UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 24, 2011
PETROQUEST ENERGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE | 001-32681 | 72-1440714 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
400 E. Kaliste Saloom Rd., Suite 6000 Lafayette, Louisiana |
70508 |
|
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (337) 232-7028
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On February 24, 2011, PetroQuest Energy, Inc. (the Company) announced net income available
to common stockholders for the quarter ended December 31, 2010 of $2,083,000, or $0.03 per share,
compared to fourth quarter 2009 net loss available to common stockholders of ($40,572,000), or
($0.66) per share. For the year ended December 31, 2010, the Company reported net income available
to common shareholders of $41,987,000, or $0.66 per share, compared to net loss available to common
shareholders of ($95,330,000), or ($1.72) per share, for the year ended December 31, 2009. The 2009
results included ceiling test write downs of $52.5 million and $156.1 million during the fourth
quarter and twelve month periods ended December 31, 2009, respectively.
Discretionary cash flow for the fourth quarter of 2010 was $23,428,000 as compared to $36,783,000
for the comparable 2009 period. Net cash flow provided by operating activities totaled $35,450,000
and $35,183,000 during the fourth quarters of 2010 and 2009, respectively. For the year ended
December 31, 2010, discretionary cash flow was $119,668,000 compared to $146,801,000 for 2009. Net
cash flow provided by operating activities totaled $131,644,000 and $121,822,000 during the years
ended December 31, 2010 and 2009, respectively. See the attached schedule for a reconciliation of
net cash flow provided by operating activities to discretionary cash flow.
Oil and gas sales during the fourth quarter of 2010 were $43,407,000 as compared to $53,852,000 in
the fourth quarter of 2009. For the year ended December 31, 2010, oil and gas sales decreased 18%
to $179,038,000 as compared to $218,644,000 in the year ended December 31, 2009. Included in oil
and gas sales were hedge settlements totaling $17,538,000 in 2010 compared to $79,892,000 in 2009.
Production for the fourth quarter and year ended December 31, 2010 was 5% higher and 9% lower,
respectively, than production for the comparable periods of 2009. Stated on an Mcfe basis, unit
prices (including the effects of hedging) received during the fourth quarter and the year ended
December 31, 2010 were lower by 23% and 10%, respectively, as compared to the prices received
during the comparable 2009 periods.
Lease operating expenses for the fourth quarter of 2010 were $1.33 per Mcfe as compared to $1.24
per Mcfe in the fourth quarter of 2009. For the year ended December 31, 2010, lease operating
expenses increased to $1.26 per Mcfe from $1.13 per Mcfe in 2009. Per unit and absolute lease
operating expenses increased during the 2010 periods as compared to the 2009 periods primarily due
to the overall reduction in produced volumes, higher maintenance costs, as well as the overall
increase in the cost of services. During the fourth quarter of 2010, the Company incurred $1.6
million of unscheduled expenses related to enhancing production and maintaining facilities.
Depreciation, depletion and amortization (DD&A) on oil and gas properties for the fourth quarter
of 2010 was $1.95 per Mcfe as compared to $2.16 per Mcfe in the fourth quarter of 2009. For the
year ended December 31, 2010, DD&A on oil and gas properties decreased 23% to $1.88 per Mcfe from
$2.44 per Mcfe for the comparable period of 2009. The decline in DD&A per Mcfe during the 2010
periods was the result of the ceiling test write-downs during 2009, the impact of the previously
announced Woodford joint venture and reserve additions during 2010.
Interest expense for the fourth quarter of 2010 increased to $2,616,000, as compared to $2,520,000
in the fourth quarter of 2009. For the year ended December 31, 2010, interest expense was
$9,952,000, compared to $12,615,000 for the comparable period of 2009. The decrease in interest
expense is primarily due to the repayment of $130,000,000 of bank debt since August 2009.
General and administrative expenses decreased $270,000 and increased $2,472,000 for the fourth
quarter and year ended December 31, 2010, as compared to the respective 2009 periods. The increase
during the year ended December 31, 2010 was primarily due to higher employee related expenses,
which includes a non-cash compensation charge related to the cancellation of certain stock options
during the third quarter of 2010.
