HighPoint Resources (HPR) Misses Q3 EPS by 1c, Revenues Beat

HighPoint Resources (NYSE: HPR) reported Q3 EPS of $0.01, $0.01 worse than the analyst estimate of $0.02. Revenue for the quarter came in at $131.13 million versus the consensus estimate of $116.61 million.

Chief Executive Officer and President Scot Woodall commented, "I am pleased with our execution and initial results of the Hereford program in the two full quarters since acquisition. The development program has confirmed our acquisition and economic model for this large, oil-weighted and rural acreage block. We are seeing positive early indications of performance from our initial DSU as the wells have been online for three weeks and are producing at a current average per well rate of approximately 480 Boe/d, of which approximately 90% is oil, and continue to increase. In addition, the early well performance from the DUCs validates the productivity of the Hereford Field and the Company's economic model for full field development. Two of the best performing wells are located six miles apart and have established strong indications of productive deliverability from east to west across our acreage position.

"We successfully managed through mid-stream constraints that persisted into the third quarter and delivered financial results that were highlighted by a 14% sequential increase in both equivalent production and oil volumes, strong growth in EBITDAX, and lower lease operating expense. Oil represented 63% of total equivalent production and we anticipate that the percentage of oil volumes will continue to grow in future quarters as the Hereford development program is expanded. DCP's commissioning of the Mewbourn 3 gas processing facility was completed during the quarter and reached design capacity of 200 MMcf/d in mid-September. We have strategically diversified our gas processing exposure in Northeast ("NE") Wattenberg to other outlets, which will approximately double our first half of 2018 processing capacity by year-end. We believe this flexibility will limit our exposure to any future mid-stream constraints in NE Wattenberg and mitigates our reliance on DCP.

"Our favorable oil weighting, low cost structure and attractive oil differential allows us to deliver a peer leading basin operating margin of $40.69 per Boe for the third quarter. We are well positioned to generate a strong growth profile with a dominant acreage position in the oily and rural areas of the DJ Basin. We will continue our disciplined capital approach and maintain ample liquidity of $567 million that supports our development program going forward."

For earnings history and earnings-related data on HighPoint Resources (HPR) click here.

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