SAN ANTONIO--(BUSINESS WIRE)--Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported financial and operating results for the three and nine months ended September 30, 2012 and provided an operational update.
Financial and Operating Results
Including Abraxas’ equity interest in the Blue Eagle joint venture (which was dissolved on August 31, 2012), the three months ended September 30, 2012 resulted in:
- Production of 384.3 MBoe (4,177 Boepd), up 3% over Q3 2011, of which 53% was oil or natural gas liquids.
The three months ended September 30, 2012 resulted in:
- Production of 370.5 MBoe (4,027 Boepd), excluding Abraxas’ equity interest in Blue Eagle’s production, a 3% increase over Q2 2012;
- Revenue of $17.2 million;
- EBITDA(a) of $5.8 million;
- Discretionary cash flow(a) of $5.2 million;
- Net loss of $18.6 million, or $0.20 per share; and
- Adjusted net loss(a) of $547,000, or $0.01 per share.
-
Debt Covenant Metrics:
Working Capital 1.49:1.0 (min 1.0:1.0)
Debt to EBITDA 3.31:1.0 (max 4.0:1.0)
Interest Coverage 7.96:1.0 (min 2.5:1.0)
(a) See reconciliation of non-GAAP financial measures below.
Net loss for the quarter ended September 30, 2012 was $18.6 million, or $0.20 per share, compared to a net income of $20.1 million, or $0.22 per share, for the same period in 2011.
Adjusted net loss, excluding certain non-cash items, for the quarter ended September 30, 2012 was $547,000 or $0.01 per share, compared to adjusted net income, excluding certain non-cash items, of $3.6 million or $0.04 per share for the same period in 2011. For the quarters ended September 30, 2012 and 2011, adjusted net income (loss) excludes the unrealized loss on derivative contracts of $5.3 million and an unrealized gain of $16.5 million respectively. Also excluded is a full cost impairment on Canadian assets of $11.8 million for the quarter ended September 30, 2012. Included in adjusted net loss for the quarter ended September 30, 2012 is the net income from our subsidiary, Raven Drilling, LLC of $1.1 million.
Unrealized gains or losses on derivative contracts are based on mark-to-market valuations which are non-cash in nature and may fluctuate drastically period to period. As commodity prices fluctuate, these derivative contracts are valued against current market prices at the end of each reporting period in accordance with Accounting Standards Codification 815, “Derivatives and Hedging,” as amended and interpreted, and require Abraxas to record an unrealized gain or loss based on the calculated value difference from the previous period-end valuation. For example, NYMEX oil prices on September 28, 2012 were $92.19 per barrel compared to $84.96 on June 30, 2012.
Conference Call
Abraxas invites you to participate in a conference call on Monday, November 12, 2012 at 10:30 a.m. CT (11:30 a.m. ET) to discuss the contents of this release and respond to questions. Please dial 1.888.679.8033 passcode 90153817 #, 10 minutes before the scheduled start time, if you would like to participate in the call. The conference call will also be webcast live on the Internet and can be accessed directly on the Company’s website at www.abraxaspetroleum.com under Investor Relations. In addition to the audio webcast replay, a transcript of the conference call will be posted on the Investor Relations section of the Company’s website approximately 24 hours after the conclusion of the call and will be accessible for at least 60 days.
Abraxas Petroleum Corporation is a San Antonio-based oil and gas exploration and production company with operations across the Rocky Mountain, Mid-Continent, Permian Basin and onshore Gulf Coast regions of the United States and in the province of Alberta, Canada.
Safe Harbor for forward-looking statements: Statements in this release looking forward in time involve known and unknown risks and uncertainties, which may cause Abraxas’ actual results in future periods to be materially different from any future performance suggested in this release. Such factors may include, but may not be necessarily limited to, changes in the prices received by Abraxas for its oil and gas. In addition, Abraxas’ future oil and gas production is highly dependent upon Abraxas’ level of success in acquiring or finding additional reserves. Further, Abraxas operates in an industry where the value of securities is highly volatile and may be influenced by economic and other factors beyond Abraxas’ control. In the context of forward-looking information provided in this release, reference is made to the discussion of risk factors detailed in Abraxas’ filings with the Securities and Exchange Commission (“SEC”) during the past 12 months.
