HighPeak Energy, Inc. (“HighPeak” or the “Company”) (NASDAQ: HPK)
today announced financial and operating results for the fourth
quarter 2021 and reaffirmed its 2022 outlook. The Company completed
its business combination on August 21, 2020 and consequently, the
following operational and financial data refer to the three months
and year ended December 31, 2021 and the three months ended
December 31, 2020 and the period from August 22, 2020 through
December 31, 2020 (the “Successor periods”) and the period from
January 1, 2020 through August 21, 2020 (the “Predecessor period”).
Fourth Quarter 2021 and Early 2022
Highlights
- Fourth quarter 2021 sales volumes of
14,881 barrels of crude oil equivalent per day (“Boe/d”), an
increase of approximately 81% compared with third quarter 2021,
consisting of approximately 88% crude oil and 95% liquids.
- Fourth quarter 2021 sales volumes
benefitted from a successfully executed fourth quarter drilling
campaign and are based primarily on production from approximately
59 gross (47.4 net) horizontal wells. At December 31, 2021, the
Company had an additional 27 gross (23.0 net) horizontal wells in
various stages of drilling and completion that are expected to come
online during the latter part of the first quarter 2022.
- EBITDAX (a non-GAAP financial
measure as defined and reconciled below) of $72.4 million and
$164.2 million for the three months and year ended December 31,
2021, respectively.
- Fourth quarter 2021 realized price
of $72.07 per Boe and realized cash operating margin of $60.26 per
Boe, excluding the effects of derivatives.
- Drilled 15 gross (14.0 net) operated
horizontal wells and completed 10 gross (6.0 net) operated
horizontal wells during the fourth quarter. Also participated in
drilling 2 gross (1.0 net) non-operated horizontal wells.
- The Company’s year-end 2021 PV-10
reserve value increased to approximately $1.5 billion using flat
pricing of $72 per barrel of oil and $3.75 per MMBtu of natural
gas, before adjustments for differentials, and an estimated
realized price of $32.18 per barrel of natural gas liquids.
- Paid a $0.025 per share quarterly
dividend in October of 2021.
- Ended 2021 with net debt of $65.1
million (a non-GAAP financial measure as defined and calculated
below).
- Increased liquidity to approximately
$225 million by completing an October public stock offering,
recently closing a private senior unsecured notes offering and
amending the revolving credit facility (“Revolving Credit
Facility”).
- During the first quarter 2022, the
Company entered into a series of agreements to acquire various
crude oil and natural gas properties contiguous to its Flat Top
operating area, which in the aggregate, consist of approximately
9,500 net acres, associated estimated production of 2,500 Boe per
day and approximately 40 additional horizontal drilling
locations.
2022 Development Outlook
The Company added a third drilling rig in
October 2021 to further delineate its Signal Peak area and to
accelerate development drilling in its Flat Top operating area. The
Company added a fourth drilling rig in early January 2022.
Additionally, we will continue the buildout of our field
infrastructure to reduce operating costs and advance our ESG
objectives. The Company currently plans to operate a minimum of
four (4) drilling rigs and an average of two (2) frac fleets during
2022, assuming commodity prices and rates of return remain
attractive. However, the scope, duration and magnitude of the
direct and indirect effects of the COVID-19 pandemic are continuing
to evolve and in ways that are difficult or impossible to
anticipate. Given the dynamic nature of this situation and the
recent Russian invasion of Ukraine, the Company is maintaining
flexibility in its capital plan and will continue to evaluate
drilling and completion activity on an economic basis, with future
activity levels assessed monthly.
|
Production (Boe/d) |
|
|
|
|
· Average production rate |
|
|
27,000 – 32,500 |
|
· Exit production rate |
|
|
40,000 – 45,000 |
| Capex
($MM) |
|
|
|
|
· Gross Operated Wells TIL |
|
|
80 – 110 |
|
· Capital Expenditures,
D,C,E&F |
|
|
$715 - $760 |
|
· Capital Expenditures,
Infra/Land/Other |
|
|
$35 - $40 |
|
· Total Capital
Expenditures |
|
|
$750 - $800 |
| Unit
Measures ($/Boe) |
|
|
|
|
· Lease Operating Expenses |
|
|
$5.00 - $5.50 |
|
· Production Taxes |
|
|
$4.25 - $5.00 |
|
· General &
Administrative |
|
|
$1.00 - $1.50 |
|
· Total Cash
Costs |
|
|
$10.25 - $12.00 |
HighPeak Chairman and Chief Executive Officer, Jack Hightower,
said, “We had a great fourth quarter as evidenced by our 81%
production growth. Even before the Ukrainian crisis, we recognized
massive underinvestment in energy over the past several years, and
contrary to industry sentiment we forged ahead and positioned
ourselves for responsible growth. HighPeak is uniquely poised to
take advantage of current market conditions because of our
exception well economics, operational success and strong balance
sheet. We are contemplating accelerating our drilling activity in
this year’s business which we can accomplish without increasing our
near-term outspend. We are a growth company and we want our
shareholders to realize that we will lean into all available
opportunities, especially given our quick payouts and high returns
on investment.”
