Sundance Energy Australia Limited Reports Second Quarter 2016 Results

DENVER, Aug. 01, 2016 (GLOBE NEWSWIRE) — Sundance Energy Australia Limited (ASX:SEA) (“Sundance” or the “Company”), a U.S. onshore oil and gas exploration and production company focused in the Eagle Ford and Greater Anadarko Basin, reported its unaudited second quarter 2016 results as filed with the Australian Securities Exchange (ASX).

Second Quarter 2016 Financial Results

  • Adjusted EBITDAX of $10.3 million substantially funded development expenditures of $10.9 million for the quarter ended June 30, 2016.
  • Cash operating costs continued to decline from $14.17/Boe for the year ended 31 December 2015 to $12.29/Boe for the six month period ended 30 June 2016.
  • Successfully raised A$80 million in a two tranche placement, resulting in pro forma cash of US$53 million as of June 30, 2016 (inclusive of net proceeds from the second tranche of US$51 million received in mid-July).
  • As of June 30, 2016, the Company’s oil hedges covered a total of 1.9 million bbls through 2019 with a weighted average floor of $50.01 and ceiling of $57.93.
  • The Company is finalizing arrangements with Nasdaq and BNY Mellon to allow its shares to begin trading on Nasdaq through a Level II American Depositary Receipt (ADR).  The Company anticipates trading commencing during the third quarter of 2016.

Second Quarter 2016 Operational Highlights

  • Net oil, natural gas and natural gas liquids (“NGLs”) production, including flared gas, totaled 474,976 Boe, or 5,220 Boe/d for the second quarter 2016, which was impacted by downtime related to shut-ins for offset fracs (5 gross (4.4 net) wells) and pump installs on 10 gross (7 net) wells.  An additional 12 wells were awaiting pump installs at quarter end.  Company reaffirms the full-year guidance of 7,000 – 7,500 Boe/d.
  • Participated in the completion of 11 gross (3.6 net) non-operated Eagle Ford wells in McMullen County that are expected to begin production in the 3rd quarter of 2016.
  • At quarter-end, the Company was completing 3 gross (2.7 net) Sundance-operated wells in the Greater Anadarko Basin and had 9 gross (6.8 net) horizontal wells, primarily in the Eagle Ford, scheduled for completion starting in the third quarter of 2016.
  • The Company entered into an agreement to acquire 5,050 acres in McMullen County, Texas prospective for the Eagle Ford with a final purchase price of $15.5 million.  The transaction, which closed 29 July 2016, includes:
    • Expected production of 600-700 boe/d for the remainder of 2016;
    • Total proved reserves of 3.0 mmboe, 1.4 mmboe of which are attributed to producing wells;
    • 27 gross (9.6 net) wells, primarily operated by Sundance
  • Subsequent to quarter-end, the Company entered into a re-fracturing partnership with Schlumberger Limited.  5 gross (4.7 net) Sundance-operated Eagle Ford wells will be re-fractured in Q3 and are expected to generate a 5-6x initial production uplift and a 40-50 percent increase in reserves for each well.

The following table reflects production volumes, revenues and pricing compared to the corresponding period in the prior year.

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Three Months Ended June 30, Six Months Ended June 30,
Unaudited 2016   2015 2016   2015
Production Summary
Oil (BBLS)   269,960   432,438   601,222   1,025,402
Natural gas (MCF)   795,283   1,050,486   1,744,966   2,242,188 )
NGL (BBLS)   72,468   78,894   156,501   149,594 )
Total BOE   474,976   686,413   1,048,550   1,548,694
Average daily production, including flared gas   5,220   7,543   5,761   8,556
Revenue (US$000s)
Oil $   11,433 $   23,933 $   21,021 $   50,347
Natural gas   579   1,083   1,427   2,707
NGL   951   1,423   1,768   2,058
Total revenue $   12,963 $   26,439 $   24,216 $   55,112
Realized Product Pricing
Oil priced received (per BBL) $   42.35 $   55.34 $   34.96 $   49.10
Oil realized price, including oil hedging (per BBL) $   52.04 $   59.93 $   46.88 $   53.88
Natural gas priced received (per MCF) * $   1.14 $   1.68 $   1.29 $   2.22
Natural gas realized Price, including natural gas hedging (per MCF) * $   1.48 $   1.84 $   1.73 $   2.21
NGL realized price (per BBL) $   13.12 $   18.04 $   11.30 $   13.75
Total price received (per BOE) $   30.37 $   42.75 $   25.72 $   39.99
Total realized price (per BOE) $   36.90 $   46.12 $   33.84 $   43.68
* Excludes flared gas of 288,698 MCF and 407,499 MCF for the three months ended June 30, 2016 and 2015, respectively and 642,096 and 1,024,261 for the six months ended June 30, 2016 and 2015, respectively.

