Penn Virginia Corporation ("Penn Virginia" or the "Company")
(NASDAQ:PVAC) today announced its financial and operational results
for the first quarter 2021.
Recent Significant
Highlights
- Sold 16,324
barrels of oil per day ("bbl/d") for the first quarter of 2021,
exceeding the high end of the first quarter guidance range. Total
sales volumes for the first quarter of 2021 were 20,534 barrels of
oil equivalent per day ("boe/d"). Total production for the seven
days ending March 31, 2021, averaged over 20,000 bbl/d and 25,000
boe/d;
- Generated net
loss of $20 million (including a non-cash loss on derivatives of
$27 million) and net loss attributable to common shareholders of
$14 million, or $0.89 per share and per diluted share, and adjusted
net income(1) of $15 million, or $0.39 per diluted share, for the
first quarter of 2021;
- Reported
adjusted EBITDAX(2)(3) of $47 million for the first quarter of
2021;
- Generated net
cash provided by operating activities of $32 million for the first
quarter of 2021;
- Recorded free
cash flow(4) of $6 million for the first quarter of 2021,
including the impact of prepaid capital expenditures of
approximately $12 million, which locked in lower service costs and
prepayment discounts; and
-
Reported capital expenditures for the first quarter of 2021 of
approximately $54 million (99% drilling and completion), which was
below the low end of the first quarter guidance range.
"In the first quarter Penn Virginia delivered on
its commitment to driving down capital costs, increasing
operational efficiencies and generating free cash flow,” said
Darrin Henke, President and Chief Executive Officer of Penn
Virginia. "Our sales volumes for the first quarter exceeded the
high end of our guidance range, while capital expenditures were
below the low end of our guidance range. Our strong performance to
date provided us the confidence to raise our full-year 2021
production guidance by more than six percent while still
maintaining the previous capital expenditures target. These results
for the quarter allowed the Company to deliver its sixth
consecutive quarter of free cash flow generation.”
Mr. Henke continued, “Over the last several
quarters, we have taken several strategic steps that we believe
have positioned the Company to deliver free cash flow in the future
through our commitment to a returns-driven strategy. We expect to
use the free cash flow we generate this year to further reduce
debt. Consistent with our disciplined approach, we expect any
further improvement in cash flow from higher commodity prices will
accelerate debt reduction. We remain steadfast in our commitment to
free cash flow generation, capital discipline, and maximizing
cash-on-cash returns.”
2021 Executive Compensation
Program
The Company recently implemented a shareholder-aligned “Pay for
Performance” compensation program, which is comprised of short-term
and long-term metrics.
- New annual bonus
framework rewards employees based on the Company’s performance
relative to various returns-based metrics such as Cash Return on
Capital Invested and Capital Efficiency per boe as well as other
Company objectives, including achievement of the Company’s
sustainability, environmental, social, and governance
objectives.
- New long-term
incentive framework with 100% of executive’s and 50% of
non-executive’s equity awards issued in performance-based
restricted stock units tied to absolute and relative shareholder
return and Return on Capital Employed over a three-year
period.
First Quarter 2021 Operating
Results
Total sales volumes for the first quarter of
2021 were 1.8 million barrels of oil equivalent, or 20,534 boe/d
(80% crude oil). During the first quarter of 2021, the Company
completed and turned to sales 13 gross (11.5 net) wells.
First Quarter 2021 Financial
Results
Operating expenses were $57.9 million, or $31.32
per barrel of oil equivalent ("boe"), in the first quarter of 2021.
Total cash direct operating expenses(5), which consist of lease
operating expenses ("LOE"), gathering, processing, and
transportation ("GPT") expenses, production and ad valorem taxes,
and cash general and administrative ("G&A") expenses, were
$29.9 million, or $16.20 per boe, in the first quarter of
2021. Total G&A expenses for the first quarter of 2021
were $7.13 per boe, which included $7.1 million of non-cash
share-based compensation, non-recurring strategic transaction
costs, and non-recurring organizational restructuring costs, of
which $2.2 million was non-cash share-based compensation. For
the first quarter of 2021, adjusted cash G&A expenses(6), which
excludes non-cash share-based compensation and non-recurring
G&A items, were $3.27 per boe. LOE was $4.78 per boe for the
first quarter of 2021.
Net loss for the first quarter of 2021 was $20.0
million and net loss attributable to common shareholders of $13.6
million, or $0.89 per share and per diluted share, compared to a
net income of $163.1 million, or $10.76 per share and per diluted
share, in the first quarter of 2020. Adjusted net
income(1) was $14.8 million, or $0.39 per diluted share, in
the first quarter of 2021 versus $28.6 million, or $1.89 per
diluted share in the first quarter of 2020.
Adjusted EBITDAX(2)(3) was $47.4 million in
the first quarter of 2021, compared to $78.5 million in the first
quarter of 2020, down primarily due to the effect of lower oil
sales volumes and realized prices adjusted for the effects of
derivatives.
Balance Sheet and Liquidity
As of March 31, 2021, Penn Virginia had cash of
$11.9 million and total debt of $375.8 million, including
borrowings under its revolving credit facility of $228.9 million.
Liquidity was $132.6 million as of March 31, 2021, including cash
of $11.9 million and $120.7 million available under the Company's
revolving credit facility. As of March 31, 2021, the Company had a
net debt(7) to LTM adjusted EBITDAX ratio of approximately 1.5x(7),
pro forma for the transaction with certain affiliates of Juniper
Capital Advisors, L.P. (collectively “Juniper”).
During the first quarter of 2021, the Company
incurred $54.1 million of capital expenditures, of which 99% was
associated with drilling and completion capital.
Acreage
As of March 31, 2021, the Company had
approximately 102,400 gross (90,400 net) acres. Approximately
91% of Penn Virginia's acreage is held by production.
