AUSTIN, Texas--(BUSINESS WIRE)--Brigham Minerals, Inc. (NYSE: MNRL) (“Brigham Minerals,” “Brigham,” or the “Company”), a leading mineral and royalty interest acquisition company, today announced record operational and financial results for the quarter ended June 30, 2022 and updated full year 2022 guidance.
RECORD SECOND QUARTER 2022 OPERATIONAL AND FINANCIAL HIGHLIGHTS
-
Record daily production volumes of 13,019 Boe/d (72% liquids, 52% oil)
- Production up 8% sequentially from Q1 2022 including a 24% increase in Permian Basin volumes
-
Record royalty revenues of $90.4 million
- Up 29% sequentially from Q1 2022 driven by 8% higher volumes and 18% higher realized prices
-
Record Net income totaling $50.2 million
- Record Adjusted EBITDA(1) totaling $79.7 million up 31% sequentially from Q1 2022
-
Declared record Q2 2022 dividend of $0.77 per share of Class A common stock(2)
- Base Dividend of $0.16 per share of Class A common stock
- Variable Dividend increased 39% sequentially to $0.61 per share of Class A common stock
- Represents 75% payout ratio of Discretionary Cash Flow ex lease bonus(1)
-
11.0 net (1,792 gross) activity wells comprised of 6.8 net (1,008 gross) DUCs and 4.2 net (784 gross) permits
- 2.4 net DUCs converted to PDP during Q2 2022
- Record 253 gross wells spud during Q2 2022 (1.5 net locations)
- Permian Basin activity wells totaling 6.7 net locations
-
Generated divestiture proceeds totaling $67.3 million from the sale of undeveloped Anadarko Basin assets
- Divested largely undeveloped minerals with anticipated Q3 2022 production of 200 Boe/d
- Asset monetization proceeds partially utilized to fund accretive Permian Basin acquisitions and reduce Net Debt(1) to approximately $49 million as of June 30, 2022
- Permian Basin now makes up 48% of net royalty acres and 68% of net locations
-
Acquired 885 net royalty acres deploying $33.2 million in mineral acquisition capital
- 100% of capital deployed to Permian Basin comprised of 95% PDP, DUC and permitted net locations with anticipated Q3 2022 production of 400 Boe/d
- Locations to be converted by top tier operators including Endeavor Energy Resources, Chevron Corporation and Marathon Oil
-
$24.1 million cash balance and undrawn revolver capacity of $217.0 million as of June 30, 2022
- Conservative leverage at 0.2x last quarter annualized Adjusted EBITDA(1)
FULL YEAR 2022 UPDATED GUIDANCE
-
Updated full year 2022 production guidance of 12,300 to 13,000 Boe/d
- Production guidance raised 9% at the midpoint relative to February 2022 guidance
-
Mineral acquisition capital raised to $100 to $120 million
- Includes impact of highly accretive Permian Basin acquisitions entered into during the first half 2022
- See additional detail in Operational and Financial Guidance Update table below
(1) |
Non-GAAP measure. See “Non-GAAP Financial Measures” below. |
(2) |
See Quarterly Cash Dividend section below regarding Board approval of future dividends. |
Robert M. (“Rob”) Roosa, Chief Executive Officer, commented, “Our team once again generated record operational and financial results during the quarter including record production, revenue, EBITDA(1) and dividends. Our production volumes increased 8% sequentially to a record 13,019 Boe/d driven by continued strong DUC conversions, particularly conversions in the Permian Basin where production volumes grew by 24% sequentially. We also saw record drilling activity during the quarter with approximately 253 gross wells spud on our assets, and when combined with our acquisition efforts, we were able to maintain an almost constant DUC inventory level even with the aforementioned strong conversions. In total, we ended the second quarter with 11.0 net activity wells in inventory and anticipate our production volumes for the full year 2022 to average between 12,300 and 13,000 Boe/d, which represents a 9% increase relative to our original guidance provided in February.”
Blake C. Williams, Chief Financial Officer, added, “Our results continue to excel and highlight the benefits of our high margin business model especially in the current inflationary environment. Our EBITDA(1) grew 31% sequentially and is up 159% year over year, leading to our $0.77 dividend at a 75% payout ratio. While many companies are seeing higher cost, we instead saw an increased EBITDA margin(1) due to our unhedged price realizations and largely fixed cost structure. Our team also took advantage of the supportive commodity price environment by successfully executing our largest, single asset monetization to date generating proceeds of approximately $67.3 million. The proceeds, along with our retained cash flow, were utilized to fully fund our second quarter ground game acquisitions as well as reduce our Net Debt(1) outstanding at the end of the quarter to approximately $49 million. With over $200 million of available liquidity, we plan to continue creating value for our shareholders through accretive acquisitions and our current and future return of capital program.”
