Brigham Minerals, Inc. Reports Third Quarter 2020 Operating and Financial Results
AUSTIN, Texas–(BUSINESS WIRE)–Brigham Minerals, Inc. (NYSE: MNRL) (“Brigham Minerals,” “Brigham,” or the “Company”), a leading mineral and royalty interest acquisition company, today announced operating and financial results for the quarter ended September 30, 2020.
THIRD QUARTER 2020 OPERATIONAL AND FINANCIAL HIGHLIGHTS AND RECENT DEVELOPMENTS
-
Daily production volumes of 9,318 Boe/d (73% liquids, 53% oil)
- Up 5% sequentially from Q2 2020 and up 19% from Q3 2019
- Large portion of Q2 2020 SCOOP and Williston curtailed production volumes returned on-line
-
Mineral and royalty revenues totaling $21.6 million
- Up 72% sequentially from Q2 2020 driven by 62% higher realized prices and 5% volume growth
- Total revenues of $23.1 million inclusive of lease bonus totaling $1.5 million
-
Net loss totaling $13.0 million
- Adjusted Net Income(1) of $5.9 million excluding $18.9 million impairment of oil and gas properties resulting from lower SEC pricing
- Adjusted EBITDA(1) totaling $16.8 million up 184% sequentially from Q2 2020
-
Declared Q3 2020 dividend of $0.24 per share of Class A common stock
- Up 71% sequentially from Q2 2020
- Represents 95% payout ratio of Q3 2020 discretionary cash flow ex lease bonus(1) with retained cash utilized to fund mineral acquisitions
- $1.5 million in lease bonus revenue also retained to fund mineral acquisitions
-
Acquired 1,125 net royalty acres deploying $16.2 million in mineral acquisition capital
- Substantially all of capital deployed to Permian Basin with 80% to Loving County
- Acquisition costs totaling $4.2 million per net location with 5% net DUCs and permits
- Remaining highly disciplined with acquisitions given uncertain market conditions
-
624 gross (3.8 net) drilled but uncompleted locations (“DUCs”) as of September 30, 2020
- Converted 143 (20%) gross and 1.2 (27%) net DUCs during Q3 2020
- Approximately 74% of Q3 2020 net DUC inventory located in Permian Basin
- Anticipate majority of DUCs to be completed by Exxon Mobil Corporation, Chevron Corporation, Royal Dutch Shell plc, Continental Resources, Inc. and PDC Energy, Inc
-
$8.2 million cash balance and revolver capacity of $130 million as of September 30, 2020
-
Associated with the Company’s late-November semi-annual borrowing base redetermination under its revolving credit facility, the Administrative Agent has recommended a reaffirmation of the borrowing base at $135 million
-
(1) Non-GAAP measure. See “Non-GAAP Financial Measures” below.
Robert M. (“Rob”) Roosa, Chief Executive Officer, commented, “Our acquisition teams delivered during the third quarter deploying $16.2 million of mineral acquisition capital via our ground game almost entirely to the Permian Basin and specifically 80% to Loving County. We believe our capital was deployed to some of the best geology in the United States and under well-capitalized operators including Royal Dutch Shell who has continued to be active throughout the down cycle. Further, our acquisition pace in the fourth quarter has continued to accelerate with approximately $17 million in acquisitions closed or currently under contract, 90% of which is deployed to the Permian Basin. Acquisition economics continue to provide our best rates of return relative to other capital allocation alternatives and their potential impact on our capital structure. Importantly, our balance sheet continues to remain strong with $138 million in liquidity as of September 30th, which provides us with substantial flexibility to continue to capitalize on acquisition opportunities well into 2021. While drilling and completion activity remains constrained with operators continuing to manage their balance sheets, we believe our strong DUC inventory, of which 30% appears to be frac’d and waiting to be turned in line to production, will provide resiliency and our production volumes will average in excess of 9,000 Boe/d over the next two quarters.”
