Sundance Energy Australia

Published : January 29th, 2016

Quarterly Activities and Cashflow Report

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Keywords :   Australia | Fixed | Georgia | Natural Gas | Oil | Saving | Taxes |

Quarterly Activities and Cashflow Report

Microsoft Word - 4Q 2015 QAR final


Sundance Energy Australia Limited

28 Greenhill Road, Wayville. South Australia. 5034 ACN 112 202 883 Telephone: +61 8 8363 0388 Facsimile: +61 8 8132 0766 www.sundanceenergy.com.au



Continued Execution on Operating Objectives

  • The Company produced 7,901 Boe/d in 2015, achieving its full year production guidance. Production was 1,266 Boe/d (19.1 percent) higher than in 2014.

  • Production for the quarter was ~7,801 Boe/d with an exit rate of 8,055 boe/d.

  • The Company achieved its full year 2015 production guidance despite bringing 11.0 net wells into production compared to guidance of 16.5 net wells.

  • Adjusted EBITDAX was $66.5 million for the year and $13.1 million for the fourth quarter with Adjusted EBITDAX margin of 72 percent for both periods, despite an approximate 51 percent decrease in realized pricing year‐over‐year.

  • Cash operating costs were reduced from $15.15/Boe for the year ended 31 December 2014 to

$14.25/Boe for the year ended 31 December 2015.


Growing Business within Cash Flows

  • Completed 3 gross (3.0 net) Eagle Ford wells in the fourth quarter that achieved peak 24‐hour production rates of 1,965, 1,266 and 863 Boe (average peak 24‐hour production of 1,365 Boe).

  • Funded all of the Company's 2015 drilling, completion and well facility capital expenditures of $60.7 million with Adjusted EBITDAX of $66.5 million.

  • 20 gross (10.5 net) horizontal wells were waiting on completion at year‐end, of which 7 gross (6.7 net) were Sundance‐operated.


2016

Guidance

  • The Company anticipates producing 6,800‐7,300 Boe/d during 2016.

  • During 2016, the Company has hedges covering 1.0 million barrels at an average floor of $50.63 and

2.0 bcf of gas at an average floor of $2.54.

  • Targeted cash operating costs (lease operating expenses, production taxes and general and administrative expenses) are expected to decline to $10.50‐$12.50/Boe in 2016 primarily driven by:

    • Headcount reduction of ~30 percent that occurred in mid‐January 2016, salary reductions, and a variety of other cost‐saving initiatives that have been implemented.

    • Implementation of field‐level operational changes in late 2015 and early 2016 as well an on‐going program designed to capture additional cost reductions.

  • Expected development cost per well in Eagle Ford, inclusive of drilling, completion, facilities and gas tie‐ins to be approximately $5.4 million (based on an average 6,300 foot lateral length well).


Liquidity

  • Completion of the Company's fourth quarter 2015 borrowing base redetermination resulted in a decrease from $75 million to $67 million. None of the $8 million reduction had been drawn at the time of the redetermination. The Company's Term Loan remains unchanged at $125 million.

  • As at the date of this report, the Company's oil hedges covered a total of 2.4 million bbls through 2019 with a weighted average floor of $50.42 and ceiling of $80.72.

Activities Report for the Quarter Ended 31 December 2015 Highlights


Operating Results



Unaudited


Units

Three Months Ended

31 December

Year Ended

31 December

2015

2014

2015

2014

Production Summary, net of Royalties


427,404


581,880


1,823,689


1,675,078

Oil Production Bbls

Natural Gas Production, excluding flare Mcf

682,226

531,084

2,581,586

1,803,000

NGL Production Bbls

126,173

84,209

393,359

267,952

Total Production, excluding flare Boe

667,282

754,602

2,647,312

2,243,529

Average Daily Production, excluding flare Boe/d

7,253

8,202

7,253

6,147

Flared Gas Boe/d

548

730

648

488

Average Daily Production, including flare Boe/d

7,801

8,932

7,901

6,635

Sales Revenue, net of Royalties


15,901


40,754


82,499


144,994

Oil Sales

US$000s

Natural Gas Sales

US$000s

1,141

801

4,802

6,161

NGL Sales

US$000s

1,316

2,352

4,532

8,638

Total Sales Revenue

US$000s

18,358

43,907

91,833

159,793

Realised Product Pricing


37.20


70.04


45.24


86.56

Oil

US$/Bbl

Effect of Hedging

US$/Bbl

9.34

(3.22)

6.49

(0.79)

Net Oil

US$/Bbl

46.54

66.82

51.73

85.77

Natural Gas

US$/Mcf

1.67

1.51

1.86

3.42

Effect of Hedging

US$/Mcf

0.38

0.16

0.22

0.01

Net Natural Gas

US$/Mcf

2.05

1.67

2.08

3.43

NGL

US$/Bbl

10.43

27.93

11.52

32.24

Total Average Realised Price

US$/Boe

27.51

58.19

34.69

71.22

Effect of Hedging

US$/Boe

6.37

(2.37)

4.69

(0.59)

Total Net Average Realised Price

US$/Boe

33.88

55.82

39.38

70.64

NOTE: Production & Revenue figures are presented net of royalties.



