Attached files
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8-K - FORM 8-K - BRIGHAM EXPLORATION CO | c04292e8vk.htm |
EX-99.2 - EXHIBIT 99.2 - BRIGHAM EXPLORATION CO | c04292exv99w2.htm |
Exhibit 99.1
NEWS RELEASE FOR IMMEDIATE RELEASE |
BRIGHAM EXPLORATION REPORTS RECORD QUARTERLY PRODUCTION VOLUMES, SECOND QUARTER 2010 RESULTS AND
UPDATES 2010 FORECASTS AND CAP-EX BUDGET
Austin, TX August 3, 2010 Brigham Exploration Company (NASDAQ:BEXP) today announced
record quarterly production volumes and its financial results for the second quarter and six months
ended June 30, 2010.
SECOND QUARTER 2010 RESULTS
Our average daily production volumes for the second quarter 2010 were a quarterly record 7,756
barrels of crude oil equivalent (Boe) per day, up 71% from the second quarter 2009 and up 43% from
the first quarter 2010. Our previous record quarterly production volumes of 7,709 Boe per day were
achieved in the second quarter 2007 and reflected production contributions from several of our high
rate Southern Louisiana natural gas wells.
Benefiting from both our operated and non-operated drilling activity in the Williston Basin,
our crude oil production volumes for the second quarter 2010 averaged 5,584 barrels per day, which
represents a 206% increase from that in the second quarter 2009 and a 57% sequential increase from
that in the first quarter 2010. Our crude oil production volumes represented 72% of our total
production volumes in the second quarter 2010 as compared to 40% in the second quarter 2009 and 66%
in the first quarter 2010.
Our production volumes in the Williston Basin for the second quarter 2010 were 5,526 Boe per
day, which represents a 334% increase from that in the second quarter 2009 and a 71% sequential
increase from that in the first quarter 2010.
Our second quarter production volumes included approximately 5,089 barrels of crude oil
produced during the quarter and added to inventory. Adjusting our production volumes for amounts
included in inventory resulted in second quarter 2010 daily sales volumes of 7,700 Boe per day.
Revenues from the sale of crude oil and natural gas, including hedge settlements for the
second quarter 2010, were up 186% to $41.4 million as compared to that in the second quarter 2009.
Higher crude oil sales volumes and crude oil prices increased revenues by $16.5 million and $9.8
million, respectively. Higher natural gas prices increased revenues by $2.0 million while lower
natural gas sales volumes decreased revenues by $1.0 million. Finally, lower hedge settlements
reduced revenues by $0.4 million.
During the second quarter 2010, our average realized price for crude oil was $68.93 per
barrel, which included a $0.26 per barrel loss due to the cash settlement of our crude oil
derivative contracts. This compares to an average realized price in the second quarter 2009 of
$48.06 per barrel, which included a $1.35 per barrel cash loss due to the settlement of our crude
oil derivative contracts. Our average realized price for natural gas in the second quarter 2010
was $6.08 per Mcf, which included a $0.84 per Mcf cash gain associated with the settlement of our
natural gas derivative contracts. This compares to an average realized price in the second quarter
2009 of $4.53 per Mcf, which included a $1.03 per Mcf cash gain due to the settlement of our
natural gas derivative contracts.
Our second quarter 2010 production costs, which include costs for operating and maintaining
(O&M expense) our producing wells, expensed workovers, ad valorem taxes and production taxes, were
up $1.13 per Boe when compared to those in the second quarter 2009. The increase was largely
driven by a $3.59 per Boe increase in production taxes, which was driven by higher commodity prices
and higher levels of production in North Dakota, which are subject to an 11.5% tax rate. Expensed
workovers increased $0.80 per Boe, with the majority of the increase due to several workovers of
our conventional Gulf Coast and Anadarko Basin natural gas wells. The increases in production
taxes and expensed workovers were partially offset by a $2.96 per Boe decrease in O&M expense due
primarily to our higher production volumes.
Our general and administrative (G&A) expenses for the second quarter 2010 increased $0.4
million compared to the second quarter 2009 primarily because of an increase in employee
compensation costs, which was partially associated with increased level of employee bonuses and
bonus accruals as we re-instated our performance bonus plan in 2010 after
suspending the plan in 2009.