(1) |
Non-GAAP measure. See “Non-GAAP Financial Measures” below. |
OPERATIONAL UPDATE
Mineral and Royalty Interest Ownership Update
During the second quarter 2022, the Company executed twenty transactions acquiring approximately 885 net royalty acres (standardized to a 1/8th royalty interest) and deployed $33.2 million in capital. The Company deployed all of its mineral acquisition capital in the second quarter to the Permian Basin. Second quarter acquisitions are expected to deliver near-term production and cash flow growth with the addition of 116 gross DUCs (0.8 net) and 27 gross permits (0.2 net) to inventory counts. The Company also divested 12,550 net royalty acres in the Anadarko Basin generating approximately $67.3 million in cash proceeds, net of customary closing adjustments.
The table below summarizes the Company’s approximate mineral and royalty interest ownership as of the dates indicated.
|
|
Delaware |
|
Midland |
|
Anadarko |
|
DJ |
|
Williston |
|
Total |
Net Royalty Acres |
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2022(1) |
|
30,010 |
|
9,015 |
|
9,850 |
|
24,755 |
|
8,180 |
|
81,810 |
March 31, 2022 |
|
29,875 |
|
8,265 |
|
22,400 |
|
24,740 |
|
8,185 |
|
93,465 |
Acres Added and (Sold) Q/Q |
|
135 |
|
750 |
|
(12,550) |
|
15 |
|
(5) |
|
(11,655) |
% Added and (Sold) Q/Q |
|
—% |
|
9% |
|
(56)% |
|
—% |
|
—% |
|
(12)% |
(1) June 30, 2022 NRA totals include Division Order Interest adjustments relative to prior quarters |
||||||||||||
DUC Conversions Updates
During the second quarter 2022, the Company identified approximately 223 gross (2.4 net) horizontal wells converted to production, which represented 33% of its net DUC inventory as of the first quarter 2022 (24% of gross DUCs). Well conversions to proved developed producing during second quarter are summarized in the table below:
Q2 2022 Wells Converted to Proved Developed Producing |
||||
|
|
Gross |
|
Net |
DUCs |
|
223 |
|
2.4 |
Acquired Wells Net of Divestitures |
|
(238) |
|
(1.6) |
Converted Permitted and Other |
|
15 |
|
— |
Total |
|
— |
|
0.8 |
Drilling Activity Update
During the second quarter 2022, the Company identified a record 253 gross (1.5 net) wells spud on its mineral position, which represents a 6% sequential increase from the first quarter 2022 on a gross well basis. Brigham’s average quarterly gross and net wells spud over 2019 to 2021 relative to the second quarter 2022 are summarized in the table below:
|
2019(1) |
|
2020(1) |
|
2021(1) |
|
Q1 22 |
|
Q2 22 |
Gross Wells Spud |
219 |
|
95 |
|
164 |
|
238 |
|
253 |
Net Wells Spud |
1.4 |
|
0.7 |
|
1.3 |
|
2.1 |
|
1.5 |
(1) Amounts represent average quarterly numbers during the year. |
|||||||||
DUC and Permit Inventory Update
The Company expects 2022 production volumes will be driven by the continued conversion of its DUC and permit inventory. Brigham’s gross and net DUC and permit inventory as of June 30, 2022 by basin is outlined in the table below:
|
|
Development Inventory by Basin(1) |
||||||||||
|
|
Delaware |
|
Midland |
|
Anadarko |
|
DJ |
|
Williston |
|
Total |
Gross Inventory |
|
|
|
|
|
|
|
|
|
|
|
|
DUCs |
|
231 |
|
373 |
|
35 |
|
205 |
|
164 |
|
1,008 |
Permits |
|
274 |
|
146 |
|
5 |
|
173 |
|
186 |
|
784 |
Net Inventory |
|
|
|
|
|
|
|
|
|
|
|
|
DUCs |
|
2.1 |
|
1.9 |
|
0.1 |
|
2.3 |
|
0.4 |
|
6.8 |
Permits |
|
2.0 |
|
0.7 |
|
— |
|
1.1 |
|
0.4 |
|
4.2 |
(1) Individual amounts may not add to totals due to rounding. |
||||||||||||
FINANCIAL UPDATE
For the three months ended June 30, 2022, crude oil, natural gas and NGL production volumes increased 8% to 13,019 Boe/d as compared to the three months ended March 31, 2022 and increased 45% as compared to the same prior-year period.
For the three months ended June 30, 2022, average realized prices were $108.37 per barrel of oil, $6.95 per Mcf of natural gas, and $42.31 per barrel of NGL, for a total equivalent price of $76.31 per Boe. This represents a 18% increase relative to the three months ended March 31, 2022 and a 69% increase relative to the same prior-year period.
The Company's net income for the three months ended June 30, 2022 was $50.2 million, up 28% from the three months ended March 31, 2022 and up 227% relative to the same prior-year period.
Adjusted EBITDA was $79.7 million for the three months ended June 30, 2022, up 31% from the three months ended March 31, 2022 and up 159% relative to the same prior-year period. Adjusted EBITDA ex lease bonus was $79.2 million for the three months ended June 30, 2022, up 34% from the three months ended March 31, 2022 and up 164% from the same prior-year period. Adjusted EBITDA and Adjusted EBITDA ex lease bonus are Non-GAAP financial measures. For a definition of Adjusted EBITDA and Adjusted EBITDA ex lease bonus and a reconciliation to our most directly comparable measure calculated and presented in accordance with GAAP, please read "Non-GAAP Financial Measures” below.
