MINNETONKA, Minn., March 28, 2013 /PRNewswire/ -- Black Ridge Oil & Gas, Inc. ("the Company") (OTCQB: ANFC), a well-positioned exploration and production (E&P) company focused on non-operated Bakken and Three Forks properties, today announced financial and operating results for the three months and year ended December 31, 2012.

Company Records Set during 2012

  • Proved reserves, prepared by Netherland, Sewell & Associates, Inc. increased 397% from 2011 to 2.4 million barrel of oil equivalents (MMBOE)
  • Production of 73.9 thousand barrel of oil equivalents (MBOE) represents 227% increase from 2011
  • Total revenues increased 214% to $6.0 million
  • Net income (including settlement income) reached $4.9 million compared to a net loss of $(2.5) million in 2011
  • Total cash flow increased to $15.0 million from a use of cash of $(0.3) million for 2011

Operational Achievements during 2012

  • Participated in the completion of 42 gross (1.62 net) wells with a 100% success rate
  • The Company ended the year with production from 66 gross (2.30 net) wells
  • Lease Operating Expenses (LOE) decreased by 62% from 2011 to $8.79/BOE
  • Monetized our legacy assets realizing net settlement income of $11.1 million and collecting $14.1 million of settlement proceeds
  • Replaced our credit facility with a new Secured Revolving Credit Agreement with Dougherty Funding LLC, which reduced our interest rate on borrowings by 9.75 percentage points.  Increased the maximum available from $10.0 million to $20.0 million, of which $16.5 million is currently available

Fourth Quarter and Year-End 2012 Results

The Company reported 2012 fourth quarter net income attributable to common stockholders of $2.9 million, or $0.06 per basic and diluted common share, compared to a net loss of $(1.7) million, or $(0.04) per basic and diluted common share, for the fourth quarter of 2011.

For the year ended December 31, 2012, the Company reported net income attributable to common stockholders of $4.9 million (including settlement income), or $0.10 per basic and diluted common share, compared to a net loss of $(2.5) million, or $(0.06) per basic and diluted common share, for the year ended December 31, 2011.

Ken DeCubellis, Black Ridge's Chief Executive Officer, said: "Black Ridge had a record year in 2012, and we are off to a great start in 2013. Our strategy of deploying capital for purchasing and developing near term high IRR projects have resulted in record earnings for the Company.  Our growing operating cash flow and strong balance sheet position allows us the flexibility to identify and participate in wells where we believe Black Ridge and its shareholders will realize the best and highest returns."

Revenues for the fourth quarter of 2012 were $1.7 million compared to $0.7 million for the fourth quarter of 2011, an increase of 152%. Production in the fourth quarter of 2012 totaled 20.4 MBOE, representing a 159% increase over the fourth quarter of 2011.

Revenues for the full-year 2012 totaled $6.0 million compared to $1.9 million for the full-year 2011, an increase of 214%.  This year-over-year increase was primarily due to a 227% increase in oil and gas production in 2012.  Production in 2012 totaled a record 73.9 MBOE, of which 96% was crude oil.  In 2012, the Company's realized commodity prices were $83.27 per barrel of oil and $5.39 per MCF for natural gas, including natural gas liquids.  Bakken oil price differentials improved over the course of 2012.  For the fourth quarter of 2012, the Company's realized oil price was 5% per barrel below WTI as compared to a differential of 16% per barrel in the first quarter of 2012.

2012 Proved Reserves

As of December 31, 2012, Black Ridge had estimated proved reserves of 2.4 MMBOE, of which 21% were classified as proved developed, and 89% was crude oil. These estimated proved reserves had a pre-tax PV-10 value of $27.9 million.  The 2012 reserves estimate represented a 397% increase over the 0.5 MMBOE of proved reserves at year-end 2011.  The increase in proved reserves equates to 26 times the Company's 2012 production. The Company's estimated reserves were prepared by its independent reservoir engineering firm, Netherland, Sewell & Associates, Inc.

