Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported
financial and operating results for the three and nine months ended
September 30, 2015.
On October 31, 2014 we closed on the sale of our interest in
Canadian Abraxas Petroleum, ULC (“Canadian Abraxas”), a
wholly-owned Canadian subsidiary of Abraxas Petroleum Corporation.
As a result of the disposal of Canadian Abraxas, the results of
operations of Canadian Abraxas are reflected in our Financial
Statements and in this document as “Discontinued Operations” and
our remaining operations are referred to in our Financial
Statements and in this document as “Continuing Operations” or
“Continued Operations.” Unless otherwise noted, all disclosures are
for continuing operations.
Financial and Operating Results for the
Three Months Ended September 30, 2015
The three months ended September 30, 2015 resulted in:
- Production of 552 MBoe (6,004
Boepd)
- Revenue of $17.8 million inclusive of
realized hedge settlements
- Adjusted EBITDA(a) of $10.0 million
inclusive of Raven Drilling
- Adjusted discretionary cash flow(a) of
$9.2 million inclusive of Raven Drilling
- Net loss of $52.4 million, or $0.50 per
share
- Adjusted net loss(a), excluding certain
non-cash items and inclusive of Raven Drilling of $2.7 million, or
$(0.03) per share
(a) See reconciliation of non-GAAP financial
measures below.
Net loss for the three months ended September 30, 2015 was
$52.4 million, or $0.50 per share, compared to net income of $25.4
million, or $0.24 per share, for the three months ended
September 30, 2014.
Adjusted net loss, excluding certain non-cash items, for the
three months ended September 30, 2015 was $2.7 million, or
$(0.03) per share, compared to an adjusted net income, excluding
certain non-cash items, of $16.1 million or $0.15 per share for the
three months ended September 30, 2014. For the three months
ended September 30, 2015 and 2014, adjusted net income (loss)
excludes the unrealized gain on derivative contracts of $10.5
million and $10.0 million, respectively. Included in adjusted net
income (loss) is the net income for the quarters ended
September 30, 2015 and September 30, 2014 from our
subsidiary, Raven Drilling, LLC of $0.2 million and $0.6 million,
respectively. For the three months ended September 30, 2015
adjusted net loss excludes the loss attributable to the ceiling
test impairment of $59.9 million.
Pursuant to SEC Regulation S-X, no income is recognized for
Raven Drilling, LLC. Contractual drilling services performed in
connection with properties in which Abraxas holds an ownership
interest cannot be recognized as income, rather it is credited to
the full cost pool and recognized through lower amortization as
reserves are produced.
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, and require 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 September 30, 2014 were $91.16 per barrel
compared to $45.09 on September 30, 2015; therefore, the
mark-to-market valuation changed considerably period to period.
Comments
Bob Watson, Abraxas' President and CEO, commented, “Our focus on
driving down cash expenses benefited our financials as lease
operating expenses (LOE) came in below the low end of the range at
$9.48/Boe. We continue to look for ways to optimize the portfolio
and drive costs out of the business, which with success will allow
us to maintain solid operating margins despite the distressed
commodity price environment.
“Despite significant shut in time associated with the postponed
Bakken fracs and gas capture issues, our production steadied late
in the third quarter. Looking into the fourth quarter, we will
benefit from the addition of high margin barrels following the
successful completion of three additional wells in the Bakken/Three
Forks. Furthermore, the planned third party infrastructure
expansion in the Bakken scheduled for the fourth quarter should
eliminate the volatile production performance we experienced in
2015. We look forward to updating the street with updated 2015
guidance when we achieve stabilized rates from our new
completions.”
Conference Call
Abraxas Petroleum Corporation (NASDAQ:AXAS) will host its third
quarter 2015 earnings conference call at 11 AM ET on November 4,
2015. To participate in the conference call, please dial
888.680.0892 and enter the passcode 94482371. 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 until December 2, 2015 by dialing 888.286.8010 and
entering the passcode 31071155 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 Rocky Mountain, Permian Basin and onshore Gulf Coast
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.
