Press Release

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08/21/18
Harvest Oil & Gas Announces Second Quarter 2018 Results and Divestitures of Central Texas and Karnes County Properties
HOUSTON, Aug. 21, 2018 (GLOBE NEWSWIRE) -- Harvest Oil & Gas Corp. (“Harvest” or the “Company”) today announced results for the second quarter of 2018 and the filing of its Form 10-Q with the Securities and Exchange Commission (“SEC”) on August 20, 2018. In addition, Harvest has entered into definitive agreements to sell substantially all of its interests in its Central Texas and Karnes County, Texas properties. Also, the Company has provided estimated net proved reserves as of May 31, 2018 and commodity hedges entered into subsequent to June 4, 2018. Further, Harvest announced the resignation of its Vice President and Chief Financial Officer effective September 30, 2018.

Key Highlights

  • Successfully completed financial restructuring as of June 4, 2018 and reduced total debt from $640 million, as of March 31, 2018, to $280 million, as of June 30, 2018
  • Entered into a definitive agreement to sell certain interests in its Central Texas and Karnes County, Texas properties to Magnolia Oil & Gas Corporation (“Magnolia”) for a total consideration of $135 million in cash and 4.2 million shares of Magnolia stock (NYSE: MGY)
  • Entered into a definitive agreement to sell certain Eagle Ford formation rights and existing production in Lee County, Texas for $3.5 million
  • Average daily production was 181.8 MMcfe for the second quarter of 2018, a 1 percent increase over the prior quarter
  • Generated a net loss of $595.6 million (which includes $588.1 million of reorganization items, net); and Adjusted EBITDAX of $28.0 million for the second quarter of 2018, a 7.4 percent increase over the prior quarter
  • OTCQX market listing process continues to progress and the Company expects the listing to go effective during the third quarter of 2018

Sale of Central Texas and Karnes County Properties

On August 20, 2018, subsequent to filing its Form 10-Q, Harvest signed a definitive agreement to sell certain interests in its Central Texas and Karnes County, Texas properties to Magnolia. Total consideration at closing will consist of $135 million in cash (subject to purchase price adjustments) and 4.2 million shares of Magnolia stock. Based on the closing price on August 17, 2018 of $13.10, total consideration would be $190 million. The transaction is expected to close on August 31, 2018 and has an effective date of July 1, 2018. The Company plans initially to use net proceeds to reduce outstanding borrowings under the Company’s revolving credit facility. Intrepid Partners, LLC is acting as strategic advisor to Harvest and its board of directors.

In addition, Harvest signed a definitive agreement to sell certain Eagle Ford formation rights and existing production in Lee County, Texas to a third party for $3.5 million of cash consideration (subject to purchase price adjustments).

These divestures represent estimated proved reserves of 104.1 Bcfe (17.4 MMBoe) based on May 31, 2018 SEC prices, and 29.9 MMcfe/d (5.0 MBoe/d) of production for the first half of 2018. The divested properties represent all of Harvest’s interests in the Austin Chalk and Eagle Ford formations.
 

                           
  Production     SEC Reserves (as of May 31, 2018)
  (Unit) 1H 2018     (Unit)   PDP   PDNP   PUD   Total Proved
Oil MBbls 339     MMBbls   2.4   0.0   4.0   6.4
Natural gas liquids MBbls 195     MMBbls   2.2   0.0   2.4   4.5
Natural gas MMcf 2,208     Bcf   23.0   0.0   15.2   38.3
Total MMcfe 5,411     Bcfe   50.5   0.2   53.4   104.1
Total MMcfe/d 29.9                      
                           


Second Quarter 2018 Financial Results

    Second Quarter (1)   First Quarter
$ in thousands unless noted otherwise   2018   2018
Average daily production (MMcfe/d)   181.8       180.0    
Total revenues   64.8       67.9    
Total assets   689.5       1,458.2    
Net loss (2)   (595.6 )     (15.4 )  
Adjusted EBITDAX (a non-GAAP financial measure) (3)   28.0       26.1    
Total debt (4)   280.0       639.7    
Total debt / Adjusted EBITDAX (3) (5)   2.5   x   6.1   x
Net cash provided by operating activities   8.5       10.9    
Total capital expenditures   17.5       19.5    

 

(1) All amounts reflect the combined results of two months ended May 31, 2018 (Predecessor) and one month ended June 30, 2018 (Successor)
(2) Includes $588.1 million of reorganization items, net in the second quarter of 2018
(3) Adjusted EBITDAX is a Non-GAAP financial measure and is described in the attached table under “Non-GAAP Measures”
(4) As of June 30, 2018 and March 31, 2018
(5) Adjusted EBITDAX annualized for the respective quarter ended
   

