mcep-8k_20190731.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): July 31, 2019

MID-CON ENERGY PARTNERS, LP

(Exact name of registrant as specified in its charter)

 

 

 

 

Delaware

001-35374

45-2842469

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

 

2431 E. 61st Street, Suite 850
Tulsa, Oklahoma

(Address of principal executive offices)

74136

(Zip code)

(918) 743-7575

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

 

 

Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

 

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities Registered pursuant to Section 12(b) of the Act:

 

Title of each class

Ticker symbol(s)

Name of each exchange on which registered

Common Units Representing Limited Partner Interests

MCEP

NASDAQ Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 


Item 2.02        Results of Operations and Financial Condition.

 

On July 31, 2019, Mid-Con Energy Partners, LP (the “Partnership”) issued a press release announcing its earnings for the second quarter ended June 30, 2019.  A copy of the press release is furnished as Exhibit 99.1 and incorporated by reference herein.

The information disclosed in this Item 2.02, and in Item 7.01 below, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing.

Item 7.01

Regulation FD Disclosure

On July 31, 2019, the Partnership issued a press release announcing its earnings for the second quarter ended June 30, 2019.  A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated herein by reference.  

As of July 31, 2019, the Partnership has posted on its website an updated investor presentation entitled “Supplemental Second Quarter 2019 Results” dated August 1, 2019.  The presentation may be accessed by going to www.midconenergypartners.com, and selecting Events and Presentations under the Investor Relations tab.

Item 9.01

Financial Statements and Exhibits

(d)Exhibits

99.1Press release dated July 31, 2019

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

 

 

 

 

MID-CON ENERGY PARTNERS, LP

 

 

 

By:

Mid-Con Energy GP, LLC

 

 

 

 

its general partner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dated:

July 31, 2019

By:

/s/Charles L. McLawhorn, III

 

 

 

 

Charles L. McLawhorn, III

 

 

 

 

Vice President, General Counsel and Secretary

 

 

 

 

 

 

mcep-ex991_6.htm

Exhibit 99.1

 

 

Mid-Con Energy Partners, LP Announces Second Quarter 2019 Operating and Financial Results

TULSA, July 31, 2019 (GLOBE NEWSWIRE) -- Mid-Con Energy Partners, LP (NASDAQ: MCEP) (“Mid-Con Energy” or the “Partnership”) announced today its operating and financial results for the second quarter 2019.

“The second quarter of 2019 was highlighted by the efforts and success of our operations team in managing costs and weather related downtime and executing development opportunities,” said President and Chief Executive Officer Jeff Olmstead. “Production increased from the previous quarter in spite of the historic floods in northern Oklahoma. Lease operating expenses came in below expectations at our newly acquired Oklahoma assets. Leverage declined, despite increased professional and other fees related to transaction activity.” Olmstead continued, “Development activity increased as we began injection in our Pine Tree field in the Powder River Basin, with greater than expected injection rates. This field provides a significant growth prospect over the next few years. We also tested several re-complete programs that yielded positive results which provide additional growth potential in the second half of 2019. The results of the second quarter set us up for additional development opportunities, continued cash flow growth and reduced leverage for the second half of 2019.”

HIGHLIGHTS AND RECENT DEVELOPMENTS

 

Production increased by 2% from first quarter of 2019, despite historic flooding in Oklahoma.

 

Decreased lease operating expenses (“LOE”) in newly acquired assets in Oklahoma, which contributed to increased cash flow during second quarter of 2019.

 

Net income was $5.1 million for the second quarter of 2019.

 

Continued to reduce outstanding borrowings on our revolving credit facility. Total net reduction of $27.0 million for the six months ended June 30, 2019.

 

Our liquidity position at July 26, 2019 consisted of approximately $0.6 million of available cash and $43.0 million of available borrowings ($110.0 million borrowing base less $66.0 million outstanding borrowings and $1.0 million outstanding standby letter of credit).

