Bill Barrett Corporation Reports Third Quarter 2017 Financial and Operating Results Highlighted by Quarterly Production of 1.92 MMBoe and Increased 2017 Production Guidance Range of 6.9-7.1 MMBoe

DENVER, Oct. 31, 2017 /PRNewswire/ --

• Production sales volumes of 1.92 million barrels of oil equivalent ("MMBoe") for the third quarter of 2017, which increased 26% sequentially from the second quarter of 2017
• Oil production sales volumes of 1.2 million barrels of oil ("MMBbls") for the third quarter, which increased 33% sequentially and represents 63% of total production volumes 
• Capital expenditures of $57 million in the third quarter were below guidance range of $65-$75 million
• Oil price differential of $2.12 per barrel decreased 13% sequentially; Denver-Julesburg ("DJ") Basin oil price differential of $2.06 per barrel decreased 5% sequentially
• Lease operating expense ("LOE") of $3.08 per Boe decreased 15% sequentially; DJ Basin LOE of $2.52 per Boe decreased 18% sequentially
• Drilling and completion cycle times for the extended reach lateral ("XRL") program improved 28% compared to 2016 led by efficiency gains
• 2017 production guidance increased to 6.9-7.1 MMBoe; represents 21% growth over 2016 at the mid-point, excluding 2016 asset sales
• Commenced marketed sales process to divest of Uinta Oil Program assets

Bill Barrett Corporation (the "Company") (NYSE: BBG) today reported third quarter of 2017 financial and operating results and updated 2017 operating guidance, including higher production and lower LOE.

For the third quarter of 2017, the Company reported a net loss of $28.8 million, or $0.39 per diluted share. Adjusted net income for the third quarter of 2017 was a net loss of $5.9 million, or $0.08 per diluted share. EBITDAX for the third quarter of 2017 was $47.9 million. Adjusted net income (loss) and EBITDAX are non-GAAP (Generally Accepted Accounting Principles) measures. Please reference the reconciliations to GAAP financial statements at the end of this release.

Commenting on the quarterly results, Chief Executive Officer and President Scot Woodall stated, "We delivered another outstanding quarter of results that was highlighted by 26% sequential production growth, 33% sequential growth in oil volumes, tighter oil differentials, an 18% sequential decrease in LOE, and capital spending that was below guidance. As these results demonstrate, our execution is strong with early positive results from our enhanced completion program meeting or exceeding our base XRL type-curve. Current planned activity underpins a further increase in our production outlook and a corresponding decrease in LOE as outlined by our updated guidance. We now anticipate 2017 production growing over 20% relative to 2016 and expect to generate greater than 30% growth in 2018. This builds significant momentum as we head into 2018 with higher associated cash flow and EBITDAX generation. We recently initiated a marketed sales process to divest of our Uinta Oil Program assets and, if successful, anticipate a sale announcement prior to year-end. Proceeds will increase liquidity and help fund expected activity in 2018. We are in a good financial position with current liquidity consisting of a cash position in excess of $150 million and an undrawn credit facility that is supported by an underlying hedge position."

OPERATING AND FINANCIAL RESULTS

The following table summarizes certain operating and financial results for the third quarter of 2017 and 2016 and the second quarter of 2017:

Oil, natural gas and natural gas liquids ("NGL") production totaled approximately 1.92 MMBoe in the third quarter of 2017. Third quarter production surpassed guidance of 1.75 MMBoe by 10% and represents a 23% increase compared to the third quarter of 2016 and a 26% increase compared to the second quarter of 2017.

Oil volumes totaled approximately 1.2 MMBbls in the third quarter, representing an 18% increase compared to the third quarter of 2016 and a 33% increase compared to the second quarter of 2017.

Higher production sales volumes were driven by an improvement in drilling and completion cycle times and positive results from the Company's enhanced completion program in the DJ Basin.

Third quarter production was comprised of approximately 63% oil, 20% natural gas and 17% NGLs.

LOE averaged $3.08 per Boe in the third quarter of 2017 compared to $3.06 per Boe in the third quarter of 2016 and $3.61 per Boe in the second quarter of 2017. The 15% reduction in LOE compared to the second quarter of 2017 is attributable to increased operating efficiencies and higher production sales volumes.