Acquisitions
During the first quarter of 2022, the Company
entered into a series of agreements to acquire various crude oil
and natural gas properties contiguous to its Flat Top operating
area in Borden and Howard counties, which in the aggregate, consist
of approximately 9,500 net acres and associated estimated
production of 2,500 Boe per day. The properties under contract also
include a salt-water disposal system (“SWD system”) which includes
three (3) active disposal wells with current disposal capacity of
12,000 barrels of water per day, in-field produced fluid gathering
pipelines, and three (3) SWD permits. Additional benefits
associated with the acquired properties include local non-potable
water sourcing capacity of approximately 35,000 barrels per day
from local surface landowners at attractive rates, which should
equate to over $3 million in annual cost savings, and in-field
crude oil gathering pipelines and LACT units. The acquired acreage
will add approximately 40 additional horizontal drilling locations
in the Wolfcamp A formation, which continues to provide robust
rates of return in the current commodity price environment. The
majority of the acquisitions are expected to close late in the
first quarter and early in the second quarter of 2022.
Closing on Issuance of $225 Million
Senior Unsecured Notes
The Company closed its previously announced
issuance of $225 million 10.0% senior unsecured notes due 2024. The
Company used a portion of the proceeds to pay off its outstanding
debt balance under its Revolving Credit Facility. The remaining
proceeds will be used to fund the Company’s 2022 development
drilling program. The Company’s liquidity after receipt of funds
from the issuance of the Notes is approximately $225 million
including cash and borrowing capacity under its Revolving Credit
Facility.
Fourth Quarter Operational
Update
The Company’s sales volumes during the fourth
quarter 2021 averaged 14,881 Boe/d, an increase of approximately
81% compared with third quarter 2021, consisting of approximately
88% oil and 95% liquids.
During the fourth quarter of 2021, the Company
drilled 15 gross (14.0 net) operated horizontal wells utilizing
approximately three drilling rigs. The Company completed 10 gross
(6.0 net) producing wells. At December 31, 2021, the Company was in
various stages of completion on 27 gross (23.0 net) wells and was
in the process of drilling 5 gross (5.0 net) operated horizontal
wells and 1 gross (1.0 net) operated salt water disposal well. The
Company also participated in drilling 2 gross (1.0 net)
non-operated horizontal wells during the fourth quarter 2021.
Michael Hollis, HighPeak’s President, commented,
“The series of highly accretive acquisitions that HighPeak entered
into this quarter not only add production and future drilling
locations, but also complement our already robust infrastructure.
By adding our fourth rig in January we have supercharged our
exceptional and differential growth engine. With one of the best
recycle ratios in the business, we have leaned into this commodity
price environment and remain flexible to react when appropriate to
market conditions.”
Mr. Hollis, concluded, “Our hearts and minds are
with the Ukrainians. HighPeak Energy is doing its part to supply
the world with clean and reliable energy. In light of the recent
conflict in Ukraine, we feel it is even more important to our
national security to reduce our need for imported oil.”
Fourth Quarter 2021 Financial
Results
HighPeak reported net income of $37.0 million
for the fourth quarter of 2021, or $0.35 per diluted share.
EBITDAX (a non-GAAP financial measure as defined and reconciled
below) was $72.4 million, or $0.68 per diluted share.
Fourth quarter average realized prices were
$77.45 per barrel of crude oil, $41.02 per barrel of natural gas
liquids and $5.05 per Mcf of natural gas, resulting in an overall
realized price of $72.07 per Boe, or 93% of the weighted average of
NYMEX crude oil prices, excluding the effects of
derivatives. HighPeak’s cash costs for the fourth quarter were
$14.62 per Boe including lease operating expenses of $8.34 per Boe,
production and ad valorem taxes of $3.47 per Boe and cash G&A
expenses of $2.81 per Boe. The Company’s unhedged cash margin
was $57.45 per Boe, or 74% of the weighted average of NYMEX crude
oil prices for the quarter.
HighPeak’s fourth quarter 2021 capital
expenditures to drill, complete, equip, provide facilities and to
build water and power infrastructure were approximately $81.6
million. In addition, the Company incurred capital
expenditures of approximately $769,000 primarily on leasehold
acquisitions.
The Company also completed a public stock
offering on October 20, 2021 of 2,530,000 shares of common stock
for aggregate gross proceeds of $25.3 million.
At December 31, 2021, the Company had $100.0
million in long-term debt and $34.9 million of cash on hand.
In February 2022, the Company closed on the issuance of $225
million Senior Unsecured Notes due in 2024. Simultaneously with the
closing of the Notes, the Company used a portion of the proceeds to
pay off its outstanding debt balance under its Revolving Credit
Facility and reduced its borrowing base and bank commitments to
$138.8 million. The Company’s liquidity after receipt of funds from
the issuance of the Notes was approximately $225 million including
cash and borrowing capacity under its Revolving Credit
Facility.
