PDC Energy (PDCE) Q1 Results - May 1

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DENVER, May 01, 2019 (GLOBE NEWSWIRE) -- PDC Energy, Inc. ("PDC" or the "Company") (NASDAQ: PDCE) today reported its 2019 first quarter operating and financial results. Additionally, the Company announced it has entered into two definitive agreements to divest its gas and water midstream assets in the Delaware Basin for a combined total of approximately $310 million, subject to post-closing adjustments.

First Quarter Highlights:

Total production of 11.2 million barrels of oil equivalent (“MMBoe”), or approximately 125,000 Boe per day, a 26 percent increase from the first quarter of 2018. < Compares to my forecast of 127,800 Boepd.

Crude oil, natural gas and NGLs sales of approximately $320 million, a five percent increase from the first quarter of 2018 despite a 16 percent decrease in average per Boe prices between periods.

Net loss for the first quarter of 2019 was $120.2 million, or $1.82 per diluted share, compared to net loss of $13.1 million, or $0.20 per diluted share, for the comparable 2018 period. The year-over-year difference was primarily attributable to a decrease of approximately $160 million in fair value of unsettled derivatives. Adjusted net income for the first quarter, a non-GAAP financial measure defined below, was $18.0 million, or $0.27 per diluted share in 2019 compared to adjusted net income of $3.0 million, or $0.05 per diluted share in 2018. < Adjusted Net Income compares to my forecast of $31.1 million, $0.46 EPS.

Net cash from operating activities was $181.9 million in the first quarter of 2019, compared to $205.1 million in the comparable 2018 period. The decrease between periods is primarily a result of changes in assets and liabilities between periods being somewhat offset by an increase in oil and gas sales between those periods. Adjusted cash flows from operations, a non-GAAP financial measure defined below, were $192.6 million in the first quarter of 2019, compared to $174.9 million in the comparable 2018 period, which does not include changes in assets and liabilities between periods. < Adjusted cash flow from operations compares to my forecast of $194.2 million, $2.86 CF per share.

Improved well costs in both Wattenberg and Delaware Basin operations reflecting reduced drill times and more completion stages per day than originally budgeted.

Nine Delaware Basin turn-in-lines (“TILs”), including the extended-reach lateral Argentine S5, the Company’s first Bone Spring well. Current production for this well, which has yet to reach a peak 30-day IP, is averaging approximately 190 Boe per day per thousand feet and 70 percent crude oil.

The Company entered into two definitive agreements to divest certain Delaware Basin midstream assets for an aggregate purchase price of approximately $310 million, subject to post-closing adjustments. Additionally, the Company entered into long-term commercial service agreements with incentive-based provisions worth up to an additional $135 million.

The Company’s Board of Directors recently authorized a stock repurchase plan of up to $200 million of its outstanding common stock, depending on market conditions. The plan is expected to be funded through free cash flow beginning in the third quarter of 2019 with a target completion date of December 31, 2020.

CEO Commentary

President and Chief Executive Officer, Bart Brookman commented, “I’m extremely pleased with our first quarter results, highlighted by our improved drilling and completion pace, below-budget well costs, prolific well results and improved cost structure. These accomplishments, along with the successful monetization of our gas and water midstream assets, which we expect to close in mid-2019, are a tremendous example of PDC delivering value to shareholders through execution of our strategy.”

“Further, as a testament to our confidence in our financial and operational strength, as well as the quality of our assets and depth of current inventory, the PDC Board of Directors has approved a stock repurchase program of up to $200 million, depending on market conditions. PDC’s financial strength and focus on capital discipline, as outlined in our multi-year outlook, has positioned the Company to execute this program through free cash flow generated from operating activities.”

I will update my forecast/valuation model for PDCE on Thursday.