Alta Mesa Resources, Inc. (NASDAQ:AMR) (“Alta Mesa Resources”, the
“Company” or “Alta Mesa”) today provided an operations update,
including a review of the Company’s first quarter production and
operational performance for its wholly owned subsidiaries, Alta
Mesa Holdings, LP (“AMHLP”) and Kingfisher Midstream, LLC
(“Kingfisher”). A conference call to discuss these items is
scheduled for today at 2 p.m. central time (888-347-8149). Prior to
the call, a supplemental slide deck to be used on the call will be
available in the investor relations portion of the Company’s
website at www.altamesa.net. As a result of the recent complex
business combination, the Company has determined additional time is
required to complete the financial presentation of the predecessor
and successor entities. Therefore, it will not release First
Quarter 2018 financials today but expects to do so shortly.
Operational Highlights
- Completed business combination on February 9, creating
pure-play STACK-focused company
- 1Q-2018 net production 24,000 BOE per day, up 9% from
4Q-2017
- Exited Q1 with average net production of 25,800 BOE per day in
March
- 8th rig added in May to support full year plan
- Expanded Kingfisher Midstream leadership and business
development team
- 200 MMCFD Kingfisher Midstream plant expansion placed in
service in April
- Launched Cimarron Express crude pipeline to Cushing
- Ended quarter with $261 million in cash for total liquidity in
excess of $700 million
Hal Chappelle, Alta Mesa’s Chief Executive
Officer, stated, “After we closed our deal in early February, we
hit the ground running to leverage our extensive experience in the
low-cost STACK oil window. For the balance of the first quarter, we
have generated solid results as we scale up and realize additional
operating efficiencies. We continue to ramp up activity in our
STACK play with a focus on multi-well pad development, including
the addition of an eighth rig.” Chappelle continued; “We have a
balance sheet that is capable of supporting our growth agenda and
an integrated platform with Kingfisher Midstream to de-risk
upstream growth and capture additional value for Alta Mesa. All of
this leads us to be optimistic about our vision for Alta Mesa and
how this represents a differentiated opportunity for
investors.”
AMHLP Upstream STACK Play
Activities
In AMHLP ’s STACK play, the company has
assembled a highly contiguous leasehold position of over 130,000
net acres. In the first quarter of 2018, AMHLP completed 28
horizontal wells in the Mississippian-age Meramec/Osage section; 15
of the wells were funded through a DrillCo with Bayou City Energy.
AMHLP currently has eight rigs operating in the STACK play area
with plans to maintain this level for the balance of 2018. In
total, AMHLP plans to drill between 170 and 180 gross wells during
the year.
Kingfisher Midstream
Activities
Kingfisher executed a definitive agreement to
form Cimarron Express Pipeline, LLC (“Cimarron Express”) with
Blueknight Energy Partners, L.P. (“BKEP”). The 50/50 partnership
will construct and operate a new 16-inch, 65-mile crude oil
pipeline extending from northeastern Kingfisher County, Oklahoma,
to BKEP’s Cushing, Oklahoma, crude oil terminal. The Cimarron
Express Pipeline will provide direct market access at Cushing for
STACK producers and will have an initial capacity of 90,000 barrels
per day, expandable to over 175,000 barrels per day, and is
expected to be completed in mid-2019. The 200 MMcf per day plant
expansion at Kingfisher was placed in service in April.
Kingfisher’s operated inlet capacity is now 260 MMcf per day.
First Quarter 2018 Production
Summary
Total production for the first quarter of 2018
was 2,162 MBOE, or an average of 24.0 MBOE per day, up 24%,
compared to 1,737 MBOE or 19.3 MBOE per day in the first quarter of
2017. The increase in production is primarily a result of the
continued successful development of AMHLP’s STACK play. AMHLP
production for 2018 is expected to average between 33 and 38 MBOE
per day.
Conference Call Information
Alta Mesa invites you to listen to its
conference call which will discuss its operational results at 2:00
p.m., Central time, on Monday, May 14, 2018. If you wish to
participate in this conference call, dial 888-347-8149 (toll free
in US/Canada) or 412-902-4228 (for International calls), five to
ten minutes before the scheduled start time. The commentary and
answers to questions will include forward-looking information. A
webcast of the call and any related materials will be available on
Alta Mesa Resources website at www.altamesa.net. Additionally, a
replay of the conference call will be available for one week
following the live broadcast by dialing 844-512-2921 (toll free in
US/Canada) or 412-317-6671 (International calls), and referencing
Conference ID #10120251.
