mcep-8k_20200303.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): March 12, 2020

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

Trading symbol

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 March 12, 2020, Mid-Con Energy Partners, LP (the “Partnership”) issued a press release announcing its earnings for the fourth quarter and year ended December 31, 2019.  A copy of the press release is furnished as Exhibit 99.1 and incorporated by reference herein.

The information disclosed in this Form 8-K, 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 they 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 March 12, 2020, the Partnership issued a press release announcing its earnings for the fourth quarter and year ended December 31, 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.  

Item 9.01

Financial Statements and Exhibits

(d)Exhibits

99.1Press release dated March 12, 2020.

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:

March 12, 2020

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 Fourth Quarter and Full Year 2019 Operating and Financial Results

TULSA, March 12, 2020 (GLOBE NEWSWIRE) -- Mid-Con Energy Partners, LP (NASDAQ: MCEP) (“Mid-Con Energy” or the “Partnership”) announced today its operating and financial results for fourth quarter and full year ended December 31, 2019.

“The Partnership acquired a significant number of mature water flood properties in Oklahoma during 2019 and successfully achieved first water injection at our Pine Tree Shannon Unit (“PTSU”) in Wyoming,” said President and Chief Operating Officer, Chad Roller.  “Our PTSU, made effective in the fourth quarter of 2019, represents the largest waterflood development in the history of the Partnership.  In the fourth quarter, we drilled wells and collected core in two Oklahoma waterflood properties acquired in 2018 with promising early results from preliminary core analysis.  Over the next year, we expect to continue to high-grade development opportunities in our portfolio to position the Partnership to reduce debt out of free cash flow.  In light of the recent commodity price volatility as of March 9, 2020, we are assessing our business plan and will make adjustments as needed.  We will issue guidance for 2020 once we complete our assessment of the business plan at current commodity prices.”

FULL YEAR 2019 SUMMARY

 

In March 2019, we simultaneously closed the previously announced definitive agreements to sell substantially all of our oil and natural gas properties located in Texas for approximately $59.8 million and to purchase certain oil and natural gas properties located in Osage, Grady and Caddo Counties in Oklahoma for an aggregate purchase price of approximately $28.1 million, including final post-closing adjustments for each transaction.

 

Received approval for unitization and began injection at PTSU, the largest new waterflood project the Partnership has undertaken, during the year ended December 31, 2019.

 

Returned approximately 202 wells to production across the portfolio during the year ended December 31, 2019.

 

Drilled 2 injection wells and 5 producing wells in Oklahoma and 1 water supply well in Wyoming during the year ended December 31, 2019.

 

Extended maturity of our revolving credit facility to May 2021.

 

Decreased total revolving credit facility borrowings by $25.0 million during the year ended December 31, 2019.

 

Full year net loss of $0.6 million in 2019 compared to a net loss $18.3 million in 2018.

FINANCIAL SUMMARY

Production for fourth quarter 2019 averaged 3,609 Boe/d, compared to 3,543 Boe/d in the third quarter of 2019. Commodity pricing increased during the fourth quarter 2019 as the average realized oil price after derivatives was $53.34 versus $52.05 per barrel in the third quarter 2019.

Lease operating expenses (“LOE”) for the fourth quarter 2019 were $9.2 million ($27.59 per Boe) compared to $8.3 million ($25.44 per Boe) in the third quarter of 2019. The majority of this increase was due to expenses associated with returning wells to production, resulting in an increased producing well count, and other workover expenses.

The Partnership spent $4.5 million on capital expenditures (“CAPEX”) during the fourth quarter of 2019, compared to CAPEX of $4.3 million during the third quarter of 2019. The increased capital spend was related to drilling five wells (three producing wells and two injection wells) in Oklahoma, re-completion programs in Wyoming and Oklahoma and continued progress on the PTSU waterflood project in Wyoming. High priority CAPEX in 2020 will be directed to the PTSU waterflood project in Wyoming and waterflood optimization projects in Oklahoma.

The increase in LOE and general and administrative expenses lowered fourth quarter 2019 Adjusted EBITDA(1) to $3.5 million from $4.4 million in the third quarter of 2019. During the fourth quarter 2019, the Partnership increased its debt by $3.0 million to $68.0 million outstanding as of December 31, 2019. As of February 28, 2020, debt outstanding was $74.0 million.

