QEP Resources, Inc. (NYSE: QEP) (QEP or the Company) today reported
fourth quarter and full year 2020 financial and operating results.
FULL YEAR 2020 HIGHLIGHTS
- Lowered 2020 average drilling and completion costs to $411 per
lateral foot in the Permian Basin
- Reduced General & Administrative expense by approximately
40% compared to 2019
- Generated $673.2 million of Net Cash Provided from Operating
Activities
- Delivered $225.4 million of Free Cash Flow (a non-GAAP
measure)
- Retired $430.5 million of principal outstanding debt and ended
the year with a $60.4 million cash balance
- Entered into a definitive merger agreement to be acquired by
Diamondback Energy in an all-stock transaction on December 20,
2020
"Our 2020 results exhibit both the strength of our core assets
and the success of the financial and operational decisions we have
made during the past several years," commented Tim Cutt,
President and CEO of QEP. "As an organization we remain focused on
delivering value over volume, achieving peer leading well costs in
the Permian Basin, increasing operational efficiencies, and
reducing G&A costs across the business. As a result of these
efforts, in 2020 we spent less capital than forecast, we achieved
oil production at the high-end of our third quarter 2020 guidance
range and delivered approximately $225 million in free cash flow, a
record for the Company. The outcome of our achievements enabled us
to materially reduce our outstanding debt and strengthen the
overall position of the company.
"These outstanding results would not have been achieved without
the focus and dedication of the QEP employees who managed through a
global pandemic while continuing to live our values. I want to
thank all of them for their on-going commitment and their continued
professionalism as we work towards a smooth integration with
Diamondback Energy."
MERGER UPDATE
As previously announced, on December 20, 2020, QEP entered into
a definitive merger agreement with Diamondback Energy, Inc.
(Diamondback) pursuant to which Diamondback will acquire QEP in an
all-stock transaction (Merger). The consideration will consist of
0.05 shares of Diamondback common stock for each share of QEP
common stock, at the effective time of the Merger. The transaction
was unanimously approved by the Board of Directors of each company.
Completion of the Merger is expected to occur late in the first
quarter of 2021, and is subject to the approval of the Company's
stockholders and other customary closing conditions.
OPERATIONS UPDATE
For the full year 2020 the Company drilled a total of 59 gross
horizontal wells, including 53 in the Permian Basin and six in the
Williston Basin, and turned 52 gross operated wells to production,
including 50 in the Permian Basin and two in the Williston Basin.
The average lateral length for the wells completed in the Permian
Basin in 2020 was 10,132 feet and the average lateral length for
the wells completed in the Williston Basin in 2020 was 12,258 feet.
The Company also re-completed five gross wells in the Williston
Basin during the full year 2020.
Production in the Permian Basin was 4.2 million barrels of oil
equivalent (MMboe) in the fourth quarter 2020, a decrease of 17%
over the fourth quarter 2019. The decrease was primarily a result
of the suspension of completion operations in the Permian Basin
beginning in March 2020 until the fourth quarter of 2020 in order
to proactively manage cash flow and preserve liquidity as a result
of the Coronavirus (COVID-19) pandemic. Total Company oil
equivalent production was 7.4 MMboe in the fourth quarter 2020, a
decrease of 13% compared with the fourth quarter 2019, primarily
driven by the Company's decision to suspend completion activity
until the fourth quarter of 2020. As of December 31, 2020, the
Company had two operated rigs in the Permian Basin and no operated
rigs in the Williston Basin.
Oil and condensate production in the Permian Basin was 2.6
million barrels (MMbbl) in the fourth quarter 2020, a decrease of
23% over the fourth quarter 2019. Total Company oil and condensate
production was 4.6 MMbbl in the fourth quarter 2020, a decrease of
19% compared with the fourth quarter 2019. The decrease in
production was primarily the result of the Company's decision to
suspend completion activity in the Permian Basin until the fourth
quarter of 2020 and reduced activity in the Williston Basin in
light of market conditions.
For the full year 2020, total Company oil equivalent production
was 30.3 MMboe (approximately 65% oil and condensate), a decrease
of 6% compared with 2019. Permian Basin oil equivalent production
for 2020 was 19.0 MMboe, a decrease of 2% compared with 2019. Total
Company oil and condensate production was 19.7 MMbbl for 2020, a
decrease of 9% compared with 2019. Permian Basin oil and condensate
production was 12.6 MMbbl for 2020, a decrease of 7% compared with
2019. The decrease in production was primarily the result of the
Company's decision to suspend completion activity in the Permian
Basin until the fourth quarter of 2020 and reduced activity in the
Williston Basin in order to proactively manage cash flow and
preserve liquidity as a result of the COVID-19 pandemic.
FINANCIAL UPDATE
The Company reported a net loss of $130.6 million in the fourth
quarter 2020, or $0.54 per diluted share, compared with a net loss
of $110.4 million, or $0.46 per diluted share, in the fourth
quarter 2019. The higher net loss in the fourth quarter 2020 was
primarily due to a $34.3 million increase in unrealized derivative
losses.
Net income (loss) includes non-cash gains and losses associated
with the change in the fair value of derivative instruments, gains
and losses from asset sales, asset impairments and certain other
items. Excluding these items, the Company's fourth quarter 2020
Adjusted Net Loss (a non-GAAP measure) was $10.1 million, or $0.04
per diluted share, compared with an Adjusted Net Loss of $25.9
million, or $0.10 per diluted share, in the fourth quarter
2019.
Adjusted EBITDA (a non-GAAP measure) for the fourth quarter 2020
was $158.3 million compared with $183.8 million in the fourth
quarter 2019, a 14% decrease. The decrease was primarily due to a
$112.9 million decrease in oil and condensate, gas and NGL sales
due to a 24% decrease in average field-level oil prices and a 13%
decrease in oil equivalent production volumes, partially offset by
a $67.6 million increase in realized derivative gains, a $12.7
million decrease in production and property taxes and a $10.3
million decrease in lease operating expenses.
The definitions and reconciliations of Adjusted Net Income
(Loss) and Adjusted EBITDA are provided under the heading Non-GAAP
Measures at the end of this release.
Capital Investment
Capital investment, excluding property acquisitions, was $74.4
million (on an accrual basis) for the fourth quarter 2020, compared
with $105.5 million for the fourth quarter 2019.
Total capital investment, excluding property acquisitions, was
$327.9 million (on an accrual basis) for the year ended
December 31, 2020, compared with $571.5 million for the year
ended December 31, 2019, a reduction of $243.6 million. The
decrease in capital expenditures was primarily driven by the
Company's decision in March 2020 to suspend completion activity in
the Permian Basin until the fourth quarter of 2020 and a decrease
in the Company's drilling and completion costs in the Permian
Basin.
Operating Expenses
During the fourth quarter 2020, lease operating expense (LOE)
was $37.1 million, a decrease of 22% compared with the fourth
quarter 2019. The decrease in LOE was primarily due to a decrease
in workover expense in the Williston Basin, and a decrease in power
and fuel, maintenance and repair expenses and water disposal
expenses in the Williston and Permian basins as a result of
continuing efforts to reduce operating expenses.
During the fourth quarter 2020, LOE was $5.04 per Boe, a
decrease of 10% compared to the fourth quarter 2019. The 10%
decrease per BOE was primarily due to continuing efforts to reduce
operating expenses, despite decreased production in the Permian and
Williston basins.
During the fourth quarter 2020, transportation and processing
costs were $16.2 million, an increase of 64% compared with the
fourth quarter 2019. Adjusted transportation and processing costs
(a non-GAAP measure) were $33.1 million, an increase of 37%
compared with the fourth quarter 2019. The increase in Adjusted
transportation and processing costs was primarily due to increased
gathering and processing rates in the Williston and Permian basins.