Blake C. Williams, Chief Financial Officer, added, “Our financial results for the third quarter showcase the strength of our high-margin royalty business model coupled with our clean capital structure allowing for a 71% sequential increase to our dividend as we continue to return capital to our shareholders on an accelerated basis. Additionally, we are encouraged by the highly compelling economics of our ground game acquisitions and are electing to retain 5% of our discretionary cash flow ex lease bonus(1) along with $1.5 million in lease bonus payments, which allowed us to internally fund approximately 14% of our third quarter acquisitions. As previously messaged, we plan to compound value for our shareholders through the reinvestment of a portion of our cash flow with a long term payout ratio target of 75% to 80% which we will gradually approach over the coming quarters. Finally, we continue to actively manage our general and administrative expenses with a $0.8 million reduction in costs to $3.2 million in the third quarter despite incurring $0.3 million in non-recurring expenses in September associated with our secondary offering.”
(1) Non-GAAP measure. See “Non-GAAP Financial Measures” below.
OPERATIONAL UPDATE
Mineral and Royalty Interest Ownership Update
The Company accelerated acquisition activity in the third quarter 2020, closing 11 transactions and acquiring 1,125 net royalty acres (standardized to a 1/8th royalty interest) by deploying $16.2 million in capital to the Permian Basin. As of September 30, 2020, the Company had acquired roughly 84,700 net royalty acres, encompassing 13,218 gross (116.7 net) undeveloped horizontal locations, across 39 counties in what the Company views as the cores of the Permian Basin in West Texas and New Mexico, the SCOOP/STACK plays in the Anadarko Basin of Oklahoma, the Denver-Julesburg (“DJ”) Basin in Colorado and Wyoming and the Williston Basin in North Dakota.
The table below summarizes the Company’s approximate mineral and royalty interest ownership at the dates indicated.
|
|
|
Delaware |
|
Midland |
|
SCOOP |
|
STACK |
|
DJ |
|
Williston |
|
Other |
|
Total |
|
Net Royalty Acres |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2020 |
|
27,550 |
|
4,875 |
|
11,400 |
|
10,725 |
|
15,600 |
|
7,825 |
|
6,725 |
|
84,700 |
|
June 30, 2020 |
|
26,550 |
|
4,800 |
|
11,375 |
|
10,700 |
|
15,600 |
|
7,825 |
|
6,725 |
|
83,575 |
|
Acres Added (Sold) Q/Q |
|
1,000 |
|
75 |
|
25 |
|
25 |
|
— |
|
— |
|
— |
|
1,125 |
|
% Added (sold) Q/Q |
|
3.8% |
|
1.6% |
|
0.2% |
|
0.2% |
|
0.0% |
|
0.0% |
|
0.0% |
|
1.3% |
DUC Conversions Updates
The Company identified approximately 143 gross (1.2 net) DUCs converted to production during the third quarter, which represented 20% of its gross DUC inventory (27% of net DUCs) at the end of second quarter of 2020. Third quarter conversions of gross and net wells by status are summarized in the table below:
|
Q3 2020 Wells Converted to Proved Developed Producing |
||||||||
|
|
|
Gross |
|
Net |
||||
|
DUCs |
|
143 |
|
87% |
|
1.2 |
|
86% |
|
Acquired |
|
21 |
|
13% |
|
0.2 |
|
14% |
|
Total |
|
164 |
|
100% |
|
1.4 |
|
100% |
Drilling Activity Update
During the third quarter 2020, the Company identified 57 gross (0.4 net) wells spud on its mineral position. In 2019 and 2018, respectively, the Company averaged 219 gross (1.4 net) and 135 gross (1.0 net) wells spud per quarter. Brigham’s gross and net wells spud activity over the past 11 quarters is summarized in the table below:
|
|
Q1 18 |
|
Q2 18 |
|
Q3 18 |
|
Q4 18 |
|
Q1 19 |
|
Q2 19 |
|
Q3 19 |
|
Q4 19 |
|
Q1 20 |
|
Q2 20 |
|
Q3 20 |
|
Gross Wells Spud |
82 |
|
99 |
|
208 |
|
150 |
|
230 |
|
248 |
|
214 |
|
185 |
|
209 |
|
36 |
|
57 |
|
Net Wells Spud |
0.3 |
|
1.1 |
|
1.4 |
|