Fresh Start Accounting and Factors Affecting the Comparability of the Results

Upon emergence from Chapter 11 proceedings on June 4, Harvest adopted fresh start accounting as required by Generally Accepted Accounting Principles (“GAAP”). As a result of adopting fresh start accounting, the Company’s condensed consolidated financial statements and certain presentations are separated into two distinct periods, the period before the convenience date of May 31, 2018 (labeled “Predecessor”) and the period after the convenience date (labeled “Successor”), to indicate the application of different basis of accounting between the periods presented. Despite the separate presentation, there was continuity of the Company’s operations.

Harvest is the successor reporting company to EV Energy Partners, L.P. pursuant to Rule 15d-5 of the Securities Exchange Act of 1934, as amended; however, the impact to the comparability of the results is generally limited to those areas associated with the basis in and accounting for oil and gas properties (specifically depreciation, depletion and amortization (“DD&A”) and impairments), exploration expense and income taxes (due to the change from a limited partnership to a corporation that occurred in connection with the Company’s emergence from bankruptcy). Accordingly, the Company believes that describing certain year-over-year variances and trends in its production, revenue and expenses for the three and six months ended June 30, 2018 and 2017 without regard to the concept of Successor and Predecessor (i.e. on a combined basis) facilitates a meaningful analysis of the results of operations. The results of operations have been derived from the unaudited condensed consolidated financial statements.

Revolving Credit Facility and Liquidity

On June 4, 2018, upon emergence from the Chapter 11 proceedings, the borrowing base under the Company's new credit facility (the “Exit Credit Facility”) was $325 million. As of August 10, 2018, the Company had approximately $278 million outstanding under the Exit Credit Facility, and liquidity from borrowing base capacity and cash on hand was over $50 million. The Company believes that cash on hand, proceeds from sales of assets, net cash flows generated from operations and borrowings under the Exit Credit Facility will be adequate to fund the capital budget and satisfy short–term liquidity needs. Upon closing of the sale of Central Texas and Karnes County, Texas properties to Magnolia, Harvest expects that its borrowing base will be reduced by $60 million to $265 million. Harvest's next semi-annual borrowing base redetermination is scheduled for April 2019.

For more information regarding Harvest's debt and liquidity, please review Harvest's Quarterly Report on Form 10-Q filed on August 20, 2018, with the SEC.

Reserves

The following reserves are an estimate of Harvest’s net proved reserves. The net proved reserves were determined using fresh start accounting guidelines and SEC prices as of May 31, 2018.
 

                     
    Estimated Net Proved Reserves
    Crude Oil
(MMBbls)
  Natural Gas
(Bcf)
  NGLs
(MMBbls)
  Natural Gas
Equivalents
(Bcfe)
  PV 10 ($mm)
Barnett Shale   0.3   195.9   18.0   305.7   $195.8
San Juan Basin   1.4   106.1   8.1   163.2   87.9
Appalachia Basin   6.8   96.0   0.5   139.9   140.3
Central Texas (1)   3.5   32.6   3.7   75.4   95.3
Michigan   0.1   67.2   0.3   69.5   34.3
Mid-Continent area   1.4   20.7   0.6   32.8   33.0
Karnes County, Texas (1)   3.3   6.1   0.9   31.3   78.8
Monroe Field   -   28.8   -   28.8   1.1
Permian Basin   0.4   9.7   2.5   27.2   19.4
Total   17.2   563.1   34.5   873.8   685.9

 

(1) Reserves associated with the announced divestitures are included in this table under Central Texas and Karnes County, Texas.
   

Commodity Hedges

Subsequent to its emergence from Chapter 11 proceedings on June 4, 2018, Harvest has entered into the following commodity hedges.
 

