Crimson Exploration Inc. Announces Record Third Quarter 2007 Financial Results.HOUSTON -- Crimson Exploration Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :CXPO) today announced financial results for the third quarter 2007 and YTD See Year-to-date. YTD See year to date (YTD). period to supplement its operating results press release from November 5th. Highlights * Achieved record average production of 50,320 Mcfe/day of natural gas equivalents for the third quarter of 2007, compared to an average daily rate of 7,552 Mcfe/day in the third quarter of 2006. * Third quarter 2007 total operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. were up 578% to $38.0 million versus the prior year quarter amount of $5.6 million. * 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 in the third quarter 2007 rose over 1,200% to $28.0 million versus $2.1 million in the third quarter of 2006. * LOE LOE Ley Orgánica de Educación (Spanish) LOE Level Of Effort LOE Limited Objective Experiment LOE Letter of Explanation LOE Language Other than English. per unit of production decreased nearly 56% to $1.42/Mcfe versus $3.23/Mcfe in 3Q:06. * Similarly, cash G&A expenses per unit of production decreased over 63% to $0.59/Mcfe from $1.62/Mcfe in 3Q:06. Summary Financial Results Total operating revenues for the third quarter 2007 were $38.0 million compared to $5.6 million in the prior year quarter. For the first nine months of 2007, total operating revenues were $69.2 million compared to $16.0 million for the first nine months of 2006. Increases for both the quarter and nine month period were due to the higher overall production impact from the acquisition of certain oil and natural gas properties and related assets in the South Texas and Gulf Coast areas of Louisiana CODE, OF LOUISIANA. In 1822, Peter Derbigny, Edward Livingston, and Moreau Lislet, were selected by the legislature to revise and amend the civil code, and to add to it such laws still in force as were not included therein. and Texas ("the STGC STGC St. George's College (Kingston, Jamaica) STGC Startec Global Communications Corporation Properties") in May 2007. Production for the third quarter 2007 was 4,629,441 Mcfe of natural gas equivalents, or 50,320 Mcfe per day, compared with production of 694,793 Mcfe, or 7,552 Mcfe per day, in the third quarter 2006. Production for the first nine months 2007 was 8,462,800 Mcfe of natural gas equivalents, or 30,999 Mcfe per day, compared with production of 1,924,443 Mcfe, or 7,049 Mcfe per day, in the first nine months of 2006. Average realized prices in the third quarter 2007 (including the effects of realized gains/losses on our commodity price hedges) were $66.47 per barrel of oil, $7.60 per Mcf of natural gas, and $45.17 per barrel of natural gas liquids, or $7.11 on a Mcfe basis. For the third quarter 2006, average realized prices were $61.01 per barrel of oil and $6.72 per Mcf of natural gas. Average realized prices for the first nine months of 2007 were $64.61 per barrel of oil, $7.57 per Mcf of natural gas, and $44.71 per barrel of natural gas liquids, or $7.39 on a Mcfe basis. For the first nine months of 2006, average realized prices were $65.43 per barrel of oil, and $6.96 per Mcf of natural gas. Total 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 third quarter 2007 were $22.3 million compared to $5.7 million in the third quarter of 2006. Of the $16.6 million increase in total operating expenses, field operating expenses were up approximately $4.3 million and depreciation, depletion and amortization increased by $10.6 million; both increases primarily due to the addition of the STGC Properties. Also contributing to the increase in total operating expenses for the quarter was a $1.7 million increase in general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. related to the increase in the size of the company after the STGC acquisition. Exploration expense increased by $0.6 million versus the third quarter of 2006, primarily due to $0.5 million in dry hole expense. For the first nine months 2007, total operating expenses were $44.2 million compared to $14.6 million in the first nine months of 2006, with increases similar in type and proportion to those reported for the quarter. Other Income (Expense) was a net negative $5.7 million for the third quarter 2007 compared to a net positive of $4.3 million in the third quarter 2006. This increase in expense was primarily due to $6.0 million in interest expense associated with our outstanding debt from the acquisition of the STGC Properties, offset slightly by the $0.6 million increase in the mark-to-market valuation on our derivative instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. . Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the first nine months of 2007, exclusive of changes in working capital, was $39.5 million, a $32.7 million increase over the $6.8 million reported for the first nine months of 2006. Net income for the third quarter 2007 was $6.2 million compared to $2.6 million for the third quarter of 2006. For both the quarter and year-to-date periods, the increase resulted from the increase in he results of operations from the STGC properties, offset in part by the increase in interest expense and the non-cash change in the mark-to-market value of our commodity hedge contracts. Selected Financial and Operating Data The following table reflects certain comparative financial and operating data for the three and nine month periods ended September 30, 2007 and 2006: [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] Non-GAAP Financial Measures Crimson also presents earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
A balance sheet item that includes the value of non-cash assets due within one year. Notes: Examples are things like prepaid expenses and accounts receivable. and accounts payable and accrued expenses Accrued Expense An accounting expense recognized in the books before it is paid for. It is a liability, usually current. These expenses are typically periodic and documented upon a company's balance sheet due to the high probability of collection. . Management uses these measures to assess the company's ability to generate cash to fund operations, exploration and development activities. Management interprets trends in these measures in a similar manner as trends in operations, cash flow and liquidity. Neither EBITDA, nor net cash flows from operations, exclusive of working capital items, should be considered as alternatives to net income, income from operations or net cash provided by operational activities as defined by GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . The following is a reconciliation of net cash provided by operating activities to net cash flow from operations, exclusive of working capital items and EBITDA: [TABLE OMITTED] This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission ("SEC"). Such statements include those concerning Crimson's strategic plans, expectations and objectives for future operations. All statements included in this press release that address activities, events or developments that Crimson expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions Crimson made based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond Crimson's control. Statements regarding future production, revenue and cash flow are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, commodity price changes, inflation or lack of availability of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. , environmental risks, drilling risks and regulatory changes and the potential lack of capital resources. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. Please refer to our filings with the SEC, including our Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2006 and our subsequent Form 10-Q's for a further discussion of these risks. |
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