Sundance Energy Australia Limited reports third quarter 2017 financial and operational results

Sundance Energy Australia Limited (ASX:SEA) (NASDAQ:SNDE) (“Sundance” or the “Company”), a U.S. onshore oil and gas exploration and production company focused in the Eagle Ford in South Texas, reported its third quarter 2017 financial and operations results.

Third Quarter 2017 Financial Results

  • Adjusted EBITDAX of US$19.5 million, or 61.7 % of Adjusted EBITDAX Margin.
  • Total revenue increased 81% to US$31.6 million as compared to the same prior year period, primarily driven by higher sales volumes, which increased 46%.
  • Average estimated third quarter price received per barrel was US$48.19, and per Boe was US$39.34.
  • Cash operating costs decreased 26% to US$15.05/Boe for the quarter, as compared to US$20.45/Boe for the quarter ended June 30, 2017.  The decrease was primarily driven by a reduction in workover-related expenses and the benefit of higher sales volumes.
  • The Company finalized a US$30 million revenue advance agreement with Vitol Inc. that provided the Company with liquidity to complete its 2017 development program.  The Company began repaying the advance in October 2017 at a rate of US$20 per gross barrel of oil sold which will increase to US$25 per gross barrel sold beginning in January 2018 through repayment of the revenue advance.
  • As of September 30, 2017, the Company’s oil hedges covered a total of US2.5 million bbls through 2020 with a weighted average floor of US$49.24 and ceiling of US$54.55.

Operational Highlights

  • Third quarter net production increased 51% to 854,887 Boe, or 9,262 Boe/day as compared to the same period in the prior year and increased 35% as compared to the second quarter of 2017, despite hurricane-related shut-ins at most of the midstream and downstream facilities serving the Company’s production (estimated impact for the quarter of 1,100 Boe/day).
  • The Company completed 6 gross (6.0 net) new wells during the third quarter in McMullen County, with an average lateral length of approximately 8,000 feet.
  • The Teal-Hoskins three-well pad had an average peak 24-Hour production rate per well of 1,735 Boe/d, at an average of 190 boe/d per 1,000 feet. The wells are currently producing 73% oil and 87% liquids.
  • The Libersat three-well pad had an average peak 24-Hour production rate of 1,644 boe/d, per well at an average of 237 boe/d per 1,000 feet. The wells are currently producing 51% oil and 73% liquids.
  • The Company has 4 gross (3.8 net) additional drilled but uncompleted wells scheduled for completion in the fourth quarter, all of which are currently producing.
  • Third quarter development and production related expenditures totaled US$16.7 million.

The Company anticipates exit rate 2017 production to be 8,500-9,500 boe/d and anticipates Q4 2017 production of 8,000-8,500 boe/d.  Hurricane Harvey caused an approximate 30 day delay in the Company’s Q4 completion and pump installation program.  The delays have pushed approximately 75,000 boe of production from the 4th quarter of 2017 to the 1st quarter of 2018.