Brigham Exploration Reports Improved 1999 Financial Results.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)--March 7, 2000 Brigham Brigham may refer to the following: Place:
Significant highlights of Brigham's 1999 financial performance include:
-- Net production volumes increased 4% on an equivalent basis in the
fourth quarter 1999 relative to the fourth quarter 1998, despite
the sale of producing reserves in mid-1999 and a significantly
reduced drilling budget during 1999;
-- Higher realized oil and gas sales prices contributed to
production revenue growth of 63% in the fourth quarter and 9% for
the full year 1999 vs. comparable periods in 1998;
-- Significant year-over-year growth in EBITDA -- 543% in the fourth
quarter and 43% for the year -- due to improved realized sales
prices and reduced unit operating costs; and
-- Continuing improvement in per unit G&A expenses -- $0.52 per Mcfe
in the fourth quarter 1999 vs. $0.92 per Mcfe in the fourth
quarter 1998.
Fourth Quarter 1999 Results Average net daily production volumes for the fourth quarter 1999 were 16.5 MMcfe MMcfe Millions of Cubic Feet Equivalent (Per Day; gas exploration) , an increase of 4% from the fourth quarter 1998. Excluding net volumes attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to properties sold by Brigham effective as of June June: see month. 30, 1999, the Company's average net daily production would have been 12.6 MMcfe for the fourth quarter 1998, resulting in comparable year-over-year production growth of 31% over those adjusted volumes. This production growth primarily resulted from the completion of wells drilled in the early portion of Brigham's 1999 drilling program combined with recompletion and workover projects performed by the Company on certain producing wells. Significant drilling discoveries made by the Company late in 1999 did not materially contribute to fourth quarter volumes and will not contribute a full quarter of production until the second quarter of 2000. Net natural gas production in the fourth quarter 1999 was 1.0 Bcf, an 11% decrease over the same period in 1998, while net oil production in the current year quarter was 80 MBbls, a 61% increase from the prior year quarter. The decrease in net natural gas production was primarily the result of the Company's producing property divestitures effective June 30, 1999. The significant increases in oil production were attributable to workovers and other production stimulation stimulation /stim·u·la·tion/ (stim?u-la´shun) the act or process of stimulating; the condition of being stimulated. deep brain stimulation operations and the resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of production for certain non-operated oil wells that were shut-in shut-in n. A person confined indoors by illness or disability. adj. 1. Confined to a home or hospital, as by illness. 2. Disposed to avoid social contact; excessively withdrawn or introverted. during the fourth quarter 1998. Natural gas comprised 68% of Brigham's equivalent fourth quarter 1999 production volumes. Natural gas and oil sales for the fourth quarter 1999 were $4.1 million, or a 63% increase from the same period last year. The Company's average realized natural gas and oil equivalent sales price increased 58% in the fourth quarter 1999 as compared to the average realized sales price in the prior year quarter resulting from improved market prices for both natural gas and crude oil. Brigham's average natural gas sales price for the fourth quarter 1999 was $2.22 per Mcf compared to $1.65 per Mcf in the fourth quarter 1998 (a 36% increase), while the Company's average oil sales price for the fourth quarter 1999 was $23.38 per Bbl compared to $13.06 per Bbl in the prior year period (a 79% increase). Losses 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 $485,000, or $0.48 per Mcf, negatively impacted Brigham's net realized natural gas sales price and revenues during the fourth quarter 1999, while natural gas hedging gains of $281,000, or $0.25 per Mcf, contributed positively to the Company's average realized natural gas sales price and revenues during the prior year period. In late September September: see month. 1999, Brigham sold call options on a portion of its future oil and natural gas production to enable the Company to increase its effective fixed swap price by an average of $0.57 per MMBtu on its existing natural gas hedging contracts during the months of October October: see month. 1999 through January January: see month. 2000. For accounting purposes, the improvement in the Company's average realized natural gas sales price attributable to these transactions is not reflected in reported revenues. Rather, it is reflected in (i) other income (expense) on the income statement, and (ii) amortization of deferred loss on 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. instruments and market value adjustment for derivatives instruments on the cash flow statement. 