J.P. Morgan Energy, Power and Renewables Conference - June 2022
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J.P. Morgan Energy, Power and Renewables Conference June 2022
Forward-Looking Statements
This presentation forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the United States (“U.S.”) Private Securities Litigation Reform Act of 1995 regarding our
business, financial condition, results of operations and prospects. All statements, other than historical facts, that address activities or results that PDC assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may
occur in the future are forward-looking statements. Forward-looking statements herein include statements regarding future investments, production, cash flows, dividends, share repurchases, costs, projects, permits, wells, locations, rigs employed, EURs,
commodity prices and realizations, taxes, debt, leverage ratios and ESG matters. The forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events. These
forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of PDC. These include the risk of any unexpected costs or expenses resulting from the acquisition, the
risk that problems may arise in integrating the businesses of the companies which may result in PDC not operating as effectively and efficiently as expected, the risk that PDC may be unable to achieve synergies or other anticipated benefits of the transaction
or that it may take longer than expected to achieve those synergies or benefits, and other important factors that could cause actual results to differ materially from those projected. Additional risks and uncertainties include those detailed in PDC’s Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that are available on its website at http://www.pdce.com and on the SEC’s website at http://www.sec.gov.
The above statements are not the exclusive means of identifying forward-looking statements herein. Although forward-looking statements contained in this presentation reflect our good faith judgment, such statements can only be based on facts and factors
currently known to us. Forward-looking statements are always subject to risks and uncertainties, and become subject to greater levels of risk and uncertainty as they address matters further into the future. Throughout presentation, we may use the term
“projection” or similar terms or expressions, or indicate that we have “modeled” certain future scenarios. We typically use these terms to indicate our current thoughts on possible outcomes relating to our business or our industry in periods beyond the
current fiscal year. Because such statements relate to events or conditions further in the future, they are subject to increased levels of uncertainty.
Reconciliation of Non-U.S. GAAP Financial Measures
•
We use “adjusted cash flows from operations,” “adjusted free cash flow (deficit),” “adjusted net income (loss)” and “adjusted EBITDAX,” non-U.S. GAAP financial measures, for internal management reporting, when evaluating period-to-period changes and, in
some cases, in providing public guidance on possible future results. In addition, we believe these are measures of our fundamental business and can be useful to us, investors, lenders and other parties in the evaluation of our performance relative to our
peers and in assessing acquisition opportunities and capital expenditure projects. These supplemental measures are not measures of financial performance under U.S. GAAP and should be considered in addition to, not as a substitute for, net income (loss) or
cash flows from operations, investing or financing activities and should not be viewed as liquidity measures or indicators of cash flows reported in accordance with U.S. GAAP. The non-U.S. GAAP financial measures that we use may not be comparable to
similarly titled measures reported by other companies. In the future, we may disclose different non-U.S. GAAP financial measures in order to help us and our investors more meaningfully evaluate and compare our future results of operations to our previously
reported results of operations. We strongly encourage investors to review our financial statements and publicly filed reports in their entirety and to not rely on any single financial measure.
•
Adjusted cash flows from operations and adjusted free cash flow (deficit). We believe adjusted cash flows from operations can provide additional transparency into the drivers of trends in our operating cash flows, such as production, realized sales prices and
operating costs, as it disregards the timing of settlement of operating assets and liabilities. We believe adjusted free cash flow (deficit) provides additional information that may be useful in an investor analysis of our ability to generate cash from operating
activities from our existing oil and gas asset base to fund exploration and development activities and to return capital to stockholders in the period in which the related transactions occurred. We exclude from this measure cash receipts and expenditures
related to acquisitions and divestitures of oil and gas properties and capital expenditures for other properties and equipment, which are not reflective of the cash generated or used by ongoing activities on our existing producing properties and, in the case of
acquisitions and divestitures, may be evaluated separately in terms of their impact on our performance and liquidity. Adjusted free cash flow is a supplemental measure of liquidity and should not be viewed as a substitute for cash flows from operations
because it excludes certain required cash expenditures. For example, we may have mandatory debt service requirements or other non-discretionary expenditures which are not deducted from the adjusted free cash flow measure.