2
Other expense during the fourth quarter of 2010 includes accruals for potential liabilities
associated with certain pending legal matters.
The following table sets forth certain information with respect to the oil and gas operations of
the Company for the three-month periods and years ended December 31, 2010 and 2009:
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Production: |
||||||||||||
Oil (Bbls) |
663,302 | 600,124 | 680,571 | |||||||||
Gas (Mcf) |
24,501,540 | 28,065,270 | 27,031,801 | |||||||||
Ngl (Mcfe) |
2,469,871 | 2,532,822 | 2,676,403 | |||||||||
Total Production (Mcfe) |
30,951,223 | 34,198,836 | 33,791,630 | |||||||||
Total Daily Production (Mmcfe/d) |
84.8 | 93.7 | 92.6 | |||||||||
Sales: |
||||||||||||
Total oil sales |
$ | 52,715,434 | $ | 41,150,657 | $ | 66,349,344 | ||||||
Total gas sales |
107,117,320 | 163,867,613 | 216,143,358 | |||||||||
Total ngl sales |
19,205,726 | 13,625,642 | 26,130,502 | |||||||||
Total oil and gas sales |
$ | 179,038,480 | $ | 218,643,912 | $ | 308,623,204 | ||||||
Average sales prices: |
||||||||||||
Oil (per Bbl) |
$ | 79.47 | $ | 68.57 | $ | 97.49 | ||||||
Gas (per Mcf) |
4.37 | 5.84 | 8.00 | |||||||||
Ngl (per Mcfe) |
7.78 | 5.38 | 9.76 | |||||||||
Per Mcfe |
5.78 | 6.39 | 9.13 |
The above sales and average sales prices include increases (reductions) to revenue related to
the settlement of gas hedges of $17,538,000, $74,333,000 and ($6,160,000) and oil hedges of $0,
$5,559,000 and ($2,124,000) for the years ended December 31, 2010, 2009 and 2008,
respectively.
3
During the first quarter of 2011, the Company experienced production downtime in all of its
operating areas and operational delays at its Gulf Coast and Woodford properties due to inclement
weather.
The following updates guidance for the first quarter and full year of 2011:
Guidance for | ||
Description | 1st Quarter 2011 | |
Production volumes (MMcfe/d) |
80 - 83 | |
Percent Gas |
80% | |
Percent Oil |
13% | |
Percent NGL |
7% | |
Expenses: |
||
Lease operating expenses (per Mcfe) |
$1.20 - $1.30 | |
Production taxes (per Mcfe) |
$0.20 - $0.25 | |
Depreciation, depletion and amortization (per Mcfe) |
$1.90 - $2.00 | |
General and administrative (in millions) |
$4.5 - $5.0 | |
Interest expense (in millions) |
$2.5 - $2.7 |
Guidance for | ||
Description | Full Year 2011 | |
Production volumes (MMcfe/d) |
80 - 88 | |
Percent Gas |
78% | |
Percent Oil |
15% | |
Percent NGL |
7% | |
Expenses: |
||
Lease operating expenses (per Mcfe) |
$1.20 - $1.30 | |
Production taxes (per Mcfe) |
$0.20 - $0.25 | |
Depreciation, depletion and amortization (per Mcfe) |
$1.90 - $2.00 | |
General and administrative (in millions) |
$20 - $21 | |
Interest expense (in millions) |
$10 - $11 | |
2011 Capital Expenditures (in millions) |
$110 - $120 |
4
Operations Update
The Company recently completed its forty-fourth Woodford operated horizontal well (4,220 foot
lateral). The well is in the early stages of flowback and has not had sufficient time to establish
a clean 24 hour initial production rate. In addition, the Company has commenced completion
activities on its forty-fifth operated horizontal well (5,026 foot lateral) and has reached total
depth on its forty-sixth operated horizontal well (4,906 foot lateral). The Company expects to
commence completion activities on its forty-sixth operated well in approximately three weeks and
expects to provide an update on all three wells (PQ #44-46) in its first quarter operations update.
The Company has also taken delivery of its third operated rig and expects to utilize a three rig
program and drill approximately 30 gross operated wells during 2011.