Our depletion expense for the second quarter 2010 was $14.2 million ($20.56 per Boe) compared
to $6.2 million ($15.30 per Boe) in the second quarter 2009. Our higher sales volumes increased
depletion expense by $4.4 million and our higher depletion rate increased depletion expense by $3.6
million.
Our net interest expense for the second quarter 2010 decreased $1.3 million from the second
quarter 2009. This decrease was primarily due to the repayment of our Senior Credit Facility as a
result of our October 2009 equity offering.
We recorded no income tax expense in either the second quarter 2010 or the second quarter
2009, as we are reversing our deferred tax asset valuation allowance against deferred income tax
expense.
Our reported net income for the second quarter 2010 was $18.5 million ($0.16 per diluted
share) versus net income (loss) of ($7.0) million (($0.12) per diluted share) for the same period
last year. Our after-tax earnings in the second quarter 2010 excluding unrealized mark-to-market
hedging gains were $15.0 million ($0.13 per diluted share) as compared to our after-tax earnings
(loss) in the second quarter 2009 excluding unrealized mark-to-market hedging losses and the
non-cash write-down of the carrying value of our inventory were ($2.8) million (($0.05) per diluted
share). After-tax earnings excluding the above items is a non-GAAP measure and a reconciliation of
GAAP net income to after-tax earnings excluding the above items is included in our accompanying
financial tables found later in this release.
In the second quarter, 2010, we spent $92.4 million in exploration and development capital
expenditures. Exploration and development and total oil and gas capital expenditures for the
second quarter 2010 and 2009 were:
Three months ended June 30, | ||||||||
2010 | 2009 | |||||||
(in thousands) | ||||||||
Drilling |
$ | 71,324 | $ | 3,552 | ||||
Net land and G&G |
21,062 | 784 | ||||||
Exploration and development capital expenditures |
$ | 92,386 | $ | 4,336 | ||||
Capitalized costs |
4,405 | 2,923 | ||||||
Capitalized FAS 143 ARO |
205 | 103 | ||||||
Total oil and gas capital expenditures |
$ | 96,996 | $ | 7,362 | ||||
FIRST SIX MONTHS 2010 RESULTS
Our average daily production volumes for the first six months of 2010 were 6,588 barrels of
crude oil equivalent (Boe) per day, up 34% from that in the first six months of 2009. Benefiting
from both our operated and non-operated drilling activity in the Williston Basin, our crude oil
production volumes for the first six months of 2010 averaged 4,568 barrels per day, which
represents a 144% increase from that in the first six months of 2009. Our crude oil production
volumes represented 69% of our total production volumes in the first six months of 2010 as compared
to 38% in the first six months of 2009.
Our production volumes in the Williston Basin for the first six months of 2010 were 4,379 Boe
per day, which represents a 240% increase from that in the first six months of 2009.
Our first six months of 2010 production volumes included approximately 10,101 barrels of crude
oil produced and added to inventory during the period. Adjusting our production volumes for
amounts included in inventory results in average first six months of 2010 daily sales volumes of
6,532 Boe per day.
Revenues from the sale of crude oil and natural gas including hedge settlements for the first
six months of 2010 were up 98% to $70.9 million as compared to that in the first six months of
2009. Higher crude oil commodity prices and crude oil sales volumes increased revenues by $23.5
million and $19.8 million. Higher natural gas prices increased revenues by $3.6 million while
lower natural gas sales volumes decreased revenues by $4.4 million. Lower hedge settlements
reduced revenues by $7.4 million.
Page 2
During the first six months of 2010, our average realized price for crude oil was $70.27 per
barrel, which included a $0.28 per barrel loss due to the cash settlement of our crude oil
derivative contracts. This compares to an average realized price in the first six months of 2009
of $44.18 per barrel, which included a $2.55 per barrel cash gain due to the settlement of our
crude oil derivative contracts. Our average realized price for natural gas in the first six months
of 2010 was $6.36 per Mcf, which included a $0.77 per Mcf cash gain associated with the settlement
of our natural gas derivative contracts. This compares to an average realized price in the first
six months of 2009 of $6.33 per Mcf, which included a $2.40 per Mcf cash gain due to the settlement
of our natural gas derivative contracts.