Revised 2021 Outlook
The table below sets forth the Company's
operational and financial guidance(3):
|
|
2Q 2021 |
|
Revised 2021 |
|
Previous 2021 |
|
|
|
|
|
|
|
Oil Sales Volumes
(boe/d) |
|
19,300 – 20,100 |
|
18,300 – 20,100 |
|
17,200 – 19,000 |
Oil
Percentage |
|
|
|
80% |
|
|
Realized Price
Differentials |
|
|
|
|
|
|
Oil (WTI, per bbl) |
|
$(2.50) - $(1.50) |
|
$(2.50) - $(1.50) |
|
$(2.50) - $(1.50) |
Natural gas (Henry Hub, per MMBtu) |
|
$(0.10) - $0.10 |
|
$(0.10) - $0.10 |
|
$(0.10) - $0.10 |
|
|
|
|
|
|
|
Direct Operating
Expenses |
|
|
|
|
|
|
Lease operating expenses (per boe) |
|
$4.70 - $4.90 |
|
$4.70 - $5.00 |
|
$4.75 - $5.05 |
GPT expenses (per boe) |
|
$2.55 - $2.75 |
|
$2.35 - $2.65 |
|
$2.35 - $2.65 |
Ad valorem and production taxes (percent of product revenue) |
|
6.3% - 6.8% |
|
6.3% - 6.8% |
|
6.3% - 6.8% |
Adjusted cash G&A expenses (per boe)(6) |
|
$3.00 - $3.30 |
|
$2.85 - $3.15 |
|
$2.85 - $3.15 |
|
|
|
|
|
|
|
Capital Expenditures
(millions) |
|
|
|
|
|
|
Drilling & Completion |
|
$56 - $64 |
|
$205 - $235 |
|
$205 - $235 |
Land, Facilities and other |
|
$1 |
|
$5 |
|
$5 |
Note: The Company's outlook is based on
maintaining a 2-rig development program. However, the Company will
closely monitor commodity prices and the service cost environment
with the goal of ensuring the capital program generates robust
returns. Full-year 2021 guidance for adjusted cash G&A
expenses(6)
does not include approximately $5 million of expenses
related to the transaction with Juniper.
First Quarter 2021 Conference
Call
A conference call and webcast discussing the
first quarter 2021 financial and operational results is currently
scheduled for Tuesday, May 4, 2021 at 5:00 p.m. ET. Prepared
remarks will be followed by a question and answer period. Investors
and analysts may participate via phone by dialing (844) 707-6931
(international: (412) 317-9248) five to 10 minutes before the
scheduled start time, or via webcast by logging on to the Company's
website, www.pennvirginia.com, at least 15 minutes prior to the
scheduled start time to download supporting materials and install
any necessary audio software.
An on-demand replay of the webcast will be available on the
Company's website beginning shortly after the webcast. The replay
will also be available from May 4, 2021, through May 11, 2021, by
dialing (877) 344-7529 (international (412) 317-0088) and entering
the passcode 10153995.
About Penn Virginia
Corporation
Penn Virginia Corporation is a pure-play
independent oil and gas company engaged in the development and
production of oil, natural gas liquids, or NGLs, and natural gas,
with operations in the Eagle Ford shale in south Texas. For more
information, please visit our website at www.pennvirginia.com.
The information on the Company's website is not part of this
release.
Cautionary Statements Regarding
Guidance
The estimates and guidance presented in this
release are based on assumptions of current and future capital
expenditure levels, prices for oil, NGLs, and natural gas, and
NGLs, available liquidity, indications of supply and demand for
oil, well results, and operating costs. The guidance provided in
this release does not constitute any form of guarantee or assurance
that the matters indicated will be achieved. While we believe these
estimates and the assumptions on which they are based are
reasonable as of the date on which they are made, they are
inherently uncertain and are subject to, among other things,
significant business, economic, operational, and regulatory risks,
and uncertainties, some of which are not known as of the date of
the statement. Guidance and estimates, and the assumptions on which
they are based, are subject to material revision. Actual results
may differ materially from estimates and guidance. Please read the
"Forward-Looking Statements" section below, as well as "Risk
Factors" in our annual report on Form 10-K and our quarterly
reports on Form 10-Q, which are incorporated herein.
Forward-Looking
Statements
This communication contains certain
"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. Statements that are
not historical facts are forward-looking statements, and such
statements include, words such as "anticipate," "guidance,"
"assumptions," "projects," "forward," "estimates,” "outlook,”
"expects,” "continues,” "intends,” "plans,” "believes,” "future,”
"potential,” "may,” "foresee,” "possible,” "should,” "would,”
"could," “focus” and variations of such words or similar
expressions, including the negative thereof, to identify
forward-looking statements. Because such statements include
assumptions, risks, uncertainties, and contingencies, actual
results may differ materially from those expressed or implied by
such forward-looking statements. These risks, uncertainties and
contingencies include, but are not limited to, the following: risks
related to the recently completed transactions with Juniper,
including the risk that the benefits of the transactions may not be
fully realized or may take longer to realize than expected, and
that management attention will be diverted to integration-related
issues; risks related to potential and completed acquisitions,
including related costs and our ability to realize their expected
benefits; the decline in, sustained market uncertainty of, and
volatility of commodity prices for crude oil, natural gas liquids,
or NGLs, and natural gas; the impact of the COVID-19 pandemic,
including reduced demand for oil and natural gas, economic
slowdown, governmental actions, stay-at-home orders, interruptions
to our operations or our customer’s operations; risks related to
and the impact of actual or anticipated other world health events;
our ability to satisfy our short-term and long-term liquidity
needs, including our ability to generate sufficient cash flows from
operations or to obtain adequate financing, including access to the
capital markets, to fund our capital expenditures and meet working
capital needs; our ability to access capital, including through
