our older pads to produce against the higher line pressures and from our new pads which can more easily produce against the higher line pressures."
"We fortunately have a large acreage position in the southern portion of the field with access to
Debt and Liquidity
Extraction ended the third quarter with
Extraction continues to maintain its robust hedging program and currently has 18.4 million barrels of crude oil and 50.6 million MMBtu of natural gas hedged through the first half of 2019 as of
Updated Investor Presentation
Extraction has posted an updated investor presentation to its website. The investor presentation may be viewed on the Company’s website (www.extractionog.com) by selecting “Investors,” then “News and Events,” then “Presentations.”
Third-Quarter Earnings Conference Call Information
Those who would like to participate can dial into the number listed below approximately 15 minutes before the scheduled conference call time, and enter confirmation number 92226881when prompted.
Date: | Wednesday, November 8, 2017 |
Time: | 8:00 AM MST / 10:00 AM EST |
Dial - In Numbers: | 1-844-229-9561 (Domestic toll-free) |
Conference ID: | 92226881 |
To access the audio webcast and related presentation materials, please visit the Investor Relations section of the Company’s website at www.extractionog.com. A replay of the conference call will be available on the website for approximately 30 days following the call.
About
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this press release constitute “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 facts, included herein concerning, among other things, planned capital expenditures, increases in oil and gas production, the number of anticipated wells to be drilled or completed after the date hereof, future cash flows and borrowings, pursuit of potential acquisition opportunities, our financial position, business strategy and other plans and objectives for future operations, are forward-looking statements. These forward-looking statements are identified by their use of terms and phrases such as "may," "expect," "estimate," "project," "plan," "believe," "intend," "achievable," "anticipate," "will," "continue," "potential," "should," "could," and similar terms and phrases. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties. These forward-looking statements represent our expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control that could cause actual results to differ materially from the results discussed in the forward-looking statements.
Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, we do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for us to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in the “Risk Factors” section of our most recent Form 10-K and Forms 10-Q filed with the
EXTRACTION OIL & GAS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited) |
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September 30, 2017 |
December 31, 2016 |
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ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 114,139 | $ | 588,736 | |||
Accounts receivable | 123,063 | 57,220 | |||||
Inventory and prepaid expenses | 13,262 | 7,722 | |||||
Commodity derivative asset | 986 | — | |||||
Total Current Assets | 251,450 | 653,678 | |||||
Property and Equipment (successful efforts method), at cost: | |||||||
Oil and gas properties | 3,453,597 | 2,402,376 | |||||
Less: accumulated depletion, depreciation and amortization | (610,390 | ) | (402,912 | ) | |||
Net oil and gas properties | 2,843,207 | 1,999,464 | |||||
Other property and equipment, net of accumulated depreciation | 26,866 | 32,721 | |||||
Net Property and Equipment | 2,870,073 | 2,032,185 | |||||
Non-Current Assets: | |||||||
Goodwill and other intangible assets, net of accumulated amortization | 54,966 | 54,489 | |||||
Other non-current assets | 11,611 | 44,424 | |||||