1.0 |
|
1.2 |
|
1.3 |
|
1.3 |
|
1.7 |
|
1.6 |
|
0.2 |
|
0.4 |
|
Four Quarter Rolling Average Net Wells Spud |
|
|
|
|
|
|
1.0 |
|
1.2 |
|
1.2 |
|
1.2 |
|
1.4 |
|
1.5 |
|
1.1 |
|
1.0 |
DUC and Permit Inventory Update
Given the current challenges facing the global crude market and our operators, the near-term conversion of wells from DUCs or permits to proved developed producing was delayed and may continue to be deferred relative to historic conversion rates. Brigham’s gross and net DUC and permit inventory as of September 30, 2020 by basin is outlined in the table below:
|
|
|
Development Inventory by Basin (1) |
||||||||||||||
|
|
|
Delaware |
|
Midland |
|
SCOOP |
|
STACK |
|
DJ |
|
Williston |
|
Other |
|
Total |
|
Gross Inventory |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DUCs |
|
185 |
|
144 |
|
72 |
|
3 |
|
100 |
|
112 |
|
8 |
|
624 |
|
Permits |
|
154 |
|
105 |
|
16 |
|
9 |
|
213 |
|
213 |
|
6 |
|
716 |
|
Net Inventory |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DUCs |
|
2.3 |
|
0.5 |
|
0.3 |
|
0.0 |
|
0.5 |
|
0.1 |
|
0.0 |
|
3.8 |
|
Permits |
|
1.1 |
|
0.4 |
|
0.1 |
|
0.0 |
|
2.2 |
|
0.4 |
|
0.1 |
|
4.3 |
(1) Individual amounts may not add to totals due to rounding.
FINANCIAL UPDATE
For the three months ended September 30, 2020, crude oil, natural gas and NGL production volumes, increased 19% to 9,318 Boe/d as compared to the same prior year period, due to a 46% increase in Permian Basin volumes, which were partially offset by an 8% decrease in Anadarko Basin volumes.
Third quarter 2020 average realized prices were $36.34 per barrel of oil, $2.02 per Mcf of natural gas, and $12.84 per barrel of NGL, for a total equivalent price of $25.16 per Boe. This represents a 25% decrease relative to year ago levels and a 62% increase relative to second quarter 2020.
The Company saw a reduction in general and administrative costs before share-based compensation of 4% for the three months ended September 30, 2020 as compared to the same prior-year period and 21% as compared to the second quarter 2020. Brigham realized savings in nearly all expense categories and achieved a quarterly run rate of $3.0 million when adjusted for non-recurring expenses related to the September secondary offering.
The Company’s net loss was $13.0 million for the three months ended September 30, 2020, inclusive of an $18.9 million impairment of oil and gas properties resulting from the continued reduction in the 12 month average rolling pricing used for reserves in accordance with SEC disclosure requirements. Adjusted EBITDA was $16.8 million for the three months ended September 30, 2020, down 13% relative to the same prior-year period. Adjusted EBITDA ex lease bonus was $15.3 million for the three months ended September 30, 2020, down 17% from the prior year. Adjusted EBITDA and Adjusted EBITDA ex lease bonus are non-GAAP financial measures. For a definition of Adjusted EBITDA and Adjusted EBITDA ex lease bonus and a reconciliation to our most directly comparable measure calculated and presented in accordance with GAAP, please read “Non-GAAP Financial Measures” below.
As previously announced, on September 15, 2020, the Company repurchased 436,630 shares of its Class A common stock from certain shareholders in a privately negotiated transaction at a price per share of $8.08, for a total of $3.5 million.
As of September 30, 2020, the Company had a cash balance of $8.2 million and $130.0 million of capacity under its revolving credit facility, providing the Company with total liquidity of $138.2 million. Associated with the Company’s borrowing base redetermination that is expected to be finalized in late November 2020, the Administrative Agent has recommended a reaffirmation of the borrowing base at $135 million.
