Brigham Exploration Announces Record Q1 2001 Financial Results -- 24% Production Growth, 101% Cash Flow Growth and Net Income of $424,000.Business Editors & Energy Writers AUSTIN Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas--(BUSINESS WIRE)--May 9, 2001 Brigham Brigham may refer to the following: Place:
Highlights of Brigham's financial performance during the first quarter include: -- Record production volumes which increased 24% in the first quarter 2001 as compared to volumes produced in the fourth quarter of 2000, and 35% relative to the first quarter of 2000; -- 52% revenue growth relative to the fourth quarter 2000 due to increased production volumes and 64% higher realized natural gas prices ($3.03 vs. $1.85 per Mcf), despite $6.6 million of hedging losses during the first quarter; -- Doubling of EBITDA to $5.1 million in the first quarter 2001 from $2.5 million in the fourth quarter 2000 due to the combined effects of higher production and improved realized sales prices; and -- Quarterly net income of $424,000 ($0.02 per diluted share) after preferred dividend expenses. First Quarter 2001 Results Average net daily production volumes for the first quarter 2001 were 22.9 MMcfe MMcfe Millions of Cubic Feet Equivalent (Per Day; gas exploration) , an increase of 35% from the first quarter 2000 and 24% from the fourth quarter 2000. Several drilling discoveries made by Brigham late in 2000 contributed significantly to the growth in first quarter volumes, including a Hunton Hunton, as a person, may refer to:
References 1. and a Frio Fri·o A river of southern Texas flowing about 354 km (220 mi) south and southeast to the Nueces River. bright spot discovery in the Texas Gulf Coast. Natural gas and oil sales for the first quarter 2001 were $6.9 million, or a 53% increase from the same period last year and a 49% increase from the fourth quarter 2000. Brigham's average realized equivalent natural gas and oil sales price increased 14% in the first quarter 2001 as compared to the prior year quarter primarily due to 57% higher realized prices for natural gas ($3.03 vs. $1.93 per Mcf), a 2% decrease in realized prices for oil ($26.74 vs. $27.16 per barrel barrel: see English units of measurement. ), and an increase in the percentage of natural gas relative to total equivalent production volumes (78% vs. 61%). Cash settlements on natural gas hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. transactions of $6.6 million ($4.08 per Mcf) negatively impacted Brigham's net realized natural gas sales price and revenues during the first quarter 2001, while natural gas hedging settlements of $514,000 ($0.55 per Mcf) reduced its average realized natural gas sales price and revenues during the prior year period. Beginning in May 2001, Brigham's natural gas hedges decreased from 15 MMBtu to 10 MMBtu per day, while its estimated NYMEX-equivalent hedge price increased from $2.19 per MMBtu in April to $2.60 per MMBtu in May. Brigham's outstanding commodity price hedging contracts as of March 31, 2001 are summarized in a table at the end of this release. Lease operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the first quarter 2001 were $706,000, a 54% increase from the first quarter 2000 primarily due to higher production volumes and increased well repair and maintenance costs. Production taxes increased 53% to $466,000 in the first quarter 2001 due to increased production volumes and higher pre-hedge oil and natural gas prices, offset in part by production tax reimbursements related to wells that qualify for severance tax severance tax n. A tax imposed by a state on the extraction of natural resources, such as oil, coal, or gas, that will be used in other states. refunds. Net general and administrative expenses were $817,000, a 10% increase from the first quarter 2000 principally due to higher employee payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. and benefits expenses. However, net general administrative expenses were down 17% on a per unit basis to $0.40 per Mcfe in the first quarter 2001 from $0.48 per Mcfe in the first quarter 2000. 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 expenses were $2.5 million ($1.20 per Mcfe), or 40% higher than the prior year quarter primarily due to increased production volumes. Net interest expense decreased 35% to $1.8 million in the first quarter 2001 from $2.8 million in the prior year period as a result of reduced borrowings and lower interest rates that resulted largely from the refinancing Refinancing An extension and/or increase in amount of existing debt. of Brigham's senior subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes during the fourth quarter 2000. Earnings before interest, taxes, depreciation, depletion and amortization (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 ) increased 60% to $5.1 million in the first quarter 2001 from $3.2 million in the first quarter 2000, while operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. for the first quarter 2001 was $3.7 million ($0.21 