Brigham Exploration Reports Third Quarter 2000 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)--Nov. 8, 2000 Brigham Brigham may refer to the following: Place:
-- Net equivalent production volumes increased 15% in the third quarter 2000 as compared to volumes produced in the second quarter of 2000, and 10% relative to the third quarter of 1999; -- 29% growth in natural gas and oil sales due to increased production volumes and 47% higher realized oil prices ($30.62 vs. $20.76 per Bbl); and -- Continued year-over-year cash flow growth with EBITDA increasing 44% to $3.6 million in the third quarter 2000 from $2.5 million in the prior year period due to reduced unit operating costs and improved realized sales prices. THIRD QUARTER 2000 RESULTS Average net daily production volumes for the third quarter 2000 were 20.3 million cubic feet of equivalent natural gas (MMcfe MMcfe Millions of Cubic Feet Equivalent (Per Day; gas exploration) ), or an increase of 10% over volumes produced during the third quarter 1999 and 15% over second quarter 2000 volumes. The growth in both sequential One after the other in some consecutive order such as by name or number. and year-over-year quarterly production volumes was largely attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to several wells completed in Brigham's 2000 drilling program, including (i) the first full quarter of production contributions from the Price 17 No. 2 Springer springer a North American term commonly used to describe heifers close to term with their first calf. discovery in the 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 the Nold Gas Unit No. 1S Frio Fri·o A river of southern Texas flowing about 354 km (220 mi) south and southeast to the Nueces River. discovery in the Texas Gulf Coast, and (ii) the addition of production volumes in early August from the Palmer palmer: see pilgrim. State No. 3 development well in the Home Run Field. Average daily production volumes for the month of September 2000 were approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 21 MMcfe per day. Natural gas and oil sales for the third quarter of 2000 were $5.4 million, a 29% increase from the same period last year as increased production volumes (1,824 MMcfe vs. 1,665 MMcfe) and significantly improved realized oil prices ($30.62 vs. $20.76 per Bbl) more than offset lower realized natural gas prices ($1.99 vs. $2.05 per Mcf). Realized natural gas prices during the third quarter of 2000 were negatively impacted by 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 totaling $2.9 million ($2.27 per Mcf), as compared with natural gas hedging losses of $567,000 ($0.50 per Mcf) in the prior year period. Brigham has fixed price natural gas swap hedges covering a total of 15,000 MMBtu (or approximately 13.6 MMcf) per day at an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. average NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). price of $2.19 per MMBtu from July July: see month. 2000 through April 2001. Crude oil hedging losses totaled $38,000 ($0.41 per Bbl) in the third quarter 2000, resulting from a fixed price collar Collar 1. A protective options strategy that is implemented after a long position in a stock has experienced substantial gains. It is created by purchasing an out of the money put option while simultaneously writing an out of the money call option. 2. agreement that covers 600 barrels of crude oil per day at a NYMEX price cap of $31.75 per barrel barrel: see English units of measurement. and a NYMEX price floor of $18.00 per barrel from July 2000 through December December: see month. 2000. 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 44% to $3.6 million in the third quarter of 2000 from $2.5 million in the third quarter of 1999, and increased 39% from $2.6 million in the second quarter of 2000. In addition to increased production volumes and equivalent realized sales prices, EBITDA growth was also attributable to reduced 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. $0.32 per Mcfe) and unit net general and administrative expenses ($0.39 vs. $0.54 per Mcfe), partially offset by higher unit production taxes ($0.30 vs. $0.18 per Mcfe) resulting from higher pre-hedge oil and natural gas sales prices. 