HOUSTON, Aug. 11, 2016 (GLOBE NEWSWIRE) -- Alta Mesa Holdings, LP announced its financial results for the second quarter of 2016 and provided highlights of its recent operations. A conference call to discuss these results is scheduled for today at 2 p.m. Central time (888-347-8149).

Financial and operational highlights of note for the quarter include the following:

• Production totaled 1.8 MMBOE, or 20 MBOE per day
• Sooner Trend STACK Q2-2016 production averaged 12,300 BOE per day
• Production Cost per BOE is down 10% vs Q2-2015
• Net Loss in Q2-2016 totaled $70.2 million
• Adjusted EBITDAX in Q2-2016 totaled $64.0 million

Net Loss

Net loss in the second quarter of 2016 was $70.2 million, compared to a net loss of $39.5 million in the second quarter of 2015. The difference in net loss between the two periods is primarily due to lower revenue as a result of lower commodity prices, the change in commodity derivative contracts and higher impairment expense, partially offset by increased production, lower production costs, lower exploration expense and lower depreciation depletion and amortization expense.

Adjusted earnings before interest, income taxes, depreciation, depletion and amortization and exploration costs (“Adjusted EBITDAX”) in the second quarter of 2016 was $64.0 million, compared to $65.1 million in the second quarter of 2015.This was above the previously provided guidance for Q2-2016 of $61 to $63 million. Adjusted EBITDAX in the second quarter of 2016 includes the settlement of approximately $37 million of oil and natural gas derivative contracts prior to contract expiry. The change in Adjusted EBITDAX between the two periods was due to lower commodity prices, partially offset by increased production, lower lease operating expense and lower production taxes. Adjusted EBITDAX for the third quarter of 2016 is expected to range between $36 and $38 million. Adjusted EBITDAX is a Non-GAAP financial measure and is described in the attached table under “Non-GAAP Financial Information and Reconciliation.”

Production

Production volumes in the second quarter of 2016 totaled 1.8 MMBOE, or an average of approximately 20,200 BOE per day, compared to 1.7 MMBOE or approximately 19,000 BOE per day in the second quarter of 2015. Production in the second quarter was within the previously provided guidance for Q2-2016 of 19,000 to 21,000 BOE per day. The Company’s total production mix was 69% oil and natural gas liquids (81% oil, 19% liquids), and 31% natural gas for the second quarter 2016. Production in the second quarter of 2016 in the Company’s Sooner Trend STACK play averaged approximately 12,300 BOE per day, up approximately 45% compared to 8,500 BOE per day in the second quarter of 2015. Total Company production for the third quarter of 2016 is expected to average between 22,000 to 24,000 BOE per day.

Revenue and Hedge Activity

Revenue from the sale of oil, natural gas and natural gas liquids in the second quarter of 2016 before the effects of commodity derivative contracts totaled $53.7 million as compared to $71.5 million in the second quarter of 2015. The variance in revenues between the two periods was primarily due to lower commodity prices, offset in part by slightly higher production. The settlement of derivative contracts totaled $40.8 million and $24.7 million in the second quarter of 2016 and 2015, respectively and included crude oil hedge settlements ahead of contract expiry of $34.4 million and natural gas hedge settlements ahead of contract expiry of $2.4 million during the second quarter of 2016. Alta Mesa has an active hedging program and as of June 30, 2016, had approximately 69% of its forecasted PDP production hedged through 2019 at average annual floor prices ranging from $2.88 per MMBtu to $4.50 per MMBtu for natural gas and $49.65 per Bbl to $67.05 per Bbl for oil.

Production Cost

Production costs, which includes lease operating expense, production and ad valorem taxes and workover expenses, in the second quarter of 2016 were $18.8 million compared to $19.7 million in the second quarter of 2015. On a per unit of production basis, production cost in the second quarter 2016 was $10.23 per BOE compared to $11.41 per BOE in the second quarter of 2015. The difference in production costs between the two periods is due in part to the decline in production taxes, resulting from lower oil revenues and decreased compression expense and salt water disposal, partially offset by an increase in field services and marketing and gathering expense.

Depreciation, Depletion and Amortization Expense

Depreciation, depletion and amortization expense in the second quarter of 2016 was $22.9 million compared to $38.2 million in the second quarter of 2015. On a per unit of production basis, depreciation, depletion and amortization expense in the second quarter of 2016 was $12.50 per BOE compared to $22.16 per BOE in the second quarter of 2015.

General and Administrative Expense

General and administrative expense in the second quarter of 2016 was $12.1 million, compared to $12.0 million in the second quarter of 2015. The slight increase in general and administrative expense between the two periods is primarily due to an increase in legal fees and credit facility arrangement fees offset by a decrease in salary, benefits and performance bonuses and a decrease in accrued legal settlement expenses. On a per unit basis, general and administrative expenses were $6.58 per BOE and $6.93 per BOE in the second quarters of 2016 and 2015, respectively.

Operational Highlights

STACK Play in Sooner Trend, Oklahoma:

Alta Mesa's assets in the Sooner Trend in Oklahoma are concentrated in and around large, contiguous acreage blocks with multiple productive zones at depths generally between 4,000 feet and 8,000 feet. Activity in these fields is focused on the continued implementation of a multi-year, multi-rig program to develop several pay zones with horizontal drilling and multi-stage hydraulic fracturing of the Mississippian age Osage, Meramec and Manning zones; the Pennsylvanian Oswego; and the definition of similar exploitation opportunities in the Woodford Shale, Hunton Lime, and other formations. The Company has increased its acreage position in the Sooner Trend both within, and contiguous with, its legacy acreage position which is currently over 92,000 net acres. As of June 30, 2016, the Company had four drilling rigs operating in this area with plans to potentially add one additional rig during 2016. In the second quarter of 2016, the Company completed 18 horizontal wells in the Osage formation. Six of the completed wells for the second quarter of 2016 were part of the Company’s Joint Development Agreement with BCE-Stack Development LLC (BCE). Alta Mesa had 21 horizontal wells in progress as of the end of the second quarter of 2016, 11 of which were drilled as part of the BCE Joint Development Agreement. Six of the 21 horizontal wells in progress as of June 30, 2016 were on production subsequent to the end of the second quarter. Production during the second quarter of 2016 was approximately 12,300 BOE per day (73% oil and natural gas liquids), up 45% compared to approximately 8,500 BOE per day for the second quarter of 2015.

Weeks Island Area, Louisiana:

Alta Mesa’s assets in this area are comprised of the Weeks Island field, located in Iberia Parish and the Cote Blanche Island field in St. Mary Parish. Each of these is a historically-prolific oil field with multiple stacked pay zones that are structurally and stratigraphically trapped around a piercement salt dome, which the Company believes offer significant future opportunities for added production and reserves. Average daily production for the second quarter of 2016 was approximately 3,900 BOE per day, of which 90% was oil.

Alta Mesa Holdings, LP is a privately held company engaged primarily in onshore oil and natural gas acquisition, exploitation, exploration and production whose focus is to maximize the profitability of our assets in a safe and environmentally sound manner. We seek to maintain a portfolio of lower risk properties in plays with known resources where we identify a large inventory of lower risk drilling, development, and enhanced recovery and exploitation opportunities. Our core properties are located in Oklahoma and Louisiana. We maximize the profitability of our assets by focusing on sound engineering, enhanced geological techniques including 3-D seismic analysis, and proven drilling, stimulation, completion, and production methods. Alta Mesa Holdings, LP is headquartered in Houston, Texas.