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| 8-K - 8-K - ABRAXAS PETROLEUM CORP | a2016earnings8k.htm |
ABRAXAS PETROLEUM CORPORATION
www.abraxaspetroleum.com
Exhibit 99.1
NEWS RELEASE
Abraxas Announces 2016 Results
SAN ANTONIO (March 14, 2017) – Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported financial and operating results for the three and twelve months ended December 31, 2016.
Financial and Operating Results for the Three Months Ended December 31, 2016
The three months ended December 31, 2016 resulted in:
• | Production of 732 MBoe (7,955 Boepd) |
• | Revenue of $22.0 million |
• | Net loss of $5.3 million, or $0.04 per share |
• | Adjusted net income(a), excluding certain non-cash items of $1.0 million, or $0.01 per share |
• | EBITDA(a) of $9.5 million |
• | Adjusted EBITDA per bank loan covenants of $9.5 million(a) |
(a) | See reconciliation of non-GAAP financial measures below. |
Net loss for the three months ended December 31, 2016 was $5.3 million, or $0.04 per share, compared to a net loss of $67.4 million, or $0.64 per share, for the three months ended December 31, 2015.
Financial and Operating Results for the Twelve Months Ended December 31, 2016
The twelve months ended December 31, 2016 resulted in:
• | Production of 2.3 MMBoe (6,181 Boepd) |
• | Revenue of $56.6 million |
• | Net loss of $96.4 million, or $0.79 per share |
• | Adjusted net loss(a), excluding certain non-cash items of $9.0 million, or $0.07 per share |
• | EBITDA(a) of $24.0 million |
• | Adjusted EBITDA per bank loan covenants of $40.1 million(a) |
(a) | See reconciliation of non-GAAP financial measures below. |
Net loss for the twelve months ended December 31, 2016 was $96.4 million, or $0.79 per share, compared to a net loss of $127.1 million, or $1.21 per share, for the twelve months ended December 31, 2015.
Operational Update
Permian/Delaware Basin
In Ward County, Texas, Abraxas is currently drilling a two well pad in the Caprito 98-201H and Caprito 98-301HR. The Caprito 98-301HR will target the Wolfcamp A2 zone and replaces the Caprito 98-301H, which was abandoned due to a surface issue. The Caprito 98-201H will target an additional prospective zone in the Wolfcamp A1. Abraxas owns a working interest of approximately 88% in the Caprito 98-201H and 98-301HR, respectively.
Following the drilling of the Caprito 98-201H and 301HR, Abraxas will drill a second two well pad targeting the Wolfcamp A2 and the Wolfcamp B. Following these two completions, Abraxas will drill a third two well pad targeting the Wolfcamp A1 and Third Bone Spring. Following the results of these wells, we believe that we will have potentially derisked four prospective horizons allowing for an efficient development of the Company’s Caprito acreage in the Delaware Basin.
Williston Basin
At Abraxas’ North Fork prospect, in McKenzie County, North Dakota, we have drilled the lateral sections of the Stenehjem 6H, 8H and 9H. Abraxas is currently drilling the lateral of the Stenehjem 7H. Abraxas' working interest in the Stenehjem 6H-9H is approximately 75%.
Following the completion of these wells, Abraxas plans to mobilize the rig to the Company’s Yellowstone unit to spud a three well pad. Abraxas anticipates having a 52% working interest in these wells.
Eagle Ford/Austin Chalk
In Atascosa County, Texas, Abraxas plans to combine the Company’s Shut Eye and Red Eye units. The new combined unit will be the Shut Eye unit where Abraxas plans to drill the Shut Eye 1H targeting the Eagle Ford with a 100% working interest. Abraxas is currently sourcing a rig to drill this well.
Comments
Bob Watson, President and CEO of Abraxas commented, “Abraxas achieved superb financial results despite a difficult operating environment in 2016. We are quite pleased our 2016 cash operating expenses all came in toward the lower end of our guidance range. January 2017 financial results continue to reflect this improvement with cash expenses coming in at the low end of our 2017 guidance range. We have also seen a tremendous improvement in natural gas and NGL realizations in January 2017.”
