Highlights
First Quarter 2024
- Sales volumes averaged 49,729 barrels of crude oil equivalent per day (“Boe/d”), consisting of 80% crude oil and 91% liquids, representing a 34% increase over first quarter 2023.
- Lease operating expenses, excluding expense workovers, were reduced for the fourth consecutive quarter to
$6.30 per Boe, representing a 26% decrease from the first quarter 2023. - Net income was
$6.4 million , or$0.05 per diluted share, and EBITDAX (a non-GAAP financial measure defined and reconciled below) was$233.3 million , or$1.63 per diluted share. Adjusted net income (a non-GAAP financial measure defined and reconciled below) was$48.3 million , or$0.37 per diluted share. - The Company generated free cash flow (a non-GAAP financial measure defined and reconciled below) of
$48.0 million , an increase of 42% compared with the fourth quarter 2023. - The Company utilized its free cash flow to reduce debt by
$30 million , increase its quarterly dividend by 60% to$0.04 per share and to implement a share buyback plan whereby it repurchased over 565,000 shares during the first quarter.
Recent Events
- On
May 8, 2024 , the Company’s Board of Directors declared a quarterly dividend of$0.04 per common share outstanding payable inJune 2024 .
HighPeak Chairman and CEO,
First Quarter 2024 Operational Update
HighPeak’s sales volumes during the first quarter of 2024 averaged 49,729 Boe/d, a 34% increase over first quarter of 2023. First quarter sales volumes consisted of approximately 80% crude oil and 91% liquids.
The Company averaged two drilling rigs and one frac crew during the first quarter, drilled 19 gross (17.8 net) operated horizontal wells and completed 12 gross (12.0 net) operated producing wells. At
HighPeak President,
First Quarter 2024 Financial Results
HighPeak reported net income of
First quarter average realized prices were
HighPeak’s first quarter 2024 capital expenditures to drill, complete, equip, provide facilities and for infrastructure were
Dividends
During the first quarter of 2024, HighPeak’s Board of Directors approved a quarterly dividend of
Conference Call
HighPeak will host a conference call and webcast on
When available, a copy of the Company’s earnings release, investor presentation and Quarterly Report on Form 10-Q may be found on its website at www.highpeakenergy.com.
Conference Participation
About
Cautionary Note Regarding Forward-Looking Statements
The information in this press release contains forward-looking statements that involve risks and uncertainties. When used in this document, the words “believes,” “plans,” “expects,” “anticipates,” “forecasts,” “intends,” “continue,” “may,” “will,” “could,” “should,” “future,” “potential,” “estimate” or the negative of such terms and similar expressions as they relate to
These risks and uncertainties include, among other things, the results of the strategic review being undertaken by the Company’s Board and the interest of prospective counterparties, the Company’s ability to realize the results contemplated by its 2024 guidance, volatility of commodity prices, product supply and demand, the impact of a widespread outbreak of an illness, such as the coronavirus disease pandemic, on global and
Reserve engineering is a process of estimating underground accumulations of hydrocarbons 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. Reserves estimates included herein may not be indicative of the level of reserves or PV-10 value of oil and natural gas production in the future. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions could impact HighPeak’s strategy and change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered.
Use of Projections
The financial, operational, industry and market projections, estimates and targets in this press release and in the Company’s guidance (including production, operating expenses and capital expenditures in future periods) are based on assumptions that are inherently subject to significant uncertainties and contingencies, many of which are beyond the Company’s control. The assumptions and estimates underlying the projected, expected or target results are inherently uncertain and are subject to a wide variety of significant business, economic, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the financial, operational, industry and market projections, estimates and targets, including assumptions, risks and uncertainties described in “Cautionary Note Regarding Forward-Looking Statements” above. These projections are speculative by their nature and, accordingly, are subject to significant risk of not being actually realized by the Company. Projected results of the Company for 2024 are particularly speculative and subject to change. Actual results may vary materially from the current projections, including for reasons beyond the Company’s control. The projections are based on current expectations and available information as of the date of this release. The Company undertakes no duty to publicly update these projections except as required by law.
Drilling Locations
The Company has estimated its drilling locations based on well spacing assumptions and upon the evaluation of its drilling results and those of other operators in its area, combined with its interpretation of available geologic and engineering data. The drilling locations actually drilled on the Company’s properties will depend on the availability of capital, regulatory approvals, commodity prices, costs, actual drilling results and other factors. Any drilling activities conducted on these identified locations may not be successful and may not result in additional proved reserves. Further, to the extent the drilling locations are associated with acreage that expires, the Company would lose its right to develop the related locations.