We are unable to present a reconciliation of forward-looking adjusted cash flow because components of the calculation, including fluctuations in working capital accounts, are inherently unpredictable. Moreover, estimating the most directly comparable
GAAP measure with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. We believe that forward-looking estimates of adjusted cash flow are important to
investors because they assist in the analysis of our ability to generate cash from our operations.
Adjusted net income (loss). We believe that adjusted net income (loss) provides additional transparency into operating trends, such as production, realized sales prices, operating costs and net settlements on commodity derivative contracts, because it
disregards changes in our net income (loss) from mark-to-market adjustments resulting from net changes in the fair value of our unsettled commodity derivative contracts, and these changes are not directly reflective of our operating performance.
Adjusted EBITDAX. We believe that adjusted EBITDAX provides additional transparency into operating trends because it reflects the financial performance of our assets without regard to financing methods, capital structure, accounting methods or historical
cost basis. In addition, because adjusted EBITDAX excludes certain non-cash expenses, we believe it is not a measure of income, but rather a measure of our liquidity and ability to generate sufficient cash for exploration, development, and acquisitions and to
service our debt obligations.
June 2022 2
PDC Energy – Positioned for Significant Value Creation
2022 Guidance
1. Focus on Efficient Execution
- Total Production: 235,000 - 250,000 Boe/d (~33% Oil)
- $950-$1,000 million Capex
Wattenberg Field
2. Sustainable FCF(1) ~210,000 Boe/d(2)
- $1.7 billion FCF in 2022 and 2023
3. Consistent & Meaningful Delaware Basin
~35,000 Boe/d(2)
Shareholder Returns
- $1+ billion in shareholder returns
4. Through-the-Cycle PDC Market Snapshot(3)
Balance Sheet Strength Nasdaq Symbol PDCE
- YE22 net leverage ratio of ~0.4x Market Cap $7.7 billion
Net Debt ~$1.7 billion
5.Committed to Environmental, Social Enterprise Value $9.4 billion
and Governance Efforts Shares Outstanding ~97.2 million
Total Liquidity ~$0.7 billion
- 15% GHG emission intensity reduction from ’21 to ‘22
Base Dividend Yield 1.8%
- 30% Methane emission intensity reduction from ’21 to ‘22
(1) FCF defined as net cash from operating activities, before changes in working capital, less oil & gas capital investments; (2) Production reflects 2Q22 E; (3) As of 6/15/22. Shares outstanding
as of 6/15/22E, including shares issued as part of GW closing and repurchased in Q2. Net debt is estimated, unaudited level as of May 31. Dividend yield represents quarterly $0.35 per share. June 2022 3
Successful Track Record of Execution
• Consistent, meaningful levels of Free Cash Flow (millions)
quarterly FCF
• Expect to generate $1.7+ billion of FCF in $425+
2022 and 2023 (1) $340
$268 $319
$176
• Expect to return $1 billion to $165
shareholders in 2022 and 2023 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22E
- Returned $245 million of capital to
shareholders in 2021
- Paid $0.50/share special dividend in 4Q21