During the fourth quarter 2020, transportation and processing costs
were $2.20 per Boe, while Adjusted transportation and processing
costs were $4.49 per Boe.
The definition and reconciliation of Adjusted transportation and
processing costs is provided under the heading Non-GAAP Measures at
the end of this release.
During the fourth quarter 2020, general and administrative
(G&A) expense was $29.9 million, including $4.5 million of
merger related costs, a decrease of 5% compared with the fourth
quarter 2019. The decrease was primarily related to workforce
reductions and a reduction in strategic initiative costs, partially
offset by an increase in market value on the deferred compensation
plan and performance share units. During the fourth quarter 2020,
total G&A was $4.06 per Boe, of which $2.43 per Boe was G&A
expense, excluding merger costs and share-based and deferred
compensation expense.
Liquidity & Debt
Net Cash Provided by Operating Activities for the fourth quarter
2020 was $119.2 million, compared with $224.9 million for the
fourth quarter 2019. Net Cash Provided by Operating Activities for
the full year 2020 was $673.2 million, compared with $566.9 million
for the full year 2019.
The Company generated Free Cash Flow of $63.4 million in the
fourth quarter 2020, an increase of $7.2 million compared with the
fourth quarter 2019. The increase was primarily due to a $31.1
million decrease in accrued property, plant and equipment capital
expenditures, partially offset by a decrease in Adjusted EBITDA of
$25.5 million.
For the full year 2020, the Company generated Free Cash Flow of
$225.4 million, an increase of $235.2 million compared with the
full year 2019. The improvement was primarily due to a $243.6
million decrease in accrued property, plant and equipment capital
expenditures, primarily driven by suspending completion activity
until the fourth quarter of 2020 and by reducing the Company's
drilling and completion costs in the Permian Basin.
As of December 31, 2020, QEP had $60.4 million in cash and
cash equivalents, no borrowings under its revolving credit
facility, $14.1 million in letters of credit outstanding and was in
compliance with the covenants under its credit facility. The
Company estimates, that as of December 31, 2020, it could incur
additional indebtedness of approximately $750.0 million and incur
up to $500.0 million of junior guaranteed indebtedness and remain
in compliance with its financial covenants (as defined in the
credit agreement).
For the full year 2020, the Company reduced principal amount of
outstanding debt by $430.5 million and ended the year with $1.6
billion of senior notes with the nearest maturity on October 1,
2022.
The Company also has $64.1 million of income tax receivables as
of December 31, 2020, primarily attributable to Alternative
Minimum Tax (AMT) credit refunds that were accelerated by the
Coronavirus Aid, Relief, and Economic Security Act stimulus bill.
The Company anticipates it will receive $30.7 million of the AMT
credit refunds within the next 12 months.
The definition and reconciliation of Free Cash Flow is provided
under the heading Non-GAAP Measures at the end of this release.
GUIDANCE
Due to the Merger, QEP has discontinued providing guidance and
does not intend to update previously issued guidance. Accordingly,
investors are cautioned not to rely on historical forward-looking
statements regarding guidance as those forward-looking statements
were the estimates of management only as of the date provided, have
not and will not be updated and were subject to the specific risks
and uncertainties that accompanied such forward-looking
statements.
COMMODITY DERIVATIVES
The following tables present QEP's volumes and average prices
for its open derivative positions as of February 17, 2021:
|
Production Commodity Derivative Swaps |
|
Year |
|
Index |
|
Total Volumes |
|
Average Swap Price per Unit |
|
|
|
|
|
(in millions) |
|
|
| Oil
sales |
|
|
|
(bbls) |
|
($/bbl) |
|
2021 (February - June) |
|
NYMEX WTI |
|
6.1 |
|
|
$ |
44.53 |
|
|
2021 (July - December) |
|
NYMEX WTI |
|
6.3 |
|
|
$ |
42.64 |
|
|
2022 (January - June) |
|
NYMEX WTI |
|
0.2 |
|
|
$ |
45.00 |
|
|
Gas sales |
|
|
|
(MMbtu) |
|
($/MMbtu) |
|
2021 |
|
IF WAHA |
|
16.7 |
|
|
$ |
1.92 |
|
|
2021 |
|
NYMEX HH |
|
8.4 |
|
|
$ |
2.44 |
|
|
Production Commodity Derivative Basis Swaps |
|
Year |
|
Index |
|
Basis |
|
Total Volumes |
|
Weighted-Average Differential |
|
|
|
|
|
|
|
(in millions) |
|
|
| Oil
sales |
|
|
|
|
|
(bbls) |
|
($/bbl) |
|
2021 |
|
NYMEX WTI |
|
Argus WTI Midland |
|
5.3 |
|
|
$ |
0.88 |
|
|
|
2021 |
|
NYMEX CMA |
|
Argus WTI |
|
1.4 |
|
|
$ |
0.00 |
|
|
|
2021 |
|
NYMEX WTI |
|
NYMEX Roll |
|
1.7 |
|
|
$ |
(0.05 |
) |
|
|
Production Commodity Costless Oil Collars |
|
Year |
|
Index |
|
Total Volumes |
|
Average Price Floor |
|
Average Price Ceiling |
|
|
|
|
|
(in millions) |
|
|
|
|
| |
|
|
|
(bbls) |
|
($/bbl) |
|
($/bbl) |
|
2021 (February - June) |
|
NYMEX WTI |
|
0.6 |
|
|
$ |
42.80 |
|
|
$ |
51.49 |
|
| 2021 (July - December) |
|
NYMEX WTI |
|
0.8 |
|
|
$ |
40.68 |
|
|
$ |
50.21 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
ESTIMATED PROVED RESERVES
At December 31, 2020, QEP's estimated proved reserves were
approximately 363.4 MMboe, a 5% decrease compared with 2019,
primarily due to a 30.3 MMboe of production in 2020, partially
offset by 11.4 MMboe of positive revisions of previous estimates.
The revisions of previous estimates includes positive revisions as
a result of changes in development sequence in the Permian Basin to
maximize free cash flow and lower operating costs, partially offset
by lower oil prices and PUD removals. The majority of the locations
that were removed are economic at current prices and are
technically consistent with our PUDs; however, they no longer
conform to the SEC’s definition of proved reserves under the five
year rule and are therefore not reported as PUDs. Approximately 83%
of total proved reserves at year-end 2020 and 84% of total proved
reserves at year-end 2019 were crude oil and NGL. Proved developed
reserves were 164.0 MMboe, or 45%, of total estimated proved
reserves at year-end 2020.