Results of Operations
|
Unaudited Financial and Operational Results |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
($ in thousands, except per unit of production data) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
Operating Revenues |
|
|
|
|
|
|
|
|
||||||||
|
Oil sales |
|
$ |
16,586 |
|
|
$ |
20,799 |
|
|
$ |
49,941 |
|
|
$ |
53,514 |
|
|
Natural gas sales |
|
2,770 |
|
|
2,132 |
|
|
7,115 |
|
|
7,028 |
|
||||
|
NGL sales |
|
2,212 |
|
|
1,204 |
|
|
5,429 |
|
|
4,232 |
|
||||
|
Total mineral and royalty revenue |
|
$ |
21,568 |
|
|
$ |
24,135 |
|
|
$ |
62,485 |
|
|
$ |
64,774 |
|
|
Lease bonus and other revenue |
|
1,510 |
|
|
972 |
|
|
5,478 |
|
|
3,127 |
|
||||
|
Total Revenues |
|
$ |
23,078 |
|
|
$ |
25,107 |
|
|
$ |
67,963 |
|
|
$ |
67,901 |
|
|
Production |
|
|
|
|
|
|
|
|
||||||||
|
Oil (MBbls) |
|
456 |
|
|
388 |
|
|
1,378 |
|
|
1,001 |
|
||||
|
Natural gas (MMcf) |
|
1,371 |
|
|
1,334 |
|
|
4,358 |
|
|
3,269 |
|
||||
|
NGLs (MBbls) |
|
172 |
|
|
110 |
|
|
505 |
|
|
274 |
|
||||
|
Equivalents (MBoe) |
|
857 |
|
|
720 |
|
|
2,609 |
|
|
1,820 |
|
||||
|
Equivalents per day (Boe/d) |
|
9,318 |
|
|
7,828 |
|
|
9,524 |
|
|
6,668 |
|
||||
|
Realized Prices ($/Boe) |
|
|
|
|
|
|
|
|
||||||||
|
Oil ($/Bbl) |
|
$ |
36.34 |
|
|
$ |
53.61 |
|
|
$ |
36.25 |
|
|
$ |
53.45 |
|
|
Natural gas ($/Mcf) |
|
2.02 |
|
|
1.60 |
|
|
1.63 |
|
|
2.15 |
|
||||
|
NGLs ($/Bbl) |
|
12.84 |
|
|
10.96 |
|
|
10.74 |
|
|
15.43 |
|
||||
|
Average Realized Price, without Derivatives |
|
$ |
25.16 |
|
|
$ |
33.51 |
|
|
$ |
23.95 |
|
|
$ |
35.58 |
|
|
Average Realized Price, with Derivatives |
|
$ |
25.16 |
|
|
$ |
33.68 |
|
|
$ |
23.95 |
|
|
$ |
35.78 |
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
||||||||
|
Gathering, transportation and marketing |
|
$ |
1,702 |
|
|
$ |
1,113 |
|
|
$ |
5,106 |
|
|
$ |
3,750 |
|
|
Severance and ad valorem taxes |
|
1,393 |
|
|
1,377 |
|
|
4,179 |
|
|
4,206 |
|
||||
|
Depreciation, depletion, and amortization |
|
11,801 |
|
|
8,434 |
|
|
35,827 |
|
|
20,310 |
|
||||
|
Impairment of oil and gas properties |
|
18,905 |
|
|
— |
|
|
18,905 |
|
|
— |
|
||||
|
General and administrative (before share-based compensation) |
|
3,206 |
|
|
3,331 |
|
|
10,870 |
|
|
8,547 |
|
||||
|
Total operating expenses (before share-based compensation) |
|
$ |
37,007 |
|
|
$ |
14,255 |
|
|
$ |
74,887 |
|
|
$ |
36,813 |
|
|
General and administrative, share-based compensation |
|
1,956 |
|
|
1,737 |
|
|
5,692 |
|
|
8,232 |
|
||||
|
Total Operating Expenses |
|
$ |
38,963 |
|
|
$ |
15,992 |
|
|
$ |
80,579 |
|
|
$ |
45,045 |
|
|
(Loss) Income From Operations |
|
$ |
(15,885) |
|
|
$ |
9,115 |
|
|
$ |
(12,616) |
|
|
$ |
22,856 |
|
|
Other expenses: |
|
|
|
|
|
|
|
|
||||||||
|
Gain (loss) on derivative instruments |
|
— |
|
|
91 |
|
|
— |
|
|
(521) |
|
||||
|
Interest expense, net |
|
(118) |
|
|
(65) |
|
|
(695) |
|
|
(5,160) |
|
||||
|
Loss on extinguishment of debt |
|
— |
|
|
— |
|
|
— |
|
|
(6,933) |
|
||||
|
Other income, net |
|
4 |
|
|
130 |
|
|
29 |
|
|
165 |
|
||||
|
(Loss) Income Before Taxes |
|
$ |
(15,999) |
|
|
$ |
9,271 |
|
|
$ |
(13,282) |
|
|
$ |
10,407 |
|
|
Income tax (benefit) expense |
|
(2,982) |
|
|
807 |
|
|
(2,250) |
|
|
1,114 |
|
||||
|
Net (Loss) Income |
|
$ |
(13,017) |
|
|
$ |
8,464 |
|
|
$ |
(11,032) |
|
|
$ |
9,293 |
|
|
Less: net income attributable to Predecessor |
|
— |
|
|
— |
|
|
— |
|
|
(5,092) |
|
||||
|
Less: net loss (income) attributable to temporary equity |
|
3,552 |
|
|