In the Niobrara, the drilling site work has been finalized in preparation for the Companys third
well, Hester #3 (WI-25%), and the well is expected to be spudded in approximately two weeks. The
Companys second well, Nevis #2 (NRI-20%), is currently flowing with the assistance of artificial
lift at 335 barrels of oil per day after 79 days of production. In addition, the Company expects
to participate in a well (WI-19%) with another operator, which is also expected to spud in
approximately two weeks.
In the Gulf Coast Basin, the Company recently performed a workover and recompletion at its
shallow-water Gulf of Mexico Ship Shoal 72 field resulting in an initial 24 hour gross daily
production rate of approximately 300 barrels of oil and 360 mcf of gas. The Company expects to
perform two additional recompletions and a multi-well sidetrack drilling program targeting oil
during the year. In addition, the Company expects to spud its La Cantera prospect (WI-23%) in March
2011.
In East Texas, the Company expects to commence completion operations on its second non-operated
horizontal Cotton Valley well (WI-26%) near the end of the first quarter. The Company expects to
drill seven horizontal Cotton Valley wells during 2011.
The Company continues to actively pursue additional Eagle Ford acreage acquisitions. The Company
has acquired approximately 3,200 acres (1,600 net acres) located in Dimmit and LaSalle Counties in
Texas. The Company expects to spud its first operated Eagle Ford Shale well during the second
quarter of 2011 and plans to drill three operated wells during 2011.
Management Statement
2010 was a significant year for our Company; we posted reserve growth of 24% (excluding the impact
of reserves sold), paid back our bank debt, and established a joint venture partnership in the
Woodford, which ultimately led to new positions in the Niobrara and Eagle Ford, said Charles T.
Goodson, Chairman, Chief Executive Officer and President. This year is similar to 2003, in that we
enter another phase of diversification; we now look to enhance our liquids production, which will
generate a more balanced production profile. As previously mentioned, we are forecasting our oil
production to grow in excess of 10% during 2011.
About the Company
PetroQuest Energy, Inc. is an independent energy company engaged in the exploration, development,
acquisition and production of oil and natural gas reserves in the Arkoma Basin, Wyoming, Texas,
South Louisiana and the shallow waters of the Gulf of Mexico. PetroQuests common stock trades on
the New York Stock Exchange under the ticker PQ.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements are subject to certain risks, trends and uncertainties
that could cause actual results to differ materially from those projected. Among those risks,
trends and uncertainties are our ability to find oil and natural gas reserves that are economically
recoverable, the volatility of oil and natural gas prices and significantly depressed natural gas
prices since the middle of 2008, the uncertain economic conditions in the United States and
globally, the declines in the values of our properties that have resulted in and may in the future
result in additional ceiling test write-downs, our ability to replace reserves and sustain
production, our estimate of the sufficiency of our existing capital sources, our ability to raise additional capital to fund cash requirements for future operations, the uncertainties
involved in prospect
5
development and property acquisitions or dispositions and in projecting future
rates of production or future reserves, the timing of development expenditures and drilling of
wells, hurricanes and other natural disasters, including the impact of the oil spill in the Gulf of
Mexico on our present and future operations, and the operating hazards attendant to the oil and gas
business. In particular, careful consideration should be given to cautionary statements made in
the various reports PetroQuest has filed with the Securities and Exchange Commission. PetroQuest
undertakes no duty to update or revise these forward-looking statements.
Click here for more information: http://www.petroquest.com/news.html?=BizID=1690&1=1
6
PETROQUEST ENERGY, INC.