(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.


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 December 31, 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

 

Weighted Average Fixed Price

 

 

Weighted Average Floor Price

 

 

Weighted Average Ceiling Price

 

 

Total Bbls

Hedged/day

 

 

Index

Swaps - 2020

 

$

55.81

 

 

$

 

 

$

 

 

 

1,931

 

 

NYMEX-WTI

Swaps - 2021

 

$

55.78

 

 

$

 

 

$

 

 

 

672

 

 

NYMEX-WTI

Collars - 2021

 

$

 

 

$

52.00

 

 

$

58.80

 

 

 

672

 

 

NYMEX-WTI

ANNUAL REPORT ON FORM 10-K

Our consolidated, audited financial statements and related footnotes will be available in our Annual Report on 2019 Form 10-K for year ended December 31, 2019 which will be filed on or about March 12, 2020.

UNITHOLDERS’ SCHEDULE K-1

Our unitholders’ Schedule K-1 for the tax year 2019 are available for download on the Mid-Con Energy website. Any questions related to Schedule K-1 should be directed to Mid-Con Energy Tax Package Support at 1-855-886-9760.

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; our ability to pay distributions; ability to replace the reserves we produce through acquisitions and the development of our properties; future capital requirements and availability of financing; technology and cybersecurity; 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; world-wide epidemics, including the coronavirus; competition in the oil and natural gas industry; environmental liabilities; counterparty credit risk; governmental regulation and taxation; compliance with NASDAQ listing requirements; developments in oil producing and natural gas producing countries; plans, objectives, expectations and intentions; 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, 2019, and in other documents and reports we file from time to time with the SEC.

 


MID-CON ENERGY PARTNERS, LP and subsidiaries

 

Consolidated Balance Sheets

 

(in thousands, except number of units)

 

(Unaudited)

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

255

 

 

$

467

 

Accounts receivable

 

 

6,853

 

 

 

4,194

 

Derivative financial instruments

 

 

 

 

 

5,666

 

Prepaid expenses

 

 

87

 

 

 

118

 

Assets held for sale

 

 

365

 

 

 

430

 

Total current assets

 

 

7,560

 

 

 

10,875

 

Property and equipment

 

 

 

 

 

 

 

 

Oil and natural gas properties, successful efforts method

 

 

 

 

 

 

 

 

Proved properties

 

 

261,375

 

 

 

379,441

 

Unproved properties

 

 

3,125

 

 

 

2,928

 

Other property and equipment

 

 

1,262

 

 

 

427

 

Accumulated depletion, depreciation, amortization and impairment

 

 

(72,303

)

 

 

(175,948

)

Total property and equipment, net

 

 

193,459

 

 

 

206,848

 

Derivative financial instruments

 

 

730

 

 

 

2,418

 

Other assets

 

 

1,020

 

 

 

1,563

 

Total assets

 

$

202,769

 

 

$

221,704

 

LIABILITIES, CONVERTIBLE PREFERRED UNITS AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

 

 

 

 

 

 

 

Trade

 

$

320

 

 

$

141

 

Related parties

 

 

6,902

 

 

 

3,732

 

Derivative financial instruments

 

 

1,944

 

 

 

 

Accrued liabilities

 

 

795

 

 

 

2,024

 

Other current liabilities

 

 

430

 

 

 

 

Total current liabilities

 

 

10,391

 

 

 

5,897

 

Long-term debt

 

 

68,000

 

 

 

93,000

 

Other long-term liabilities

 

 

457

 

 

 

47

 

Asset retirement obligations

 

 

30,265

 

 

 

26,001

 

Commitments and contingencies

 

 

 

 

 

 

 

 

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

 

 

22,964

 

 

 

21,715

 

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

 

 

14,829

 

 

 

14,635

 

Equity, per accompanying statements

 

 

 

 

 

 

 

 

General partner

 

 

(793

)

 

 

(786

)

Limited partners - 30,824,291 and 30,436,124 units issued and outstanding, respectively

 

 

56,656

 

 

 

61,195

 