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 third quarter of 2000 was $2.5 million ($0.15 per share), an increase from $2.1 million ($0.14 per share) for the same period in 1999. Despite this improvement in cash flow, Brigham reported a net loss of $5.3 million ($0.32 per share) for the third quarter of 2000 compared to a net loss of $2.7 million ($0.18 per share) for the prior year period. The net loss in the current year period was primarily the result of (i) $3.3 million in non-cash expenses 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) related to the change in fair market value of certain outstanding oil and natural gas hedging contracts, (ii) higher net interest expenses ($3.3 million vs. $2.5 million), and (iii) $2.9 million in aggregate cash settlements on natural gas and oil hedging contracts, offset in part by a decrease in depletion of natural gas and oil properties ($2.2 million vs. $2.9 million). Excluding the non-cash impact of changes in fair market value of hedging contracts, Brigham's net loss for the third quarter 2000 would have been $2.0 million ($0.12 per share) as compared with an adjusted net loss of $3.0 million ($0.20 per share) for the same period in 1999. Net capital expenditures incurred in exploration and development operations during the third quarter of 2000 totaled $9.0 million, including $7.5 million for drilling projects, $182,000 for land and G&G activities and $1.6 million for 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. G&A and interest expenses. MANAGEMENT COMMENT Curtis Harrell Harrell can refer to: People
Adjustment of the book value or collateral value of a security to reflect current market value. value of these contracts from the end of the second quarter to the end of the third quarter 2000. Looking forward, price realizations should improve as a result of expected increases in production volumes, and both a 33% reduction in natural gas volumes hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. and an approximate $0.55 per MMBtu increase in our natural gas hedge price beginning in April 2001." Harrell further stated, "Our recently completed refinancing Refinancing An extension and/or increase in amount of existing debt. of our senior subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes provides several positive impacts in terms of improved cash flow, reduced balance sheet leverage and enhanced liquidity. Importantly, these transactions resulted in an approximate $49 million reduction in long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , or $3.07 per share, while providing $17.5 million in additional capital availability through our new subordinated credit facility. Annual cash interest payment obligations have also been reduced by approximately $5.5 million. This improved cash flow and capital availability will supplement our operating cash flow to provide a substantial portion of the required funding for our expected capital expenditures for the balance of 2000 and well into 2001." CONFERENCE CALL INFORMATION Management will host a conference call to discuss Brigham's financial and operational results for the third quarter 2000 with investors, analysts and other interested parties on Thursday Thursday: see week. , November November: see month. 9th, at 9:00 a.m. Central time. To participate in the call, please dial 888-673-1385 and ask for the Brigham Exploration conference call (conference identification number 16825560). A replay of the conference call will be available to interested parties at www.streetevents.com through 5:00 p.m. Central time on Wednesday Wednesday: see week. , November 22nd. 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 Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1999 2000 1999 2000
------------------ ------------------
Revenues:
Natural gas
and oil sales $ 4,152 $ 5,362 $ 10,896 $ 14,502
Workstation revenue 86 3 247 52
-------- -------- -------- --------
4,238 5,365 11,143 14,554
Costs and expenses:
Lease operating 525 541 1,679 1,502
Production taxes 300 554 685 1,253
General and
administrative 901 718 2,710 2,166
Depletion of natural
gas and oil properties 2,935 2,207 5,810 5,791
Depreciation
and amortization 132 127 398 374
Amortization of
stock compensation (123) 20 (10) 56
-------- -------- -------- --------
4,670 4,167 11,272 11,142
-------- -------- -------- --------
Operating income (432) 1,198 (129) 3,412
Interest expense, net (2,512) (3,291) (6,970) (9,097)
Interest income 40 24 134 80
Loss on sale of natural
gas and oil properties -- -- (12,195) --
Other income (expense) (a) 253 (3,276) (274) (6,266)
-------- -------- -------- --------
Net loss before
income taxes (2,651) (5,345) (19,434) (11,871)
Income tax expense -- -- -- --
-------- -------- -------- --------
Net loss $ (2,651) $ (5,345) $(19,434) $(11,871)
======== ======== ======== ========
Net loss per share:
Basic/Diluted $ (0.18) $ (0.32) $ (1.39) $ (0.73)
Wt. avg. common
shares outstanding:
Basic/Diluted 14,447 16,713 14,028 16,237
(a) Includes non-cash income (expenses) related to changes in the fair
market value of certain hedging contracts of $296,000 and ($3.3)
million in the third quarter 1999 and 2000, respectively, and
($233,000) and ($5.7) million in the first nine months of 1999 and
2000, respectively.