A reconciliation of reported quantities of estimated proved
reserves is summarized in the table below:
| |
Oil and condensate |
|
Gas |
|
NGL |
|
Total |
| |
(MMbbl) |
|
(Bcf) |
|
(MMbbl) |
|
(MMboe)(1) |
|
Balance at December 31, 2019 |
254.9 |
|
|
373.3 |
|
|
65.2 |
|
|
382.3 |
|
|
Revisions of previous estimates |
2.7 |
|
|
27.6 |
|
|
4.1 |
|
|
11.4 |
|
|
Extensions and discoveries |
0.1 |
|
|
0.2 |
|
|
— |
|
|
0.2 |
|
|
Purchase of reserves in place |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Sale of reserves in place |
(0.1 |
) |
|
(0.3 |
) |
|
— |
|
|
(0.2 |
) |
|
Production |
(19.7 |
) |
|
(32.5 |
) |
|
(5.2 |
) |
|
(30.3 |
) |
| Balance at December
31, 2020 |
237.9 |
|
|
368.3 |
|
|
64.1 |
|
|
363.4 |
|
____________________________(1) Natural
gas is converted to crude oil equivalent at the ratio of six Mcf of
natural gas to one barrel of crude oil equivalent.Details on the
reported quantities of estimated year-end 2020 and 2019 proved
reserves presented by operating area, proved reserve category and
percentage of total estimated proved reserves composed of crude oil
and NGL (liquids) are as follows:
| |
Total (in MMboe) |
|
% of total |
|
PUD % |
|
liquids % |
| For the year ended
December 31, 2020 |
|
|
|
|
|
|
|
|
| Northern
Region |
|
|
|
|
|
|
|
|
Williston Basin |
80.2 |
|
|
22 |
% |
|
17 |
% |
|
82 |
% |
|
Uinta Basin |
— |
|
|
— |
% |
|
— |
% |
|
— |
% |
|
Other Northern |
— |
|
|
— |
% |
|
— |
% |
|
— |
% |
| Southern
Region |
|
|
|
|
|
|
|
|
Permian Basin |
283.2 |
|
|
78 |
% |
|
66 |
% |
|
83 |
% |
|
Haynesville/Cotton Valley |
— |
|
|
— |
% |
|
— |
% |
|
— |
% |
|
Other Southern |
— |
|
|
— |
% |
|
— |
% |
|
— |
% |
|
Total proved reserves |
363.4 |
|
|
100 |
% |
|
55 |
% |
|
83 |
% |
| |
|
|
|
|
|
|
|
| For the
year ended December 31, 2019 |
|
|
|
|
|
|
| Northern
Region |
|
|
|
|
|
|
|
|
Williston Basin |
116.0 |
|
|
30 |
% |
|
25 |
% |
|
81 |
% |
|
Uinta Basin |
— |
|
|
— |
% |
|
— |
% |
|
— |
% |
|
Other Northern |
— |
|
|
— |
% |
|
— |
% |
|
— |
% |
| Southern
Region |
|
|
|
|
|
|
|
|
Permian Basin |
266.3 |
|
|
70 |
% |
|
61 |
% |
|
85 |
% |
|
Haynesville/Cotton Valley |
— |
|
|
— |
% |
|
— |
% |
|
— |
% |
|
Other Southern |
— |
|
|
— |
% |
|
— |
% |
|
— |
% |
|
Total proved reserves |
382.3 |
|
|
100 |
% |
|
50 |
% |
|
84 |
% |
Fourth Quarter and Full Year 2020 Results Conference
Call
In light of QEP's recent entry into a definitive merger
agreement with Diamondback, QEP will not host a conference call or
webcast to discuss fourth quarter and full year 2020 results
About QEP Resources, Inc.
QEP Resources, Inc. (NYSE: QEP) is an independent crude oil and
natural gas exploration and production company focused in two
regions of the United States: the Southern Region (primarily in
Texas) and the Northern Region (primarily in North Dakota). For
more information, visit QEP's website at: www.qepres.com.
Forward-Looking Statements
This release includes forward-looking statements within the
meaning of Section 27(a) of the Securities Act of 1933, as amended,
and Section 21(e) of the Securities Exchange Act of 1934, as
amended. Forward-looking statements can be identified by words such
as “anticipates,” “believes,” “forecasts,” “plans,” “estimates,”
“expects,” “should,” “will” or other similar expressions. Such
statements are based on management’s current expectations,
estimates and projections, which are subject to a wide range of
uncertainties and business risks. These forward-looking statements
include statements regarding: the expected closing of the Merger;
the amount of additional indebtedness QEP could incur and be in
compliance with the covenants in its debt instruments; the
anticipated receipt of AMT refunds; estimated reserves; and
usefulness of non-GAAP measures. Actual results may differ
materially from those included in the forward-looking statements
due to a number of factors, including, but not limited to: changes
in oil, gas and NGL prices; liquidity constraints, including those
resulting from the cost or unavailability of financing due to debt
and equity capital and credit market conditions, changes in QEP’s
credit rating, QEP’s compliance with loan covenants, the increasing
credit pressure on QEP’s industry or demands for cash collateral by
counterparties to derivative and other contracts; market
conditions; global geopolitical and macroeconomic factors; the
activities of the Organization of Petroleum Exporting
Countries and other oil producing countries such as Russia; general
economic conditions, including interest rates; changes in local,
regional, national and global demand for natural oil, gas and NGL;
impact of new laws and regulations, including the use of hydraulic
fracture stimulation; impact of U.S. dollar exchange rates on oil,
gas and NGL prices; elimination of federal income tax deductions
for oil and gas exploration and development; guidance for
implementation of the Tax Cuts and Jobs Act; actual proceeds from
asset sales; actions of activist shareholders; tariffs on products
QEP uses in its operations or on the products QEP sells; drilling
results; shortages of oilfield equipment, services and personnel;
the availability of storage and refining capacity; operating risks
such as unexpected drilling conditions; transportation constraints,
including gas and crude oil pipeline takeaway capacity in the
Permian Basin; weather conditions; changes in maintenance, service
and construction costs; permitting delays; outcome of contingencies
such as legal proceedings; inadequate supplies of water and/or lack
of water disposal sources; credit worthiness of counterparties to
agreements; and the other risks discussed in the Company’s periodic
filings with the Securities and Exchange Commission, including
the Risk Factors section of the Company’s Annual Report on Form
10-K for the year ended December 31, 2020 and the Company’s
Proxy Statement in respect of the Merger, filed February 10, 2021,
including the Risk Factors section. QEP Resources undertakes no
obligation to publicly correct or update the forward-looking
statements in this news release, in other documents, or on the
website to reflect future events or circumstances. All such
statements are expressly qualified by this cautionary
statement.
Important Information for Investors and Stockholders;
Additional information and Where to Find It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale, issuance,
exchange or transfer of the securities referred to in this document
in any jurisdiction in contravention of applicable law. In
connection with the Merger, Diamondback previously filed with the
SEC a registration statement on Form S-4, as amended, which was
declared effective by the SEC on February 10, 2021 (the
Registration Statement). Following the Registration being declared
effective, the Company filed a definitive proxy statement on
February 10, 2021 (the Proxy). No offering of securities shall be
made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act. The Proxy was mailed to
stockholders of QEP on or about February 10, 2021.
INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND DIAMONDBACK
ARE URGED TO READ THE REGISTRATION STATEMENT, THE PROXY AND OTHER
DOCUMENTS THAT HAVE BEEN, AND MAY IN THE FUTURE BE, FILED WITH THE
SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE MERGER.
Investors and security holders may obtain free copies of these
documents and other documents containing important information
about the Company and Diamondback, from the SEC through the website
maintained by the SEC at http://www.sec.gov. Copies of the
documents filed with the SEC by QEP are available free of charge on
QEP’s website at https://www.qepres.com under the tab “Investors”
and then under the heading “Financial Information.” Copies of the
documents filed with the SEC by Diamondback are available free of
charge on Diamondback ‘s website at
https://www.diamondbackenergy.com/home/default.aspx under the tab
“Investors” and then under the heading “Financial Information.”
PARTICIPANTS IN THE
SOLICITATION
The Company, Diamondback and certain of their respective
directors, executive officers and other persons may be deemed to be
participants in the solicitation of proxies in respect of the
proposed transaction. Information regarding Diamondback's directors
and executive officers is available in its definitive proxy
statement for its 2020 annual meeting, filed with the SEC on April
24, 2020, and information regarding the directors and executive
officers of QEP is available in its definitive proxy statement for
its 2020 annual meeting, filed with the SEC on April 2, 2020.