As of June 30, 2022, the Company had a cash balance of $24.1 million and $217.0 million of undrawn revolver capacity under its credit facility, providing the Company with total liquidity of $241.1 million.
Results of Operations |
||||||||||||||||
Unaudited Financial and Operational Results |
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
($ in thousands, except for realized prices and unit expenses) |
|
June 30, 2022 |
|
March 31, 2022 |
|
June 30, 2022 |
|
June 30, 2021 |
||||||||
Operating Revenues |
|
|
|
|
|
|
|
|
||||||||
Oil sales |
|
$ |
66,415 |
|
|
$ |
50,688 |
|
|
$ |
117,103 |
|
|
$ |
49,542 |
|
Natural gas sales |
|
|
13,968 |
|
|
|
10,312 |
|
|
|
24,280 |
|
|
|
12,141 |
|
NGL sales |
|
|
10,020 |
|
|
|
8,995 |
|
|
|
19,015 |
|
|
|
7,498 |
|
Total mineral and royalty revenue |
|
$ |
90,403 |
|
|
$ |
69,995 |
|
|
$ |
160,398 |
|
|
$ |
69,181 |
|
Lease bonus and other revenue |
|
|
476 |
|
|
|
1,433 |
|
|
|
1,909 |
|
|
|
2,403 |
|
Total Revenues |
|
$ |
90,879 |
|
|
$ |
71,428 |
|
|
$ |
162,307 |
|
|
$ |
71,584 |
|
Production |
|
|
|
|
|
|
|
|
||||||||
Oil (MBbls) |
|
|
612 |
|
|
|
552 |
|
|
|
1,164 |
|
|
|
834 |
|
Natural gas (MMcf) |
|
|
2,011 |
|
|
|
1,868 |
|
|
|
3,879 |
|
|
|
2,916 |
|
NGLs (MBbls) |
|
|
237 |
|
|
|
220 |
|
|
|
457 |
|
|
|
301 |
|
Equivalents (MBoe) |
|
|
1,185 |
|
|
|
1,083 |
|
|
|
2,268 |
|
|
|
1,621 |
|
Equivalents per day (Boe/d) |
|
|
13,019 |
|
|
|
12,031 |
|
|
|
12,528 |
|
|
|
8,959 |
|
Realized Prices ($/Boe) |
|
|
|
|
|
|
|
|
||||||||
Oil ($/Bbl) |
|
$ |
108.37 |
|
|
$ |
91.90 |
|
|
$ |
100.57 |
|
|
$ |
59.39 |
|
Natural gas ($/Mcf) |
|
|
6.95 |
|
|
|
5.52 |
|
|
|
6.26 |
|
|
|
4.16 |
|
NGLs ($/Bbl) |
|
|
42.31 |
|
|
|
40.90 |
|
|
|
41.63 |
|
|
|
24.88 |
|
Average Realized Price |
|
$ |
76.31 |
|
|
$ |
64.64 |
|
|
$ |
70.74 |
|
|
$ |
42.66 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
||||||||
Gathering, transportation and marketing |
|
$ |
2,246 |
|
|
$ |
2,003 |
|
|
$ |
4,249 |
|
|
$ |
3,326 |
|
Severance and ad valorem taxes |
|
|
5,361 |
|
|
|
4,331 |
|
|
|
9,692 |
|
|
|
4,133 |
|
Depreciation, depletion, and amortization |
|
|
13,449 |
|
|
|
12,313 |
|
|
|
25,762 |
|
|
|
18,447 |
|
General and administrative (before share-based compensation) |
|
|
3,587 |
|
|
|
4,428 |
|
|
|
8,015 |
|
|
|
6,284 |
|
Total operating expenses (before share-based compensation) |
|
$ |
24,643 |
|
|
$ |
23,075 |
|
|
$ |
47,718 |
|
|
$ |
32,190 |
|
General and administrative, share-based compensation |
|
|
1,959 |
|
|
|
1,481 |
|
|
|
3,440 |
|
|
|
4,855 |
|
Total Operating Expenses |
|
$ |
26,602 |
|
|
$ |
24,556 |
|
|
$ |
51,158 |
|
|
$ |
37,045 |
|
Income from Operations |
|
$ |
64,277 |
|
|
$ |
46,872 |
|
|
$ |
111,149 |
|
|
$ |
34,539 |
|
Other expenses: |
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
(1,154 |
) |
|
|
(914 |
) |
|
|
(2,068 |
) |
|
|
(654 |
) |
Other income, net |
|
|
14 |
|
|
|
20 |
|
|
|
34 |
|
|
|
15 |
|
Income Before Taxes |
|
$ |
63,137 |
|
|
$ |
45,978 |
|
|
$ |
109,115 |
|
|
$ |
33,900 |
|
Income tax expense |
|
|
12,957 |
|
|
|
6,913 |
|
|
|
19,870 |
|
|
|
6,503 |
|
Net Income |
|
$ |
50,180 |
|
|
$ |
39,065 |
|
|
$ |
89,245 |
|
|
$ |
27,397 |
|
Less: Net income attributable to non-controlling interest |
|
|
(7,931 |
) |
|
|
(8,083 |
) |
|
|
(16,014 |
) |
|
|
(7,613 |
) |
Net income attributable to Brigham Minerals, Inc. stockholders |
|
$ |
42,249 |
|
|
$ |
30,982 |
|
|
$ |
73,231 |
|
|
$ |
19,784 |
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||
Unit Expenses ($/Boe) |
|
June 30, 2022 |
|
March 31, 2022 |
|
June 30, 2022 |
|
June 30, 2021 |
||||
Gathering, transportation and marketing |
|
$ |
1.90 |
|
$ |
1.85 |
|
$ |
1.87 |
|
$ |
2.05 |
Severance and ad valorem taxes |
|
|
4.52 |
|
|
4.00 |
|
|
4.27 |
|
|
2.55 |
Depreciation, depletion and amortization |
|
|
11.35 |
|
|
11.37 |
|
|
11.36 |
|
|
11.38 |
General and administrative (before share-based compensation) |
|
|
3.03 |
|
|
4.09 |
|
|
3.53 |
|
|
3.87 |
General and administrative, share-based compensation |
|
|
1.65 |
|
|
1.37 |
|
|
1.52 |
|
|
2.99 |
Interest expense, net |
|
|
0.97 |
|
|
0.84 |
|
|
0.91 |
|
|
0.40 |