Our production costs for the first six months of 2010 were up $2.73 per Boe when compared to
those in the corresponding period last year. The increase was largely driven by a $3.59 per Boe
increase in production taxes, which was driven by higher commodity prices and higher levels of
production in North Dakota, which are subject to an 11.5% tax rate. Expensed workovers increased
$1.10 per Boe, with the majority of the increase due to several workovers of our conventional Gulf
Coast and Anadarko Basin natural gas wells. The increases in production taxes and expensed
workovers were partially offset by a $1.79 per Boe decrease in O&M expense due primarily to our
higher production volumes.
Our G&A expenses for the first six months of 2010 increased $1.4 million compared to those in
the corresponding period last year primarily because of an increase in employee compensation costs,
which was partially associated with increased levels of employee bonuses and bonus accruals as we
re-instated our performance bonus plan in 2010 after suspending the plan in 2009.
Our depletion expense for the first six months of 2010 was $23.5 million ($19.95 per Boe)
versus $16.1 million ($18.12 per Boe) in the first six months of 2009. Our higher sales volumes
increased depletion expense by $5.2 million and higher depletion rate increased depletion expense
by $2.1 million.
Our net interest expense for the first six months of 2010 decreased $2.5 million from the
corresponding period last year. This decrease was primarily due to the repayment of our Senior
Credit Facility as a result of our October 2009 equity offering.
We recorded no income tax expense in either the first six months of 2010 or the corresponding
period last year, as we are reversing our deferred tax asset valuation allowance against deferred
income tax expense.
Our reported net income for the first six months of 2010 was $29.8 million ($0.27 per diluted
share) versus net income (loss) of ($126.0) million (($2.39) per diluted share) for the same period
last year. Our after-tax earnings in the first six months of 2010 excluding unrealized
mark-to-market hedging gains were $23.2 million ($0.21 per diluted share) as compared to our
after-tax earnings (loss) in the first six months of 2009 excluding the effect of our first quarter
2009 ceiling test write-down, unrealized mark-to-market hedging losses, and $2.2 million non-cash
write-down of the carrying value of our inventory were ($2.2) million (($0.04) per diluted share).
After-tax earnings excluding the above items is a non-GAAP measure and a reconciliation of GAAP net
income to after-tax earnings excluding the above items is included in our accompanying financial
tables found later in this release.
Through June 30, 2010, we spent $144.5 million in exploration and development capital
expenditures. Exploration and development and total oil and gas capital expenditures for the first
six months of 2010 and 2009 were:
Six months ended June 30, | ||||||||
2010 | 2009 | |||||||
(in thousands) | ||||||||
Drilling |
$ | 114,930 | $ | 26,492 | ||||
Net land and G&G |
29,539 | (5,687 | ) | |||||
Exploration and development capital expenditures |
$ | 144,469 | $ | 20,805 | ||||
Capitalized costs |
8,974 | 5,663 | ||||||
Capitalized FAS 143 ARO |
257 | 275 | ||||||
Total oil and gas capital expenditures |
$ | 153,700 | $ | 26,743 | ||||
THIRD AND FOURTH QUARTER 2010 FORECASTS
The following forecasts and estimates for the third quarter and fourth quarter 2010 are
forward-looking statements subject to the risks and uncertainties identified in the
Forward-Looking Statements Disclosure at the end of this release.
Page 3
We are forecasting that our third quarter 2010 total production volumes to average between
7,900 Boe per day and 8,400 Boe per day and that our crude oil volumes will comprise approximately
72% of our total third quarter production volumes. We are forecasting that our fourth quarter 2010
total production volumes to average between 9,500 Boe per day and 10,500 Boe per day and that our
crude oil volumes will comprise approximately 74% of our total fourth quarter production volumes.