Total Non-Current Assets | 66,577 | 98,913 | |||||
Total Assets | $ | 3,188,100 | $ | 2,784,776 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 151,940 | $ | 131,134 | |||
Revenue and production taxes payable | 80,765 | 62,489 | |||||
Commodity derivative liability | 8,259 | 56,003 | |||||
Accrued interest payable | 14,068 | 19,621 | |||||
Asset retirement obligations | 4,998 | 5,300 | |||||
Total Current Liabilities | 260,030 | 274,547 | |||||
Non-Current Liabilities: | |||||||
Senior Notes, net of unamortized debt issuance costs | 932,570 | 538,141 | |||||
Deferred tax liability | 98,470 | 106,026 | |||||
Commodity derivative liability | 3,025 | 6,738 | |||||
Other non-current liabilities | 103,369 | 90,112 | |||||
Total Non-Current Liabilities | 1,137,434 | 741,017 | |||||
Total Liabilities | 1,397,464 | 1,015,564 | |||||
Commitments and Contingencies | |||||||
Series A Convertible Preferred Stock, $0.01 par value; 50,000,000 shares authorized; 185,280 issued and outstanding | 156,995 | 153,139 | |||||
Total Stockholders' Equity | 1,633,641 | 1,616,073 | |||||
Total Liabilities and Stockholders' Equity | $ | 3,188,100 | $ | 2,784,776 |
EXTRACTION OIL & GAS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) |
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For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
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2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues: | |||||||||||||||
Oil sales | $ | 132,075 | $ | 51,760 | $ | 269,597 | $ | 135,896 | |||||||
Natural gas sales | 24,672 | 12,792 | 63,095 | 27,730 | |||||||||||
NGL sales | 24,114 | 8,350 | 57,574 | 19,773 | |||||||||||
Total Revenues | 180,861 | 72,902 | 390,266 | 183,399 | |||||||||||
Operating Expenses: | |||||||||||||||
Lease operating expenses | 15,465 | 9,514 | 41,626 | 25,751 | |||||||||||
Transportation and gathering | 13,802 | 5,966 | 34,129 | 15,068 | |||||||||||
Production taxes | 16,290 | 6,186 | 33,254 | 16,935 | |||||||||||
Exploration expenses | 7,181 | 5,985 | 24,431 | 14,735 | |||||||||||
Depletion, depreciation, amortization and accretion | 94,220 | 46,680 | 213,483 | 141,317 | |||||||||||
Impairment of long lived assets | — | 467 | 675 | 23,350 | |||||||||||
Other operating expenses | — | 345 | 519 | 1,236 | |||||||||||
General and administrative expenses | 28,741 | 20,071 | 77,916 | 35,189 | |||||||||||
Total Operating Expenses | 175,699 | 95,214 | 426,033 | 273,581 | |||||||||||
Operating Income (Loss) | 5,162 | (22,312 | ) | (35,767 | ) | (90,182 | ) | ||||||||
Other Income (Expense): | |||||||||||||||
Commodity derivatives gain (loss) | (37,875 | ) | 16,225 | 46,423 | (62,424 | ) | |||||||||
Interest expense | (15,080 | ) | (31,216 | ) | (33,761 | ) | (57,914 | ) | |||||||
Other income | 891 | 36 | 1,709 | 120 | |||||||||||
Total Other Income (Expense) | (52,064 | ) | (14,955 | ) | 14,371 | (120,218 | ) | ||||||||
Loss Before Income Taxes | (46,902 | ) | (37,267 | ) | (21,396 | ) | (210,400 | ) | |||||||
Income tax benefit | (17,106 | ) | — | (7,556 | ) | — | |||||||||
Net Loss | $ | (29,796 | ) | $ | (37,267 | ) | $ | (13,840 | ) | $ | (210,400 | ) | |||
Loss Per Common Share(1) | |||||||||||||||
Basic and diluted | $ | (0.20 | ) | $ | (0.15 | ) | |||||||||
Weighted Average Common Shares Outstanding | |||||||||||||||
Basic and diluted | 171,845 | 171,838 |
(1) | For further information, see the reconciliation of Net Income (Loss) to Net Income (Loss) available to common shareholders in Note 10 of our Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2017. |
EXTRACTION OIL & GAS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
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For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
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2017 | 2016 | 2017 | 2016 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net loss | $ | (29,796 | ) | $ | (37,267 | ) | $ | (13,840 | ) | $ | (210,400 | ) | |||