As of December 31, 2012, the Company controlled approximately 12,256 net mineral acres prospective for the Bakken and Three Forks formations.  During the year the Company participated in the completion of 42 gross (1.62 net) wells with a 100% success rate.  In addition, the Company owned working interests in 9 gross wells representing 0.36 net wells that are preparing to drill, drilling, awaiting completion, complete or producing.

Liquidity Position

During 2012, Black Ridge entered into a new Secured Revolving Credit Agreement with Dougherty Funding, LLC., and subsequently increased the facility from $10.0 million to $20.0 million, of which $16.5 million is currently available.  Black Ridge monetized legacy assets during 2012 realizing net settlement income of $11.1 million and collecting $14.1 million of settlement proceeds.  Black Ridge ended the year with $2.9 million of working capital and $10.8 million of remaining availability on the Dougherty credit facility.

DeCubellis said: "Black Ridge is in a position to continue on our growth trajectory.  By remaining focused on our strategy of actively aggregating high quality, non-operated leases and converting the opportunities into high return near term development and production we are excited to expand on our successes in 2013."

2013 Update

The Company expects to see continued reductions in Lease Operating Expenses (LOE) and anticipates LOE to be approximately $7.50 per BOE in 2013.  Based on the Company's development and acquisition plans for 2013, which are currently fully funded, and a forecasted realized crude oil price of $85 per barrel, we anticipate achieving sequential quarter over quarter production growth, as well as annual production, revenue and adjusted EBITDA records from oil and gas operations.

DeCubellis said: "We continue to see basin-wide improvements in well economics due to the cost abatements and drilling efficiencies that began in the second half of 2012.  In 2013, through March 15th, we received 16 Authorizations for Expenditures (AFEs) from our drilling partners with per-well average drilling and completion costs of approximately $8.6 million. This is approximately an 11% reduction from the previous year's average AFE.  We believe we are well positioned to continue converting our leases into production and cash flow as we further develop our asset base in North America's premier unconventional oil play."

Well Update

Producing Wells:  The following table sets forth Bakken and Three Forks wells in which Black Ridge holds a participating interest that were producing as of December 31, 2012.

Well

Location

Operator

WI(1)

Christensen 159-102-8-5-1H

Williams, ND

Newfield

0.300

Fairbanks 1-20H

Williams, ND

Continental

0.287

Go-State 157-97-2116H-1

Williams, ND

Hess

0.130

Pasternak #1-32-29HC

Williams, ND

G3 Operating

0.125

Peggy Schettler 14-33H

Dunn, ND

Marathon

0.125

Colfax 1X-19H

Williams, ND

Continental

0.106

Go-Hill 158-98-3427H-1

Williams, ND

Hess

0.102

Dahl Federal 2-15H (2)