Other information regarding the participants in the proxy
solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, is contained in the
Registration Statement, the Proxy and other relevant materials to
be filed with the SEC when such materials become available.
Investors should read the Registration Statement and the Proxy
carefully before making any voting or investment decisions. You may
obtain free copies of these documents from the Company or
Diamondback using the sources indicated above.
Contact
| Investors/Media: |
| William I. Kent, IRC |
| Director, Investor
Relations |
| 303-405-6665 |
| |
| |
QEP RESOURCES, INC.CONSOLIDATED
STATEMENTS OF OPERATIONS
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
| |
|
| REVENUES |
(in millions, except per share amounts) |
|
Oil and condensate, gas and NGL sales |
$ |
198.7 |
|
|
$ |
311.6 |
|
|
$ |
714.6 |
|
|
$ |
1,187.4 |
|
|
Other revenues |
0.8 |
|
|
0.8 |
|
|
2.4 |
|
|
7.9 |
|
|
Purchased oil and gas sales |
0.7 |
|
|
9.5 |
|
|
7.4 |
|
|
10.9 |
|
|
Total Revenues |
200.2 |
|
|
321.9 |
|
|
724.4 |
|
|
1,206.2 |
|
| OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
Purchased oil and gas expense |
0.5 |
|
|
9.5 |
|
|
8.7 |
|
|
11.0 |
|
|
Lease operating expense |
37.1 |
|
|
47.4 |
|
|
141.6 |
|
|
182.9 |
|
|
Transportation and processing costs |
16.2 |
|
|
9.9 |
|
|
54.4 |
|
|
48.7 |
|
|
Gathering and other expense |
1.9 |
|
|
3.3 |
|
|
10.8 |
|
|
13.2 |
|
|
General and administrative |
29.9 |
|
|
31.4 |
|
|
93.0 |
|
|
155.8 |
|
|
Production and property taxes |
15.6 |
|
|
28.3 |
|
|
57.9 |
|
|
95.9 |
|
|
Depreciation, depletion and amortization |
149.4 |
|
|
144.5 |
|
|
574.0 |
|
|
540.0 |
|
|
Exploration expenses |
0.2 |
|
|
0.1 |
|
|
0.2 |
|
|
0.1 |
|
|
Impairment |
8.7 |
|
|
— |
|
|
8.7 |
|
|
5.0 |
|
|
Total Operating Expenses |
259.5 |
|
|
274.4 |
|
|
949.3 |
|
|
1,052.6 |
|
| Net gain (loss) from asset
sales, inclusive of restructuring costs |
(2.6 |
) |
|
1.4 |
|
|
1.2 |
|
|
3.9 |
|
|
OPERATING INCOME (LOSS) |
(61.9 |
) |
|
48.9 |
|
|
(223.7 |
) |
|
157.5 |
|
| Realized and unrealized gains
(losses) on derivative contracts |
(84.3 |
) |
|
(117.6 |
) |
|
232.7 |
|
|
(173.4 |
) |
| Interest and other income
(expense) |
2.1 |
|
|
0.1 |
|
|
9.8 |
|
|
4.7 |
|
| Gain (loss) from early
extinguishment of debt |
— |
|
|
(1.0 |
) |
|
18.2 |
|
|
(1.0 |
) |
| Interest expense |
(23.9 |
) |
|
(28.1 |
) |
|
(113.7 |
) |
|
(128.1 |
) |
|
INCOME (LOSS) BEFORE INCOME TAXES |
(168.0 |
) |
|
(97.7 |
) |
|
(76.7 |
) |
|
(140.3 |
) |
| Income tax (provision)
benefit |
37.4 |
|
|
(12.7 |
) |
|
79.9 |
|
|
43.0 |
|
|
NET INCOME (LOSS) |
$ |
(130.6 |
) |
|
$ |
(110.4 |
) |
|
$ |
3.2 |
|
|
$ |
(97.3 |
) |
| |
|
|
|
|
|
|
|
| Earnings (loss) per common
share |
|
|
|
|
|
|
|
|
Basic |
$ |
(0.54 |
) |
|
$ |
(0.46 |
) |
|
$ |
0.01 |
|
|
$ |
(0.41 |
) |
|
Diluted |
$ |
(0.54 |
) |
|
$ |
(0.46 |
) |
|
$ |
0.01 |
|
|
$ |
(0.41 |
) |
| |
|
|
|
|
|
|
|
| Weighted-average common shares
outstanding |
|
|
|
|
|
|
|
|
Used in basic calculation |
242.6 |
|
|
237.8 |
|
|
241.6 |
|
|
237.7 |
|
|
Used in diluted calculation |
242.6 |
|
|
237.8 |
|
|
241.6 |
|
|
237.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QEP RESOURCES, INC.CONSOLIDATED BALANCE
SHEETS
| |
December 31,2020 |
|
December 31,2019 |
| |
|
| ASSETS |
(in millions) |
| Current Assets |
|
|
|
|
Cash and cash equivalents |
$ |
60.4 |
|
|
$ |
166.3 |
|
|
Accounts receivable, net |
89.1 |
|
|
108.4 |
|
|
Income tax receivable |
33.2 |
|
|
37.4 |
|
|
Fair value of derivative contracts |
— |
|
|
1.5 |
|
|
Prepaid expenses |
14.1 |
|
|
11.4 |
|
|
Other current assets |
0.2 |
|
|
0.2 |
|
|
Total Current Assets |
197.0 |
|
|
325.2 |
|
| Property, Plant and Equipment
(successful efforts method for oil and gas properties) |
|
|
|
|
|
|
Proved properties |
9,941.2 |
|
|
9,574.9 |
|
|
Unproved properties |
454.4 |
|
|
599.1 |
|
|
Gathering and other |
167.3 |
|
|
164.2 |
|
|
Materials and supplies |
18.7 |
|
|
15.6 |
|
|
Total Property, Plant and Equipment |
10,581.6 |
|
|
10,353.8 |
|
| Less Accumulated Depreciation,
Depletion and Amortization |
|
|
|
|
Exploration and production |
5,728.0 |
|
|
5,250.5 |
|
|
Gathering and other |
70.7 |
|
|
61.0 |
|
|
Total Accumulated Depreciation, Depletion and Amortization |
5,798.7 |
|
|
5,311.5 |
|
|
Net Property, Plant and Equipment |
4,782.9 |
|
|
5,042.3 |
|
| Fair value of derivative
contracts |
— |
|
|
0.2 |
|
| Operating lease right-of-use
assets, net |
48.0 |
|
|
56.8 |
|
| Other noncurrent assets |
86.3 |
|
|
53.3 |
|
| Noncurrent assets held for
sale |
— |
|
|
— |
|
|
TOTAL ASSETS |
$ |
5,114.2 |
|
|
$ |
5,477.8 |
|
| |
|
|
|
| LIABILITIES AND
EQUITY |
|
|
|
| Current Liabilities |
|
|
|
|
Checks outstanding in excess of cash balances |
$ |
2.1 |
|
|
$ |
18.3 |
|
|
Accounts payable and accrued expenses |
159.3 |
|
|
227.2 |
|
|
Production and property taxes |
12.2 |
|
|
18.9 |
|
|
Interest payable |
21.5 |
|
|
31.0 |
|
|
Fair value of derivative contracts |
76.4 |
|
|
18.7 |
|
|
Current operating lease liabilities |
21.7 |
|
|
18.0 |
|
|
Asset retirement obligations |
6.4 |
|
|
6.0 |
|
|
Total Current Liabilities |
299.6 |
|
|
338.1 |
|
| Long-term debt |
1,591.3 |
|
|
2,015.6 |
|
| Deferred income taxes |
385.2 |
|
|
274.5 |
|
| Asset retirement
obligations |
96.3 |
|
|
94.9 |
|
| Fair value of derivative
contracts |
0.3 |
|
|
0.5 |
|
| Operating lease
liabilities |
31.3 |
|
|
44.8 |
|
| Other long-term
liabilities |
40.0 |
|
|
48.8 |
|
| Commitments and
Contingencies |
|
|
|
| EQUITY |
|
|
|
|
Common stock - par value $0.01 per share; 500.0 million shares