- Increased base quarterly dividend to $0.35 Shareholder Returns (millions)
per share
- Since beginning of 2022, repurchased ~4.0
million shares through share buyback
program (~$275 million)(2) ~$250
$113 $110
$72
$22 $38
1Q21 2Q21 3Q21 4Q21 1Q22 2Q22E
(1) Assumes $95 WTI/$6.00 NYMEX/$36.50 NGL for balance of year and $85 WTI /$5.00 NYMEX/$31.50 NGL in 2023
(2) Through 6/15/22 June 2022 4
Strong Cash Flow Generation with Commitment to Shareholder Returns
Committed to returning 60+% of post base dividend FCF to shareholders in the form of share buybacks and special annual dividends
2022 Est. Comment
Adjusted Cash flow from Operations1 (in millions) $2,700 Assuming midpoint of production and operating expenses
Capital Expenditures (in millions) ($975) Assuming midpoint of capital range
Adjusted Free Cash Flow2 (in millions) $1,725
Base Dividends Paid (in millions) $125 Assuming no change to share count
60+% of FCF less Base Dividends Paid (in millions) $960
Amount spent on shares repurchased (in millions) $625 Assuming half of $1.25 billion authorized is repurchased in 2022
Commitment towards 60+% annual shareholder return (in millions) $345 Special dividend opportunity
Dividend History and Opportunity
$4.00
$3.00
$2.00
$1.00
$0.50
$0.25 $0.35 $0.35 $0.35
$0.12 $0.12 $0.12
$-
2Q21 3Q21 4Q21 1Q22 2Q22 3Q22E 4Q22E
Base Special
1Assuming $95 WTI/$6.00 NYMEX/$36.50 NGL 2Non GAAP measure, see appendix for reconciliation
June 2022 5
Preserving Fortress Balance Sheet
• 1Q 2022 net leverage ratio of 0.4x with $171 million cash on hand
• No near-term maturities and systematic hedge program enable manageable debt balance
- Current long term debt of $1.7 billion (~0.7x pro forma leverage ratio)
- Anticipate YE22 pro forma leverage ratio of ~0.4x
- Ability to opportunistically term out debt
- Hedges in place to protect debt paydown
YE21/1Q22: ~$950 million LT debt Expected YE22: ~$1,250 million LT debt
$2,000 $2,000 $1,500MM
$1,500MM
Credit Facility Credit Facility
Undrawn (~$300MM Drawn)
$1,500 $1,500
5.75% 5.75%
Senior Senior
Notes Notes
$1,000 $1,000
$750MM $750MM
6.125% 6.125%
Senior Senior
$500 Notes $500 Notes
$200MM $200MM
$0 $0
2021 2022 2023 2024 2025 2026 2027 2028 2021 2022 2023 2024 2025 2026 2027 2028
June 2022 6
Committed to Further Improving ESG Performance
15%
• Key 2022 ESG Priorities $100
• Plan to invest ~$100 million to further improve environmental
performance(1)
$3.5 million
million
-
-
Aim to reduce GHG emission intensity 15% year-over-year(2)
~50%
300+
Target 30% year-over-year methane emission intensity reduction(2)
- Plan to plug and reclaim 300+ vertical Wattenberg wells
- Building out Adams County Water Gathering system to significantly reduce truck-traffic 4,000
- Intent to disclose Scope 2 emissions in 2022 reporting cycle hours
- Begin RSG certification process with membership in OGMP(3) 2.0
• Continued emphasis on earning our social license to operate
30%
- Anticipate donating nearly $3.5 million to local charities, foundations
and scholarship programs and includes humanitarian aid to Ukraine
- Goal of exceeding 4,000 hours of employee community service
• Commitment to best-in-class corporate governance and board refreshment
- Women and minorities represent 50% of current independent directors after addition