(5,318) |
|
|
2,223 |
|
|
(2,377) |
|
||||
|
Net (loss) income attributable to Brigham Minerals, Inc. Stockholders |
|
$ |
(9,465) |
|
|
3,146 |
|
|
$ |
(8,809) |
|
|
1,824 |
|
||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Unit Expenses ($/Boe) |
|
|
|
|
|
|
|
|
||||||||
|
Gathering, transportation and marketing |
|
$ |
1.99 |
|
|
$ |
1.55 |
|
|
$ |
1.96 |
|
|
$ |
2.06 |
|
|
Severance and ad valorem taxes |
|
1.63 |
|
|
1.91 |
|
|
1.60 |
|
|
2.31 |
|
||||
|
Depreciation, depletion and amortization |
|
13.77 |
|
|
11.71 |
|
|
13.73 |
|
|
11.16 |
|
||||
|
General and administrative (before share-based compensation) |
|
3.74 |
|
|
4.63 |
|
|
4.17 |
|
|
4.69 |
|
||||
|
General and administrative, share-based compensation |
|
2.28 |
|
|
2.41 |
|
|
2.18 |
|
|
4.52 |
|
||||
|
Interest expense, net |
|
0.14 |
|
|
0.09 |
|
|
0.27 |
|
|
2.83 |
|
||||
QUARTERLY CASH DIVIDEND
The Company’s Board of Directors (the “Board”) has declared a quarterly cash dividend incorporating results for the third quarter 2020 of $0.24 per share of Class A common stock, to be paid on December 7, 2020 to holders of record as of November 30, 2020. An amount equal to the cash dividend per share will also be set aside for each outstanding award granted under the long-term incentive plan for payment upon the vesting of such awards in accordance with their terms.
Future declarations of dividends are subject to approval by the Board and to the Board’s continuing determination that the declarations of dividends are in the best interests of the Company and its stockholders. Future dividends may be adjusted at the Board’s discretion based on market conditions and capital availability.
BRIGHAM MINERALS THIRD QUARTER 2020 EARNINGS CONFERENCE CALL
- Friday, November 6, 2020 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time)
- Pre-register by visiting http://dpregister.com/10149466
- Listen to a live audio webcast of the call by visiting the Company’s website
- A recording of the webcast will be available on the Company’s website after the call
NON-GAAP FINANCIAL MEASURES
Adjusted Net Income (Loss), Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Discretionary Cash Flow and Discretionary Cash Flow ex lease bonus are non-GAAP supplemental financial measures used by our management and by external users of our financial statements such as investors, research analysts and others to assess the financial performance of our assets and their ability to sustain dividends over the long term without regard to financing methods, capital structure or historical cost basis.
We define Adjusted Net Income (Loss) as net income (loss) before impairment of oil and gas properties and loss on extinguishment of debt. We define Adjusted EBITDA as Adjusted Net Income (loss) before depreciation, depletion and amortization, impairment of oil and gas properties, share based compensation expense, interest expense, gain or loss on derivative instruments and income tax expense, less other income and gain or loss on sale of oil and gas properties. We define Adjusted EBITDA ex lease bonus as Adjusted EBITDA further adjusted to eliminate the impacts of lease bonus revenue we receive due to the unpredictability of timing and magnitude of the revenue. We define Discretionary Cash Flow as Adjusted EBITDA, less cash interest expense and cash taxes. We define Discretionary Cash Flow ex lease bonus as Discretionary Cash Flow further adjusted to eliminate the impacts of lease bonus revenue.