 

Achieved first injection in our Pine Tree waterflood project. Formal unitization approval expected in third quarter of 2019.

 

Returned approximately 50 wells to production in newly acquired assets.

 

Generated second quarter Adjusted EBITDA of $5.1 million(1). Excluding professional and other fees related to transaction activity during the quarter, Adjusted EBITDA would have been $5.9 million.

 

Reported Total Leverage Ratio, as defined by our credit agreement, of 3.24x for the period ending June 30, 2019. Excluding professional and other fees related to transaction activity during the quarter, Total Leverage Ratio would have been 2.79x.

(1) Non-GAAP financial measure. Please refer to the related disclosure and reconciliation of net income (loss) to Adjusted EBITDA included in this press release.

FINANCIAL SUMMARY

During the second quarter 2019, the Partnership continued to execute on its plan to reduce debt, while funding capital expenditures with internally generated cash flow.

Production was up 2% to 3,538 Boe/d for the second quarter of 2019 from 3,467 Boe/d in the first quarter of 2019. Commodity pricing also improved during second quarter 2019 as realized oil price increased to $55.20 per barrel from $50.47 per barrel in the first quarter of 2019. Revenue was positively impacted by both the increase in production and realized oil prices.

Total lease operating expenses were expected to increase during the quarter due to the acquisition of the Oklahoma properties. Overall LOE increased by 11%, however the operating teams were able to greatly reduce the expenses on the recently acquired properties in Oklahoma, when compared to historical expenses from the predecessor operator. This reduction helped increase cash flow on those specific assets.

General and administrative expenses were higher than anticipated for the quarter due to one-time professional and other fees related to transaction activities.

Adjusted EBITDA continued the positive trend of financial results as it increased to $5.1 million from $4.5 million in the first quarter 2019.


HEDGING SUMMARY

Mid-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 oil prices. We believe this risk management strategy will serve to secure a 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 June 30, 2019, the following table reflects volumes of Mid-Con Energy’s production hedged by commodity derivative contracts, with the corresponding prices at which the production is hedged:

 

Period Covered

 

Differential Fixed Price

 

 

Weighted Average Fixed Price

 

 

Weighted Average Floor Price

 

 

Weighted Average Ceiling Price

 

 

Total Bbls

Hedged/day

 

 

Index

Swaps - 2019

 

$

 

 

$

56.08

 

 

$

 

 

$

 

 

 

1,692

 

 

NYMEX-WTI

Swaps - 2019

 

$

(20.15

)

 

$

 

 

$

 

 

$

 

 

 

150

 

 

WCS-CRUDE-OIL

Swaps - 2020

 

$

 

 

$

55.81

 

 

$

 

 

$

 

 

 

1,931

 

 

NYMEX-WTI

Swaps - 2021

 

$

 

 

$

55.78

 

 

$

 

 

$

 

 

 

672

 

 

NYMEX-WTI

Collars - 2021

 

$

 

 

$

 

 

$

52.00

 

 

$

58.80

 

 

 

672

 

 

NYMEX-WTI

FISCAL YEAR 2019 GUIDANCE

The 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.

 

Guidance as of July 31, 2019

 

FY 2019

Net production (Boe/d)(1)

 

3,400 - 3,800

Lease operating expenses per Boe

 

$21.00 - $24.00

Production and ad valorem taxes (% of total revenue)

 

8.00% - 9.00%

Estimated capital expenditures

 

$9.0 MM

(1) Production volumes in Boe equivalents calculated at a rate of six Mcf per Bbl.

SECOND QUARTER 2019 CONFERENCE CALL

As announced on July 29, 2019, Mid-Con Energy’s management will host a conference call on Thursday, August 1, 2019, at 9:00 a.m. ET. Interested parties are invited to participate via telephone by dialing 1-877-847-5946 (Conference ID: 4076206) 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 Thursday, August 8, 2019, by dialing 1-855-859-2056 (Conference ID: 4076206). Additionally, a webcast archive will be available at www.midconenergypartners.com.  As of July 31, 2019, the Partnership has posted on its website an updated investor presentation entitled “Supplemental Second Quarter 2019 Results” dated August 1, 2019. The presentation may be accessed by going to www.midconenergypartners.com, and selecting Events and Presentations under the Investor Relations tab.