“Operationally, our execution in 2016 was also on point. Despite approximately 175 Boepd of divestitures over the course of 2016, our production guidance also came in at the approximate midpoint of guidance. This was achieved on a capital expenditure budget that came in 21% and 9% below original and revised guidance for the year.”
“Post our recent equity offering we now boast a best-in-class balance sheet. As of March, 10 2017, we are $18 million drawn on our $115 million borrowing base. Our balance sheet and robust cash flow position will allow us to execute on our current program to run one full-time rig in the Bakken and one full-time rig in the Permian. Both those rigs are currently drilling and all operations remain on schedule. Abraxas also continues to pursue several cost-effective bolt-on acquisition opportunities in the Delaware Basin. Importantly, we look forward to accomplishing all of this without compromising our balance sheet.”
Conference Call
Abraxas Petroleum Corporation (NASDAQ:AXAS) will host its fourth quarter and full year 2016 earnings conference call at 11 AM ET on March 15, 2017. To participate in the conference call, please dial 844.778.4143 and enter the passcode 56250056. Additionally, a live listen only webcast of the conference call can be accessed under the investor relations section of the Abraxas website at www.abraxaspetroleum.com. A replay of the conference call will be available through April 12, 2017 by dialing 855.859.2056 and entering the passcode 56250056 or can be accessed under the investor relations section of the Abraxas website.
Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploration and production company with operations across the Permian Basin, Rocky Mountain, and South Texas regions of the United States.
Safe Harbor for forward-looking statements: Statements in this release looking forward in time involve known and unknown risks and uncertainties, which may cause Abraxas’ actual results in future periods to be materially different from any future performance suggested in this release. Such factors may include, but may not be necessarily limited to, changes in the prices received by Abraxas for crude oil and natural gas. In addition, Abraxas’ future crude oil and natural gas production is highly dependent upon Abraxas’ level of success in acquiring or finding additional reserves. Further, Abraxas operates in an industry sector where the value of securities is highly volatile and may be influenced by economic and other factors beyond Abraxas’ control. In the context of forward-looking information provided for in this release, reference is made to the discussion of risk factors detailed in Abraxas’ filings with the Securities and Exchange Commission during the past 12 months.
FOR MORE INFORMATION CONTACT:
Geoffrey King/Vice President – Chief Financial Officer
Telephone 210.490.4788
gking@abraxaspetroleum.com
www.abraxaspetroleum.com
ABRAXAS PETROLEUM CORPORATION
CONSOLIDATED
FINANCIAL HIGHLIGHTS
FINANCIAL HIGHLIGHTS
(In thousands except per share data) | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Financial Results: | ||||||||||||||||
Revenues | $ | 22,007 | $ | 13,348 | $ | 56,555 | $ | 67,030 | ||||||||
Net loss | (5,301 | ) | (67,419 | ) | (96,378 | ) | (127,110 | ) | ||||||||
Net loss per share – basic | $ | (0.04 | ) | $ | (0.64 | ) | $ | (0.79 | ) | $ | (1.21 | ) | ||||
