Attached files
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8-K - FORM 8-K - BRIGHAM EXPLORATION CO | c99964e8vk.htm |
EX-99.2 - EXHIBIT 99.2 - BRIGHAM EXPLORATION CO | c99964exv99w2.htm |
Exhibit 99.1
NEWS RELEASE | ||
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FOR IMMEDIATE RELEASE |
BRIGHAM EXPLORATION REPORTS FIRST QUARTER 2010 RESULTS
Austin, TX April 29, 2010 Brigham Exploration Company (NASDAQ:BEXP) today announced
financial results for the quarter ended March 31, 2010.
FIRST QUARTER 2010 RESULTS
Our average daily production volumes for the first quarter 2010 were 5,420 barrels of crude
oil equivalent (Boe) per day, up 7% sequentially from the fourth quarter 2009 and up 1% from the
first quarter 2009. Benefiting from both our operated and non-operated drilling activity in the
Williston Basin, our crude oil production volumes for the first quarter 2010 averaged 3,552 barrels
per day, which represents a 24% sequential increase from that in the fourth quarter 2009 and an 84%
increase from that in the first quarter 2009. Our crude oil production volumes represented 66% of
our total production volumes in the first quarter 2010 as compared to 57% in the fourth quarter
2009 and 36% in the first quarter 2009. Our production volumes in the Williston Basin for the
first quarter 2010 were 3,232 Boe per day, which represents a 29% increase from that in the fourth
quarter 2009 and a 149% increase from that in the first quarter 2009. Our first quarter production
volumes included approximately 5,012 barrels of crude oil produced during the quarter and added to
inventory at the end of the quarter. Adjusting our production volumes for amounts included in
inventory results in average first quarter daily sales volumes of 5,364 Boe per day.
Revenues from the sale of oil and natural gas including hedge settlements for the first
quarter 2010 were up 38% to $29.5 million as compared to that in the first quarter 2009. Higher
commodity prices and crude oil sales volumes increased revenues by $13.8 million and $4.8 million,
respectively, while lower hedge settlements and natural gas sales volumes decreased revenues by
$6.9 million and $3.6 million, respectively.
During the first quarter 2010, our average realized price for crude oil was $72.39 per barrel,
which included a $0.30 per barrel loss due to the settlement of our crude oil derivative contracts.
This compares to an average realized price in the first quarter 2009 of $40.53 per barrel, which
included a $6.24 per barrel gain due to the settlement of our crude oil derivative contracts. Our
average realized price for natural gas in the first quarter 2010 was $6.68 per Mcf, which included
a $0.67 per Mcf gain associated with the settlement of our natural gas derivative contracts. This
compares to an average realized price in the first quarter 2009 of $7.76 per Mcf, which included a
$3.49 per Mcf gain due to the settlement of our natural gas derivative contracts.
Our first 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 $4.53 per Boe when compared to those in the first quarter 2009. The increase was largely driven
by a $3.51 per Boe increase in production taxes, which was driven by higher commodity prices and
higher levels of production in North Dakota. Expensed workovers increased $1.61 per Boe primarily
associated with first quarter workovers of our conventional natural gas wells. O&M expense was
$0.51 per Boe lower as a result of lower compressor rental and equipment rental expense.
Our general and administrative (G&A) expenses for the first quarter 2010 increased $1.0
million compared to the first quarter 2009 because of higher employee compensation costs partially
due to reinstating our employee performance bonus plan in 2010 after suspending the plan in 2009.
Our depletion expense for the first quarter 2010 was $9.2 million ($19.07 per Boe) compared to
$9.8 million ($20.46 per Boe) in the first quarter 2009. Our lower depletion rate, which partially
resulted from our higher level of proved reserves at year-end 2009, resulted in a $0.7 million
decrease in depletion expense while higher production volumes increased depletion expense by $0.1
million.
Our net interest expense for the first quarter 2010 decreased $1.2 million from the first
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 first quarter 2010 or the first quarter 2009.
