Sundance Energy Australia

Published : April 29th, 2016

Quarterly Activities and Cashflow Report

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Keywords :   Australia | Cash | Natural Gas | Oil | Saving | Tax | Taxes |

Quarterly Activities and Cashflow Report

ce3ef461-2d90-4ace-9f75-4c65668d1ec6.pdf

Sundance Energy Australia Limited‌‌‌

32 Beulah Road, Norwood. South Australia. 5067 ACN 112 202 883

Telephone: +61 8 8363 0388 Facsimile: +61 8 8132 0766 www.sundanceenergy.com.au

Activities Report for the Quarter Ended 31 March 2016

Highlights

Continued Focus on Operating Cost Reductions‌‌‌‌‌

  • Adjusted EBITDAX was $9.8 million for the quarter ended 31 March 2016. An Adjusted EBITDAX margin of 87.5 percent was achieved through implementation of various measures to reduce cash operating costs and realization of gains from the Company's commodity hedging program.

  • The Company produced 6,304 Boe/d in Q1 2016, down 3,277 Boe/d (34.2 percent) compared to the same period in 2015. Production declined as a result of the decision to defer well completions during this period of low commodity prices. Although production for the quarter came in below the low end of the range for 2016 production guidance, the Company reaffirms the full year guidance of 6,800 - 7,400 Boe/d as it has scheduled the completion of several wells during the remainder of 2016 and also expects to increase production from existing wells through various operational optimisation projects that are in progress.

  • Cash operating costs declined from $14.17/Boe for the year ended 31 December 2015 to $12.26/Boe for the quarter ended 31 March 2016; a $1.91/Boe (13.5 percent) reduction, through:

    • Field-level operational changes implemented in early 2016 reduced LOE to $5.79/Boe (compared to $6.96/Boe for the year ended 31 December 2015); a $1.17/Boe (16.8 percent) reduction. Additional LOE reductions are expected through the remainder of 2016 as the full impact of these changes is realized.

    • A 30 percent headcount reduction that occurred in mid-January 2016 combined with salary reductions and a variety of other cost-saving initiatives implemented throughout the quarter resulted in cash G&A of $4.98/Boe. Cash G&A for the remainder of the year is expected to average approximately 20 percent lower than the first quarter.‌

Development Program within Operating Cash Flows

  • Development expenditures totaled $2.1 million for the quarter ended 31 March 2016. Development activity for the quarter was focused on pump installations and other production enhancement operations as well as capital expenditures related to various field optimisation projects targeted at increasing sales or reducing LOE.

  • 21 gross (11.5 net) horizontal wells were waiting on completion at quarter-end, of which 8 gross (7.7 net) were Sundance-operated.

Liquidity and Working Capital

  • During the quarter ended 31 March 2016, the Company realized gains of $4.9 million on settlement of commodity hedging contracts. The Company's realised oil price was $42.68/Bbl for the quarter inclusive of realised hedging gains of $13.74/Bbl.

  • As at 31 March 2016, the Company's oil hedges covered a total of 2.0 million bbls through 2019 with a weighted average floor of $50.00 and ceiling of $59.37 and an estimated fair value of $13.2 million.

  • The Company used cash flow generated during the quarter to reduce accounts payable and accrued expenses which decreased approximately $7.8 million as compared to 31 December 2015.

