WildHorse Resource Development Corporation Announces Fourth Quarter and Full Year 2017 Results

HOUSTON–(BUSINESS WIRE)–WildHorse Resource Development Corporation (NYSE: WRD) announced today
its operating and financial results for the fourth quarter and year
ended December 31, 2017. Financial and operational highlights for the
fourth quarter and full year 2017 include:

• Delivered fourth quarter 2017 average daily production of 45.9 Mboe/d
  and full year 2017 average daily production of 30.7 Mboe/d, exceeding
  the mid-point of annual guidance by over 1.7 Mboe/d
• Reported Net Income of $14.1 million for the fourth quarter 2017 and
  $49.9 million for the full year 2017
• Reported Net Income available to common stockholders of $5.6 million
  or $0.06 per share for the fourth quarter 2017 and $31.1 million or
  $0.32 per share for the full year 2017
  • Reported Adjusted Net Incomeavailable to common
    stockholders(1) of $22.5 million or $0.23 per share for
    the fourth quarter 2017 and $41.8 million or $0.43 per share for
    the full year 2017
  • Reported Adjusted EBITDAX(1) of $138.0 million for the
    fourth quarter 2017 and $323.3 million for the full year 2017
• Brought online 37 gross (35.7 net) horizontal wells in the fourth
  quarter of 2017 including 30 gross (29.4 net) wells in the Eagle Ford,
  1 gross (1.0 net) Austin Chalk well, and 6 gross (5.3 net) wells in
  North Louisiana
  • Brought online 10 gross wells on the Anadarko/KKR acquired acreage
  • Brought online 2 additional Eagle Ford step out wells
• Brought online an Austin Chalk well in Washington County, the Lillie
  Hohlt #1H, which came online at an IP-30(2) of 2,604 Boe/d
  or 15.6 MMcfe/d (66% natural gas, 31% NGLs, and 3% oil) on a 4,815’
  lateral
• Brought online six wells in North Louisiana with IP-30 rates averaging
  14% above the Upper Red type curve
• Achieved an average drilling time of 13.8 days from spud to rig
  release on all Eagle Ford rigs in the fourth quarter
• Exited 2017 with 21 gross (19.3 net) wells in the process of drilling,
  completion, or awaiting completion

First Quarter 2018 Highlights:

• Brought online an Austin Chalk well, the Brollier AC #1H, at a peak
  24hr rate of 3,016 Boe/d and an IP-30 of 2,704 Boe/d or 16.2 MMcfe/d
  (61% natural gas, 30% NGLs and 9% oil) on a 5,684’ lateral
• Brought online the Fritsche 109 #1 refrac, located 10.5 miles
  southwest of the Lee and Burleson County line, at a peak 30-day uplift(3)
  of 481 Boe/d (88% oil) on a 5,387’ lateral
• Closed the acquisition of 17,453 net acres and 110 net locations in
  Lee County, TX for approximately $18.6 million
• Agreed to divest WRD’s North Louisiana assets to a third party for
  consideration of $217 million in cash and up to $35 million based on
  the number of wells spud on the North Louisiana assets over the next
  four years. The sale is expected to close on or about March 30, 2018
  with an effective date of January 1, 2018

Key milestones achieved in 2017 (as previously announced on February 12,
2018):

• Brought online 93 gross (90.7 net) horizontal wells in 2017 including
  82 gross (81.0 net) Eagle Ford wells, 3 gross (3.0 net) Austin Chalk
  wells, and 8 gross (6.7 net) wells in North Louisiana. A total of 98
  Gen 3 Eagle Ford wells are online as of year-end 2017
• Increased proved reserves by 198% to 454.3 MMboe at year-end 2017 from
  152.5 MMboe at year-end 2016
• Increased proved, probable and possible (“3P”)(4) reserves
  by 131% to 1,892.2 MMboe at year-end 2017 from 818.9 MMboe at year-end
  2016
• Increased PV-10(5) of proved reserves by 372% to $3.539
  billion at year-end 2017 from $750 million at year-end 2016
• Drill-bit finding and development (“F&D”)(6) costs,
  excluding acquisitions and price revisions, averaged $3.36 per Boe
• Replaced 2,096% of production in 2017 including performance revisions
  and excluding price revisions and acquisitions
• Raised the Eagle Ford type curve to an EUR of 95 Boe per foot from 91
  Boe per foot
• Increased the number of Eagle Ford locations at the 95 Boe per foot
  type curve to 3,154 net locations from 1,996 net locations post the
  close of the Anadarko/KKR acquisition on June 30, 2017
• Released a Washington County Austin Chalk budget type curve and
  location count
• Increased the borrowing base on WRD’s revolving credit facility to
  $875 million from $450 million at year-end 2016
• Closed $594 million Anadarko/KKR acquisition of approximately 111,000
  net acres in the Eagle Ford
• Closed financing of $435 million Series A Perpetual Convertible
  Preferred Stock
• Issued $500 million of senior unsecured notes due 2025 at 6.875%