lending arrangements and the capital markets, as and when desired;
negative events or publicity adversely affecting our ability to
maintain our relationships with our suppliers, service providers,
customers, employees, and other third parties; plans, objectives,
expectations and intentions contained in this communication that
are not historical; our ability to execute our business plan in
volatile and depressed commodity price environments; our ability to
develop, explore for, acquire and replace oil and gas reserves and
sustain production; changes to our drilling and development program
our ability to generate profits or achieve targeted reserves in our
development and exploratory drilling and well operations; our
ability to meet guidance, market expectations and internal
projections, including type curves; any impairments, write-downs or
write-offs of our reserves or assets; the projected demand for and
supply of oil, NGLs and natural gas; our ability to contract for
drilling rigs, frac crews, materials, supplies and services at
reasonable costs; our ability to renew or replace expiring
contracts on acceptable terms; our ability to obtain adequate
pipeline transportation capacity or other transportation for our
oil and gas production at reasonable cost and to sell our
production at, or at reasonable discounts to, market prices; the
uncertainties inherent in projecting future rates of production for
our wells and the extent to which actual production differs from
that estimated in our proved oil and gas reserves; use of new
techniques in our development, including choke management and
longer laterals; drilling, completion and operating risks,
including adverse impacts associated with well spacing and a high
concentration of activity; our ability to compete effectively
against other oil and gas companies; leasehold terms expiring
before production can be established and our ability to replace
expired leases; environmental obligations, costs and liabilities
that are not covered by an effective indemnity or insurance; the
timing of receipt of necessary regulatory permits; the effect of
commodity and financial derivative arrangements with other parties,
and counterparty risk related to the ability of these parties to
meet their future obligations; the occurrence of unusual weather or
operating conditions, including force majeure events; our ability
to retain or attract senior management and key employees; our
reliance on a limited number of customers and a particular region
for substantially all of our revenues and production; compliance
with and changes in governmental regulations or enforcement
practices, especially with respect to environmental, health and
safety matters; physical, electronic and cybersecurity breaches;
uncertainties relating to general domestic and international
economic and political conditions; the impact and costs associated
with litigation or other legal matters; sustainability initiatives;
and other risks set forth in our filings with the SEC, including
our most recent Annual Report on Form 10-K. Additional Information
concerning these and other factors can be found in our press
releases and public filings with the SEC. Many of the factors that
will determine our future results are beyond the ability of
management to control or predict. In addition, readers should not
place undue reliance on forward-looking statements, which reflect
management's views only as of the date hereof. The statements in
this communication speak only as of the date of the communication.
We undertake no obligation to revise or update any forward-looking
statements, or to make any other forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required by applicable law. Expected results of
the completed period are preliminary and subject to change until
published in our Quarterly Report on Form 10-Q filed with the
SEC.
Footnotes
1) Adjusted net income is a
non-GAAP financial measure. Definitions of non-GAAP financial
measures and reconciliations of non-GAAP financial measures to the
closest GAAP-based financial measures appear at the end of this
release.
2) Adjusted EBITDAX is a
non-GAAP financial measure. Definitions of non-GAAP financial
measures and reconciliations of non-GAAP financial measures to the
closest GAAP-based financial measures appear at the end of this
release.
3) The Company currently
expects adjusted EBITDAX to be reduced by approximately $9.3
million for 2021 for option premiums paid in current and prior
periods related to current period production and prior period
settlements of early-terminated derivatives originally designated
to settle against current period production, including $3.8 million
in the first quarter of 2021, $2.9 million in the second quarter of
2021 and $2.6 million in the second half of 2021. Adjusted EBITDAX
is a non-GAAP financial measure. Definitions of non-GAAP financial
measures appear at the end of this release.
4) Free cash flow is a non-GAAP
financial measure. Definitions of non-GAAP financial measures and
reconciliations of non-GAAP financial measures to the closest
GAAP-based financial measures appear at the end of this
release.
5) Total cash direct operating
expenses is a non-GAAP financial measure. Definitions of non-GAAP
financial measures and reconciliations of non-GAAP financial
measures to the closest GAAP-based financial measures appear at the
end of this release.
6) Adjusted cash G&A
expense is a non-GAAP financial measure. Definitions of non-GAAP
financial measures and reconciliations of non-GAAP financial
measures to the closest GAAP-based financial measures appear at the
end of this release.
7) Net debt to LTM adjusted
EBITDAX is a ratio of the Company's net debt to LTM adjusted
EBITDAX, which are non-GAAP measures defined and reconciled at the
end of this release.
PENN VIRGINIA
CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONSand SELECTED OPERATING STATISTICS -
unaudited(in thousands, except per share, production and
price data)
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2021 |
|
2020 |
|
2020 |
Revenues and