Net loss per share – diluted | $ | (0.04 | ) | $ | (0.64 | ) | $ | (0.79 | ) | $ | (1.21 | ) | ||||
Capital expenditures | 7,031 | 16,777 | 31,663 | 69,391 | ||||||||||||
EBITDA(a) | 9,493 | 7,162 | 24,028 | 38,558 | ||||||||||||
Adjusted net income (loss), excluding certain non-cash items(a) | 984 | (2,345 | ) | (8,959 | ) | (7,876 | ) | |||||||||
Adjusted net income (loss), excluding certain non-cash items(a) , per share – basic | $ | 0.01 | $ | (0.02 | ) | $ | (0.07 | ) | $ | (0.08 | ) | |||||
Adjusted net income (loss), excluding certain non-cash items(a), per share – diluted | $ | 0.01 | $ | (0.02 | ) | $ | (0.07 | ) | $ | (0.08 | ) | |||||
Weighted average shares outstanding – basic | 133,597 | 104,703 | 122,132 | 104,605 | ||||||||||||
Weighted average shares outstanding – diluted | 133,597 | 104,703 | 122,132 | 104,605 | ||||||||||||
Production from Continuing Operations: | ||||||||||||||||
Crude oil per day (Bblpd) | 4,923 | 3,696 | 3,750 | 3,946 | ||||||||||||
Natural gas per day (Mcfpd) | 10,087 | 8,352 | 8,633 | 8,260 | ||||||||||||
Natural gas liquids per day (Bblpd) | 1,350 | 753 | 993 | 652 | ||||||||||||
Crude oil equivalent per day (Boepd) | 7,955 | 5,841 | 6,181 | 5,975 | ||||||||||||
Crude oil equivalent (MBoe) | 732 | 537 | 2,262 | 2,181 | ||||||||||||
Realized Prices, net of realized hedging activity: | ||||||||||||||||
Crude oil ($ per Bbl) | $ | 40.16 | $ | 42.32 | $ | 38.70 | $ | 47.54 | ||||||||
Natural gas ($ per Mcf) | 1.65 | 1.62 | 1.26 | 2.19 | ||||||||||||
Natural gas liquids ($ per Bbl) | 6.90 | 4.39 | 4.27 | 7.89 | ||||||||||||
Crude oil equivalent ($ per Boe) | 28.12 | 29.66 | 25.92 | 35.28 | ||||||||||||
Expenses: | ||||||||||||||||
Lease operating ($ per Boe) | $ | 6.28 | $ | 9.80 | $ | 8.05 | $ | 10.58 | ||||||||
Production taxes (% of oil and gas revenue) | 8.4 | % | 10.7 | % | 9.7 | % | 10.0 | % | ||||||||
General and administrative, excluding stock-based compensation ($ per Boe) | $ | 6.20 | $ | 3.30 | $ | 4.58 | $ | 3.61 | ||||||||
Cash interest ($ per Boe) | 1.17 | 1.83 | 1.69 | 1.53 | ||||||||||||
Depreciation, depletion and amortization ($ per Boe) | 8.88 | 14.28 | 10.80 | 17.76 | ||||||||||||
(a) See reconciliation of non-GAAP financial measures below.
BALANCE SHEET DATA
(In thousands) | December 31, 2016 | December 31, 2015 | |||||||||
Cash | $ | — | $ | 3,540 | |||||||
Working capital | (7,178) | (2,395) | |||||||||
Property and equipment – net | 136,311 | 224,838 | |||||||||
Total assets | 161,648 | 267,872 | |||||||||
Long-term debt | 96,616 | 138,402 | |||||||||
Stockholders’ equity | 18,505 | 84,465 | |||||||||
Common shares outstanding | 135,094 | 106,346 | |||||||||
Working capital per bank loan covenants (a) | (4,064) | (18,967) | |||||||||
(a) | Excludes current maturities of long-term debt and current derivative assets and liabilities in accordance with our bank loan covenants. |
ABRAXAS PETROLEUM CORPORATION
CONSOLIDATED
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS
(In thousands except per share data) | Twelve Months Ended December 31, | |||||||||||
2016 | 2015 | 2014 | ||||||||||
Revenues: | ||||||||||||
Oil and gas production | $ | 56,493 | $ | 67,002 | $ | 133,701 | ||||||
Other | 62 | 28 | 75 | |||||||||
56,555 | 67,030 | 133,776 | ||||||||||
Operating costs and expenses: | ||||||||||||
Lease operating | 18,205 | 23,074 | 25,875 | |||||||||
Production and ad valorem taxes | 5,454 | 6,679 | 11,462 | |||||||||
Rig expense | 664 | — | — | |||||||||