| ABRAXAS PETROLEUM CORPORATION | |||||||||||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||||||||
|
(UNAUDITED) |
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| (In thousands except per share data) |
Three Months Ended
September 30, |
Nine Months Ended September 30, |
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| 2012 | 2011 | 2012 | 2011 | ||||||||||||||
| Financial Results: | |||||||||||||||||
| Revenues | $ | 17,170 | $ | 17,666 | $ | 49,501 | $ | 48,170 | |||||||||
| EBITDA(a) | 5,756 | 9,607 | 22,706 | 23,762 | |||||||||||||
| Discretionary cash flow(a) | 5,226 | 8,140 | 18,787 | 18,417 | |||||||||||||
| Net income (loss) | (18,644 | ) | 20,085 | (6,924 | ) | 19,003 | |||||||||||
| Net income (loss) per share – basic | $ | (0.20 | ) | $ | 0.22 | $ | (0.08 | ) | $ | 0.21 | |||||||
| Adjusted net income (loss)(a) | (547 | ) | 3,635 | 3,622 | 5,572 | ||||||||||||
| Adjusted net income (loss) per share(a) – basic | $ | (0.01 | ) | $ | 0.04 | $ | 0.04 | $ | 0.06 | ||||||||
| Weighted average shares outstanding – basic | 91,898 | 91,509 | 91,866 | 89,663 | |||||||||||||
| Production: | |||||||||||||||||
| Crude oil per day (Bopd) | 1,775 | 1,663 | 1,707 | 1,451 | |||||||||||||
| Natural gas per day (Mcfpd) | 11,569 | 11,826 | 11,122 | 11,674 | |||||||||||||
| Natural gas liquids per day (Bblpd) | 323 | 95 | 292 | 66 | |||||||||||||
| Crude oil equivalent per day (Boepd) | 4,027 | 3,729 | 3,853 | 3,462 | |||||||||||||
| Crude oil equivalent (MBoe) | 370.5 | 343.1 | 1,055.6 | 945.1 | |||||||||||||
| Crude oil equivalent per day (Boepd)(b) | 4,177 | 4,055 | 4,088 | 3,858 | |||||||||||||
| Crude oil equivalent (MBoe)(b) | 384.3 | 373.1 | 1,120.2 | 1053.3 | |||||||||||||
| Realized Prices, net of realized hedging activity: | |||||||||||||||||
| Crude oil ($ per Bbl) | $ | 73.88 | $ | 77.87 | $ | 71.92 | $ | 75.70 | |||||||||
| Natural gas ($ per Mcf) | 2.92 | 5.61 | 4.55 | 5.65 | |||||||||||||
| Natural gas liquids ($ per Bbl) | 31.69 | 50.20 | 37.04 | 50.24 | |||||||||||||
| Crude oil equivalent ($ per Boe) | 43.51 | 53.80 | 47.80 | 51.73 | |||||||||||||
| Expenses: | |||||||||||||||||
| Lease operating ($ per Boe) | $ | 18.40 | $ | 16.53 | $ | 17.18 | $ | 16.14 | |||||||||
| Production taxes (% of oil and gas revenue) | 10.0 | % | 8.8 | % | 9.5 | % | 8.8 | % | |||||||||
| General and administrative, excluding stock-based compensation ($ per Boe) |
5.00 |
4.75 |
4.70 |
5.98 |
|||||||||||||
| Cash interest ($ per Boe) | 3.98 | 2.53 | 3.51 | 3.79 | |||||||||||||
|
Depreciation, depletion and amortization ($ per Boe) |
16.12 |
12.13 |
15.34 |
12.03 |
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(a) See reconciliation of non-GAAP financial measures below.
