HOUSTON, March 29, 2018 (GLOBE NEWSWIRE) -- Alta Mesa Resources, Inc., (NASDAQ:AMR) today announced 2018 production and capex guidance estimates for its wholly owned subsidiaries, Alta Mesa Holdings, LP and Kingfisher Midstream, LLC. In addition, AMHLP reported its financial results for the fourth quarter and full year of 2017. A conference call to discuss these items is scheduled for today at 10 a.m. central time (888-347-8149). Prior to the call, a supplemental slide deck to be used on the call will be available in the investor relations portion of the Company’s website at www.altamesa.net.

• Alta Mesa’s total capital expenditures for 2018 are expected to range from $725 million to $800 million, including AMHLP STACK production facilities and Kingfisher midstream facilities (excluding acquisitions). Capital will be allocated primarily to AMHLP’s upstream STACK area, $550 million to $580 million, with the remaining balance being allocated to Kingfisher, $175 million to $220 million;
• AMHLP’s full-year 2017 STACK production was approximately 20.6 MBOE per day, a 58% increase over 2016 production of approximately 13.1 MBOE per day. Fourth quarter 2017 AMHLP STACK production was approximately 22.1 MBOE per day, a 47% increase over fourth quarter 2016 production of approximately 15.1 MBOE per day. AMHLP’s production in the STACK has grown at a five-year compound annual growth rate of over 80%;
• For 2018, AMHLP forecasts total STACK production to average 33 to 38 MBOE per day, representing an estimated year-over-year growth of 70% at the midpoint, compared to 2017 STACK production;
• AMHLP’s year-end 2017 Proved Reserves in the STACK were 176.2 MMBOE, an increase of 46.6 MMBOE, or 36% over year-end 2016;
• AMHLP drilled and completed 134 gross wells in the STACK in 2017, of which 37 gross wells were funded by the joint development agreement with Bayou City Energy;
• Kingfisher’s 2018 projected Net Income is expected to range between $81.2 million and $96.2 million and projected EBITDA is expected to range between $95 million and $110 million (based on consolidating financial statements), and capital expenditures are expected to range from $175 million to $215 million. EBITDA is a non-GAAP measure and is explained in greater detail under “Non-GAAP Financial Information and Reconciliation.”

Hal Chappelle, Alta Mesa’s Chief Executive Officer, said, “2017 was a year of significant progress for our company marked by several important milestones that we believe has set us up for success in 2018 and beyond. We achieved year-over-year growth in our production, reserves and EBITDAX; we have de-risked our acreage with over 250 operated horizontal wells and a comprehensive scientific and engineering effort to begin systematic development with multi-well patterns. Creating Alta Mesa Resources with the upstream assets of Alta Mesa Holdings and midstream assets of Kingfisher, we believe we have a strong balance sheet that will allow us to execute on our vision for years to come.”

AMHLP Upstream STACK Play Activities

In AMHLP’s STACK play, the company has assembled a highly contiguous leasehold position of over 130,000 net acres. In the fourth quarter of 2017, AMHLP completed 36 horizontal wells in the Osage and Meramec formations. AMHLP had 43 horizontal wells in progress as of the end of the fourth quarter, 22 of which were on production subsequent to the end of the quarter. AMHLP currently has seven rigs operating in the STACK play, with a contracted eighth rig arriving in April and plans to maintain this level for the balance of 2018. In total, AMHLP plans to drill between 170 and 180 gross wells during the year. We expect drilling and completion costs on these wells to average $3.8 million and our type curve has been approximately 650 MBOE per well. Additionally, we are intending to deploy approximately $25 million in early 2018 to expand our fresh water supply system.