ABOUT MID-CON ENERGY PARTNERS, LP

Mid-Con Energy is a publicly held Delaware limited partnership formed in July 2011 to own, acquire 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 primarily in Oklahoma and Wyoming. For more information, please visit Mid-Con Energy’s website at www.midconenergypartners.com.

FORWARD-LOOKING STATEMENTS

This 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,” “pursue,” “target,” “will” and the negative of such terms or other comparable terminology. 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

 


due to a number of factors including but not limited to volatility of commodity prices; revision to oil and natural gas reserves estimates as a result of changes in commodity prices; effectiveness of risk management activities; business strategies; future financial and operating results; ability to replace the reserves we produce through acquisitions and the development of our properties; future capital requirements and availability of financing; realized oil and natural gas prices; production volumes; lease operating expenses; general and administrative expenses; cash flow and liquidity; availability of production equipment; availability of oil field labor; capital expenditures; availability and terms of capital; marketing of oil and natural gas; general economic conditions; competition in the oil and natural gas industry; environmental liabilities; compliance with NASDAQ listing requirements; and any other risks and uncertainties discussed in our Form 10-K and other filings with the SEC.

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, 2018, 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)

 

 

 

 

 

 

 

June 30, 2019

 

 

December 31, 2018

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

525

 

 

$

467

 

Accounts receivable

 

 

6,438

 

 

 

4,194

 

Derivative financial instruments

 

 

 

 

 

5,666

 

Prepaid expenses

 

 

393

 

 

 

118

 

Assets held for sale, net

 

 

430

 

 

 

430

 

Total current assets

 

 

7,786

 

 

 

10,875

 

Property and equipment

 

 

 

 

 

 

 

 

Oil and natural gas properties, successful efforts method

 

 

 

 

 

 

 

 

Proved properties

 

 

256,654

 

 

 

379,441

 

Unproved properties

 

 

3,476

 

 

 

2,928

 

Other property and equipment

 

 

1,456

 

 

 

427

 

Accumulated depletion, depreciation, amortization and impairment

 

 

(71,686

)

 

 

(175,948

)

Total property and equipment, net

 

 

189,900

 

 

 

206,848

 

Derivative financial instruments

 

 

955

 

 

 

2,418

 

Other assets

 

 

1,186

 

 

 

1,563

 

Total assets

 

$

199,827

 

 

$

221,704

 

 

 

 

 

 

 

 

 

 

LIABILITIES, CONVERTIBLE PREFERRED UNITS AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

 

 

 

 

 

 

 

Trade

 

$

693

 

 

$

141

 

Related parties

 

 

3,320

 

 

 

3,732

 

Derivative financial instruments

 

 

1,086

 

 

 

 

Accrued liabilities

 

 

632

 

 

 

2,024

 

Other current liabilities

 

 

415

 

 

 

 

Total current liabilities

 

 

6,146

 

 

 

5,897

 

Long-term debt

 

 

66,000

 

 

 

93,000

 

Other long-term liabilities

 

 

675

 

 

 

47

 

Asset retirement obligations

 

 

30,082

 

 

 

26,001

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Class A convertible preferred units - 11,627,906 issued and outstanding, respectively

 

 

22,325

 

 

 

21,715

 

Class B convertible preferred units - 9,803,921 issued and outstanding, respectively

 

 

14,731

 

 

 

14,635

 

Equity, per accompanying statements

 

 

 

 

 

 

 

 

General partner

 

 

(771

)

 

 

(786

)

Limited partners - 30,785,958 and 30,436,124 units issued and outstanding, respectively

 

 

60,639

 

 

 

61,195

 

Total equity

 