For the third quarter 2010, lease operating expenses are projected to be $6.63 per Boe based
on the mid-point of our production guidance, production taxes are projected to be approximately 9.5
to 10.0% of pre-hedge crude oil and natural gas revenues, and general and administrative expenses
are projected to be $2.9 million ($3.93 per Boe).
UPDATED 2010 EXPLORATION AND DEVELOPMENT BUDGET
Our updated 2010 exploration and development capital budget will fund approximately 37.8 net
Williston Basin wells, two net Vicksburg wells in South Texas and 3.5 net wells primarily in the
West Texas Wolfberry oil resource play. Included in the updated budget are capital expenditures
associated with four transactions and organic leasing to acquire Williston Basin acreage totaling
approximately 52,800 net acres. Our updated 2010 exploration and development capital budget is as
follows:
(in millions) | ||||
Drilling |
$ | 275.5 | ||
Field level infrastructure |
32.8 | |||
Land and seismic |
41.8 | |||
Acreage acquisitions |
53.9 | |||
Exploration and development capital expenditures |
$ | 404.0 |
MANAGEMENT COMMENTS
Gene Shepherd, Brighams Chief Financial Officer, commented, During the second quarter, the
further acceleration in our horizontal Bakken and Three Forks drilling program led to record
production volumes, which was the primary factor contributing to our record financial performance for the quarter. Furthermore, we ended the second quarter with $333 million of cash, cash equivalents and
investments on the balance sheet and an undrawn credit facility. When combined with our growing
cash flow and expanded hedging program, this level of liquidity ensures the companys ability to
continue to fund the ramp up in our Bakken and Three Forks drilling program that we have been
building to for the last several years, ensuring a strong level of operational performance for the
second half of 2010.
Gene Shepherd continued, The $110 million increase in our 2010 budget takes our exploration
and development capital expenditures to $404 million. We are very excited about the fact that
roughly $69 million or 62% of the cap-ex increase will fund the acquisition of additional Williston
Basin acreage primarily in our Rough Rider project area. The fact that roughly 34,000 or 64% of
the 52,800 net acres acquired is located in our core, de-risked project areas makes our recently
completed second quarter, given these acreage acquisitions in combination with our operational
successes, a period of significant net asset value growth for our shareholders.
CONFERENCE CALL INFORMATION
Our management will host a conference call to discuss operational and financial results for
the second quarter 2010 with investors, analysts and other interested parties on Wednesday, August
4, at 11:00 a.m. Eastern Time. To participate in the call, participants within the U.S. please
dial 888-713-4211 and participants outside the U.S. please dial 617-213-4864. The participant
passcode for the call is 48199177. Participants may pre-register for the call at
https://www.theconferencingservice.com/prereg/key.process?key=P8W9TULAA. Pre-registrants will be
issued a pin number to use when dialing into the live call which will provide quick access to the
conference. A telephone recording of the conference call will be available approximately two hours
after the call is completed through 12:00 p.m. Eastern Time on Wednesday, August 11, 2010. To
access the recording, domestic callers dial 888-286-8010 and international callers dial 617-801-6888. The passcode for the conference call playback is 86879958. In addition, a live and
archived web cast of the conference call will be available over the Internet at either
www.bexp3d.com or www.streetevents.com.
Page 4
A copy of this press release and other financial and statistical information about the periods
covered by this press release and by the conference call that will take place on Wednesday, August
4, 2010, will be available on our website. To access the press release, go to www.bexp3d.com,
click on Investor Relations and then click on News Releases. The file with a copy of the press
release is named Brigham Exploration Reports Second Quarter 2010 Results and is dated Tuesday,
August 3, 2010. To access the other financial and statistical information that will be covered by
the conference call that will take place on Wednesday, August 4, 2010, go to www.bexp3d.com, click
on Investor Relations and then click on Event Calendar. The file with the other financial and
statistical information is named Financial and Statistical Information for the Second Quarter 2010
Conference Call and is dated Tuesday, August 3, 2010.
ABOUT BRIGHAM EXPLORATION
Brigham Exploration Company is an independent exploration, development and production company
that utilizes advanced exploration, drilling and completion technologies to systematically explore
for, develop and produce domestic onshore oil and natural gas reserves. For more information about
Brigham Exploration, please visit our website at www.bexp3d.com or contact Investor Relations at
512-427-3444.