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 fourth quarter 1999 were $580,000, an 8% reduction from the fourth quarter 1998. Also lower in the current year quarter, net general and administrative expenses were $771,000 in the fourth quarter 1999, or a significant 41% reduction from the fourth quarter 1998. 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 $2.0 million ($1.34 per Mcfe), or a 50% decrease from the prior year quarter due to Brigham's improved drilling results during 1999. Interest expense increased to $2.7 million in the fourth quarter 1999 from $2.4 million in the prior year period as a result of increased borrowings and higher effective interest rates. 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 543% to $3.3 million in the fourth quarter 1999 from $512,000 in the fourth quarter 1998, 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 fourth quarter 1999 was $2.8 million ($0.19 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), an increase from a loss of $891,000 ($0.07 per diluted share) for the same period in 1998. The Company reported a net loss of $2.2 million ($0.15 per diluted share) for the fourth quarter 1999 compared to a net loss of $31.6 million ($2.38 per diluted share) for the prior year period. The net loss during the fourth quarter 1998 included a $25.9 million ($1.95 per diluted share) non-cash capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. ceiling impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge. 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. 1999 Results Net equivalent production volumes totaled 6.3 Bcfe (67% natural gas) for the full year 1999 compared with 6.6 net Bcfe produced in 1998. Adjusted for the Company's proved reserve sales effective June 30, 1999, Brigham achieved comparable year-over-year production volume growth of 3%. Natural gas and oil sales for 1999 totaled $15 million compared to $13.8 million last year, an increase of 9% despite the Company's mid-year producing property divestitures, which generated proceeds of $17.1 million. Brigham's average realized natural gas and oil equivalent sales price increased 15% to $2.39 per Mcfe in 1999 from $2.08 per Mcfe in the prior year. Average realized sales prices during 1999 were $2.11 per Mcf for natural gas and $17.79 per Bbl for oil compared with average realized sales prices during 1998 of $2.04 per Mcf and $12.85 per Bbl, respectively. Despite the Company's sales of producing properties at mid-year and its reduced drilling budget relative to 1998, Brigham achieved growth in EBITDA, operating cash flow and net income during 1999. EBITDA for 1999 increased 43% to $9.5 million from $6.6 million last year, while operating cash flow increased to $7.5 million ($0.53 per diluted share) in 1999, a 245% increase from $2.2 million ($0.17 per diluted share) for 1998. The Company reported a net loss of $21.6 million ($1.53 per diluted share) for 1999, partially attributable to a non-cash $12.2 million loss associated with its property divestitures in mid- mid- pref. Middle: midbrain. 1999. Under full-cost accounting rules, the Company was required to recognize this loss in the second quarter 1999 despite the economic gain actually realized on the sales. Excluding this one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge, Brigham's net loss for 1999 would have been $9.4 million ($0.67 per diluted share). This compares to a loss of $33.3 million ($2.64 per diluted share) for 1998, which included a $25.9 million ($2.05 per diluted share) non-cash capitalized ceiling impairment charge recognized during the fourth quarter 1998. Current Daily Production Increased From Fourth Quarter 1999 Brigham currently estimates its average net daily production volumes to be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 20 MMcfe, or 21% higher than its average daily production during the fourth quarter 1999. This growth in daily production volumes is primarily attributable to the late February February: see month. additions of the recently completed Palmer palmer: see pilgrim. State No. 2 well in Brigham's Home Run Field discovery in Brooks County, Texas Brooks County is a county located in the U.S. state of Texas. As of 2000, the population is 7,976. Its county seat is Falfurrias6. Brooks is named for James Abijah Brooks, a Texas Ranger and legislator. Geography According to the U.S. and a well in Brigham's Frio Fri·o A river of southern Texas flowing about 354 km (220 mi) south and southeast to the Nueces River. play in Brazoria County, Texas Brazoria County is a county in the U.S. state of Texas located on the Gulf Coast within the Houston–Sugar Land–Baytown metropolitan area. Its county seat is Angleton, and its largest city is Pearland. As of the 2000 U.S. . Following the completion of its recently announced financing transactions, Brigham has spud three wells and has plans to spud an additional 10 wells in the next 60 days in its Anadarko Basin The Anadarko Basin is one of the most prolific natural gas reserves in North America, with ultimate gas production in excess of 100 trillion cubic feet of gas.[1] External links