Quarterly Cash Dividend
The Company’s Board of Directors (the “Board”) has declared a quarterly cash dividend incorporating results for the second quarter 2022 of $0.77 per share of Class A common stock at a 75% payout ratio. This represents a 28% increase in payout compared to the dividend declared for the first quarter of 2022. The second quarter dividend represents a base dividend of $0.16 per share and a variable dividend of $0.61 per share and will be paid on August 26, 2022 to holders of record as of August 19, 2022. An amount equal to the cash dividend per share will also be set aside for each outstanding award granted under the long-term incentive plan for payment upon the vesting of such awards in accordance with their terms.
Future declarations of dividends are subject to approval by the Board and to the Board’s continuing determination that the declarations of dividends are in the best interests of the Company and its shareholders. Future dividends may be adjusted at the Board’s discretion based on market conditions and capital availability.
OPERATIONAL AND FINANCIAL GUIDANCE UPDATE
Below is Brigham's updated guidance for the full year 2022:
|
|
Original 2022 Guidance |
|
Updated 2022 Guidance |
|
Change % |
||||
Guidance Ranges |
|
Low |
|
High |
|
Low |
|
High |
|
|
Capital Allocation |
|
|
|
|
|
|
|
|
|
|
Quarterly Base Dividend (Annualized)(1) |
|
$0.16 ($0.64) |
|
$0.16 ($0.64) |
|
|
||||
Payout Ratio (Base + Variable Dividend) |
|
75% |
— |
80% |
|
70% |
— |
80% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Daily Net Production (Boe/d) |
|
11,300 |
— |
12,000 |
|
12,300 |
— |
13,000 |
|
+9% |
Oil Cut (%) |
|
48% |
— |
52% |
|
48% |
— |
52% |
|
|
Lease Bonus ($ millions) |
|
$1.0 |
— |
$3.0 |
|
$1.5 |
— |
$3.5 |
|
+25% |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
Cash G&A Expense ($ millions) |
|
$13.3 |
— |
13.8(2) |
|
$15.3 |
— |
15.8(2) |
|
+15% |
Cash G&A Expense Unit Cost ($/Boe) |
|
$3.20 midpoint |
|
$3.36 midpoint |
|
+5% |
||||
Share Based Compensation Expense ($ millions)(2) |
|
$9.2 |
— |
$10.0(2) |
|
$7.2 |
— |
$8.0(2) |
|
-21% |
Total G&A Expense ($ millions) |
|
$22.5 |
— |
$23.8 |
|
$22.5 |
— |
$23.8 |
|
0% |
Total G&A Expense Unit Cost ($/Boe) |
|
$5.44 midpoint |
|
$5.01 midpoint |
|
-8% |
||||
|
|
|
|
|
|
|
|
|
|
|
Gathering, Transportation, and Marketing ($/Boe) |
|
$2.75 |
— |
$3.25 |
|
$2.00 |
— |
$2.50 |
|
-25% |
Production Taxes (% of Revenue) |
|
7% |
— |
9% |
|
7% |
— |
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes |
|
|
|
|
|
|
|
|
|
|
Tax Depletion ($/Boe) |
|
$11.50 |
— |
$13.50 |
|
$11.50 |
— |
$13.50 |
|
|
Percent of Dividend Expected to be Return of Capital |
|
20% |
— |
40% |
|
20% |
— |
40% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mineral Acquisition Capital |
|
|
|
|
|
|
|
|
|
|
Ground Game Acquisition Budget ($ millions) |
|
$60 |
— |
$80 |
|
$100 |
— |
$120 |
|
+57% |
(1) Subject to future board approval |
||||||||||
(2) Original 2022 Guidance modified in May 2022 to reflect subsequent implementation of short term incentive plan, which re-allocated approximately $2 million from share based compensation to cash G&A |
||||||||||
Brigham Minerals Second Quarter 2022 Earnings Conference Call
- Friday, August 5, 2022 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time)
- Pre-register by visiting: https://ige.netroadshow.com/registration/q4inc/11359/brigham-minerals-second-quarter-2022-earnings-conference-call/
- Listen to a live audio webcast of the call by visiting the Company’s website
- A recording of the webcast will be available on the Company’s website after the call
Non-GAAP Financial Measures
Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA Margin, Discretionary Cash Flow, Discretionary Cash Flow ex lease bonus, and Net Debt are non-GAAP supplemental financial measures used by our management and by external users of our financial statements such as investors, research analysts and others to assess the financial performance of our assets and their ability to sustain dividends over the long term without regard to financing methods, capital structure or historical cost basis.