other |
|
|
|
|
|
|
Crude oil |
|
$ |
81,913 |
|
|
|
$ |
61,009 |
|
|
|
$ |
86,308 |
|
|
Natural gas liquids (NGLs) |
|
3,562 |
|
|
|
2,653 |
|
|
|
1,893 |
|
|
Natural gas |
|
2,833 |
|
|
|
2,830 |
|
|
|
2,690 |
|
|
Total product revenues |
|
88,308 |
|
|
|
66,492 |
|
|
|
90,891 |
|
|
Other operating income, net |
|
247 |
|
|
|
504 |
|
|
|
488 |
|
|
Total revenues and other |
|
88,555 |
|
|
|
66,996 |
|
|
|
91,379 |
|
|
Operating
expenses |
|
|
|
|
|
|
Lease operating |
|
8,825 |
|
|
|
9,562 |
|
|
|
10,532 |
|
|
Gathering, processing and transportation |
|
4,674 |
|
|
|
5,253 |
|
|
|
5,444 |
|
|
Production and ad valorem taxes |
|
5,513 |
|
|
|
3,467 |
|
|
|
6,154 |
|
|
General and administrative |
|
10,931 |
|
|
|
9,286 |
|
|
|
6,374 |
|
|
Total cash direct operating expenses |
|
29,943 |
|
|
|
27,568 |
|
|
|
28,504 |
|
|
Share-based compensation - equity classified awards |
|
2,246 |
|
|
|
702 |
|
|
|
856 |
|
|
Depreciation, depletion and amortization |
|
23,884 |
|
|
|
25,782 |
|
|
|
40,718 |
|
|
Impairments of oil and gas properties |
|
1,811 |
|
|
|
120,351 |
|
|
|
— |
|
|
Total operating expenses |
|
57,884 |
|
|
|
174,403 |
|
|
|
70,078 |
|
|
Operating income (loss) |
|
30,671 |
|
|
|
(107,407 |
) |
|
|
21,301 |
|
|
Other income (expense) |
|
|
|
|
|
|
Interest expense, net |
|
(5,397 |
) |
|
|
(7,044 |
) |
|
|
(8,180 |
) |
|
Loss on extinguishment of debt |
|
(1,231 |
) |
|
|
— |
|
|
|
— |
|
|
Derivatives |
|
(44,368 |
) |
|
|
(21,457 |
) |
|
|
151,119 |
|
|
Other, net |
|
(6 |
) |
|
|
(808 |
) |
|
|
(8 |
) |
|
Income (loss) before income
taxes |
|
(20,331 |
) |
|
|
(136,716 |
) |
|
|
164,232 |
|
|
Income tax benefit (expense) |
|
310 |
|
|
|
1,193 |
|
|
|
(1,138 |
) |
|
Net income
(loss) |
|
(20,021 |
) |
|
|
(135,523 |
) |
|
|
163,094 |
|
|
Net loss attributable to Noncontrolling interest |
|
6,449 |
|
|
|
— |
|
|
|
— |
|
|
Net income (loss)
attributable to common shareholders |
|
$ |
(13,572 |
) |
|
|
$ |
(135,523 |
) |
|
|
$ |
163,094 |
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
Basic |
|
$ |
(0.89 |
) |
|
|
$ |
(8.92 |
) |
|
|
$ |
10.76 |
|
|
Diluted |
|
$ |
(0.89 |
) |
|
|
$ |
(8.92 |
) |
|
|
$ |
10.76 |
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
Basic |
|
15,263 |
|
|
|
15,200 |
|
|
|
15,152 |
|
|
Diluted |
|
15,263 |
|
|
|
15,200 |
|
|
|
15,160 |
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2021 |
|
2020 |
|
2020 |
Sales
Volumes |
|
|
|
|
|
|
Crude oil (Mbbls) |
|
1,469 |
|
|
1,538 |
|
|
1,881 |
|
NGLs (Mbbls) |
|
210 |
|
|
248 |
|
|
307 |
|
Natural gas (MMcf) |
|
1,013 |
|
|
1,154 |
|
|
1,474 |
|
Total
(Mboe) |
|
1,848 |
|
|
1,978 |
|
|
2,433 |
|
Average sales volumes
(boe/d) |
|
20,534 |
|
|
21,502 |
|
|
26,740 |
|
|
|
|
|
|
|
|
Realized
Prices |
|
|
|
|
|
|
Crude oil ($/bbl) |
|
$ |
55.76 |
|
|
$ |
39.66 |
|
|
$ |
45.90 |
|
NGLs ($/bbl) |
|
$ |
16.95 |
|
|
$ |
10.71 |
|
|
$ |
6.16 |
|
Natural gas ($/Mcf) |
|
$ |
2.80 |
|
|
$ |
2.45 |
|
|
$ |
1.83 |
|
Aggregate ($/boe) |
|
$ |
47.79 |
|
|
$ |
33.61 |
|
|
$ |
37.35 |
|
|
|
|
|
|
|
|
Realized Prices,
including effects of derivatives, net
1 |
|
|
|
|
|
|
Crude oil ($/bbl) |
|
$ |
44.80 |
|
|
$ |
48.84 |
|
|
$ |
54.15 |
|
Natural gas ($/Mcf) |
|
$ |
2.84 |
|
|
$ |
1.95 |
|
|
$ |
1.90 |
|
Aggregate ($/boe) |
|
$ |
39.10 |
|
|
$ |
40.46 |
|
|
$ |
43.78 |
|
1 Realized prices, including
effects of derivatives, net are non-GAAP measures. Definitions of
non-GAAP financial measures and reconciliations of non-GAAP
financial measures appear at the end of this release.
Reconciliation of GAAP “Realized prices”
to Non-GAAP “Realized prices, including effects of derivatives,
net”We present our realized prices for crude oil and
natural gas, as adjusted for the effects of derivatives, net as we
believe these measures are useful to management and stakeholders in
determining the effectiveness of our price-risk management program
that is designed to reduce the volatility associated with our
operations. Realized prices for crude oil and natural gas, as
adjusted for the effects of derivatives, net, are supplemental
financial measures that are not prepared in accordance with
generally accepted accounting principles (“GAAP”). The following
table presents the calculation of our non-GAAP realized prices for
crude oil and natural gas, as adjusted for the effects of
derivatives, net and reconciles to realized prices for crude oil
and natural gas determined in accordance with GAAP:
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2021 |
|
2020 |
|
2020 |
|
|
|
|
|
|
|
Crude oil realized price ($/bbl) |
|
$ |
55.76 |
|
|
|
$ |
39.66 |
|
|
|
$ |
45.90 |
|
Effect of derivatives
($/bbl) |
|
(10.96 |
) |
|
|
9.18 |
|
|
|
8.25 |
|
Crude oil realized price,
including effects of derivatives, net ($/bbl) |
|
$ |
44.80 |
|
|
|
$ |
48.84 |
|
|
|
$ |
54.15 |
|
|
|
|
|
|
|
|
Natural gas realized price
($/Mcf) |
|
$ |
2.80 |
|
|
|
$ |
2.45 |
|
|
|
$ |
1.83 |
|
Effect of derivatives
($/Mcf) |
|
0.04 |
|
|
|
(0.50 |
) |
|
|
0.07 |
|
Natural gas realized price,
including effects of derivatives, net ($/Mcf) |
|
$ |
2.84 |
|
|
|
$ |
1.95 |
|
|
|
$ |
1.90 |
|
|
|
|
|
|
|
|
Aggregate realized price
($/boe) |
|
$ |
47.79 |
|
|
|
$ |
33.61 |
|
|
|
$ |
37.35 |
|
Effect of derivatives
($/boe) |
|
(8.69 |
) |
|
|
6.85 |
|
|
|
6.42 |
|
Aggregate realized price, including effects of derivatives, net
($/boe) |
|
$ |
39.10 |
|
|
|
$ |
40.46 |
|
|
|
$ |
43.77 |
|
Effects of derivatives includes, as applicable
to the period presented: (i) current period commodity derivative
settlements; (ii) the impact of option premiums paid or received in
prior periods related to current period production; (iii) the
impact of prior period cash settlements of early-terminated
derivatives originally designated to settle against current period
production; (iv) the exclusion of option premiums paid or received
in current period related to future period production; and (v) the
exclusion of the impact of current period cash settlements for
early-terminated derivatives originally designated to settle
against future period production.