About Alta Mesa Resources,
IncAlta Mesa Resources, Inc., is an independent energy
company focused on the development and acquisition of
unconventional oil and natural gas reserves in the Anadarko Basin
in Oklahoma, and through Kingfisher Midstream, LLC, provides
best-in-class midstream energy services, including crude oil and
gas gathering, processing and marketing to producers in the STACK
play.
Safe Harbor Statement and
DisclaimerThe information in this press release includes
“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 present or historical fact included in this
press release, regarding Alta Mesa Resources’ strategy, guidance,
future operations, financial position, rig schedule and drilling
plans, the timing and costs associated with the construction of the
Cimarron Express pipeline, and other projected costs, prospects,
plans and objectives of management are forward-looking statements.
When used in this press release, the words “could”, “should”,
“will”, “may”, “believe”, “anticipate”, “intend”, “estimate”,
“expect”, “project,” the negative of such terms and similar
expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain such
identifying words. These forward-looking statements are based on
Alta Mesa Resources’ current expectations and assumptions about
future events and are based on currently available information as
to the outcome and timing of future events. Alta Mesa Resources’
cautions you that these forward-looking statements are subject to
all of the risks and uncertainties, most of which are difficult to
predict and many of which are beyond its control, incident to the
exploration for and development and production, gathering and sale
of oil, natural gas, and natural gas liquids. These risks include,
but are not limited to: commodity price volatility, global economic
conditions, inflation, increased operating costs, lack of
availability of drilling and production equipment supplies,
services and qualified personnel, processing volumes and pipeline
throughput, uncertainties related to new technologies, geographical
concentration of operations of our subsidiaries Alta Mesa Holdings,
LP (“AMHLP”) and Kingfisher Midstream, LLC (“Kingfisher”),
environmental risks, weather risks, security risks, drilling and
other operating risks, regulatory changes, the uncertainty inherent
in estimating oil and natural gas reserves and in projecting future
rates of production, reductions in cash flow, lack of access to
capital, Alta Mesa Resources’ ability to satisfy future cash
obligations, restrictions in existing or future debt agreements of
Alta Mesa or Kingfisher, the timing of development expenditures,
managing growth and integration of acquisitions, failure to realize
expected value creation from property acquisitions, title defects
and limited control over non-operated properties, the Company’s
ability to complete an initial public offering of the Kingfisher
midstream business and the other risks described in the Company’s
filings with the SEC. Except as otherwise required by applicable
law, Alta Mesa Resources disclaims any duty to update any
forward-looking statements, all of which are expressly qualified by
the statements in this section, to reflect events or circumstances
after the date of this press release.
FOR MORE INFORMATION CONTACT:
Lance L. Weaver (281) 943-5597 lweaver@altamesa.net
|
Reaffirmation of Previous Alta Mesa Resources
Annual Guidance |
|
|
|
|
Upstream -
AMHLP |
2018E |
|
|
|
|
Drilling Activity |
|
|
Average rigs |
8 |
|
Gross
well count |
170 - 180 |
|
Net Volumes |
|
|
Oil (BOPD) |
18,000
- 21,000 |
|
Gas (MCFD) |
58,000
- 68,000 |
|
NGL (BPD) |
5,000
– 6,000 |
|
BOEPD |
33,000
- 38,000 |
|
Differentials |
|
|
Oil (% WTI) |
95% |
|
Gas (% NYMEX HH) |
93% |
|
Expenses |
|
|
Total Operating
Expenses |
$135mm
- $155mm |
|
CAPEX |
|
|
Non-Acquisition
CAPEX |
$550mm
- $580mm |
|
|
|
|
|
|
|
Midstream -
Kingfisher |
2018E |
|
|
|
|
Processing Capacity |
|
|
Cryogenic
processing |
260
MMcf/d |
|
Processing
Agreements |
90
MMcf/d |
|
Inlet Volumes |
|
|
Alta Mesa |
90 -
100 MMcf/d |
|
Third Parties |
50 -
70 MMcf/d |
|
Average Rig count |
|
|
Alta Mesa |
8 |
|
Third Parties |
5 -
15 |
|
Operating Expenses |
|
|
Operating Cost
($/MMbtu) |
$0.20
- $0.25 per MMbtu |
|
G&A |
$5-$6mm |
|
CAPEX |
|
|
Total Capex |
$175 -
$220mm |
|
Plant construction |
$25 -
$45mm |
|
Existing area well
connects and compression |
$70 -
$80mm |
|
Expansion area well
connects and compression |
$70 -
$80mm |
|
Crude
Gathering |
$12 - $15mm |
|
EBITDA |
$95 - $110mm |
|
|
|
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