authorized; 248.0 million and 242.1 million shares issued,
respectively |
2.5 |
|
|
2.4 |
|
|
Treasury stock - 5.4 million and 4.4 million shares,
respectively |
(57.6 |
) |
|
(55.4 |
) |
|
Additional paid-in capital |
1,470.1 |
|
|
1,456.5 |
|
|
Retained earnings |
1,268.0 |
|
|
1,269.6 |
|
|
Accumulated other comprehensive income (loss) |
(12.8 |
) |
|
(12.5 |
) |
|
Total Common Shareholders' Equity |
2,670.2 |
|
|
2,660.6 |
|
|
TOTAL LIABILITIES AND EQUITY |
$ |
5,114.2 |
|
|
$ |
5,477.8 |
|
|
|
|
|
QEP RESOURCES, INC.CONSOLIDATED CASH
FLOWS
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
| |
|
| OPERATING
ACTIVITIES |
(in millions) |
|
Net income (loss) |
$ |
(130.6 |
) |
|
$ |
(110.4 |
) |
|
$ |
3.2 |
|
|
$ |
(97.3 |
) |
| Adjustments to reconcile net
income (loss) to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
149.4 |
|
|
144.5 |
|
|
574.0 |
|
|
540.0 |
|
|
Deferred income taxes (benefit) |
(54.7 |
) |
|
65.5 |
|
|
110.6 |
|
|
4.3 |
|
|
Impairment |
8.7 |
|
|
— |
|
|
8.7 |
|
|
5.0 |
|
|
Non-cash share-based compensation |
3.1 |
|
|
4.6 |
|
|
12.4 |
|
|
20.8 |
|
|
Non-cash (gain) loss from warehouse inventory |
(0.7 |
) |
|
— |
|
|
— |
|
|
— |
|
|
Amortization of debt issuance costs and discounts |
1.0 |
|
|
1.4 |
|
|
4.7 |
|
|
5.4 |
|
|
Net (gain) loss from asset sales, inclusive of restructuring
costs |
2.6 |
|
|
(1.4 |
) |
|
(1.2 |
) |
|
(3.9 |
) |
|
(Gain) loss from early extinguishment of debt |
— |
|
|
1.0 |
|
|
(18.2 |
) |
|
1.0 |
|
|
Unrealized (gains) losses on marketable securities |
(2.1 |
) |
|
(1.1 |
) |
|
(3.2 |
) |
|
(3.9 |
) |
|
Unrealized (gains) losses on derivative contracts |
143.6 |
|
|
109.3 |
|
|
59.2 |
|
|
138.3 |
|
|
Changes in operating assets and liabilities |
(1.1 |
) |
|
11.5 |
|
|
(77.0 |
) |
|
(42.8 |
) |
|
Net Cash Provided by (Used in) Operating Activities |
119.2 |
|
|
224.9 |
|
|
673.2 |
|
|
566.9 |
|
| INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
|
Property acquisitions |
— |
|
|
0.1 |
|
|
(4.1 |
) |
|
(3.5 |
) |
|
Expenditures for property, plant and equipment |
(69.0 |
) |
|
(97.5 |
) |
|
(353.5 |
) |
|
(562.7 |
) |
|
Proceeds from disposition of assets |
0.4 |
|
|
2.4 |
|
|
13.8 |
|
|
678.9 |
|
|
Net Cash Provided by (Used in) Investing Activities |
(68.6 |
) |
|
(95.0 |
) |
|
(343.8 |
) |
|
112.7 |
|
| FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
|
Checks outstanding in excess of cash balances |
2.2 |
|
|
17.6 |
|
|
(16.1 |
) |
|
3.7 |
|
|
Long-term debt issuance costs paid |
(0.1 |
) |
|
— |
|
|
(0.6 |
) |
|
— |
|
|
Long-term debt extinguishment costs paid |
— |
|
|
(1.0 |
) |
|
— |
|
|
(1.0 |
) |
|
Repurchases and redemptions of senior notes |
— |
|
|
(66.9 |
) |
|
(410.3 |
) |
|
(66.9 |
) |
|
Proceeds from credit facility |
15.9 |
|
|
0.1 |
|
|
37.0 |
|
|
56.1 |
|
|
Repayments of credit facility |
(15.9 |
) |
|
— |
|
|
(37.0 |
) |
|
(486.0 |
) |
|
Common stock repurchased and retired |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Treasury stock repurchases |
(0.9 |
) |
|
(0.6 |
) |
|
(1.7 |
) |
|
(7.6 |
) |
|
Dividends paid |
— |
|
|
(4.8 |
) |
|
(4.8 |
) |
|
(9.6 |
) |
|
Net Cash Provided by (Used in) Financing Activities |
1.2 |
|
|
(55.6 |
) |
|
(433.5 |
) |
|
(511.3 |
) |
| Change in cash, cash
equivalents and restricted cash |
51.8 |
|
|
74.3 |
|
|
(104.1 |
) |
|
168.3 |
|
| Beginning cash, cash
equivalents and restricted cash |
40.5 |
|
|
122.1 |
|
|
196.4 |
|
|
28.1 |
|
| Ending cash, cash equivalents
and restricted cash |
$ |
92.3 |
|
|
$ |
196.4 |
|
|
$ |
92.3 |
|
|
$ |
196.4 |
|
| |
| |
| |
Production by Region |
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
| |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
| |
|
| |
(in Mboe) |
|
Northern Region |
|
|
|
|
|
|
|
|
|
|
|
|
Williston Basin |
3,111.2 |
|
|
3,341.9 |
|
|
(7 |
)% |
|
11,284.9 |
|
|
12,403.8 |
|
|
(9 |
)% |
|
Other Northern |
4.9 |
|
|
6.5 |
|
|
(25 |
)% |
|
12.0 |
|
|
71.6 |
|
|
(83 |
)% |
|
Total Northern Region |
3,116.1 |
|
|
3,348.4 |
|
|
(7 |
)% |
|
11,296.9 |
|
|
12,475.4 |
|
|
(9 |
)% |
|
Southern Region |
|
|
|
|
|
|
|
|
|
|
|
|
Permian Basin |
4,247.7 |
|
|
5,113.4 |
|
|
(17 |
)% |
|
19,023.8 |
|
|
19,406.6 |
|
|
(2 |
)% |
|
Haynesville/Cotton Valley |
— |
|
|
— |
|
|
— |
% |
|
— |
|
|
310.5 |
|
|
(100 |
)% |
|
Other Southern |
0.3 |
|
|
3.5 |
|
|
(91 |
)% |
|
4.2 |
|
|
17.8 |
|
|
(76 |
)% |
|
Total Southern Region |
4,248.0 |
|
|
5,116.9 |
|
|
(17 |
)% |
|
19,028.0 |
|
|
19,734.9 |
|
|
(4 |
)% |
|
Total production |
7,364.1 |
|
|
8,465.3 |
|
|
(13 |
)% |
|
30,324.9 |
|
|
32,210.3 |
|
|
(6 |
)% |
| |
Total Production |
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
| |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
|
Oil and condensate (Mbbl) |
4,596.7 |
|
|
5,653.9 |
|
|
(19 |
)% |
|
19,721.6 |
|
|
21,558.3 |
|
|
(9 |
)% |
|
Gas (Bcf) |
8.5 |
|
|
8.5 |
|
|
— |
% |
|
32.5 |
|
|
33.1 |
|
|
(2 |
)% |
|
NGL (Mbbl) |
1,364.3 |
|
|
1,391.2 |
|
|
(2 |
)% |
|
5,185.1 |
|
|
5,139.0 |
|
|
1 |
% |
|
Total equivalent production (Mboe) |
7,364.1 |
|
|
8,465.3 |
|
|
(13 |
)% |
|
30,324.9 |
|
|
32,210.3 |
|
|
(6 |
)% |
|
Average daily production (Mboe) |
80.0 |
|
|
92.0 |
|
|
(13 |
)% |
|
82.9 |
|
|
88.2 |
|
|
(6 |
)% |
| |
Prices |
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
| |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
| Oil (per
bbl) |
|
|
|
|
|
|
|
|
|
|
|
| Average field-level price |
$ |
40.02 |
|
|
$ |
52.83 |
|
|
|
|
$ |
35.08 |
|
|
$ |
52.54 |
|
|
|
| Commodity derivative
impact |
13.77 |
|
|
(1.47 |
) |
|
|
|
15.03 |
|
|
(1.50 |
) |
|
|
|
Net realized price |
$ |
53.79 |
|
|
$ |
51.36 |
