HOUSTON, May 11, 2017 (GLOBE NEWSWIRE) -- Alta Mesa Holdings, LP announced its financial results for the first quarter of 2017 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:

• Net income totaled $24.9 million, compared to a net loss of $24.2 million for Q1-2016
• Adjusted EBITDAX totaled $40.1 million, up 29% from $31.1 million in Q1-2016
• Average daily production was 24.7 MBOE/d, up 35% from 18.3 MBOE/d in Q1-2016
• Production in the STACK up 75% to 19.3 MBOE/d from 11.0 MBOE/d in Q1-2016
• Production mix is 68% oil and natural gas liquids

Financial and Production Highlights

Net income for the first quarter of 2017 was $24.9 million, compared to a net loss of $24.2 million for the first quarter of 2016. The difference in net income/loss between the two periods was primarily due to higher revenue and lower interest expense and general and administrative expense, partially offset by higher marketing and transportation expense and exploration expense.

Adjusted earnings before interest, income taxes, depreciation, depletion and amortization and exploration costs ("Adjusted EBITDAX") for the first quarter of 2017 was $40.1 million compared to $31.1 million for the first quarter of 2016, an increase of 29%. Adjusted EBITDAX for the first quarter of 2017 is within the previous guidance for Q1-2017 of $38 to $41 million. The change in Adjusted EBITDAX between the two periods is, in part, a result of higher production and commodity prices, lower interest expense and lower general and administrative expense, partially offset by an increase in marketing and transportation expense. Adjusted EBITDAX for the second quarter of 2017 is expected to range between $37 and $40 million. *Adjusted EBITDAX is a Non-GAAP financial measure and is described in the attached table under “Non-GAAP Financial Information and Reconciliation.”

Total Company production volumes in the first quarter of 2017 totaled 2.2 MMBOE, or an average of 24.7 MBOE per day, compared to 1.7 MMBOE or 18.3 MBOE per day in the first quarter of 2016. Production for the first quarter was within the previous guidance for Q1-2017 of 23 to 25 MBOE per day. The increase in production is primarily a result of the continued successful development of Alta Mesa’s STACK play in Kingfisher County, Oklahoma. Production in the second quarter of 2017 is expected to average between 24 and 26 MBOE per day. The Company’s total production mix was 68% oil and natural gas liquids (80% oil, 20% liquids) for the first quarter 2017.

Oil, natural gas and natural gas liquids revenues for the first quarter of 2017 totaled $79.6 million compared to $38.0 million in the first quarter of 2016. The change in revenues between the two periods was due primarily to the increase in commodity prices and an increase in oil, natural gas and natural gas liquids production. Realized prices for oil (including settlements of derivative contracts) for the first quarter of 2017 were $48.28 per barrel, compared to $53.21 per barrel in the first quarter 2016. Realized prices for natural gas liquids (including settlements of derivative contracts) for the first quarter 2017 were $24.32 per barrel compared to $11.26 per barrel in the first quarter 2016. Realized prices for natural gas (including settlements of derivative contracts) in the first quarter 2017 were $2.91 per MCF, compared to $2.44 per MCF in first quarter 2016. Alta Mesa has an active hedging program. Currently the Company has hedged approximately 57% of its forecasted production of proved developed producing reserves through 2019 at weighted average annual floor prices ranging from $49.30 per Bbl to $51.67 per Bbl for oil to $3.15 per MMBtu to $4.50 per MMBtu for natural gas.

Production costs, which includes lease operating expense, marketing and transportation expense, production and ad valorem taxes and workover expenses, in the first quarter of 2017 were $28.2 million, or $12.72 per BOE, compared to $22.3 million, or $13.40 per BOE in the first quarter of 2016. The increase between the two periods is primarily related to an increase in marketing and transportation expense due to increased production.

General and administrative expense in the first quarter of 2017 was $9.7 million compared to $10.2 million in the first quarter of 2016. The difference in general and administrative expense between the two periods is primarily due to lower legal fees, offset in part by increased information system fees and engineering consulting fees.

Operational Highlights

STACK Play, Oklahoma

In Alta Mesa’s Oklahoma STACK play, the Company has assembled a highly contiguous leasehold position which has grown from approximately 45,000 net acres in early 2015 to over 100,000 net acres at the end of the first quarter of 2017. The Company is currently operating six horizontal drilling rigs, targeting the Mississippian-age Osage, Meramec, and Manning formations and the Pennsylvanian-age Oswego formation.

In the first quarter of 2017, the Company completed 25 horizontal wells in the Osage formation. The Company had 35 horizontal wells in progress as of the end of the first quarter of 2017, seven of which were completed subsequent to the end of the quarter. Fourteen of the wells in progress for the first quarter of 2017 were funded through the Company’s Joint Development Agreement with Bayou City Energy Management. The Company has allocated approximately 95% of its 2017 capital expenditure budget, including acquisitions, to the STACK. Capital expenditures for this area in the first quarter of 2017 were $58.3 million out of the total Company expenditures of $60.6 million. Average daily production for this core area in the first quarter of 2017 was approximately 19.3 MBOE per day (70% oil and natural gas liquids), an increase of 75% compared to 11.0 MBOE per day in the first quarter of 2016.

Weeks Island

The Weeks Island Area, located in Iberia and St. Mary Parish, Louisiana consists of the historically prolific Weeks Island and Cote Blanche Island fields. As of the end of 2016, Alta Mesa had a 96% average working interest in a total of 57 gross producing wells. Average daily production from the Weeks Island Area in the first quarter of 2017 was approximately 2,300 BOE per day.

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.