Adjusted Net Income (Loss), Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Discretionary Cash Flow, and Discretionary Cash Flow ex lease bonus do not represent and should not be considered alternatives to, or more meaningful than, net income, income from operations, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of our financial performance. Adjusted Net Income (Loss), Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Discretionary Cash Flow, and Discretionary Cash Flow ex lease bonus have important limitations as analytical tools because they exclude some but not all items that affect net income, the most directly comparable GAAP financial measure. Our computation of Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Discretionary Cash Flow, and Discretionary Cash Flow ex lease bonus may differ from computations of similarly titled measures of other companies.
The following tables present a reconciliation of Adjusted Net Income (Loss), Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Discretionary Cash Flow, and Discretionary Cash Flow ex lease bonus to the most directly comparable GAAP financial measure for the periods indicated.
SUPPLEMENTAL SCHEDULES
Reconciliation of Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA ex Lease Bonus
|
|
|
Three Months Ended |
||||||||||
|
($ In thousands) |
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
||||||
|
Net (Loss) Income |
|
$ |
(13,017) |
|
|
$ |
(6,816) |
|
|
$ |
8,464 |
|
|
Add: |
|
|
|
|
|
|
||||||
|
Impairment of oil and gas properties |
|
18,905 |
|
|
— |
|
|
— |
|
|||
|
Adjusted Net Income (Loss) |
|
$ |
5,888 |
|
|
$ |
(6,816) |
|
|
$ |
8,464 |
|
|
Add: |
|
|
|
|
|
|
||||||
|
Depreciation, depletion, and amortization |
|
11,801 |
|
|
11,200 |
|
|
8,434 |
|
|||
|
Share based compensation expense |
|
1,956 |
|
|
1,853 |
|
|
1,737 |
|
|||
|
Interest expense |
|
118 |
|
|
545 |
|
|
65 |
|
|||
|
Income tax expense |
|
— |
|
|
— |
|
|
807 |
|
|||
|
Less: |
|
|
|
|
|
|
||||||
|
Gain on derivative instruments, net |
|
— |
|
|
— |
|
|
91 |
|
|||
|
Other income, net |
|
4 |
|
|
23 |
|
|
130 |
|
|||
|
Income tax benefit |
|
2,982 |
|
|
850 |
|
|
— |
|
|||
|
Adjusted EBITDA |
|
$ |
16,777 |
|
|
$ |
5,909 |
|
|
$ |
19,286 |
|
|
Less: |
|
|
|
|
|
|
||||||
|
Lease bonus and other revenue |
|
1,510 |
|
|
62 |
|
|
972 |
|
|||
|
Adjusted EBITDA ex Lease Bonus |
|
$ |
15,267 |
|
|
$ |
5,847 |
|
|
$ |
18,314 |
|
Reconciliation of Discretionary Cash Flow and Discretionary Cash Flow ex Lease Bonus
|
|
|
Three Months Ended |
||||||
|
($ In thousands, except per share amounts) |
|
September 30, 2020 |
|
June 30, 2020 |
||||
|
Adjusted EBITDA (1) |
|
$ |
16,777 |
|
|
$ |
5,909 |
|
|
Less: |
|
|
|
|
||||
|
Adjusted EBITDA attributable to non-controlling interest |
|
(3,912) |
|
|
(1,829) |
|
||
|
Adjusted EBITDA attributable to Class A common stock |
|
$ |
12,865 |
|
|
$ |
4,080 |
|
|
Less: |
|
|
|
|
||||
|
Cash interest expense |
|
437 |
|
|
165 |
|
||
|
Cash taxes (2) |
|
— |
|
|
(2,036) |
|
||
|
Dividend equivalent rights |
|
192 |
|
|
462 |
|
||
|
Discretionary cash flow to Class A common stock |
|
$ |
12,236 |
|
|
$ |
5,489 |
|
|
Less: |
|
|
|
|
||||
|
Lease bonus |
|
1,158 |
|
|
43 |
|
||
|
Discretionary cash flow ex lease bonus to Class A common stock |
|
$ |
11,078 |
|
|
$ |
5,446 |
|
|
Add: |
|
|
|
|
||||
|
Lease Bonus |
|
— |
|
|
43 |
|||
|
Less: |
|
|
|
|
||||
|
Retained cash flow |
|
554 |
|
|
— |
|
||
|
Distributed cash flow to Class A common stock |
|
$ |
10,524 |
|
|
$ |
5,489 |
|
|
|
|
|
|
|
||||
|
Shares of Class A common stock |
|
43,316 |
|
|
39,297 |
|
||
|
|
|
|
|
|
||||
|
Distributed cash flow per share of Class A common stock – Dividend |
|
$ |
0.24 |
|
|
$ |
0.14 |
|
(1) Refer to Reconciliation of Adjusted EBITDA from Net Income (Loss) above.