Consolidated Statements of Income
(Unaudited)
(Amounts In Thousands, Except Per Share Data)
Consolidated Statements of Income
(Unaudited)
(Amounts In Thousands, Except Per Share Data)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues: |
||||||||||||||||
Oil and gas sales |
$ | 43,407 | $ | 53,852 | $ | 179,038 | $ | 218,644 | ||||||||
Gas gathering revenue |
70 | 59 | 256 | 231 | ||||||||||||
43,477 | 53,911 | 179,294 | 218,875 | |||||||||||||
Expenses: |
||||||||||||||||
Lease operating expenses |
10,555 | 9,370 | 39,012 | 38,541 | ||||||||||||
Production taxes |
1,609 | 1,460 | 4,917 | 4,656 | ||||||||||||
Depreciation, depletion and amortization |
15,859 | 16,643 | 59,326 | 84,772 | ||||||||||||
Ceiling test writedown |
| 52,552 | | 156,134 | ||||||||||||
Gas gathering costs |
9 | 10 | 31 | 191 | ||||||||||||
General and administrative |
5,435 | 5,705 | 21,341 | 18,869 | ||||||||||||
Accretion of asset retirement obligation |
6 | 748 | 1,306 | 2,452 | ||||||||||||
Interest expense |
2,616 | 2,520 | 9,952 | 12,615 | ||||||||||||
36,089 | 89,008 | 135,885 | 318,230 | |||||||||||||
Gain on legal settlement |
| | 12,400 | | ||||||||||||
Loss on early extinguishment of debt |
| | (5,973 | ) | | |||||||||||
Gain on sale of assets |
| | | 485 | ||||||||||||
Other expense |
(1,309 | ) | (52 | ) | (1,080 | ) | (5,955 | ) | ||||||||
Income (loss) from operations |
6,079 | (35,149 | ) | 48,756 | (104,825 | ) | ||||||||||
Income tax expense (benefit) |
2,711 | 4,137 | 1,630 | (14,635 | ) | |||||||||||
Net income (loss) |
3,368 | (39,286 | ) | 47,126 | (90,190 | ) | ||||||||||
Preferred stock dividend |
1,285 | 1,286 | 5,139 | 5,140 | ||||||||||||
Net income (loss) available to common
stockholders |
$ | 2,083 | $ | (40,572 | ) | $ | 41,987 | $ | (95,330 | ) | ||||||
Earnings per common share: |
||||||||||||||||
Basic |
||||||||||||||||
Net income (loss) per share |
$ | 0.03 | $ | (0.66 | ) | $ | 0.67 | $ | (1.72 | ) | ||||||
Diluted |
||||||||||||||||
Net income (loss) per share |
$ | 0.03 | $ | (0.66 | ) | $ | 0.66 | $ | (1.72 | ) | ||||||
Weighted average number of common shares: |
||||||||||||||||
Basic |
61,542 | 61,155 | 61,415 | 55,363 | ||||||||||||
Diluted |
61,927 | 61,155 | 61,789 | 55,363 |
7
PETROQUEST ENERGY, INC.
Consolidated Balance Sheets
(Unaudited)
(Amounts in Thousands)
Consolidated Balance Sheets
(Unaudited)
(Amounts in Thousands)
December 31, | ||||||||
2010 | 2009 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 63,237 | $ | 20,772 | ||||
Revenue receivable |
13,386 | 16,457 | ||||||
Joint interest billing receivable |
12,193 | 11,792 | ||||||
Other receivable |
13,795 | | ||||||
Hedge asset |
| 2,796 | ||||||
Prepaid drilling costs |
789 | 2,383 | ||||||
Drilling pipe inventory |
11,711 | 19,297 | ||||||
Other current assets |
1,827 | 1,619 | ||||||
Total current assets |
116,938 | 75,116 | ||||||
Property and equipment: |
||||||||
Oil and gas properties: |
||||||||
Oil and gas properties, full cost method |
1,433,642 | 1,296,177 | ||||||
Unevaluated oil and gas properties |
54,851 | 108,079 | ||||||
Accumulated depreciation, depletion and amortization |
(1,175,553 | ) | (1,082,381 | ) | ||||
Oil and gas properties, net |
312,940 | 321,875 | ||||||
Gas gathering assets |
4,177 | 4,848 | ||||||
Accumulated depreciation and amortization of gas gathering assets |
(1,496 | ) | (1,198 | ) | ||||
Total property and equipment |
315,621 | 325,525 | ||||||
Other assets, net of accumulated depreciation and amortization
of $6,435 and $8,342, respectively |
6,958 | 9,818 | ||||||
Total assets |
$ | 439,517 | $ | 410,459 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable to vendors |
$ | 26,097 | $ | 27,113 | ||||
