WildHorse keeps leverage low; revolver borrowing base could increase

By Devika Patel

Knoxville, Tenn., March 8 – WildHorse Resource Development Corp. plans to keep its leverage ratio “well below” 2x in 2018 and also expects that its borrowing base under its revolver will increase to $1 billion by the end of March.

“Given the current strip pricing, WildHorse expects to remain well below the 2x net debt to annualized and LTM adjusted EBITDAX at year-end 2018,” executive vice president and chief financial officer Andrew J. Cozby said on the company’s fourth quarter and year ended Dec. 31, 2017 earnings conference call on Thursday.

The company has a high borrowing base under its revolver, nearly double what it had at its IPO in December 2016, but expects its borrowing base will be increased to $1 billion by the end of March.

“In addition, [WildHorse] retains flexibility with its $875 million revolving credit facility, which is almost double the $450 million borrowing base that we had at the IPO.

“At our next redetermination, on or about the end of this month in March, WildHorse expects to receive a borrowing base above $1 billion,” he said.

The company reported adjusted EBITDAX of $138 million for the fourth quarter of 2017 and $323.3 million for the full year 2017.

As of Dec. 31, 2017, total net debt was $786.2 million.

Also as of Dec. 31, 2017, the company’s liquidity of $588.8 million consisted of $200,000 of cash and cash equivalents and $588.6 million of availability under its revolving credit facility.

Year-end net debt to annualized fourth quarter adjusted EBITDAX was 1.4x.

WildHorse is an oil and natural gas company based in Houston.

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