Hedging Update
As of March 7, 2022, the Company has hedged 2.95
million barrels of its 2022 crude oil production, or 8,082 barrels
of oil (“BO”) per day (“BO/d), at an average swap price of $71.27
per BO and 641,200 barrels of its 2023 crude oil production, or
1,757 BO/d at an average swap price of $66.04 per BO. The Company’s
crude oil derivative contracts are based on reported settlement
prices on the New York Mercantile Exchange for West Texas
Intermediate pricing.
Year End 2021 Proved
Reserves
As of December 31, 2021, HighPeak Energy’s
estimated proved reserves, prepared by Cawley, Gillespie &
Associates, Inc., increased 185% to 64.2 MMBoe consisting of 81%
crude oil, 8% natural gas and 11% natural gas liquids compared with
December 31, 2020 estimated proved reserves. Proved developed
reserves increased 178% to 28.6 MMBoe and were 45% of the Company’s
total proved reserves. The Company’s PV-10, a non-GAAP financial
measure, was approximately $1.34 billion at year end 2021, an
increase of 468%, compared with $235.5 million at year end 2020,
each based on pricing guidelines established by the Securities and
Exchange Commission (“SEC”). 2021 SEC pricing was $66.56 per barrel
of crude oil and $3.598 per MMBtu of natural gas, before
adjustments for price differentials. Natural gas liquids realized
pricing for the 2021 proved reserve report was $29.76 per
barrel.
Using flat pricing of $72 per barrel of crude
oil and $3.75 per MMBtu of natural gas, before adjustments for
differentials, and an estimated realized price of $32.18 per barrel
of natural gas liquids, 2021-year end proved reserves are estimated
to be 64.5 MMBoe of which 45% are proved developed. Under this
price case, the Company’s PV-10 reserve value increased to
approximately $1.5 billion including $815 million for proved
developed reserves.
| |
SEC PRICING |
|
FLAT $72/$3.75(1) |
|
Reserve Category |
Crude Oil(MMBbl) |
Natural Gas(Bcf) |
NGL(MMBbl) |
Total (MMBoe) |
PV-10 ($MM) |
|
Total (MMBoe) |
PV-10 ($MM) |
| Proved Dev. Producing
(PDP) |
16 |
11 |
3 |
20 |
$531 |
|
21 |
$582 |
| Proved Dev. Non-Producing
(PDNP) |
7 |
3 |
1 |
8 |
$211 |
|
8 |
$233 |
| Total Proved Dev.
Reserves |
23 |
15 |
4 |
29 |
$ 742 |
|
29 |
$ 815 |
| Proved Undeveloped (PUD) |
29 |
15 |
4 |
36 |
$596 |
|
36 |
$682 |
| Total Proved
Reserves |
52 |
30 |
7 |
64 |
$ 1,338 |
|
65 |
$ 1,498 |
(1) Flat Pricing Scenario of
$72 per Bbl of oil, $3.75/MMBtu of natural gas and $32.18 per Bbl
of NGL
Dividend
In September 2021, the Company’s Board of
Directors approved its second quarterly dividend of $0.025 per
share which resulted in a total of $2.3 million in dividends paid
to stockholders on October 25, 2021. In addition, in
January 2022, the Company’s Board of Directors declared a quarterly
dividend of $0.025 per share which resulted in a total of $2.4
million in dividends paid to stockholders on February 25, 2022.
Conference Call
HighPeak Energy will host a conference call and
webcast on Tuesday, March 8, 2022 at 10:00 a.m. Central Time for
investors and analysts to discuss its results for the fourth
quarter of 2022 as well as provide an overview of recent activities
and its 2022 operating plan. Conference call participants may
call (833) 362-0226 (United States/Canada) or (914) 987-7683
(International) and enter confirmation code 4378555. A live
broadcast of the earnings conference call will also be available on
the HighPeak Energy website at www.highpeakenergy.com under the
“Investors” section of the website. A replay will also be available
on the website following the call.
When available, a copy of the Company’s earnings
release, investor presentation and Annual Report on Form 10-K may
be found on its website at www.highpeakenergy.com.
Conference Participation
HighPeak Energy will participate in the upcoming
34th Annual Roth Conference in one-on-one meetings and a fireside
chat to be held from March 13, 2022 through March 15, 2022. The
meetings will not be webcast. The Company will use its March 2022
investor presentation for this event. The Company’s March investor
presentation will be posted to its website before market open on
Tuesday, March 8, 2022.
About HighPeak Energy, Inc.
HighPeak Energy, Inc. is a publicly traded
independent crude oil and natural gas company, headquartered in
Fort Worth, Texas, focused on the acquisition, development,
exploration and exploitation of unconventional crude oil and
natural gas reserves in the Midland Basin in West Texas. For more
information, please visit our website
at www.highpeakenergy.com.
Cautionary Note Regarding
Forward-Looking Statements
The information in this press release contains
forward-looking statements that involve risks and uncertainties.