 

59,868

 

 

 

60,409

 

Total liabilities, convertible preferred units and equity

 

$

199,827

 

 

$

221,704

 

 

 


Mid-Con Energy Partners, LP and subsidiaries

 

Condensed Consolidated Statements of Operations

 

(in thousands, except per unit data)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil sales

 

$

16,792

 

 

$

15,931

 

 

$

31,386

 

 

$

30,475

 

Natural gas sales

 

 

397

 

 

 

264

 

 

 

647

 

 

 

432

 

Other operating revenues

 

 

340

 

 

 

 

 

 

712

 

 

 

 

Gain (loss) on derivatives, net

 

 

3,396

 

 

 

(9,500

)

 

 

(8,802

)

 

 

(12,882

)

Total revenues

 

 

20,925

 

 

 

6,695

 

 

 

23,943

 

 

 

18,025

 

Operating costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

 

7,587

 

 

 

5,009

 

 

 

14,417

 

 

 

9,649

 

Production and ad valorem taxes

 

 

1,469

 

 

 

1,205

 

 

 

2,751

 

 

 

2,238

 

Other operating expenses

 

 

417

 

 

 

 

 

 

890

 

 

 

 

Impairment of proved oil and natural gas properties

 

 

204

 

 

 

959

 

 

 

204

 

 

 

9,710

 

Depreciation, depletion and amortization

 

 

2,369

 

 

 

3,393

 

 

 

5,467

 

 

 

6,834

 

Dry holes and abandonments of unproved properties

 

 

 

 

 

97

 

 

 

 

 

 

185

 

Accretion of discount on asset retirement obligations

 

 

417

 

 

 

191

 

 

 

745

 

 

 

344

 

General and administrative

 

 

2,348

 

 

 

1,358

 

 

 

5,010

 

 

 

3,252

 

Total operating costs and expenses

 

 

14,811

 

 

 

12,212

 

 

 

29,484

 

 

 

32,212

 

Gain (loss) on sales of oil and natural gas properties, net

 

 

223

 

 

 

12

 

 

 

9,692

 

 

 

(388

)

Income (loss) from operations

 

 

6,337

 

 

 

(5,505

)

 

 

4,151

 

 

 

(14,575

)

Other (expense) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1

 

 

 

 

 

 

9

 

 

 

2

 

Interest expense

 

 

(1,229

)

 

 

(1,410

)

 

 

(2,844

)

 

 

(2,749

)

Other income

 

 

44

 

 

 

 

 

 

49

 

 

 

 

(Loss) gain on settlements of asset retirement obligations

 

 

(56

)

 

 

60

 

 

 

(56

)

 

 

49

 

Total other expense

 

 

(1,240

)

 

 

(1,350

)

 

 

(2,842

)

 

 

(2,698

)

Net income (loss)

 

 

5,097

 

 

 

(6,855

)

 

 

1,309

 

 

 

(17,273

)

Less: Distributions to preferred unitholders

 

 

1,157

 

 

 

1,139

 

 

 

2,306

 

 

 

2,155

 

Less: General partner's interest in net income (loss)

 

 

60

 

 

 

(81

)

 

 

15

 

 

 

(204

)

Limited partners' interest in net income (loss)

 

$

3,880

 

 

$

(7,913

)

 

$

(1,012

)

 

$

(19,224

)

Limited partners' interest in net income (loss) per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.13

 

 

$

(0.26

)

 

$

(0.03

)

 

$

(0.64

)

Diluted

 

$

0.07

 

 

$

(0.26

)

 

$

(0.03

)

 

$

(0.64

)

Weighted average limited partner units outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Limited partner units (basic)

 

 

30,786

 

 

 

30,306

 

 

 

30,708

 

 

 

30,241

 

Limited partner units (diluted)

 

 

53,187

 

 

 

30,306

 

 

 

30,708

 

 

 

30,241

 

 

 

 


Mid-Con Energy Partners, LP and subsidiaries

 