Our reported net income for the first quarter 2010 was $11.3 million ($0.11 per diluted share)
versus net income (loss) of ($119.1) million (($2.60) per diluted share) for the same period last
year. Our after-tax earnings in the first quarter 2010 excluding unrealized mark-to-market hedging
gains were $8.3 million ($0.08 per diluted share) as compared to our after-tax earnings in the
first quarter 2009 excluding the effects of the first quarter 2009 ceiling test write-down,
unrealized mark-to-market hedging losses, and a $2.0 million non-cash write-down of the carrying
value of our inventory were $0.6 million ($0.01 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 March 31, 2010, we spent $52.1 million in exploration and development capital
expenditures. Exploration and development and total oil and gas capital expenditures for the first
three months of 2010 and 2009 were:
Three months ended March 31, | ||||||||
2010 | 2009 | |||||||
(in thousands) | ||||||||
Drilling |
$ | 43,606 | $ | 22,940 | ||||
Land, seismic, and reimbursements |
8,477 | (6,471 | ) | |||||
Exploration and Development Capital Expenditures |
$ | 52,083 | $ | 16,469 | ||||
Capitalized costs |
4,569 | 2,740 | ||||||
Capitalized FAS 143 ARO |
52 | 172 | ||||||
Total oil and gas capital expenditures |
$ | 56,704 | $ | 19,381 | ||||
SECOND QUARTER 2010 FORECASTS
The following forecasts and estimates of our second quarter 2010 production volumes are
forward-looking statements subject to the risks and uncertainties identified in the
Forward-Looking Statements Disclosure at the end of this release. We are forecasting that our
second quarter 2010 total production volumes to average between 6,200 Boe per day and 6,800 Boe per
day. We currently anticipate that our crude oil volumes will comprise approximately 68% of our
total production volumes for the second quarter 2010.
For the second quarter 2010, lease operating expenses are projected to be $6.57 per Boe based
on the mid-point of our production guidance, production taxes are projected to be approximately
9.50% to 10.00% of pre-hedge oil and natural gas revenues, and G&A expenses are projected to be
$2.75 million ($4.49 to $4.93 per Boe). The above estimates are proforma for the previously
announced West Texas asset divestiture. The transaction is anticipated to close May 7, 2010 and
has an effective date of January 1, 2010.
MANAGEMENT COMMENTS
Gene Shepherd, Brighams Chief Financial Officer, commented, With the proceeds from our
recently completed equity offering, we now have the capital to fund the ramp up in drilling
activity to 8 operated rigs by May 2011. Furthermore, we feel in the current environment our
current liquidity position could sustain an even higher level of activity beyond the 8 operated
rigs. Other sources of liquidity, including the continued out-performance of our horizontal Bakken
and Three Forks wells, proceeds from the sale of our conventional assets and some future leveraging
event, provide additional financial flexibility for the company to grow net asset value through
additional acceleration or incremental acreage acquisitions in the Williston Basin.
CONFERENCE CALL INFORMATION
Page 2
CONFERENCE CALL INFORMATION
Our management will host a conference call to discuss operational and financial results for
the first quarter 2010 with investors, analysts and other interested parties on Friday, April 30,
at 11:00 a.m. Eastern Time. To participate in the call, participants within the U.S. please dial
888-713-4199 and participants outside the U.S. please dial 617-213-4861. The participant passcode
for the call is 58133960. Participants may pre-register for the call at
https://www.theconferencingservice.com/prereg/key.process?key=PVE7WWFNN. 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 to interested
parties approximately two hours after the call is completed through 12:00 p.m. Eastern Time on
Friday, May 7, 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 91083533. 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.