Total equity

 

 

55,863

 

 

 

60,409

 

Total liabilities, convertible preferred units and equity

 

$

202,769

 

 

$

221,704

 

 

 


Mid-Con Energy Partners, LP and subsidiaries

 

Condensed Consolidated Statements of Operations

 

(in thousands, except per unit data)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil sales

 

$

16,309

 

 

$

15,966

 

 

$

63,163

 

 

$

65,206

 

Natural gas sales

 

 

374

 

 

 

318

 

 

 

1,304

 

 

 

1,130

 

Other operating revenues

 

 

297

 

 

 

458

 

 

 

1,280

 

 

 

778

 

(Loss) gain on derivatives, net

 

 

(7,174

)

 

 

24,914

 

 

 

(10,246

)

 

 

5,674

 

Total revenues

 

 

9,806

 

 

 

41,656

 

 

 

55,501

 

 

 

72,788

 

Operating costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

 

9,160

 

 

 

6,642

 

 

 

31,870

 

 

 

22,537

 

Production and ad valorem taxes

 

 

1,402

 

 

 

1,680

 

 

 

5,486

 

 

 

5,483

 

Other operating expenses

 

 

642

 

 

 

657

 

 

 

2,068

 

 

 

945

 

Impairment of proved oil and natural gas properties

 

 

 

 

 

21,450

 

 

 

384

 

 

 

31,160

 

Impairment of assets held for sale

 

 

65

 

 

 

 

 

 

65

 

 

 

 

Depreciation, depletion and amortization

 

 

2,595

 

 

 

5,105

 

 

 

10,621

 

 

 

16,751

 

Dry holes and abandonments of unproved properties

 

 

 

 

 

417

 

 

 

 

 

 

612

 

Accretion of discount on asset retirement obligations

 

 

428

 

 

 

(27

)

 

 

1,596

 

 

 

721

 

General and administrative

 

 

2,158

 

 

 

1,565

 

 

 

8,572

 

 

 

6,311

 

Total operating costs and expenses

 

 

16,450

 

 

 

37,489

 

 

 

60,662

 

 

 

84,520

 

(Loss) gain on sales of oil and natural gas properties, net

 

 

(21

)

 

 

(120

)

 

 

9,671

 

 

 

(509

)

(Loss) income from operations

 

 

(6,665

)

 

 

4,047

 

 

 

4,510

 

 

 

(12,241

)

Other (expense) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

 

 

10

 

 

 

3

 

Interest expense

 

 

(1,147

)

 

 

(1,641

)

 

 

(5,166

)

 

 

(6,010

)

Other expense

 

 

(56

)

 

 

(35

)

 

 

(3

)

 

 

(15

)

Gain on sale of other assets

 

 

 

 

 

 

 

 

123

 

 

 

 

(Loss) gain on settlements of asset retirement obligations

 

 

(1

)

 

 

(2

)

 

 

(73

)

 

 

10

 

Total other expense

 

 

(1,204

)

 

 

(1,678

)

 

 

(5,109

)

 

 

(6,012

)

Net (loss) income

 

 

(7,869

)

 

 

2,369

 

 

 

(599

)

 

 

(18,253

)

Less: Distributions to preferred unitholders

 

 

1,171

 

 

 

1,153

 

 

 

4,643

 

 

 

4,456

 

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

 

 

(91

)

 

 

29

 

 

 

(7

)

 

 

(214

)

Limited partners' interest in net (loss) income

 

$

(8,949

)

 

$

1,187

 

 

$

(5,235

)

 

$

(22,495

)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.29

)

 

$

0.04

 

 

$

(0.17

)

 

$

(0.74

)

Diluted

 

$

(0.29

)

 

$

0.02

 

 

$

(0.17

)

 

$

(0.74

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average limited partner units outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Limited partner units (basic)

 

 

30,824

 

 

 

30,436

 

 

 

30,764

 

 

 

30,328

 

Limited partner units (diluted)

 

 

30,824

 

 

 

52,579

 

 

 

30,764

 

 

 

30,328

 

 

 

 


Mid-Con Energy Partners, LP and subsidiaries

 

Condensed Consolidated Statements of Cash Flows

 