of third new diverse board member in February 2022
- Quantitative ESG metric added to 2022 executive compensation program
(1) Includes G&A, LOE and capital costs to meet/exceed Colorado regulations, ESG emission reduction targets, P&A of legacy wells and employee/
community engagement initiatives; (2) Preliminary targets based on estimated 2021 GHG and methane emission intensities. 2022 targets include
improved data analytics. (3) Oil and Gas Methane Partnership June 2022 7Operations Overview
8Significant Scale in Best-of-Class Core Wattenberg
~230,000 Pro Forma Net Acres
• 4 years with no lost time work injuries
Prairie
LARIMER
WELD
• Anticipate investing ~$775-$825 million in 2022
- 3 rig program focused in Range, Kersey and Plains (150 – 175 spuds)
Summit
- One full-time and one part-time completion crew (150 – 175 completions and TILs) Kersey
• Best-in-class cost structure driven by anticipated LOE of < $2.50/Boe
Plains
• Expect to test several key operating initiatives in 2022
- Transitioning to electric rigs and e-fleet completion crew
- Drilling and completing 3-mile lateral wells WELD
- Niobrara A offers inventory upside in portions of the field
ADAMS
Range
PDC Great Western CAP/OGDP
June 2022 9Accretive Transaction Solidifies Core Wattenberg Position
Closed May 2022
• $1.4 billion Core Wattenberg acquisition
Honoring PDC’s Acquisition Criteria
- $543 million of cash plus direct issuance of ~4.0 million shares
- Assumption of ~$550 million of net debt
- ~$26,000 per Boe/d
Highly economic, core inventory in area of expertise
• Key Acquisition Benefits
• Adds Material Scale Enhances sustainable FCF generating ability
- ~185 MMBoe of SEC proved reserves (YE21)
- 50,000 – 55,000 Boe/d total production (42% oil / 67% liquids)(1)
Increases shareholder returns
- ~54,000 net acres
- ~315 total operated locations (~125 DUCs + approved permits)
Accretive to all key per share financial metrics
• Accretive to Key Financial Metrics and GHG & Methane
Emission Intensity
- FCF & FCF/share Maintains strong balance sheet
- Shareholder returns
- G&A and LOE per Boe
- NAV/share
(1) Production estimated as of closing.
June 2022 10Building Progress on Colorado Permitting
Encouraging permit flow from COGCC
• No anti-industry Colorado ballot initiatives for 2022
- March 25th deadline passed for submission to Colorado Secretary of State
• Great Western’s Ocho pad (10 wells) - Adams County
- Received approved Form 2s (subsurface) from COGCC on April 20th after receiving approved Form 2As in 2017
• Kenosha OGDP (69 wells)
- Kenosha approved by COGCC on June 8th
• Great Western’s Broe OGDP (~30 wells)
- On COGCC Docket for approval on June 29th
• Guanella CAP (~450 wells)
- Received feedback from COGCC and Weld County after our pre-Completeness April meeting, working toward Completeness Determination
Pro Forma location count by status (as of June 2022)
Area DUCs Permits Unpermitted Total
Kersey 25 129 55 209
Summit 55 35 317 407
Plains 48 43 386 477
Prairie 14 60 688 762
Range 39 208 0 247
Total 181 475 1,446 2,102
June 2022 11Focused on Execution in the Delaware
4 years with no lost time work injuries • 2022 TIL program has been encouraging
- U-Laterals – 2-mile equivalent laterals in 1-mile section are