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 Friday, April 30,
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 First Quarter 2010 Results and is dated Thursday, April 29,
2010. To access the other financial and statistical information that will be covered by the
conference call that will take place on Friday, April 30, 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 First Quarter 2010
Conference Call and is dated Thursday, April 29, 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 3
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 | ||||||||
March 31, | ||||||||
2010 | 2009 | |||||||
Revenues: |
||||||||
Oil and natural gas sales |
$ | 28,930 | $ | 13,809 | ||||
Hedging settlements |
582 | 7,521 | ||||||
29,512 | 21,330 | |||||||
Unrealized hedging gains(losses) |
3,052 | (2,878 | ) | |||||
32,564 | 18,452 | |||||||
Other revenue |
9 | 34 | ||||||
Total Revenue |
32,573 | 18,486 | ||||||
Costs and expenses: |
||||||||
Lease operating |
4,349 | 3,799 | ||||||
Production taxes |
2,508 | 814 | ||||||
General and administrative |
3,086 | 2,122 | ||||||
Depletion of oil and natural gas properties |
9,211 | 9,833 | ||||||
Impairment of oil and natural gas properties |
| 114,781 | ||||||
Depreciation and amortization |
233 | 149 | ||||||
Accretion of discount on asset retirement obligations |
105 | 101 | ||||||
Loss on inventory valuation |
| 2,039 | ||||||
19,492 | 133,638 | |||||||
Operating income (loss) |
13,081 | (115,152 | ) | |||||
Other income (expense): |
||||||||
Interest expense, net Interest income |
(2,904 | ) | (4,127 | ) | ||||
Interest income |
453 | 93 | ||||||
Other income (expense) |
685 | 115 | ||||||
(1,766 | ) | (3,919 | ) | |||||
Income (loss) before income taxes |
$ | 11,315 | $ | (119,071 | ) | |||
Income tax (expense) benefit: |
||||||||
Current |
| | ||||||
Deferred |
| | ||||||
| | |||||||
Net income (loss) |
$ | 11,315 | $ | (119,071 | ) | |||
Net income (loss) per share available to common stockholders: |
||||||||
Basic |
$ | 0.11 | $ | (2.60 | ) | |||
Diluted |
$ | 0.11 | $ | (2.60 | ) | |||
Weighted average shares outstanding: |
||||||||
Basic |
99,444 | 45,726 | ||||||
Diluted |
101,357 | 45,726 | ||||||
Page 4
BRIGHAM EXPLORATION COMPANY
PRODUCTION VOLUMES, SALES VOLUMES, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
PRODUCTION VOLUMES, SALES VOLUMES, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended March 31, | ||||||||
2010 | 2009 | |||||||
Average net daily production volumes: |
||||||||
Crude oil (Bbls) |
3,552 | 1,928 | ||||||
Natural gas (MMcf) |
11.2 | 20.5 | ||||||
Equivalent crude oil (Boe) (6:1) |
5,420 | 5,340 | ||||||
Total net production volumes: |
||||||||
Crude oil (MBbls) |
320 | 174 | ||||||
Natural gas (MMcf) |
1,009 | 1,842 | ||||||
Equivalent oil (MBoe) (6:1) |
488 | 481 | ||||||
% Crude oil |
66 | % | 36 | % | ||||
Increase in inventory: |
||||||||
Crude oil (Bbls) |
5,012 | | ||||||
Natural gas (MMcf) |
| | ||||||
Equivalent crude oil (Boe) (6:1) |
5,012 | | ||||||
Average net daily sales volumes (Average net
production
volumes less average net daily increase in inventory): |
||||||||
Crude oil (Bbls) |
3,496 | 1,928 | ||||||
Natural gas (MMcf) |
11.2 | 20.5 | ||||||
Equivalent crude oil (Boe) (6:1) |