When used in this document, the words “believes,” “plans,”
“expects,” “anticipates,” “forecasts,” “intends,” “continue,”
“may,” “will,” “could,” “should,” “future,” “potential,” “estimate”
or the negative of such terms and similar expressions as they
relate to HighPeak Energy, Inc. (“HighPeak Energy,” the “Company”
or the “Successor”) are intended to identify forward-looking
statements, which are generally not historical in nature. The
forward-looking statements are based on the Company's current
expectations, assumptions, estimates and projections about the
Company and the industry in which the Company operates. Although
the Company believes that the expectations and assumptions
reflected in the forward-looking statements are reasonable as and
when made, they involve risks and uncertainties that are difficult
to predict and, in many cases, beyond the Company’s control.
These risks and uncertainties include, among
other things, volatility of commodity prices, product supply and
demand, the impact of a widespread outbreak of an illness, such as
the coronavirus disease (“COVID-19”) pandemic, on global and U.S.
economic activity, competition, the ability to obtain environmental
and other permits and the timing thereof, other government
regulation or action, the ability to obtain approvals from third
parties and negotiate agreements with third parties on mutually
acceptable terms, litigation, the costs and results of drilling and
operations, availability of equipment, services, resources and
personnel required to perform the Company’s drilling and operating
activities, access to and availability of transportation,
processing, fractionation, refining and storage facilities,
HighPeak Energy’s ability to replace reserves, implement its
business plans or complete its development activities as scheduled,
access to and cost of capital, the financial strength of
counterparties to any credit facility and derivative contracts
entered into by HighPeak Energy, if any, and purchasers of HighPeak
Energy’s crude oil, natural gas liquids and natural gas production,
uncertainties about estimates of reserves, identification of
drilling locations and the ability to add proved reserves in the
future, the assumptions underlying forecasts, including forecasts
of production, expenses, cash flow from sales of crude oil and gas
and tax rates, quality of technical data, environmental and weather
risks, including the possible impacts of climate change,
cybersecurity risks and acts of war or terrorism. These and other
risks are described in the Company's Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K and
other filings with the SEC. The Company undertakes no duty to
publicly update these statements except as required by law.
|
HighPeak Energy, Inc.Unaudited Condensed
Consolidated Balance Sheet Data(In
thousands) |
| |
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
Cash and cash equivalents |
|
$ |
34,869 |
|
|
$ |
19,552 |
|
| Other current assets |
|
|
52,085 |
|
|
|
13,743 |
|
| Crude oil and natural gas
properties, net |
|
|
725,615 |
|
|
|
502,636 |
|
| Other noncurrent assets |
|
|
6,391 |
|
|
|
1,999 |
|
| Total
assets |
|
$ |
818,960 |
|
|
$ |
537,930 |
|
| |
|
|
|
|
|
|
| Current liabilities |
|
$ |
103,000 |
|
|
$ |
22,435 |
|
| Long-term debt, net |
|
|
97,929 |
|
|
|
— |
|
| Other long-term
liabilities |
|
|
64,968 |
|
|
|
41,269 |
|
| |
|
|
|
|
|
|
| Stockholders' equity |
|
|
|
|
|
|
|
Common stock |
|
|
10 |
|
|
|
9 |
|
|
Additional paid-in capital |
|
|
617,489 |
|
|
|
581,426 |
|
|
Accumulated deficit |
|
|
(64,436 |
) |
|
|
(107,209 |
) |
|
Total stockholders' equity |
