Abraxas Reports Fourth Quarter and Full-Year 2004 Results.SAN ANTONIO San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. -- 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 ("Abraxas") (AMEX AMEX See: American Stock Exchange :ABP 1. (networking) ABP - Alternating bit protocol. 2. ABP - Microsoft Address Book Provider. ) today reported financial and operating results for the fourth quarter and year-ended December December: see month. 31, 2004. As a result of the Grey Wolf Exploration Inc. ("Grey Wolf") initial public offering ("IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ") that closed on February February: see month. 28, 2005, the information herein represents financial and operating results from operations in the U.S. only as all of Grey Wolf's historical performance is treated as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. . Production of 5.8 Bcfe for the year generated revenues of $33.9 million and net income of $7.8 million or $0.22 per share from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the . This compares to a net loss from continuing operations of $14.1 million or $0.40 per share for the prior year ended December 31, 2003. Abraxas posted net income of $17.0 million ($0.47 per share) in the fourth quarter of 2004 compared to a loss of $3.4 million ($0.10 per share) in the same quarter of 2003 from continuing operations. The net income in the fourth quarter of 2004 (and full-year 2004) included a $12.6 million gain on redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of debt booked as a result of the refinancing Refinancing An extension and/or increase in amount of existing debt. completed in October October: see month. of 2004 and an income tax benefit of $6.1 million related to the gain on the sale of the Grey Wolf shares that Abraxas owned. The actual gain on the sale of the Grey Wolf shares will be booked in the first quarter of 2005 and will include a similar income tax expense of $6.1 million. The most significant items related to 2004 results included: --Restricted capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. of $9.3 million during 2004, over half of which was spent in the fourth quarter, compared to $9.2 million in 2003; --Daily production rates declined a modest 6% amid capital restrictions; --Realized price per Mcfe of $5.72 in 2004 compared to $4.82 in 2003; --Global refinancing completed in October; and --Preparation for expanded budget in 2005. Subsequent to year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. , as a result of the secondary shares sold by Abraxas in the Grey Wolf IPO, outstanding indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. under Abraxas' $25 million bridge loan was reduced to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $5 million. "For Abraxas, 2004 was a year of preparation -- for a stronger balance sheet and an expanded capital budget. So far, in 2005, we have significantly reduced the leverage on our balance sheet to a manageable level through the Grey Wolf IPO, and kicked off our capital development program with 6 wells in various stages of drilling and completion," commented Bob Watson
Abraxas invites your participation in a conference call on Thursday Thursday: see week. , March 24th, at 10:00 a.m. CT to discuss the contents of this release and respond to questions. Please call 1-800-500-0177 between 9:50 a.m. and 10:00 a.m. CT, confirmation code 764281, 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, confirmation code 764281, beginning approximately 1:00 p.m. CT, March 24th, through midnight CT, March 31st. Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploitation Exploitation See also Opportunism. Barnum, P. T. (1810–1891) circus impressario famous for his saying, “Never give a sucker an even break.” [Am. Hist. and production company with operations in Texas and 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. . 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 statements 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 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 crude oil and natural gas. In addition, Abraxas' future crude oil and natural gas production is highly dependent upon Abraxas' level of success in acquiring or finding additional reserves. Further, Abraxas operates in an industry sector where the value of securities is highly volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. and may be influenced by economic and other factors beyond Abraxas' 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 Abraxas' filing with the Securities and Exchange Commission during the past 12 months.
ABRAXAS PETROLEUM CORPORATION
QUARTER AND YEAR-END RESULTS
(In thousands except per share Three Months Ended Twelve Months Ended
data) December 31, December 31,
------------------ -------------------
2004 2003 2004 2003
--------- -------- --------- ---------
Financial Results:
--------------------------------
Revenues $9,153 $7,187 $33,854 $30,380
EBITDA(a) 5,707 3,843 19,490 17,434
Cash Flow (Before Working
Capital Changes)(a) 2,148 2,513 10,099 9,291
Net Income (Loss) from
continuing operations 17,025 (3,431) 7,844 (14,104)
Income (Loss) Per Share from
continuing operations - Basic 0.47 (0.10) 0.22 (0.40)
Weighted Average Shares
Outstanding 36.3 35.8 36.2 35.4
Production Per Day:
--------------------------------
Crude Oil (Bbl/d) 595 605 602 603
NGL (Bbl/d) 24 27 24 26
Natural Gas (Mcf/d) 11,100 13,413 12,030 13,098
Mcfe/d 14,815 17,203 15,789 16,872
Realized Prices (net of hedge
impact):
--------------------------------
Crude Oil ($/Bbl) $46.81 $29.99 $40.12 $30.43
NGL ($/Bbl) 31.27 21.32 26.32 20.46
Natural Gas ($/Mcf) 6.14 4.29 5.45 4.77
Price per Mcfe 6.53 4.43 5.72 4.82
Expenses:
--------------------------------
Lease Operating ($/Mcfe) $1.36 $1.23 $1.48 $1.35
General & Administrative
($/Mcfe) 1.00 0.78 0.89 0.65
Cash Interest ($/Mcfe) 2.51 0.63 1.32 0.59
Total Interest ($/Mcfe) 3.26 2.65 3.09 2.65
D/D/A ($/Mcfe) 1.33 1.23 1.25 1.24
----------------------------------------------------------------------
(a) See reconciliation of non-GAAP financial measures below
Note: The above quarterly and yearly results exclude impact from Grey
Wolf Exploration Inc.