Advances from co-owners |
7,963 | 3,662 | ||||||
Oil and gas revenue payable |
7,220 | 7,886 | ||||||
Accrued interest and preferred stock dividend |
6,575 | 3,133 | ||||||
Hedge liability |
1,089 | | ||||||
Asset retirement obligation |
1,517 | 4,517 | ||||||
Other accrued liabilities |
7,380 | 4,106 | ||||||
Total current liabilities |
57,841 | 50,417 | ||||||
Bank debt |
| 29,000 | ||||||
10 3/8% Senior Notes |
| 149,267 | ||||||
10% Senior Notes |
150,000 | | ||||||
Asset retirement obligation |
23,075 | 19,399 | ||||||
Other liabilities |
439 | 271 | ||||||
Commitments and contingencies |
||||||||
Stockholders equity: |
||||||||
Preferred stock, $.001 par value; authorized 5,000
shares; issued and outstanding 1,495 shares |
1 | 1 | ||||||
Common stock, $.001 par value; authorized 150,000
shares; issued and outstanding 61,565 and 61,177
shares, respectively |
62 | 61 | ||||||
Paid-in capital |
266,907 | 259,981 | ||||||
Accumulated other comprehensive income (loss) |
(1,089 | ) | 1,768 | |||||
Accumulated deficit |
(57,719 | ) | (99,706 | ) | ||||
Total stockholders equity |
208,162 | 162,105 | ||||||
Total liabilities and stockholders equity |
$ | 439,517 | $ | 410,459 | ||||
8
PETROQUEST ENERGY, INC.
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in Thousands)
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in Thousands)
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Cash flows from operating activities: |
||||||||||||
Net income (loss) |
$ | 47,126 | $ | (90,190 | ) | $ | (96,960 | ) | ||||
Adjustments to reconcile net income (loss) to net cash
provided by operating activities: |
||||||||||||
Deferred tax expense (benefit) |
1,630 | (14,635 | ) | (55,581 | ) | |||||||
Depreciation, depletion and amortization |
59,326 | 84,772 | 134,340 | |||||||||
Ceiling test writedown |
| 156,134 | 266,156 | |||||||||
Non-cash gain on legal settlement |
(4,164 | ) | | | ||||||||
Loss on early extinguishment of debt |
5,973 | | | |||||||||
Gain on sale of assets |
| (485 | ) | (26,812 | ) | |||||||
Accretion of asset retirement obligation |
1,306 | 2,452 | 1,317 | |||||||||
Pipe inventory impairment |
| 913 | | |||||||||
Share-based compensation expense |
7,137 | 6,328 | 9,582 | |||||||||
Amortization costs and other |
1,334 | 1,512 | 1,492 | |||||||||
Payments to settle asset retirement obligations |
(6,274 | ) | (1,803 | ) | (19,377 | ) | ||||||
Changes in working capital accounts: |
||||||||||||
Revenue receivable |
3,071 | 3,617 | 2,746 | |||||||||
Joint interest billing receivable |
(401 | ) | 11,937 | (1,323 | ) | |||||||
Prepaid drilling and pipe costs |
9,180 | 14,828 | (35,973 | ) | ||||||||
Accounts payable and accrued liabilities |
3,368 | (51,375 | ) | (4,567 | ) | |||||||
Advances from co-owners |
4,301 | (1,687 | ) | (7,521 | ) | |||||||
Other |
(1,269 | ) | (496 | ) | 1,542 | |||||||
Net cash provided by operating activities |
131,644 | 121,822 | 169,061 | |||||||||
Cash flows from investing activities: |
||||||||||||
Investment in oil and gas properties |
(103,926 | ) | (63,420 | ) | (325,936 | ) | ||||||
Investment in gas gathering assets |
| (204 | ) | (6,204 | ) | |||||||
Proceeds from sale of gathering assets, net of
expenses |
| | 43,170 | |||||||||
Proceeds from sale of unevaluated properties |
22,473 | | | |||||||||
Proceeds from sale of oil and gas properties
and other |
35,000 | 7,451 | 2,256 | |||||||||
Net cash used in investing activities |
(46,453 | ) | (56,173 | ) | (286,714 | ) | ||||||
Cash flows from financing activities: |
||||||||||||
Net proceeds from (payments for) share based
compensation |
(210 | ) | (366 | ) | 1,597 | |||||||
Deferred financing costs |
(12 | ) | (114 | ) | (1,450 | ) | ||||||