Depreciation, depletion, and amortization | 24,431 | 38,721 | 43,139 | |||||||||
Impairment | 67,626 | 128,573 | — | |||||||||
General and administrative (including stock-based compensation of $3,194, $3,912, and $2,703, respectively) | 13,562 | 11,788 | 13,378 | |||||||||
129,942 | 208,835 | 93,854 | ||||||||||
Operating (loss) income | (73,387 | ) | (141,805 | ) | 39,922 | |||||||
Other (income) expense: | ||||||||||||
Interest income | (1 | ) | (2 | ) | (2 | ) | ||||||
Interest expense | 4,319 | 3,906 | 2,570 | |||||||||
Amortization of deferred financing fees | 1,019 | 643 | 934 | |||||||||
Loss (gain) on derivative contracts | 18,028 | (19,301 | ) | (25,237 | ) | |||||||
(Gain) on sale of properties | (374 | ) | — | — | ||||||||
Other | — | 318 | (7 | ) | ||||||||
22,991 | (14,436 | ) | (21,742 | ) | ||||||||
(Loss) income from continuing operations before income tax | (96,378 | ) | (127,369 | ) | 61,664 | |||||||
Income tax benefit | — | 279 | 287 | |||||||||
Net (loss) income from continuing operations | (96,378 | ) | (127,090 | ) | 61,951 | |||||||
Net (loss) income from discontinued operations - net of tax | — | (20 | ) | 1,318 | ||||||||
Net loss | $ | (96,378 | ) | $ | (127,110 | ) | $ | 63,269 | ||||
Net (loss) income per common share - basic | $ | (0.79 | ) | $ | (1.21 | ) | $ | 0.64 | ||||
Net (loss) income per common share - diluted | $ | (0.79 | ) | $ | (1.21 | ) | $ | 0.62 | ||||
Weighted average shares outstanding: | ||||||||||||
Basic | 122,132 | 104,605 | 98,835 | |||||||||
Diluted | 122,132 | 104,605 | 101,468 | |||||||||
ABRAXAS PETROLEUM CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
To fully assess Abraxas’ operating results, management believes that, although not prescribed under generally accepted accounting principles ("GAAP") in the United States of America, EBITDA is an appropriate measure of Abraxas' ability to satisfy capital expenditure obligations and working capital requirements. EBITDA is a non-GAAP financial measure as defined under SEC rules. EBITDA should not be considered in isolation or as a substitute for other financial measurements prepared in accordance with GAAP or as a measure of the Company's profitability or liquidity. EBITDA excludes some, but not all items that affect net income and may vary among companies. The EBITDA presented below may not be comparable to similarly titled measures of other companies.
EBITDA is defined as net income (loss) plus interest expense, deferred income taxes, depreciation, depletion and amortization expenses, impairments, unrealized gains and losses on derivative contracts, and stock-based compensation. The following table provides a reconciliation of EBITDA to net loss for the periods presented.
We have also disclosed Adjusted EBITDA per bank loan covenants. Adjusted EBITDA per bank loan covenants is a non-GAAP financial measure as defined under SEC rules. Our management believes that information regarding Adjusted EBITDA per bank loan covenants is material to an understanding of our financial condition and liquidity. Adjusted EBITDA per bank loan covenants should not be considered in isolation or as a substitute for other financial measurements prepared in accordance with GAAP or as a measure of the Company's profitability or liquidity. Adjusted EBITDA per bank loan covenants presented below may not be comparable to similarly titled measures of other companies.