• Anticipate investing ~$175 million in 2022 outperforming expectations
- Full-time drilling rig (15 – 20 spuds) - Six well pad in North Central Area has three URLs and three SRLs on
8-10 well per section effective spacing in Wolfcamp A and B
- Part-time completion crew in 1H (20 TILs)
- Potential acreage trades and small bolt-on acquisitions
- Other up-spaced wells performing above type curve
- Testing 2nd Bone Spring
June 2022 12Strong Free Cash Flow Generation At a Compelling Valuation
2023E TOTAL SHAREHOLDER RETURN YIELD
14.5% 13.7% 12.9% 12.4% 12.4%
8.9% 8.1% 7.8% 6.9% 5.7%
2.9% 2.7%
0.9% 0.7% 0.1% 0.0% 0.0%
Peer 1 Peer 2 Peer 3 Peer 4 PDC Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Peer 14 Peer 15 Peer 16
2023E FREE CASH FLOW YIELD
26.6% 26.4%
23.9%
20.7% 19.5% 19.2% 18.4% 17.4% 15.9% 14.4% 14.3% 13.1% 11.7% 11.6% 10.1% 9.5% 8.7%
Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 PDC Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Peer 14 Peer 15 Peer 16
EQUITY VALUE / 2023E CASH FLOW
6.9x 6.5x 5.9x 5.9x 5.4x 4.9x 4.5x 4.3x
3.7x 3.3x 3.2x 3.1x 3.1x 3.0x 2.7x 2.3x 1.9x
Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 PDC Peer 14 Peer 15 Peer 16
Note: Share count does not include the benefit of future incremental share repurchases. Peer operating cash flow and free cash flow 2023 projections per Capital IQ consensus
median estimates. Peer share count and balance sheet items reflect latest, publicly available figures and are updated for announced M&A transactions not closed before end of first
quarter 2022. Total shareholder returns reflect projected total dividends and share repurchases under the most recently announced framework; estimated 2023 shareholder
repurchases reflect authorized programs with guidance on amount and timing of repurchases. Market data as of 6/14/2022. June 2022 13PDC Energy - Focused on Execution and Positioned for Value Creation
Highly Economic, Core Inventory of Permitted Assets
Consistent and Meaningful Shareholder Returns Profile
Preserving Fortress Balance Sheet
Committed to Further Improving ESG Performance
Compelling Value Opportunity with Sustainable FCF
June 2022 14Investor Relations
Aaron Vandeford, Director Investor Relations
Aaron.Vandeford@pdce.com
Corporate Headquarters
PDC Energy, Inc.
1775 Sherman St.
Suite 3000
D e n v e r, C O 8 0 2 0 3
303.860.5800
www.pdce.com
15Appendix
16Committed to Significant Shareholder Returns
• Increased quarterly base dividend to $0.35 per share
• Committed to returning 60+% of annual post-dividend FCF to shareholders via
systematic share repurchases and a special dividend, if needed
• Intend to fully utilize board-authorized $1.25 billion share repurchase program by year-end 2023
Mid-Cycle Prices Bullish Environment Bearish Environment
$55 - $75/bbl WTI $75+/bbl WTI < $55/bbl WTI
• Honor base dividend • Honor base dividend • Honor base dividend
• Aim to meet/exceed 60% threshold via systematic • Avoid overaggressive share repurchases at procyclical highs • Strong balance sheet enables aggressive share repurchase
share repurchase program • Systematic buyback plan may not meet 60% threshold plan in countercyclical world
• Utilize opportunistic buybacks when appropriate • Utilize special dividend, as needed, to meet 60% threshold • Aim to return significantly more than 60% of post-