“We are very proud of our achievements in 2017. In the matter of a year,
we have more than doubled our production, reserves, and PV-10(5)
valuation. This has all been accomplished while ending 2017 with a Net
Debt(1) to annualized fourth quarter adjusted EBITDAX(1)
ratio of 1.4x and almost doubling our borrowing base. In addition, our
location count has grown significantly, our Austin Chalk wells continue
to outperform expectations, and our Eagle Ford type curve has been
raised for the fourth time since our Eagle Ford drilling program began
in 2014,” said Chairman and Chief Executive Officer, Jay Graham.

“In addition, 2018 holds the potential to be even more exciting. Our
planned in-field sand mine will set WRD on a course which takes
advantage of our size and scale in the basin and could reduce well costs
from $400,000 to $600,000 per well. We look forward to executing our
2018 plan and delineating even more of our acreage position,” added Jay
Graham.

WRD discusses fourth quarter and full year 2017 results below. Please
see the supplemental financial information in the Appendix section of
this press release for a reconciliation of the non-GAAP financial
measures of Adjusted EBITDAX and Adjusted Net Income (Loss) available to
common stockholders(1) to GAAP financial measures and
pro-forma measures mentioned in the press release.

Fourth Quarter 2017 Results

Net production was 45.9 Mboe/d for the fourth quarter 2017 compared to
14.3 Mboe/d for the fourth quarter 2016. Fourth quarter 2017 net
production consisted of approximately 62% oil, 28% natural gas, and 10%
NGLs. The Eagle Ford represented 36.0 Mboe/d of total production (78%
oil), and North Louisiana represented 59.3 MMcfe/d of total production
(96% natural gas).

Separate from the North Louisiana divestiture, WRD reached a settlement
with a third party regarding previously unrecognized acreage and
associated production in North Louisiana. As a result of the settlement,
WRD’s reported fourth quarter 2017 production was 2.1 Mboe/d higher than
the preliminary fourth quarter production estimate of 43.8 Mboe/d
released on February 12, 2018. The settlement provided WRD with higher
working interests and accompanying production from certain wells which
had previously been held in suspense. In addition, the settlement
resulted in an increase to capital expenditures of $8.1 million.

WRD reported Net Income of $14.1 million for the fourth quarter 2017
compared to a Net Loss for the fourth quarter 2016 of $17.6 million. Net
Income available to common stockholders was $5.6 million or $0.06 per
share for the fourth quarter 2017. The North Louisiana settlement
resulted in a non-cash loss before taxes of $7.0 million recognized in
the fourth quarter of 2017.

Adjusted Net Income available to common stockholders(1) for
the fourth quarter 2017 was $22.5 million or $0.23 per share. One of the
adjusting items in the fourth quarter and full year 2017 was a non-cash
income tax benefit of $43.4 million related to the revaluation of WRD's
deferred tax liability and certain other items resulting from the Tax
Cuts and Jobs Act. WRD’s effective income tax rate is expected to be
approximately 23% in 2018, reflecting the enactment of the Tax Cuts and
Jobs Act that lowered the corporate federal income tax rate. WRD
reported Adjusted EBITDAX(1) for the fourth quarter 2017 of
$138.0 million compared to Adjusted EBITDAX(1) for the fourth
quarter 2016 of $21.2 million.