|
|
5 |
% |
|
$ |
50.11 |
|
|
$ |
51.04 |
|
|
(2 |
)% |
| Gas (per
Mcf) |
|
|
|
|
|
|
|
|
|
|
|
| Average field-level price |
$ |
1.79 |
|
|
$ |
1.53 |
|
|
|
|
$ |
1.22 |
|
|
$ |
1.58 |
|
|
|
| Commodity derivative
impact |
(0.47 |
) |
|
— |
|
|
|
|
(0.14 |
) |
|
(0.08 |
) |
|
|
|
Net realized price |
$ |
1.32 |
|
|
$ |
1.53 |
|
|
(14 |
)% |
|
$ |
1.08 |
|
|
$ |
1.50 |
|
|
(28 |
)% |
| NGL (per
bbl) |
|
|
|
|
|
|
|
|
|
|
|
| Average field-level price |
$ |
12.17 |
|
|
$ |
10.22 |
|
|
|
|
$ |
8.82 |
|
|
$ |
11.15 |
|
|
|
| Commodity derivative
impact |
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
|
Net realized price |
$ |
12.17 |
|
|
$ |
10.22 |
|
|
19 |
% |
|
$ |
8.82 |
|
|
$ |
11.15 |
|
|
(21 |
)% |
| Average net equivalent
price (per Boe) |
|
|
|
|
|
|
|
|
|
|
|
| Average field-level price |
$ |
29.28 |
|
|
$ |
38.50 |
|
|
|
|
$ |
25.63 |
|
|
$ |
38.57 |
|
|
|
| Commodity derivative
impact |
8.05 |
|
|
(0.98 |
) |
|
|
|
9.63 |
|
|
(1.09 |
) |
|
|
|
Net realized price |
$ |
37.33 |
|
|
$ |
37.52 |
|
|
(1 |
)% |
|
$ |
35.26 |
|
|
$ |
37.48 |
|
|
(6 |
)% |
| |
Operating Expenses |
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
| |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
| |
|
| |
(in millions) |
|
Lease operating expense |
$ |
37.1 |
|
|
$ |
47.4 |
|
|
(22 |
)% |
|
|
$ |
141.6 |
|
|
$ |
182.9 |
|
|
(23 |
)% |
| Adjusted transportation and
processing costs(1) |
33.1 |
|
|
24.1 |
|
|
37 |
% |
|
|
116.9 |
|
|
103.6 |
|
|
13 |
% |
| Production and property
taxes |
15.6 |
|
|
28.3 |
|
|
(45 |
)% |
|
|
57.9 |
|
|
95.9 |
|
|
(40 |
)% |
|
Total production costs |
$ |
85.8 |
|
|
$ |
99.8 |
|
|
(14 |
)% |
|
|
$ |
316.4 |
|
|
$ |
382.4 |
|
|
(17 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
(per Boe) |
| Lease operating expense |
$ |
5.04 |
|
|
$ |
5.60 |
|
|
(10 |
)% |
|
|
$ |
4.67 |
|
|
$ |
5.68 |
|
|
(18 |
)% |
| Adjusted transportation and
processing costs(1) |
4.49 |
|
|
2.85 |
|
|
58 |
% |
|
|
3.85 |
|
|
3.22 |
|
|
20 |
% |
| Production and property
taxes |
2.12 |
|
|
3.35 |
|
|
(37 |
)% |
|
|
1.91 |
|
|
2.98 |
|
|
(36 |
)% |
|
Total production costs |
$ |
11.65 |
|
|
$ |
11.80 |
|
|
(1 |
)% |
|
|
$ |
10.43 |
|
|
$ |
11.88 |
|
|
(12 |
)% |
____________________________(1) Adjusted
transportation and processing costs is a non-GAAP measure. The
definition and reconciliation of adjusted transportation and
processing costs to transportation and processing costs, as
presented, are provided within Non-GAAP Measures at the end of this
release.
| |
General and Administrative Expenses |
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
| |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
| |
|
| |
(in millions) |
|
General and administrative (excluding merger costs and share-based
and deferred compensation) |
$ |
17.9 |
|
$ |
25.3 |
|
|
$ |
(7.4 |
) |
|
$ |
72.7 |
|
$ |
128.1 |
|
$ |
(55.4 |
) |
| General and administrative
merger costs(1) |
4.1 |
|
— |
|
|
4.1 |
|
|
4.1 |
|
— |
|
4.1 |
|
| General and administrative
(share-based and deferred compensation): |
|
|
|
|
|
|
|
|
|
|
|
|
Cash share-based compensation(2) |
1.1 |
|
(0.2 |
) |
|
1.3 |
|
|
2.8 |
|
4.6 |
|
(1.8 |
) |
|
Non-cash share-based compensation(1) (2) |
3.1 |
|
4.6 |
|
|
(1.5 |
) |
|
12.4 |
|
20.8 |
|
(8.4 |
) |
|
Deferred compensation mark-to-market adjustments(3) |
3.7 |
|
1.7 |
|
|
2.0 |
|
|
1.0 |
|
2.3 |
|
(1.3 |
) |
| Total General and
administrative |
$ |
29.9 |
|
$ |
31.4 |
|
|
$ |
(1.5 |
) |
|
$ |
93.0 |
|
$ |
155.8 |
|
$ |
(62.8 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
(per Boe) |
| General and administrative
(excluding merger costs and share-based and deferred
compensation) |
$ |
2.43 |
|
$ |
2.99 |
|
|
$ |
(0.56 |
) |
|
$ |
2.40 |
|
$ |
3.98 |
|
$ |
(1.58 |
) |
| General and administrative
merger costs(1) |
0.56 |
|
— |
|
|
0.56 |
|
|
0.14 |
|
— |
|
0.14 |
|
| General and administrative
(share-based and deferred compensation): |
|
|
|
|
|
|
|
|
|
|
|
|
Cash share-based compensation(2) |
0.15 |
|
(0.02 |
) |
|
0.17 |
|
|
0.09 |
|
0.14 |
|
(0.05 |
) |
|
Non-cash share-based compensation(1) (2) |
0.42 |
|
0.54 |
|
|
(0.12 |
) |
|
0.41 |
|
0.65 |
|
(0.24 |
) |
|
Deferred compensation mark-to-market adjustments(3) |
0.50 |
|
0.20 |
|
|
0.30 |
|
|
0.03 |
|
0.07 |
|
(0.04 |
) |
| Total General and
administrative |
$ |
4.06 |
|
$ |
3.71 |
|
|
$ |
0.35 |
|
|
$ |
3.07 |
|
$ |
4.84 |
|
$ |
(1.77 |
) |
____________________________(1) Total merger
costs recognized in "General and administrative" expense for the
three months ended and year ended December 31, 2020 were $4.5
million. Of which, $4.1 million is presented as "General and
administrative merger costs" and $0.4 million is presented as
"Non-cash share-based compensation" as these costs relate to
restricted share awards in which vesting was accelerated in
accordance with the Merger Agreement.(2) Cash share-based
compensation represents restricted cash awards, performance share
units and restricted share units recorded under the Company's
Long-Term Incentive and Cash Incentive Plan. Non-cash share-based
compensation represents stock options and restricted share awards
recorded under the Company's Long-Term Incentive Plan. Refer to the
Annual Report on Form 10-K for the year ended December 31,
2020 for more information on share-based compensation.(3) Deferred
compensation mark-to-market adjustments represents mark-to-market
adjustments of the Company's nonqualified, unfunded deferred
compensation wrap plan (Wrap Plan). Refer to the Annual Report on
Form 10-K for the year ended December 31, 2020 for more
information on the Wrap Plan.
