Brigham Exploration Reports Third Quarter 1998 Results.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)--Oct. 27, 1998--Brigham Exploration Company (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BEXP) today announced its financial and operational results for the quarter ended Sept. 30, 1998. Average daily production volumes for the third quarter 1998 were 20.9 MMcfe MMcfe Millions of Cubic Feet Equivalent (Per Day; gas exploration) , an increase of 140% from the prior year quarter and roughly flat compared with production during the second quarter 1998. 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. and earnings 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 were $0.05 and ($0.08), respectively, in the third quarter 1998 as compared to $0.06 and ($0.01), respectively, in the same period last year. THIRD QUARTER 1998 RESULTS Brigham's net equivalent production volumes in the third quarter 1998 totaled 1.9 Bcfe as compared with previously reported volumes of 0.8 Bcfe in the third quarter 1997 and 1.9 Bcfe in the second quarter 1998. Third quarter 1998 production volumes were flat with second quarter 1998 primarily due to the Company's decision to delay a portion of its wells planned for the second and third quarters until Brigham Brigham may refer to the following: Place:
A U.S. energy-trading and utilities company that housed one of the biggest accounting frauds in history. Enron's executives employed accounting practices that falsely inflated the company's revenues, which, at the height of the scandal, made the firm become the seventh Corp. (NYSE NYSE See: New York Stock Exchange :ENE) in late August. Natural gas production in the third quarter 1998 was 1.2 Bcf, a 263% increase over the same period in 1997 and a 1% decrease from the second quarter 1998. Oil production in the third quarter 1998 was 114 MBbls, a 51% increase over the same period in 1997 and a 2% decrease from the second quarter 1998. Natural gas comprised 64% of Brigham's equivalent third quarter 1998 production volumes. Partially offsetting the growth in year-over-year production volumes, the Company's average realized natural gas and oil equivalent sales price declined 17% in the third quarter 1998 as compared to the average realized sales price in the prior year quarter. Brigham's average natural gas sales price for the third quarter 1998 was $2.32 per Mcf compared to $2.10 per Mcf in the prior year period (a 10% increase), while the Company's average oil sales price for the third quarter 1998 was $12.14 per Bbl compared to $18.53 in the prior year period (a 34% decrease). 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. gains of $235,900, or $0.20 per Mcf, contributed to the Company's average realized natural gas sales prices during the third quarter 1998. Natural gas and oil sales for the third quarter 1998 were $4.2 million compared to $2.1 million for the same period last year, an increase of 98% despite lower average sales prices in the current year period. Earnings before interest, taxes, depreciation, 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 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 194% to $2.3 million in the third quarter 1998 from $798,000 in the third quarter 1997. Operating cash flow for the third quarter 1998 was $678,000 ($0.05 per diluted share), a 10% decrease from $752,000 ($0.06 per diluted share) for the same period in 1997. The Company reported a net loss of $952,000 ($0.08 per diluted share) for the third quarter 1998 compared to a net loss of $96,000 ($0.01 per diluted share) for the prior year period. Brigham indicated that certain additional factors contributed to its third quarter 1998 operating results as compared with those of the prior year quarter. These factors were lower per unit 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. ($0.30 vs. $0.40 per Mcfe), general and administrative expenses ($0.57 vs. $1.27 per Mcfe) and depreciation, depletion and amortization expenses ($0.99 vs. $1.10 per Mcfe), net of higher interest expenses ($2 million vs. $87,000) due to increased debt borrowings. In addition, the Company noted that total interest expenses reported for the third quarter 1998 of $2 million consisted of $1.7 million of cash interest expenses and approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $271,000 of non-cash amortization of deferred financing costs and debt discounts. OPERATIONAL REVIEW Brigham spud 17 gross (9.0 net) wells in the third quarter 1998, which reflects lower levels of drilling activity than previously budgeted as a result of the Company's decision to delay a portion of its wells planned for the late second and early third quarters. Through the first nine months of 1998, Brigham spud a total of 50 gross (24.9 net) wells, of which 3 gross (1.3 net) wells are currently drilling. The Company's year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. success rates in its 1998 drilling program are 74% on a gross basis and 73% on a net basis. Of the 50 wells spud during the first nine months of 1998, 8 gross (4.8 net) are currently completing or awaiting pipeline hookup hookup, n in the Trager method of therapy, the practitioner enters into a meditative state along with the patient, which allows him or her to work more intuitively and to feel subtle changes in the patient's movement and tissue texture. . Since the end of the third quarter, Brigham has spud an additional 8 gross (4.1 net) wells, one gross (0.4 net) of which is being completed and the balance are drilling. Following the Company's mid-year drilling delay, Brigham resumed the planned drilling pace of its 1998 capital program in late August. The Company has