Revenue (US$000s) & Production (Boe/d), net of

Royalties

12,000


10,000


8,000


6,000


4,000


2,000


0

$50,000

$45,000

$40,000

$35,000

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$0

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

Revenue for the quarter decreased by $25.5 million, or 58 percent, to $18.4 million compared to the same period in the prior year. This decrease in revenue was primarily due to lower realised oil pricing of $37.20 per barrel compared to $70.04 per barrel in the fourth quarter of 2014. This negatively impacted revenue by $14.0 million. In addition, quarter‐over‐quarter production volumes decreased by 949 Boe/d to 7,253 Boe/d which resulted in lower revenue of $9.4 million.


Revenue

Boe/d



Unaudited (US$000s, except per BOE)

Three Months Ended

31 December

Year Ended

31 December

2015

2014

2015

2014

Operating Activity


$ 18,358


$ 43,907


$ 91,833


$ 159,793

Sales Revenue, net of Royalties

Lease Operating Expenses (LOE)

(4,481)

(3,704)

(18,496)

(13,523)

Production Taxes

(1,792)

(742)

(6,139)

(6,966)

Cash G&A, net of amounts capitalised

(2,741)

(3,403)

(13,085)

(13,501)

LOE/Boe:

$ 6.71

$ 4.91

$ 6.99

$ 6.03

Production taxes as a % of revenue

9.8%

1.7%

6.7%

4.4%

Cash G&A/Boe:

$ 4.11

$ 4.51

$ 4.94

$ 6.02

Adjusted EBITDAX (1)

$ 13,137

$ 40,228

$ 66,526

$ 126,373

Adjusted EBITDAX Margin

71.6%

91.6%

72.4%

79.1%


The Company reduced its cash costs by 6 percent to $14.25/Boe for the year ended 31 December 2015 compared to the prior year. Cash costs include cash paid for LOE, production taxes and G&A, net of amounts capitalised.

Lease Operating Expenses (LOE)

LOE per Boe was $6.99 for year ended 31 December 2015 and $6.71 per Boe for the fourth quarter of 2015 compared to $6.03 and $4.91, respectively, for the same periods in 2014. The primary driver of the increase in LOE per Boe was workovers performed on wells to improve or maintain production and reduce future operating costs.

Production Tax Expense

Production tax expense as a percentage of revenue increased to 6.7 percent for the year ended 31 December 2015 and 9.8 percent for the fourth quarter of 2015, compared to 4.4 percent and 1.7 percent, respectively, for the comparable periods of 2014. The increase in production taxes for the fourth quarter of 2015, was the result of an adjustment for higher than anticipated ad valorem taxes assessed in Texas, (whereas the fourth quarter of 2014 included a lower than anticipated ad valorem tax assessment adjustment).

Cash General and Administrative Costs (G&A)

Cash G&A per Boe, net of amounts capitalized, decreased 18 percent to $4.94 for the year ended 31 December 2015 compared to $6.02 in 2014, primarily due to lower professional fees. The Company has also captured economies of scale in its fixed overhead cost structure due to increased production levels.

Cash G&A per Boe, net of amounts capitalized, decreased to $4.11 for fourth quarter of 2015 compared to $4.51 for the same period in 2014, primarily as a result of lower professional fees.

Adjusted EBITDAX

100%

80%


60%


40%


20%


0%

Q1 Q2 Q3 Q4 Q1 Q2

Q3 Q4

The Company's Adjusted EBITDAX decreased by $59.8 million to $66.5 million (72 percent of revenue) for the year ended 31 December 2015 compared to $126.4 million in 2014 (79 percent of revenue). Despite significantly lower pricing, the Company has been able to maintain relatively high Adjusted EBITDAX margin as a result of cost reductions implemented throughout the year.



Adjusted EBITDAX


$45,000

$40,000

$35,000

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$‐


2014 2014 2014 2014 2015 2015 2015 2015

Adjusted EBITDAX (US$000s) Adjusted EBITDAX Margin (%)

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Sundance Energy Australia

CODE : SEA.AX
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Sundance Energy is a and oil exploration company based in United states of america.

Sundance Energy holds various exploration projects in Australia and in USA.

Its main exploration properties are ARKOMA BASIN in USA and COOPER EROMANGA BASIN and WILLISTON BASIN in Australia.

Sundance Energy is listed in Australia. Its market capitalisation is AU$ 206.1 millions as of today (US$ 139.7 millions, € 126.9 millions).

Its stock quote reached its highest recent level on August 22, 2014 at AU$ 1.42, and its lowest recent point on December 12, 2018 at AU$ 0.04.

Sundance Energy has 1 249 350 016 shares outstanding.

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