QEP RESOURCES, INC.NON-GAAP
MEASURES(Unaudited)
Adjusted EBITDA
This release contains references to the non-GAAP measure of
Adjusted EBITDA. Management defines Adjusted EBITDA as earnings
before interest, income taxes, depreciation, depletion and
amortization (EBITDA), adjusted to exclude changes in fair value of
derivative contracts, exploration expenses, gains and losses from
asset sales, impairment, gains or losses from early extinguishment
of debt and certain other items. Management uses Adjusted EBITDA to
evaluate QEP’s financial performance and trends, make operating
decisions, and allocate resources. Management believes the measure
is useful supplemental information for investors because it
eliminates the impact of certain nonrecurring, non-cash and/or
other items that management does not consider as indicative of
QEP’s performance from period to period. QEP’s Adjusted EBITDA may
be determined or calculated differently than similarly titled
measures of other companies in our industry, which would reduce the
usefulness of this non-GAAP financial measure when comparing our
performance to that of other companies.
Below is a reconciliation of Net Income (Loss) (a GAAP measure)
to Adjusted EBITDA. This non-GAAP measure should be considered by
the reader in addition to, but not instead of, the financial
statements prepared in accordance with GAAP.
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
| |
|
| |
(in millions) |
|
Net income (loss) |
$ |
(130.6 |
) |
|
$ |
(110.4 |
) |
|
$ |
3.2 |
|
|
$ |
(97.3 |
) |
| Interest expense |
23.9 |
|
|
28.1 |
|
|
113.7 |
|
|
128.1 |
|
| Interest and other (income)
expense |
(2.1 |
) |
|
(0.1 |
) |
|
(9.8 |
) |
|
(4.7 |
) |
| Income tax provision
(benefit) |
(37.4 |
) |
|
12.7 |
|
|
(79.9 |
) |
|
(43.0 |
) |
| Depreciation, depletion and
amortization |
149.4 |
|
|
144.5 |
|
|
574.0 |
|
|
540.0 |
|
| Unrealized (gains) losses on
derivative contracts |
143.6 |
|
|
109.3 |
|
|
59.2 |
|
|
138.3 |
|
| Exploration expenses |
0.2 |
|
|
0.1 |
|
|
0.2 |
|
|
0.1 |
|
| Net (gain) loss from asset
sales, inclusive of restructuring costs |
2.6 |
|
|
(1.4 |
) |
|
(1.2 |
) |
|
(3.9 |
) |
| Impairment |
8.7 |
|
|
— |
|
|
8.7 |
|
|
5.0 |
|
| (Gain) loss from early
extinguishment of debt |
— |
|
|
1.0 |
|
|
(18.2 |
) |
|
1.0 |
|
|
Adjusted EBITDA |
$ |
158.3 |
|
|
$ |
183.8 |
|
|
$ |
649.9 |
|
|
$ |
663.6 |
|
|
|
Free Cash Flow
This release contains references to non-GAAP measure of Free
Cash Flow.
The Company defines Free Cash Flow as Adjusted EBITDA plus
certain non-cash items that are included in Net Cash Provided by
(Used in) Operating activities but excluded from Adjusted EBITDA
less interest expense, excluding amortization of debt issuance
costs and discounts, and accrued property, plant and equipment
capital expenditures. Management believes that this measure is
useful to management and investors for analysis of the Company's
ability to pay dividends, repay debt, fund acquisitions or
repurchase stock.
Free Cash Flow is not a measurement of our liquidity under GAAP
and should not be considered as an alternative to Net Cash Provided
by (Used in) Operating Activities as a measure of QEP’s liquidity.
Free Cash Flow has limitations as an analytical tool and you should
not consider it in isolation or as a substitute for analysis of
QEP’s results as reported under GAAP, but rather as supplemental
information to QEP’s business results. Free Cash Flow may not be
comparable to similarly titled measures of other companies due to
potential differences in methods of calculation and items or events
being adjusted. In addition, other companies may use different
measures to evaluate their performance, all of which could reduce
the usefulness of Free Cash Flow as a tool for comparison.
Below is a reconciliation of Net Cash Provided by (Used in)
Operating Activities (the most comparable GAAP measure) to Free
Cash Flow. This non-GAAP measure should be considered by the reader
in addition to, but not instead of, the financial statements
prepared in accordance with GAAP.