Unaudited Condensed Consolidated Balance Sheet Data (In thousands) | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 173,380 | $ | 194,515 | |||||
Accounts receivable | 109,005 | 94,589 | |||||||
Derivative instruments | 11,179 | 31,480 | |||||||
Inventory | 2,772 | 7,254 | |||||||
Prepaid expenses | 2,639 | 995 | |||||||
Total current assets | 298,975 | 328,833 | |||||||
Crude oil and natural gas properties, using the successful efforts method of accounting: | |||||||||
Proved properties | 3,487,622 | 3,338,107 | |||||||
Unproved properties | 72,997 | 72,715 | |||||||
Accumulated depletion, depreciation and amortization | (814,961 | ) | (684,179 | ) | |||||
Total crude oil and natural gas properties, net | 2,745,658 | 2,726,643 | |||||||
Other property and equipment, net | 3,563 | 3,572 | |||||||
Derivative instruments | 1,380 | 16,059 | |||||||
Other noncurrent assets | 5,116 | 5,684 | |||||||
Total assets | $ | 3,054,692 | $ | 3,080,791 | |||||
Current liabilities: | |||||||||
Current portion of long-term debt, net | $ | 120,000 | $ | 120,000 | |||||
Accrued capital expenditures | 49,232 | 39,231 | |||||||
Accounts payable - trade | 47,273 | 63,583 | |||||||
Revenues and royalties payable | 29,344 | 29,724 | |||||||
Other accrued liabilities | 19,580 | 19,613 | |||||||
Derivative instruments | 16,440 | 13,054 | |||||||
Advances from joint interest owners | 4,845 | 262 | |||||||
Accrued interest | 847 | 1,398 | |||||||
Operating leases | 400 | 528 | |||||||
Total current liabilities | 287,961 | 287,393 | |||||||
Noncurrent liabilities: | |||||||||
Long-term debt, net | 1,004,798 | 1,030,299 | |||||||
Deferred income taxes | 198,757 | 197,068 | |||||||
Asset retirement obligations | 13,685 | 13,245 | |||||||
Derivatives | 1,054 | 65 | |||||||
Commitments and contingencies | |||||||||
Stockholders' equity | |||||||||
Common stock | 13 | 13 | |||||||
Additional paid-in capital | 1,184,371 | 1,189,424 | |||||||
Retained earnings | 364,053 | 363,284 | |||||||
Total stockholders' equity | 1,548,437 | 1,552,721 | |||||||
Total liabilities and stockholders' equity | $ | 3,054,692 | $ | 3,080,791 | |||||
Unaudited Condensed Consolidated Statements of Operations | |||||||||
(in thousands, except per share data) | |||||||||
Three Months Ended | |||||||||
2024 | 2023 | ||||||||
Operating revenues: | |||||||||
Crude oil sales | $ | 282,369 | $ | 215,696 | |||||
NGL and natural gas sales | 5,395 | 8,098 | |||||||
Total operating revenues | 287,764 | 223,794 | |||||||
Operating costs and expenses: | |||||||||
Crude oil and natural gas production | 30,271 | 32,942 | |||||||
Production and ad valorem taxes | 14,402 | 12,297 | |||||||
Exploration and abandonments | 498 | 2,164 | |||||||
Depletion, depreciation and amortization | 130,850 | 81,131 | |||||||
Accretion of discount | 239 | 118 | |||||||
General and administrative | 4,685 | 2,502 | |||||||
Stock-based compensation | 3,798 | 4,054 | |||||||
Total operating costs and expenses | 184,743 | 135,208 | |||||||
Other expense | 1 | — | |||||||
Income from operations | 103,020 | 88,586 | |||||||
Interest and other income | 2,392 | 30 | |||||||
Interest expense | (43,634 | ) | (26,972 | ) | |||||
Derivative gain (loss), net | (53,043 | ) | 3,120 | ||||||
Income before income taxes | 8,735 | 64,764 | |||||||
Income tax expense | 2,297 | 14,507 | |||||||
Net income | $ | 6,438 | $ | 50,257 | |||||
Earnings per share: | |||||||||
Basic net income | $ | 0.05 | $ | 0.41 | |||||
Diluted net income | $ | 0.05 | $ | 0.39 | |||||
Weighted average shares outstanding: | |||||||||
Basic | 125,696 | 111,055 | |||||||
Diluted | 129,641 | 117,765 | |||||||
Dividends declared per share | $ | 0.040 | $ | 0.025 |
