We are a domestic independent exploration and production company that acquires,
produces, develops, and explores for crude oil, natural gas, and NGLs. Our operations
are located in the Wattenberg Field in Colorado; the Utica Shale in southeastern
Ohio; and, with the closing of our $1.76 billion acquisitions of proved producing,
proved undeveloped, and unproved leaseholds in December 2016, in the Delaware
Basin in Texas
we own an interest in approximately 2,900 gross (2,400 net) productive wells,
of which approximately 25 percent are horizontal. We operate 88 percent of the
wells in which we have an interest. We produced 22.2 MMBoe in 2016, including
0.2 MMBoe contributed from the newly acquired Delaware Basin assets, representing
an increase of 44 percent compared to 2015. For the month ended December 31,
2016, we maintained an average production rate of 73 MBoe per day. This exit
rate represents a 42 percent increase from December 2015. We were able to achieve
this strong growth rate while maintaining a robust liquidity position, comprised
of cash and cash equivalents and available capacity under our revolving credit
facility totaling $932.4 million as of December 31, 2016. Our debt to EBITDAX
ratio as of December 31, 2016, as defined in our revolving credit facility agreement,
was 2.10 to 1.00, well within our compliance limit of 4.00 to 1.00.
Multi-year project inventory in premier crude oil, natural gas, and NGLs plays.
We have a significant operational presence in two premier U.S. onshore basins
providing us with approximately 2,600 potential horizontal drilling locations
from our total proved and unproved leasehold. The primary focus for development
is currently in the Wattenberg Field and the Delaware Basin. We believe that
our inventory of drilling locations, the majority of which reflect 4,000 to
10,000 foot horizontal laterals, will allow us to continue to grow our proved
reserves and production at attractive rates of return utilizing our current
internal long-term commodity price projections and our current expected cost
structure. Our 2017 drilling and completion operations are expected to specifically
focus on the middle core of the Wattenberg Field and our newly acquired Delaware
Basin assets. In the Wattenberg Field, we have identified a substantial inventory
consisting of approximately 700 proved undeveloped horizontal drilling locations
and an additional approximately 1,100 probable horizontal drilling locations.
Through our acquisitions in the Delaware Basin, we added approximately 20 proved
undeveloped horizontal drilling locations, which were included in the 785 gross
potential drilling locations that were identified on our 62,500 net acres of
leasehold. At the time of the initial acquisition, our undeveloped location
count was based on wells expected to be drilled with horizontal lateral lengths
ranging from 4,000 to 10,000 horizontal feet. We believe that with additional
development and exploration activity, together with advances in technology,
we may be able to access additional productive zones in the Delaware Basin,
which could significantly increase our inventory of undeveloped locations.
Strong liquidity position. As of December 31, 2016, we had a total liquidity
position of $932.4 million, comprised of $244.1 million of cash and cash equivalents
and $688.3 million available for borrowing under our revolving credit facility.
During 2016, we raised in excess of $1.4 billion of new capital, net of issuance
costs.
Our long-term business strategy focuses on generating stockholder value through
the acquisition, exploration, and development of crude oil and natural gas properties.
We are focused on the growth of our reserves, production, and cash flows through
organic exploration and development of our existing and acquired leasehold in
our horizontal drilling programs. Our operational focus is concentrated with
a substantial presence in two basins. We pursue various midstream, marketing,
and cost reduction initiatives designed to increase our per unit operating margins
while maintaining a disciplined financial strategy focused on providing sufficient
liquidity and balance sheet strength to execute our business strategy.
We focus on horizontal development drilling programs in resource plays that
offer repeatable results and the potential for attractive returns on investment
in a range of commodity price environments. Our inventory of drilling locations
supports our planned organic growth over the next several years. We expect our
drilling and completion activity to drive increases in proved reserves, production,
and cash flows. In addition to development drilling, we routinely review acquisition
and acreage swap opportunities in our core areas of operations. We believe we
can extract additional value from such transactions through production optimization
opportunities and increases in our working interests in our development drilling
locations afforded by more concentrated acreage positions. As a result, once
we have established a significant presence in an area, the use of bolt-on acquisitions
and acreage trades can potentially provide synergies that result in additional
economies of scale. We also pursue a limited and disciplined exploration program
with the goal of replenishing our portfolio with new exploration projects capable
of positioning us for significant production and reserve growth in future years.
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