5,364 | 5,340 | ||||||
Total net sales volumes (Total net production volumes
less increase in inventory): |
||||||||
Crude oil (MBbls) |
315 | 174 | ||||||
Natural gas (MMcf) |
1,009 | 1,842 | ||||||
Equivalent crude oil (MBoe) (6:1) |
483 | 481 | ||||||
% Crude oil |
65 | % | 36 | % | ||||
Sales price: |
||||||||
Crude oil ($/Bbl) |
$ | 72.69 | $ | 34.29 | ||||
Natural gas ($/Mcf) |
6.01 | 4.27 | ||||||
Equivalent crude oil ($/Boe) (6:1) |
59.93 | 28.74 | ||||||
Sales price including derivative settlement gains
(losses): |
||||||||
Crude oil ($/Bbl) |
$ | 72.39 | $ | 40.53 | ||||
Natural gas ($/Mcf) |
6.68 | 7.76 | ||||||
Equivalent crude oil ($/Boe) (6:1) |
61.13 | 44.40 | ||||||
Sales price including derivative settlement gains (losses)
and unrealized gains (losses): |
||||||||
Crude oil ($/Bbl) |
$ | 73.90 | $ | 32.99 | ||||
Natural gas ($/Mcf) |
9.23 | 6.91 | ||||||
Equivalent crude oil ($/Boe) (6:1) |
67.45 | 38.40 |
Page 5
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)
(in thousands)
March 31, 2010 | December 31, 2009 | |||||||
Assets: |
||||||||
Current assets |
$ | 158,456 | $ | 158,439 | ||||
Oil and natural gas properties, net (full cost method) |
378,227 | 330,733 | ||||||
Other property and equipment, net |
3,066 | 3,025 | ||||||
Other non-current assets |
5,871 | 6,059 | ||||||
Total assets |
$ | 545,620 | $ | 498,256 | ||||
Liabilities and stockholders equity: |
||||||||
Current liabilities |
$ | 102,713 | $ | 67,773 | ||||
Senior notes |
159,027 | 158,968 | ||||||
Other non-current liabilities |
7,143 | 7,232 | ||||||
Total liabilities |
$ | 268,883 | $ | 233,973 | ||||
Stockholders equity |
276,737 | 264,283 | ||||||
Total liabilities and stockholders equity |
$ | 545,620 | $ | 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 March 31, | ||||||||
2010 | 2009 | |||||||
Cash flows from operating activities: |
||||||||
Net income (loss) |
$ | 11,315 | $ | (119,071 | ) | |||
Depletion, depreciation and amortization |
9,444 | 9,982 | ||||||
Impairment of oil and gas properties |
| 114,781 | ||||||
Accretion of discount on ARO |
105 | 101 | ||||||
Amortization of deferred loan fees and debt issuance costs |
506 | 296 | ||||||
Non-cash stock compensation |
427 | 353 | ||||||
Market value adjustments for derivatives instruments |
(3,052 | ) | 2,878 | |||||
Deferred income tax expense |
| | ||||||
Other noncash items |
(1 | ) | 36 | |||||
Changes in operating assets and liabilities |
7,229 | 4,079 | ||||||
Cash flows provided by operating activities |
$ | 25,973 | $ | 13,435 | ||||
Cash flows provided (used) by investing activities |
(42,910 | ) | (26,389 | ) | ||||
Cash flows provided (used) by financing activities |
632 | (58 | ) | |||||
Net increase (decrease) in cash and cash equivalents |
$ | (16,305 | ) | $ | (13,012 | ) | ||
Page 6
SUMMARY PER BOE DATA
(unaudited)
(unaudited)
Three Months Ended March 31, | ||||||||
2010 | 2009 | |||||||
Revenues: |
||||||||
Oil and natural gas sales |
$ | 59.93 | $ | 28.74 | ||||
Hedging settlements |
1.20 | 15.66 | ||||||
Unrealized hedging gains / (losses) |
6.32 | (6.00 | ) | |||||
Other revenue |
0.02 | 0.06 | ||||||
$ | 67.47 | $ | 38.46 | |||||
Costs and expenses: |
||||||||
Lease operating |
9.00 | 7.98 | ||||||