Total revenues for the fourth quarter 2017 were $180.2 million compared
to $39.3 million for the fourth quarter 2016. Increased production as a
result of operations and acquisitions along with favorable pricing
variances were primarily responsible for the difference between fourth
quarter 2017 and fourth quarter 2016 revenues.

Average realized prices for the fourth quarter 2017 and 2016, before the
effect of commodity derivatives, are presented below:

Average realized prices for the fourth quarter 2017 and 2016, after the
effect of commodity derivatives, are presented below:

Lease operating expense ("LOE") for the fourth quarter 2017 was $13.6
million, or $3.22 per Boe, compared to $4.6 million, or $3.52 per Boe,
for the fourth quarter 2016.

Gathering, processing and transportation expense for the fourth quarter
2017 was $4.5 million, or $1.07 per Boe, compared to $1.5 million, or
$1.16 per Boe in the fourth quarter 2016.

Taxes other than income were $9.7 million for the fourth quarter 2017,
or $2.30 per Boe, compared to $1.8 million, or $1.34 per Boe, for the
fourth quarter 2016. In the fourth quarter 2017, taxes other than income
increased primarily due to higher price realizations, changes in
commodity mix, higher ad valorem taxes associated with increased
property valuations, and Louisiana franchise taxes incurred as a result
of corporate reorganization at WRD’s initial public offering during
fourth quarter of 2016.

General and administrative ("G&A") expense for the fourth quarter 2017
was $12.1 million, or $2.87 per Boe, compared to $9.9 million, or $7.53
per Boe, for the fourth quarter 2016. During the fourth quarter of 2017,
G&A expense included $2.4 million, or $0.58 per Boe, of stock-based
compensation expense and $0.6 million, or $0.13 per Boe, of acquisition
related costs. Cash G&A expense excluding acquisition related costs for
the fourth quarter 2017 was $9.1 million, or $2.16 per Boe. In 2017, the
employee head count grew from 85 employees at year-end 2016 to 137
employees.

Net interest expense during the fourth quarter 2017 was $11.0 million,
including amortization of deferred financing fees of approximately $0.6
million. This compares to net interest expense during the fourth quarter
2016 of $2.2 million, including amortization of deferred financing fees
of approximately $0.1 million.

Drilling and completion (“D&C”) capital expenditures were approximately
$266.3 million in the fourth quarter 2017 in comparison to $33.7 million
in fourth quarter 2016. Fourth quarter capital expenditures include $8.1
million due to the North Louisiana settlement.

Full Year 2017 Results

Production increased 112% year-over-year to 30.7 Mboe/d in 2017 compared
to 14.5 Mboe/d in 2016. Full year 2017 net production consisted of
approximately 59% oil, 30% natural gas, and 11% NGLs. WRD exceeded the
mid-point of full year 2017 guidance by over 1,700 Boe/d. This
production is in addition to the 1,000 Boe/d upward guidance revision
due to outperformance announced in May 2017. The Eagle Ford represented
23.5 Mboe/d of total production (76% oil), and North Louisiana
represented 43.5 MMcfe/d of total production (96% natural gas).

WRD reported Net Income of $49.9 million for the full year 2017 compared
to a Net Loss for the full year 2016 of $47.1 million. Net Income
available to common stockholders for 2017 was $31.1 million or $0.32 per
share.

Adjusted Net Income available to common stockholders(1) for
2017 was $41.8 million or $0.43 per share. WRD also reported Adjusted
EBITDAX(1) for 2017 of $323.3 million compared to $84.3
million for 2016.

In 2017, total revenues were $427.2 million compared to $127.3 million
for 2016. Total revenues do not include the impact of realized hedges.
Greater total production, higher commodity prices, and a higher
percentage of oil in the production mix contributed to an increase in
oil, natural gas and NGL revenues in 2017. Average realized prices for
the years ended December 31, 2017 and 2016, before the effect of
commodity derivatives, are presented below:

Average realized prices for the years ended December 31, 2017 and 2016,
after the effect of commodity derivatives, are presented below:

LOE for 2017 was $39.8 million, or $3.54 per Boe, compared to $12.3
million, or $2.33 per Boe, in 2016. In 2017, WRD recorded $7.7 million
of workover expenses used to increase efficiency on legacy wells. In
addition, full year 2017 LOE was greater as a result of higher cost LOE
production acquired with the Clayton Williams acquisition in late fourth
quarter 2016 and the Anadarko/KKR acquisition at the end of the second
quarter 2017.