FORWARD-LOOKING STATEMENTS DISCLOSURE
Except for the historical information contained herein, the matters discussed in this press
release are forward-looking statements within the meaning of the federal securities laws.
Important factors that could cause our actual results to differ materially from those contained in
the forward-looking statements include our growth strategies, our ability to successfully and
economically explore for and develop oil and natural gas resources, anticipated trends in our
business, our liquidity and ability to finance our exploration and development activities, market
conditions in the oil and natural gas industry, our ability to make and integrate acquisitions, the
impact of governmental regulation and other risks more fully described in the companys filings
with the Securities and Exchange Commission. Forward-looking statements are typically identified
by use of terms such as may, will, expect, anticipate, estimate and similar words,
although some forward-looking statements may be expressed differently. All forward-looking
statements contained in this release, including any forecasts and estimates, are based on
managements 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.
Contact: | Rob Roosa, Finance Manager (512) 427-3300 |
Page 5
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues: |
||||||||||||||||
Crude oil sales |
$ | 34,423 | $ | 8,105 | $ | 57,293 | $ | 14,055 | ||||||||
Natural gas sales |
6,141 | 5,104 | 12,201 | 12,963 | ||||||||||||
Hedging settlements |
861 | 1,286 | 1,443 | 8,807 | ||||||||||||
41,425 | 14,495 | 70,937 | 35,825 | |||||||||||||
Unrealized hedging gains/ losses |
3,501 | (4,013 | ) | 6,553 | (6,891 | ) | ||||||||||
44,926 | 10,482 | 77,490 | 28,934 | |||||||||||||
Other revenue |
4 | 32 | 13 | 66 | ||||||||||||
Total revenue |
44,930 | 10,514 | 77,503 | 29,000 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Lease operating |
4,371 | 3,573 | 8,720 | 7,372 | ||||||||||||
Production taxes |
3,900 | 831 | 6,408 | 1,645 | ||||||||||||
General and administrative |
2,711 | 2,264 | 5,797 | 4,386 | ||||||||||||
Depletion of crude oil and natural gas properties |
14,247 | 6,233 | 23,458 | 16,066 | ||||||||||||
Impairment of crude oil and gas properties |
| | | 114,781 | ||||||||||||
Depreciation and amortization |
261 | 167 | 494 | 316 | ||||||||||||
Loss on inventory valuation |
| 128 | | 2,167 | ||||||||||||
Accretion of discount on asset retirement obligations |
104 | 105 | 209 | 206 | ||||||||||||
25,594 | 13,301 | 45,086 | 146,939 | |||||||||||||
Operating income (loss) |
19,336 | (2,787 | ) | 32,417 | (117,939 | ) | ||||||||||
Other income (expense): |
||||||||||||||||
Interest expense, net |
(2,931 | ) | (4,251 | ) | (5,835 | ) | (8,378 | ) | ||||||||
Interest income |
887 | 111 | 1,340 | 204 | ||||||||||||
Other income (expense) |
1,181 | (33 | ) | 1,866 | 82 | |||||||||||
(863 | ) | (4,173 | ) | (2,629 | ) | (8,092 | ) | |||||||||
Income before income taxes |
18,473 | (6,960 | ) | 29,788 | (126,031 | ) | ||||||||||
Income tax expense: |
||||||||||||||||
Current |
| | | | ||||||||||||
Deferred |
| | | | ||||||||||||
| | | | |||||||||||||