ABRAXAS PETROLEUM
CORPORATION CONSOLIDATED FINANCIAL
HIGHLIGHTS (In thousands except per share data)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2015 2014 2015 2014 Financial
Results: Revenues $ 16,077 $ 43,874 $ 53,682 $ 102,584 Adjusted
EBITDA(a) 10,043 31,804 35,189 70,861 Adjusted discretionary cash
flow(a) 9,161 31,342 32,711 69,171 Capital expenditures 12,931
44,733 52,614 137,462 Net income (loss) (52,372 ) 25,399 (59,691 )
33,137 Net income (loss) per share – basic $ (0.50 ) $ 0.24 $ (0.57
) $ 0.34 Net income (loss) per share – diluted $ (0.50 ) $ 0.24 $
(0.57 ) $ 0.33 Adjusted net income (loss), excluding certain
non-cash items(a) (2,726 ) 16,124 (4,031 ) 33,749 Adjusted net
income (loss), excluding certain non-cash items(a) , per share –
basic $ (0.03 ) $ 0.15 $ (0.04 ) $ 0.35 Adjusted net income (loss),
excluding certain non-cash items(a), per share – diluted $ (0.03 )
$ 0.15 $ (0.04 ) $ 0.34 Weighted average shares outstanding – basic
104,614 104,408 104,561 96,742 Weighted average shares outstanding
– diluted 104,614 107,671 104,561 99,531 Production from
Continuing Operations: Crude oil per day (Bblpd) 3,967 4,743 4,030
3,570 Natural gas per day (Mcfpd) 8,154 9,086 8,229 7,645 Natural
gas liquids per day (Bblpd) 678 752 618 517 Crude oil equivalent
per day (Boepd) 6,004 7,010 6,020 5,361 Crude oil equivalent (MBoe)
552 645 1,643 1,463 Realized Prices, net of realized hedging
activity: Crude oil ($ per Bbl) $ 43.81 $ 86.81 $ 49.15 $ 88.24
Natural gas ($ per Mcf) 2.02 3.86 2.39 4.21 Natural gas liquids ($
per Bbl) 5.07 32.11 9.32 36.25 Crude oil equivalent ($ per Boe)
32.26 67.19 37.12 68.26 Expenses: Lease operating ($ per
Boe) $ 9.48 $ 11.06 $ 10.83 $ 12.55 Production taxes (% of oil and
gas revenue) 9.8 % 8.5 % 9.8 % 8.6 % General and administrative,
excluding stock-based compensation ($ per Boe) 3.29 2.79 3.71 4.01
Cash interest ($ per Boe) 1.53 0.63 1.43 1.03
Depreciation, depletion and amortization
($ per Boe)
18.40 21.45 18.89 20.80
(a) See reconciliation of non-GAAP
financial measures below.
BALANCE SHEET DATA
(In thousands) September 30, 2015 December 31, 2014
Cash $ — $ 3,772 Working capital (a) (21,463 ) (52,832 ) Property
and equipment – net 284,420 322,879 Total assets 322,423 374,899
Long-term debt 124,991 76,554 Stockholders’ equity 151,058
207,495 Common shares outstanding 106,346 106,187 (a)
Excludes current maturities of long-term debt and current
derivative assets and liabilities in accordance with our loan
covenants.