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share), or a 51% increase from $2.5 million ($0.16 per diluted share) for the same period in 2000. Brigham reported net income of $424,000 ($0.02 per diluted share) for the first quarter 2001 compared to a net loss of $2.2 million ($0.14 per diluted share) for the prior year period. Capital expenditures during the first quarter 2001 totaled $10.7 million, which primarily included $7.8 million related to drilling, $1.1 million for land and G&G activities and $1.5 million for capitalized interest Capitalized interest Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. and overhead expenses. Operational Update Since the late 2000 Hunton and Frio bright spot discoveries that were completed early in 2001, Brigham has completed eight additional wells that are currently impacting second quarter production volumes. In the Texas Gulf Coast region, Brigham recently completed its third consecutive Frio bright spot discovery, the Pitchfork Ranch ranch, large farm devoted chiefly to raising and breeding cattle, horses, sheep, and goats. The cattle ranch was introduced from Latin America to Texas and the plains of the W United States and Canada. No. 1 well, which is currently producing 12.1 MMcfe per day (2.8 MMcfe net to Brigham's revenue interest). Brigham has also completed two Home Run Field development wells that are currently producing a combined 18 MMcfe (4.7 MMcfe net to Brigham's revenue interest). In its Anadarko Basin region, Brigham completed a recently announced Springer springer a North American term commonly used to describe heifers close to term with their first calf. Channel discovery, which is currently producing 6.5 MMcfe per day (1.3 MMcfe net). In the same area, Brigham is currently completing its fourth consecutive Springer Channel discovery, in which it retains a 41% revenue interest. This well should be producing to sales in the next five days. In its West Texas region, Brigham is now completing its fourth consecutive oil discovery. The first three of these discoveries have recently been brought on line at a combined rate of 616 barrels of oil per day, or 407 barrels (2.4 MMcfe) net to Brigham's revenue interest. Brigham anticipates that its most recent discovery in the Canyon canyon Very narrow, deep valley cut by a river through resistant rock and having steep, almost vertical sides. Canyons occur most often in arid or semiarid regions. Some canyons (e.g., the Grand Canyon) are spectacular natural features. See also submarine canyon. Reef should be producing to sales in the next several weeks at a rate of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 250 barrels of oil per day, or approximately 195 barrels of oil (1.2 MMcfe) net to Brigham's revenue interest. Several wells spud by Brigham in 2000 were completed during the first quarter of 2001. Thus far in its 2001 drilling program, Brigham has completed six wells (3.4 net) and plugged three wells (0.8 net), yielding an 81% net completion rate. Brigham currently has five wells (2.5 net) drilling, including a Brigham-operated Vicksburg Vicksburg, city (1990 pop. 20,908), seat of Warren co., W Miss., on bluffs above the Mississippi River at the mouth of the Yazoo; inc. 1825. An important port, it is the commercial, processing, and shipping center for a cotton, timber, and livestock area. test (50% working interest) of an adjacent fault block to Brigham's Home Run Field. Six additional wells are expected to spud in the next thirty days. Second Quarter 2001 Results Guidance The following forecasts and estimates of Brigham's second quarter 2001 results are 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. subject to the risks and uncertainties identified in the "Forward Looking Statements Disclosure" at the end of this release. Brigham currently expects second quarter 2001 production volumes to average between 26 and 28 MMcfe per day, 75% of which consists of natural gas. For the second quarter 2001, lease operating expenses are projected to be $0.35 per Mcfe, production taxes are projected to be 5.5% of pre-hedge oil and gas revenues, and net general and administrative expenses are projected to be $875,000 ($0.35 to $0.37 per Mcfe). Based on these production and cost estimates, assumed average NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). prices of $4.75 per MMBtu for natural gas and $27.75 per barrel for oil, and taking into account current hedging contracts outstanding, Brigham forecasts revenue of between $8.5 and $9.3 million and EBITDA of between $6.2 million and $6.9 million for the second quarter 2001. Management Comment Bud Brigham, chairman, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and president, stated, "Our first quarter financial performance provides the first quantitative quantitative /quan·ti·ta·tive/ (kwahn´ti-ta?tiv) 1. denoting or expressing a quantity. 