|
|
553,063 |
|
|
|
474,226 |
|
| Total liabilities and
stockholders' equity |
|
$ |
818,960 |
|
|
$ |
537,930 |
|
| |
|
|
|
|
|
|
|
HighPeak Energy, Inc. |
|
Unaudited Condensed Consolidated Statements of
Operations |
|
(in thousands, except per share data) |
|
|
|
|
|
Three Months Ended December 31, |
|
|
|
|
Year Ended December 31, 2020 |
|
|
|
2021 |
|
|
2020 |
|
|
Year EndedDecember 31,2021 |
|
August 22,2020 throughDecember31, 2020 |
|
January 1,2020throughAugust 21,2020 |
|
|
|
Successor |
|
Successor |
|
Successor |
|
Successor |
|
Predecessor |
| Operating
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil sales |
|
$ |
93,813 |
|
|
$ |
11,201 |
|
|
$ |
210,453 |
|
|
$ |
15,988 |
|
|
$ |
8,069 |
|
|
Natural gas and NGL sales |
|
|
4,852 |
|
|
|
365 |
|
|
|
9,671 |
|
|
|
412 |
|
|
|
154 |
|
|
Total operating revenues |
|
|
98,665 |
|
|
|
11,566 |
|
|
|
220,124 |
|
|
|
16,400 |
|
|
|
8,223 |
|
| Operating Costs and
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil and natural gas production |
|
|
11,424 |
|
|
|
1,982 |
|
|
|
25,053 |
|
|
|
2,653 |
|
|
|
4,870 |
|
|
Production and ad valorem taxes |
|
|
4,756 |
|
|
|
629 |
|
|
|
10,746 |
|
|
|
886 |
|
|
|
566 |
|
|
Exploration and abandonments |
|
|
407 |
|
|
|
4,966 |
|
|
|
1,549 |
|
|
|
5,032 |
|
|
|
4 |
|
|
Depletion, depreciation and amortization |
|
|
21,464 |
|
|
|
7,550 |
|
|
|
65,201 |
|
|
|
9,877 |
|
|
|
6,385 |
|
|
Accretion of discount |
|
|
51 |
|
|
|
36 |
|
|
|
167 |
|
|
|
51 |
|
|
|
89 |
|
|
General and administrative |
|
|
3,843 |
|
|
|
1,959 |
|
|
|
8,885 |
|
|
|
2,775 |
|
|
|
4,840 |
|
|
Stock-based compensation |
|
|
3,782 |
|
|
|
1,268 |
|
|
|
6,676 |
|
|
|
15,776 |
|
|
|
— |
|
|
Total operating costs and expenses |
|
|
45,727 |
|
|
|
18,390 |
|
|
|
118,277 |
|
|
|
37,050 |
|
|
|
16,754 |
|
| Income (loss) from
operations |
|
|
52,938 |
|
|
|
(6,824 |
) |
|
|
101,847 |
|
|
|
(20,650 |
) |
|
|
(8,531 |
) |
|
Interest income |
|
|
— |
|
|
|
5 |
|
|
|
1 |
|
|
|
6 |
|
|
|
— |
|
|
Interest expense |
|
|
(1,331 |
) |
|
|
(8 |
) |
|
|
(2,484 |
) |
|
|
(8 |
) |
|
|
— |
|
|
Derivative loss, net |
|
|
(2,318 |
) |
|
|
— |
|
|
|
(26,734 |
) |
|
|
— |
|
|
|
— |
|
|
Other expense |
|
|
(40 |
) |
|
|
— |
|
|
|
(167 |
) |
|
|
— |
|
|
|
(76,503 |
) |
| Income (loss) before
income taxes |
|
|
49,249 |
|
|
|
(6,827 |
) |
|
|
72,463 |
|
|
|
(20,652 |
) |
|
|
(85,034 |
) |
|
Income tax expense (benefit) |
|
|
12,224 |
|
|
|
(1,914 |
) |
|
|
16,904 |
|
|
|
(4,223 |
) |
|
|
— |
|
| Net income
(loss) |
|
$ |
37,025 |
|
|
$ |
(4,913 |
) |
|
$ |
55,559 |
|
|
$ |
(16,429 |
) |
|
$ |
(85,034 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) |
|
$ |
0.36 |
|
|
$ |
(0.05 |
) |
|
$ |
0.55 |
|
|
$ |
(0.18 |
) |
|
|
|
|
Diluted net income (loss) |
|
$ |
0.35 |
|
|
$ |
(0.05 |
) |
|
$ |
0.54 |
|
|
$ |
(0.18 |
) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
94,546 |
|
|
|
91,646 |
|
|
|
93,127 |
|
|
|
91,629 |
|
|
|
|
|
Diluted |
|
|
97,804 |
|
|
|
91,646 |
|
|
|
94,772 |
|
|
|
91,629 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends declared per
share |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.125 |
|
|
$ |
— |
|
|
|
|
|
HighPeak Energy, Inc. |
|
Unaudited Condensed Consolidated Statements of Cash
Flows |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
Year Ended December 31, 2020 |
|
|
|
Year Ended December 31, 2021 |
|
August 22, 2020 through December 31, 2020 |
|
January 1, 2020 through August 21, 2020 |
|
|
|
Successor |
|
Successor |
|
Predecessor |
| CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
55,559 |
|
|
$ |
(16,429 |
) |
|
$ |