Production tax expense averaged $2.80 per Boe in the third quarter of 2017 compared to $2.45 per Boe in the third quarter of 2016 and $2.25 per Boe in the second quarter of 2017. Higher production tax expense in the third quarter of 2017 was primarily attributable to higher average realized oil prices relative to the comparable quarters. Production taxes totaled 8% of pre-hedge revenues for the third quarter of 2017 compared to 7.6% of pre-hedge revenues for the third quarter of 2016.

Depreciation, depletion and amortization ("DD&A") averaged $22.52 per Boe in the third quarter of 2017 compared to $27.51 per Boe in the third quarter of 2016 and $25.78 per Boe in the second quarter of 2017. Lower DD&A on a per unit basis for the third quarter of 2017 was primarily the result of proved reserves added at lower costs.

Debt and Liquidity

At September 30, 2017, the principal debt balance was $677.4 million, while cash and cash equivalents were $155.9 million, resulting in net debt (principal balance of debt outstanding less the cash and cash equivalents balance) of $521.5 million. Cash and cash equivalents were reduced subsequent to the end of the quarter as the Company made a regularly scheduled interest payment in October 2017 of approximately $14 million related to its Senior Notes due 2022.

The Company's semi-annual borrowing base review was completed in October 2017 with no changes to the terms or conditions of the $300 million credit facility. There are no borrowings outstanding and $274 million in available capacity after taking into account a $26 million letter of credit.

Capital Expenditures

Capital expenditures for the third quarter of 2017 totaled $56.8 million, which was 19% below the midpoint of the Company's guidance range of $65-$75 million. Lower than anticipated capital expenditures were primarily the result of improved drilling and completion efficiencies that have offset service cost increases. The Company operated two drilling rigs for the quarter and spud 26 extended reach lateral ("XRL") wells in the DJ Basin. Completion operations were conducted on 19 XRL wells. 

OPERATIONAL HIGHLIGHTS
DJ Basin

The Company produced an average of 18,508 Boe/d in the third quarter of 2017, representing 28% sequential growth. Eleven XRL wells were placed on initial flowback during the third quarter and two drilling rigs are currently operating in the basin. The Company continues to see improving well results from its enhanced completion program that has evolved to include approximately 1,500 pounds of sand per lateral foot and frac stage spacing of approximately 120 feet. In addition, the Company incorporated modifications to its choke management program on recent drilling and spacing units ("DSU") that are anticipated to result in peak production being achieved earlier in the production cycle. Performance from the 2017 enhanced completion program continues to meet or exceed the Company's base XRL type-curve of 600 MBoe.

The following provides a synopsis of the current activity for the DSUs that are in the drilling and completion or initial flowback phase:

• 5-63-32 - The DSU is located within the western area of NE Wattenberg and includes 5 XRL wells. Initial flowback began in the third quarter of 2017. The wells incorporated enhanced completion and flowback methods. Early production is currently tracking above the Company's base XRL type curve.
• 5-63-30 - The DSU is located within the western area of NE Wattenberg and includes 6 XRL wells. Initial flowback began in the third quarter of 2017. The wells incorporated enhanced completion and flowback methods. Early production is currently tracking above the Company's base XRL type curve.
• 5-61-20 - The DSU is located within the central area of NE Wattenberg and includes 8 XRL wells. Completion operations have commenced and the wells are expected to be placed on initial flowback in the fourth quarter of 2017.
• 4-62-29/32 - The DSUs are located within the southern area of NE Wattenberg and includes 10 XRL wells per DSU. Completion operations commenced in October 2017.
• 3-62-4 - The DSU is located within the southern area of NE Wattenberg and includes 10 XRL wells. Drilling operations commenced in October 2017.

The Company continues to achieve drilling and completion efficiencies on its XRL well program that have resulted in a 28% average year-over-year improvement in 2017 cycle times leading to increased stages completed and pounds of sand pumped per day. This has been primarily achieved through a 37% improvement in the number of frac stages completed per day and a 27% improvement in the number of days required to drill out frac plugs.

Drilling and completion costs for XRL wells drilled during the first nine months of 2017 have averaged approximately $4.7 million per well, which includes the cost of incorporating higher proppant concentrations and tighter frac stage spacing.

