Abraxas Reports Third Quarter 2005 Results with 47% Revenue and 17% Production Growth Over Second Quarter 2005.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 quarter and nine months ended September September: see month. 30, 2005 and provided an operational update.
Production of 1.6 Bcfe for the quarter generated:
-- Revenue of $14.2 million;
-- EBITDA (a) of $10.0 million;
-- Cash flow (a) of $6.3 million; and
-- Net income of $3.8 million or $0.09 per share from
continuing operations, excluding non-cash stock-based
compensation expense.
(a) See reconciliation of non-GAAP financial measures below
This compares to a net loss 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 , excluding non-cash stock-based compensation expense, of $1.6 million or $0.04 per share for the same quarter of 2004. Continuing operations represent financial and operating results from operations in the U.S. only as all of Grey Wolf Exploration Inc.'s ("Grey Wolf") historical performance and results from the sale of Grey Wolf shares owned by Abraxas in its initial public offering that closed on February February: see month. 28, 2005, are treated as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . As a result of the elimination of our capital expenditure limitations (due to previous debt covenant covenant (kŭv`ənənt), agreement entered into voluntarily by two or more parties to do or refrain from doing certain acts. In the Bible and in theology the covenant is the agreement or engagement of God with man as revealed in the restrictions), a significant item related to third quarter 2005 results included capital expenditures of $11.2 million compared to $1.3 million in the third quarter of 2004. These capital expenditures enabled sequential One after the other in some consecutive order such as by name or number. quarterly production to increase 17% and together with realized natural gas and crude oil prices of $8.15 per Mcf and $60.24 per barrel barrel: see English units of measurement. , contributed to a 47% increase in revenue from second quarter of 2005. During the third quarter, a non-cash expense 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) of $7.1 million, related to stock-based compensation, significantly impacted our net earnings. The non-cash stock-based compensation expense captured the 187% appreciation in Abraxas' stock price from June June: see month. 30, 2005 to September 30, 2005, as it relates solely to options granted to employees, which were previously re-priced in 2003. Including non-cash stock-based compensation expense, Abraxas' reported net loss for the quarter of $3.3 million or $0.08 per share from continuing operations. This compares to a net loss from continuing operations of $3.0 million or $0.08 per share for the same quarter of 2004, which included $1.4 million of non-cash stock-based compensation expense. In Brooks Brooks , Gwendolyn Elizabeth 1917-2000. American poet known for her verse detailing the dreams and struggles of African Americans. An early volume of poems, Annie Allen (1949), was awarded a Pulitzer Prize. Noun 1. Draw, 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. , completion operations are currently underway on all four wells drilled during the quarter. In the Oates SW Field of West Texas, the initial Wolfcamp re-entry RE-ENTRY, estates. The resuming or retaking possession of land which the party lately had. 2. Ground rent deeds and leases frequently contain a clause authorizing the landlord to reenter on the non-payment of rent, or the breach of some covenant, when the , La Escalera #2, is still recovering fluid after the fracture fracture, breaking of a bone. A simple fracture is one in which there is no contact of the broken bone with the outer air, i.e., the overlying tissues are intact. In a comminuted fracture the bone is splintered. stimulation stimulation /stim·u·la·tion/ (stim?u-la´shun) the act or process of stimulating; the condition of being stimulated. deep brain stimulation while re-entry operations on the initial Woodford