(85,034 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operations: |
|
|
|
|
|
|
|
|
|
|
Exploration and abandonment expense |
|
|
742 |
|
|
|
4,854 |
|
|
|
4 |
|
|
Depletion, depreciation and amortization expense |
|
|
65,201 |
|
|
|
9,877 |
|
|
|
6,385 |
|
|
Accretion expense |
|
|
167 |
|
|
|
51 |
|
|
|
89 |
|
|
Stock based compensation expense |
|
|
6,676 |
|
|
|
15,776 |
|
|
|
— |
|
|
Amortization of debt issuance costs |
|
|
498 |
|
|
|
4 |
|
|
|
— |
|
|
Derivative-related activity |
|
|
15,467 |
|
|
|
— |
|
|
|
— |
|
|
Loss on terminated acquisition |
|
|
— |
|
|
|
— |
|
|
|
76,500 |
|
|
Deferred income taxes |
|
|
16,904 |
|
|
|
(1,047 |
) |
|
|
— |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(31,655 |
) |
|
|
(5,177 |
) |
|
|
844 |
|
|
Prepaid expenses, inventory and other assets |
|
|
(7,053 |
) |
|
|
(506 |
) |
|
|
(196 |
) |
|
Accounts payable, accrued liabilities and other current
liabilities |
|
|
24,509 |
|
|
|
(1,990 |
) |
|
|
(2,694 |
) |
|
Net cash provided by (used in) operating activities |
|
|
147,015 |
|
|
|
5,413 |
|
|
|
(4,102 |
) |
| CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
Additions to crude oil and natural gas properties |
|
|
(236,242 |
) |
|
|
(64,947 |
) |
|
|
(49,364 |
) |
|
Changes in working capital associated with crude oil and natural
gas property additions |
|
|
37,259 |
|
|
|
(5,666 |
) |
|
|
7,348 |
|
|
Acquisitions of crude oil and natural gas properties |
|
|
(54,045 |
) |
|
|
(1,181 |
) |
|
|
(3,338 |
) |
|
Proceeds from sales of properties |
|
|
3,366 |
|
|
|
— |
|
|
|
— |
|
|
Other property additions |
|
|
(709 |
) |
|
|
(145 |
) |
|
|
(50 |
) |
|
Issuance of notes receivable |
|
|
— |
|
|
|
— |
|
|
|
(7,482 |
) |
|
Extension payment on acquisition |
|
|
— |
|
|
|
— |
|
|
|
(15,000 |
) |
|
Net cash used in investing activities |
|
|
(250,371 |
) |
|
|
(71,939 |
) |
|
|
(67,886 |
) |
| CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
Borrowings under revolving credit facility |
|
|
120,000 |
|
|
|
— |
|
|
|
— |
|
|
Proceeds from stock offering |
|
|
25,300 |
|
|
|
92,554 |
|
|
|
— |
|
|
Proceeds from exercises of warrants |
|
|
5,466 |
|
|
|
— |
|
|
|
— |
|
|
Proceeds from subscription receivable from exercise of
warrants |
|
|
3,596 |
|
|
|
— |
|
|
|
— |
|
|
Proceeds from exercises of stock options |
|
|
1,573 |
|
|
|
— |
|
|
|
— |
|
|
Dividend equivalents paid |
|
|
(1,037 |
) |
|
|
— |
|
|
|
— |
|
|
Debt issuance costs |
|
|
(2,169 |
) |
|
|
(405 |
) |
|
|
— |
|
|
Stock offering costs |
|
|
(2,463 |
) |
|
|
(8,114 |
) |
|
|
— |
|
|
Dividends paid |
|
|
(11,593 |
) |
|
|
— |
|
|
|
— |
|
|
Repayments under revolving credit facility |
|
|
(20,000 |
) |
|
|
— |
|
|
|
— |
|
|
Cash acquired from non-successors in HighPeak business
combination |
|
|
— |
|
|
|
100 |
|
|
|
— |
|
|
Contributions from partners |
|
|
— |
|
|
|
— |
|
|
|
54,000 |
|
|
Distributions to partners |
|
|
— |
|
|
|
— |
|
|
|
(2,780 |
) |
|
Net cash provided by financing activities |
|
|
118,673 |
|
|
|
84,135 |
|
|
|
51,220 |
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
15,317 |
|
|
|
17,609 |
|
|
|
(20,768 |
) |
| Cash and cash equivalents,
beginning of period |
|
|
19,552 |
|
|
|
1,943 |
|
|
|
22,711 |
|
| Cash and cash equivalents, end
of period |
|
$ |
34,869 |
|
|
$ |
19,552 |
|
|
$ |
1,943 |
|
| |
|
|
|
|
|
|
|
|
|
|
HighPeak Energy, Inc. |
|
Unaudited Summary Operating Highlights |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended December 31, |
|
|
|
2021 |
|
|
2020 |
|
| Sales
Volumes: |
|
|
|
|
|
|
|
Crude oil (Bbls) |
|
|
1,211,198 |
|
|
|
274,064 |
|
| NGLs (Bbls) |
|
|
89,486 |
|
|
|
15,917 |
|