(2) The Company does not expect to incur federal income taxes for income related to results for the nine months ended September 30, 2020.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
September 30, |
|
December 31, |
||||
|
(In thousands, except share amounts) |
|
2020 |
|
2019 |
||||
|
ASSETS |
|
|
|
|
||||
|
Current assets: |
|
|
|
|
||||
|
Cash and cash equivalents |
|
$ |
8,182 |
|
|
$ |
51,133 |
|
|
Restricted cash |
|
338 |
|
|
— |
|
||
|
Accounts receivable |
|
19,680 |
|
|
30,291 |
|
||
|
Prepaid expenses and other |
|
2,464 |
|
|
1,688 |
|
||
|
Total current assets |
|
30,664 |
|
|
83,112 |
|
||
|
Oil and gas properties, at cost, using the full cost method of accounting: |
|
|
|
|
||||
|
Unevaluated property |
|
318,693 |
|
|
291,664 |
|
||
|
Evaluated property |
|
472,687 |
|
|
449,061 |
|
||
|
Less accumulated depreciation, depletion, and amortization |
|
(116,532) |
|
|
(61,103) |
|
||
|
Total oil and gas properties, net |
|
674,848 |
|
|
679,622 |
|
||
|
Other property and equipment |
|
5,435 |
|
|
5,095 |
|
||
|
Less accumulated depreciation |
|
(4,570) |
|
|
(3,703) |
|
||
|
Other property and equipment, net |
|
865 |
|
|
1,392 |
|
||
|
Deferred tax asset |
|
16,750 |
|
|
18,823 |
|
||
|
Other assets, net |
|
825 |
|
|
1,213 |
|
||
|
Total assets |
|
$ |
723,952 |
|
|
$ |
784,162 |
|
|
|
|
|
|
|
||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
||||
|
Current liabilities: |
|
|
|
|
||||
|
Accounts payable and accrued liabilities |
|
$ |
7,423 |
|
|
$ |
11,533 |
|
|
Total current liabilities |
|
7,423 |
|
|
11,533 |
|
||
|
Long-term bank debt |
|
5,000 |
|
|
— |
|
||
|
Other non-current liabilities |
|
1,813 |
|
|
803 |
|
||
|
Temporary equity |
|
127,182 |
|
|
454,507 |
|
||
|
Shareholders’ equity: |
|
|
|
|
||||
|
Preferred stock, $0.01 par value; 50,000,000 authorized; no shares issued and outstanding at September 30, 2020 and December 31, 2019 |
|
— |
|
|
— |
|
||
|
Class A common stock, $0.01 par value; 400,000,000 authorized, 43,752,493 shares issued and 43,315,863 shares outstanding at September 30, 2020; 34,040,934 issued and outstanding at December 31, 2019 |
|
438 |
|
|
340 |
|
||
|
Class B common stock, $0.01 par value; 150,000,000 authorized, 13,167,687 shares issued and outstanding at September 30, 2020; 22,847,045 shares issued and outstanding at December 31, 2019 |
|
— |
|
|
— |
|
||
|
Additional paid-in capital |
|
633,634 |
|
|
323,578 |
|
||
|
Accumulated deficit |
|
(48,011) |
|
|
(6,599) |
|
||
|
Treasury stock, at cost; 436,630 shares at September 30, 2020 and no shares at December 31, 2019 |
|
(3,527) |
|
|
— |
|
||
|
Total shareholders’ equity attributable to Brigham Minerals, Inc. |
|
582,534 |
|
|
317,319 |
|
||
|
Total liabilities and shareholders’ equity |
|
$ |
723,952 |
|
|
$ |
784,162 |
|
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
(In thousands, except per share data) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