Condensed Consolidated Statements of Cash Flows

 

(In thousands)

 

(Unaudited)

 

 

 

 

 

Six Months Ended

June 30,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net income (loss)

 

$

1,309

 

 

$

(17,273

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

5,467

 

 

 

6,834

 

Debt issuance costs amortization

 

 

356

 

 

 

329

 

Accretion of discount on asset retirement obligations

 

 

745

 

 

 

344

 

Impairment of proved oil and natural gas properties

 

 

204

 

 

 

9,710

 

Dry holes and abandonments of unproved properties

 

 

 

 

 

185

 

Loss (gain) on settlements of asset retirement obligations

 

 

56

 

 

 

(49

)

Cash paid for settlements of asset retirement obligations

 

 

(72

)

 

 

(65

)

Mark to market on derivatives

 

 

 

 

 

 

 

 

Loss on derivatives, net

 

 

8,802

 

 

 

12,882

 

Cash settlements paid for matured derivatives, net

 

 

(586

)

 

 

(3,505

)

(Gain) loss on sales of oil and natural gas properties

 

 

(9,692

)

 

 

388

 

Non-cash equity-based compensation

 

 

456

 

 

 

367

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(2,441

)

 

 

(325

)

Prepaid expenses and other assets

 

 

(254

)

 

 

(1,565

)

Accounts payable - trade and accrued liabilities

 

 

434

 

 

 

442

 

Accounts payable - related parties

 

 

(293

)

 

 

1,277

 

Net cash provided by operating activities

 

 

4,491

 

 

 

9,976

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Acquisitions of oil and natural gas properties

 

 

(3,262

)

 

 

(9,257

)

Additions to oil and natural gas properties

 

 

(5,085

)

 

 

(3,724

)

Proceeds from sales of oil and natural gas properties

 

 

32,514

 

 

 

1,163

 

Net cash provided by (used in) investing activities

 

 

24,167

 

 

 

(11,818

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds from line of credit

 

 

7,000

 

 

 

7,000

 

Payments on line of credit

 

 

(34,000

)

 

 

(19,000

)

Debt issuance costs

 

 

 

 

 

(651

)

Proceeds from sale of Class B convertible preferred units, net of offering costs

 

 

 

 

 

14,878

 

Distributions to Class A convertible preferred units

 

 

(1,000

)

 

 

(1,500

)

Distributions to Class B convertible preferred units

 

 

(600

)

 

 

(200

)

Net cash (used in) provided by financing activities

 

 

(28,600

)

 

 

527

 

Net increase (decrease) in cash and cash equivalents

 

 

58

 

 

 

(1,315

)

Beginning cash and cash equivalents

 

 

467

 

 

 

1,832

 

Ending cash and cash equivalents

 

$

525

 

 

$

517

 

 


 

Mid-Con Energy Partners, LP and subsidiaries

 

Production, Prices, and Unit Costs per Boe

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

 

 

 

 

 

 

 

 

 

Six Months Ended

June 30,

 

 

 

 

 

 

 

 

 

 

 

2019

 

 

2018

 

 

Change

 

 

% Change

 

 

2019

 

 

2018

 

 

Change

 

 

% Change

 

Production Volumes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil (MBbls)

 

 

291

 

 

 

251

 

 

 

40

 

 

16%

 

 

 

583

 

 

 

489

 

 

 

94

 

 

19%

 

Natural gas (MMcf)

 

 

184

 

 

 

92

 

 

 

92

 

 

100%

 

 

 

305

 

 

 

178

 

 

 

127

 

 

71%

 

Total (MBoe)

 

 

322

 

 

 

267

 

 

 

55

 

 

21%

 

 

 

634

 

 

 

519

 

 

 

115

 

 

22%

 

Average daily net production (Boe/d)

 

 

3,538

 

 

 

2,934

 

 

 

604

 

 

21%

 

 

 

3,503

 

 

 

2,867

 

 

 

636

 