Gathering, processing and transportation expense for 2017 was $11.9
million, or $1.06 per Boe, compared to $6.6 million, or $1.24 per Boe in
2016.

Taxes other than income were $24.2 million for 2017, or $2.15 per Boe,
compared to $6.8 million, or $1.29 per Boe, for the previous year. On a
Boe basis, taxes other than income increased in 2017 due primarily to
higher realized commodity prices.

G&A expense for 2017 was $40.7 million, or $3.62 per Boe, compared to
$24.0 million, or $4.53 per Boe, for 2016. During 2017, G&A expense
included $6.6 million, or $0.59 per Boe, of stock-based compensation
expense and $4.5 million, or $0.40 per Boe, of acquisition and IPO
related costs. Cash G&A expense excluding acquisition and IPO related
costs for 2017 was $29.5 million, or $2.63 per Boe. The increase in G&A
expense was primarily due to greater staffing and expenses associated
with operating as a public company.

Net interest expense during 2017 was $31.9 million, including
amortization of deferred financing fees of approximately $2.6 million.
This compares to net interest expense during 2016 of $7.8 million,
including amortization of deferred financing fees of approximately $0.5
million.

For full year 2017, D&C capital expenditures totaled $744.2 million.
Leasehold and acquisitions totaled $651.8 million in 2017. In full year
2016, D&C capital expenditures totaled $100.6 million. Leasehold and
acquisitions totaled $470.5 million in 2016. Average working interest
for all wells in 2017 was 97%, which surpassed WRD’s 2017 guidance of
89%. In addition, WRD exited 2017 with 21 gross (19.3 net) wells in the
process of drilling, completion, or awaiting completion, which results
in some capex benefitting the 2018 program.

Operational Update

WRD brought online 37 gross (35.7 net) horizontal wells in the fourth
quarter of 2017 including 30 gross (29.4 net) Eagle Ford, 1 gross (1.0
net) Austin Chalk, and 6 gross (5.3 net) North Louisiana wells during
the fourth quarter 2017. Of the Eagle Ford wells, 10 gross wells were
located on the recently acquired Anadarko/KKR acreage. During the
quarter, Eagle Ford wells were drilled at an average of 13.8 days under
the target of 14 days from spud to rig release.

Also in the fourth quarter of 2017 as previously announced, WRD brought
online an Austin Chalk well in Washington County, the Lillie Hohlt #1H,
which came online at an IP-30(2) of 2,604 Boe/d or 15.6
MMcfe/d (66% natural gas, 31% NGLs, and 3% oil) on a 4,815’ lateral.

In addition, during the first quarter of 2018, WRD brought on another
Austin Chalk well in Washington County, the Brollier AC #1H. Since the
2018 guidance release on February 12th, the Brollier’s
production has continued to increase reaching a peak 24-hour rate of
3,016 Boe/d and an IP-30(2) of 2,704 Boe/d or 16.2 MMcfe/d
(61% natural gas, 30% NGLs, and 9% oil) on a 5,684’ lateral. The
Brollier’s production may continue to peak with additional days online.

These two Austin Chalk wells are located 5 and 6 miles northeast of the
Winkelmann #1H, respectively. The wells were drilled at an average of 25
days per well from spud to rig release which is below the budgeted
drilling time of 30 days per well.

In addition, as previously announced, WRD also brought online a two-well
step out pad during the fourth quarter, the Wilde EF 1H and Teal EF 1H,
representing the northernmost Gen 3 Eagle Ford wells brought online at
year-end 2017. The pad averaged an IP-30(2) of 602 Boe/d (93%
oil) on a 6,513’ lateral and is currently tracking an average EUR of 84
Bo per foot which is above the Eagle Ford type curve. These wells were
considered outside of CG&A’s 3P reserve area at year-end 2016 and are
located close to the northern tip of Burleson County near the Brazos
County line. The Wilde and Teal bring the total number of step-outs to 7
wells in 2017 outside of CG&A’s 3P reserve area based on the year-end
2016 reserve report.

