QEP Resources, Inc.

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SEC Filings

8-K
QEP RESOURCES, INC. filed this Form 8-K on 11/07/2018
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Exhibit


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QEP RESOURCES REPORTS THIRD QUARTER 2018 FINANCIAL AND OPERATING RESULTS
AND PROVIDES UPDATE ON ITS STRATEGIC INITIATIVES

DENVER November 7, 2018 — QEP Resources, Inc. (NYSE:QEP) (QEP or the Company) today reported third quarter 2018 financial and operating results and provided an update on its strategic and financial initiatives (Strategic Initiatives) announced in February 2018.

THIRD QUARTER 2018 OPERATING HIGHLIGHTS

Delivered record quarterly oil and condensate production of 6.6 million barrels (MMbbls), including a record 3.5 MMbbls in the Permian Basin
Decreased Permian Basin lease operating expense (LOE) to $4.42 per Boe, a 31% year-over-year decrease
Increased 2018 oil and condensate production guidance to reflect improved efficiencies in the Permian Basin and better than forecasted results in the Williston Basin, despite the loss of production associated with Uinta Basin divestiture
Increased full year 2018 capital expenditure guidance by 4% at the midpoint to include additional wells drilled and put on production in the Permian Basin as a result of efficiency gains and additional refrac activity in the Williston Basin
Secured Permian Basin flow assurance, via sales agreements with refiners and marketers, on more than 90% of current and projected gross oil volumes for the remainder of 2018 and for 2019

STRATEGIC INITIATIVES UPDATE

Entered into a definitive agreement to sell Williston Basin assets for a purchase price of up to $1.725 billion, subject to purchase price adjustments(1) 
Closed the previously announced Uinta Basin divestiture on September 6, 2018 (Uinta Basin Divestiture) for net cash proceeds of $153.0 million, subject to post-closing adjustments
Continued to progress discussions with interested parties for full divestment of the Company's Haynesville/Cotton Valley assets
Received net cash proceeds of $15.7 million from the sale of other non-core assets during the quarter, bringing total net cash proceeds from asset sales, including the Uinta Basin Divestiture, to $217.5 million in 2018
Reduced headcount by approximately 30% since March 1, 2018 to present, as the Company transitions to a pure-play Permian Basin company

"Our Permian Basin asset delivered Company record oil production volumes for the third consecutive quarter, driven primarily by continued utilization of our 'tank-style' development technique, combined with well density optimization and unmatched completion efficiency," commented Chuck Stanley, Chairman, President and CEO of QEP. "During the quarter, we put four more Permian Basin wells on production than forecast, as we continued to deliver quarter-over-quarter improvements in the pace of new well delivery while driving down costs through industry-leading frac crew efficiency and full utilization of locally sourced proppant. Permian Basin lease operating and gathering and transportation expense also continued to decline as we grew production from horizontal wells, plugged legacy vertical wells and captured operational performance benefits from our full field development.



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(1)
The purchase price is comprised of $1.65 billion in cash and contractual rights to receive up to $50 million and $25 million in the buyer's common stock if the daily volume weighted average trading price of the buyer's common stock for 10 out of 20 consecutive trading days is at or above $12 per share and $15 per share, respectively. QEP shall be entitled to the equity consideration if the share price thresholds are met at any time during the five year period following closing of the transaction. (See Asset Divestitures discussion in this release for additional details).

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