Production taxes |
5.19 | 1.68 | ||||||
General and administrative |
6.39 | 4.44 | ||||||
Depletion of oil and natural gas properties |
19.07 | 20.46 | ||||||
Impairment of oil and gas properties |
| 238.80 | ||||||
Depreciation and amortization |
0.48 | 0.30 | ||||||
Accretion of discount on ARO |
0.22 | 0.24 | ||||||
Loss on inventory valuation |
| 4.26 | ||||||
$ | 40.35 | $ | 278.16 | |||||
Operating income (loss) |
$ | 27.12 | $ | (239.70 | ) | |||
Interest expense, net of interest income (a) |
(5.07 | ) | (8.40 | ) | ||||
Other income (expense) |
1.42 | 0.24 | ||||||
Adjusted income (loss) |
$ | 23.47 | $ | (247.86 | ) | |||
(a) | Calculated as interest expense minus interest income divided by production for period. |
BRIGHAM EXPLORATION COMPANY
RECONCILIATION OF GAAP NET INCOME TO AFTER-TAX EARNINGS
EXCLUDING THE EFFECTS OF CERTAIN ITEMS
(in thousands)
RECONCILIATION OF GAAP NET INCOME TO AFTER-TAX EARNINGS
EXCLUDING THE EFFECTS OF CERTAIN ITEMS
(in thousands)
Three months | ||||||||
ended March 31, | ||||||||
2010 | 2009 | |||||||
Net income (loss) as reported |
$ | 11,315 | $ | (119,071 | ) | |||
Impairment of oil and natural gas properties |
| 114,781 | ||||||
Loss on inventory valuation |
| 2,039 | ||||||
Unrealized derivative (gains) losses |
(3,052 | ) | 2,878 | |||||
Tax impact |
| | ||||||
Earnings excluding the effects of certain items |
$ | 8,263 | $ | 627 | ||||
Earnings without the effects of certain items represents net income excluding both unrealized
gains and losses on derivative contracts; our non-cash impairment change in our oil and natural gas
properties, and our loss on inventory valuation. Management believes that exclusion of these items
enhances comparability of operating results between periods.
Page 7
BRIGHAM EXPLORATION COMPANY
SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF APRIL 29, 2010
(unaudited)
SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF APRIL 29, 2010
(unaudited)
2010 | 2011 | 2012 | ||||||||||||||||||||||||||||||||||||||
Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | ||||||||||||||||||||||||||||||||
Crude Oil Costless Collars: | ||||||||||||||||||||||||||||||||||||||||
Daily volumes |
Bbls/d | 2,319 | 2,174 | 1,783 | 1,656 | 1,341 | 1,174 | 1,109 | 330 | 330 | ||||||||||||||||||||||||||||||
Floor |
$/Bbl | $ | 61.55 | $ | 63.26 | $ | 61.87 | $ | 69.03 | $ | 68.11 | $ | 68.47 | $ | 68.38 | $ | 75.00 | $ | 75.00 | |||||||||||||||||||||
Cap |
$/Bbl | $ | 90.16 | $ | 91.90 | $ | 90.91 | $ | 98.32 | $ | 98.85 | $ | 99.18 | $ | 99.51 | $ | 106.90 | $ | 106.90 | |||||||||||||||||||||
Natural Gas Costless Collars: | ||||||||||||||||||||||||||||||||||||||||
Daily volumes |
MMBtu/d | 7,582 | 7,500 | 5,870 | 6,000 | 3,626 | 3,587 | 3,587 | | | ||||||||||||||||||||||||||||||
Floor |
$/MMBtu | $ | 5.513 | $ | 5.513 | $ | 5.936 | $ | 6.169 | $ | 5.477 | $ | 5.477 | $ | 5.477 | $ | | $ | | |||||||||||||||||||||
Cap |
$/MMBtu | $ | 7.015 | $ | 7.015 | $ | 7.589 | $ | 7.786 | $ | 7.159 | $ | 7.159 | $ | 7.159 | $ | | $ | |
Hedged volumes and prices reflected in this table represent average contract amounts for the
quarterly periods presented; crude oil hedge contract prices and natural gas hedge prices are based
on NYMEX pricing.
Page 8