McKenzie, ND

SM-energy

0.087

Lowe 18-19-158N-99W

Williams, ND

Crescent Point

0.084

Weyrauch 15-11H

Williams, ND

Hess

0.083

Stromme Family Trust 157-101-11C-2-1H

Williams, ND

Petro-Hunt

0.079

Pasternak Trust 157-100-18A-19-1H

Williams, ND

Petro-Hunt

0.078

A.Tufto 18-19 #1-H

Williams, ND

Brigham

0.072

King 157-101-3B-10-1H

Williams, ND

Petro-Hunt

0.068

Sidonia 15-1102H

Mountrail, ND

EOG

0.063

Go-Durning 157-97-2932H-1

Williams, ND

Hess

0.063

Love 11-2 #1H

Williams, ND

Samson

0.062

Erickson 41-25 SWH

McKenzie, ND

Denbury

0.050

Austin 17-20-158N-99W

Williams, ND

Crescent Point

0.049

Paul Peter Coffee 35HA

Dunn, ND

WPX Energy

0.018

Paul Peter Coffee 35HC

Dunn, ND

WPX Energy

0.018

Paul Peter Coffee 35HD

Dunn, ND

WPX Energy

0.018

Blikre 158-94-13B-24-1H

Mountrail, ND

Petro-Hunt

0.016

Burke 24-08H

Mountrail, ND

EOG

0.016

Revolver 1-35H

Mountrail, ND

Slawson

0.016

Revolver 2-35H

Mountrail, ND

Slawson

0.016

White 157-100-17B-20-1H

Williams, ND

Petro-Hunt

0.016

En-Jorstad-157-94-0904H-1

Mountrail, ND

Hess

0.012

Marshall 1-13H

Dunn, ND

Continental

0.012

Miller 157-101-12C-1-1H

Williams, ND

Petro-Hunt

0.011

Vanville 22-2623H

Burke, ND

EOG

0.010

Vanville 21-2635H

Burke, ND

EOG

0.010

Olson 15-36H

Williams, ND

Hess

0.010

Clearwater 1-24-25H 1

Mountrail, ND

Hunt

0.010

Kannegeiter 160-90-17-P-1H

Burke, ND

OXY

0.010

Berger 156-100-7-6-1H

Williams, ND

Liberty

0.010

Opedahl 21x-11

Williams, ND

XTO

0.010

SC-Tami 157-99-0805H-1

Williams, ND

Hess

0.009

Talkington 21-30TFH

Stark, ND

Whiting

0.008

Talkington 41-30PH

Stark, ND

Whiting

0.008

Talkington 11-30PH

Stark, ND

Whiting

0.008

Probe 1-19-30HMB

Mountrail, ND

Slawson

0.008

Clearwater 1-26-23H 1

Mountrail, ND

Hunt

0.007

Lindy 156-100-10-3-1H

Williams, ND

Liberty

0.007

Pankowski 4-6H

Williams, ND

Kodiak

0.007

En-Charles Wood-157-94-1720H-1

Mountrail, ND

Hess

0.006

Lielan 1-10H

Burke, ND

Continental

0.006

EN-Will Trust B-157-94-2635H-1

Mountrail, ND

Hess

0.005

EN-Will Trust B-157-94-2635H-2

Mountrail, ND

Hess

0.005

EN-Will Trust B-157-94-2635H-3

Mountrail, ND

Hess

0.005

Hodenfield 15-23H

Williams, ND

Hess

0.005

Tempe #1-29H

Divide, ND

Continental

0.004

Go-Soine A-156-97-3229H-1

Williams, ND

Hess

0.004

Mathewson 1-30H

Williams, ND

Continental

0.004

Washburne 1-22H

Williams, ND

Continental

0.003

Marcy 1-24H

Williams, ND

Continental

0.003

Marcy 2-24H

Williams, ND

Continental

0.003

Marcy 3-24H

Williams, ND

Continental

0.003

Hokanson 157-99-1A-12-1H

Williams, ND

Petro-Hunt

0.003

Homer 1-14H

Williams, ND

Continental

0.002

Setterlund 159-94-28B-33-1H

Burke, ND

Petro-Hunt

0.002

Orion Federal 5792 42-20H

Mountrail, ND

Oasis

0.002

Scanlan 3-5H

Williams, ND

Kodiak

0.002

Opsal 158-99-26A-35-1H

Williams, ND

Petro-Hunt

0.001

Helstad 158-99-34D-27-1H

Williams, ND

Petro-Hunt

0.001

Feller 1-22H

Williams, ND

Continental

0.001

Vig 157-99-10D-3-1H

Williams, ND

Petro-Hunt

0.001



(1)

The working interests are based on Black Ridge's internal records and may be subject to change by operators' third-party legal counsel in preparing final division order title opinions for each well.

(2)

This well was not included in quarter end financial reporting because the operator is holding the funds related to the Company's working interest pending resolution of third party litigation related to the state of North Dakota's control of riparian acreage.

"Drilling" Wells: The following table sets forth Bakken and Three Forks wells in which Black Ridge holds a participating interest that are either preparing to drill, drilling, awaiting completion or completing as of December 31, 2012

Well

Location

Operator

WI(1)

Stateline 14-3427H

Roosevelt, MT

EOG

0.083

SCHA 33-34 #2TFH

Mountrail, ND

Brigham

0.063

SCHA 33-34 #3H

Mountrail, ND

Brigham

0.063

SCHA 33-34 #4TFH

Mountrail, ND

Brigham

0.063

Hanson 33-28H

Williams, ND

Zenergy

0.036

Louisville 2-9H

McKenzie, ND

Continental

0.021

Moody 159-94-15A-22-1H

Burke, ND

Petro-Hunt

0.018

Jackman 156-100-11-2-1H

Williams, ND

Liberty

0.015

Helstad 157-99-2A-11-1H

Williams, ND

Petro-Hunt

0.002



(1)

The working interests are based on Black Ridge's internal records and may be subject to change by operators' third-party legal counsel in preparing final division order title opinions for each well.