ABRAXAS PETROLEUM
CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2015 2014 2015 2014 Revenues:
Oil and gas production $ 16,075 $ 43,865 $ 53,658 $ 102,521 Other
2 9 24 63
16,077 43,874 53,682 102,584 Operating costs and expenses: Lease
operating 5,236 7,131 17,806 18,361 Production and ad valorem taxes
1,569 3,744 5,255 8,786 Depreciation, depletion, and amortization
10,165 13,836 31,044 30,441 Impairment 59,891 — 59,891 — General
and administrative (including stock-based compensation of $835,
$582, $3,085, and $2,050, respectively) 2,654
2,379 9,190 7,915 79,515
27,090 123,186 65,503
Operating (loss) income (63,438 ) 16,784 (69,504 ) 37,081
Other (income) expense: Interest income — — (1 ) (1 )
Interest expense 992 548 2,784 1,927 Amortization of deferred
financing fees 161 150 481 779 (Gain) loss on derivative contracts
- realized (1,745 ) 534 (6,899 ) 2,624 (Gain) on derivative
contracts - unrealized (10,474 ) (9,979 ) (6,198 ) (1,899 ) Other
— (8 ) — (8 )
(11,066 ) (8,755 ) (9,833 ) 3,422
(Loss) income from continuing operations before income tax (52,372
) 25,539 (59,671 ) 33,659 Income tax (expense) benefit —
— — — Net (loss)
income from continuing operations (52,372 ) 25,539 (59,671 ) 33,659
Net loss from discontinued operations - net of tax —
(140 ) (20 ) (522 ) Net (loss) income $
(52,372 ) $ 25,399 $ (59,691 ) $ 33,137
Net (loss) income per common share - basic Continuing operations $
(0.50 ) $ 0.24 $ (0.57 ) $ 0.35 Discontinued
operations $ — $ — $ — $ (0.01 ) Net (loss)
income per common share - basic $ (0.50 ) $ 0.24 $ (0.57 ) $
0.34 Net (loss) income per common share - diluted
Continuing operations $ (0.50 ) $ 0.24 $ (0.57 ) $ 0.34
Discontinued operations $ — $ — $ — $
(0.01 ) Net (loss) income per common share - diluted $ (0.50 ) $
0.24 $ (0.57 ) $ 0.33 Weighted average shares
outstanding: Basic 104,614 104,408 104,561 96,742 Diluted 104,614
107,671 104,561 99,531
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"), discretionary cash flow and EBITDA are
appropriate measures of Abraxas' ability to satisfy capital
expenditure obligations and working capital requirements.
Discretionary cash flow and EBITDA are non-GAAP financial measures
as defined under SEC rules. Abraxas' discretionary cash flow and
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. As
discretionary cash flow and EBITDA exclude some, but not all items
that affect net income and may vary among companies, the
discretionary cash flow and EBITDA presented below may not be
comparable to similarly titled measures of other companies.
Management believes that operating income (loss) calculated in
accordance with GAAP is the most directly comparable measure to
discretionary cash flow; therefore, operating income (loss) is
utilized as the starting point for the discretionary cash flow
reconciliation.
Discretionary cash flow is defined as operating income (loss)
plus depreciation, depletion and amortization expenses, non-cash
expenses and impairments, cash portion of other income (expense)
less cash interest. Adjusted discretionary cash flow is defined as
discretionary cash flow, plus cash flow from Raven Drilling’s
operations. Accounting rules do not permit the inclusion of the net
income and other components of Raven Drilling’s operations to be
included in our consolidated results of operations and cash flow,
instead, the results of Raven Drilling’s operations are credited to
the full cost pool. Accordingly, for purposes of adjusted
discretionary cash flow, Raven Drilling’s cash flow is added back.
The following table provides a reconciliation of discretionary cash
flow and adjusted discretionary cash flow to operating income
(loss) for the periods presented.
(In thousands)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2015 2014 2015 2014 Operating income
(loss) $ (63,438 ) $ 16,784 $ (69,504 ) $ 37,081 Depreciation,
depletion and amortization 10,165 13,836 31,044 30,441 Impairment
59,891 — 59,891 — Stock-based compensation 835 582 3,085 2,050
Realized gain (loss) on derivative contracts (a) 1,745 (534 ) 7,346
(2,624 ) Cash interest (847 )
(406 ) (2,357 ) (1,506 )
Discretionary cash flow $ 8,351 $ 30,262 $ 29,505 $ 65,442 Cash
flow from Raven Drilling operations 810
1,080 3,206
3,729 Adjusted discretionary cash flow
$ 9,161 $ 31,342 $ 32,711
$ 69,171 (a) Realized gain (loss) on
derivative contracts does not include a loss of $0.4 million for
the nine months ended 2015 related to the monetization of the
July-December 2015 fixed price oil swaps. The monetization resulted
in cash proceeds of $4.6 million.
