The volatility in natural gas prices forced Oklahoma City’s Ascent Resources to include more oil production, but the company still reported a net loss of $98 million along with adjusted net income of $96 million.
The firm indicated it had adjusted EBITDAX of $333 million and cash flows from operations of $211 million and adjusted free cash flow of $76 million.
It also had a 5% increase in net production of 2,190 mmcfe a day compared to a year ago. Liquids production show up 60% over a year ago with an average of 50 mbbls a day from its operations in the Utica shale of southern Ohio.
Ascent’s chairman and Chief Executive Officer Jeff Fisher gave a hint of what’s to come.
“I am pleased to say that we built on our success from the first quarter by continuing to balance our development program to more prominently feature liquids in the production mix. By doing so, we have improved price realizations and maximized returns during a volatile quarter for natural gas prices.
Second quarter 2024 net production averaged 2,190 mmcfe per day, consisting of 1,910 mmcf per day of natural gas, 12,209 bbls per day of oil and 34,571 bbls per day of natural gas liquids (“NGL”).
For the six months ended June 30, 2024, Ascent reported a Net Loss of $12 million, Adjusted Net Income of $314 million and Adjusted EBITDAX of $788 million, along with Cash Flow from Operations of $579 million and Adjusted Free Cash Flow of $275 million. Ascent incurred a total of $425 million of capital expenditures during the six months ended June 30, 2024 consisting of $337 million of D&C costs, $72 million of land and leasehold costs, and $16 million of capitalized interest.
As of June 30, 2024, Ascent had total debt of approximately $2.4 billion, with $655 million of borrowings and $169 million of letters of credit issued under the credit facility. Liquidity as of June 30, 2024 was approximately $1.2 billion, comprised of $1.2 billion of available borrowing capacity under the credit facility and $6 million of cash on hand.
During the second quarter of 2024, Ascent spud 19 operated wells, hydraulically fractured 18 wells, and turned-in-line 17 wells with an average lateral length of 13,761 feet. As of June 30, 2024, Ascent had 888 gross operated producing Utica wells.
The company confirmed again its use of “significant hedges” in place in order to reduce exposure to the volatility in commodity prices, as well as to protect expected operating cash flow. As of June 30, 2024, Ascent had hedged 1,483,000 mmbtu per day of natural gas production for the remainder of 2024 at an average downside price of $3.49 per mmbtu, and 1,450,000 mmbtu per day in 2025 at an average downside price of $3.80 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 6,000 bbls per day in 2025 at an average price of $71.13. We also have a significant portion of our natural gas basis position hedged in 2024 and 2025 along with additional natural gas hedges in place through 2027.