Unaudited Condensed Consolidated Statements of Cash Flows | |||||||||
(in thousands) | |||||||||
Three Months Ended | |||||||||
2024 | 2023 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Net income | $ | 6,438 | $ | 50,257 | |||||
Adjustments to reconcile net income to net cash provided by operations: | |||||||||
Provision for deferred income taxes | 1,688 | 14,507 | |||||||
Loss (gain) on derivative instruments | 53,043 | (3,120 | ) | ||||||
Cash paid on settlement of derivative instruments | (5,148 | ) | (2,194 | ) | |||||
Amortization of debt issuance costs | 2,053 | 2,668 | |||||||
Amortization of original issue discounts on long-term debt | 2,453 | 4,290 | |||||||
Stock-based compensation expense | 3,798 | 4,054 | |||||||
Accretion expense | 239 | 118 | |||||||
Depletion, depreciation and amortization expense | 130,850 | 81,131 | |||||||
Exploration and abandonment expense | 274 | 1,950 | |||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | (14,414 | ) | 15,617 | ||||||
Prepaid expenses, inventory and other assets | (4,722 | ) | (2,567 | ) | |||||
Accounts payable, accrued liabilities and other current liabilities | (5,113 | ) | 23,295 | ||||||
Net cash provided by operating activities | 171,439 | 190,006 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Additions to crude oil and natural gas properties | (147,698 | ) | (379,103 | ) | |||||
Changes in working capital associated with crude oil and natural gas property additions | 1,705 | 65,062 | |||||||
Acquisitions of crude oil and natural gas properties | (2,171 | ) | (5,463 | ) | |||||
Other property additions | (59 | ) | (18 | ) | |||||
Net cash used in investing activities | (148,223 | ) | (319,522 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Repayments under Term Loan Credit Agreement | (30,000 | ) | — | ||||||
Repurchased shares under buyback program | (8,764 | ) | — | ||||||
Dividends paid | (5,050 | ) | (2,776 | ) | |||||
Dividend equivalents paid | (530 | ) | (282 | ) | |||||
Debt issuance costs | (7 | ) | (544 | ) | |||||
Borrowings under Prior Credit Agreement | — | 150,000 | |||||||
Proceeds from exercises of stock options | — | 148 | |||||||
Proceeds from exercises of warrants | — | 2 | |||||||
Net cash provided by financing activities | (44,351 | ) | 146,548 | ||||||
Net decrease in cash and cash equivalents | (21,135 | ) | 17,032 | ||||||
Cash and cash equivalents, beginning of period | 194,515 | 30,504 | |||||||
Cash and cash equivalents, end of period | $ | 173,380 | $ | 47,536 | |||||
Unaudited Summary Operating Highlights | |||||||||
Three Months Ended | |||||||||
2024 | 2023 | ||||||||
Average Daily Sales Volumes: | |||||||||
Crude oil (Bbls) | 39,959 | 31,507 | |||||||
NGLs (Bbls) | 5,147 | 3,280 | |||||||
Natural gas (Mcf) | 27,733 | 14,611 | |||||||
Total (Boe) | 49,729 | 37,222 | |||||||
Average Realized Prices (excluding effects of derivatives): | |||||||||
Crude oil per Bbl | $ | 77.65 | $ | 76.07 | |||||
NGL per Bbl | $ | 24.94 | $ | 27.04 | |||||
Natural gas per Mcf | $ | 1.33 | $ | 2.21 | |||||
Total per Boe | $ | 63.59 | $ | 66.80 | |||||
Margin Data ($ per Boe): | |||||||||
Average price | $ | 63.59 | $ | 66.80 | |||||
Lease operating expenses | (6.30 | ) | (8.57 | ) | |||||
Expense workovers | (0.39 | ) | (1.26 | ) | |||||
Production and ad valorem taxes | (3.18 | ) | (3.67 | ) | |||||
$ | 53.72 | $ | 53.30 | ||||||
Unaudited Earnings Per Share Details | |||||||||
Three Months Ended | |||||||||
2024 | 2023 | ||||||||
Net income as reported | $ | 6,438 | $ | 50,257 | |||||
Participating basic earnings | (605 | ) | (4,638 | ) | |||||
Basic earnings attributable to common shareholders | 5,833 | 45,619 | |||||||
Reallocation of participating earnings | 1 | 75 | |||||||