(b)
Includes Abraxas’ equity interest in Blue Eagle’s production.
|
BALANCE SHEET DATA |
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| (In thousands) | September 30, 2012 | December 31, 2011 | |||||
| Cash | $ | 2,615 | $ | — | |||
| Working capital (a) | 9,127 | (14,404 | ) | ||||
| Property and equipment – net | 204,625 | 179,552 | |||||
| Total assets | 250,128 | 241,150 | |||||
| Long-term debt | 145,616 | 126,258 | |||||
| Stockholders’ equity | 57,905 | 62,651 | |||||
| Common shares outstanding | 92,389 | 92,261 | |||||
(a) Excludes current maturities of long-term debt and current derivative assets and liabilities.
| ABRAXAS PETROLEUM CORPORATION | ||||||||||||||||
| STATEMENTS OF OPERATIONS | ||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||
| (In thousands except per share data) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues: | ||||||||||||||||
| Oil and gas production revenues | $ | 17,146 | $ | 17,665 | $ | 49,459 | $ | 48,165 | ||||||||
| Other | 24 | 1 | 42 | 5 | ||||||||||||
| 17,170 | 17,666 | 49,501 | 48,170 | |||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Lease operating | 6,816 | 5,670 | 18,132 | 15,251 | ||||||||||||
| Production taxes | 1,714 | 1,549 | 4,699 | 4,229 | ||||||||||||
| Depreciation, depletion, and amortization | 5,971 | 4,161 | 16,189 | 11,371 | ||||||||||||
| Impairment | 11,761 | — | 13,067 | — | ||||||||||||
| General and administrative (including stock-based compensation of $413, $430, $1,612 and $1,499) |
2,267 |
2,061 |
6,572 |
7,153 |
||||||||||||
| 28,529 | 13,441 | 58,659 | 38,004 | |||||||||||||
| Operating income (loss) | (11,359 | ) | 4,225 | (9,158 | ) | 10,166 | ||||||||||
| Other (income) expense: | ||||||||||||||||
| Interest income | (1 | ) | (2 | ) | (3 | ) | (6 | ) | ||||||||
| Interest expense | 1,596 | 983 | 4,061 | 3,924 | ||||||||||||
| Amortization of deferred financing fees | 311 | 245 | 607 | 1,515 | ||||||||||||
| Loss (gain) on derivative contracts (unrealized of $5,267, $(16,450), $(4,153), $(13,431)) | 5,351 | (16,641 | ) | (4,935 | ) | (12,394 | ) | |||||||||
| Equity in (income) loss of joint venture | (282 | ) | (546 | ) | (2,316 | ) | (2,064 | ) | ||||||||
| Other | — | 101 | 42 | 188 | ||||||||||||
| 6,975 | (15,860 | ) | (2,544 | ) | (8,837 | ) | ||||||||||
| Net income (loss) before income tax | (18,334 | ) | 20,085 | (6,614 | ) | 19,003 | ||||||||||
| Income tax expense | 310 | — | 310 | — | ||||||||||||
| Net income (loss) | $ | (18,644 | ) | $ | 20,085 | $ | (6,924 | ) | $ | 19,003 | ||||||
| Net income (loss) per common share - basic | $ | (0.20 | ) | $ | 0.22 | $ | (0.08 | ) | $ | 0.21 | ||||||
| Net income (loss) per common share - diluted | $ | (0.20 | ) | $ | 0.21 | $ | (0.08 | ) | $ | 0.21 | ||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 91,898 | 91,509 | 91,866 | 89,663 | ||||||||||||
| Diluted | 91,898 | 93,616 | 91,866 | 92,160 | ||||||||||||
ABRAXAS PETROLEUM CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
To fully assess Abraxas’ operating results, management believes that, although not prescribed under generally accepted accounting principles ("GAAP"), discretionary cash flow and EBITDA are appropriate measures of Abraxas' ability to satisfy capital expenditure obligations and working capital requirements. Discretionary cash flow and EBITDA are non-GAAP financial measures as defined under SEC rules. Abraxas' discretionary cash flow and EBITDA should not be considered in isolation or as a substitute for other financial measurements prepared in accordance with GAAP or as a measure of the Company's profitability or liquidity. As discretionary cash flow and EBITDA exclude some, but not all items that affect net income and may vary among companies, the discretionary cash flow and EBITDA presented below may not be comparable to similarly titled measures of other companies. Management believes that operating income calculated in accordance with GAAP is the most directly comparable measure to discretionary cash flow; therefore, operating income is utilized as the starting point for the discretionary cash flow reconciliation.