PENN VIRGINIA
CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS -
unaudited(in thousands)
|
|
March 31, |
|
December 31, |
|
|
2021 |
|
2020 |
Assets |
|
|
|
|
Current assets |
|
$ |
110,879 |
|
|
$ |
153,420 |
|
Net property and equipment |
|
792,077 |
|
|
723,549 |
|
Other noncurrent assets |
|
10,175 |
|
|
30,357 |
|
Total assets |
|
$ |
913,131 |
|
|
$ |
907,326 |
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
Current liabilities |
|
151,778 |
|
|
148,195 |
|
Other noncurrent liabilities |
|
23,648 |
|
|
36,796 |
|
Total long-term debt, net |
|
363,562 |
|
|
509,497 |
|
Equity |
|
|
|
|
Common shareholders’ equity |
|
150,971 |
|
|
212,838 |
|
Noncontrolling interest |
|
223,172 |
|
|
— |
|
Total equity |
|
374,143 |
|
|
212,838 |
|
Total liabilities and equity |
|
$ |
913,131 |
|
|
$ |
907,326 |
|
PENN VIRGINIA
CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS -
unaudited(in thousands)
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2021 |
|
2020 |
|
2020 |
Cash flows from
operating activities |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(20,021 |
) |
|
|
$ |
(135,523 |
) |
|
|
$ |
163,094 |
|
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
|
Loss on exchange of debt |
|
1,231 |
|
|
|
— |
|
|
|
— |
|
|
Depreciation, depletion and amortization |
|
23,884 |
|
|
|
25,782 |
|
|
|
40,718 |
|
|
Impairments of oil and gas properties |
|
1,811 |
|
|
|
120,351 |
|
|
|
— |
|
|
Derivative contracts: |
|
|
|
|
|
|
Net (gains) losses |
|
44,368 |
|
|
|
21,457 |
|
|
|
(151,119 |
) |
|
Cash settlements and premiums received (paid), net |
|
(7,169 |
) |
|
|
12,792 |
|
|
|
(269 |
) |
|
Deferred income tax (benefit) expense |
|
(310 |
) |
|
|
(1,393 |
) |
|
|
2,320 |
|
|
Gain on sales of assets, net |
|
(4 |
) |
|
|
(4 |
) |
|
|
(6 |
) |
|
Non-cash interest expense |
|
611 |
|
|
|
814 |
|
|
|
823 |
|
|
Share-based compensation (equity-classified) |
|
2,246 |
|
|
|
702 |
|
|
|
856 |
|
|
Other, net |
|
6 |
|
|
|
8 |
|
|
|
8 |
|
|
Changes in operating assets and liabilities, net |
|
(14,442 |
) |
|
|
(12,931 |
) |
|
|
16,048 |
|
|
Net cash provided by operating activities |
|
32,211 |
|
|
|
32,055 |
|
|
|
72,473 |
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
Capital expenditures |
|
(34,758 |
) |
|
|
(29,555 |
) |
|
|
(62,015 |
) |
|
Proceeds from sales of assets, net |
|
4 |
|
|
|
4 |
|
|
|
75 |
|
|
Net cash used in investing activities |
|
(34,754 |
) |
|
|
(29,551 |
) |
|
|
(61,940 |
) |
|
Cash flows from
financing activities |
|
|
|
|
|
|
Proceeds from credit facility borrowings |
|
— |
|
|
|
— |
|
|
|
46,000 |
|
|
Repayment of credit facility borrowings |
|
(85,500 |
) |
|
|
(10,000 |
) |
|
|
(9,000 |
) |
|
Repayment of second lien term loan |
|
(53,140 |
) |
|
|
— |
|
|
|
— |
|
|
Proceeds from redeemable common units |
|
151,160 |
|
|
|
— |
|
|
|
— |
|
|
Proceeds from redeemable preferred stock |
|
2 |
|
|
|
— |
|
|
|
— |
|
|
Transaction costs paid on behalf of Noncontrolling interest |
|
(5,543 |
) |
|
|
— |
|
|
|
— |
|
|
Issue costs paid for Noncontrolling interest securities |
|
(3,758 |
) |
|
|
— |
|
|
|
— |
|
|
Debt issuance costs paid |
|
(1,830 |
) |
|
|
— |
|
|
|
— |
|
|
Net cash provided by (used in) financing activities |
|
1,391 |
|
|
|
(10,000 |
) |
|
|
37,000 |
|
|
Net increase (decrease) in
cash and cash equivalents |
|
(1,152 |
) |
|
|
(7,496 |
) |
|
|
47,533 |
|
|
Cash and cash equivalents -
beginning of period |
|
13,020 |
|
|
|
20,516 |
|
|
|
7,798 |
|
|
Cash and cash equivalents -
end of period |
|
$ |
11,868 |
|
|
|
$ |
13,020 |
|
|
|
$ |
55,331 |
|
|
PENN VIRGINIA
CORPORATIONCERTAIN NON-GAAP FINANCIAL MEASURES -
unaudited
Readers are reminded that non-GAAP measures are
merely a supplement to, and not a replacement for, or superior to
financial measures prepared according to GAAP. They should be
evaluated in conjunction with the GAAP financial measures. It
should be noted as well that our non-GAAP information may be
different from the non-GAAP information provided by other
companies.