Diluted net income attributable to common shareholders | $ | 5,834 | $ | 45,694 | |||||
Basic weighted average shares outstanding | 125,696 | 111,055 | |||||||
Dilutive warrants and unvested stock options | 1,786 | 4,588 | |||||||
Dilutive unvested restricted stock | 2,159 | 2,122 | |||||||
Diluted weighted average shares outstanding | 129,641 | 117,765 | |||||||
Net income per share attributable to common shareholders: | |||||||||
Basic | $ | 0.05 | $ | 0.41 | |||||
Diluted | $ | 0.05 | $ | 0.39 | |||||
Unaudited Reconciliation of Net Income to EBITDAX, Discretionary Cash Flow and Net Cash Provided by Operations | |||||||||
(in thousands) | |||||||||
Three Months Ended | |||||||||
2024 | 2023 | ||||||||
Net income | $ | 6,438 | $ | 50,257 | |||||
Interest expense | 43,634 | 26,972 | |||||||
Interest and other income | (2,392 | ) | (30 | ) | |||||
Income tax expense | 2,297 | 14,507 | |||||||
Depletion, depreciation and amortization | 130,850 | 81,131 | |||||||
Accretion of discount | 239 | 118 | |||||||
Exploration and abandonment expense | 498 | 2,164 | |||||||
Stock based compensation | 3,798 | 4,054 | |||||||
Derivative related noncash activity | 47,895 | (5,314 | ) | ||||||
Other expense | 1 | — | |||||||
EBITDAX | 233,258 | 173,859 | |||||||
Cash interest expense | (39,128 | ) | (20,014 | ) | |||||
Other (a) | 1,558 | (184 | ) | ||||||
Discretionary cash flow | 195,688 | 153,661 | |||||||
Changes in operating assets and liabilities | (24,249 | ) | 36,345 | ||||||
Net cash provided by operating activities | $ | 171,439 | $ | 190,006 | |||||
(a) includes interest and other income net of current tax expense, other expense and operating portion of exploration and abandonment expenses. | |||||||||
Unaudited Reconciliation of Net Income to Adjusted Net Income | |||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
Amounts | Amounts per Diluted Share | ||||||||||||||||||
Net income | $ | 6,438 | $ | 0.05 | |||||||||||||||
Derivative loss, net | 53,043 | 0.41 | |||||||||||||||||
Stock-based compensation | 3,798 | 0.03 | |||||||||||||||||
Income tax adjustment for above items * | (14,947 | ) | (0.12 | ) | |||||||||||||||
Adjusted net income | $ | 48,332 | $ | 0.37 | |||||||||||||||
* Assuming 26.3% effective tax rate consistent with overall tax provision |
Unaudited Cash Margin Reconciliation | |||||||||
(in thousands, except per Boe data) | |||||||||
Three Months Ended | |||||||||
2024 | 2023 | ||||||||
Crude oil, NGL and natural gas sales revenue | $ | 287,764 | $ | 223,794 | |||||
Less: Lease operating expenses | (28,533 | ) | (28,720 | ) | |||||
Less: Workover expenses | (1,738 | ) | (4,222 | ) | |||||
Less: Production and ad valorem taxes | (14,402 | ) | (12,297 | ) | |||||
Less: General and administrative expenses | (4,685 | ) | (2,502 | ) | |||||
Cash Margin | $ | 238,406 | $ | 176,053 | |||||
Divide by: Sales volumes (MBoe) | 4,525.3 | 3,350.0 | |||||||
Cash Margin per Boe, excluding effects of derivatives | $ | 52.68 | $ | 52.55 | |||||
Cash Margin | $ | 238,406 | $ | 176,053 | |||||
General and administrative expenses | $ | 4,685 | $ | 2,502 | |||||
Divide by: Sales volumes (MBoe) | 4,525.3 | 3,350.0 | |||||||
Cash Operating Margin per Boe, excluding effects of derivatives | $ | 53.72 | $ | 53.30 | |||||
Unaudited Free Cash Flow Reconciliation | |||||||
(in thousands) | |||||||
Three Months Ended | |||||||
Net cash provided by operating activities | $ | 171,439 | |||||
Changes in operating assets and liabilities | 24,249 | ||||||
Less: Costs incurred excluding acquisitions | (147,698 | ) | |||||
Free cash flow | $ | 47,990 | |||||
Investor Contact:
Vice President, Business Development
817.850.9204
rhightower@highpeakenergy.com
Source:
Source:
2024 GlobeNewswire, Inc., source