The following table summarizes Adjusted EBITDAX, and operating costs on an actual (in US thousands) and per unit basis.

Three Months Ended June 30, Six Months Ended June 30,
Unaudited (US$000s, except BOE) 2016   2015 2016   2015
           
Adjusted EBITDAX (1) $   10,341 $   19,254 $   20,182 $   41,283
Adjusted EBITDAX margin 79.8 % 72.8 % 83.3 % 74.9 %
           
Costs:
Lease operating expenses (LOE) $   2,340 $   4,830 $   5,323 $   8,758
Production taxes   846   1,377   1,609   3,241
Cash G&A, net of amounts capitalised   2,074   3,049   4,639   6,888
Total $   5,260 $   9,256 $   11,571 $   18,887
Costs per BOE:
LOE $   5.48 $   7.81 $   5.65 $   6.36
Production taxes   1.99   2.24   1.71   2.35
Cash G&A   4.86   4.93   4.93   5.00
Total $   12.33 $   14.98 $   12.29 $   13.71
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Additional Information

(1) We define “Adjusted EBITDAX” as earnings before interest expense, restructuring charges, income taxes, depreciation, depletion and amortization, property impairments, gain/(loss) on sale of non-current assets, exploration expense, share based compensation and income and gains and losses on commodity hedging, net of settlements of commodity hedging.

The Company reports under International Financial Reporting Standards (IFRS).   All amounts are reported in US dollars unless otherwise noted.

The Company’s full Unaudited Activities Report for the Quarter Ended June 30, 2016 can be found at www.sundanceenergy.net.

The Company’s 2015 Annual Report was filed with the ASX on March 31, 2016 and can be found at www.sundanceenergy.net.

About Sundance Energy Australia Limited

Sundance Energy Australia Limited (“Sundance” or the “Company”) is an Australian-based, independent energy exploration company, with a wholly owned US subsidiary, Sundance Energy Inc., located in Denver, Colorado, USA.

The Company is focused on the acquisition and development of large, repeatable oil and natural gas resource plays in North America. Current activities are focused in the Eagle Ford and Greater Anadarko Basins.  A comprehensive overview of the Company can be found on Sundance’s website at www.sundanceenergy.net.

Summary Information

The following disclaimer applies to this document and any information contained in it. The information in this release is of general background and does not purport to be complete. It should be read in conjunction with Sundance’s periodic and continuous disclosure announcements lodged with ASX Limited that are available at www.asx.com.au and Sundance’s filings with the Securities and Exchange Commission available at www.sec.gov

Forward Looking Statements

This release may contain forward-looking statements. These statements relate to the Company’s expectations, beliefs, intentions or strategies regarding the future. These statements can be identified by the use of words like “anticipate”, “believe”, “intend”, “estimate”, “expect”, “may”, “plan”, “project”, “will”, “should”, “seek” and similar words or expressions containing same.

These forward-looking statements reflect the Company’s views and assumptions with respect to future events as of the date of this release and are subject to a variety of unpredictable risks, uncertainties, and other unknowns. Actual and future results and trends could differ materially from those set forth in such statements due to various factors, many of which are beyond our ability to control or predict. These include, but are not limited to, risks or uncertainties associated with our the discovery and development of oil and natural gas reserves, cash flows and liquidity, business and financial strategy, budget, projections and operating results, oil and natural gas prices, amount, nature and timing of capital expenditures, including future development costs, availability and terms of capital and general economic and business conditions. Given these uncertainties, no one should place undue reliance on any forward looking statements attributable to Sundance, or any of its affiliates or persons acting on its behalf.  Although every effort has been made to ensure this release sets forth a fair and accurate view, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For more information, please contact:

United States
Eric McCrady, Managing Director
Tel: +1 (303) 543 5703

Australia
Mike Hannell, Chairman
Tel: +61 8 8363 0388