Indigo 2020 EBITDA dips as revenue holds firm, hedges and liquidity provide cushion for 2021

Indigo Natural Resources generated USD 555m of adjusted EBITDA in 2020, down from USD 601m in 2019, according to three sources familiar with the situation. Meanwhile, oil and gas revenue plus realized derivatives gains stayed mostly flat at USD 920m in 2020 from USD 925m in 2019, two of the sources added. 

The company also provided capex guidance for 2021 of USD 455m-USD 475m, the sources said. Indigo is guiding 2021 full-year production growth of 0-5% relative to 2020 production of 1 Bcfe/d, the sources added. 

For 4Q20, the company’s adjusted EBITDA totaled roughly USD 146m, compared to USD 136m in 3Q20, two of the sources said. For the quarter, the company generated USD 36m of free cash flow.

Pro forma the 1Q21 refinancing, liquidity totaled USD 710m through USD 85m of cash and USD 625m of revolver availability, the sources said. For the same period, the company’s net leverage was 1.3x through USD 825m of total debt and USD 555m of adjusted EBITDA.

The company expects to be free cash flow positive in 2021, the sources said.

Moody’s expects the company’s hedges through 2024 to benefit cash flow visibility and counteract fluctuations in natural gas prices, according to a 19 January Moody’s ratings report. 

The USD 700m 5.375% senior unsecured notes due 2029 last traded at par to yield 5.373% on 13 April, up from trades at 98.022 to yield 5.69%, according to MarketAxess. 

Indigo declined to comment.

2021 Debtwire

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