Oklahoma City-based Ascent Resources Utica Holdings, LLC reported adjusted net income of $51 million and adjusted EBITDAX of $250 million but also a net loss of $1.3 billion for the third quarter of 2021.
The company, considered one of the largest private producers of natural gas in the US is focused on acquiring, developing, producing and operating natural gas and oil properties in the Utica Shale of southern Ohio. It said the net loss was driven by a $1.3 billion unrealized commodity derivative fair value loss primarily due to an increase in the forward strip for natural gas. It drove up the company’s net loss for the nine months ended September 30 to $1.9 billion.
It still had $161 million of net cash from operating activities and averaged net production of approximately 1.98 billion cubic feet equivalent of gas a day during the quarter.
Ascent also generated $28 million of free cash flow during the quarter, the sixth consecutive quarter for free cash flow generation. The company maintained four drilling rigs and one frac crew during the quarter and had total capital expenditures of $630 million to $650 million.
“Coming into the quarter, we successfully increased our
production profile in the second quarter and continued to build on that momentum in the third quarter with 17 new turnin-lines. Our execution combined with the sustainable operational efficiencies we have been able to achieve in the field have improved margins and contributed to consistent free cash flow generation despite significant hedge losses during the quarter,” offered Jeff Fisher, Ascent’s Chairman and Chief Executive Officer.
He said despite the higher cap-ex, the company increased its free cash flow guidance to $175 to $200 million.
“Consistent with our previously stated strategy, the additional free cash flow will be used to repay debt, improve our balance sheet and maximize value for our shareholders,” added Fisher.
Third quarter net production averaged 1,978 mmcfe a day consisting of 1,829 mmcf a day of natural gas and 7,370 bbls a day of oil and 17,522 bbls a day of natural gas liquids.
As of September 30, 2021, Ascent had total debt outstanding of approximately $2.6 billion, with $543 million of
borrowings as well as $169 million of letters of credit issued under our revolving credit facility. Liquidity at the end of
the third quarter of 2021 was $1.14 billion, comprised of $1.14 billion of available borrowing capacity under the
revolving credit facility and $6 million of cash on hand.
During the third quarter of 2021, Ascent operated four drilling rigs and one fracture stimulation crew. The Company
spud 19 operated wells, hydraulically fractured 20 wells, and turned in line 17 wells with an average lateral length of
13,220 feet. Of the 17 new wells brought online, 13 were located in the dry gas or lean gas areas, while the other four
wells were located in the liquids-rich window. As of September 30, 2021, Ascent had 656 gross operated producing
Utica wells.
Click here for release