Abraxas Reports 2003 Second Quarter Financial Results; First Full Quarter after Canadian Property Sales.Energy Editors/Business Editors SAN ANTONIO--(BUSINESS WIRE)--Aug. 13, 2003 Abraxas A`brax´as n. 1. A mystical word used as a charm and engraved on gems among the ancients; also, a gem stone thus engraved. Petroleum Corporation (AMEX AMEX See: American Stock Exchange :ABP 1. (networking) ABP - Alternating bit protocol. 2. ABP - Microsoft Address Book Provider. ) today reported results for the second quarter of 2003, the first full quarter impacted by the sale of its Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. subsidiaries and related financial transactions completed in January January: see month. 2003. Significant results of the quarter and items that impacted Q2 results include:
-- $2.3 million loss for Q2 2003 ($0.07 per share) compared to
$95.7 million loss in Q2 2002 ($3.19 per share);
-- Cash flow(a) for the quarter totaled $4.1 million;
-- EBITDA(a) of $5.0 million;
-- Q2 2003 includes $757,000 of non-cash stock-based compensation
expense;
-- Q2 2003 results include $930,000 of cash interest expense and
$2.9 million of non-cash interest costs;
-- Natural gas price realization was $5.11 per Mcf in 2003
compared to $2.44 per Mcf in 2002; and
-- 2002 results include the impact of oil and gas properties sold
subsequent to Q2 2002.
(a) See attached Reconciliation of Non-GAAP Financial Measures.
The second quarter of 2003 represents the first full quarter of operations since the sale of the Company's Canadian subsidiaries in January 2003 and the related financial transactions also concluded in January. While downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing the Company with the property sales, the 2003 Q2 results reflect the corresponding reductions in debt and interest costs, including a significant portion of the Company's future interest costs being paid in additional notes as opposed op·pose v. op·posed, op·pos·ing, op·pos·es v.tr. 1. To be in contention or conflict with: oppose the enemy force. 2. to cash. Second Quarter Operations Update: The Company believes that the effect of property sales, including the sale of the Company's Canadian subsidiaries in January 2003, make year-to-year comparisons not meaningful. A comparison to Q1 2003 shows second quarter production declined from 20.1 MMcfepd to 18.1 MMcfepd, which was in line with Company projections and guidance. This decline was expected due to natural declines and seasonal delays associated with spring breakup breakup The division of a company into separate parts. The most famous breakup to date was the 1984 division of AT&T (formerly, American Telephone & Telegraph Company). This breakup was intended to increase competition in the communications industry. in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . Lease operating costs operating costs npl → gastos mpl operacionales and G&A costs, at $1.25 and $.75 respectively per Mcfe, remain within the Company's projections on an annual basis. The Company incurred $5.6 million in capital costs for the second quarter, related to the drilling of five wells. Two wells were drilled during the quarter on Canadian acreage, one in the Peace River Arch area of western Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. , currently awaiting tie-in tie-in n. One thing that is related to or connected with another. Noun 1. tie-in - a fastener that serves to join or connect; "the walls are held together with metal links placed in the wet mortar during construction" , and the second in the Caroline Car·o·line adj. Relating to the life and times of Charles I or Charles II of England. [Medieval Latin Carol area of southwestern south·west n. 1. Abbr. SW The direction or point on the mariner's compass halfway between due south and due west, or 135° west of due north. 2. An area or region lying in the southwest. 3. Alberta. The Caroline well was drilled pursuant to a farmout agreement with PrimeWest Energy Inc., the buyer of the Company's former Canadian subsidiaries in January 2003. This latest well has been drilled and is currently awaiting completion. In U.S. operations, three wells spudded during the quarter, one in south Texas and two in west Texas. The south Texas well was placed on production late in Q2 with both west Texas wells still in drilling operations. An EOG EOG electro-olfactogram. EOG abbr. electro-oculography EOG electro-oculogram; electro-olfactogram. EOG Electrooculogram, see there operated Montoya Montoya is an Hispanic surname. The name may refer to: Persons:
Key quarterly results are summarized below:
(Amounts in thousands)
----------------------
2003 2002
---- ----
Revenues $8,430 $14,235
Operating Income (Loss) 1,927 (115,879)
Net Income (Loss) (2,346) (95,690)
Earnings (Loss) Per Share (.07) (3.19)
EBITDA(a) 4,985 9,226
Average Oil Price
(after hedge) 28.53 23.47
Average Gas Price
(after hedge) 5.11 2.44
Total Assets 122,069 188,497
(a) See attached Reconciliation of Non-GAAP Financial Measures.