• Ability to reduce debt and build cash • Ability to reduce debt and build cash for future flexibility dividend FCF through systematic and opportunistic share
buybacks
Systematic = SEC rule 10b5-1; daily repurchases in and out of blackout periods
Opportunistic = SEC rule 10b-18; discretionary repurchases in open trading windows June 2022 17Detailed Hedging
Hedges in place as of June 15th
Crude Oil Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Crude Oil (MMBbls) 2022 2023 2024 2025
Volumes (MMBbls) Volumes (MMBbls)
Collar 1.4 1.4 1.4 1.5 1.5 1.5 0.3 0.2 0.2 0.2 Collar 5.5 5.9 0.8 -
Swap 3.4 3.4 2.5 2.5 2.4 2.4 1.5 1.5 1.6 1.6 Swap 11.3 9.8 6.1 2.6
Total Crude Oil Hedged (MMBbls) 4.8 4.8 3.9 4.0 3.9 3.9 1.8 1.7 1.7 1.7 Total Oil Hedged (MMBbls) 16.8 15.7 7.0 2.6
Crude Oil Price ($/Bbl) Crude Oil Price ($/Bbl)
Floor $ 53.18 $ 53.18 $ 63.61 $ 63.18 $ 59.19 $ 59.19 $ 62.50 $ 65.00 $ 70.00 $ 70.00 Floor $ 53.18 $ 61.27 $ 65.91 $ -
Ceilings $ 67.34 $ 67.34 $ 86.86 $ 86.27 $ 79.74 $ 79.74 $ 85.06 $ 88.37 $ 95.00 $ 95.00 Ceilings $ 67.34 $ 83.11 $ 89.58 $ -
NYMEX Swap $ 58.35 $ 58.35 $ 63.55 $ 64.73 $ 68.78 $ 68.78 $ 69.10 $ 69.10 $ 71.98 $ 71.98 NYMEX Swap $ 52.34 $ 66.42 $ 70.59 $ 75.10
Weighted Average Price (floor) $56.88 $56.88 $63.57 $64.15 $65.10 $65.10 $67.99 $68.56 $71.81 $71.81 Weighted Avg Price (floor) $52.62 $64.48 $70.03 $75.10
Weighted Average Price (ceiling) $60.92 $60.92 $72.04 $72.83 $72.99 $72.99 $71.79 $71.65 $73.97 $73.97 Weighted Avg Price (ceiling) $57.24 $72.71 $72.84 $75.10
Nymex Gas Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Nymex Gas (Mmbtu) 2022 2023 2024 2025
Volumes (MMBtu) Volumes (MMBtu)
Collar 10.7 10.4 5.9 3.8 3.8 3.8 - - - - Collar 39.6 17.2 - -
Swap 14.6 15.0 14.3 12.1 12.1 12.1 6.5 6.5 6.5 6.5 Swap 48.3 50.6 26.2 4.8
Total Nymex Gas Hedged (MMBtu) 25.4 25.4 20.3 15.8 15.8 15.8 6.5 6.5 6.5 6.5 Total Nymex Gas Hedged 87.9 67.8 26.2 4.8
Nymex Gas Price ($/mmbtu) Nymex Gas Price ($/mmbtu)
Floor $ 3.12 $ 3.14 $ 3.37 $ 3.07 $ 3.07 $ 3.07 $ - $ - $ - $ - Floor $ 3.13 $ 3.17 $ - $ -
Ceilings $ 4.61 $ 4.68 $ 5.81 $ 4.36 $ 4.36 $ 4.36 $ - $ - $ - $ - Ceilings $ 4.68 $ 4.91 $ - $ -
NYMEX Swap $ 2.96 $ 2.95 $ 3.18 $ 3.17 $ 3.17 $ 3.17 $ 3.54 $ 3.54 $ 3.54 $ 3.54 NYMEX Swap $ 2.88 $ 3.17 $ 3.54 $ 3.51
Weighted Average Price (floor) $3.02 $3.03 $3.23 $3.15 $3.15 $3.15 $3.54 $3.54 $3.54 $3.54 Weighted Avg Price (floor) $2.99 $3.17 $3.54 $3.51
Weighted Average Price (ceiling) $3.66 $3.66 $3.95 $3.45 $3.45 $3.45 $3.54 $3.54 $3.54 $3.54 Weighted Avg Price (ceiling) $3.69 $3.61 $3.54 $3.51
CIG Weighted Avg. Swap Price ($/mmbtu) $ (0.27) $ (0.27) $ (0.30) $ (0.31) $ (0.31) $ (0.31) $ (0.39) $ (0.39) $ (0.39) $ (0.39) $ (0.26) $ (0.30) $ (0.39) $ (0.41)
June 2022 182022 Guidance
Select operating and financial data
2022 Estimated Commodity Price Sensitivity
Capital Adjusted Cash Flows
from Operations
• Total Investments: $950 - $1,000 million Commodity Price Change: Change:
(millions)
Production $5.00 change in NYMEX crude oil price $ 40
• Total: 235,000 - 250,000 Boe/d $1.00 change in NYMEX natural gas price (assuming constant basis) $ 50
$2.50 change in composite NGLs price $ 45
• Oil: 78,000 – 83,000 Bbls/d