Net income (loss) |
$ | 18,473 | $ | (6,960 | ) | $ | 29,788 | $ | (126,031 | ) | ||||||
Net income per share available to common stockholders: |
||||||||||||||||
Basic |
$ | 0.16 | $ | (0.12 | ) | $ | 0.28 | $ | (2.39 | ) | ||||||
Diluted |
$ | 0.16 | $ | (0.12 | ) | $ | 0.27 | $ | (2.39 | ) | ||||||
Weighted average shares outstanding: |
||||||||||||||||
Basic |
113,426 | 59,687 | 106,473 | 52,745 | ||||||||||||
Diluted |
115,383 | 59,687 | 108,491 | 52,745 | ||||||||||||
Page 6
BRIGHAM EXPLORATION COMPANY
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Average net daily production volumes: |
||||||||||||||||
Crude oil (Bbls) |
5,584 | 1,823 | 4,568 | 1,875 | ||||||||||||
Natural gas (MMcf) |
13.0 | 16.2 | 12.1 | 18.3 | ||||||||||||
Equivalent crude oil (Boe) (6:1) |
7,756 | 4,526 | 6,588 | 4,933 | ||||||||||||
Total net production volumes: |
||||||||||||||||
Crude oil (MBbls) |
503 | 164 | 822 | 338 | ||||||||||||
Natural gas (MMcf) |
1,173 | 1,460 | 2,182 | 3,302 | ||||||||||||
Equivalent crude oil (MBoe) (6:1) |
698 | 407 | 1,186 | 888 | ||||||||||||
% Crude oil |
72 | % | 40 | % | 69 | % | 38 | % | ||||||||
Increase in inventory: |
||||||||||||||||
Crude oil (Bbls) |
5,089 | | 10,101 | | ||||||||||||
Natural gas (MMcf) |
| | | | ||||||||||||
Equivalent crude oil (Boe) (6:1) |
5,089 | | 10,101 | | ||||||||||||
Average net daily sales volumes (Average net
production
volumes less average net daily increase in inventory): |
||||||||||||||||
Crude oil (Bbls) |
5,528 | 1,823 | 4,512 | 1,875 | ||||||||||||
Natural gas (MMcf) |
13.0 | 16.2 | 12.1 | 18.3 | ||||||||||||
Equivalent crude oil (Boe) (6:1) |
7,700 | 4,526 | 6,532 | 4,933 | ||||||||||||
Total net sales volumes (Total net production volumes
less increase in inventory): |
||||||||||||||||
Crude oil (MBbls) |
497 | 164 | 812 | 338 | ||||||||||||
Natural gas (MMcf) |
1,173 | 1,460 | 2,182 | 3,302 | ||||||||||||
Equivalent crude oil (MBoe) (6:1) |
693 | 407 | 1,176 | 888 | ||||||||||||
% Crude oil |
72 | % | 40 | % | 69 | % | 38 | % | ||||||||
Sales price: |
||||||||||||||||
Crude oil ($/Bbl) |
$ | 69.19 | $ | 49.41 | $ | 70.55 | $ | 41.63 | ||||||||
Natural gas ($/Mcf) |
5.24 | 3.50 | 5.59 | 3.93 | ||||||||||||
Equivalent crude oil ($/Boe) (6:1) |
58.53 | 32.40 | 59.09 | 30.42 | ||||||||||||
Sales price including derivative settlement gains
(losses): |
||||||||||||||||
Crude oil ($/Bbl) |
$ | 68.93 | $ | 48.06 | $ | 70.27 | $ | 44.18 | ||||||||
Natural gas ($/Mcf) |
6.08 | 4.53 | 6.36 | 6.33 | ||||||||||||
Equivalent crude oil ($/Boe) (6:1) |
59.78 | 35.58 | 60.32 | 40.32 | ||||||||||||
Sales price including derivative settlement gains
(losses) and unrealized gains (losses): |
||||||||||||||||
Crude oil ($/Bbl) |
$ | 79.16 | $ | 29.56 | $ | 77.12 | $ | 31.32 | ||||||||
Natural gas ($/Mcf) |
4.73 | 3.86 | 6.81 | 5.56 | ||||||||||||
Equivalent crude oil ($/Boe) (6:1) |
64.83 | 25.74 | 65.89 | 32.58 |
Page 7
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)
(in thousands)
June 30, 2010 | December 31, 2009 | |||||||
(unaudited) | ||||||||
Assets: |
||||||||
Current assets |
$ | 396,353 | $ | 158,439 | ||||
Oil and natural gas properties, net (full cost method) |
