Third Quarter Highlights:
- Averaged net production of over 2.3 bcfe per day
- Realized record Adjusted EBITDAX(1) of $559 million and Net Cash Provided by Operating Activities of $761 million
- Incurred $195 million of D&C costs and $24 million of land and leasehold costs
- Generated $277 million of Adjusted Free Cash Flow(1)
- Reduced total borrowings under our credit facility by $55 million even with funding the remaining portion of the XTO acquisition
- Achieved our long-term leverage target of less than 2.0x, ending the quarter at 1.7x on an LTM basis(2)
(1)
A non-GAAP financial measure. See the Non-GAAP reconciliations included in this press release for the definition of, and other important information regarding, this non-GAAP financial measure.
(2)
Includes the full-year Adjusted EBITDAX impact of the XTO acquisition
According to the company’s website news release on November 8, 2022, Ascent Resources Utica Holdings, LLC ("Ascent", "our" or the "Company") reported its third quarter 2022 operating and financial results. Additionally, Ascent announced a conference call with analysts and investors scheduled for 9 AM CT / 10 AM ET, Thursday, November 10, 2022. For more detailed information on Ascent, please refer to the latest investor presentation and additional information located on our website at https://www.ascentresources.com/investors.
Commenting on the quarter, Ascent's Chairman and Chief Executive Officer, Jeff Fisher said, "The third quarter was excellent, both operationally and financially as the team continues to execute on our plan. Production averaged over 2.3 bcfe/d, as we benefited from the strong turn-in-line activity and well performance over the last two quarters. As a result, we generated record quarterly financial results including $277 million of Adjusted Free Cash Flow."
Fisher continued, "As we move through the fourth quarter, the Company is well positioned to capture value and finish the year on a strong note. We continue to work diligently with our partners and contractors to improve efficiencies in the field to ensure our execution and results are aligned with our returns-focused strategy. We are excited about the opportunity in front of us as we close out the year and move into 2023."
Third Quarter 2022 Financial Results
Third quarter 2022 net production averaged 2,339 mmcfe per day, consisting of 2,204 mmcf per day of natural gas, 6,663 bbls per day of oil and 15,826 bbls per day of natural gas liquids ("NGL").
Third quarter 2022 price realizations, including the impact of settled commodity derivatives, were $4.07 per mcfe. Excluding the impact of settled commodity derivatives, price realizations were $8.05 per mcfe in the third quarter of 2022.
For the third quarter of 2022, Ascent reported net income of $47 million, Adjusted Net Income of $307 million and Adjusted EBITDAX of $559 million. Ascent incurred $229 million of total capital expenditures in the third quarter of 2022 including $195 million for D&C costs, $24 million for land and leasehold costs, and $10 million for capitalized interest. The Company generated $277 million of Adjusted Free Cash Flow during the three months ended September 30, 2022, despite a realized commodity hedge loss of approximately $856 million.
Year-to-Date 2022 Financial Results
Net production for the nine months ended September 30, 2022 averaged 2,090 mmcfe per day, consisting of 1,953 mmcf per day of natural gas, 7,308 bbls per day of oil and 15,586 bbls per day of NGLs.
Price realizations, including the impact of settled commodity derivatives, were $3.86 per mcfe for the nine months ended September 30, 2022. Excluding the impact of settled commodity derivatives, price realizations were $7.06 per mcfe for the year-to-date period.
For the nine months ended September 30, 2022, Ascent reported a net loss of $1.24 billion, Adjusted Net Income of $664 million and Adjusted EBITDAX of $1.32 billion. Ascent incurred a total of $741 million of capital expenditures during the nine months ended September 30, 2022 including $629 million for D&C costs, $79 million for land and leasehold costs, and $33 million for capitalized interest. The Company generated $435 million of Adjusted Free Cash Flow during the nine months ended September 30, 2022, despite a realized commodity hedge loss of approximately $1.83 billion.
Balance Sheet and Liquidity
As of September 30, 2022, Ascent had total debt of approximately $2.91 billion, with $805 million of borrowings and $169 million of letters of credit issued under the Credit Facility. Liquidity as of September 30, 2022 was $1.03 billion, comprised of $1.03 billion of available borrowing capacity under the revolving credit facility and $8 million of cash on hand. Our leverage ratio at the end of the quarter was 1.7x based on an LTM Adjusted EBITDAX basis, and 1.3x on an LQA Adjusted EBITDAX basis when including the full-year EBITDAX impact of the XTO acquisition.
Operational Update
During the third quarter of 2022, we spud 19 operated wells, hydraulically fractured 17 wells, and turned-in-line 13 wells with an average lateral length of approximately 12,000 feet. As of September 30, 2022, Ascent had 708 gross operated producing Utica wells.
Over the last two quarters, activity has been exceptionally busy as we brought online 44 new wells across the play, with 27 of the wells turning-in-line between June and August. This level of activity contributed to a substantial increase in production during the third quarter. As we move into the fourth quarter, our turn-in-line activity is expected to increase relative to the third quarter as we were able to source an additional frac crew in October. The activity will be more balanced than prior quarters as several liquids rich locations are set to come online. On the cost front, the team continues to experience many of the inflationary and supply chain issues impacting the industry and economy at large, but we are working through these challenges to mitigate further impacts to our program.
About Ascent Resources
Ascent is one of the largest private producers of natural gas in the United States and is focused on acquiring, developing, and operating natural gas and oil properties located in the Utica Shale in southern Ohio. With a continued focus on good corporate citizenship, Ascent is committed to delivering clean-burning, affordable energy to our country and the world, while reducing environmental impacts.
Contact:
Chris Benton
Director – Finance and Investor Relations
405-252-7850
chris.benton@ascentresources.com
This news release contains forward-looking statements within the meaning of US federal securities laws. Forward-looking statements express views of Ascent regarding future plans and expectations. Forward-looking statements in this news release include, but are not limited to, statements regarding future operations, business strategy, liquidity and cash flows of Ascent. These statements are based on numerous assumptions and are subject to known and unknown risks and uncertainties, including, commodity price volatility, inherent uncertainty in estimating natural gas, oil and NGL reserves, environmental and regulatory risks, availability of capital, and the other risks described in Ascent's most recent investor presentation provided at www.ascentresources.com/investors. Actual future results may vary materially from those expressed or implied in this news release and Ascent's business, financial condition, results of operations and cash flow could be materially and adversely affected by such risks and uncertainties. As a result, forward-looking statements should be understood to be only predictions and statements of Ascent's current beliefs; they are not guarantees of performance.