We define Adjusted EBITDA as Net Income before depreciation, depletion and amortization, share-based compensation expense, interest expense, and income tax expense, less other income. We define Adjusted EBITDA ex lease bonus as Adjusted EBITDA further adjusted to eliminate the impacts of lease bonus and other revenues we receive due to the unpredictability of timing of the revenue. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenue. We define Discretionary Cash Flow as Adjusted EBITDA, less cash interest expense and cash taxes. We define Discretionary Cash Flow ex lease bonus as Discretionary Cash Flow further adjusted to eliminate the impacts of lease bonus revenue. We define Net Debt as total debt less cash and cash equivalents.
Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA Margin, Discretionary Cash Flow, Discretionary Cash Flow ex lease bonus, and Net Debt do not represent and should not be considered alternatives to, or more meaningful than, net income or any other measure of financial performance presented in accordance with GAAP as measures of our financial performance. Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA Margin, Discretionary Cash Flow and Discretionary Cash Flow ex lease bonus have important limitations as analytical tools because they exclude some but not all items that affect net income, the most directly comparable GAAP financial measure. Net Debt should not be considered an alternative to, or more meaningful than, total debt, the most directly comparable GAAP measure. Our computation of Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA Margin, Discretionary Cash Flow, Discretionary Cash Flow ex lease bonus, and Net Debt may differ from computations of similarly titled measures of other companies.
The following tables present a reconciliation of Adjusted EBITDA, Adjusted EBITDA ex lease bonus, Adjusted EBITDA Margin, Discretionary Cash Flow, Discretionary Cash Flow ex lease bonus, and Net Debt to the most directly comparable GAAP financial measure for the periods indicated.
SUPPLEMENTAL SCHEDULES |
||||||||||||||||||||
Reconciliation of Adjusted EBITDA, Adjusted EBITDA ex Lease Bonus and Adjusted EBITDA Margin |
||||||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
($ In thousands) |
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
||||||||||
Net Income |
|
$ |
50,180 |
|
|
$ |
39,065 |
|
|
$ |
15,326 |
|
|
$ |
89,245 |
|
|
$ |
27,397 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation, depletion, and amortization |
|
|
13,449 |
|
|
|
12,313 |
|
|
|
9,080 |
|
|
|
25,762 |
|
|
|
18,447 |
|
Share-based compensation expense |
|
|
1,959 |
|
|
|
1,481 |
|
|
|
2,555 |
|
|
|
3,440 |
|
|
|
4,855 |
|
Interest expense, net |
|
|
1,154 |
|
|
|
914 |
|
|
|
387 |
|
|
|
2,068 |
|
|
|
654 |
|
Income tax expense |
|
|
12,957 |
|
|
|
6,913 |
|
|
|
3,430 |
|
|
|
19,870 |
|
|
|
6,503 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income, net |
|
|
14 |
|
|
|
20 |
|
|
|
2 |
|
|
|
34 |
|
|
|
15 |
|
Adjusted EBITDA |
|
$ |
79,685 |
|
|
$ |
60,666 |
|
|
$ |
30,776 |
|
|
$ |
140,351 |
|
|
$ |
57,841 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease bonus and other revenue |
|
|
476 |
|
|
|
1,433 |
|
|
|
806 |
|
|
|
1,909 |
|
|
|
2,403 |
|
Adjusted EBITDA ex Lease Bonus |
|
$ |
79,209 |
|
|
$ |
59,233 |
|
|
$ |
29,970 |
|
|
$ |
138,442 |
|
|
$ |
55,438 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Memo: Adjusted EBITDA Margin |
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue |
|
$ |
90,879 |
|
|
$ |
71,428 |
|
|
$ |
37,811 |
|
|
$ |
162,307 |
|
|
$ |
71,584 |
|
Adjusted EBITDA |
|
$ |
79,685 |
|
|
$ |
60,666 |
|
|
$ |
30,776 |
|
|
$ |
140,351 |
|
|
$ |
57,841 |
|
Adjusted EBITDA Margin |
|
|
88 |
% |
|
|
85 |
% |
|
|
81 |
% |
|
|
86 |
% |
|
|
81 |
% |
Reconciliation of Discretionary Cash Flow and Discretionary Cash Flow ex Lease Bonus |
||||||||||||
|
|
Three Months Ended |
||||||||||
($ In thousands, except per share amounts) |
|
June 30, 2022 |
|
March 31, 2022 |
|
June 30, 2021 |
||||||
Adjusted EBITDA(1) |
|
$ |
79,685 |
|
|
$ |
60,666 |
|
|
$ |
30,776 |
|
Less: |
|
|
|
|
|
|
||||||
Adjusted EBITDA attributable to non-controlling interest |
|
|
(8,869 |
) |
|
|
(8,220 |
) |
|
|
(6,315 |
) |
Adjusted EBITDA attributable to Class A common stock |
|
$ |
70,816 |
|
|
$ |
52,446 |
|
|
$ |
24,461 |
|
Less: |
|
|
|
|
|
|
||||||
Cash interest expense |
|
|
989 |
|
|
|
694 |
|
|
|
178 |
|
Cash taxes |
|
|
13,500 |
|
|
|
8,200 |
|
|
|
3,200 |
|
Dividend equivalent rights |
|
|
887 |
|
|
|
647 |
|
|
|
616 |
|
Discretionary cash flow to Class A common stock |
|
$ |
55,440 |
|
|
$ |
42,905 |
|
|
$ |
20,467 |
|
Less: |
|
|
|
|
|
|
||||||
Lease bonus |
|
|
423 |
|
|
|
1,239 |
|
|
|
641 |
|
Discretionary cash flow ex lease bonus to Class A common stock |
|
$ |
55,017 |
|
|
$ |
41,666 |
|
|
$ |
19,826 |
|
Payout Ratio: |
|
|
75 |
% |
|
|
75 |
% |
|
|
80 |
% |
Distributed cash flow to Class A common stock |
|
$ |
41,263 |
|
|
$ |
31,250 |
|
|
$ |
15,861 |
|
|
|
|
|
|
|
|
||||||
Shares of Class A common stock |
|
|
53,721 |
|
|
|
52,322 |
|
|
|
45,134 |
|
|
|
|
|
|
|
|
||||||
Distributed cash flow per share of Class A common stock — Dividend |
|
$ |
0.77 |
|
|
$ |
0.60 |
|
|
$ |
0.35 |
|
(1) Refer to Reconciliation of Adjusted EBITDA from Net Income above. |
||||||||||||
Reconciliation of Net Debt |
|||||||||
($ In thousands) |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|||
Total Debt |
|
$ |
73,000 |
|
$ |
93,000 |
|
$ |
93,000 |
Less: Cash and Cash Equivalents |
|
|
24,103 |
|
|
6,213 |
|
|
20,819 |
Net Debt |
|
$ |
48,897 |
|
$ |
86,787 |
|
$ |
72,181 |
Condensed Consolidated Balance Sheets |
||||||||
|
|
June 30, |
|
December 31, |
||||
(In thousands, except share amounts) |
|
|
2022 |
|
|
|
2021 |
|
ASSETS |
|
(Unaudited) |
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
24,103 |
|
|
$ |
20,819 |
|
Restricted cash |
|
|
— |
|
|
|
200 |
|
Accounts receivable |
|
|
72,947 |
|
|
|
30,539 |
|
Prepaid expenses and other |
|
|
4,967 |
|
|
|
3,145 |
|
Total current assets |
|
|
102,017 |
|
|
|
54,703 |
|
Oil and gas properties, at cost, using the full cost method of accounting: |
|
|
|
|
||||
Unevaluated property |
|
|
307,451 |
|
|
|
338,613 |
|
Evaluated property |
|
|
744,018 |
|
|
|
633,138 |
|
Less accumulated depreciation, depletion, and amortization |
|
|
(339,513 |
) |
|
|
(239,612 |
) |
Oil and gas properties, net |
|
|
711,956 |
|
|
|
732,139 |
|
Other property and equipment |
|
|
3,357 |
|
|
|
2,060 |
|
Less accumulated depreciation |
|
|
(1,512 |
) |
|
|
(1,280 |
) |
Other property and equipment, net |
|
|
1,845 |
|
|
|
780 |
|
Operating lease right-of-use asset |
|
|
6,178 |
|
|
|
6,764 |
|
Deferred tax asset |
|
|
37,918 |
|
|
|
25,308 |
|
Other assets, net |
|
|
1,356 |
|
|
|
1,183 |
|
Total assets |
|
$ |
861,270 |
|
|
$ |
820,877 |
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable and accrued liabilities |
|
$ |
18,990 |
|
|
$ |
20,473 |
|
Current operating lease liability |
|
|
1,200 |
|
|
|
1,178 |
|
Total current liabilities |
|
|
20,190 |
|
|
|
21,651 |
|
Long-term bank debt |
|
|
73,000 |
|
|
|
93,000 |
|
Non-current operating lease liability |
|
|
5,138 |
|
|
|
5,742 |
|
Other non-current liabilities |
|
|
1,711 |
|
|
|
810 |
|
Equity: |
|
|
|
|
||||
Preferred stock, $0.01 par value; 50,000,000 authorized; no shares issued and outstanding at June 30, 2022 and December 31, 2021 |
|
|
— |
|
|
|
— |
|
Class A common stock, $0.01 par value; 400,000,000 authorized, 54,138,411 shares issued and 53,579,712 shares outstanding at June 30, 2022; 400,000,000 authorized, 48,796,518 shares issued and 48,359,888 shares outstanding at December 31, 2021 |
|
|
541 |
|
|
|
488 |
|
Class B common stock, $0.01 par value; 150,000,000 authorized, 6,866,430 shares issued and outstanding at June 30, 2022; 150,000,000 authorized, 11,371,517 shares issued and outstanding at December 31, 2021 |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
746,022 |
|
|
|
634,564 |
|
Accumulated deficit |
|
|
(86,783 |
) |
|
|
(105,096 |
) |
Treasury stock, at cost; 558,699 shares at June 30, 2022 and 436,630 shares at December 31, 2021 |
|
|
(6,338 |
) |
|
|
(3,527 |
) |
Total equity attributable to Brigham Minerals, Inc. |
|
|
653,442 |
|
|
|
526,429 |
|
Non-controlling interests |
|
|
107,789 |
|
|
|
173,245 |
|
Total equity |
|
$ |
761,231 |
|
|
$ |
699,674 |
|
Total liabilities and equity |
|
$ |
861,270 |
|
|
$ |
820,877 |
|
Unaudited Condensed Consolidated Statements of Operations |
||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
(In thousands, except per share data) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
REVENUES |
|
|
|
|
|
|
|
|
||||||||
Mineral and royalty revenues |
|
$ |
90,403 |
|
|
$ |
37,005 |
|
|
$ |
160,398 |
|
|
$ |
69,181 |
|
Lease bonus and other revenues |
|
|
476 |
|
|
|
806 |
|
|
|
1,909 |
|
|
|
2,403 |
|
Total revenues |
|
|
90,879 |
|
|
|
37,811 |
|
|
|
162,307 |
|
|
|
71,584 |
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
||||||||
Gathering, transportation and marketing |
|
|
2,246 |
|
|
|
1,593 |
|
|
|
4,249 |
|
|
|
3,326 |
|
Severance and ad valorem taxes |
|
|
5,361 |
|
|
|
2,300 |
|
|
|
9,692 |
|
|
|
4,133 |
|
Depreciation, depletion, and amortization |
|
|
13,449 |
|
|
|
9,080 |
|
|
|
25,762 |
|
|
|
18,447 |
|
General and administrative |
|
|
5,546 |
|
|
|
5,697 |
|
|
|
11,455 |
|
|
|
11,139 |
|
Total operating expenses |
|
|
26,602 |
|
|
|
18,670 |
|
|
|
51,158 |
|
|
|
37,045 |
|
INCOME FROM OPERATIONS |
|
|
64,277 |
|
|
|
19,141 |
|
|
|
111,149 |
|
|
|
34,539 |
|
Interest expense, net |
|
|
(1,154 |
) |
|
|
(387 |
) |
|
|
(2,068 |
) |
|
|
(654 |
) |
Other income, net |
|
|
14 |
|
|
|
2 |
|
|
|
34 |
|
|
|
15 |
|
Income before income taxes |
|
|
63,137 |
|
|
|
18,756 |
|
|
|
109,115 |
|
|
|
33,900 |
|
Income tax expense |
|
|
12,957 |
|
|
|
3,430 |
|
|
|
19,870 |
|
|
|
6,503 |
|
NET INCOME |
|
$ |
50,180 |
|
|
$ |
15,326 |
|
|
$ |
89,245 |
|
|
$ |
27,397 |
|
Less: Net income attributable to non-controlling interest |
|
|
(7,931 |
) |
|
|
(4,138 |
) |
|
|
(16,014 |
) |
|
|
(7,613 |
) |
Net income attributable to Brigham Minerals, Inc. stockholders |
|
$ |
42,249 |
|
|
$ |
11,188 |
|
|
$ |
73,231 |
|
|
$ |
19,784 |
|
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME PER COMMON SHARE |
|
|
|
|
|
|
|
|||||||||
Basic |
|
$ |
0.80 |
|
|
$ |
0.25 |
|
|
$ |
1.45 |
|
|
$ |
0.45 |
|
Diluted |
|
$ |
0.78 |
|
|
$ |
0.25 |
|
|
$ |
1.40 |
|
|
$ |
0.44 |
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
52,547 |
|
|
|
43,916 |
|
|
|
50,505 |
|
|
|
43,717 |
|
Diluted |
|
|
54,398 |
|
|
|
45,281 |
|
|
|
52,205 |
|
|
|
45,091 |
|
Unaudited Condensed Consolidated Statement of Cash Flows |
||||||||
|
|
Six Months Ended June 30, |
||||||
(In thousands) |
|
|
2022 |
|
|
|
2021 |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
||||
Net income |
|
$ |
89,245 |
|
|
$ |
27,397 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation, depletion and amortization |
|
|
25,762 |
|
|
|
18,447 |
|
Share-based compensation expense |
|
|
3,440 |
|
|
|
4,855 |
|
Amortization of debt issuance costs |
|
|
280 |
|
|
|
141 |
|
Deferred income tax expense |
|
|
2,272 |
|
|
|
1,286 |
|
Credit losses |
|
|
274 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
(Increase) in accounts receivable |
|
|
(42,682 |
) |
|
|
(8,040 |
) |
(Increase) decrease in other current assets |
|
|
(1,818 |
) |
|
|
581 |
|
Increase in accounts payable and accrued liabilities |
|
|
10,175 |
|
|
|
448 |
|
Increase in other long-term liabilities |
|
|
— |
|
|
|
16 |
|
Net cash provided by operating activities |
|
$ |
86,948 |
|
|
$ |
45,131 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
||||
Additions to oil and gas properties |
|
|
(59,800 |
) |
|
|
(36,331 |
) |
Additions to other fixed assets |
|
|
(1,229 |
) |
|
|
(27 |
) |
Proceeds from sale of oil and gas properties, net |
|
|
74,370 |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
|
$ |
13,341 |
|
|
$ |
(36,358 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
||||
Payments of long-term debt |
|
|
(70,000 |
) |
|
|
(4,000 |
) |
Borrowing of long-term debt |
|
|
50,000 |
|
|
|
27,000 |
|
Offering costs of Class A common stock |
|
|
(78 |
) |
|
|
— |
|
Dividends paid |
|
|
(55,768 |
) |
|
|
(25,537 |
) |
Distribution to holders of non-controlling interest |
|
|
(11,163 |
) |
|
|
(7,809 |
) |
Debt issuance costs |
|
|
(453 |
) |
|
|
(21 |
) |
Payment of employee tax withholding for settlement of equity compensation awards |
|
|
(9,743 |
) |
|
|
(1,136 |
) |
Net cash used in financing activities |
|
$ |
(97,205 |
) |
|
$ |
(11,503 |
) |
Change in cash and cash equivalents and restricted cash |
|
|
3,084 |
|
|
|
(2,730 |
) |
Cash and cash equivalents and restricted cash, beginning of period |
|
|
21,019 |
|
|
|
9,144 |
|
Cash and cash equivalents and restricted cash, end of period |
|
$ |
24,103 |
|
|
$ |
6,414 |
|
Supplemental disclosure of non-cash activity: |
|
|
|
|
||||
Accrued capital expenditures |
|
$ |
62 |
|
|
$ |
100 |
|
Capitalized share-based compensation cost |
|
$ |
2,855 |
|
|
$ |
3,487 |
|
Issuance of Class A common stock for acquisitions of oil and gas properties, net |
|
$ |
17,629 |
|
|
$ |
— |
|
Temporary equity cumulative adjustment to carrying value |
|
$ |
— |
|
|
$ |
54,294 |
|
Supplemental cash flow information: |
|
|
|
|
||||
Cash payments for loan commitment fees and interest |
|
$ |
(1,916 |
) |
|
$ |
(437 |
) |
Tax payments, net of refunds |
|
$ |
(11,564 |
) |
|
$ |
(2,881 |
) |
ABOUT BRIGHAM MINERALS, INC.
Brigham Minerals is an Austin, Texas, based company that acquires and actively manages a portfolio of mineral and royalty interests in the core of some of the most active, highly economic, liquids-rich resource basins across the continental United States. Brigham Minerals’ assets are located in the Delaware and Midland Basins in West Texas and New Mexico, the Anadarko Basin of Oklahoma, the DJ Basin in Colorado and Wyoming, and the Williston Basin in North Dakota. The Company’s primary business objective is to maximize risk-adjusted total return to its shareholders by both capturing organic growth in its existing assets as well as leveraging its highly experienced technical evaluation team to continue acquiring minerals.
Cautionary Statement Concerning Forward-Looking Statements
This press release contains forward-looking statements. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including production and other guidance within this press release. These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include, but are not limited to, operator capital discipline and inflation impacts on their cash flows, the Company’s ability to integrate acquisitions into its existing business, changes in oil, natural gas and NGL prices, weather and environmental conditions, the timing of planned capital expenditures, availability of and competition for acquisitions, operational factors affecting the commencement or maintenance of producing wells on the Company’s properties, the condition of the capital markets generally, as well as the Company’s ability to access them, economic and competitive conditions, including those resulting from the current conflict between Russia and Ukraine and elevated inflation levels resulting from global supply and demand imbalances, the proximity to and capacity of transportation, uncertainties regarding environmental regulations or litigation, global or national health events, including the ongoing spread and economic effects of the ongoing COVID-19 pandemic, potential future pandemics, the actions of the Organization of Petroleum Exporting Countries and other significant producers and governments and the ability of such producers to agree to and maintain oil price and production controls and other legal or regulatory developments affecting the Company’s business and other important factors. These and other applicable uncertainties, factors and risks are described more fully in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2021, and any subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company’s actual results and plans could differ materially from those expressed in any forward-looking statements.
Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise except as required by applicable law.
