COLORADO
(State or other jurisdiction of
incorporation or organization)
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001-35245
(Commission
File Number)
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20-2835920
(I.R.S. Employer
Identification Number)
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Exhibit No.
|
|
Description
|
10.1
|
|
Third Amendment to Employment Agreement, dated as of October 30, 2018, by and between the Company and Lynn A. Peterson
|
99.1
|
|
Press Release of SRC Energy Inc., dated October 31, 2018
|
By:
|
/s/ James P. Henderson
|
•
|
Revenues were
$161.0 million
for the three months ended
September 30, 2018
|
•
|
Net
income
was
$62.6 million
or
$0.26
per diluted share for the three months ended
September 30, 2018
|
•
|
Adjusted EBITDA was
$121.5 million
and
$344.9 million
for the
three and nine months ended
September 30, 2018
, respectively (see further discussion regarding the presentation of adjusted EBITDA in "About Non-GAAP Financial Measures" below)
|
•
|
Drilling and completion capital expenditures were
$177.1 million
and
$408.3 million
for the
three and nine months ended
September 30, 2018
, respectively
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
Net Volumes
|
9/30/2018
|
|
9/30/2017
|
|
% Chg.
|
|
9/30/2018
|
|
9/30/2017
|
|
% Chg.
|
Crude Oil (MBbls)
|
1,915
|
|
1,726
|
|
11%
|
|
5,802
|
|
3,668
|
|
58%
|
Natural Gas Liquids (MBbls)
|
1,030
|
|
753
|
|
37%
|
|
2,780
|
|
1,758
|
|
58%
|
Natural Gas (MMcf)
|
9,471
|
|
7,412
|
|
28%
|
|
26,177
|
|
17,122
|
|
53%
|
Sales Volumes: (MBOE)
|
4,523
|
|
3,714
|
|
22%
|
|
12,945
|
|
8,280
|
|
56%
|
Average Daily Volumes
|
|
|
|
|
|
|
|
|
|
|
|
Daily Production (BOE)
|
49,165
|
|
40,378
|
|
22%
|
|
47,416
|
|
30,331
|
|
56%
|
Product Price Received
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil ($/Bbl)
|
$63.48
|
|
$41.89
|
|
52%
|
|
$60.13
|
|
$41.73
|
|
44%
|
Natural Gas Liquids ($/Bbl)
|
$19.93
|
|
17.32
|
|
15%
|
|
$18.91
|
|
15.49
|
|
22%
|
Natural Gas ($/Mcf)
|
$1.79
|
|
$2.35
|
|
(24)%
|
|
$1.84
|
|
$2.39
|
|
(23)%
|
Avg. Realized Price ($/BOE)
|
$35.15
|
|
$27.66
|
|
27%
|
|
$34.73
|
|
$26.72
|
|
30%
|
Per Unit Cost Information ($/BOE)
|
|||||||||||
Lease Operating Exp.
|
$2.29
|
|
$1.17
|
|
96%
|
|
$2.31
|
|
$1.57
|
|
47%
|
Production Tax
|
$2.83
|
|
$2.71
|
|
4%
|
|
$3.19
|
|
$2.54
|
|
26%
|
DD&A Expense
|
$9.99
|
|
$9.08
|
|
10%
|
|
$9.59
|
|
$8.86
|
|
8%
|
Total G&A Expense
|
$2.36
|
|
$2.29
|
|
3%
|
|
$2.29
|
|
$2.93
|
|
(22)%
|
|
SRC ENERGY INC.
|
|||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
|
|||||||||||||||
(unaudited, in thousands)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
62,628
|
|
|
$
|
43,848
|
|
|
$
|
178,048
|
|
|
$
|
91,664
|
|
Depreciation, depletion, and accretion
|
45,188
|
|
|
33,740
|
|
|
124,146
|
|
|
73,396
|
|
||||
Stock-based compensation
|
3,405
|
|
|
3,030
|
|
|
9,347
|
|
|
8,390
|
|
||||
Mark-to-market of commodity derivative contracts:
|
|
|
|
|
|
|
|
||||||||
Total gain on commodity derivatives contracts
|
8,529
|
|
|
2,383
|
|
|
28,604
|
|
|
(2,324
|
)
|
||||
Cash settlements on commodity derivative contracts
|
(7,142
|
)
|
|
544
|
|
|
(13,263
|
)
|
|
778
|
|
||||
Interest income
|
(23
|
)
|
|
(16
|
)
|
|
(37
|
)
|
|
(47
|
)
|
||||
Income tax expense
|
8,918
|
|
|
—
|
|
|
18,076
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
121,503
|
|
|
$
|
83,529
|
|
|
$
|
344,921
|
|
|
$
|
171,857
|
|
SRC ENERGY INC.