Operating Results

Unaudited

Units

Three Months Ended

31 March

2016

2015

Production Summary, net of Royalties

331,261

592,964

Oil Production Bbls

Natural Gas Production, excluding flare Mcf

596,283

574,940

NGL Production Bbls

84,033

70,700

Total Production, excluding flare Boe

514,675

759,487

Average Daily Production, excluding flare Boe/d

5,656

648

8,439

1,142

Flared Gas Boe/d

Average Daily Production, including flare Boe/d

6,304

9,581

Sales Revenue, net of Royalties

9,588

26,414

Oil Sales

US$000s

Natural Gas Sales

US$000s

848

1,624

NGL Sales

US$000s

817

634

Total Sales Revenue

US$000s

11,253

28,672

Realised Product Pricing

28.94

44.55

Oil

US$/Bbl

Effect of Hedging

US$/Bbl

13.74

4.91

Net Oil

US$/Bbl

42.68

49.46

Natural Gas

US$/Mcf

1.42

0.52

2.83

0.14

Effect of Hedging

US$/Mcf

Net Natural Gas

US$/Mcf

1.94

2.97

NGL

US$/Bbl

9.72

8.97

Total Average Realised Price

US$/Boe

21.86

9.45

37.75

3.94

Effect of Hedging

US$/Boe

Total Net Average Realised Price

US$/Boe

31.31

41.69

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

Revenue for the quarter decreased $17.4 million, or

  1. percent, to $11.3 million compared to the same period in the prior year. Volumes declined by 3,277 Boe/d which contributed $11.5 million to the reduction in revenue. Period over period, realized product prices decreased $15.61 per barrel for oil and a $1.41 per Mcf for natural gas which negatively impacted revenue by $5.9 million.

    For the current quarter, inclusive of the effect of hedging, the Company realised $42.68 per Bbl (13.7 percent decrease compared to the same quarter in 2015) of oil and $1.94 per Mcf (34.5 percent decrease compared to the same quarter in 2015) of natural gas, net of transportation and marketing fees.

    Operating Results (continued)

    For the quarter ended 31 March 2016, the Company produced an average of 6,304 Boe/d, which includes 648 Boe/d of flared gas. The Company is in the process of upgrading its treatment facility which will reduce flared volumes and allow the Company to sell a larger portion of its natural gas production.

    Unaudited (US$000s, except per BOE)

    Three Months Ended 31 March

    2016

    2015

    Operating Activity

    $ 11,253

    $ 28,672

    Sales Revenue, net of Royalties

    Lease Operating Expenses (LOE)

    (2,982)

    (3,928)

    Production Taxes

    (763)

    (1,864)

    Cash G&A, net of amounts capitalised

    (2,565)

    (3,839)

    LOE/Boe:

    $ 5.79

    $ 5.17

    Production taxes as a % of revenue

    6.8%

    6.5%

    Cash G&A/Boe:

    $ 4.98

    $ 5.05

    Adjusted EBITDAX (1)

    $ 9,841

    $ 22,004

    Adjusted EBITDAX Margin (1)

    87.5%

    76.7%

  2. Q1 2016 and 2015 Adjusted EBITDAX and Adjusted EBITDAX Margin include realised gain on hedging of $4.9 million and $3.0 million, respectively. Realised gain on hedging is not included in Sales Revenue.

  3. Despite the prolonged depressed commodity price environment, the Company has continued to improve upon its top tier cost structure and has reduced total cash costs per Boe (cash paid for LOE, production taxes and G&A) from $14.17/Boe for the year ended 31 December 2015 to $12.26/Boe in the first quarter of 2016. In absolute terms, total cash costs decreased $3.3 million (34.5 percent) to $6.3 million for the quarter ended 31 March 2016, compared to $9.6 million in the comparable period in the prior year.

    Lease operating expenses (LOE)

    LOE per BOE decreased 16.7 percent to $5.79 for the quarter ended 31 March 2016 compared to $6.96 for the year ended 31 December 2015 due to several cost saving initiatives as well as on-going field-level improvements designed to continue to drive down LOE. In absolute terms, LOE decreased $0.9 million (24.1 percent) to $3.0 million for the quarter ended 31 March 2016, compared to $3.9 million in the comparable period in the prior year. Further cost reductions are expected throughout the remainder of 2016.

    Production tax expense

    Production tax expense as a percentage of revenue of 6.8 percent for the quarter ended 31 March 2016 was consistent with the 6.7 percent incurred for the year ended 31 December 2015.

    Cash general and administrative costs (G&A)

    Cash G&A per Boe, net of amounts capitalised, increased 1.1 percent to $4.98 per Boe for the quarter ended 31 March 2016 compared to the year ended 31 December 2015. The Company has implemented cost reductions to scale in its overhead cost structure to expected production levels. In absolute terms, cash G&A decreased by $1.3 million (33.2 percent) to $2.6 million for the quarter ended 31 March 2016, compared to $3.8 million in the comparable period in the prior year.

    Operating Results (continued)

    Adjusted EBITDAX

    The Company achieved a higher Adjusted EBITDAX margin for the quarter (87.5 percent) as compared to the comparable quarter in the prior year (76.7 percent) despite a quarter-over-quarter revenue decline of $17.4 million. The margin improvement was driven by reductions in cash operating costs and an increase in realized gains on commodity hedging.