Abraxas invites your participation in a conference call on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , August 15, at 10:00 am CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT to discuss the contents of this release and respond to questions. Please call 1-888-855-5428 between 9:50 and 10:00 am CDT, passcode code 475788, if you would like to participate in the call. There will be a replay of the conference call available by calling 1-888-203-1112, passcode code 475788, beginning at 1:00 pm CDT on August 15, 2003. Abraxas Petroleum Corporation is a San Antonio-based crude oil and natural gas exploitation and production company. The Company operates in Texas, Wyoming Wyoming, city, United States Wyoming, city (1990 pop. 63,891), Kent co., W Mich., in the greater Grand Rapids metropolitan area, on the Grand River; settled 1832, inc. 1959. and western Canada
Western Canada, commonly referred to as the West . Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward-looking statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : Statements in this release looking forward in time involve known and unknown risks and uncertainties, which may cause the Company's 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 the Company for crude oil and natural gas and our ability to sell certain assets in a timely manner to support liquidity needs. In addition, the Company's future crude oil and natural gas production is highly dependent upon the Company's level of success in acquiring or finding additional reserves. Further, the Company operates in an industry sector where securities values are highly volatile and may be influenced by economic and other factors beyond the Company's control. In the context of forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information provided for in this release, reference is made to the discussion of risk factors detailed in the Company's filing with the Securities and Exchange Commission during the past 12 months.
ABRAXAS PETROLEUM CORPORATION
QUARTER-END RESULTS
(UNAUDITED)
(In thousands except per share Three Months Six Months
data) Ended June 30, Ended June 30,
2003 2002(a) 2003 2002(a)
-------- -------- -------- --------
Operations Data:
Revenues $8,430 $14,235 $21,541 $26,042
Cash Flow (Before Working
Capital Changes)(b) 4,055 702 12,133 (1,598)
Net Income (Loss)(c) (2,346) (95,690) 60,356 (104,389)
Net Income (Loss) Per Share (.07) (3.19) 1.73 (3.48)
Weighted Ave. Shares
Outstanding 35.6 30.0 34.9 30.0
Production:
Crude Oil (BPD) 636 826 681 825
NGL (BPD) 58 676 141 717
Natural Gas (MCFPD) 13,977 46,350 17,885 45,254
MMCFEPD 18.1 55.4 22.8 54.5
Prices (net of hedge impact):
Crude Oil ($/BBL) $28.53 $23.47 $31.03 $20.08
NGL's ($/BBL) 22.10 17.73 24.64 15.11
Natural Gas ($/MCF) 5.11 2.44 5.12 2.33
Price per MCFE 5.00 2.61 5.09 2.44
Expenses:
Lease Operating ($/MCFE) $1.25 $.67 $1.16 $.74
General & Administrative
($/MCFE) .75 .29 .64 .32
Cash Interest ($/MCFE) .57 1.74 .58 1.74
Total Interest ($/MCFE) 2.32 1.74 2.27 1.74
D/D/A ($/MCFE) 1.39 1.81 1.32 1.61
(a) 2002 Results include impact from Canadian operations sold in
January 2003.
(b) See attached Reconciliation of Non-GAAP Financial Measures.
(c) Net loss for 2002 includes a $116 million proved property
impairment due to lower realized prices at period end.
Balance Sheet Data (In $000s)
June 30, 2003 December 31, 2002
Cash $2,099 $4,882
Working Capital (Deficit)(a) (3,537) (2,109)
Plant/Property/Equipment, Net 106,597 150,394
Total Assets 122,069 181,425
Long-Term Debt 176,646 236,943
Shareholders Equity (Deficit) (69,542) (142,254)
Common Shares Outstanding
(Millions) 35.6 30.1
(a) 12/31/2002 working capital excludes current portion of
long-term debt of $63.5 million.