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||
(unaudited; in thousands)
|
|||||||
|
|
|
|
||||
ASSETS
|
September 30, 2018
|
|
December 31, 2017
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
19,236
|
|
|
$
|
48,772
|
|
Other current assets
|
152,467
|
|
|
111,263
|
|
||
Total current assets
|
171,703
|
|
|
160,035
|
|
||
|
|
|
|
||||
Oil and gas properties and other equipment
|
2,362,919
|
|
|
1,876,576
|
|
||
Goodwill
|
40,711
|
|
|
40,711
|
|
||
Other assets
|
3,599
|
|
|
2,242
|
|
||
|
|
|
|
||||
Total assets
|
$
|
2,578,932
|
|
|
$
|
2,079,564
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities
|
353,077
|
|
|
202,307
|
|
||
|
|
|
|
||||
Revolving credit facility
|
115,000
|
|
|
—
|
|
||
Notes payable, net of issuance costs
|
539,050
|
|
|
538,186
|
|
||
Asset retirement obligations
|
48,951
|
|
|
28,376
|
|
||
Other liabilities
|
22,055
|
|
|
2,261
|
|
||
Total liabilities
|
1,078,133
|
|
|
771,130
|
|
||
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
||||
Common stock and paid-in capital
|
1,488,831
|
|
|
1,474,514
|
|
||
Retained earnings (deficit)
|
11,968
|
|
|
(166,080
|
)
|
||
Total shareholders' equity
|
1,500,799
|
|
|
1,308,434
|
|
||
|
|
|
|
||||
Total liabilities and shareholders' equity
|
$
|
2,578,932
|
|
|
$
|
2,079,564
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
178,048
|
|
|
$
|
91,664
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depletion, depreciation, and accretion
|
124,146
|
|
|
73,396
|
|
||
Provision for deferred taxes
|
18,076
|
|
|
—
|
|
||
Other, non-cash items
|
19,454
|
|
|
2,767
|
|
||
Changes in operating assets and liabilities
|
3,830
|
|
|
(25,010
|
)
|
||
Net cash provided by operating activities
|
343,554
|
|
|
142,817
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Acquisitions of oil and gas properties and leaseholds
|
(129,069
|
)
|
|
(62,562
|
)
|
||
Capital expenditures for drilling and completion activities
|
(331,702
|
)
|
|
(305,636
|
)
|
||
Other capital expenditures
|
(29,353
|
)
|
|
(15,256
|
)
|
||
Proceeds from sales of oil and gas properties and other
|
1,233
|
|
|
77,017
|
|
||
Net cash used in investing activities
|
(488,891
|
)
|
|
(306,437
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Equity financing activities
|
3,039
|
|
|
(517
|
)
|
||
Debt financing activities
|
112,762
|
|
|
148,628
|
|
||
Net cash provided by financing activities
|
115,801
|
|
|
148,111
|
|
||
|
|
|
|
||||
Net decrease in cash, cash equivalents, and restricted cash
|
(29,536
|
)
|
|
(15,509
|
)
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
48,772
|
|
|
36,834
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
19,236
|
|
|
$
|
21,325
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Oil, natural gas, and NGL revenues
|
$
|
160,978
|
|
|
$
|
103,593
|
|
|
$
|
455,298
|
|
|
$
|
222,419
|
|
|
|
|
|
|
|
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses
|
10,360
|
|
|
4,316
|
|
|
29,868
|
|
|
13,008
|
|
||||
Transportation and gathering
|
1,994
|
|
|
838
|
|
|
5,729
|
|
|
1,136
|
|
||||
Production taxes
|
12,824
|
|
|
10,083
|
|
|
41,325
|
|
|
21,013
|
|
||||
Depreciation, depletion, and accretion
|
45,188
|
|
|
33,740
|
|
|
124,146
|
|
|
73,396
|
|
||||
Unused commitment charge
|
—
|
|
|
—
|
|
|
—
|
|
|
669
|
|
||||
General and administrative
|
10,685
|
|
|
8,484
|
|
|
29,691
|
|
|
24,289
|
|
||||
Total expenses
|
81,051
|
|
|
57,461
|
|
|
230,759
|
|
|
133,511
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating income
|
79,927
|
|
|
46,132
|
|
|
224,539
|
|
|
88,908
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Commodity derivatives gain (loss)
|
(8,529
|
)
|
|
(2,383
|
)
|
|
(28,604
|
)
|
|
2,324
|
|
||||
Interest expense, net of amounts capitalized
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest income
|
23
|
|
|
16
|
|
|
37
|
|
|
47
|
|
||||
Other income
|
125
|
|
|
83
|
|
|
152
|
|
|
385
|
|
||||
Total other income (expense)
|
(8,381
|
)
|
|
(2,284
|
)
|
|
(28,415
|
)
|
|
2,756
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
71,546
|
|
|
43,848
|
|
|
196,124
|
|
|
91,664
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax expense
|
8,918
|
|
|
—
|
|
|
18,076
|
|
|
—
|
|
||||
Net income
|
$
|
62,628
|
|
|
$
|
43,848
|
|
|
$
|
178,048
|
|
|
$
|
91,664
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.26
|
|
|
$
|
0.22
|
|
|
$
|
0.74
|
|
|
$
|
0.46
|
|
Diluted
|
$
|
0.26
|
|
|
$
|
0.22
|
|
|
$
|
0.73
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
242,536,781
|
|
|
200,881,447
|
|
|
242,184,348
|
|
|
200,807,436
|
|
||||
Diluted
|
243,560,046
|
|
|
201,460,915
|
|
|
243,207,058
|
|
|
201,326,129
|
|