REVENUES |
|
|
|
|
|
|
|
|
||||||||
|
Mineral and royalty revenues |
|
$ |
21,568 |
|
|
$ |
24,135 |
|
|
$ |
62,485 |
|
|
$ |
64,774 |
|
|
Lease bonus and other revenues |
|
1,510 |
|
|
972 |
|
|
5,478 |
|
|
3,127 |
|
||||
|
Total revenues |
|
23,078 |
|
|
25,107 |
|
|
67,963 |
|
|
67,901 |
|
||||
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
||||||||
|
Gathering, transportation and marketing |
|
1,702 |
|
|
1,113 |
|
|
5,106 |
|
|
3,750 |
|
||||
|
Severance and ad valorem taxes |
|
1,393 |
|
|
1,377 |
|
|
4,179 |
|
|
4,206 |
|
||||
|
Depreciation, depletion, and amortization |
|
11,801 |
|
|
8,434 |
|
|
35,827 |
|
|
20,310 |
|
||||
|
Impairment of oil and gas properties |
|
18,905 |
|
|
— |
|
|
18,905 |
|
|
— |
|
||||
|
General and administrative, excluding share- based compensation |
|
3,206 |
|
|
3,331 |
|
|
10,870 |
|
|
8,547 |
|
||||
|
Total operating expenses (excluding share-based compensation) |
|
37,007 |
|
|
14,255 |
|
|
74,887 |
|
|
36,813 |
|
||||
|
General and administrative, share-based compensation |
|
1,956 |
|
|
1,737 |
|
|
5,692 |
|
|
8,232 |
|
||||
|
Total operating expenses |
|
38,963 |
|
|
15,992 |
|
|
80,579 |
|
|
45,045 |
|
||||
|
(LOSS) INCOME FROM OPERATIONS |
|
(15,885) |
|
|
9,115 |
|
|
(12,616) |
|
|
22,856 |
|
||||
|
Gain (loss) on derivative instruments, net |
|
— |
|
|
91 |
|
|
— |
|
|
(521) |
|
||||
|
Interest expense, net |
|
(118) |
|
|
(65) |
|
|
(695) |
|
|
(5,160) |
|
||||
|
Loss on extinguishment of debt |
|
— |
|
|
— |
|
|
— |
|
|
(6,933) |
|
||||
|
Other income, net |
|
4 |
|
|
130 |
|
|
29 |
|
|
165 |
|
||||
|
(Loss) income before income taxes |
|
(15,999) |
|
|
9,271 |
|
|
(13,282) |
|
|
10,407 |
|
||||
|
Income tax (benefit) expense |
|
(2,982) |
|
|
807 |
|
|
(2,250) |
|
|
1,114 |
|
||||
|
NET (LOSS) INCOME |
|
$ |
(13,017) |
|
|
$ |
8,464 |
|
|
$ |
(11,032) |
|
|
$ |
9,293 |
|
|
Less: net income attributable to Predecessor |
|
— |
|
|
— |
|
|
— |
|
|
(5,092) |
|
||||
|
Less: net loss (income) attributable to temporary equity |
|
3,552 |
|
|
(5,318) |
|
|
2,223 |
|
|
(2,377) |
|
||||
|
Net (loss) income attributable to Brigham Minerals, Inc. shareholders |
|
$ |
(9,465) |
|
|
$ |
3,146 |
|
|
$ |
(8,809) |
|
|
$ |
1,824 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
NET (LOSS) INCOME PER COMMON SHARE |
|
|
|
|
|
|
|
|||||||||
|
Basic |
|
$ |
(0.24) |
|
|
$ |
0.14 |
|
|
$ |
(0.24) |
|
|
$ |
0.07 |
|
|
Diluted |
|
$ |
(0.24) |
|
|
$ |
0.14 |
|
|
$ |
(0.24) |
|
|
$ |
0.07 |
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
40,124 |
|
|
21,838 |
|
|
36,475 |
|
|
13,299 |
|
||||
|
Diluted |
|
40,124 |
|
|
21,926 |
|
|
36,475 |
|
|
13,346 |
|
||||
Contacts
At the Company:
Brigham Minerals, Inc.
Blake C. Williams
Chief Financial Officer
(512) 220-6350
Or
For Investor and Media Inquiries:
Lincoln Churchill Advisors
Julie D. Baughman
(512) 220-1500
[email protected]
