Resolute Energy (REN) Misses Q1 EPS by 266c

Resolute Energy (NYSE: REN) reported Q1 EPS of ($2.80), which includes a non-cash impairment charge of $220 million, and does not compare to the analyst estimate of ($0.14). Revenue for the quarter came in at $41.13 million versus the consensus estimate of $56.81 million.

Our legacy assets, Aneth and Hilight fields, have been producing above levels contemplated in our 2015 guidance. Company-wide we produced an average of 13,500 Boe per day during the quarter as compared to 12,598 in the first quarter 2014 and 13,341 in the fourth quarter of 2014. First quarter production had only a partial contribution from the three horizontal wells that we completed in Reeves County, Texas. Two of the wells went on production in early February, the third went on-line late that month and we expect these wells to contribute more in the second quarter when they will have been on production for a full quarter.

"Perhaps equally important in this time of dampened product pricing, we enhanced our liquidity position. We sold non-core assets in Howard and Martin counties, Texas, for $42 million and worked closely with our banks to secure a borrowing base of $270 million, which includes recognition of the Texas asset sale. We continue to evaluate additional non-core asset sales in order to reduce leverage and further enhance liquidity. These efforts, coupled with the strong commodity price hedges we have in place this year and next, position us to withstand lower product prices. We also have the option to draw down an additional $50 million of second lien term debt which, if consummated, would add substantial liquidity. At this stage, we are on track to generate free cash flow in 2015 that we expect to use to reduce our bank debt."

For earnings history and earnings-related data on Resolute Energy (REN) click here.

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