References 1. and Gulf Coast 3-D projects, which would contribute to production volumes beginning in the second and third quarters of 2000. Management Comment Curtis Harrell Harrell can refer to: People
Harrell further stated, "Our Company continues to benefit from its prior investments in 3-D seismic and land assets with 80% of our 2000 capital budget directed towards drilling. We therefore have an excellent opportunity in 2000 to accelerate our growth in production volumes and reserves at extremely attractive all-in all-in adj (BRIT) (also adv) [charge] → todo incluido all-in adj, adv (Brit) [charge] → tout compris finding costs. With an improved cost structure and higher commodity prices, EBITDA margins should continue to improve from the record levels realized in the fourth quarter of 1999." Conference Call Information Brigham management will host a conference call to discuss the Company's year-end 1999 financial and operational results with investors, analysts and other interested parties on Wednesday Wednesday: see week. , March 8, at 9:00 a.m. Central time. To participate in the call, please dial 800/340-5810 and ask for the Brigham Exploration conference call (conference identification number 14513509). A 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 Thursday Thursday: see week. , March 9. To access the recording, please dial 800/633-8284 and enter 14513509 as the conference playback Playback could mean:
About Brigham Exploration Brigham Exploration Company (www.bexp3d.com) 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. 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. Disclosure Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that are based upon current expectations. The Company's actual capital expenditures in 2000 may differ from the estimates discussed herein. 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, availability of sufficient capital resources by the Company and its project participants, 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.
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three Months Twelve Months
Ended December 31, Ended December 31,
-------------------- ---------------------
1998 1999 1998 1999
-------------------- ---------------------
Revenues:
Natural gas
and oil sales $ 2,507 $ 4,096 $ 13,799 $ 14,992
Workstation revenue 68 38 390 285
-------- -------- -------- --------
2,575 4,134 14,189 15,277
Costs and expenses:
Lease operating 630 580 2,172 2,259
Production taxes 145 283 850 968
General and
administrative 1,310 771 4,672 3,481
Depletion of natural
gas and oil
properties 3,970 1,982 8,483 7,792
Capitalized ceiling
impairment 25,926 -- 25,926 --
Depreciation and
amortization 125 127 413 525
Amortization of
stock compensation 74 11 372 1
-------- -------- -------- --------
32,180 3,754 42,888 15,026
-------- -------- -------- --------
Operating income
(loss) (29,605) 380 (28,699) 251
Interest expense (2,386) (2,727) (5,968) (9,697)
Interest income 22 42 136 176
Other income (expense) -- 111 -- (163)
Loss on sale of
natural gas and oil
properties -- -- -- (12,195)
-------- -------- -------- --------
Net loss before
income taxes (31,969) (2,194) (34,531) (21,628)
Income tax benefit 322 -- 1,186 --
-------- -------- -------- --------
Net loss $(31,647) $ (2,194) $(33,345) $(21,628)
======== ======== ======== ========
Net loss per share:
Basic / Diluted $ (2.38) $ (0.15) $ (2.64) $ (1.53)
Wt. avg. common
shares outstanding:
Basic / Diluted 13,306 14,518 12,626 14,152
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Twelve Months
Ended December 31, Ended December 31,
-------------------- ---------------------
1998 1999 1998 1999
-------------------- ---------------------
Avg. net daily
production:
Natural gas (MMcf) 12.5 11.1 11.9 11.7
Oil (Bbls) 551 887 1,100 960
Equivalent natural gas
(MMcfe) (6:1) 15.8 16.5 18.5 17.4
Total net production:
Natural gas (MMcf) 1,125 1,003 4,269 4,197
Oil (MBbls) 50 80 396 346
Equivalent natural gas
(MMcfe) (6:1) 1,422 1,482 6,644 6,270
% Natural gas 79% 68% 64% 67%
Sales prices:
Natural gas ($/Mcf) (a) $ 1.65 $ 2.22 $ 2.04 $ 2.11
Oil ($/Bbl) $ 13.06 $ 23.38 $ 12.85 $ 17.79
Equivalent natural gas
($/Mcfe) (6:1) $ 1.76 $ 2.76 $ 2.08 $ 2.39
Other financial data:
EBITDA ($000) (b) $ 512 $ 3,293 $ 6,631 $ 9,456
Operating cash flow
($000) (c) $ (891) $ 2,757 $ 2,182 $ 7,532
Operating cash flow per
diluted share (c) $ (0.07) $ 0.19 $ 0.17 $ 0.53
(a) Includes the effects of natural gas hedging gains and losses.
