Jones Energy, Inc. (NYSE:JONE) Q3 2018 Earnings Conference Call - Final Transcript

Nov 01, 2018 • 10:30 am ET


Jones Energy, Inc. (NYSE:JONE) Q3 2018 Earnings Conference Call - Final Transcript


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Good morning. My name is Jesse, and I'll be your conference operator today. I'd now turn the call over to Page Portas.

Page Portas

Ladies and gentlemen, thank you for standing by. Welcome to the Jones Energy 2018 Third Quarter Earnings Conference Call. The Company's news release announcing its results was circulated yesterday and is also available in the IR section of our website at (Operator Instructions) As a reminder, this call is being recorded. The webcast replay and downloadable audio file will be available shortly following the call through the IR section of the company's website. (Forward Looking Cautionary Statements) Participating with me on today's call will be Mr. Carl Giesler, CEO of Jones Energy as well as other senior members of the management team. Today's call will include formal remarks only.

I would now like to turn the call over to Carl Giesler. Carl?

Carl Fredrick Giesler

Thank you, Page. Welcome and thank you for your interest in Jones Energy. Joining Page and I are Jeff Tanner, our COO, Thomas Hester, our VP of Finance and Kirk Goehring, our VP of Strategy. Yesterday afternoon, we reported our third quarter 2018 operating and financial results. Today, we plan to go over highlights from our release as well as recent initiatives at Jones Energy. We recognize that given transitions in the Company, we've not hosted a call for the past couple quarters. While we want to provide a comprehensive update on the Company's position and plan, please bear in mind that still fluid circumstances limit what we can share at this time. A lot of our current efforts inherently need to happen behind the scenes. We look forward to providing more detailed and expansive updates as the situation permits.

With that preamble, let's start with our third quarter 2018 results. From an earnings perspective, the Company reported a loss of $35 million attributable to common shareholders or a loss of $7.16 per share. Adjusted non-GAAP earnings were a net loss attributable to common shareholders of $33.2 million or $6.77 per share. We reported third quarter 2018 EBITDAX of $20 million. This EBITDAX was negatively impacted by $16 million of hedge-related losses. From a capital perspective, we deployed $43.6 million of capital in the third quarter, 84% of which was related to drilling and completion operations. In addition to our planned D&C investments, we increased our working interest in several operated Merge sections through trades and pooling. The trades add significant value by blocking up operated acreage, which increases operating leverage and exiting nonoperated acreage with near-term explorations and/or extension obligations. We also elected to participate in the greater-than-anticipated high-quality non-op activity on our acreage.

For the fourth quarter, we anticipate further capital expenditures of $38 million to $43 million. From a production perspective, we met the top end of our BOE guided range averaging 21,750 BOE per day for the third quarter. Gas and NGLs outpaced are in range oil production. For fourth quarter 2018, we project average daily production of 19,400 BOE per day