(In thousands) | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net loss | $ | (5,301 | ) | $ | (67,419 | ) | $ | (96,378 | ) | $ | (127,110 | ) | ||||
Net interest expense | 969 | 1,121 | 4,318 | 3,904 | ||||||||||||
Income tax (benefit) | — | (279 | ) | — | (279 | ) | ||||||||||
Depreciation, depletion and amortization | 6,500 | 7,677 | 24,431 | 38,721 | ||||||||||||
Amortization of deferred financing fees | 256 | 162 | 1,019 | 643 | ||||||||||||
Impairment | — | 68,682 | 67,626 | 128,573 | ||||||||||||
Stock-based compensation | 784 | 826 | 3,194 | 3,912 | ||||||||||||
Unrealized loss (gain) on derivative contracts | 6,285 | (3,608 | ) | 19,818 | (9,806 | ) | ||||||||||
EBITDA | $ | 9,493 | $ | 7,162 | $ | 24,028 | $ | 38,558 | ||||||||
EBITDA | $ | 9,493 | $ | 7,162 | $ | 24,028 | $ | 38,558 | ||||||||
(Gain) on sale of properties | — | — | (374 | ) | — | |||||||||||
Realized loss on derivative monetization | — | — | 349 | 447 | ||||||||||||
Loss from discontinued operations | — | — | — | 20 | ||||||||||||
Other non cash items | — | 318 | — | 318 | ||||||||||||
Monetized derivative contracts | — | — | 14,370 | 4,610 | ||||||||||||
Expenses related to equity offering/loan amendments | 29 | — | 1,776 | — | ||||||||||||
Adjusted EBITDA per bank loan covenants | $ | 9,522 | $ | 7,480 | $ | 40,149 | $ | 43,953 | ||||||||
This release also includes a discussion of “adjusted net loss, excluding certain non-cash items,” which is also a non-GAAP financial measure as defined under SEC rules. The following table provides a reconciliation of adjusted net loss, excluding ceiling test impairment and unrealized changes in derivative contracts. Management believes that net loss calculated in accordance with GAAP is the most directly comparable measure to adjusted net income (loss), excluding certain non-cash items. The calculation of adjusted net income (loss), excluding certain non cash items presented below may not be comparable to similarly titled measures of other companies.
Unrealized gains or losses on derivative contracts are based on mark-to-market valuations which are non-cash in nature and may fluctuate drastically from period to period. As commodity prices fluctuate, these derivative contracts are valued against current market prices at the end of each reporting period in accordance with Accounting Standards Codification 815: Derivatives and Hedging as amended and interpreted, which requires Abraxas to either record an unrealized gain or loss based on the calculated value difference from the previous period-end valuation. For example, NYMEX oil prices on December 31, 2015 were $37.04 per barrel compared to $53.72 on December 31, 2016; therefore, the mark-to-market valuation changed considerably from period to period.
(In thousands) | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net loss | $ | (5,301 | ) | $ | (67,419 | ) | $ | (96,378 | ) | $ | (127,110 | ) | ||||
Impairment | — | 68,682 | 67,626 | 128,573 | ||||||||||||
Unrealized loss (gain) on derivative contracts | 6,285 | (3,608 | ) | 19,818 | (9,806 | ) | ||||||||||
Realized loss on derivative monetization | — | — | 349 | 447 | ||||||||||||
Loss from discontinued operations | — | — | — | 20 | ||||||||||||
(Gain) on sale of properties | — | — | (374 | ) | — | |||||||||||
Adjusted net income (loss), excluding certain non-cash items | $ | 984 | $ | (2,345 | ) | $ | (8,959 | ) | $ | (7,876 | ) | |||||
Net loss per share – basic | $ | (0.04 | ) | $ | (0.64 | ) | $ | (0.79 | ) | $ | (1.21 | ) | ||||
Net loss per share – diluted | $ | (0.04 | ) | $ | (0.64 | ) | $ | (0.79 | ) | $ | (1.21 | ) | ||||
Adjusted net income (loss), excluding certain non-cash items, per share – basic | $ | 0.01 | $ | (0.02 | ) | $ | (0.07 | ) | $ | (0.08 | ) | |||||
Adjusted net income (loss), excluding certain non-cash items, per share – diluted | $ | 0.01 | $ | (0.02 | ) | $ | (0.07 | ) | $ | (0.08 | ) | |||||