Kingfisher Midstream Activities

The initial Kingfisher 60 MMcf per plant has been operating at capacity since late 2017 and the 200 MMcf per day plant expansion is now mechanically complete, with the cryogenic plant operation set to begin in April. Once the expansion plant is fully operational, Kingfisher’s operated inlet capacity will be 260 MMcf per day, bringing the total system capacity to 350 MMcf per day when including the additional 90 MMcf per day of additional contracted offtake and processing capacity. In late 2017 and early 2018, drilling and completions by third party E&P operators under contract with Kingfisher slowed considerably. This slowdown in development by third party groups is reflected in the revised throughput estimates for 2018. Currently, Kingfisher has more than 300 miles of low-pressure crude and gas gathering lines, approximately 125 miles of high pressure gas transportation pipelines and a 50,000 barrel crude storage capacity with six truck loading LACTS along with three 90,000 gallon bullet tanks for NGL storage.

James Hackett, Alta Mesa Executive Chairman and Kingfisher Chief Operating Officer stated, “Despite the delays in volumes due to changes in third party drilling and completion schedules on dedicated acreage and a later closing of our merger, Kingfisher Midstream is well conceived to provide right-sized, scalable gas gathering and processing and market interface, and is situated to serve growing production in the STACK. 2017 saw Kingfisher Midstream establish and grow its service to producers. Acreage dedications and customer service, combined with differentiated access to interstate markets, are our fundamental strengths. We are building a strong management team for Kingfisher Midstream to both earn business, and to offer the market proven, experienced leadership for what we expect will be a separate public company.”

AMHLP Fourth Quarter and Full-Year 2017 Financial and Production Results

During the fourth quarter of 2017, AMHLP sold its Weeks Island field. Results of operations for Weeks Island field are reflected as discontinued operations in our consolidated financial statement for all periods presented. Operating revenues and expenses for all periods exclude discontinued operations in the Weeks Island field.

Net loss from continuing operations for the fourth quarter of 2017 was $40.8 million, compared to a net loss from continuing operations of $47.3 million for the fourth quarter of 2016. Net loss from continuing operations for full-year 2017 was $56.3 million, compared to net loss from continuing operations of $165.6 million for full-year 2016. Adjusted earnings from continuing operations before interest, income taxes, depreciation, depletion and amortization and exploration costs ("Adjusted EBITDAX") for the fourth quarter of 2017 was $41.0 million, compared to $33.1 million for the fourth quarter of 2016. Adjusted EBITDAX from continuing operations for full-year 2017 was $138.7 million compared to $146.3 million for full-year 2016. The change in adjusted EBITDAX between the annual periods is, in part, a result of lower average realized commodity prices, offset in part by increased production and decreased interest expense. Adjusted EBITDAX is a Non-GAAP financial measure and is described in the attached table under “Non-GAAP Financial Information and Reconciliation.”

Total production volumes from continuing operations in the fourth quarter of 2017 totaled 2.3 MMBOE, or an average of 24.6 MBOE per day compared to 1.7 MMBOE or 18.6 MBOE per day in the fourth quarter of 2016. Total production volumes from continuing operations for full-year 2017 totaled 8.6 MMBOE, or an average of 23.5 MBOE per day, compared to 6.1 MMBOE or 16.6 MBOE per day for full-year 2016. The increase in production is primarily a result of the continued successful development of AMHLP’s STACK play in Kingfisher County, Oklahoma. Total production in 2017 was comprised of 49% oil, 35% natural gas and 16% natural gas liquids. AMHLP production for 2018 is expected to average between 33 and 38 MBOE per day.

Oil, natural gas and natural gas liquids revenue from continuing operations for the fourth quarter of 2017 totaled $85.5 million compared to $55.1 million in the fourth quarter of 2016. The change in revenues between the two periods was primarily due to the increase in oil, natural gas and natural gas liquids production, offset in part by the decrease in net realized commodity prices.

About Alta Mesa Resources, Inc.
Alta Mesa Resources, Inc. is an independent energy company focused on the development and acquisition of unconventional oil and natural gas reserves in the Anadarko Basin in Oklahoma and provides midstream energy services, including crude oil and gas gathering, processing and marketing to producers in the STACK play region through Kingfisher Midstream, LLC.