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Ascent Resources boosts daily production while slashing expenditures by more than half

A rig drills an Ascent Resources well in the Utica Shale field. [OKLAHOMAN ARCHIVES]
A rig drills an Ascent Resources well in the Utica Shale field. [OKLAHOMAN ARCHIVES]

Ascent Resources got more as it spent less in 2019.

The company's average daily production climbed 45%, year-over-year, to nearly 2 billion cubic feet equivalent daily.

About 1.8 billion cubic feet of that was natural gas, while its daily average of oil production was about 13,000 barrels, according to a release issued by the company's private investor-backed subsidiary, Ascent Resources Utica Holdings.

Total daily liquids production for the full year averaged nearly 37,000 barrels, up 116%, year-over-year, officials said.

It grew its proved reserves by 21% year-over-year, to 9.3 trillion cubic feet (equivalent), company officials said.

Meanwhile, its capital expenditures in 2019 totaled $1.3 billion, compared to $2.8 billion the previous year.

The company’s deal in July 2018 to spend about $1.5 billion

to acquire additional natural gas and oil lease and mineral rights holdings and drilling locations that came along with those in the field from Hess Corp., CNX Resources, Utica Minerals Development, and a fourth undisclosed seller helped.

"Ascent successfully delivered on our operational and financial objectives in 2019," Jeff Fisher, Ascent’s CEO, stated as part of the release.

"Our results reflect the strength of the Southern Utica and the talents of our team to develop this prolific asset.

“As a result, our business plan has successfully transitioned Ascent into a sustainable free cash flow generating company of scale in today's upstream energy market."

For the full year 2019, Ascent reported net income of $466 million and adjusted net income of $328 million, compared to a net loss of $4 million and adjusted net income of $244 million in the full year 2018.

Its adjusted earnings before interest, taxes, depreciation, amortization and exploration and production costs (EBITDAX) for the full year was $1.2 billion, up 36% compared to $844 million the previous year.

Its year-end leverage of debt to earnings ratio decreased to less than 2.5, as the company was able to work with its lenders recently both to reconfirm the size of its revolving credit facility at $2 billion and extend its maturity date for owed debt to 2024.

It also reduced its gathering, processing and transportation costs and general administrative expenses in 2019, compared to the previous year.

In the final quarter of the year, Ascent’s EBITDAX climbed 7%, compared to the same quarter a year ago and the company generated $17 million in free cash flow.

As for 2020, its capital budget is set to be between $700 million and $800 million and the company expects its total production to range between 2 and 2.3 billion cubic feet (equivalent) daily.

It expects to see continued free cash flow in 2020 based on current commodity pricing and expected rig activity.

Fisher stated that the company, created in 2015 when it separated from Aubrey McClendon’s American Energy Partners, checked all the boxes for the year.

"We exited 2019 as indicated on prior investor calls, with approximately 2.3 billion cubic feet per day of daily production, substantial liquidity and, more importantly, free cash flow generation that will allow us to create sustainable value growth for our investors," Fisher said.

“Our focus has shifted from production growth to free cash flow generation and liquidity growth.”

Related Photos


<figure><img src="//cdn2.newsok.biz/cache/r960-77034eda5bfac551512d9cbd71b11cf6.jpg" alt="Photo - Fisher " title=" Fisher "><figcaption> Fisher </figcaption></figure><figure><img src="//cdn2.newsok.biz/cache/r960-3128944fb4ecc0f9761f1c52cb2aa540.jpg" alt="Photo - A rig drills an Ascent Resources well in the Utica Shale field. [OKLAHOMAN ARCHIVES] " title=" A rig drills an Ascent Resources well in the Utica Shale field. [OKLAHOMAN ARCHIVES] "><figcaption> A rig drills an Ascent Resources well in the Utica Shale field. [OKLAHOMAN ARCHIVES] </figcaption></figure>
Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›