Special Note About Presentation
Effective with our reporting for the period ended September 30,
2020, and for future periods, the Company changed the manner in
which settlements from interest rate swap derivatives are presented
in the non-GAAP financial measure “Adjusted EBITDAX.” Previously,
our presentation of such interest rate swap settlements were
commingled with commodity derivative settlements in the caption
titled “Realized settlements, net.” Because these interest rate
swap derivative financial instruments represent hedges of the
interest expense attributable to our variable-rate debt
instruments, we believe that the related gain or loss on our
Consolidated Statements of Operations should be treated similarly
to the exclusion of interest expense in the determination of
“Adjusted EBITDAX.” In order to mitigate the potential for any
confusion and to align our reporting with what we believe to be the
dominant presentation methodology regarding such non-GAAP financial
measures in our industry, which is also consistent with the
treatment afforded such derivative financial instruments in our
debt agreements, we will exclude the effect of such settlements in
our non-GAAP financial measure “Adjusted EBITDAX”. We have applied
the aforementioned presentation methodology to all prior periods
presented herein.
Reconciliation of GAAP “Net income (loss)” to Non-GAAP
“Adjusted net income”Adjusted net income is a non-GAAP
financial measure that represents net income (loss) adjusted to
include net realized settlements of derivatives and exclude the
effects, net of income taxes, of non-cash changes in the fair value
of derivatives, impairments of oil and gas properties, net gains
and losses on the sales of assets, loss on extinguishment of debt,
strategic transaction costs, organizational restructuring,
including severance and income tax effect of adjustments. We
believe that non-GAAP adjusted net income and non-GAAP adjusted net
income per share amounts provide meaningful supplemental
information regarding our operational performance. This information
facilitates management’s internal comparisons to the Company’s
historical operating results as well as to the operating results of
our competitors. Since management finds this measure to be useful,
the Company believes that our investors can benefit by evaluating
both non-GAAP and GAAP results. Adjusted net income is not a
measure of financial performance under GAAP and should not be
considered as a measure of liquidity or as an alternative to net
income (loss).
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2021 |
|
2020 |
|
2020 |
|
|
|
|
|
(in thousands, except per share amounts) |
Net income (loss) |
|
$ |
(20,021 |
) |
|
|
$ |
(135,523 |
) |
|
|
$ |
163,094 |
|
|
Adjustments for
derivatives: |
|
|
|
|
|
|
Net losses (gains) |
|
44,368 |
|
|
|
21,457 |
|
|
|
(151,119 |
) |
|
Realized settlements, net 1 |
|
(16,982 |
) |
|
|
12,613 |
|
|
|
15,699 |
|
|
Impairments of oil and gas
properties |
|
1,811 |
|
|
|
120,351 |
|
|
|
— |
|
|
Gain on sales of assets,
net |
|
(4 |
) |
|
|
(4 |
) |
|
|
(6 |
) |
|
Loss on extinguishment of
debt |
|
1,231 |
|
|
|
— |
|
|
|
— |
|
|
Strategic transaction
costs |
|
4,655 |
|
|
|
4,448 |
|
|
|
— |
|
|
Organizational restructuring,
including severance |
|
239 |
|
|
|
74 |
|
|
|
— |
|
|
Income tax effect of
adjustments |
|
(539 |
) |
|
|
(1,386 |
) |
|
|
948 |
|
|
Adjusted net
income |
|
$ |
14,758 |
|
|
|
$ |
22,030 |
|
|
|
$ |
28,616 |
|
|
Net income (loss), per
diluted share |
|
$ |
(0.89 |
) |
|
|
$ |
(8.92 |
) |
|
|
$ |
10.76 |
|
|
Adjusted net income,
per diluted share 2 |
|
$ |
0.39 |
|
|
|
$ |
1.43 |
|
|
|
$ |
1.89 |
|
|
1 Realized settlements, net
includes, as applicable to the period presented: (i) current period
commodity and interest rate derivative settlements; (ii) the impact
of option premiums paid or received in prior periods related to
current period production; (iii) the impact of prior period cash
settlements of early-terminated derivatives originally designated
to settle against current period production; (iv) the exclusion of
option premiums paid or received in current period related to
future period production; and (v) the exclusion of the impact of
current period cash settlements for early-terminated derivatives
originally designated to settle against future period
production.
2 Adjusted net income per
diluted share is calculated based on diluted shares of 37.9 million
(assumes the exchange of Series A Preferred stock and 22.5 million
Common units held by Juniper for common shares), 15.3 million and
15.2 million for the three months ended March 31, 2021, December
31, 2020 and March 31, 2020, respectively.
Reconciliation of GAAP “Net income (loss)” to Non-GAAP
“Adjusted EBITDAX”Adjusted EBITDAX represents net income
(loss) before loss on extinguishment of debt, interest expense,
income taxes, impairments of oil and gas properties, depreciation,
depletion and amortization expense and share-based compensation
expense, further adjusted to include the net commodity realized
settlements of derivatives and exclude the effects of gains and
losses on sales of assets, non-cash changes in the fair value of
derivatives, and special items including strategic transaction
costs, and organizational restructuring, including severance. We
believe this presentation is commonly used by investors and
professional research analysts for the valuation, comparison,
rating, investment recommendations of companies within the oil and
gas exploration and production industry. We use this information
for comparative purposes within our industry. Adjusted EBITDAX is
not a measure of financial performance under GAAP and should not be
considered as a measure of liquidity or as an alternative to net
income (loss). Adjusted EBITDAX as defined by Penn Virginia may not
be comparable to similarly titled measures used by other companies
and should be considered in conjunction with net income (loss) and
other measures prepared in accordance with GAAP, such as operating
income or cash flows from operating activities. Adjusted EBITDAX
should not be considered in isolation or as a substitute for an
analysis of Penn Virginia’s results as reported under GAAP.