| Natural gas (Mcf) |
|
|
410,072 |
|
|
|
99,591 |
|
|
Total (Boe) |
|
|
1,369,029 |
|
|
|
306,580 |
|
| |
|
|
|
|
|
|
| Daily Sales
Volumes: |
|
|
|
|
|
|
| Crude oil (Bbls/d) |
|
|
13,165 |
|
|
|
2,979 |
|
| NGLs (Bbls/d) |
|
|
973 |
|
|
|
173 |
|
| Natural gas (Mcf/d) |
|
|
4,457 |
|
|
|
1,083 |
|
|
Total (Boe/d) |
|
|
14,881 |
|
|
|
3,332 |
|
| |
|
|
|
|
|
|
| Revenues (in
thousands): |
|
|
|
|
|
|
| Crude oil sales |
|
$ |
93,813 |
|
|
$ |
11,201 |
|
| Crude oil derivative
settlements |
|
|
(6,252 |
) |
|
|
— |
|
| NGL and natural gas sales |
|
|
4,852 |
|
|
|
366 |
|
|
Total Revenues, including derivative settlements |
|
$ |
92,413 |
|
|
$ |
11,567 |
|
| |
|
|
|
|
|
|
| Average sales
prices: |
|
|
|
|
|
|
| Crude oil (per Bbl) |
|
$ |
77.45 |
|
|
$ |
40.87 |
|
| Crude oil derivative
settlements (per Bbl) |
|
|
(5.16 |
) |
|
|
— |
|
| NGL (per Bbl) |
|
|
41.02 |
|
|
|
19.77 |
|
| Natural gas (per Mcf) |
|
|
5.05 |
|
|
|
1.34 |
|
|
Total, including derivative contract settlements (per Boe) |
|
$ |
67.50 |
|
|
$ |
37.73 |
|
| |
|
|
|
|
|
|
| Weighted Average NYMEX
WTI ($/Bbl) |
|
$ |
77.28 |
|
|
$ |
42.56 |
|
| Weighted Average NYMEX
Henry Hub ($/Mcf) |
|
|
5.78 |
|
|
|
2.69 |
|
| Realization to
benchmark |
|
|
|
|
|
|
| Crude oil (per Bbl) |
|
|
100 |
% |
|
|
96 |
% |
| Natural gas (per Mcf) |
|
|
87 |
% |
|
|
50 |
% |
|
|
|
|
|
|
|
|
| Operating Costs and
Expenses (in thousands): |
|
|
|
|
|
|
| Lease operating expenses |
|
$ |
11,424 |
|
|
$ |
1,983 |
|
| Production and ad valorem
taxes |
|
|
4,756 |
|
|
|
628 |
|
| General and administrative
expenses |
|
|
3,843 |
|
|
|
1,959 |
|
| Depletion, depreciation and
amortization |
|
|
21,465 |
|
|
|
7,550 |
|
| |
|
|
|
|
|
|
| Operating costs per
Boe: |
|
|
|
|
|
|
| Lease operating expenses |
|
$ |
8.34 |
|
|
$ |
6.47 |
|
| Production and ad valorem
taxes |
|
|
3.47 |
|
|
|
2.05 |
|
| General and administrative
expenses |
|
|
2.81 |
|
|
|
6.39 |
|
| Depletion, depreciation and
amortization |
|
|
15.68 |
|
|
|
24.63 |
|
|
HighPeak Energy, Inc. |
|
Unaudited Summary Operating Highlights |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
Year Ended December 31, 2020 |
|
|
|
|
Year EndedDecember 31, 2021 |
|
August 22,2020throughDecember31, 2020 |
|
January 1,2020throughAugust 21,2020 |
|
|
|
|
Successor |
|
Successor |
|
Predecessors |
|
| Sales
Volumes: |
|
|
|
|
|
|
|
|
|
|
|
Crude oil (Bbls) |
|
|
3,002,200 |
|
|
|
398,232 |
|
|
|
235,557 |
|
|
| NGLs (Bbls) |
|
|
223,596 |
|
|
|
17,666 |
|
|
|
20,024 |
|
|
| Natural gas (Mcf) |
|
|
1,020,186 |
|
|
|
112,057 |
|
|
|
87,258 |
|
|
|
Total (Boe) |
|
|
3,395,827 |
|
|
|
434,575 |
|
|
|
270,123 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Daily Sales
Volumes: |
|
|
|
|
|
|
|
|
|
|
| Crude oil (Bbls/d) |
|
|
8,225 |
|
|
|
3,017 |
|
|
|
1,007 |
|
|
| NGLs (Bbls/d) |
|
|
613 |
|
|
|
134 |
|
|
|
86 |
|
|
| Natural gas (Mcf/d) |
|
|
2,795 |
|
|
|
849 |
|
|
|
373 |
|
|
|
Total (Boe/d) |
|
|
9,304 |
|
|
|
3,292 |
|
|
|
1,154 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Revenues (in
thousands): |
|
|
|
|
|
|
|
|
|
|
| Crude oil sales |
|
$ |
210,453 |
|
|
$ |
15,988 |
|
|
$ |
8,069 |
|
|
| Crude oil derivative
settlements |
|
|
(11,267 |
) |
|
|
- |
|
|
|
- |
|
|
| NGL and natural gas sales |
|
|
9,671 |
|
|
|
412 |
|
|
|
154 |
|
|
|
Total Revenues, including derivative settlements |
|
$ |
208,857 |
|
|
$ |
16,400 |
|
|
$ |
8,223 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Average sales
prices: |
|
|
|
|
|
|
|
|
|
|
| Crude oil (per Bbl) |
|
$ |
70.10 |
|
|
$ |
40.15 |
|
|
$ |
34.26 |
|
|
| Crude oil derivative
settlements (per Bbl) |
|
|
(3.75 |