a number of high equity wells 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 provinces that are currently drilling or in the process of completing that, based on preliminary drilling results to date, are expected to contribute to Brigham's anticipated production and reserve growth in the fourth quarter of 1998. Brigham expects to maintain a high level of drilling activity in the fourth quarter and believes it is on track to reach its targeted 40-45 net wells spud during the full year 1998. The Company's fourth quarter 1998 and 1999 drilling will be focused almost exclusively on its natural gas prospects in the Anadarko Basin and Gulf Coast regions where Brigham has experienced 80% to 85% average drilling success rates thus far in 1998. MANAGEMENT COMMENT Bud Brigham, the Company's 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, "Given the current scarcity Scarcity The basic economic problem which arises from people having unlimited wants while there are and always will be limited resources. Because of scarcity, various economic decisions must be made to allocate resources efficiently. of capital for our industry combined with significantly lower Anadarko Basin and Gulf Coast drilling costs, our Company is focusing its available capital resources on our high quality drilling program. Accordingly, we will slow our 3-D seismic acquisition activity by taking a planned break in our Anadarko Basin Alliance II 3-D program from mid-November n. 1. the middle part of November. Noun 1. mid-November - the middle part of November period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue through mid-February n. 1. the middle part of February. Noun 1. mid-February - the middle part of February period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue . We believe that concentrating our capital expenditures on our drilling program, where we've we've Contraction of we have. we've have consistently achieved low finding costs and high present value multiples relative to our drilling investments, is prudent in order to manage our capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. in the present industry environment." Bud Brigham continued, "We are now capitalizing on the quality and depth of our 3-D seismic-generated prospect inventory. For example, we are currently drilling and completing a number of high potential, high equity wells which should have a significant impact on our fourth quarter production volumes and reserve additions. In addition, we are anticipating that the fourth quarter will ultimately prove to be one of our most active with roughly 30 wells targeted to spud with a 50% average working interest. It is also one of the most exciting in terms of the potential reserve exposure to our Company." 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. natural gas and oil provinces in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . For further information, please contact Investor Relations Investor relations The process by which the corporation communicates with its investors. at 512/427-3444, investor@bexp3d.com or mail requests to 6300 Bridge Point Parkway, Building Two, Suite 500, Austin, TX 78730. FORWARD LOOKING STATEMENTS DISCLOSURE Except for the historical information contained herein, the matters discussed in this news release 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. 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. -0-
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three Months Ended September 30,
-----------------------------------
1997 1998
--------------- ---------------
Revenues:
Natural gas and oil sales $ 2,097 $ 4,162
Workstation revenue 133 75
--------------- ---------------
2,230 4,237
Costs and expenses:
Lease operating 317 564
Production taxes 120 255
General and administrative 995 1,069
Depletion of natural gas
and oil properties 713 1,688
Depreciation and
amortization 59 113
Amortization of stock
compensation 86 49
--------------- ---------------
2,290 3,738
--------------- ---------------
Operating income (loss) (60) 499
Interest expense, net (46) (1,942)
--------------- ---------------
Net loss before income
taxes (106) (1,443)
Income tax benefit (expense) 10 491
--------------- ---------------
Net loss $ (96) $ (952)
=============== ===============
Net loss per share:
Basic $ (0.01) $ (0.08)
Diluted $ (0.01) $ (0.08)
Wt. avg. common shares
outstanding:
Basic 12,254 12,677
Diluted 12,394 12,808
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Nine Months Ended September 30,
-----------------------------------
1997 1998
--------------- ---------------
Revenues:
Natural gas and oil sales $ 5,951 $ 11,292
Workstation revenue 457 322
--------------- ---------------
6,408 11,614
Costs and expenses:
Lease operating 787 1,542
Production taxes 339 705
General and administrative 2,450 3,362
Depletion of natural gas
and oil properties 2,108 4,472
Depreciation and
amortization 231 288
Amortization of stock
compensation 201 239
--------------- ---------------
6,116 10,608
--------------- ---------------
Operating income (loss) 292 1,006
Interest expense, net (510) (4,297)
--------------- ---------------
Net loss before income
taxes (218) (3,291)
Income tax benefit (expense) (4,803)(a) 1,112
--------------- ---------------
Net loss $ (5,021) $ (2,179)
=============== ===============
Net loss per share:
Basic $ (0.47) $ (0.18)
Diluted $ (0.47) $ (0.18)
Wt. avg. common shares
outstanding:
Basic 10,686 12,396
Diluted 10,716 12,615
(a) Includes a $5 million, or $0.47 per basic and diluted share,
non-cash deferred income tax charge related to the Company's
conversion from a partnership to a corporation in the nine months
ended September 30, 1997.