                 
        Swap   Swap  
Period   Index   Volume   Price  
Natural Gas (MmmBtus):                
Jul - Aug 2018   NYMEX   3,720.0     2.94  
Sep - Dec 2018   NYMEX   10,980.0     2.91  
Jan - Dec 2019   NYMEX   31,025.0     2.77  
                 
Crude (MBbls):                
Jul - Aug 2018   WTI   124.0     66.61  
Sep - Dec 2018   WTI   366.0     66.34  
Jan - Dec 2019   WTI   1,022.0     63.02  
Jan - Dec 2020   WTI   732.0     60.51  
                 
Ethane (MBbls):                
Jul - Dec 2018   Mt Belvieu   368.0     12.51  
Jan - Dec 2019   Mt Belvieu   730.0     11.50  
Jan - Dec 2020   Mt Belvieu   512.4     11.91  
                 
Propane (MBbls):                
Jul - Dec 2018   Mt Belvieu   184.0     37.44  
Jan - Dec 2019   Mt Belvieu   365.0     32.76  
Jan - Dec 2020   Mt Belvieu   256.2     29.23  
                 

Planned Senior Management Changes

Harvest announced today the resignation of its Vice President and Chief Financial Officer, Nicholas Bobrowski, effective September 30, 2018. This resignation is for personal reasons and not the result of any disagreement with Harvest or its board of directors. The Company has initiated a search for Mr. Bobrowski’s successor.

Public Common Stock and Warrant Listing Update

The Company is in the process of applying to list its common shares and warrants to be traded and quoted on the OTCQX market. The Company expects the new listing to go effective during the third quarter of 2018. The Company plans to issue a press release prior to the start of trading to announce that the shares and warrants have been listed.

Quarterly Report on Form 10-Q

Harvest financial statements and related footnotes are available in the Form 10-Q, which was filed on August 20, 2018, and is available through the Investor Relations/SEC Filings section of the Harvest website at http://www.hvstog.com.

EV Energy Partners Unitholders’ Schedule K-1

EV Energy Partners, L.P. (“EVEP”) unitholders’ Schedule K-1s for the 2018 tax year will be available for download at https://www.taxpackagesupport.com/evenergy in the first quarter of 2019. For any questions regarding their Schedule K-1, previous unitholders of EVEP are invited to call the Tax Package Support helpline at 1-800-973-7551.

About Harvest Oil & Gas Corp.

Harvest is an independent oil and gas company engaged in the acquisition, efficient operation and development of onshore oil and gas properties in the continental United States. The Company’s assets consist primarily of producing and non-producing properties in the Barnett Shale, the San Juan Basin, the Appalachian Basin (which includes the Utica Shale), Michigan, Central Texas (which includes the Austin Chalk area), the Mid-Continent areas in Oklahoma, Texas, Arkansas, Kansas and Louisiana, the Permian Basin, the Monroe Field in Northern Louisiana, and Karnes County, Texas. More information about Harvest is available on the internet at https://www.hvstog.com.

Forward Looking Statements

This press release contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends affecting the financial condition of its business. These forward-looking statements are subject to a number of risks and uncertainties, most of which are difficult to predict and many of which are beyond its control. Please read the Company’s filings with the Securities and Exchange Commission, including “Risk Factors” in its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q and, if applicable, its Current Reports on Form 8-K, and other public filings and press releases for a discussion of risks and uncertainties that could cause actual results to differ from those in such forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “expect,” “indicate” and similar expressions are intended to identify forward-looking statements. All statements other than statements of current or historical fact contained in this press release are forward-looking statements. Although the Company believes that the forward-looking statements contained in this press release are based upon reasonable assumptions, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

Operating Statistics

                         
  Successor     Predecessor         Predecessor
            Combined      
  One Month     Two Months   Three Months   Three Months
  Ended     Ended   Ended   Ended
  June 30, 2018     May 31, 2018   June 30, 2018   June 30, 2017
Production data:                        
Oil (MBbls)   107       261     368     372
Natural gas liquids (MBbls)   215       405     620     528
Natural gas (MMcf)   3,612       7,001     10,613     10,241
Net production (MMcfe)   5,548       10,994     16,542     15,640
Average sales price per unit: (1)                        
Oil (Bbl) $ 66.53     $ 67.31   $ 67.08   $ 44.06
Natural gas liquids (Bbl)   26.55       26.27     26.37     18.26
Natural gas (Mcf)   2.40       2.08     2.19     2.87
Mcfe   3.88       3.89     3.89     3.54
Average unit cost per Mcfe:                        
Production costs:                        
Lease operating expenses $ 1.69     $ 1.62   $ 1.64   $ 1.68
Production taxes   0.17       0.17     0.17     0.16
Total   1.86       1.79     1.81     1.84
Depreciation, depletion and amortization   0.49       1.75     1.33     1.38
General and administrative expenses   0.37       0.72     0.60     0.45
                         