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1999 2000 1999 2000
------------------ ------------------
Avg. net daily production:
Natural gas (MMcf) 12.7 14.1 11.8 12.1
Oil (Bbls) 969 1,027 984 1,039
Equivalent natural
gas (MMcfe) (6:1) 18.5 20.3 17.7 18.3
Total net production:
Natural gas (MMcf) 1,142 1,270 3,194 3,257
Oil (MBbls) 87 92 266 281
Equivalent natural gas
(MMcfe) (6:1) 1,665 1,824 4,788 4,941
% Natural gas 69% 70% 67% 66%
Sales prices:
Natural gas ($/Mcf) (a) $ 2.05 $ 1.99 $ 2.07 $ 1.97
Oil ($/Bbl) (a) $20.76 $30.62 $16.12 $28.79
Equivalent natural gas
($/Mcfe) (6:1) $ 2.49 $ 2.94 $ 2.28 $ 2.94
Other financial data:
EBITDA ($000) (b) $2,509 $3,616 $6,162 $9,410
Operating cash
flow ($000) (c) $2,081 $2,451 $4,774 $6,548
Operating cash flow
per share (c) $ 0.14 $ 0.15 $ 0.34 $ 0.40
(a) Includes the effects of hedging gains (losses) of:
Natural gas ($/Mcf) ($0.50) ($2.27) ($0.00) ($1.58)
Oil ($/Bbl) $0.00 ($0.41) $0.00 ($0.14)
(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, September 30,
1999 2000
------------ -------------
Assets:
Current assets $ 8,264 $ 8,868
Natural gas and oil
properties, at cost, net 112,066 127,148
Other property and
equipment, at cost, net 1,686 1,395
Other non-current assets 3,667 3,120
-------- --------
Total assets $125,683 $140,531
======== ========
Liabilities and stockholders' equity:
Current liabilities $ 17,744 $ 15,150
Notes payable 56,000 71,000
Senior subordinated notes, net 41,341 45,949
Other non-current liabilities 1,600 6,727
-------- --------
Total liabilities 116,685 138,826
Stockholders' equity 8,998 1,705
-------- --------
Total liabilities and
stockholders' equity $125,683 $140,531
======== ========
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1999 2000 1999 2000
------------------ ------------------
Cash flows from
operating activities:
Net loss $ (2,651) $ (5,345) $(19,434) $(11,871)
Depletion, depreciation
and amortization 3,067 2,334 6,208 6,165
Interest paid through
issuance of add'l senior
sub. notes 1,386 1,572 4,028 4,575
Amortization of deferred
stock compensation (123) 20 (10) 56
Amortization of deferred
loan fees 532 298 1,160 987
Amortization of discount
on senior subordinated
notes 166 256 394 673
Amortization of deferred
loss on derivatives
instruments -- -- -- 280
Market value adjustment
for derivatives
instruments (296) 3,316 233 5,683
Loss on sale of natural
gas and oil properties -- -- 12,195 --
Changes in deferred
income tax liability -- -- -- --
-------- -------- -------- --------
Operating cash flow 2,081 2,451 4,774 6,548
Changes in working capital
and other items (2,837) (818) (5,194) (8,682)
-------- -------- -------- --------
Cash flows provided (used)
by operating activities (756) 1,633 (420) (2,134)
Cash flows (used) provided
by investing activities (5,092) (7,412) 6,113 (19,088)
Cash flows (used) provided
by financing activities 6,477 5,766 (4,881) 18,540
-------- -------- -------- --------
Net increase (decrease)
in cash and cash
equivalents $ 629 $ (13) $ 812 $ (2,682)
======== ======== ======== ========
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1999 2000 1999 2000
------------------ ------------------
Revenues:
Natural gas and oil sales $ 2.49 $ 2.94 $ 2.28 $ 2.94
Workstation revenue 0.05 0.00 0.05 0.01
-------- -------- -------- --------
2.54 2.94 2.33 2.95
Costs and expenses:
Lease operating 0.32 0.30 0.35 0.30
Production taxes 0.18 0.30 0.14 0.25
General and administrative 0.54 0.39 0.57 0.44
Depletion of natural
gas and oil properties 1.76 1.21 1.21 1.17
Depreciation and
amortization 0.08 0.07 0.08 0.08
Amortization of stock
compensation (0.07) 0.01 0.00 0.01
-------- -------- -------- --------
2.81 2.28 2.35 2.25
-------- -------- -------- --------
Operating income $ (0.27) $ 0.66 $ (0.02) $ 0.70
======== ======== ======== ========
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