| |
Three Months Ended |
|
Year Ended |
| |
December 31, |
|
December 31, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
| |
|
| |
(in millions) |
|
Net Cash Provided by (Used in) Operating Activities |
$ |
119.2 |
|
|
$ |
224.9 |
|
|
$ |
673.2 |
|
|
$ |
566.9 |
|
| Exploration expense |
0.2 |
|
|
0.1 |
|
|
0.2 |
|
|
0.1 |
|
| Amortization of debt issuance
costs and discounts |
(1.0 |
) |
|
(1.4 |
) |
|
(4.7 |
) |
|
(5.4 |
) |
| Interest expense |
23.9 |
|
|
28.1 |
|
|
113.7 |
|
|
128.1 |
|
| Unrealized (gains) losses on
marketable securities |
2.1 |
|
|
1.1 |
|
|
3.2 |
|
|
3.9 |
|
| Interest and other (income)
expense |
(2.1 |
) |
|
(0.1 |
) |
|
(9.8 |
) |
|
(4.7 |
) |
| Deferred income (taxes)
benefit |
54.7 |
|
|
(65.5 |
) |
|
(110.6 |
) |
|
(4.3 |
) |
| Income tax provision
(benefit) |
(37.4 |
) |
|
12.7 |
|
|
(79.9 |
) |
|
(43.0 |
) |
| Non-cash share-based
compensation |
(3.1 |
) |
|
(4.6 |
) |
|
(12.4 |
) |
|
(20.8 |
) |
| Non-cash gain (loss) from
warehouse inventory |
0.7 |
|
|
— |
|
|
— |
|
|
— |
|
| Changes in operating assets
and liabilities |
1.1 |
|
|
(11.5 |
) |
|
77.0 |
|
|
42.8 |
|
|
Adjusted EBITDA |
$ |
158.3 |
|
|
$ |
183.8 |
|
|
$ |
649.9 |
|
|
$ |
663.6 |
|
| Non-cash share-based
compensation |
3.1 |
|
|
4.6 |
|
|
12.4 |
|
|
20.8 |
|
| Non-cash (gain) loss from
warehouse inventory |
(0.7 |
) |
|
— |
|
|
— |
|
|
— |
|
| Interest expense, excluding
amortization of debt issuance costs and discounts |
(22.9 |
) |
|
(26.7 |
) |
|
(109.0 |
) |
|
(122.7 |
) |
| Accrued property, plant and
equipment capital expenditures |
(74.4 |
) |
|
(105.5 |
) |
|
(327.9 |
) |
|
(571.5 |
) |
|
Free Cash Flow |
$ |
63.4 |
|
|
56.2 |
|
|
$ |
225.4 |
|
|
(9.8 |
) |
|
|
Adjusted Net Income (Loss)
This release also contains references to the non-GAAP measure of
Adjusted Net Income (Loss). Management defines Adjusted Net Income
(Loss) as earnings excluding changes in fair value of derivative
contracts, gains and losses from asset sales, impairment, loss on
early extinguishment of debt and certain other items. Management
uses Adjusted Net Income (Loss) to evaluate QEP’s financial
performance and trends, make operating decisions, and allocate
resources. Management believes the measure is useful supplemental
information for investors because it eliminates the impact of
certain nonrecurring, non-cash and/or other items that management
does not consider as indicative of QEP’s performance from period to
period. QEP’s Adjusted Net Income (Loss) may be determined or
calculated differently than similarly titled measures of other
companies in our industry, which would reduce the usefulness of
this non-GAAP financial measure when comparing our performance to
that of other companies.
Below is a reconciliation of Net Income (Loss) (a GAAP measure)
to Adjusted Net Income (Loss). This non-GAAP measure should be
considered by the reader in addition to, but not instead of, the
financial statements prepared in accordance with GAAP.
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
| |
2020 |
|
2019 |
|
2020 |
|
2019 |
| |
|
| |
(in millions, except earnings per share amounts) |
|
Net income (loss) |
$ |
(130.6 |
) |
|
$ |
(110.4 |
) |
|
$ |
3.2 |
|
|
$ |
(97.3 |
) |
| Adjustments to net income
(loss) |
|
|
|
|
|
|
|
|
Unrealized (gains) losses on derivative contracts |
143.6 |
|
|
109.3 |
|
|
59.2 |
|
|
138.3 |
|
|
Income taxes on unrealized (gains) losses on derivative
contracts(1) |
(31.9 |
) |
|
(24.5 |
) |
|
(61.7 |
) |
|
(42.3 |
) |
|
Net (gain) loss from asset sales, inclusive of restructuring
costs |
2.6 |
|
|
(1.4 |
) |
|
(1.2 |
) |
|
(3.9 |
) |
|
Income taxes on net (gain) loss from asset sales, inclusive of
restructuring costs(1) |
(0.6 |
) |
|
0.3 |
|
|
1.3 |
|
|
1.2 |
|
|
Impairment |
8.7 |
|
|
— |
|
|
8.7 |
|
|
5.0 |
|
|
Income taxes on impairment(1) |
(1.9 |
) |
|
— |
|
|
(9.1 |
) |
|
(1.5 |
) |
|
(Gain) loss from early extinguishment of debt |
— |
|
|
1.0 |
|
|
(18.2 |
) |
|
1.0 |
|
|
Income taxes on loss from early extinguishment of debt(1) |
— |
|
|
(0.2 |
) |
|
19.0 |
|
|
(0.3 |
) |
| Total after-tax adjustments to
net income |
120.5 |
|
|
84.5 |
|
|
(2.0 |
) |
|
97.5 |
|
| Adjusted Net Income
(Loss) |
$ |
(10.1 |
) |
|
$ |
(25.9 |
) |
|
$ |
1.2 |
|
|
$ |
0.2 |
|
| |
|
|
|
|
|
|
|
| Earnings (Loss) per Common
Share |
|
|
|
|
|
|
|
|
Diluted earnings per share |
$ |
(0.54 |
) |
|
$ |
(0.46 |
) |
|
$ |
0.01 |
|
|
$ |
(0.41 |
) |
|
Diluted after-tax adjustments to net income (loss) per share |
0.50 |
|
|
0.36 |
|
|
(0.01 |
) |
|
0.41 |
|
|
Diluted Adjusted Net Income per share |
$ |
(0.04 |
) |
|
$ |
(0.10 |
) |
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
| Weighted-average common shares
outstanding |
|
|
|
|
|
|
|
|
Diluted |
242.6 |
|
|
237.8 |
|
|
241.6 |
|
|
237.7 |
|
________________________(1)
Income tax impact of adjustments is calculated using QEP’s
statutory rate of 22.2% and 22.4% for the three months ended and
December 31, 2020 and 2019, respectively, and 104.2% and 30.6%
for the year ended December 31, 2020 and 2019,
respectively.Adjusted Transportation and Processing
Costs
This release contains references to the non-GAAP measure of
Adjusted transportation and processing costs. Management defines
Adjusted transportation and processing costs as transportation and
processing costs presented on the Consolidated Statements of
Operations and transportation and processing costs that are
included as part of "Oil and condensate, gas and NGL sales" on the
Consolidated Statements of Operations. These costs are added
together to reflect the total transportation and processing costs
associated with QEP's production. Management believes that Adjusted
transportation and processing costs is useful supplemental
information for investors as this non-GAAP measure, collectively
with the Company’s lease operating expenses and production and
severance taxes, more completely reflect the Company’s total
production costs required to operate the wells for the period.
Below is a reconciliation of Adjusted Transportation and
Processing Costs to transportation and processing costs as
presented on the Condensed Consolidated Statements of Operations (a
GAAP measure). This non-GAAP measure should be considered by the
reader in addition to but not instead of, the financial statements
prepared in accordance with GAAP.
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
| |
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
| |
|
| |
(in millions) |
|
Transportation and processing costs, as presented |
$ |
16.2 |
|
$ |
9.9 |
|
$ |
6.3 |
|
$ |
54.4 |
|
$ |
48.7 |
|
$ |
5.7 |
| Transportation and processing
costs deducted from oil and condensate, gas and NGL sales |
16.9 |
|
14.2 |
|
2.7 |
|
62.5 |
|
54.9 |
|
7.6 |
|
Adjusted transportation and processing costs |
$ |
33.1 |
|
$ |
24.1 |
|
$ |
9.0 |
|
$ |
116.9 |
|
$ |
103.6 |
|
$ |
13.3 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
(per Boe) |
| Transportation and processing
costs, as presented |
$ |
2.20 |
|
$ |
1.17 |
|
$ |
1.03 |
|
$ |
1.79 |
|
$ |
1.51 |
|
$ |
0.28 |
| Transportation and processing
costs deducted from oil and condensate, gas and NGL sales |
2.29 |
|
1.68 |
|
0.61 |
|
2.06 |
|
1.70 |
|
0.36 |
|
Adjusted transportation and processing costs |
$ |
4.49 |
|
$ |
2.85 |
|
$ |
1.64 |
|
$ |
3.85 |
|
$ |
3.21 |
|
$ |
0.64 |
Qep Resources (NYSE:QEP)
Gráfica de Acción Histórica
De Dic 2024 a Ene 2025
Qep Resources (NYSE:QEP)
Gráfica de Acción Histórica
De Ene 2024 a Ene 2025
