Bonanza Creek (BCEI)

[dan_s]

Production and Adjusted EPS came in slightly below my forecast. I will update the forecast tomorrow. - Dan

DENVER, November 6, 2014 - Bonanza Creek Energy, Inc. (BCEI) today reported its third quarter 2014 operating and financial results.

Key highlights for third quarter 2014, as compared to results from continuing operations for third quarter 2013(1), include:
• 44% increase in sales volumes to 25,505 Boe/d; 69% crude oil and liquids
• 24% increase in revenue to $156.4 million
• 14% decrease in per unit cash operating costs(2)
• 174% increase in net income to $48.8 million, or $1.18 per diluted share; excluding the impact of certain items such as derivative gains, adjusted net income(3) was $18.9 million, or $0.46 per diluted share
• 27% increase in adjusted EBITDAX(3) to $110.4 million
1.Bonanza Creek began the divestiture process of its California properties in second quarter 2012 and sold its remaining property, the Midway Sunset Field, on March 21, 2014. Under generally accepted accounting principles, the results of operations for third quarter 2013 are presented as continuing operations.
2.Cash operating costs include lease operating expense and cash general and administrative expense, a non-GAAP measure. See Schedule 1 for general and administrative break-out of stock-based compensation.
3.Non-GAAP measure; see attached Reconciliation Schedules.

Operational highlights for third quarter 2014 include:
• 40-acre spaced Niobrara B bench pad achieved an average initial 90-day production rate of 416 Boe/d; after 200 days, all four wells are tracking above the 313 Mboe type curve
• Drilled and completed the Company`s first Niobrara A bench well; its initial 30-day production rate was 325 Boe/d
• Successfully drilled and completed two 9,000 foot laterals and both are in the first month of production

Marvin Chronister, Bonanza Creek`s Interim President and Chief Executive Officer, commented, "I am pleased with our progress towards our 2014 goals, particularly with respect to per unit operating costs. Despite downtime issues experienced due to Wattenberg Field gas compression and processing infrastructure, we are well-positioned to execute on all of our strategic priorities this year. Our evolution in completion design continues to encourage and has established an attractive economic baseline that supports our 3P inventory assumptions. The detailed analysis performed on the acquisition acreage over the past several months confirms our inventory assumption of approximately 700 net locations made back in July and we are eager to begin our drilling efforts there in the fourth quarter. Furthermore, our catalyst well program has shown positive results in the thinner Codell, the Niobrara A bench and extended reach laterals. We are keeping a close eye on macro oil price conditions as we plan our budget for 2015 but we are confident that our program achieves attractive economic returns at current levels and are planning for another exciting year of value creation for our shareholders."

[dan_s]

An updated Net Income & Cash Flow Forecast model has been posted under the Sweet 16 Tab.

3rd quarter results were solid, but production growth was more gas than oil. They also narrowed 2014 production to the lower half of previous guidance. I lowered my 2015 production forecast a bit. Production growth will be ~47% this year and my forecast is for ~35% YOY production growth in 2015.

I have lowered my Fair Value Estimate $2.85 to $65.15/share, compared to First Call's Price Target of $64.00.