BALANCE SHEET DATA
(In thousands) December 31, 2004 December 31, 2003
----------------- -----------------
Cash $1,284 $-
Working Capital (Deficit)(b) (3,857) (2,023)
Plant/Property/Equipment, Net 78,077 76,021
Total Assets 152,685 126,437
Long-Term Debt 126,425 184,649
Shareholders Equity (Deficit) (53,464) (72,203)
Common Shares Outstanding
(Millions) 36.5 35.9
(b) Continuing operations only
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data) Year Ended December 31
----------------------------
2002 2003 2004
---------- -------- --------
Revenues:
Oil and gas production revenues $20,835 $29,710 $33,073
Rig revenues 635 663 771
Other 71 7 10
---------- -------- --------
21,541 30,380 33,854
Operating costs and expenses:
Lease operating and production taxes 7,639 8,342 8,567
Depreciation, depletion, and
amortization 9,194 7,608 7,213
Proved property impairment 28,178 - -
Rig operations 567 609 671
General and administrative 4,045 3,995 5,126
Stock-based compensation - 1,106 1,305
---------- -------- --------
49,623 21,660 22,882
---------- -------- --------
Operating income (loss) (28,082) 8,720 10,972
Other (income) expense:
Interest income (92) (30) (10)
Amortization of deferred financing fees 1,325 1,630 1,848
Interest expense 24,689 16,323 17,867
Financing costs 967 4,406 1,657
Gain on debt redemption - - (12,561)
Other 201 100 387
---------- -------- --------
27,090 22,429 9,188
---------- -------- --------
Income (loss) from continuing operations
before cumulative effect of accounting
change (55,172) (13,709) 1,784
Cumulative effect of accounting change - 395 -
---------- -------- --------
Net income (loss) from continuing
operations before income tax (55,172) (14,104) 1,784
Deferred income tax benefit - - (6,060)
---------- -------- --------
Net income (loss) from continuing
operations (55,172) (14,104) 7,844
Net income (loss) from discontinued
operations (63,355) 70,024 3,323
---------- -------- --------
Net income (loss) $(118,527) $55,920 $11,167
========== ======== ========
Basic earnings (loss) per common share:
Net earnings (loss) from continuing
operations $(1.84) $(0.39) $0.22
Discontinued operations (loss) (2.11) 1.98 0.09
Cumulative effect of accounting
change - (0.01) -
---------- -------- --------
Net income (loss) per common share -
basic $(3.95) $1.58 $0.31
========== ======== ========
Diluted earnings (loss) per common share:
Net earnings (loss) from continuing
operations $(1.84) $(0.38) $0.20
Discontinued operations (loss) (2.11) 1.94 0.09
Cumulative effect of accounting
change - (0.01) -
---------- -------- --------
Net income (loss) per common share -
diluted $(3.95) $1.55 $0.29
========== ======== ========
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. 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 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 (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,
depreciation and amortization expenses, non-cash expenses, cash gains
(losses) on the settlement of non-hedge derivatives 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 Twelve Months Ended
(In thousands) December 31, December 31,
------------------ -------------------
2004 2003 2004 2003
-------- -------- --------- --------
Operating income (loss) $3,712 $1,263 $10,972 $8,720
Depletion, depreciation and
amortization 1,811 1,940 7,213 7,608
Non-cash stock based
compensation expense 184 640 1,305 1,106
Financing costs (16) (224) (1,657) (4,406)
Cash portion of other expense (126) (102) (126) (100)
Cash interest (3,417) (1,004) (7,608) (3,637)
----------------------------------------------------------------------
Cash Flow $2,148 $2,513 $10,099 $9,291
----------------------------------------------------------------------
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 -- see consolidated statements of operations for a
reconciliation of net income (loss) to operating income (loss).
Three Months Ended Twelve Months Ended
(In thousands) December 31, December 31,
------------------ -------------------
2004 2003 2004 2003
-------- -------- --------- --------
Operating income (loss) $3,712 $1,263 $10,972 $8,720
Depletion, depreciation and
amortization 1,811 1,940 7,213 7,608
Non-cash stock based
compensation expense 184 640 1,305 1,106
----------------------------------------------------------------------
EBITDA $5,707 $3,843 $19,490 $17,434
----------------------------------------------------------------------
Note: The above cash flow and EBITDA reconciliations exclude impact
from Grey Wolf Exploration Inc.
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