Reconciliation of net loss to net cash provided by operating activities: | |||||||||||||||
Depletion, depreciation, amortization and accretion | 94,220 | 46,680 | 213,483 | 141,317 | |||||||||||
Abandonment and impairment of unproved properties | 1,124 | 469 | 5,684 | 3,331 | |||||||||||
Impairment of long lived assets | — | 467 | 675 | 23,350 | |||||||||||
Loss on sale of property and equipment | — | — | 451 | — | |||||||||||
Amortization of debt issuance costs and debt discount | 1,469 | 15,905 | 3,181 | 18,330 | |||||||||||
Deferred rent | (73 | ) | 214 | (229 | ) | 600 | |||||||||
(Gain) loss on commodity derivatives, including settlements and premiums paid | 42,222 | (15,394 | ) | (55,316 | ) | 104,828 | |||||||||
Deferred income tax expense | (17,106 | ) | — | (7,556 | ) | — | |||||||||
Unit and stock-based compensation | 18,110 | 12,315 | 46,707 | 14,922 | |||||||||||
Equity in earnings of unconsolidated affiliate | (266 | ) | — | (256 | ) | — | |||||||||
Distributions from unconsolidated affiliate | 131 | — | 131 | — | |||||||||||
Changes in current assets and liabilities: | |||||||||||||||
Accounts receivable | (53,863 | ) | 2,770 | (65,458 | ) | (4,617 | ) | ||||||||
Inventory and prepaid expenses | (77 | ) | (20 | ) | (180 | ) | (273 | ) | |||||||
Accounts payable and accrued liabilities | 4,839 | (1,575 | ) | 1,653 | (18,242 | ) | |||||||||
Revenue and production taxes payable | 21,340 | 23,401 | 19,567 | 16,447 | |||||||||||
Accrued interest payable | (5,909 | ) | 8,646 | (5,553 | ) | 8,342 | |||||||||
Asset retirement expenditures | (456 | ) | (226 | ) | (1,408 | ) | (372 | ) | |||||||
Net cash provided by operating activities | 75,909 | 56,385 | 141,736 | 97,563 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Oil and gas property additions | (443,595 | ) | (64,038 | ) | (1,015,700 | ) | (223,684 | ) | |||||||
Acquired oil and gas properties | — | (13,674 | ) | (17,225 | ) | (13,674 | ) | ||||||||
Sale of property and equipment | 3,155 | — | 5,155 | 2,148 | |||||||||||
Other property and equipment additions | (3,818 | ) | (754 | ) | (9,608 | ) | (3,336 | ) | |||||||
Distributions from unconsolidated affiliates, return of capital | 116 | — | 116 | — | |||||||||||
Cash held in escrow | 8,400 | (42,000 | ) | 42,200 | (42,000 | ) | |||||||||
Net cash used in investing activities | (435,742 | ) | (120,466 | ) | (995,062 | ) | (280,546 | ) | |||||||
Cash flows from financing activities: | |||||||||||||||
Borrowings under credit facility | 250,000 | 50,000 | 250,000 | 60,000 | |||||||||||
Repayments under credit facility | (250,000 | ) | (196,000 | ) | (250,000 | ) | (196,000 | ) | |||||||
Proceeds from the issuance of Senior Notes | 394,000 | 550,000 | 394,000 | 550,000 | |||||||||||
Repayments of Second Lien notes | — | (430,000 | ) | — | (430,000 | ) | |||||||||
Proceeds from the issuance of units | — | 5,000 | — | 121,370 | |||||||||||
Repurchase of units | — | (2,209 | ) | — | (2,867 | ) | |||||||||
Payment of employee payroll withholding taxes | (2,832 | ) | — | (2,832 | ) | — | |||||||||
Dividends on Series A Preferred Stock | (2,722 | ) | — | (7,680 | ) | — | |||||||||
Debt issuance costs | (3,163 | ) | (13,189 | ) | (3,273 | ) | (13,189 | ) | |||||||
Equity issuance costs | — | (1,805 | ) | (1,486 | ) | (2,051 | ) | ||||||||
Net cash provided by (used in) financing activities | 385,283 | (38,203 | ) | 378,729 | 87,263 | ||||||||||
Increase (decrease) in cash and cash equivalents | 25,450 | (102,284 | ) | (474,597 | ) | (95,720 | ) | ||||||||
Cash and cash equivalents at beginning of period | 88,689 | 103,670 | 588,736 | 97,106 | |||||||||||
Cash and cash equivalents at end of the period | $ | 114,139 | $ | 1,386 | $ | 114,139 | $ | 1,386 | |||||||
Supplemental cash flow information: | |||||||||||||||