447,269 | 330,733 | ||||||
Other property and equipment, net |
8,284 | 3,025 | ||||||
Other non-current assets |
10,306 | 6,059 | ||||||
Total assets |
$ | 862,212 | $ | 498,256 | ||||
Liabilities and stockholders equity: |
||||||||
Current liabilities |
$ | 124,488 | $ | 67,773 | ||||
Senior notes |
159,087 | 158,968 | ||||||
Other non-current liabilities |
5,622 | 7,232 | ||||||
Total liabilities |
$ | 289,197 | $ | 233,973 | ||||
Stockholders equity |
573,015 | 264,283 | ||||||
Total liabilities and stockholders equity |
$ | 862,212 | $ | 498,256 | ||||
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Cash flows from operating activities: |
||||||||||||||||
Net income |
$ | 18,473 | $ | (6,960 | ) | $ | 29,788 | $ | (126,031 | ) | ||||||
Depletion, depreciation and amortization |
14,508 | 6,400 | 23,952 | 16,382 | ||||||||||||
Impairment of oil and gas properties |
| | | 114,781 | ||||||||||||
Accretion of discount on ARO |
104 | 105 | 209 | 206 | ||||||||||||
Amortization of deferred loan fees and debt issuance costs |
508 | 330 | 1,014 | 626 | ||||||||||||
Non-cash stock compensation |
611 | 444 | 1,038 | 797 | ||||||||||||
Market value adjustments for derivatives instruments |
(6,208 | ) | 4,013 | (9,260 | ) | 6,891 | ||||||||||
Deferred income tax expense |
| | | | ||||||||||||
Other noncash items |
| (1 | ) | (1 | ) | 35 | ||||||||||
Changes in operating assets and liabilities |
12,951 | (1,819 | ) | 20,180 | 2,260 | |||||||||||
Cash flows provided by operating activities |
$ | 40,947 | $ | 2,512 | $ | 66,920 | $ | 15,947 | ||||||||
Cash flows used by investing activities |
(250,882 | ) | (19,109 | ) | (293,792 | ) | (45,498 | ) | ||||||||
Cash flows (used) provided by financing activities |
268,281 | 57,652 | 268,913 | 57,594 | ||||||||||||
Net increase (decrease) in cash and cash equivalents |
$ | 58,346 | $ | 41,055 | $ | 42,041 | $ | 28,043 | ||||||||
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SUMMARY PER BOE DATA
(unaudited)
(unaudited)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues: |
||||||||||||||||
Crude oil and natural gas sales |
$ | 58.53 | $ | 32.40 | $ | 59.09 | $ | 30.42 | ||||||||
Hedge settlements |
1.24 | 3.18 | 1.23 | 9.90 | ||||||||||||
Unrealized hedge gains (losses) |
5.05 | (9.84 | ) | 5.57 | (7.74 | ) | ||||||||||
Other revenue |
0.01 | 0.06 | 0.01 | 0.06 | ||||||||||||
$ | 64.83 | $ | 25.80 | $ | 65.90 | $ | 32.64 | |||||||||
Costs and expenses: |
||||||||||||||||
Lease operating |
6.30 | 8.76 | 7.41 | 8.28 | ||||||||||||
Production taxes |
5.63 | 2.04 | 5.45 | 1.86 | ||||||||||||
General and administrative |
3.91 | 5.58 | 4.93 | 4.92 | ||||||||||||
Depletion of crude oil and natural gas properties |
20.56 | 15.30 | 19.95 | 18.12 | ||||||||||||
Impairment of crude oil and natural gas properties |
| | | 129.24 | ||||||||||||
Depreciation and amortization |
0.38 | 0.42 | 0.42 | 0.36 | ||||||||||||
Loss on inventory valuation |
| 0.30 | | 2.46 | ||||||||||||
Accretion of discount on ARO |
0.15 | 0.24 | 0.18 | 0.24 | ||||||||||||
$ | 36.93 | $ | 32.64 | $ | 38.34 | $ | 165.48 | |||||||||
Operating income (loss) |