  Successor     Predecessor         Predecessor
            Combined    
  One Month     Five Months   Six Months   Six Months
  Ended     Ended   Ended   Ended
  June 30, 2018     May 31, 2018   June 30, 2018   June 30, 2017
Production data:                        
Oil (MBbls)   107       662     769     707
Natural gas liquids (MBbls)   215       1,040     1,255     1,039
Natural gas (MMcf)   3,612       16,982     20,594     20,607
Net production (MMcfe)   5,548       27,193     32,741     31,087
Average sales price per unit: (1)                        
Oil (Bbl) $ 66.53     $ 64.14   $ 64.47   $ 45.48
Natural gas liquids (Bbl)   26.55       25.86     25.98     19.57
Natural gas (Mcf)   2.40       2.41     2.41     2.87
Mcfe   3.88       4.06     4.03     3.59
Average unit cost per Mcfe:                        
Production costs:                        
Lease operating expenses $ 1.69     $ 1.67   $ 1.67   $ 1.61
Production taxes   0.17       0.20     0.19     0.17
Total   1.86       1.87     1.86     1.78
Depreciation, depletion and amortization   0.49       1.70     1.49     1.56
General and administrative expenses   0.37       0.58     0.54     0.44

 

(1) Prior to $0.4 million of net hedge losses on settlements of commodity derivatives for the three months ended June 30, 2017, and $1.6 million of net hedge gains and $2.9 million of net hedge losses on settlements of commodity derivatives for the six months ended June 30, 2018 and 2017, respectively.
   

Condensed Consolidated Balance Sheets
(In $ thousands, except number of shares/units)

               
    Successor     Predecessor
    June 30,     December 31,
    2018       2017  
ASSETS              
Current assets:              
Cash and cash equivalents   $ 5,354       $ 4,896  
Restricted cash     7,650         -  
Accounts receivable:              
Oil, natural gas and natural gas liquids revenues     48,794         47,694  
Other     1,377         78  
Derivative asset     -         3,052  
Other current assets     2,628         5,713  
Total current assets     65,803         61,433  
               
Oil and natural gas properties, net of accumulated depreciation, depletion and              
amortization; June 30, 2018, $2,730; December 31, 2017, $1,191,559     617,327         1,375,527  
Long-term derivative assets     232         -  
Other assets     6,164         4,845  
Total assets   $ 689,526       $ 1,441,805  
               
LIABILITIES AND EQUITY              
Current liabilities:              
Accounts payable and accrued liabilities:              
Third party   $ 35,303       $ 43,817  
Related party     -         4,194  
Derivative liability     4,184         396  
Current portion of long-term debt     -         605,549  
Total current liabilities     39,487         653,956  
               
               
Asset retirement obligations     120,598         158,793  
Long–term debt, net     280,000         -  
Long–term derivative liability     280         -  
Other long–term liabilities     1,021         1,044  
               
Commitments and contingencies              
               
Stockholders' / owners’ equity:              
Predecessor common unitholders – 49,368,869 units issued and outstanding              
as of December 31, 2017     -         648,371  
Predecessor general partner interest     -         (20,359 )
Successor common stock – $0.01 par value; 65,000,000 shares authorized;              
10,000,016 shares issued and outstanding as of June 30, 2018     100         -  
Successor additional paid-in capital     248,578         -  
Successor retained earnings (accumulated deficit)     (538 )       -  
Total stockholders' / owners’ equity     248,140         628,012  
Total liabilities and equity   $ 689,526       $ 1,441,805  
               


Condensed Consolidated Statements of Operations
(In $ thousands, except per share/unit data)

                         
  Successor     Predecessor         Predecessor
            Combined      
  One Month     Two Months   Three Months   Three Months
  Ended     Ended   Ended   Ended
  June 30, 2018     May 31, 2018   June 30, 2018   June 30, 2017
Revenues:                        
Oil, natural gas and natural gas liquids revenues $ 21,535       $ 42,749     $ 64,284     $ 55,404  
Transportation and marketing–related revenues   185         340       525       648  
Total revenues   21,720         43,089       64,809       56,052  
                         
Operating costs and expenses:                        
Lease operating expenses $ 9,375       $ 17,828     $ 27,203     $ 26,235  
Cost of purchased natural gas   129         242       371       460  
Dry hole and exploration costs   43         40       83       75  
Production taxes   970         1,818       2,788       2,496  
Accretion expense on obligations   789         1,279       2,068       1,870  
Depreciation, depletion and amortization   2,730         19,194       21,924       21,531  
General and administrative expenses   2,029         7,923       9,952       7,023  
Impairment of oil and natural gas properties   -         -       -       18,397  
(Gain) loss on sales of oil and natural gas properties   (19 )       7       (12 )     (9 )
Total operating costs and expenses   16,046         48,331       64,377       78,078  
                         