Property and equipment included in accounts payable and accrued liabilities | $ | 130,022 | $ | 53,371 | $ | 130,022 | $ | 53,371 | |||||||
Cash paid for interest | $ | 22,447 | $ | 3,584 | $ | 44,703 | $ | 30,531 | |||||||
Accretion of beneficial conversion feature of Series A Preferred Stock | $ | 1,365 | $ | — | $ | 3,992 | $ | — | |||||||
Cash paid for Second Lien Notes prepayment penalty | $ | — | $ | 4,300 | $ | — | $ | 4,300 | |||||||
Non-cash settlement of promissory notes issued to officers | $ | — | $ | 5,562 | $ | — | $ | 5,562 | |||||||
Non-cash contribution to unconsolidated affiliate | $ | 116 | $ | — | $ | 8,307 | $ | — | |||||||
Increase in dividends payable | $ | (1 | ) | $ | — | $ | 484 | $ | — |
EXTRACTION OIL & GAS, INC. RECONCILIATION OF ADJUSTED EBITDAX AND ADJUSTED EBITDAX, UNHEDGED (In thousands) |
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For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
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2017 | 2016 | 2017 | 2016 | ||||||||||||
Reconciliation of Net Loss to Adjusted EBITDAX: | |||||||||||||||
Net loss | $ | (29,796 | ) | $ | (37,267 | ) | $ | (13,840 | ) | $ | (210,400 | ) | |||
Add back: | |||||||||||||||
Depletion, depreciation, amortization and accretion | 94,220 | 46,680 | 213,483 | 141,317 | |||||||||||
Impairment of long lived assets | — | 467 | 675 | 23,350 | |||||||||||
Exploration expenses | 7,181 | 5,985 | 24,431 | 14,735 | |||||||||||
Rig termination fee | — | — | — | 891 | |||||||||||
Loss on sale of property and equipment | — | — | 451 | — | |||||||||||
Acquisition transaction expenses | — | 345 | 68 | 345 | |||||||||||
(Gain) loss on commodity derivatives | 37,875 | (16,225 | ) | (46,423 | ) | 62,424 | |||||||||
Settlements on commodity derivative instruments | 3,162 | 4,787 | (6,022 | ) | 37,947 | ||||||||||
Premiums paid for derivatives that settled during the period | (293 | ) | (132 | ) | 20 | (5,470 | ) | ||||||||
Unit and stock-based compensation expense | 18,110 | 12,315 | 46,707 | 14,922 | |||||||||||
Amortization of debt discount and debt issuance costs | 1,469 | 15,905 | 3,181 | 18,330 | |||||||||||
Interest expense | 13,611 | 15,311 | 30,580 | 39,584 | |||||||||||
Income tax benefit | (17,106 | ) | — | (7,556 | ) | — | |||||||||
Adjusted EBITDAX | $ | 128,433 | $ | 48,171 | $ | 245,755 | $ | 137,975 | |||||||
Deduct: | |||||||||||||||
Settlements on commodity derivative instruments | 3,162 | 4,787 | (6,022 | ) | 37,947 | ||||||||||
Premiums paid for derivatives that settled during the period | (293 | ) | (132 | ) | 20 | (5,470 | ) | ||||||||
Adjusted EBITDAX, Unhedged | $ | 125,564 | $ | 43,516 | $ | 251,757 | $ | 105,498 |
Adjusted EBITDAX and Adjusted EBITDAX, Unhedged are not measures of net income (loss) as determined by
Management believes Adjusted EBITDAX and Adjusted EBITDAX, Unhedged are useful because they allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDAX and Adjusted EBITDAX, Unhedged because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX and Adjusted EBITDAX, Unhedged should not be considered as alternatives to, or more meaningful than, net income (loss) as determined in accordance with GAAP or as an indicator of our operating performance. Certain items excluded from Adjusted EBITDAX and Adjusted EBITDAX, Unhedged are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital, hedging strategy and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX and Adjusted EBITDAX, Unhedged. Our computations of Adjusted EBITDAX and Adjusted EBITDAX, Unhedged may not be comparable to other similarly titled measure of other companies. We believe that Adjusted EBITDAX and Adjusted EBITDAX, Unhedged are widely followed measures of operating performance. A reconciliation of Adjusted EBITDAX and Adjusted EBITDAX, Unhedged and net income (loss) for the three and nine months ended
Investor Contact: Louis Baltimore, ir@extractionog.com, 720-974-7773