$ | 27.90 | $ | (6.84 | ) | $ | 27.56 | $ | (132.84 | ) | ||||||
Interest expense, net of interest income (a) |
(2.94 | ) | (10.14 | ) | (3.82 | ) | (9.18 | ) | ||||||||
Other income (expense) |
1.70 | (0.06 | ) | 1.59 | 0.12 | |||||||||||
Adjusted income |
$ | 26.66 | $ | (17.04 | ) | $ | 25.33 | $ | (141.90 | ) | ||||||
(a) | Calculated as interest expense minus interest income divided by production for period. |
BRIGHAM EXPLORATION COMPANY
RECONCILIATION OF GAAP NET INCOME TO EARNINGS WITHOUT THE EFFECT OF CERTAIN ITEMS
(in thousands)
RECONCILIATION OF GAAP NET INCOME TO EARNINGS WITHOUT THE EFFECT OF CERTAIN ITEMS
(in thousands)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net income (loss) as reported |
$ | 18,473 | $ | (6,960 | ) | $ | 29,788 | $ | (126,031 | ) | ||||||
Unrealized derivative (gains) losses |
(3,501 | ) | 4,013 | (6,553 | ) | 6,891 | ||||||||||
Impairment of crude oil and natural gas
properties |
| | | 114,781 | ||||||||||||
Loss on inventory valuation |
| 128 | | 2,167 | ||||||||||||
Tax impact |
| | | | ||||||||||||
Earnings without the effect of certain items |
$ | 14,972 | $ | (2,819 | ) | $ | 23,235 | $ | (2,192 | ) | ||||||
Earnings without the effect of certain items represent net income excluding both unrealized
gains and losses on derivative contracts and our non-cash impairment change in our oil and gas
properties. Management believes that exclusion of both of these items will help enhance
comparability of operating results between periods.
Page 9
SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF AUGUST 3, 2010
(unaudited)
(unaudited)
2010 | 2011 | 2012 | ||||||||||||||||||||||||||||||||||||||
Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||||||||||||||||||||||||||||||||
Crude Oil Costless Collars: |
||||||||||||||||||||||||||||||||||||||||
Daily volumes |
Bbls/d | 3,500 | 4,114 | 4,256 | 4,610 | 4,935 | 5,207 | 5,330 | 5,330 | 1,685 | ||||||||||||||||||||||||||||||
Floor |
$/Bbl | $ | 63.92 | $ | 63.64 | $ | 66.57 | $ | 65.91 | $ | 65.83 | $ | 65.72 | $ | 65.62 | $ | 65.62 | $ | 65.00 | |||||||||||||||||||||
Cap |
$/Bbl | $ | 94.60 | $ | 95.49 | $ | 98.63 | $ | 99.26 | $ | 99.67 | $ | 99.81 | $ | 100.42 | $ | 100.42 | $ | 101.57 | |||||||||||||||||||||
Crude Oil Floors: |
||||||||||||||||||||||||||||||||||||||||
Daily volumes |
Bbls/d | | | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | | ||||||||||||||||||||||||||||||
Floor |
$/Bbl | $ | | $ | | $ | 65.00 | $ | 65.00 | $ | 65.00 | $ | 65.00 | $ | 65.00 | $ | 65.00 | $ | | |||||||||||||||||||||
Natural Gas Costless Collars: |
||||||||||||||||||||||||||||||||||||||||
Daily volumes |
MMBtu/d | 7,500 | 5,870 | 6,000 | 3,626 | 3,587 | 3,587 | | | | ||||||||||||||||||||||||||||||
Floor |
$/MMBtu | $ | 5.51 | $ | 5.94 | $ | 6.17 | $ | 5.48 | $ | 5.48 | $ | 5.48 | $ | | $ | | $ | | |||||||||||||||||||||
Cap |
$/MMBtu | $ | 7.02 | $ | 7.59 | $ | 7.79 | $ | 7.16 | $ | 7.16 | $ | 7.16 | $ | | $ | | $ | |
Hedged volumes and prices reflected in this table represent average contract amounts for the
quarterly periods presented; natural gas hedge prices and crude oil hedge contract prices are based
on NYMEX pricing.
Page 10