Operating income (loss)   5,674         (5,242 )     432       (22,026 )
                         
Other income (expense), net:                        
Gain (loss) on derivatives, net   (4,232 )       45       (4,187 )     6,511  
Interest expense   (1,199 )       (3,176 )     (4,375 )     (10,435 )
Other income, net   27         474       501       723  
Total other income (expense), net   (5,404 )       (2,657 )     (8,061 )     (3,201 )
                         
Reorganization items, net   (808 )       (587,325 )     (588,133 )     -  
                         
Loss before income taxes   (538 )       (595,224 )     (595,762 )     (25,227 )
                         
Income tax benefit   -         148       148       66  
                         
Net loss $ (538 )     $ (595,076 )   $ (595,614 )   $ (25,161 )
                         
Basic and diluted earnings per share/unit:                        
Net loss $ (0.05 )     $ (11.81 )         $ (0.50 )
                         
Weighted average common shares/units outstanding                        
(basic and diluted)   10,000         49,369             49,369  
                         

 

                         
                         
  Successor     Predecessor         Predecessor
            Combined    
  One Month     Five Months   Six Months   Six Months
  Ended     Ended   Ended   Ended
  June 30, 2018     May 31, 2018   June 30, 2018   June 30, 2017
Revenues:                        
Oil, natural gas and natural gas liquids revenues $ 21,535       $ 110,307     $ 131,842     $ 111,723  
Transportation and marketing–related revenues   185         724       909       1,316  
Total revenues   21,720         111,031       132,751       113,039  
                         
Operating costs and expenses:                        
Lease operating expenses $ 9,375       $ 45,372     $ 54,747     $ 50,174  
Cost of purchased natural gas   129         557       686       940  
Dry hole and exploration costs   43         122       165       55  
Production taxes   970         5,343       6,313       5,255  
Accretion expense on obligations   789         3,176       3,965       3,869  
Depreciation, depletion and amortization   2,730         46,196       48,926       48,511  
General and administrative expenses   2,029         15,648       17,677       13,719  
Restructuring costs   -         5,211       5,211       -  
Impairment of oil and natural gas properties   -         3       3       67,984  
(Gain) loss on sales of oil and natural gas properties   (19 )       5       (14 )     (35 )
Total operating costs and expenses   16,046         121,633       137,679       190,472  
                         
Operating income (loss)   5,674         (10,602 )     (4,928 )     (77,433 )
                         
Other income (expense), net:                        
Gain (loss) on derivatives, net   (4,232 )       444       (3,788 )     20,740  
Interest expense   (1,199 )       (13,652 )     (14,851 )     (20,409 )
Other income, net   27         776       803       1,081  
Total other income (expense), net   (5,404 )       (12,432 )     (17,836 )     1,412  
                         
Reorganization items, net   (808 )       (587,325 )     (588,133 )     -  
                         
Loss before income taxes   (538 )       (610,359 )     (610,897 )     (76,021 )
                         
Income tax (expense) benefit   -         (166 )     (166 )     29  
                         
Net loss $ (538 )     $ (610,525 )   $ (611,063 )   $ (75,992 )
                         
Basic and diluted earnings per share/unit:                        
Net loss $ (0.05 )     $ (12.12 )         $ (1.51 )
                         
Weighted average common shares/units outstanding                        
(basic and diluted)   10,000         49,369             49,345  
                         


Condensed Consolidated Statements of Cash Flows
(In $ thousands)

                     
    Successor     Predecessor
    One Month     Five Months   Six Months
    Ended     Ended   Ended
    June 30, 2018     May 31, 2018   June 30, 2017
Cash flows from operating activities:                    
Net loss   $ (538 )     $ (610,525 )   $ (75,992 )
Adjustments to reconcile net loss to net cash flows provided by                    
operating activities:                    
Accretion expense on obligations     789         3,176       3,869  
Depreciation, depletion and amortization     2,730         46,196       48,511  
Share–based compensation cost     -         3,784       2,204  
Impairment of oil and natural gas properties     -         3       67,984  
(Gain) loss on sales of oil and natural gas properties     (19 )       5       (35 )
(Gain) loss on derivatives, net     4,232         (444 )     (20,740 )
Cash settlements of matured derivative contracts     -         3,099       (2,929 )
Reorganization items, net     -         573,304       -  
Other     60         248       523  
Changes in operating assets and liabilities:                    
Accounts receivable     876         (3,518 )     (7,859 )
Other current assets     (354 )       1,853       847  
Accounts payable and accrued liabilities     1,490         4,405       (5,967 )
Other, net     (790 )       69       (217 )
Net cash flows provided by operating activities     8,476         21,655       10,199  
                     