In North Louisiana, WRD brought online the 3-well Henderson pad on a
restricted choke at a combined 30-day rate of 38.7 MMcfe/d or an average
of 12.9 MMcfe/d on a 7,296’ lateral and the 3-well Shriners pad on a
restricted choke at a combined 30-day rate of 38.2 MMcfe/d or an average
of 12.7 MMcfe/d on a 7,381’ lateral during the fourth quarter of 2017.
The average IP-30 of the six wells, adjusted for lateral length,
exceeded the North Louisiana Upper Red type curve by 14%. Average
working interest on the six wells was 89%, above the budgeted working
interest of 58% on February 2017.

2018 Development Plan (including North Louisiana)

WRD projects 2018 average daily production between 53 – 56 Mboe/d
consisting of 31 – 35 Mbbls/d of oil, 90 – 100 MMcf/d of natural gas,
and 5 – 7 Mbbls/d of NGLs. At the mid-point of guidance, this represents
a total production growth rate of 78% over 2017's average daily
production.

WRD estimates a fiscal year 2018 D&C capex budget of approximately $700
– $800 million. Drilling and completion activity will be weighted toward
the first half of 2018 as WRD transitions from 7.0 rigs at the beginning
of the year to 4.0 rigs at mid-year for an average of 4.8 rigs in the
Eagle Ford and Austin Chalk during 2018. WRD has no commitments on its
drilling rig fleet. In addition, WRD expects to transition from 4.0
completion crews in the first half of the year to 3.0 completion crews
in the second half of 2018.

The budget also allocates between $65 – $75 million of non-D&C capital
expenditure for the acquisition, evaluation, and construction of WRD’s
recently announced sand mine which is expected to produce savings of
$400,000 to $600,000 per well upon completion by the first quarter of
2019. WRD expects its capital budget to be funded by cash on hand, the
anticipated proceeds of the North Louisiana divestiture, and borrowings
under its revolving credit facility.

For the full year 2018, WRD expects to spud 100 to 110 gross wells and
to bring online 100 to 110 gross wells which include 90 – 100 Eagle Ford
wells and 8 Austin Chalk wells. For wells brought online in 2018, WRD
estimates an average working interest of approximately 93% in the Eagle
Ford and 96% in the Austin Chalk.

The table below shows WRD’s fiscal year 2018 guidance and the effect of
the announced North Louisiana divestiture on the guidance plan. The
difference between the guidance scenarios reflects only the impact of
the North Louisiana divestiture and does not include any material
changes in drilling or completion activity as almost 100% of capital
spending is allocated to the Eagle Ford and Austin Chalk in either
scenario. Both scenarios include production for the first quarter of
2018 from North Louisiana because the divestiture is expected to close
on or about March 30, 2018.

Year-End 2017 Proved and 3P Reserves

On February 12, 2018, WRD announced Cawley Gillespie & Associates
(“CG&A”) audited year-end 2017 proved reserves of 454.3 MMboe, an
increase of 198% from 152.5 MMboe at year-end 2016. The PV-10(5)
of proved reserves increased by 372% to $3.539 billion at year-end 2017
from $750 million at year-end 2016. CG&A audited proved, probable and
possible (“3P”)(4) reserves at year-end 2017 were 1,892.2
MMboe, a 131% increase over 818.9 MMboe at year-end 2016. In addition,
WRD increased its type curve to 95 Boe per foot from 91 Boe per foot.

As of December 31, 2017, management estimates 3,154 net locations at the
95 Boe type curve, a 58% increase from 1,996 locations at year-end 2016.
Total net horizontal locations were 3,849 net locations including 3,154
net locations in the Eagle Ford, 53 net locations in the Austin Chalk,
and 642 net locations in North Louisiana.

Contacts

WildHorse Resource Development Corporation
Pearce Hammond, CFA,
(713) 255-7094
Vice President, Investor Relations
[email protected]

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