Ascent Resources Utica Holdings, LLC had another strong quarter in the third quarter claimed company Chairman and Chief Executive Officer, Jeff Fisher after releasing the earnings report this week.
The Oklahoma City company reported its third quarter 2024 operating and financial results, showing $92 million in net income and adjusted net income of $97 million along with adjusted EBITDAX of $327 million. Cash flow from operations totaled $260 million and adjusted free cash flow came to $56 million.
“We maintained the momentum gained in the first half of the year by continuing to balance our development between natural gas and liquids while reducing operating costs throughout the business,” said Fisher. “This approach, combined with our continuous focus on efficiency gains in the field, has improved margins and ultimately sets us on the course to generating nearly $500 million of free cash flow in a down market.”
Described as the nation’s largest private natural gas producers with major operations in the Utica gas play, Ascent’s net income in the nine months ended Sept. 30n totaled $80 million and adjusted net income for the period was $411 million while adjusted EBITDAX was $1.1 billion. Cash flows from operations during the nine months was $839 million while adjusted free cash flow totaled $331 million.
In the first six months of the year, Ascent recorded a net loss of $12 million while adjustsed EBItDAS was $788 million.
Fisher continued, “As we close out the year, fourth quarter activity will once again be predominantly focused on liquids. Our financially disciplined approach to managing the business, combined with our industry leading hedge position, puts us in an enviable position to grow free cash flow, reduce debt and return capital to our unitholders.”
Third Quarter 2024 Financial Results
Third quarter 2024 net production averaged 2,075 mmcfe per day, consisting of 1,829 mmcf per day of natural gas, 12,011 bbls per day of oil and 28,891 bbls per day of natural gas liquids (“NGL”).
Third quarter 2024 price realizations, including the impact of settled commodity derivatives, were $3.29 per mcfe. Excluding the impact of settled commodity derivatives, price realizations were $2.29 per mcfe in the third quarter of 2024.
Net production for the nine months ended September 30, 2024 averaged 2,160 mmcfe per day, consisting of 1,911 mmcf per day of natural gas, 11,208 bbls per day of oil and 30,296 bbls per day of NGLs.
Price realizations, including the impact of settled commodity derivatives, were $3.41 per mcfe for the nine months ended September 30, 2024. Excluding the impact of settled commodity derivatives, price realizations were $2.36 per mcfe for the period.
As of September 30, 2024, Ascent had total debt of approximately $2.4 billion, with $625 million of borrowings and $102 million of letters of credit issued under the credit facility. Liquidity as of September 30, 2024 was approximately $1.3 billion, comprised of $1.3 billion of available borrowing capacity under the credit facility and $5 million of cash on hand. The Company’s leverage ratio at the end of the quarter was 1.7x based on a LTM Adjusted EBITDAX basis.
After quarter end, the Company completed several transactions that enhanced its balanced sheet and improved its credit profile. In early October, Ascent extended the maturity of its revolving credit facility by two years from June 2027 to June 2029. Concurrent with the extension, the Company also reaffirmed the borrowing base and elected commitment amounts under the credit facility at $3.0 billion and $2.0 billion, respectively. Ascent also issued $600 million of new 6.625% senior unsecured notes due 2032 with proceeds used to refinance its existing 7.000% senior unsecured notes due 2026.
Operational Update
During the third quarter of 2024, the Company spud 14 operated wells, hydraulically fractured 15 wells, and turned-in-line 15 wells with an average lateral length of 13,745 feet. As of September 30, 2024, Ascent had 904 gross operated producing Utica wells.
Hedging Update
Ascent has significant hedges in place to reduce exposure to the volatility in commodity prices, as well as to protect its expected operating cash flow. As of September 30, 2024, Ascent had hedged 1,473,000 mmbtu per day of natural gas production for the remainder of 2024 at an average downside price of $3.50 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 7,000 bbls per day in 2025 at an average price of $70.96. Subsequent to quarter end, the Company added additional oil hedges in 2025, increasing its hedge position to a total of 11,000 bbls per day at an average price of $70.36. Ascent also has a significant portion of its natural gas basis position hedged in 2024 and 2025 along with additional natural gas hedges in place through 2027. Please reference the financial statements for additional detail on Ascent’s hedge position.