|
|
Three Months Ended |
|
LTM Ended |
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
March 31, |
|
|
|
2021 |
|
2020 |
|
2020 |
|
2021 |
|
|
|
|
|
|
|
(in thousands, except per unit amounts) |
|
Net income
(loss) |
|
$ |
(20,021 |
) |
|
|
$ |
(135,523 |
) |
|
|
$ |
163,094 |
|
|
|
$ |
(493,672 |
) |
|
|
Adjustments to reconcile to
Adjusted EBITDAX: |
|
|
|
|
|
|
|
|
|
Loss on extinguishment of debt |
|
1,231 |
|
|
|
— |
|
|
|
— |
|
|
|
1,231 |
|
|
|
Interest expense, net |
|
5,397 |
|
|
|
7,044 |
|
|
|
8,180 |
|
|
|
28,474 |
|
|
|
Income tax (benefit) expense |
|
(310 |
) |
|
|
(1,193 |
) |
|
|
1,138 |
|
|
|
(3,751 |
) |
|
|
Impairments of oil and gas properties |
|
1,811 |
|
|
|
120,351 |
|
|
|
— |
|
|
|
393,660 |
|
|
|
Depreciation, depletion and amortization |
|
23,884 |
|
|
|
25,782 |
|
|
|
40,718 |
|
|
|
123,839 |
|
|
|
Share-based compensation expense (equity-classified) |
|
2,246 |
|
|
|
702 |
|
|
|
856 |
|
|
|
4,674 |
|
|
|
Gain on sales of assets, net |
|
(4 |
) |
|
|
(4 |
) |
|
|
(6 |
) |
|
|
(16 |
) |
|
|
Adjustments for derivatives: |
|
|
|
|
|
|
|
|
|
Net losses (gains) |
|
44,368 |
|
|
|
21,457 |
|
|
|
(151,119 |
) |
|
|
107,065 |
|
|
|
Realized commodity settlements, net 1 |
|
(16,059 |
) |
|
|
13,536 |
|
|
|
15,631 |
|
|
|
61,740 |
|
|
|
Adjustment for special items: |
|
|
|
|
|
|
|
|
|
Strategic transaction costs |
|
4,655 |
|
|
|
4,448 |
|
|
|
— |
|
|
|
9,628 |
|
|
|
Organizational restructuring, including severance |
|
239 |
|
|
|
74 |
|
|
|
— |
|
|
|
1,685 |
|
|
|
Adjusted EBITDAX |
|
$ |
47,437 |
|
|
|
$ |
56,674 |
|
|
|
$ |
78,492 |
|
|
|
$ |
234,557 |
|
|
2 |
|
Net income (loss) per boe |
|
$ |
(10.83 |
) |
|
|
$ |
(68.51 |
) |
|
|
$ |
67.02 |
|
|
|
$ |
(59.47 |
) |
|
|
Adjusted EBITDAX per boe |
|
$ |
25.67 |
|
|
|
$ |
28.65 |
|
|
|
$ |
32.26 |
|
|
|
$ |
28.25 |
|
|
|
1 Realized commodity settlements, net
includes, as applicable to the period presented: (i) current period
commodity derivative settlements; (ii) the impact of option
premiums paid or received in prior periods related to current
period production; (iii) the impact of prior period cash
settlements of early-terminated derivatives originally designated
to settle against current period production; (iv) the exclusion of
option premiums paid or received in current period related to
future period production; and (v) the exclusion of the impact of
current period cash settlements for early-terminated derivatives
originally designated to settle against future period
production.
2 Excludes Adjusted EBITDAX
adjustments of approximately $5 million attributable to oil and gas
properties contributed by Rocky Creek Resources/Juniper.
Reconciliation of GAAP “Operating expenses” to Non-GAAP
“Adjusted direct operating expenses and Adjusted direct operating
expenses per boe”
Adjusted direct operating expenses and adjusted
direct operating expenses per boe are supplemental non-GAAP
financial measure that exclude certain non-recurring expenses and
non-cash expenses. We believe that the non-GAAP measure of Adjusted
total direct operating expense per boe is useful to investors
because it provides readers with a meaningful measure of our cost
profile and provides for greater comparability
period-over-period.
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2021 |
|
2020 |
|
2020 |
|
|
|
|
|
(in thousands, except per unit amounts) |
Operating expenses - GAAP |
|
$ |
57,884 |
|
|
|
$ |
174,403 |
|
|
|
$ |
70,078 |
|
|
Less: |
|
|
|
|
|
|
Share-based compensation - equity-classified awards |
|
(2,246 |
) |
|
|
(702 |
) |
|
|
(856 |
) |
|
Impairment of oil and gas properties |
|
(1,811 |
) |
|
|
(120,351 |
) |
|
|
— |
|
|
Depreciation, depletion and amortization |
|
(23,884 |
) |
|
|
(25,782 |
) |
|
|
(40,718 |
) |
|
Total cash direct
operating expenses |
|
29,943 |
|
|
|
27,568 |
|
|
|
28,504 |
|
|
Significant special
charges: |
|
|
|
|
|
|
Strategic transaction costs |
|
(4,655 |
) |
|
|
(4,448 |
) |
|
|
— |
|
|
Organizational restructuring, including severance |
|
(239 |
) |
|
|
(74 |
) |
|
|
— |
|
|
Non-GAAP Adjusted direct operating expenses |
|
$ |
25,049 |
|
|
|
$ |
23,046 |
|
|
|
$ |
28,504 |
|
|
|
|
|
|
|
|
|
Operating expenses per boe |
|
$ |
31.32 |
|
|
|
$ |
88.17 |
|
|
|
$ |
28.80 |
|
|
|
|
|
|
|
|
|
Total cash direct operating expenses per boe |
|
$ |
16.20 |
|
|
|
$ |
13.94 |
|
|
|
$ |
11.71 |
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted direct operating expenses per
boe |
|
$ |
13.55 |
|
|
|
$ |
11.65 |
|
|
|
$ |
11.71 |
|
|
Reconciliation of GAAP “General and
administrative expenses” to Non-GAAP “Adjusted cash general and
administrative expenses”Adjusted cash general and
administrative expenses is a supplemental non-GAAP financial
measure that excludes certain non-recurring expenses and non-cash
share-based compensation expense. We believe that the non-GAAP
measure of Adjusted cash general and administrative expenses is
useful to investors because it provides readers with a meaningful
measure of our recurring G&A expense and provides for greater
comparability period-over-period.