Proceeds from common stock offering |
| 38,036 | | |||||||||
Costs of common stock offering |
| (258 | ) | | ||||||||
Payment of preferred stock dividend |
(5,137 | ) | (5,139 | ) | (5,439 | ) | ||||||
Repayment of bank borrowings |
(29,000 | ) | (101,000 | ) | (128,000 | ) | ||||||
Proceeds from bank borrowings |
| | 258,000 | |||||||||
Redemption of 10 3/8% Senior Notes |
(150,000 | ) | | | ||||||||
Costs to redeem 10 3/8% Senior Notes |
(4,187 | ) | | | ||||||||
Proceeds from issuance of 10% Senior Notes |
150,000 | | | |||||||||
Costs to issue 10% Senior Notes |
(4,180 | ) | | | ||||||||
Net cash provided by (used in) financing activities |
(42,726 | ) | (68,841 | ) | 124,708 | |||||||
Net increase (decrease) in cash and cash
equivalents |
42,465 | (3,192 | ) | 7,055 | ||||||||
Cash and cash equivalents at beginning of period |
20,772 | 23,964 | 16,909 | |||||||||
Cash and cash equivalents at end of period |
$ | 63,237 | $ | 20,772 | $ | 23,964 | ||||||
Supplemental disclosure of cash flow information
Cash paid during the period for: |
||||||||||||
Interest |
$ | 11,195 | $ | 20,335 | $ | 17,851 | ||||||
Income taxes |
$ | 192 | $ | 227 | $ | | ||||||
9
PETROQUEST ENERGY, INC.
Non-GAAP Disclosure Reconciliation
(Amounts In Thousands)
Non-GAAP Disclosure Reconciliation
(Amounts In Thousands)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net income (loss) |
$ | 3,368 | $ | (39,286 | ) | $ | 47,126 | $ | (90,190 | ) | ||||||
Reconciling items: |
||||||||||||||||
Deferred tax expense (benefit) |
2,711 | 4,137 | 1,630 | (14,635 | ) | |||||||||||
Gain on sale of assets |
| | | (485 | ) | |||||||||||
Depreciation, depletion and amortization |
15,859 | 16,643 | 59,326 | 84,772 | ||||||||||||
Ceiling test writedown |
| 52,552 | | 156,134 | ||||||||||||
Non-cash gain on legal settlement |
| | (4,164 | ) | | |||||||||||
Loss on early extinguishment of debt |
| | 5,973 | | ||||||||||||
Accretion of asset retirement obligation |
6 | 748 | 1,306 | 2,452 | ||||||||||||
Pipe inventory impairment |
| 10 | | 913 | ||||||||||||
Share based compensation expense |
1,274 | 1,594 | 7,137 | 6,328 | ||||||||||||
Amortization expense and other |
210 | 385 | 1,334 | 1,512 | ||||||||||||
Discretionary cash flow |
23,428 | 36,783 | 119,668 | 146,801 | ||||||||||||
Changes in working capital accounts |
12,624 | (1,344 | ) | 18,250 | (23,176 | ) | ||||||||||
Settlement of asset retirement obligations |
(602 | ) | (256 | ) | (6,274 | ) | (1,803 | ) | ||||||||
Net cash flow provided by operating
activities |
$ | 35,450 | $ | 35,183 | $ | 131,644 | $ | 121,822 | ||||||||
Note: | Management believes that discretionary cash flow is relevant and useful
information, which is commonly used by analysts, investors and other interested parties in the
oil and gas industry as a financial indicator of an oil and gas companys ability to generate
cash used to internally fund exploration and development activities and to service debt.
Discretionary cash flow is not a measure of financial performance prepared in accordance with
generally accepted accounting principles (GAAP) and should not be considered in isolation or
as an alternative to net cash flow provided by operating activities. In addition, since
discretionary cash flow is not a term defined by GAAP, it might not be comparable to similarly
titled measures used by other companies. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
PETROQUEST ENERGY, INC. |
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Date: February 24, 2011 | By: | /s/ J. Bond Clement | ||
J. Bond Clement | ||||
Executive Vice President, Chief Financial Officer and Treasurer | ||||
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