Cash flows from investing activities:                    
Acquisition of oil and natural gas properties     -         -       (58,651 )
Additions to oil and natural gas properties     (7,220 )       (29,727 )     (3,635 )
Reimbursements related to oil and natural gas properties     -         652       -  
Proceeds from sale of oil and natural gas properties     16         3       1,989  
Other     -         26       17  
Net cash flows used in investing activities     (7,204 )       (29,046 )     (60,280 )
                     
Cash flows from financing activities:                    
Repayment of long-term debt borrowings     (17,000 )       -       (21,000 )
Long-term debt borrowings     -         34,000       17,000  
Loan costs incurred     -         (2,813 )     -  
Contributions from general partner     -         40       -  
Net cash flows provided by (used in) financing activities     (17,000 )       31,227       (4,000 )
                     
Increase (decrease) in cash, cash equivalents and restricted cash     (15,728 )       23,836       (54,081 )
Cash, cash equivalents and restricted cash – beginning of period     28,732         4,896       57,633  
Cash, cash equivalents and restricted cash – end of period   $ 13,004       $ 28,732     $ 3,552  
                     


Non-GAAP Measures

The Company defines Adjusted EBITDAX as net loss plus income taxes, interest expense, net, depreciation, depletion and amortization, accretion expense on obligations, (gain) loss on derivatives, net, cash settlements of matured commodity derivative contracts, non-cash equity-based compensation, impairment of oil and natural gas properties, non-cash oil inventory adjustment, dry hole and exploration costs, gain on sales of oil and natural gas properties, reorganization items, net, and other income, net.

Adjusted EBITDAX is used by the Company’s management to provide additional information and statistics relative to the performance of the business, including (prior to the creation of any reserves) the cash return on investment. The Company believes this financial measure may indicate to investors whether or not it is generating cash flow at a level that can support or sustain quarterly interest expense and capital expenditures. Adjusted EBITDAX should not be considered as an alternative to net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDAX excludes some, but not all, items that affect net income and operating income and this measure may vary among companies. Therefore, Harvest’s Adjusted EBITDAX may not be comparable to similarly titled measures of other companies.
 

Reconciliation of Net Loss to Adjusted EBITDAX
(In $ thousands)

                               
    Three Months Ended   Six Months Ended
    Combined   Predecessor   Combined   Predecessor
    Jun 30, 2018   Jun 30, 2017   Mar 31, 2018   Jun 30, 2018   Jun 30, 2017
                               
Net loss   $ (595,614 )   $ (25,161 )   $ (15,449 )   $ (611,063 )   $ (75,992 )
                               
Add:                              
Income taxes     (148 )     (66 )     314       166       (29 )
Interest expense, net     4,375       10,435       10,475       14,850       20,409  
Depreciation, depletion and amortization     21,924       21,531       27,002       48,926       48,511  
Accretion expense on obligations     2,068       1,870       1,897       3,965       3,869  
(Gain) loss on derivatives, net     4,187       (6,511 )     (399 )     3,788       (20,740 )
Cash settlements of matured commodity     -       (404 )     1,559       1,559       (2,858 )
derivative contracts                              
Non-cash equity-based compensation     3,197       1,019       587       3,784       2,204  
Impairment of oil and natural gas properties     -       18,397       3       3       67,984  
Non-cash oil inventory adjustment     (204 )     424       -       (204 )     424  
Dry hole and exploration costs     83       75       82       165       55  
Gain on sales of oil and natural gas properties     (12 )     (9 )     (2 )     (14 )     (35 )
Reorganization items, net (1)     588,133       -       -       588,133       -  
Other income, net     -       -       -       -       (197 )
Adjusted EBITDAX     27,989       21,600       26,069       54,058       43,605  

 

(1) Represent costs, gains and losses directly associated with the Company’s filing for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code since the petition date, and also include adjustments to reflect the carrying value of certain liabilities subject to compromise at their estimated allowed claim amounts, as such adjustments are determined.
   

Harvest Oil & Gas Corp., Houston, TX
Nicholas Bobrowski
713-651-1144
hvstog.com

Production bar chart