) |
|
|
— |
|
|
|
— |
|
|
| NGL (per Bbl) |
|
|
35.11 |
|
|
|
19.44 |
|
|
|
9.31 |
|
|
| Natural gas (per Mcf) |
|
|
4.36 |
|
|
|
1.45 |
|
|
|
0.52 |
|
|
|
Total, including derivative contract settlements (per Boe) |
|
$ |
61.50 |
|
|
$ |
37.74 |
|
|
$ |
30.44 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Weighted Average NYMEX
WTI ($/Bbl) |
|
$ |
70.50 |
|
|
$ |
41.82 |
|
|
$ |
35.17 |
|
|
| Weighted Average NYMEX
Henry Hub ($/Mcf) |
|
|
4.36 |
|
|
|
2.65 |
|
|
|
1.76 |
|
|
| Realization to
benchmark |
|
|
|
|
|
|
|
|
|
|
| Crude oil (per Bbl) |
|
|
99 |
% |
|
|
96 |
% |
|
|
97 |
% |
|
| Natural gas (per Mcf) |
|
|
100 |
% |
|
|
55 |
% |
|
|
30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Costs and
Expenses (in thousands): |
|
|
|
|
|
|
|
|
|
|
| Lease operating expenses |
|
$ |
25,053 |
|
|
$ |
2,653 |
|
|
$ |
4,870 |
|
|
| Production and ad valorem
taxes |
|
|
10,746 |
|
|
|
886 |
|
|
|
566 |
|
|
| General and administrative
expenses |
|
|
8,885 |
|
|
|
2,775 |
|
|
|
4,840 |
|
|
| Depletion, depreciation and
amortization |
|
|
65,201 |
|
|
|
9,877 |
|
|
|
6,385 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Operating costs per
Boe: |
|
|
|
|
|
|
|
|
|
|
| Lease operating expenses |
|
$ |
7.38 |
|
|
$ |
6.10 |
|
|
$ |
18.03 |
|
|
| Production and ad valorem
taxes |
|
|
3.16 |
|
|
|
2.04 |
|
|
|
2.10 |
|
|
| General and administrative
expenses |
|
|
2.62 |
|
|
|
6.39 |
|
|
|
17.92 |
|
|
| Depletion, depreciation and
amortization |
|
|
19.20 |
|
|
|
22.73 |
|
|
|
23.64 |
|
|
|
HighPeak Energy, Inc. |
|
Unaudited Reconciliation of Net Income (Loss) to
EBITDAX |
|
(in thousands) |
| |
|
Three Months Ended December 31, |
|
|
|
|
Year Ended December 31, 2020 |
|
|
|
2021 |
|
|
2020 |
|
|
Year Ended December 31, 2021 |
|
August 22, 2020 through December 31, 2020 |
|
January 1, 2020 through August 21, 2020 |
|
|
|
Successor |
|
Successor |
|
Successor |
|
Successor |
|
Predecessor |
|
Net income (loss) |
|
$ |
37,025 |
|
|
$ |
(4,913 |
) |
|
$ |
55,559 |
|
|
$ |
(16,429 |
) |
|
$ |
(85,034 |
) |
| Interest expense |
|
|
1,331 |
|
|
|
8 |
|
|
|
2,484 |
|
|
|
8 |
|
|
|
— |
|
| Interest income |
|
|
— |
|
|
|
(5 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
|
|
— |
|
| Income tax expense
(benefit) |
|
|
12,224 |
|
|
|
(1,914 |
) |
|
|
16,904 |
|
|
|
(4,223 |
) |
|
|
— |
|
| Depletion, depreciation and
amortization |
|
|
21,464 |
|
|
|
7,550 |
|
|
|
65,201 |
|
|
|
9,877 |
|
|
|
6,385 |
|
| Accretion of discount |
|
|
51 |
|
|
|
36 |
|
|
|
167 |
|
|
|
51 |
|
|
|
89 |
|
| Exploration and abandonment
expense |
|
|
407 |
|
|
|
4,966 |
|
|
|
1,549 |
|
|
|
5,032 |
|
|
|
4 |
|
| Stock based compensation |
|
|
3,782 |
|
|
|
1,268 |
|
|
|
6,676 |
|
|
|
15,776 |
|
|
|
— |
|
| Derivative related noncash
activity |
|
|
(3,935 |
) |
|
|
— |
|
|
|
15,467 |
|
|
|
— |
|
|
|
— |
|
| Other expense |
|
|
40 |
|
|
|
— |
|
|
|
167 |
|
|
|
— |
|
|
|
76,503 |
|
| EBITDAX |
|
$ |
72,389 |
|
|
$ |
6,996 |
|
|
$ |
164,173 |
|
|
$ |
10,086 |
|
|
$ |
(2,053 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HighPeak Energy, Inc. |
|
Unaudited Net Debt |
|
(In thousands) |
|
|
|
|
|
|
| |
|
December 31, 2021 |
|
| Outstanding borrowings on
Revolving Credit Facility |
|
$ |
100,000 |
|
| Cash and cash equivalents |
|
|
34,869 |
|
| Net debt |
|
$ |
65,131 |
|
| |
|
|
|
|
Investor Contact:
Ryan HightowerVice President, Business
Development817.850.9204rhightower@highpeakenergy.com
Source: HighPeak Energy, Inc.
HighPeak Energy (NASDAQ:HPK)
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HighPeak Energy (NASDAQ:HPK)
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