Oklahoma City’s Ascent Resources Utica Holdings appears to be one of the nation’s natural gas producers that hasn’t been greatly impacted by the slump in national gas prices.
The company revealed its first quarter financial report showing $86 million in net income and $218 million in adjusted net income, results that Ascent Chairman and Chief Executive Officer Jeff Fisher called “exceptional financial and operational results.”
“Our disciplined approach to cost management, focus on efficiencies and strong hedge book have allowed us to deliver outstanding results. Our commitment to maximizing and growing free cash flow remain our top priority, ensuring the sustainability of our business for many years to come.”
Considered to be one of the largest private producers of natural gas in the nation with a focus on properties in the Utica Shale of southern Ohio, the company’s first quarter 2024 net production averaged 2,215 mmcfe per day, consisting of 1,994 mmcf per day of natural gas, 9,396 bbls per day of oil and 27,429 bbls per day of natural gas liquids (“NGL”).
First quarter 2024 price realizations, including the impact of settled commodity derivatives, were $3.73 per mcfe. Excluding the impact of settled commodity derivatives, price realizations were $2.61 per mcfe in the first quarter of 2024.
It helped the company create adjusted EBITDAX of $456 million during the quarter along with operational cash flow of $369 million and adjusted free cash flow of $198 million.
During the quarter’s operations, it incurred $212 million in total capital ependitures. As of March 31, 2024, Ascent had total debt of approximately $2.4 billion, with $645 million of borrowings and $169 million of letters of credit issued under the credit facility. Liquidity as of March 31, 2024 was approximately $1.2 billion, comprised of $1.2 billion of available borrowing capacity under the credit facility and $9 million of cash on hand.
Ascent spud 15 operated wells during the quarter and hydraulically fractured 17 wells and turned-in-line 10 wells with an average lateral length of neary 15,700 feet. At the end of the quarter on March 31, the company had 876 gross operated producing wells in the Utica.
To offset what’s happened to natural gas prices, Ascent put what it called “significant” hedges in place “in order to reduce exposure to the volatility in commodity prices, as well as to protect our expected operating cash flow.”
As of March 31, 2024, Ascent had hedged 1,453,000 mmbtu per day of natural gas production for the remainder of 2024 at an average downside price of $3.51 per mmbtu, and 1,370,000 mmbtu per day in 2025 at an average downside price of $3.82 per mmbtu. Additionally, Ascent has hedged 10,000 bbls per day of crude oil production at an average price of $75.39 per bbl for the remainder of 2024, and 4,000 bbls per day in 2025 at an average price of $70.42.
The company admitted it had a significant portion of its natural basis position hedged in 2024 and 2025 along with additional natural gas hedges in place through 2027.