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended September 30,
-----------------------------------
1997 1998
--------------- ---------------
Avg. net daily production:
Natural gas (Mcf) 3,669 13,310
Oil (Bbls) 842 1,270
Equivalent natural gas
(Mcfe) (6:1) 8,719 20,931
Total net production:
Natural gas (Mcf) 330,170 1,197,929
Oil (Bbls) 75,751 114,308
Equivalent natural gas
(Mcfe) (6:1) 784,676 1,883,779
% Natural gas 42% 64%
Sales prices:
Natural gas ($/Mcf) (b) $ 2.10 $ 2.32
Oil ($/Bbl) $ 18.53 $ 12.14
Equivalent natural gas
($/Mcfe) (6:1) $ 2.67 $ 2.21
Other financial data:
EBITDA ($000) $ 798 $ 2,349
Operating cash flow ($000) (c) $ 752 $ 678
Operating cash flow per diluted
share (c) $ 0.06 $ 0.05
(b) Includes the effects of natural gas hedging gains of $235,900, or
$0.20 per Mcf, in the three months ended September 30, 1998, and
$274,600, or $0.09 per Mcf, in the nine months ended September
30, 1998.
(c) Net income (loss) plus DD&A expenses, deferred income taxes and
other non-cash items.
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Nine Months Ended September 30,
-----------------------------------
1997 1998
--------------- ---------------
Avg. net daily production:
Natural gas (Mcf) 2,917 11,646
Oil (Bbls) 752 1,282
Equivalent natural gas
(Mcfe) (6:1) 7,430 19,341
Total net production:
Natural gas (Mcf) 787,566 3,144,554
Oil (Bbls) 203,101 346,250
Equivalent natural gas
(Mcfe) (6:1) 2,006,172 5,222,054
% Natural gas 39% 60%
Sales prices:
Natural gas ($/Mcf) (b) $ 2.40 $ 2.18
Oil ($/Bbl) $ 19.99 $ 12.82
Equivalent natural gas
($/Mcfe) (6:1) $ 2.97 $ 2.16
Other financial data:
EBITDA ($000) $ 2,832 $ 6,005
Operating cash flow ($000) (c) $ 2,322 $ 2,245
Operating cash flow per diluted
share (c) $ 0.22 $ 0.18
(b) Includes the effects of natural gas hedging gains of $235,900, or
$0.20 per Mcf, in the three months ended September 30, 1998, and
$274,600, or $0.09 per Mcf, in the nine months ended September
30, 1998.
(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, September 30,
1997 1998
--------------- ---------------
Assets:
Current assets $ 6,890 $ 9,712
Natural gas and oil
properties, at cost, net 84,176 133,558
Other property and equipment,
at cost, net 1,239 1,782
Other non-current assets 96 3,749
--------------- ---------------
Total assets $ 92,401 $ 148,801
=============== ===============
Liabilities and stockholders'
equity:
Current liabilities $ 15,513 $ 20,153
Notes payable 32,000 37,000
Senior subordinated notes -- 35,574
Deferred income tax liability 1,228 116
Other non-current liabilities 507 522
--------------- ---------------
Total liabilities 49,248 93,365
Stockholders' equity 43,153 55,436
--------------- ---------------
Total liabilities and
stockholders' equity $ 92,401 $ 148,801
=============== ===============
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended September 30,
-----------------------------------
1997 1998
--------------- ---------------
Cash flows from operating
activities:
Net loss $ (96) $ (952)
Depletion, depreciation and
amortization 772 1,801
Amortization of deferred
stock compensation 86 49
Amortization of deferred
loan fees -- 197
Amortization of discount on
senior subordinated notes -- 74
Changes in deferred income
tax liability (10) (491)
--------------- ---------------
Operating cash flow 752 678
Changes in working capital
and other items 2,353 3,707
--------------- ---------------
Cash flows from operating
activities 3,105 4,385
Cash flows used by investing
activities (10,641) (22,735)
Cash flows provided by
financing activities 7,957 16,495
--------------- ---------------
Net increase (decrease) in
cash and cash equivalents $ 421 $ (1,855)
=============== ===============
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Nine Months Ended September 30,
-----------------------------------
1997 1998
--------------- ---------------
Cash flows from operating