Adjusted Net Income (Loss) and Adjusted EBITDA

In addition to reporting net income (loss) as defined under GAAP, we also present Adjusted Net Income (Loss) and Adjusted EBITDA.  We define Adjusted Net Income (Loss) as net income excluding settlement income, net of settlement expenses, and tax.  We define Adjusted EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depreciation, depletion and amortization, (iv) accretion of abandonment liability, and (v) non-cash expenses relating to share based payments recognized under ASC Topic 718.  We believe the use of non-GAAP financial measures provides useful information to investors regarding our current financial performance; however, Adjusted Net Income (Loss) and Adjusted EBITDA do not represent, and should not be considered alternatives to GAAP measurements.  We believe these measures are useful in evaluating our fundamental core operating performance.  Specifically, we believe the non-GAAP Adjusted Net Income (Loss) and Adjusted EBITDA results provide useful information to both management and investors by excluding certain income and expenses that our management believes are not indicative of our core operating results.  Although we use Adjusted Net Income (Loss) and Adjusted EBITDA to manage our business, including the preparation of our annual operating budget and financial projections, we believe that non-GAAP financial measures have limitations and do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures.  A reconciliation of Adjusted Net Income (Loss) and Adjusted EBITDA to Net Income, GAAP, are included below:


Years Ended December 31,


2012


2011

Net income (loss)

$    4,911,410


$ (2,482,255)

Subtract:




Settlement income, net of tax (a)

(6,355,895)


-

Adjusted net income (loss)

$  (1,444,485)


$ (2,482,255)





Weighted average common shares outstanding - basic

47,789,225


42,882,772

Weighted average common shares outstanding - fully diluted

48,061,239


42,882,772





Net income (loss) per common share - basic

$             0.10


$          (0.06)

Subtract:




Settlement income per common share, net of tax

(0.13)


-

Adjusted net income (loss) per common share - basic

$           (0.03)


$          (0.06)





Net income (loss) per common share - fully diluted

$             0.10


$          (0.06)

Subtract:




Settlement income per common share, net of tax

(0.13)


-

Adjusted net income (loss) per common share - fully diluted

$          (0.03)


$          (0.06)



(a)

Adjusted to reflect tax expense, computed based on our effective tax rate of approximately 43%, of $4,790,000 for the year Ended December 31, 2012.

 


Years Ended December 31,


2012


2011

Net income (loss)

$   4,911,410


$ (2,482,255)

Add back:




Interest expense, net, excluding amortization




of warrant based financing costs

873,754


13,155

Income tax provision

3,720,601


(1,680,905)

Impairment of oil and gas properties

-


2,392,742

Depreciation, depletion, and amortization

2,467,688


933,674

Accretion of abandonment liability

4,557


509

Common stock issued for terminated oil and gas acquisition

438,539


-

Share-based compensation

1,167,561


840,944





Adjusted EBITDA

$  13,584,110


$       17,864

Our Adjusted EBITDA for the year ended December 31, 2012 includes settlement income, net of settlement expenses, of $11,145,895.

Financial and Statistical Data Tables

Following are financial highlights for the comparative twelve month period ended December 31, 2012 and 2011. The following information is based on GAAP reported earnings, with additional required disclosures included in the Company's Form 10-K:

 

BLACK RIDGE OIL & GAS, INC. (Formerly Ante5, Inc.)