Coordinates: Woodford test, Hudgins 11-1, are steadily progressing below 10,000'. "Increasing production through the quarter is largely attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the Oates SW Devonian horizontal horizontal /hor·i·zon·tal/ (hor?i-zon´t'l) 1. parallel to the plane of the horizon. 2. occupying or confined to a single level in a hierarchy. horizontal parallel to the plane of the horizon. well that came on-line during the quarter at 5.2 MMcfepd and the impact of a full quarter of production from the horizontal Edwards wells drilled in South Texas earlier in the year. We expect production growth to continue through the fourth quarter of 2005 and into 2006 as the Wyoming and West Texas wells are brought on-line. To date, the completions in Wyoming have gone well and we look forward to definitive results once multiple zones in each well are perforated per·fo·ra·ted adj. Pierced with one or more holes. and fracture stimulated stim·u·late v. stim·u·lat·ed, stim·u·lat·ing, stim·u·lates v.tr. 1. To rouse to activity or heightened action, as by spurring or goading; excite. See Synonyms at provoke. 2. . The Wolfcamp re-entry has taken longer than anticipated; however, we consistently have gas returns with the unloading Unloading Selling securities or commodities whose prices are dropping to minimize loss. fluid," commented Bob Watson
Watson added with regard to the non-cash stock-based compensation expense, "While our shareholders experienced a 187% increase in share price from the end of the second quarter to the end of the third quarter, this appreciation, unfortunately, due to accounting rules for re-priced options, rendered a $7.1 million expense for Abraxas. This expense is non-cash and has no impact on our daily operations or our cash flow." Abraxas invites you to participate in a conference call on Monday Monday: see week. , November November: see month. 7th, at 2:00 p.m. CT to discuss the contents of this release and respond to questions. Please dial 866-800-8652, passcode 96786064, 10 minutes before the scheduled start time, if you would like to participate in the call. There will be a replay of the conference call available by dialing 888-286-8010, passcode 38394833, beginning approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 4:00 p.m. CT, November 7th, through November 21st. A transcript A generic term for any kind of copy, particularly an official or certified representation of the record of what took place in a court during a trial or other legal proceeding. A transcript of record of the call will also be available on the Company's website, www.abraxaspetroleum.com, at the Event Calendar. 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. 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 natural gas and crude oil. In addition, Abraxas' future natural gas and crude oil 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' filings 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 Ended Nine Months Ended
data) September 30, September 30,
------------------ -----------------
2005 2004 2005 2004
--------- -------- -------- --------
Financial Results:
---------------------------------
Revenues $14,164 $8,237 $31,613 $24,701
EBITDA (a) 10,028 4,956 20,249 13,784
Cash Flow (Before Working Capital
Changes) (a) 6,336 3,702 10,053 7,953
Net Income (Loss) from continuing
operations, excluding non-cash
stock based compensation expense 3,799 (1,608) 2,868 (8,059)
Net Income (Loss) from continuing
operations (3,254) (2,982) (4,463) (9,181)
Income (Loss) Per Share from
continuing operations - Basic $(0.08) $(0.08) $(0.12) $(0.25)
Weighted Average Shares
Outstanding 41.0 36.3 38.5 36.2
Production Per Day:
---------------------------------
Crude Oil (Bbl/d) 487 586 532 604
NGL (Bbl/d) - 23 - 24
Natural Gas (Mcf/d) 14,848 11,772 12,554 12,342
Mcfe/d 17,769 15,430 15,745 16,116
Realized Prices (net of hedge
impact):
---------------------------------
Crude Oil ($/Bbl) $60.24 $42.43 $51.95 $37.91
NGL ($/Bbl) - 27.55 - 24.71
Natural Gas ($/Mcf) (b) 8.15 5.24 6.75 5.24
Price per Mcfe 8.46 5.65 7.14 5.47
Expenses:
---------------------------------
Lease Operating ($/Mcfe) $1.84 $1.49 $1.82 $1.52
General & Administrative ($/Mcfe) 0.58 0.70 0.70 0.85
Interest ($/Mcfe) 2.26 3.02 2.38 3.04
D/D/A ($/Mcfe) 1.29 1.23 1.31 1.22
---------------------------------
(a) See reconciliation of non-GAAP financial measures below
(b) Includes deductions of $0.04 per Mcf in Q3 2005, $0.04 per Mcf in
Q3 2004, $0.17 per Mcf in 1st 3 quarters 2005 and $0.06 per Mcf in
1st 3 quarters 2004 related to commodity hedges (including
non-cash hedge accounting impact)
Note: The above results exclude impact from Grey Wolf Exploration Inc.