(b) Net income (loss) plus interest expense, DD&A expenses, deferred
income taxes and other non-cash items.
(c) Net income (loss) plus DD&A expenses, deferred income taxes and
other non-cash items.
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands) (unaudited)
December 31, December 31,
1998 1999
------------------ -------------------
Assets:
Current assets $ 10,797 $ 8,264
Natural gas and oil
properties, at cost, net 134,317 112,066
Other property and
equipment, at cost, net 2,014 1,686
Other non-current assets 3,388 3,667
-------------- ---------------
Total assets $ 150,516 $ 125,683
============== ===============
Liabilities and stockholders' equity:
Current liabilities $ 23,513 $ 17,744
Notes payable 59,000 56,000
Senior subordinated
notes, net 35,786 41,341
Other non-current
liabilities 7,536 1,600
-------------- ---------------
Total liabilities $ 125,835 $ 116,685
Stockholders' equity 24,681 8,998
-------------- ---------------
Total liabilities and
stockholders' equity $ 150,516 $ 125,683
============== ===============
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------- ----------------------
1998 1999 1998 1999
--------------------- ----------------------
Cash flows from
operating activities:
Net loss $(31,647) $ (2,194) $(33,345) $(21,628)
Depletion, depreciation
and amortization 4,095 2,109 8,896 8,317
Capitalized ceiling
impairment 25,926 -- 25,926 --
Interest paid through
issuance of add'l
senior sub. notes 507 1,431 507 5,459
Amortization of deferred
stock compensation 74 11 372 1
Amortization of deferred
loan fees 263 579 726 1,739
Amortization of discount
on senior subordinated
notes 212 181 286 575
Amortization of deferred
loss on derivatives
instruments -- 759 -- 759
Market value adjustment
for derivatives
instruments -- (119) -- 115
Loss on sale of natural
gas and oil properties -- -- -- 12,195
Changes in deferred
income tax liability (321) -- (1,186) --
-------- -------- -------- --------
Operating cash flow (891) 2,757 2,182 7,532
Changes in working
capital and other items 12,144 240 12,592 (4,954)
-------- -------- -------- --------
Cash flows provided
by operating
activities 11,253 2,997 14,774 2,578
Cash flows (used)
provided by investing
activities (31,780) (4,468) (86,227) 1,644
Cash flows (used)
provided by financing
activities 21,845 832 72,321 (4,049)
-------- -------- -------- --------
Net increase (decrease)
in cash and cash
equivalents $ 1,318 $ (639) $ 868 $ 173
======== ======== ======== ========
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------- ----------------------
1998 1999 1998 1999
--------------------- ----------------------
Revenues:
Natural gas and
oil sales $ 1.76 $ 2.76 $ 2.08 $ 2.39
Workstation revenue 0.05 0.03 0.06 0.05
---------- --------- --------- -----------
1.81 2.79 2.14 2.44
Costs and expenses:
Lease operating 0.44 0.39 0.33 0.36
Production taxes 0.10 0.19 0.13 0.15
General and
administrative 0.92 0.52 0.70 0.56
Depletion of natural gas
and oil properties 2.79 1.34 1.28 1.24
Capitalized ceiling
impairment 18.23 0.00 3.90 0.00
Depreciation and
amortization 0.09 0.09 0.06 0.08
Amortization of stock
compensation 0.05 0.01 0.06 0.00
---------- --------- --------- -----------
22.62 2.54 6.46 2.39
---------- --------- --------- -----------
Operating income $ (20.81) $ 0.25 $ (4.32) $ 0.05
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