Mach Natural Resources LP Reports Third Quarter 2024 Results; Declares Quarterly Cash Distribution of $0.60 Per Unit; Provides 2025 Outlook

OKLAHOMA CITY--(BUSINESS WIRE)--November 12, 2024-- 

Mach Natural Resources LP $(MNR)$ ("Mach" or the "Company") today reported financial and operating results for the three months ended September 30, 2024. The Company also announced its quarterly cash distribution and provided its full year 2025 outlook.

Third Quarter 2024 Highlights

   -- 
 Averaged total net production of 81.8 thousand barrels of oil 
      equivalent per day ("Mboe/d") 
 
 
   -- 
 Lease operating expense of $5.85 per barrel of oil equivalent ("Boe") 
      was at the low-end of guidance 
 
 
   -- 
 Reported net income and Adjusted EBITDA(1) of $67 million and $134 
      million, respectively 
 
 
   -- 
 Generated net cash provided by operating activities of $111 million 
 
 
   -- 
 Incurred total capital expenditures--excluding acquisitions--of $53 
      million, resulting in a year-to-date reinvestment rate of 49% 
 
 
   -- 
 Completed a public offering resulting in net proceeds of $129 million 
      including the exercise of the over-allotment option; proceeds from the 
      offering were used to fund certain acquisitions 
 
 
   -- 
 Declared a quarterly cash distribution of $0.60 per unit 
 

Year-to-Date 2024 Highlights

   -- 
 Averaged total net production of 86.7 Mboe/d 
 
 
   -- 
 Lease operating expense of $5.53 per Boe was below the low-end of 
      guidance 
 
 
   -- 
 Incurred total capital expenditures--excluding acquisitions--of $179 
      million, in line with the Company's 2024 capital expenditure guidance of 
      $215 million to $240 million 
 
 
   -- 
 Paid cash distributions to the Company's unitholders of $247 million, 
      or $2.60 per unit 
 

"Our quarterly results reflect Mach's discipline to maintain a low leverage profile and consistently deliver cash distributions," said Tom L. Ward, Chief Executive Officer. "Our recent public equity offering highlights our commitment to financing acquisitions that are accretive to our distribution while protecting our fortress balance sheet. We remain on track to finish 2024 strong and carry our momentum and financial strength into next year."

Third Quarter 2024 Financial Results

Mach reported total revenue and net income of $256 million and $67 million in the third quarter of 2024, respectively. Additionally, during the third quarter, the average realized price was $74.55 per barrel of oil, $1.73 per Mcf of natural gas, and $22.61 per barrel of natural gas liquids ("NGLs"). These prices exclude the effects of derivatives.

As of September 30, 2024, Mach had a cash balance of $185 million and a pro forma net-debt-to-Adjusted-EBITDA ratio of 0.9x.

Third Quarter 2024 Operational Results

During the third quarter of 2024, Mach achieved average oil equivalent production of 81.8 Mboe/d, which consisted of 23% oil, 53% natural gas and 24% NGLs. Also, for the third quarter of 2024, Mach's production revenues from oil, natural gas, and NGLs sales totaled $209 million, comprised of 60% oil, 20% natural gas, and 20% NGLs.

The Company spud 11 gross (9 net) operated wells and brought online 11 gross (9 net) operated wells in the third quarter of 2024. As of September 30, 2024, the Company had 5 gross (4 net) operated wells in various stages of drilling and completion.

Mach's lease operating expense in the third quarter of 2024 was $44 million, or $5.85 per Boe. Mach incurred $24 million, or $3.13 per Boe, of gathering and processing expenses in the third quarter of 2024. Furthermore, during the third quarter of 2024, production taxes as a percentage of oil, natural gas, and NGL sales were approximately 4.7%, midstream operating profit was approximately $4 million, general and administrative expenses--excluding equity-based compensation of $1 million--was $8 million, and interest expense was $27 million.