CONSOLIDATED BALANCE SHEETS










December 31,


December 31,


2012


2011

ASSETS








Current assets:




Cash and cash equivalents

$    1,417,340


$    1,401,141

Accounts receivable

856,233


673,003

Settlement receivable

2,500,000


-

Prepaid expenses

1,397,450


40,599

Current portion of contingent consideration receivable

-


2,309,752

Total current assets

6,171,023


4,424,495





Property and equipment:




Oil and natural gas properties, full cost method of accounting




Proved properties

35,248,983


10,867,443

Unproved properties

9,055,513


13,236,057

Other property and equipment

85,917


78,489

Total property and equipment

44,390,413


24,181,989

Less, accumulated depreciation, amortization, depletion and allowance for impairment

(5,793,184)


(3,325,497)

Total property and equipment, net

38,597,229


20,856,492





Contingent consideration receivable, net of current portion and allowance




of $-0- and $878,650 at December 31, 2012 and 2011, respectively

-


3,698,850

Debt issuance costs, net

657,702


52,049

Total other assets

657,702


3,750,899





Total assets

$  45,425,954


$  29,031,886









LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities:




Accounts payable, including $160,000 and $-0-




of settlement payables, respectively

$    3,113,526


$    2,820,936

Accounts payable, related parties, including $116,234




and $-0- of settlement payables, respectively

116,234


9,206

Accrued expenses

61,666


-

Royalties payable, related party

-


300,431

Total current liabilities

3,291,426


3,130,573





Asset retirement obligations

67,145


3,900

Revolving credit facilities

5,748,844


-

Deferred tax liability

4,732,696


1,012,095





Total liabilities

13,840,111


4,146,568





Commitments and contingencies








Stockholders' equity:




Preferred stock, $0.001 par value, 20,000,000 shares




authorized, no shares issued and outstanding

-


-

Common stock, $0.001 par value, 500,000,000 shares




authorized, 47,979,990 and 47,402,965 shares issued and




outstanding at December 31, 2012 and 2011, respectively

47,980


47,403

Additional paid-in capital

29,847,212


28,058,674

Retained earnings (accumulated deficit)

1,690,651


(3,220,759)

Total stockholders' equity

31,585,843


24,885,318





Total liabilities and stockholders' equity

$  45,425,954


$  29,031,886

 

BLACK RIDGE OIL & GAS, INC. (Formerly Ante5, Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS













For the Years



Ended December 31,



2012


2011






Oil and gas sales


$     6,022,540


$       1,917,719






Operating expenses:





Production expenses


649,603


527,844

Production taxes


692,527


214,363

General and administrative


3,530,643


1,850,536

Depletion of oil and gas properties


2,443,482


919,631

Impairment of oil and gas properties


-


2,392,742

Accretion of discount on asset retirement obligations


4,557


509

Depreciation and amortization


24,206


14,043

Total operating expenses


7,345,018


5,919,668






Net operating loss


(1,322,478)


(4,001,949)






Other income (expense):





Interest income


1,872


1,717

Interest (expense)


(1,193,278)


(101,956)

Other income


-


38,075

Settlement income


17,020,759


-

Settlement expenses


(5,874,864)


-

Loss on disposal of equipment


-


(1,061)

Indemnification expenses


-


(97,986)

Total other income (expense)


9,954,489


(161,211)






Income (loss) before provision for income taxes


8,632,011


(4,163,160)






Provision for income taxes


(3,720,601)


1,680,905






Net income (loss)


$     4,911,410


$     (2,482,255)











Weighted average common shares outstanding - basic


47,789,225


42,882,772

Weighted average common shares outstanding - fully diluted


48,061,239


42,882,772






Net income (loss) per common share - basic


$              0.10


$              (0.06)

Net income (loss) per common share - fully diluted


$              0.10


$              (0.06)

 

BLACK RIDGE OIL & GAS, INC. (Formerly Ante5, Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS










For the Years


Ended December 31,


2012


2011

CASH FLOWS FROM OPERATING ACTIVITIES




Net income (loss)

$  4,911,410


$ (2,482,255)

Adjustments to reconcile net income (loss)




to net cash provided by (used in) operating activities:




Depletion of oil and gas properties

2,443,482


919,631

Depreciation and amortization

24,206


14,043

Impairment of oil and gas properties

-


2,392,742

Amortization of debt issuance costs

190,580


14,872

Accretion of discount on asset retirement obligations

4,557


509

Loss on disposal of equipment

-


1,061

Common stock issued for terminated oil & gas acquisition

438,539


-

Common stock issued for services

-


43,120

Common stock warrants

271,933


74,022

Common stock warrants, related parties

45,719


13,062

Common stock options, related parties

849,909


710,740

Decrease (increase) in assets:




Accounts receivable

(183,230)


(657,163)

Settlement receivable

(2,500,000)


-

Prepaid expenses

(1,424,985)


(32,168)

Contingent consideration receivable

6,008,602


463,398

Increase (decrease) in liabilities:




Accounts payable, including $160,000 and $-0-




of settlement payables, respectively

347,744


73,202

Accounts payable, related parties, including $116,234




and $-0- of settlement payables, respectively

107,028


(67,571)

Accrued expenses

61,666


(47,267)

Royalties payable, related party

(300,431)


(23,169)

Deferred tax liability

3,720,601


(1,680,905)

Net cash provided by (used in) operating activities

15,017,330


(270,096)





CASH FLOWS FROM INVESTING ACTIVITIES




Proceeds from sale of oil and gas properties

1,893,649


336,925

Purchases of oil and gas properties and development capital expenditures

(21,839,963)


(12,731,225)

Purchases of other property and equipment

(7,428)


(78,489)

Net cash used in investing activities

(19,953,742)


(12,472,789)





CASH FLOWS FROM FINANCING ACTIVITIES




Advances from revolving credit facilities

16,350,000


-

Repayments on revolving credit facilities

(10,601,156)


-

Proceeds from the sale of common stock, net of $526,444 of offering costs

-


5,616,057

Debt issuance costs paid

(796,233)


(66,921)

Proceeds from the exercise of common stock options

-


17,280

Net cash provided by financing activities

4,952,611


5,566,416





NET CHANGE IN CASH AND CASH EQUIVALENTS

16,199


(7,176,469)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

1,401,141


8,577,610

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$  1,417,340


$  1,401,141









SUPPLEMENTAL INFORMATION:




Interest paid

$     667,917


$                 -

Income taxes paid

$                 -


$                 -





NON-CASH INVESTING AND FINANCING ACTIVITIES:




Purchase of oil and gas properties accrued within accounts payable

$  2,618,145


$  2,422,150

Purchase of oil and gas properties through issuance of common stock

$                 -


$  4,940,269

Capitalized asset retirement costs

$       58,688


$         3,391

Liabilities relieved to additional paid in capital

$     183,015


$                 -

Cautionary Statement as to Forward-Looking Statements

Certain statements contained herein, which are not historical, are forward-looking statements that are subject to risks and uncertainties not known or disclosed herein that could cause actual results to differ materially from those expressed herein. These statements may include projections and other "forward-looking statements" within the meaning of the federal securities laws. Any such projections or statements reflect Black Ridge Oil & Gas current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from those projected. Important factors that could cause the actual results to differ materially from those projected include, without limitation, general economic or industry conditions nationally and/or in the communities in which our Company conducts business, volatility in commodity prices for crude oil and natural gas, environmental risks, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital or have access to debt financing, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, increases in operator costs, other economic, competitive, governmental, regulatory and technical factors affecting our Company's operations, products, services and prices and other risks inherent in the Company's businesses that are detailed in the Company's Securities and Exchange Commission ("SEC") filings. Readers are encouraged to review these risks in the Company's SEC filings.

About the Company

Black Ridge Oil & Gas is an oil and gas exploration and production company based in Minnetonka, Minnesota. Black Ridge's focus is exclusive to the Williston Basin Bakken and Three Forks trend in North Dakota and Montana. Black Ridge Oil & Gas controls approximately 12,256 net acres prospective for Bakken and/or Three Forks development. For additional information, visit the Company's website at www.blackridgeoil.com.

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Contact
Black Ridge Oil & Gas, Inc.
Ken DeCubellis, Chief Executive Officer
952-426-1241
www.blackridgeoil.com

 

 

SOURCE Black Ridge Oil & Gas, Inc.

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