activities:
Net loss $ (5,021) $ (2,179)
Depletion, depreciation and
amortization 2,339 4,760
Amortization of deferred
stock compensation 201 239
Amortization of deferred
loan fees -- 463
Amortization of discount on
senior subordinated notes -- 74
Changes in deferred income
tax liability 4,803 (1,112)
--------------- ---------------
Operating cash flow 2,322 2,245
Changes in working capital
and other items 588 448
--------------- ---------------
Cash flows from operating
activities 2,910 2,693
Cash flows used by investing
activities (22,746) (53,619)
Cash flows provided by
financing activities 23,799 50,476
--------------- ---------------
Net increase (decrease) in
cash and cash equivalents $ 3,963 $ (450)
=============== ===============
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended September 30,
-----------------------------------
1997 1998
--------------- ---------------
Revenues:
Natural gas and oil sales $ 2.67 $ 2.21
Workstation revenue 0.17 0.04
--------------- ---------------
2.84 2.25
Costs and expenses:
Lease operating 0.40 0.30
Production taxes 0.15 0.14
General and administrative 1.27 0.57
Depletion of natural gas
and oil properties 0.91 0.90
Depreciation and
amortization 0.08 0.06
Amortization of stock
compensation 0.11 0.03
--------------- ---------------
2.92 2.00
--------------- ---------------
Operating income (loss) $ (0.08) $ 0.25
=============== ===============
SUMMARY PER MCFE DATA
(unaudited)
Nine Months Ended September 30,
-----------------------------------
1997 1998
--------------- ---------------
Revenues:
Natural gas and oil sales $ 2.97 $ 2.16
Workstation revenue 0.23 0.06
--------------- ---------------
3.20 2.22
Costs and expenses:
Lease operating 0.39 0.30
Production taxes 0.17 0.14
General and administrative 1.22 0.64
Depletion of natural gas
and oil properties 1.05 0.86
Depreciation and
amortization 0.12 0.06
Amortization of stock
compensation 0.10 0.05
--------------- ---------------
3.05 2.05
--------------- ---------------
Operating income (loss) $ 0.15 $ 0.17
=============== ===============
BRIGHAM EXPLORATION COMPANY
DRILLING AND 3-D SEISMIC ACTIVITY BY REGION
(unaudited)
Q3 1998
-----------------------
Gross Net WI%
-----------------------
Anadarko Basin Wells Spud:
Completed 4 3.2 80%
P&A 4 1.0 24%
Drilling 2 0.5 25%
-- ---- ----
Total 10 4.7 47%
=== ==== ====
Success Rate 50% 77% --
Sq. Miles Seismic Acquired 232 217 94%
Gulf Coast Wells Spud:
Completed 3 2.1 70%
P&A 1 1.0 96%
Drilling 1 0.8 80%
-- ---- ----
Total 5 3.8 77%
== ==== ====
Success Rate 75% 68% --
Sq. Miles Seismic Acquired 206 206 100%
West Texas Wells Spud:
Completed 2 0.5 24%
P&A 0 0.0 0%
Drilling 0 0.0 0%
-- ---- ---
Total 2 0.5 24%
== ==== ====
Success Rate 100% 100% --
Sq. Miles Seismic Acquired 0 0 0%
Overall Wells Spud:
Completed 9 5.7 64%
P&A 5 1.9 39%
Drilling 3 1.3 43%
-- ---- ----
Total 17 9.0 53%
=== ==== ====
Success Rate 64% 75% --
Sq. Miles Seismic Acquired 438 423 97%
BRIGHAM EXPLORATION COMPANY
DRILLING AND 3-D SEISMIC ACTIVITY BY REGION
(unaudited)
Q1 - Q3 1998
------------------------
Gross Net WI%
------------------------
Anadarko Basin Wells Spud:
Completed 19 9.9 52%
P&A 5 1.9 38%
Drilling 2 0.5 25%
-- ---- ---
Total 26 12.3 47%
=== ===== ===
Success Rate 79% 84% --
Sq. Miles Seismic Acquired 419 404 96%
Gulf Coast Wells Spud:
Completed 11 5.0 46%
P&A 2 1.0 49%
Drilling 1 0.8 80%
-- ---- ---
Total 14 6.8 48%
=== ==== ===
Success Rate 85% 84% --
Sq. Miles Seismic Acquired 599 448 75%
West Texas Wells Spud:
Completed 5 2.3 46%
P&A 5 3.5 70%
Drilling 0 0.0 0%
-- ---- ---
Total 10 5.8 58%
=== ==== ===
Success Rate 50% 40% --
Sq. Miles Seismic Acquired 30 30 100%
Overall Wells Spud:
Completed 35 17.2 49%
P&A 12 6.4 53%
Drilling 3 1.3 43%
-- ---- ---
Total 50 24.9 50%
=== ===== ===
Success Rate 74% 73% --
Sq. Miles Seismic Acquired 1,048 882 84%
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