    Exploration & Development

    The Company's exploration and development activities are focused in the Eagle Ford formation (Texas) and the Mississippian/Woodford formations in the Greater Anadarko Basin (Oklahoma). The Company's development activities for the quarter ended 31 March 2016 are summarised below:

    31-Dec-15 New 31-Mar-16

    Waiting on

    Drilling Frac

    Total

    Eagle Ford 95 - 95

    1 15

    16

    Anadarko Basin 66 - 66

    - 5

    5

    Total 161 - 161

    1 20

    21

    GROSS WELLS

    NET WELLS

    PRODUCING IN PROGRES S

    PRODUCING IN PROGRES S

    31-Dec-15

    New

    31-Mar-16

    Drilling

    Waiting on

    Frac

    Total

    Eagle Ford

    69.7

    -

    69.7

    1.0

    7.5

    8.5

    Mulhall

    27.7

    -

    27.7

    -

    3.0

    3.0

    Other

    0.1

    -

    0.1

    -

    -

    -

    Anadarko Basin

    27.8

    -

    27.8

    -

    3.0

    3.0

    Total

    97.5

    -

    97.5

    1.0

    10.5

    11.5

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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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Annual reports of Sundance Energy Australia
2007 Annual Report
2006 Annual Report
Nominations of Sundance Energy Australia
12/16/2008 Appoints New Chairman
Project news of Sundance Energy Australia
4/23/2008(May-jon) Extends US Oil and Gas Interest with May-Jon Prospect
4/17/2008(North Washington)Extends US Oil and Gas Interest with North Washington Prospe...
Corporate news of Sundance Energy Australia
8/1/2016Acquisition of Eagle Ford Assets Completed
8/1/2016Acquisition of Eagle Ford Assets no Re-Fracturing Partnershi...
8/1/2016Quarterly Activities and Cashflow Report
6/22/2016Acquisition of Eagle Ford Assets
5/27/2016Chairman's Report AGM
5/23/2016Borrowing Base Reaffirmed
4/29/2016Quarterly Activities and Cashflow Report
1/29/2016Quarterly Activities and Cashflow Report
11/2/2015Edited Transcript of SEA.AX earnings conference call or pres...
10/30/2015Sundance Energy Australia Limited Reports Third Quarter 2015...
10/29/2015Quarterly Activities and Cashflow Report
10/26/2015Quarterly Earnings Call
9/10/2015Half Year Accounts
8/10/2015Cleansing Notice
8/10/2015Acquisition of Eagle Ford and Cooper Basin Assets
8/10/2015Sundance Energy Australia Limited Closed on Acquisition of N...
8/4/2015Edited Transcript of SEA.AX earnings conference call or pres...
7/31/2015Sundance Energy Australia Limited Reports Second Quarter 201...
7/31/2015Quarterly Activities and Cashflow Report
7/29/2015Quarterly Earnings Call
4/27/2015Notice of Annual General Meeting/Proxy Form
3/31/2015Annual Report 2014
3/9/2015Investor Presentation
1/30/2015Quarterly Activities and Cashflow Report
1/30/2015Operations Update
1/29/2015Quarterly Earnings Call
1/29/2015Reserve Upgrade
10/31/2014Operations Update
10/30/2014Quarterly Earnings Call Presentation
5/12/2014Sundance Energy Australia Limited Files Form 15F to Terminat...
2/5/2014Sundance Energy Australia Limited Announces Launch of Initia...
11/13/2012s
10/31/2012s
10/16/2012s
9/26/2012s
9/7/2012s
6/20/2012s
5/30/2012s
5/18/2012s
5/7/2012s
4/23/2012s
4/12/2012s
3/27/2012s
3/15/2012s
2/24/2012s
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1/16/2012s
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12/13/2011s
11/29/2011s
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5/13/2011s
4/29/2011s
4/19/2011s
4/8/2011s
3/28/2011s
2/11/2011s
12/17/2009to Participate in Bakken/Three Forks Test Well
11/30/2009to Appoint Reg Nelson as a Director
3/10/2009Company and Development Update
11/27/2008Development Update
11/13/2008AGM address and presentation
8/12/2008Revenue and Developement Update
6/17/2008Another Extension of US Oil and Gas Interest with Colorado C...
6/4/2008 2008 Development Campaign Update
4/15/2008 Spuds Second Well at Phoenix Prospect
1/2/2008Closes Drilling Deal for Phoenix Prospect
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