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2021 |
|
2020 |
|
2020 |
|
|
(in thousands, except per unit amounts) |
General and administrative expenses - direct |
|
$ |
10,931 |
|
|
|
$ |
9,286 |
|
|
|
$ |
6,374 |
|
|
Share-based compensation -
equity-classified awards |
|
2,246 |
|
|
|
702 |
|
|
|
856 |
|
|
GAAP General and
administrative expenses |
|
13,177 |
|
|
|
9,988 |
|
|
|
7,230 |
|
|
Less: Share-based compensation
- equity-classified awards |
|
(2,246 |
) |
|
|
(702 |
) |
|
|
(856 |
) |
|
Significant special
charges: |
|
|
|
|
|
|
Strategic transaction costs |
|
(4,655 |
) |
|
|
(4,448 |
) |
|
|
— |
|
|
Organizational restructuring, including severance |
|
(239 |
) |
|
|
(74 |
) |
|
|
— |
|
|
Adjusted cash-based
general and administrative expenses |
|
$ |
6,037 |
|
|
|
$ |
4,764 |
|
|
|
$ |
6,374 |
|
|
GAAP General and
administrative expenses per boe |
|
$ |
7.13 |
|
|
|
$ |
5.05 |
|
|
|
$ |
2.97 |
|
|
Adjusted cash general
and administrative expenses per boe |
|
$ |
3.27 |
|
|
|
$ |
2.41 |
|
|
|
$ |
2.62 |
|
|
Definition and Explanation of Free Cash
FlowFree Cash Flow is a non-GAAP financial measure that
management believes illustrates our ability to generate cash flows
from our business that are available to be returned to our
providers of financing capital represented primarily by our debt
holders as we do not currently have a dividend or share repurchase
program. We present Free Cash Flow as the excess (deficiency) of
Discretionary cash flow over Capital additions, net. Discretionary
cash flow is defined as Adjusted EBITDAX (non-GAAP measure defined
and reconciled to GAAP net income above) less interest expense,
debt issue costs, other, net and adjustments for income taxes
refunded and changes for working capital. Capital additions
represent our committed capital expenditure and acquisition
transactions, net of any proceeds from the sales or disposition of
assets. We believe Free Cash Flow is commonly used by investors and
professional research analysts for the valuation, comparison,
rating, investment recommendations of companies in many industries.
Free Cash Flow should be considered as a supplement to net income
as a measure of performance and net cash provided by operating
activities as a measure of our liquidity.
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
March 31, 2021 |
|
March 31, 2021 |
|
|
|
|
|
(in thousands) |
Adjusted EBITDAX, as reported |
|
$ |
47,437 |
|
|
|
$ |
234,557 |
|
|
Interest expense, as reported,
less non-cash interest |
|
(5,632 |
) |
|
|
(27,438 |
) |
|
Income taxes refunded |
|
— |
|
|
|
2,471 |
|
|
Debt issue costs paid |
|
(1,830 |
) |
|
|
(1,908 |
) |
|
Working capital and other,
net |
|
20,020 |
|
|
|
(53,622 |
) |
|
Discretionary cash flow |
|
59,995 |
|
|
|
154,060 |
|
|
|
|
|
|
|
Capital expenditures, as
reported |
|
(54,122 |
) |
|
|
(105,510 |
) |
|
Proceeds from asset sales |
|
4 |
|
|
|
16 |
|
|
Sales and use tax refunds
applied to capital additions |
|
425 |
|
|
|
425 |
|
|
Capital additions, net |
|
(53,693 |
) |
|
|
(105,069 |
) |
|
Non-GAAP Free cash
flow |
|
$ |
6,302 |
|
|
|
$ |
48,991 |
|
|
|
|
|
|
|
As adjusted net debt at
beginning of period 1 |
|
$ |
370,194 |
|
|
|
$ |
412,883 |
|
|
Less: Historical net debt at
end of period |
|
(363,892 |
) |
|
|
(363,892 |
) |
|
Non-GAAP Free cash
flow |
|
$ |
6,302 |
|
|
|
$ |
48,991 |
|
|
1 Net debt at the beginning of the
period has been adjusted for the net cash effects of the
Transaction and debt amendments See the following table for
adjustments attributed to the Juniper transaction and debt
amendments.
Net DebtNet debt, excluding unamortized
discount and debt issuance costs is a non-GAAP financial measure
that is defined as total principal amount of long-term debt less
cash and cash equivalents. Net debt, as adjusted, calculated on a
pro forma basis as of December 31, 2020 and March 31, 2020 to
adjust for related impacts of the Transaction (refer to footnote 1
below). The most comparable financial measure to net debt,
excluding unamortized discount and debt issuance costs under GAAP
is principal amount of long-term debt. Net debt is used by
management as a measure of our financial leverage. Net debt,
excluding unamortized discount and debt issuance costs should not
be used by investors or others as the sole basis in formulating
investment decisions as it does not represent the Company’s actual
indebtedness.
|
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
|
|
|
|
Actual |
|
Pro FormaAdjusted 1 |
|
Actual |
|
Pro FormaAdjusted 1 |
|
|
|
|
|
(in thousands) |
Credit Facility |
|
$ |
228,900 |
|
|
|
$ |
314,400 |
|
|
|
$ |
233,900 |
|
|
|
$ |
399,400 |
|
|
|
$ |
318,900 |
|
|
Second lien term loan,
excluding unamortized discount and issue costs |
|
146,860 |
|
|
|
200,000 |
|
|
|
148,735 |
|
|
|
200,000 |
|
|
|
148,735 |
|
|
Cash and cash equivalents |
|
(11,868 |
) |
|
|
(13,020 |
) |
|
|
(12,441 |
) |
|
|
(55,331 |
) |
|
|
(54,752 |
) |
|
Net Debt |
|
$ |
363,892 |
|
|
|
$ |
501,380 |
|
|
|
$ |
370,194 |
|
|
|
$ |
544,069 |
|
|
|
$ |
412,883 |
|
|
1 Adjustments attributable to the
Transaction and debt amendments include (i) prepayments of $80.5
million under the Credit Facility; (ii) prepayments of $51.3
million under the Second Lien term loan and (iii) transaction
expenses of $0.6 million paid in excess of the $150 million
received as a capital contribution from Juniper used to fund the
prepayments and transaction expenses.
Contact
Clay
Jeansonne Investor
RelationsPh: (713)
722-6540E-Mail: invest@pennvirginia.com
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