Abraxas Petroleum Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
-------- -------- -------- --------
Revenue:
Oil and gas production
revenues $8,261 $13,143 $21,033 $24,029
Gas processing revenues -- 741 132 1,411
Rig revenues 158 193 339 344
Other 11 158 37 258
-------- -------- -------- ---------
8,430 14,235 21,541 26,042
Operating costs and expenses:
Lease operating and
production taxes 2,066 3,353 4,792 7,262
Depreciation, depletion and
amortization 2,301 9,110 5,443 15,924
Proved property impairment -- 115,995 -- 115,995
Rig operations 148 175 314 296
General and administrative 1,231 1,481 2,627 3,179
General and administrative
(Stock-based compensation) 757 -- 792 --
-------- --------- -------- --------
6,503 130,114 13,968 142,656
-------- -------- -------- --------
Operating income (loss) 1,927 (115,879) 7,573 (116,614)
Other (income) expense:
Interest income (7) (8) (17) (41)
Interest expense 3,846 8,761 9,010 17,174
Amortization of deferred
financing fee 434 431 811 858
Financing cost -- -- 3,601 --
Gain on sale of foreign
subsidiaries -- -- (66,960) --
Other expense -- -- -- --
-------- -------- -------- --------
4,273 9,184 (53,555) 17,991
-------- -------- -------- --------
Earnings (loss) before
cumulative effect of
accounting change and taxes (2,346) (125,063) 61,128 (134,605)
Cumulative effect of
accounting change -- -- (395) --
Income tax (expense) benefit -- 29,373 (377) 30,216
-------- ----------- -------- --------
Net earnings (loss) (2,346) $(95,690) $60,356 $(104,389)
======== ======== ======== =========
Basic earnings (loss) per
common share:
Net earnings (loss) $(0.07) $(3.19) $1.74 $(3.48)
Cumulative effect of
accounting change -- -- (0.01) --
-------- -------- -------- --------
Net earnings (loss) per common
share - basic $(0.07) $(3.19) $1.73 $(3.48)
======== ======== ======== ========
Diluted earnings (loss) per
common share:
Net earnings (loss) $(0.07) $(3.19) $1.72 $(3.48)
Cumulative effect of
accounting change -- -- (0.01) --
-------- -------- -------- --------
Net earnings (loss) per
common share - diluted $(0.07) $(3.19) $1.71 $(3.48)
======== ======== ======== ========
Reconciliation of Non-GAAP Financial Measures To fully assess Abraxas' operating results, management believes that, although not prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "), discretionary cash flow Discretionary cash flow Cash flow that is available after the funding of all positive net present value (NPV) capital investment projects; it is available for paying cash dividends, repurchasing common stock, retiring debt, and so on. and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become are appropriate measures of Abraxas' ability to satisfy capital expenditure obligations and working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . Cash flow and EBITDA are non-GAAP financial measures as defined under SEC rules. Abraxas' cash flow and EBITDA should not be considered in isolation or as a substitute for other financial measurements prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP or as a measure of the Company's profitability or liquidity. As cash flow and EBITDA exclude some, but not all, items that affect net income and may vary among companies, the cash flow and EBITDA presented below may not be comparable to similarly titled measures of other companies. Management believes that operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (loss) calculated in accordance with GAAP is the most directly comparable measure most similar to cash flow and EBITDA. Cash flow is defined as operating income (loss) plus depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able , depreciation and amortization expense, non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) , cash gains (losses) on the settlement of non-hedge derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. and cash portion of other income (expense) and cash interest. The following table provides a reconciliation of cash flow to operating income (loss) for the periods presented.
Three Months Ended Six Months Ended
June 30 June 30,
2002 2003 2002 2003
Operating income (loss) $(115,879) $1,927 $(116,614) $7,573
Depletion, depreciation
and amortization 9,110 2,301 15,924 5,443
Non-cash stock based
comp. expense -- 757 -- 793
Proved Property
Impairment 115,995 -- 115,995 --
Cash interest (8,523) (930) (16,903) (1,676)
Cash Flow $702 $4,055 $(1,598) $12,133
EBITDA is defined as net income (loss) plus interest expense,
depletion, depreciation and amortization expenses, deferred income
taxes and other non-cash items. The following table provides a
reconciliation of EBITDA to operating income (loss) for the periods
presented.
Three Months Ended Six Months Ended
June 30 June 30,
2002 2003 2002 2003
Operating income (loss) $(115,879) $1,927 $(116,614) $7,573
Depletion, depreciation
and amortization 9,110 2,301 15,924 5,443
Proved Property
Impairment 115,995 -- 115,995 --
Non-cash stock based comp.
expense -- 757 -- 793
EBITDA $9,226 $4,985 $15,305 $13,809
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