PetroShare Corp. Issues Third Quarter 2018 Financial Results

PetroShare Corp.

Companies Mentioned:

Primary Exchange: OTCQB
Under the Symbol: PRHR

PetroShare Corp. Issues Third Quarter 2018 Financial Results

Thursday, November 15, 2018 7:00 AM

ENGLEWOOD, CO / ACCESSWIRE / November 15, 2018 / PetroShare Corp. (OTCQB: PRHR), a Colorado-based oil and gas exploration and production company with operations in the Wattenberg Field of the Denver-Julesburg Basin, today provided its 2018 third quarter financial results.

Third Quarter 2018 Highlights

  • Production increased 23% to 112,564 BOE, or 1,224 BOE/day compared to the corresponding prior year period.
  • Revenues increased 84% to $5.2 million for the three months ended September 30, 2018 vs the corresponding period year period.
  • Net loss was $1.4 million, Operating Income was $1.3 million and Adjusted EBITDA was $3.3 million for the three months ended September 30, 2018 (see further discussion regarding the presentation of Adjusted EBITDA in "Use of Non-GAAP Financial Measures" below)

Third Quarter 2018 Financial Results*

The following tables present a comparison of results of operations for the three and nine months ended:


Net Sales Volumes
Three Months Ended 9/30/2018 Nine Months Ended 9/30/2018
Crude Oil (Bbls)
65,960 153,530
Natural Gas Liquids (Bbls)
13,300 37,125
Natural Gas (Mcf)
199,828 479,014
Sales Volumes: (BOE)
112,564 270,490
Average Daily Sales Volumes
Daily sales volumes (BOE/day)
1,224 991
Product Price Received
Crude Oil ($/Bbl)
$ 64.11 $ 63.16
Natural Gas Liquids ($/Bbl)
$ 21.96 $ 19.56
Natural Gas ($/Mcf)
$ 3.46 $ 3.10
Average Realized Price ($/BOE)
$ 46.30 $ 44.02

Per Unit Cost Information ($/BOE)
Lease Operating Exp.
$ 2.02 $ 2.66
Production Tax
$ 3.44 $ 3.12
Transportation and other
$ 2.69 $ 2.21
DD&A Expense
$ 15.02 $ 13.27
Total G&A Expense
$ 10.92 $ 10.23

Crude oil, natural gas and NGL sales revenue was $5.2 million, for the three months ended September 30, 2018 compared to $2.8 million for the three months ended September 30, 2017. The revenue increase is due to both increased production and higher realized prices for our production than in the corresponding prior year period. The revenue that we reported in the third quarter of 2018 came from the sale of crude oil, natural gas and NGLs produced primarily from horizontal wells in which we participated as a non-operator and our operated Shook pad.

The Company's 2018 third quarter net loss totaled $1.4 million, or $(0.05) per diluted share compared to a net loss of $1.7 million or $(0.08) per diluted share in the year ago quarter. Operating Income was $1.3 million compared to generating an Operating Loss of $0.3 million in the corresponding prior year period. Adjusted EBITDA in the third quarter was $3.3 million as compared to $1.3 million in the corresponding prior year period.

*Please refer to the form 10-Q filed with the SEC for the period ending 9/30/2018 for detailed financial data, which may be found on our website at www.petrosharecorp.com.

Management Comment

Frederick J. Witsell, President, of PetroShare Corp., commented, "The improved results in the third quarter compared to a year ago reflect an initial contribution from our operated Shook pad and additional non-operated wells coming online. Initial flowing pressures on the Shook wells are strong and we expect further production increases in the fourth quarter from the Shook wells as mid-stream expansion projects come fully online and we optimize our production facilities allowing us to flow all wells to their full capacity. Consequently, we believe our previous guidance of 2,000-2,600 BOED for the fourth quarter remains valid. We have a total of 96 permits approved or in process. It is our understanding that all such permits would have been grandfathered, and we would have been allowed to move forward with development, even in the case that Proposition 112 had passed. Furthermore, our production facility at Shook represents a step forward in reducing truck traffic, air emissions, and surface footprint, as our facility design has the wells flowing directly into pipelines at the pad site for both our oil and gas production. We believe these attributes will be important to the further development of our asset base as we work with the counties and stakeholders where we operate. We continue to pursue strategic alternatives to address our balance sheet and capital needs, but we are encouraged by the potential for a substantial increase in our operated production and the quality of the undeveloped assets we control."

Important Cautions Regarding Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. The use of words such as "believes," "expects," "anticipates," "intends," "plans," "estimates," "should," "likely," "guidance" or similar expressions indicates a forward-looking statement. Forward-looking statements herein include statements regarding future transactions, plans and midstream issues. These statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, and information currently available to management. The actual results could differ materially from a conclusion, forecast or projection in the forward-looking information. Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information. The identification in this press release of factors that may affect the Company's future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Factors that could cause the Company's actual results to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: the success of the Company's exploration and development efforts; the price of oil and gas; worldwide economic situation; changes in interest rates or inflation; willingness and ability of third parties to honor their contractual commitments; the availability of adequate midstream infrastructure, the Company's ability to raise additional capital, as it may be affected by current conditions in the stock market and competition in the oil and gas industry for risk capital; the Company's capital costs, which may be affected by delays or cost overruns; costs of production; environmental and other regulations, as the same presently exist or may later be amended; the Company's ability to identify, finance and integrate any future acquisitions; the volatility of the Company's stock price; and the other factors described in the "Risk Factors" sections of the Company's filings with the Securities and Exchange Commission, all of which are incorporated by reference in this release.

Reconciliation of Non-GAAP Financial Measures

We define adjusted EBITDA, a non-GAAP financial measure, as net (loss) adjusted to exclude the impact of the items set forth in the table below. We exclude those items because they can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. We believe that adjusted EBITDA is widely used in our industry as a measure of operating performance and may also be used by investors to measure our ability to meet debt covenant requirements. The following table presents a reconciliation of adjusted EBITDA to net (loss), its nearest GAAP measures.


PETROSHARE CORP.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(unaudited)


Three Months Ended September 30,
2018 2017
Adjusted EBITDA:
Net (loss)
$ (1,420,408 ) $ (1,714,472 )
Depletion, depreciation, and accretion
1,703,433 849,430
Stock-based compensation
218,764 397,205
Interest expense, net of interest income
2,895,551 1,731,834
Other non-cash
(141,362 ) -
AdjustedEBITDA
$ 3,255,978 $ 1,263,997

CONTACT INFORMATION

Investor Relations Contacts

PetroShare Corp.
Jon B. Kruljac
720-441-0719
Email: [email protected]

SOURCE: PetroShare Corp.


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