In the third quarter of 2024, Mach's total capital expenditures--excluding acquisitions--were $53 million, including $50 million of upstream capital and $3 million of other capital (including midstream and land).

Distributions

Mach announced today that the board of directors of its general partner declared a quarterly cash distribution for the third quarter of 2024 of $0.60 per unit. The quarterly cash distribution is to be paid on December 10, 2024, to the Company's unitholders of record as of the close of trading on November 26, 2024.

2025 Outlook

Today the Company also provided its outlook for 2025. Additional details of Mach's forward-looking guidance are available on the Company's website at www.machnr.com.

Conference Call and Webcast Information

Mach will host a conference call and webcast at 8:00 a.m. Central (9:00 a.m. Eastern) on Wednesday, November 13, 2024, to discuss its third quarter 2024 results. Participants can access the conference call by dialing 877-407-2984. A webcast link to the conference call will be provided on the Company's website at www.machnr.com. A replay will also be available on the Company's website following the call.

About Mach Natural Resources LP

Mach Natural Resources LP is an independent upstream oil and gas Company focused on the acquisition, development and production of oil, natural gas and NGL reserves in the Anadarko Basin region of Western Oklahoma, Southern Kansas and the panhandle of Texas. For more information, please visit www.machnr.com.

Non-GAAP Financial Measures and Disclosures

This press release includes non-GAAP financial measures. Pursuant to regulatory disclosure requirements, Mach is required to reconcile non-GAAP financial measures to the related GAAP information (GAAP refers to generally accepted accounted principles). Reconciliations of these non-GAAP measures are provided below. Reconciliations of these non-GAAP measures, along with other financial and operational disclosures, are also within the supplemental tables that are available on the Company's website at www.machnr.com and in the related Form 10-Q filed with the Securities and Exchange Commission (the "SEC").

Adjusted EBITDA(1)

We include in this press release the supplemental non-GAAP financial performance measure Adjusted EBITDA and provide our calculation of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, our most directly comparable financial measures calculated and presented in accordance with GAAP. We define Adjusted EBITDA as net income before (1) interest expense, net, (2) depreciation, depletion, amortization and accretion, (3) unrealized (gain) loss on derivative instruments, (4) equity-based compensation expense, (5) credit losses, and (6) (gain) loss on sale of assets.

Adjusted EBITDA is used as a supplemental financial performance measure by our management and by external users of our financial statements, such as industry analysts, investors, lenders, rating agencies and others, to more effectively evaluate our operating performance and our results of operation from period to period and against our peers without regard to financing methods, capital structure or historical cost basis. We exclude the items listed above from net income in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as indicators of our operating performance. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax burden, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our results will be unaffected by unusual items. Our computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies.

 
 Reconciliation of GAAP Financial Measures to Adjusted EBITDA 
 
                    Three Months Ended     Nine Months Ended 
                       September 30,          September 30, 
                    -------------------  ---------------------- 
($ in thousands)      2024       2023      2024       2023 
------------------   -------    -------   -------    ------- 
Net Income 
Reconciliation to 
Adjusted EBITDA: 
  Net income        $ 67,444   $ 83,485  $148,662   $252,988 
    Interest 
     expense, net     25,598      1,667    76,550      4,962 
    Depreciation, 
     depletion, 
     amortization 
     and 
     accretion        65,577     33,035   201,108     93,923 
    Unrealized 
     (gain) loss 
     on derivative 
     instruments     (27,118)     1,678     5,981     (6,534) 
    Equity-based 
     compensation 
     expense           1,267        647     4,749      1,941 
    Credit losses      1,243         --     1,890         -- 
    Gain on sale 
     of assets           (40)        --      (349)        (1) 
                     -------    -------   -------    ------- 
Adjusted EBITDA     $133,971   $120,512  $438,591   $347,279 
                     =======    =======   =======    ======= 
 

Cautionary Note Regarding Forward-Looking Statements

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