2. relating to the proportionate quantities or to the amount of the constituents of a compound. look at the value creation established from our 2000 drilling program. As a result of this successful program, our production volumes grew 24% over fourth quarter volumes. Our drilling success has continued in 2001 and, given the eight wells we've we've Contraction of we have. we've have completed thus far, we expect production to grow another 18% in the second quarter. The combination of growing production volumes, the roll off of a significant portion of our natural gas hedges and our reduced debt leverage will continue to drive expansion in both EBITDA margins and operating cash flow during the course of 2001." Conference Call Information Brigham management will host a conference call to discuss the company's first quarter 2001 operational and financial results with investors, analysts and other interested parties on Thursday Thursday: see week. , May 10, at 9:00 a.m. Central time. To participate in the call, please dial 800/670-3545 and ask for the Brigham Exploration conference call (conference identification number 18585193). A telephone recording of the conference call will be available to interested parties approximately one hour after the call is completed through 5:00 p.m. Central time on Monday Monday: see week. , May 14. To access the recording, please dial 800/633-8284 and enter 18585193 as the conference playback Playback could mean:
Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at either www.bexp3d.com or www.streetevents.com. About Brigham Exploration Brigham Exploration Company is an independent exploration and production company that applies 3-D seismic imaging and other advanced technologies to systematically explore and develop onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. domestic natural gas and oil provinces. For more information about Brigham Exploration, please visit our Web site at www.bexp3d.com or contact Investor Relations Investor relations The process by which the corporation communicates with its investors. at 512/427-3444. Forward-Looking Statements Disclosure Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 that are based upon current expectations. Important factors that could cause actual results to differ materially from those in the forward-looking statements include risks inherent in exploratory drilling activities, the timing and extent of changes in commodity prices, unforeseen engineering and mechanical or technological difficulties in drilling wells, availability of drilling rigs, land issues, federal and state regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. developments and other risks more fully described in the company's filings with the Securities and Exchange Commission. All forward-looking statements contained in this release, including any forecasts and estimates, are based on management's outlook only as of the date of this release, and we undertake no obligation to update or revise these forward-looking statements, whether as a result of subsequent developments or otherwise.
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three Months Ended March 31,
-------------------------------
2000 2001
-------------- --------------
Revenues:
Natural gas and oil sales $ 4,505 $ 6,905
Other revenue 33 138
-------- --------
4,538 7,043
Costs and expenses:
Lease operating 459 706
Production taxes 304 466
General and administrative 740 817
Depletion of natural gas and
oil properties 1,764 2,477
Depreciation and amortization 123 110
Amortization of stock
compensation 12 42
-------- --------
3,402 4,618
-------- --------
Operating income 1,136 2,425
Interest expense, net (2,775) (1,806)
Interest income 37 62
Other income (expense) (a) (596) 221
-------- --------
Net income (loss) before
income taxes (2,198) 902
Income tax expense -- --
-------- --------
Net income (loss) (2,198) 902
Preferred stock dividend expense -- 478
-------- --------
Net income (loss) to common $ (2,198) $ 424
======== ========
Net income (loss) to common per share:
Basic $ (0.14) $ 0.03
Diluted $ (0.14) $ 0.02
Wt. avg. common shares outstanding:
Basic 15,279 15,983
Diluted 15,279 17,888
(a) Includes non-cash income (expenses) related to
changes in the fair market value of
certain hedging contracts of: $ (443) $ 221
BRIGHAM EXPLORATION COMPANY
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended March 31,
-------------------------------
2000 2001
--------- ---------
Avg. net daily production:
Natural gas (MMcf) 10.4 17.9
Oil (Bbls) 1,100 841
Equivalent natural gas (MMcfe) (6:1) 17.0 22.9
Total net production:
Natural gas (MMcf) 940 1,610
Oil (MBbls) 99 76
Equivalent natural gas (MMcfe) (6:1) 1,534 2,064
% Natural gas 61% 78%
Sales prices:
Natural gas ($/Mcf) (a) $ 1.93 $ 3.03
Oil ($/Bbl) (a) $27.16 $26.74
Equivalent natural gas ($/Mcfe) (6:1) $ 2.94 $ 3.35
Other financial data:
EBITDA ($000) (b) $3,199 $5,116
Operating cash flow ($000) (c) $2,472 $3,728
Operating cash flow per diluted share (c) $ 0.16 $ 0.21
(a) Includes the effects of hedging gains
(losses) of:
Natural gas ($/Mcf) $ (0.55) $ (4.08)
Oil ($/Bbl) $ (0.02) $ (1.00)
(b) Net income (loss) plus interest expense, DD&A expenses, income
taxes and other non-cash items.