(in thousands)

 

(Unaudited)

 

 

 

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(599

)

 

$

(18,253

)

Adjustments to reconcile net loss to net cash provided by operating activities

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

10,621

 

 

 

16,751

 

Debt issuance costs amortization

 

 

702

 

 

 

678

 

Accretion of discount on asset retirement obligations

 

 

1,596

 

 

 

721

 

Impairment of proved oil and natural gas properties

 

 

384

 

 

 

31,160

 

Impairment of assets held for sale

 

 

65

 

 

 

 

Dry holes and abandonments of unproved properties

 

 

 

 

 

612

 

Loss (gain) on settlements of asset retirement obligations

 

 

73

 

 

 

(10

)

Cash paid for settlements of asset retirement obligations

 

 

(97

)

 

 

(128

)

Mark to market on derivatives

 

 

 

 

 

 

 

 

Loss (gain) on derivatives, net

 

 

10,246

 

 

 

(5,674

)

Cash settlements paid for matured derivatives, net

 

 

(949

)

 

 

(6,928

)

Cash premiums paid for derivatives

 

 

 

 

 

(401

)

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

 

 

(9,671

)

 

 

509

 

Gain on sale of other assets

 

 

(123

)

 

 

 

Non-cash equity-based compensation

 

 

696

 

 

 

744

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(2,856

)

 

 

1,367

 

Prepaid expenses and other assets

 

 

70

 

 

 

(61

)

Accounts payable - trade and accrued liabilities

 

 

97

 

 

 

(210

)

Accounts payable - related parties

 

 

1,554

 

 

 

1,708

 

Net cash provided by operating activities

 

 

11,809

 

 

 

22,585

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Acquisitions of oil and natural gas properties

 

 

(3,331

)

 

 

(21,243

)

Additions to oil and natural gas properties

 

 

(13,868

)

 

 

(8,617

)

Proceeds from sales of oil and natural gas properties

 

 

33,453

 

 

 

1,044

 

Proceeds from sale of other assets

 

 

123

 

 

 

 

Net cash provided by (used in) investing activities

 

 

16,377

 

 

 

(28,816

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds from line of credit

 

 

11,000

 

 

 

22,000

 

Payments on line of credit

 

 

(36,000

)

 

 

(28,000

)

Debt issuance costs

 

 

(198

)

 

 

(681

)

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

 

 

 

 

 

14,847

 

Distributions to Class A convertible preferred units

 

 

(2,000

)

 

 

(2,500

)

Distributions to Class B convertible preferred units

 

 

(1,200

)

 

 

(800

)

Net cash (used in) provided by financing activities

 

 

(28,398

)

 

 

4,866

 

Net decrease in cash and cash equivalents

 

 

(212

)

 

 

(1,365

)

Beginning cash and cash equivalents

 

 

467

 

 

 

1,832

 

Ending cash and cash equivalents

 

$

255

 

 

$

467

 

 


 

Mid-Con Energy Partners, LP and subsidiaries

Net Production Volumes, Average Sales Prices and Unit Costs per Boe

(Unaudited)

 

  

 

Three Months Ended

December 31,

 

 

 

 

 

 

 

 

 

 

Year Ended

December 31,

 

 

 

 

 

 

 

 

 

 

 

2019

 

 

2018

 

 

Change

 

 

% Change

 

 

2019

 

 

2018

 

 

Change

 

 

% Change

 

Production volumes, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil (MBbls)

 

 

302

 

 

 

314

 

 

 

(12

)

 

(4%)

 

 

 

1,179

 

 

 

1,112

 

 

 

67

 

 

6%

 

Natural gas (MMcf)

 

 

178

 

 

 

140

 

 

 

38

 

 

27%

 

 

 

676

 

 

 

457

 

 

 

219

 

 

48%

 

Total (MBoe)

 

 

332

 

 

 

337

 

 

 

(5

)

 

(1%)

 

 

 

1,292

 

 

 

1,188

 

 

 

104

 

 

9%

 

Average daily net production (Boe/d)

 

 

3,609

 

 

 

3,663

 

 

 

(54

)

 

(1%)

 

 

 

3,540

 

 

 

3,255

 

 

 

