/EINPresswire.com/ -- DENVER, CO--(Marketwired - August 03, 2017) - SRC Energy Inc. (NYSE MKT: SRCI) (NYSE American: SRCI) ("SRC", the "Company", "we", "us" or "our"), a U.S. oil and gas exploration and production company with operations focused on the Greater Wattenberg Field in the Denver-Julesburg Basin, reports its financial and operating results for the three and six months ended June 30, 2017.

Second Quarter 2017 Highlights

• Revenues were $75.0 million for the three months ended June 30, 2017
• Net income was $27.9 million or $0.14 per diluted share for the three months ended June 30, 2017
• Adjusted EBITDA was $55.9 million for the three months ended June 30, 2017 (see further discussion regarding the presentation of adjusted EBITDA in "About Non-GAAP Financial Measures" below)

Second Quarter 2017 Financial Results

The following tables present certain per unit metrics that compare results of the corresponding reporting periods:

Oil, natural gas and natural gas liquids revenues for the three months ended June 30, 2017 increased 213% compared to the three months ended June 30, 2016. This was due to a 194% increase in sales volumes combined with a 7% improvement in average realized sales price per BOE. As of June 30, 2017, substantially all of SRC's production was from horizontal wells.

During the three months ended June 30, 2017, SRC experienced decreased production expenses compared to the three months ended June 30, 2016 on an aggregate and per-unit basis. Unit operating costs benefited from larger volumes of early production from horizontal wells turned to sales during the quarter. The consolidation of the Company's operations into a more centralized geographic operating area, and a 28% reduction in SRC's net number of vertical wells through divestitures and plugging activities also contributed to lower aggregate and per-unit LOE costs.

The Company's 2017 second quarter net income totaled $27.9 million, or $0.14 per diluted share compared to a net loss of $153.8 million or $(0.89) per diluted share in the year ago quarter. The three months ended June 30, 2016 was impacted by an impairment charge of $144.1 million. Adjusted EBITDA in the second quarter was $55.9 million as compared to $11.2 million in the year ago quarter.

Operational Highlights

SRC has entered into an agreement with another operator to trade approximately 4,000 net acres of the Company's non-contiguous acreage for a like number of acres within the Company's core acreage position, further consolidating SRC's development area. This transaction is expected to close in the third quarter of 2017.

Management Comment

Lynn A. Peterson, Chairman and CEO of SRC Energy Inc., commented, "although we discuss it frequently at conferences and in meetings, the quality of our acreage and the strength of our team is now very evident in our production growth over the last few quarters. As we press forward with our development plan, we will continue to search for opportunities to enhance the value of our assets while maintaining the ability to flex our activity levels up or down, which is a critical strategic objective. We continue to believe that the Company is well positioned to respond to changing market conditions going forward."

Concluding, Mr. Peterson added, "Our execution year-to-date has been outstanding, and I want to commend our entire team as well as the service providers we depend upon. Looking forward, as the midstream infrastructure evolves in the DJ Basin, we continue to work closely with SRC's partners to ensure our plans can continue to be executed in a timely manner. The expansion of the natural gas processing and oil gathering infrastructure over the next few months and years are crucial steps for all active operators in the DJ Basin, and we look forward to the added predictability that it will bring."

Conference Call

The Company will host a conference call on Friday, August 4, 2017 at 11:00 a.m. Eastern time (9:00 a.m. Mountain time) to discuss the results. The call will be conducted by Chairman and CEO Lynn A. Peterson, CFO James Henderson, Chief Development Officer Nick Spence, Chief Operations Officer Mike Eberhard, and Manager of Investor Relations John Richardson. A Q&A session will immediately follow the discussion of the results for the quarter. Please refer to SRC's website at www.srcenergy.com for the most recent corporate presentation and other news and information.

Dial-in (Toll-Free): (877) 407-9122
Dial-in (International): (201) 493-6747

Replay Information:

Conference ID #: 411931
Replay Dial-In (Toll Free): 877-660-6853
Replay Dial-In (International): 201-612-7415
Expiration Date: 8/18/17

Webcast URL: http://syrginfo.equisolvewebcast.com/q2-2017

About SRC Energy Inc.

SRC Energy Inc. is a domestic oil and natural gas exploration and production company. SRC's core area of operations is in the Wattenberg Field of the Denver-Julesburg Basin. The Denver-Julesburg Basin encompasses parts of Colorado, Wyoming, Kansas and Nebraska. The Company's corporate offices are located in Denver, Colorado. More company news and information about SRC is available at www.srcenergy.com.

Important Cautions Regarding Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. The use of words such as "believes", "expects", "anticipates", "intends", "plans", "estimates", "should", "likely", "guidance" or similar expressions indicates a forward-looking statement. Forward-looking statements herein include statements regarding future transactions, plans and midstream issues. These statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, and information currently available to management. The actual results could differ materially from a conclusion, forecast or projection in the forward-looking information. Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information. The identification in this press release of factors that may affect the Company's future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Factors that could cause the Company's actual results to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: the success of the Company's exploration and development efforts; the price of oil and gas; worldwide economic situation; change in interest rates or inflation; willingness and ability of third parties to honor their contractual commitments; the availability of adequate midstream infrastructure, the Company's ability to raise additional capital, as it may be affected by current conditions in the stock market and competition in the oil and gas industry for risk capital; the Company's capital costs, which may be affected by delays or cost overruns; costs of production; environmental and other regulations, as the same presently exist or may later be amended; the Company's ability to identify, finance and integrate any future acquisitions; the volatility of the Company's stock price; and the other factors described in the "Risk Factors" sections of the Company's filings with the Securities and Exchange Commission, all of which are incorporated by reference in this release.

Reconciliation of Non-GAAP Financial Measures

We define adjusted EBITDA, a non-GAAP financial measure, as net income (loss) adjusted to exclude the impact of the items set forth in the table below. We exclude those items because they 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. We believe that adjusted EBITDA is widely used in our industry as a measure of operating performance and may also be used by investors to measure our ability to meet debt covenant requirements. The following table presents a reconciliation of adjusted EBITDA to net income (loss), its nearest GAAP measure:

Condensed Consolidated Financial Statements

Condensed consolidated financial statements are included below. Additional financial information, including footnotes that are considered an integral part of the condensed consolidated financial statements, can be found in SRC's Quarterly Report on Form 10-Q for the period ended June 30, 2017, which is available at www.sec.gov.