Discretionary cash flow is defined as operating income plus depreciation, depletion and amortization expenses, non-cash expenses and impairments, cash portion of other income (expense) less cash interest. The following table provides a reconciliation of discretionary cash flow to operating income for the periods presented.
| (In thousands) |
Three Months Ended
September 30, |
Nine Months Ended September 30, |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Operating (loss) income | $ | (11,359 | ) | $ | 4,225 | $ | (9,158 | ) | $ | 10,166 | ||||||
| Depreciation, depletion and amortization | 5,971 | 4,161 | 16,189 | 11,371 | ||||||||||||
| Impairment | 11,761 | — | 13,067 | — | ||||||||||||
| Stock-based compensation | 413 | 430 | 1,612 | 1,499 | ||||||||||||
| Realized gain (loss) on derivative contracts | (84 | ) | 191 | 782 | (1,037 | ) | ||||||||||
| Cash interest | (1,476 | ) | (867 | ) | (3,705 | ) | (3,582 | ) | ||||||||
| Discretionary cash flow | $ | 5,226 | $ | 8,140 | $ | 18,787 | $ | 18,417 | ||||||||
EBITDA is defined as net income (loss) plus interest expense, depreciation, depletion and amortization expenses, deferred income taxes and other non-cash items. The following table provides a reconciliation of EBITDA to Net income for the periods presented.
| (In thousands) |
Three Months Ended
September 30, |
Nine Months Ended September 30, |
||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Net (loss) income | $ | (18,644 | ) | $ | 20,085 | $ | (6,924 | ) | $ | 19,003 | ||||||
| Net interest expense | 1,595 | 981 | 4,058 | 3,918 | ||||||||||||
| Income tax expense | 310 | — | 310 | — | ||||||||||||
| Depreciation, depletion and amortization | 5,971 | 4,161 | 16,189 | 11,371 | ||||||||||||
| Impairment | 11,761 | — | 13,067 | — | ||||||||||||
| Amortization of deferred financing fee | 311 | 245 | 607 | 1,515 | ||||||||||||
| Stock-based compensation | 413 | 430 | 1,612 | 1,499 | ||||||||||||
| Unrealized (gain) loss on derivative contracts | 5,267 | (16,450 | ) | (4,153 | ) | (13,431 | ) | |||||||||
| Realized (gain) loss on interest derivative contract | (946 | ) | 600 | 214 | 1,763 | |||||||||||
| Equity in (income) of joint venture | (282 | ) | (546 | ) | (2,316 | ) | (2,064 | ) | ||||||||
| Other non-cash items | — | 101 | 42 | 188 | ||||||||||||
| EBITDA | $ | 5,756 | $ | 9,607 | $ | 22,706 | $ | 23,762 | ||||||||
This release also includes a discussion of “adjusted net income (loss), excluding certain non-cash items,” which is a non-GAAP financial measure as defined under SEC rules. Furthermore, in accordance with SEC Regulations, earnings (or losses) related to Raven Drilling, LLC are credited to full cost pool rather than included in net income (loss) for the period presented. The following table provides a reconciliation of adjusted net income (loss), excluding ceiling test impairment, including net income from Raven Drilling, LLC and change in unrealized derivative contracts, to net income (loss) for the periods presented. Management believes that net income (loss) calculated in accordance with GAAP is the most directly comparable measure to adjusted net income (loss), excluding certain non-cash items.
| (In thousands) |
Three Months Ended
September 30, |
Nine Months Ended September 30, |
||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Net income (loss) | $ | (18,644 | ) | $ | 20,085 | $ | (6,924 | ) | $ | 19,003 | ||||||
| Impairment | 11,761 | — | 13,067 | — | ||||||||||||
| Net income related to Raven Drilling, LLC | 1,069 | — | 1,632 | — | ||||||||||||
| Unrealized (gain) loss on derivative contracts | 5,267 | (16,450 | ) | (4,153 | ) | (13,431 | ) | |||||||||
| Adjusted net income (loss), excluding certain non-cash items | $ | (547 | ) | $ | 3,635 | $ | 3,622 | $ | 5,572 | |||||||
| Net income (loss) per share – basic | $ | (0.20 | ) | $ | 0.22 | $ | (0.08 | ) | $ | 0.21 | ||||||
| Adjusted net income (loss), excluding certain non-cash items, per share – basic |
$ |
(0.01 |
) |
$ |
0.04 |
0.04 |
0.06 |
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