285

 

 

9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average sales price

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil (per Bbl)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales price

 

$

54.00

 

 

$

50.85

 

 

$

3.15

 

 

6%

 

 

$

53.57

 

 

$

58.64

 

 

$

(5.07

)

 

(9%)

 

Effect of net settlements on matured derivative instruments

 

$

(0.66

)

 

$

(3.64

)

 

$

2.98

 

 

(82%)

 

 

$

(0.80

)

 

$

(6.59

)

 

$

5.79

 

 

88%

 

Realized oil price after derivatives

 

$

53.34

 

 

$

47.21

 

 

$

6.13

 

 

13%

 

 

$

52.77

 

 

$

52.05

 

 

$

0.72

 

 

1%

 

Natural gas (per Mcf)

 

$

2.10

 

 

$

2.27

 

 

$

(0.17

)

 

(7%)

 

 

$

1.93

 

 

$

2.47

 

 

$

(0.54

)

 

(22%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average unit costs per Boe

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

$

27.59

 

 

$

19.71

 

 

$

7.88

 

 

40%

 

 

$

24.67

 

 

$

18.97

 

 

$

5.70

 

 

30%

 

Production and ad valorem taxes

 

$

4.22

 

 

$

4.99

 

 

$

(0.77

)

 

(15%)

 

 

$

4.25

 

 

$

4.62

 

 

$

(0.37

)

 

(8%)

 

Depreciation, depletion and amortization

 

$

7.82

 

 

$

15.15

 

 

$

(7.33

)

 

(48%)

 

 

$

8.22

 

 

$

14.10

 

 

$

(5.88

)

 

(42%)

 

General and administrative expenses

 

$

6.50

 

 

$

4.64

 

 

$

1.86

 

 

40%

 

 

$

6.63

 

 

$

5.31

 

 

$

1.32

 

 

25%

 

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;

 

Impairment of proved oil and natural gas properties;

 

Impairment of assets held for sale;

 

Dry holes and abandonments of unproved properties;

 

(Gain) loss on derivatives, net;

 

Cash settlements received (paid) for matured derivatives, net;

 

Cash premiums received (paid) for derivatives, net;

 

Non-cash equity-based compensation;

 

(Gain) loss on sale of other assets; and

 

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

 

 


Mid-Con Energy Partners, LP and subsidiaries

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

(in thousands)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net (loss) income

 

$

(7,869

)

 

$

2,369

 

 

$

(599

)

 

$

(18,253

)

Interest expense, net

 

 

1,147

 

 

 

1,641

 

 

 

5,156

 

 

 

6,007

 

Depreciation, depletion and amortization

 

 

2,595

 

 

 

5,105

 

 

 

10,621

 

 

 

16,751

 

Accretion of discount on asset retirement obligations

 

 

428

 

 

 

(27

)

 

 

1,596

 

 

 

721

 

Impairment of proved oil and natural gas properties

 

 

 

 

 

21,450

 

 

 

384

 

 

 

31,160

 

Impairment of assets held for sale

 

 

65

 

 

 

 

 

 

65

 

 

 

 

Dry holes and abandonments of unproved properties

 

 

 

 

 

417

 

 

 

 

 

 

612

 

Loss (gain) on derivatives, net

 

 

7,174

 

 

 

(24,914

)

 

 

10,246

 

 

 

(5,674

)

Cash settlements paid for matured derivatives, net

 

 

(199

)

 

 

(940

)

 

 

(949

)

 

 

(6,928

)

Cash premiums paid for derivatives

 

 

 

 

 

(201

)

 

 

 

 

 

(401

)

Non-cash equity-based compensation

 

 

119

 

 

 

74

 

 

 

696

 

 

 

744

 

Gain on sales of other assets

 

 

 

 

 

 

 

 

(123

)

 

 

 

Loss (gain) on sales of oil and natural gas properties, net

 

 

21

 

 

 

120

 

 

 

(9,671

)

 

 

509

 

Adjusted EBITDA

 

$

3,481

 

 

$

5,094

 

 

$

17,422

 

 

$

25,248

 

 

INVESTOR RELATIONS CONTACT

IR@midcon-energy.com

(918) 743-7575