BALANCE SHEET DATA
(In thousands) September 30, 2005 December 31, 2004
------------------ -----------------
Cash $763 $1,284
Working Capital (Deficit) (c) (4,138) (3,857)
Plant/Property/Equipment, Net 101,058 78,077
Total Assets 120,382 152,685
Long-Term Debt 129,842 126,425
Shareholders Equity (Deficit) (27,185) (53,464)
Common Shares Outstanding
(Millions) 42.0 36.5
(c) Continuing operations only
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands except per share Three Months Ended Nine Months Ended
data) September 30, September 30,
------------------ -----------------
2005 2004 2005 2004
--------- -------- -------- --------
Revenues:
Oil and gas production revenues $13,829 $8,018 $30,690 $24,174
Rig revenues 330 214 909 518
Other 5 5 14 9
--------- -------- -------- --------
14,164 8,237 31,613 24,701
Operating costs and expenses:
Lease operating and production
taxes 3,007 2,109 7,807 6,716
Depreciation, depletion, and
amortization 2,107 1,744 5,622 5,402
Rig operations 176 174 560 442
General and administrative 953 998 2,997 3,759
Stock-based compensation 7,053 1,375 7,330 1,122
--------- -------- -------- --------
13,296 6,400 24,316 17,441
--------- -------- -------- --------
Operating income 868 1,837 7,297 7,260
Other (income) expense:
Interest income (11) (2) (12) (7)
Interest expense 3,700 4,285 10,241 13,416
Amortization of deferred
financing fees 403 468 1,257 1,380
Financing costs - 68 - 1,641
Other 30 - 274 11
--------- -------- -------- --------
4,122 4,819 11,760 16,441
--------- -------- -------- --------
Earnings (loss) from continuing
operations (3,254) (2,982) (4,463) (9,181)
Net income from discontinued
operations (net of $6,060 income
tax expense in 2005) - 1,339 10,704 2,353
--------- -------- -------- --------
Net income (loss) $(3,254) $(1,643) $6,241 $(6,828)
========= ======== ======== ========
Basic earnings (loss) per common
share:
Net earnings (loss) from
continuing operations $(0.08) $(0.08) $(0.12) $(0.25)
Discontinued operations - 0.04 0.28 0.07
--------- -------- -------- --------
Net income (loss) per common
share - basic $(0.08) $(0.04) $0.16 $(0.18)
========= ======== ======== ========
Diluted earnings (loss) per
common share:
Net earnings (loss) from
continuing operations $(0.08) $(0.08) $(0.12) $(0.25)
Discontinued operations - 0.04 0.28 0.07
--------- -------- -------- --------
Net income (loss) per common
share - diluted $(0.08) $(0.04) $0.16 $(0.18)
========= ======== ======== ========
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 to cash
flow and EBITDA; therefore, operating income (loss) is utilized as the
starting point for these reconciliations.
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 Nine Months Ended
(In thousands) September 30, September 30,
------------------ -----------------
2005 2004 2005 2004
--------- -------- -------- --------
Operating income (loss) $868 $1,837 $7,297 $7,260
Depletion, depreciation and
amortization 2,107 1,744 5,622 5,402
Non-cash stock based compensation
expense 7,053 1,375 7,330 1,122
Financing costs - (68) - (1,641)
Cash portion of other expense (30) - (39) -
Cash interest (3,662) (1,186) (10,157) (4,190)
----------------------------------------------------------------------
Cash Flow $6,336 $3,702 $10,053 $7,953
----------------------------------------------------------------------
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 Nine Months Ended
(In thousands) September 30, September 30,
------------------ -----------------
2005 2004 2005 2004
--------- -------- -------- --------
Operating income (loss) $868 $1,837 $7,297 $7,260
Depletion, depreciation and
amortization 2,107 1,744 5,622 5,402
Non-cash stock based compensation
expense 7,053 1,375 7,330 1,122
----------------------------------------------------------------------
EBITDA $10,028 $4,956 $20,249 $13,784
----------------------------------------------------------------------
Note: The above cash flow and EBITDA reconciliations exclude impact
from Grey Wolf Exploration Inc.
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