EBITDA is defined as net income (loss) plus interest expense,
depreciation, depletion and amortization expenses, deferred income
taxes and other non-cash items. Adjusted EBITDA includes all of the
components of EBITDA plus Raven Drilling’s EBITDA. Accounting rules
do not permit the inclusion of the net income and other components
of Raven Drilling’s operations to be included in our consolidated
results of operations, instead, the results of Raven Drilling’s
operations are credited to the full cost pool. Accordingly, for
purposes of Adjusted EBITDA, Raven Drilling’s EBITDA is added back.
The following table provides a reconciliation of EBITDA and
Adjusted EBITDA to net income (loss) for the periods presented.
(In thousands)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2015 2014 2015 2014 Net income (loss) $
(52,372 ) $ 25,399 $ (59,691 ) $ 33,137 Net interest expense 992
548 2,783 1,926 Depreciation, depletion and amortization 10,165
13,836 31,044 30,441 Amortization of deferred financing fees 161
150 481 779 Stock-based compensation 835 582 3,085 2,050 Impairment
59,891 — 59,891 — Unrealized (gain) on derivative contracts (10,474
) (9,979 ) (6,198 ) (1,899 ) Realized loss on derivative
monetization — — 447 — Loss from discontinued operations — 140 20
522 Other non cash items —
(8 ) — (8 ) EBITDA
$ 9,198 $ 30,668 $ 31,862 $ 66,948 Raven Drilling EBITDA
845 1,136
3,327 3,913 Adjusted EBITDA
$ 10,043 $ 31,804 $
35,189 $ 70,861 EBITDA $
9,198 $ 30,668 $ 31,862 $ 66,948 Monetized derivative contracts
— —
4,610 — Adjusted EBITDA per bank
covenants $ 9,198 $ 30,668
$ 36,472 $ 66,948
This release also includes a discussion of “adjusted net income
(loss), excluding certain non-cash items,” which is a non-GAAP
financial measure as defined under SEC rules. The following table
provides a reconciliation of adjusted net income (loss), excluding
ceiling test impairment and unrealized changes in derivative
contracts and net income related to Raven Drilling, LLC capitalized
to the full cost pool, to net income (loss) for the periods
presented. Management believes that net income (loss) calculated in
accordance with GAAP is the most directly comparable measure to
adjusted net income (loss), excluding certain non-cash items.
(In thousands)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2015 2014 2015 2014 Net income
(loss) $ (52,372 ) $ 25,399 $ (59,691 ) $ 33,137 Impairment 59,891
— 59,891 — Net income related to Raven Drilling 229 564 1,500 1,989
Unrealized (gain) on derivative contracts (10,474 ) (9,979 ) (6,198
) (1,899 ) Realized loss on derivative monetization — — 447 — Loss
from discontinued operations —
140 20 522
Adjusted net income (loss), excluding certain non-cash items
$ (2,726 ) $ 16,124 $ (4,031 )
$ 33,749 Adjusted net income (loss), excluding
certain non-cash items, per share – basic $ (0.03 )
$ 0.15 $ (0.04 ) $ 0.35
Adjusted net income (loss), excluding certain non-cash items, per
share – diluted $ (0.03 ) $ 0.15
$ (0.04 ) $ 0.34 Net income (loss) per share –
basic $ (0.50 ) $ 0.24 $ (0.57 )
$ 0.34 Net income (loss) per share – diluted
$ (0.50 ) $ 0.24 $ (0.57 )
$ 0.33
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version on businesswire.com: http://www.businesswire.com/news/home/20151104005263/en/
Abraxas Petroleum CorporationGeoffrey King, 210-490-4788Vice
President – Chief Financial Officergking@abraxaspetroleum.comwww.abraxaspetroleum.com
Abraxas Petroleum (CE) (USOTC:AXAS)
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