(c) Net income (loss) plus DD&A expenses, deferred income taxes and
other non-cash items.
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands) (unaudited)
December 31, March 31,
2000 2001
--------------- --------------
Assets:
Current assets $ 10,673 $ 25,455
Natural gas and oil properties,
at cost, net 129,490 137,665
Other property and equipment,
at cost, net 1,341 1,311
Other non-current assets 5,407 4,670
-------- --------
Total assets $146,911 $169,101
======== ========
Liabilities and stockholders' equity:
Current liabilities $ 17,899 $ 23,587
Notes payable 75,000 75,000
Senior subordinated notes, net 7,000 16,075
Other non-current liabilities 3,697 2,025
-------- --------
Total liabilities 103,596 116,687
Redeemable preferred stock, net 8,558 14,183
Stockholders' equity 34,757 38,231
-------- --------
Total liabilities and
stockholders' equity $146,911 $169,101
======== ========
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended March 31,
------------------------------
2000 2001
------------ ------------
Cash flows from operating activities:
Net income (loss) $ (2,198) $ 902
Depletion, depreciation and
amortization 1,887 2,587
Interest paid through issuance of
add'l senior sub. notes 1,477 75
Amortization of deferred stock
compensation 12 42
Amortization of deferred loan fees 391 343
Amortization of discount on senior
subordinated notes 180 --
Amortization of deferred loss on
derivatives instruments 280 --
Market value adjustment for
derivatives instruments 443 (221)
Changes in deferred income tax
liability -- --
-------- --------
Operating cash flow 2,472 3,728
Changes in working capital and other
items (5,444) (2,476)
-------- --------
Cash flows provided (used) by
operating activities (2,972) 1,252
Cash flows used by investing
activities (4,157) (8,918)
Cash flows provided by financing
activities 6,046 18,858
-------- --------
Net increase (decrease) in cash and
cash equivalents $ (1,083) $ 11,192
======== ========
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended March 31,
---------------------------------
2000 2001
-------------- --------------
Revenues:
Natural gas and oil sales $ 2.94 $ 3.35
Workstation revenue 0.02 0.07
----- -----
2.96 3.42
Costs and expenses:
Lease operating 0.30 0.34
Production taxes 0.20 0.23
General and administrative 0.48 0.40
Depletion of natural gas and oil
properties 1.15 1.20
Depreciation and amortization 0.08 0.05
Amortization of stock compensation 0.01 0.02
----- -----
2.22 2.24
----- -----
Operating income $ 0.74 $ 1.18
===== =====
BRIGHAM EXPLORATION COMPANY
SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF MARCH 31, 2001
(unaudited)
Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002
------- ------- ------- ------- -------
Natural Gas
Swap: MMBtu/d 10,000 - - - - - - - -
$/MMBtu $2.19 - - - - - - - -
Natural Gas
Collar: Cap - MMBtu/d 6,703 10,000 10,000 10,000 10,000
Cap - $/MMBtu $2.60 $2.60 $2.73 $2.80 $2.67
Floor - MMBtu/d 3,352 2,500 2,500 - - - -
Floor - $/MMBtu $1.90 $1.90 $1.90 - - - -
Crude Oil
Collar: Cap - Bbls/d 400 200 200 - - - -
Cap - $/Bbl $26.60 $25.25 $25.25 - - - -
Floor - Bbls/d 400 200 200 - - - -
Floor - $/Bbl $18.00 $16.10 $16.10 - - - -
Note: Hedged volumes and prices reflected in this table represent
average contract amounts for the quarterly periods presented;
natural gas hedge prices reflect estimated NYMEX equivalent
prices since the actual contract prices are based on various
regional index prices, while the crude oil hedge contract
prices are based on NYMEX pricing.
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion