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LRR Energy, L.P. Announces Third Quarter 2012 Results

Stocks in this article: LRE

LRR Energy, L.P. (NYSE: LRE) (“LRR Energy”) announced today its operating and financial results for the three and nine months ended September 30, 2012.

Highlights for the three months ended September 30, 2012

  • Reported quarterly records of average net production of 6,663 Boe per day and Adjusted EBITDA of $19.5 million (see reconciliation of Non-GAAP financial measures on page 9)
  • Increased Distribution Coverage Ratio to 1.14x for the three months ended September 30, 2012 (see reconciliation of Non-GAAP financial measures on page 9)
  • As planned, successfully completed eight new wells in our largest field, Red Lake, with better than expected initial production results
  • Successfully completed the Nowata #1ST well at our Pecos Slope field, with strong initial production results

Eric Mullins, Chairman and Co-Chief Executive Officer, commented, “We are pleased with our record third quarter results. Our strong quarter enabled us to increase our distribution and strengthen our distribution coverage ratio.” Charlie Adcock, Co-Chief Executive Officer, reflected that, “During the third quarter, we continued to experience better than expected production results from our drilling program in our Red Lake field.”

Our financial statements for the nine months ended September 30, 2012 have been recast as if we had owned the assets acquired on June 1, 2012 from Lime Rock Resources since our initial public offering, as the transaction was between entities under common control.

Results for the three months ended September 30, 2012

  • Total revenues were $9.2 million
  • Net loss was $15.6 million and net loss per limited partner unit (basic and diluted) was $0.69
  • Total cash capital expenditures were $13.1 million
  • Distributable Cash Flow was $12.2 million (see reconciliation of Non-GAAP financial measures on page 9)
  • Net losses on commodity derivative instruments totaled $15.7 million, including $5.8 million of realized gains and $21.5 million of unrealized losses
  • Lease operating expenses (LOE) were $6.9 million, or $11.29 per Boe
  • Production and ad valorem taxes were $2.0 million, or $3.24 per Boe
  • Depletion and depreciation expense was $8.3 million, or $13.49 per Boe
  • General and administrative expense was $2.3 million, or $3.74 per Boe
  • Interest expense was $2.1 million

Recent Events

On October 15, 2012, LRR Energy announced that the Board of Directors of its general partner declared a cash distribution for the third quarter of 2012 of $0.4775 per outstanding unit, or $1.91 on an annualized basis. The distribution will be paid on November 14, 2012 to all unitholders of record as of the close of business on October 30, 2012.

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