Note: Sensitivity assumes $95 WTI/$6.00 NYMEX/$36.50 NGL
Operating Expenses
• LOE: $245 - $265 million (< $3.00/Boe)
• G&A: $160 - $175 million (< $1.75/Boe) inclusive of $20-$25
million of transaction and transition costs
• TGP: $1.45 - $1.60/Boe
• Production Tax: 7.0% - 8.0%
Price Realizations (% of NYMEX)
• Oil: 95% - 99% (gross realization, excl. TGP)
• Gas: 70% - 80%
1LOE, TGP and Production Taxes June 2022 19Non-U.S. GAAP Reconciliations
In millions unless noted
Cash Flows from Operations to Adjusted Cash Flows from Operations and Adjusted Free Cash Flow
Three Months Ended
March 31, 2022 December 31, 2021
Cash flows from operations to adjusted cash flows from operations and adjusted
free cash flow:
Net cash from operating activities $ 489.0 $ 520.0
Changes in assets and liabilities 49.8 (46.9)
Adjusted cash flows from operations 538.8 473.1
Capital expenditures for development of crude oil and natural gas properties (187.0) (154.3)
Change in accounts payable related to capital expenditures for oil and gas
(33.1) 20.7
development activities
Adjusted free cash flow $ 318.7 $ 339.5
Adjusted EBITDAX
Three Months Ended
March 31, 2022 December 31, 2021
Net income (loss) to adjusted EBITDAX:
Net income (loss) $ (32.0) $ 473.1
Loss (gain) on commodity derivative instruments 568.1 (5.7)
Net settlements on commodity derivative instruments (161.6) (194.8)
Non-cash stock-based compensation 5.5 5.7
Interest expense, net 12.9 23.5
Income tax expense (benefit) 1.2 26.5
Impairment of properties and equipment 0.9 0.1
Exploration, geologic and geophysical expense 0.3 0.2
Depreciation, depletion and amortization 151.1 156.6
Accretion of asset retirement obligations 3.0 2.9
Loss (gain) on sale of properties and equipment (0.1) (0.4)
Adjusted EBITDAX $ 549.3 $ 487.7
Cash from operating activities to adjusted EBITDAX:
Net cash from operating activities $ 489.0 $ 520.0
Interest expense, net 12.9 16.6
Amortization and write-off of debt discount, premium and issuance costs (1.4) (2.3)
Exploration, geologic and geophysical expense 0.3 0.2
Other (1.3) 0.1
Changes in assets and liabilities 49.8 (46.9)
Adjusted EBITDAX $ 549.3 $ 487.7
June 2022 20Definitions
Adjusted FCF (FCF)– Free Cash Flow (cash flows from operations before changes EUR – Estimated Ultimate Recovery
in working capital, less capital investments)
FCF Margin – Adjusted free cash flow divided by capital investments
AMI – Area of Mutual Interest
Gross Margin – Oil, gas and NGL sales less LOE, TGP and prod. tax, as a % of oil, gas
Bbl – Barrel and NGL sales
Boe – Barrel of oil equivalent IRR – Internal rate of return
BU – Building Unit Leverage Ratio – as defined in our revolving credit facility agreement; similar to
Net Debt to EBITDAX
Btu – British thermal unit
LOE – Lease operating expenses
CAGR – Compound Annual Growth Rate
MM – Million
CFPS – Cash flow per share
MMcf – Million cubic feet
COGCC – Colorado Oil & Gas Commission
RoR – Rate of Return
CWC – Completed well cost
SRL/MRL/XRL – Standard-, Mid- and Extended-reach lateral
D&C – Drilling and Completions
SWD – Salt-water disposal
Adj. EBITDAX – Earnings before interest, taxes, depreciation, amortization and
exploration TGP – Transportation, gathering and processing
TIL – Turn-in-line
June 2022 21You can also read