Uinta Oil Program

Production sales volumes averaged 2,333 Boe/d (91% oil) during the third quarter of 2017. The oil price differential averaged $2.41 per barrel less than WTI as new marketing contracts became effective on May 1, 2017.

The Company has commenced a marketed sales process to divest of its Uinta Oil Program assets and, if successful, it is anticipated that a sale would be announced in the fourth quarter of 2017.

2017 OPERATING GUIDANCE

The Company is providing the following update to its 2017 operating guidance. See "Forward-Looking Statements" below.

• Capital expenditures of $250-$270 million, unchanged
• Fourth quarter capital expenditures are expected to total $80-$90 million. Higher capital expenditures compared to the third quarter of 2017 are due to increased completion activity associated with a two-rig drilling program.
• Production of 6.9-7.1 MMBoe, increased from a previous guidance range of 6.4-6.6 MMBoe to reflect actual production sales volumes for the first nine months of 2017 and anticipated production for the fourth quarter of 2017
• Fourth quarter production sales volumes are expected to approximate 2.0-2.2 MMBoe
• Fourth quarter production is expected to be weighted approximately 63% oil
• Lease operating expense of $24-$25 million, narrowed from a previous guidance range of $24-$26 million due to further operational efficiencies
• General and administrative expenses of $32-$33 million, narrowed from a previous range of $30-$33 million due to variable employee compensation costs related to performance
• Gathering, transportation and processing costs of $2-$3 million, unchanged
• Unused commitment for firm natural gas transportation charges of $18-$19 million, unchanged

COMMODITY HEDGES UPDATE

The following table summarizes our current hedge position as of October 30, 2017:

Realized sales prices will reflect basis differentials from the index prices to the sales location.

UPCOMING EVENTS

Third Quarter Conference Call and Webcast

The Company plans to host a conference call on Wednesday, November 1, 2017, to discuss third quarter of 2017 results. The call is scheduled at 10:00 a.m. Eastern time (8:00 a.m. Mountain time). Please join the webcast conference call live or for replay via the Internet at www.billbarrettcorp.com, accessible from the home page. To join by telephone, call (855) 760-8152 ((631) 485-4979 international callers) with passcode 98924903. The webcast will remain on the Company's website for approximately 7 days and a replay of the call will be available through November 8, 2017 at (855) 859-2056 ((404) 537-3406 international) with passcode 98924903.

Investor Events

Members of the Company's management are currently scheduled to participate in the following investor events:

• November 13, 2017 - Ladenburg Thalmann & Co. Energy Conference in New York, NY
• November 14, 2017 - KLR Group E&P Day in Denver, CO
• November 29, 2017 - Bank of America Merrill Lynch Leveraged Finance Conference in Boca Raton, FL
• November 30, 2017 - KeyBanc Capital Markets E&P Bus Tour in Denver, CO

DISCLOSURE STATEMENTS

Forward-Looking Statements

All statements in this press release, other than statements of historical fact, are 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. Words such as expects, forecast, guidance, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements herein; however, these are not the exclusive means of identifying forward-looking statements. In particular, the Company is providing "2017 Operating Guidance," which contains projections for certain 2017 operational and financial metrics. Additional forward-looking statements in this release relate to, among other things, future capital expenditures, costs, projects and opportunities; and the planned disposition of our Uinta Basin properties.

These and other forward-looking statements in this press release are based on management's judgment as of the date of this release and are subject to numerous risks and uncertainties. Actual results may vary significantly from those indicated in the forward-looking statements. Please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC, and other filings, including our Current Reports on Form 8-K and Quarterly Reports on Form 10-Q, all of which are incorporated by reference herein, for further discussion of risk factors that may affect the forward-looking statements. In particular, the planned disposition of Uinta Basin properties may not be completed in the timeframe expected, on terms favorable to us, or at all. The Company encourages you to consider the risks and uncertainties associated with projections and other forward-looking statements and to not place undue reliance on any such statements. In addition, the Company assumes no obligation to publicly revise or update any forward-looking statements based on future events or circumstances.

ABOUT BILL BARRETT CORPORATION

Bill Barrett Corporation (NYSE: BBG), headquartered in Denver, Colorado, develops oil and natural gas in the Rocky Mountain region of the United States. Additional information about the Company may be found on its website www.billbarrettcorp.com.

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SOURCE Bill Barrett Corporation