 

22%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average sales price

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil (per Bbl)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales price

 

$

57.70

 

 

$

63.47

 

 

$

(5.77

)

 

(9%)

 

 

$

53.84

 

 

$

62.32

 

 

$

(8.48

)

 

(14%)

 

Effect of net settlements on matured derivative instruments

 

$

(2.50

)

 

$

(8.69

)

 

$

6.19

 

 

71%

 

 

$

(1.01

)

 

$

(7.17

)

 

$

6.16

 

 

86%

 

Realized oil price after derivatives

 

$

55.20

 

 

$

54.78

 

 

$

0.42

 

 

1%

 

 

$

52.83

 

 

$

55.15

 

 

$

(2.32

)

 

(4%)

 

Natural gas (per Mcf)

 

$

2.16

 

 

$

2.87

 

 

$

(0.71

)

 

(25%)

 

 

$

2.12

 

 

$

2.43

 

 

$

(0.31

)

 

(13%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average unit costs per Boe

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

$

23.56

 

 

$

18.76

 

 

$

4.80

 

 

26%

 

 

$

22.74

 

 

$

18.59

 

 

$

4.15

 

 

22%

 

Production and ad valorem taxes

 

$

4.56

 

 

$

4.51

 

 

$

0.05

 

 

1%

 

 

$

4.34

 

 

$

4.31

 

 

$

0.03

 

 

1%

 

Depreciation, depletion and amortization

 

$

7.36

 

 

$

12.71

 

 

$

(5.35

)

 

(42%)

 

 

$

8.62

 

 

$

13.17

 

 

$

(4.55

)

 

(35%)

 

General and administrative expenses

 

$

7.29

 

 

$

5.09

 

 

$

2.20

 

 

43%

 

 

$

7.90

 

 

$

6.27

 

 

$

1.63

 

 

26%

 

 


NON-GAAP FINANCIAL MEASURE

This press release, the financial tables and other supplemental information include “Adjusted EBITDA” which is a non-generally accepted accounting principles (“Non-GAAP”) measure used by our management to describe financial performance with external users of our financial statements. The Partnership believes the Non-GAAP financial measure described above is useful to investors because this measurement is used by many companies in its industry as a measurement of financial performance and is 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 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 (minus):

 

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 premiums received (paid) for derivatives, net;

 

Impairment of proved oil and natural gas properties;

 

Non-cash equity-based compensation;

 

(Gain) loss on sales of oil and natural gas properties, net; and

 

Dry holes and abandonments on unproved properties.

 

Mid-Con Energy Partners, LP and subsidiaries

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

(in thousands)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 30, 2019

 

 

March 31, 2019

 

 

June 30, 2018

 

Net income (loss)

 

$

5,097

 

 

$

(3,788

)

 

$

(6,855

)

Interest expense, net

 

 

1,228

 

 

 

1,607

 

 

 

1,410

 

Depreciation, depletion and amortization

 

 

2,369

 

 

 

3,098

 

 

 

3,393

 

Accretion of discount on asset retirement obligations

 

 

417

 

 

 

328

 

 

 

191

 

Impairment of proved oil and natural gas properties

 

 

204

 

 

 

 

 

 

959

 

Dry holes and abandonments of unproved properties

 

 

 

 

 

 

 

 

97

 

(Gain) loss on derivatives, net

 

 

(3,396

)

 

 

12,198

 

 

 

9,500

 

Cash settlements (paid) received for matured derivatives

 

 

(729

)

 

 

143

 

 

 

(2,181

)

Non-cash equity-based compensation

 

 

122

 

 

 

334

 

 

 

128

 

Gain on sales of oil and natural gas properties, net

 

 

(223

)

 

 

(9,469

)

 

 

(12

)

Adjusted EBITDA

 

$

5,089

 

 

$

4,451

 

 

$

6,630

 

 

INVESTOR RELATIONS CONTACT

IR@midcon-energy.com

(918) 743-7575