Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported
financial and operating results for the three and nine months ended
September 30, 2016.
Financial and Operating Results for the
Three Months Ended September 30, 2016
The three months ended September 30, 2016 resulted in:
- Production of 548 MBoe (5,955
Boepd)
- Revenue of $14.0 million
- Adjusted EBITDA(a) of $4.9 million
- Adjusted EBITDA per bank loan agreement
of $5.0 million(a)
- Adjusted discretionary cash flow(a) of
$4.1 million
- Net loss of $3.3 million, or $0.02 per
share
- Adjusted net loss(a), excluding certain
non-cash items of $3.3 million, or $0.02 per share
(a) See reconciliation of non-GAAP financial measures below.
Net loss for the three months ended September 30, 2016 was
$3.3 million, or $0.02 per share, compared to a net loss of $52.4
million, or $0.50 per share, for the three months ended
September 30, 2015.
Adjusted net loss, excluding certain non-cash items, for the
three months ended September 30, 2016 was $3.3 million, or
$0.02 per share, compared to an adjusted net loss, excluding
certain non-cash items, of $2.7 million or $0.03 per share for the
three months ended September 30, 2015. For the three months
ended September 30, 2016 and 2015, adjusted net loss excludes
the unrealized gain on derivative contracts of $3.5 million and
$10.5 million, respectively. For the quarter ended
September 30, 2015, adjusted net loss includes the net income
from our subsidiary, Raven Drilling, LLC of $0.2 million. For the
three months ended September 30, 2016 and 2015, adjusted net
loss excludes the loss attributable to the ceiling test impairment
of $3.8 million and $59.9 million, respectively.
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, 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 September 30, 2015 were $45.09 per barrel compared
to $48.24 on September 30, 2016; therefore, the mark-to-market
valuation changed considerably from period to period.
Conference Call
Abraxas Petroleum Corporation (NASDAQ:AXAS) will host its third
quarter 2016 earnings conference call at 11 AM ET on November 14,
2016. To participate in the conference call, please dial
844.778.4143 and enter the passcode 94561017. 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 December 12, 2016 by dialing 855.859.2056 and
entering the passcode 94561017 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
Three Months Ended Nine Months Ended
(In thousands except per share data)
September 30, September 30, 2016
2015 2016 2015
Financial Results: Revenues $ 13,976 $ 16,077 $ 34,548 $
53,682 Adjusted EBITDA(a) 4,938 10,043 14,325 35,189 Adjusted
discretionary cash flow(a) 4,088 9,161 11,340 32,711 Capital
expenditures 18,966 12,931 24,632 52,614 Net loss (3,260 ) (52,372
) (91,077 ) (59,691 ) Net loss per share – basic $ (0.02 ) $ (0.50
) $ (0.77 ) $ (0.57 ) Net loss per share – diluted $ (0.02 ) $
(0.50 ) $ (0.77 ) $ (0.57 ) Adjusted net loss, excluding certain
non-cash items(a) (3,312 ) (2,726 ) (10,535 ) (4,031 )
Adjusted net loss, excluding certain
non-cash items(a), per share – basic
$ (0.02 ) $ (0.03 ) $ (0.09 ) $ (0.04 )
Adjusted net loss, excluding certain
non-cash items(a), per share – diluted
$ (0.02 ) $ (0.03 ) $ (0.09 ) $ (0.04 ) Weighted average shares
outstanding – basic 133,546 104,614 118,274 104,561 Weighted
average shares outstanding – diluted 133,546 104,614 118,274
104,561 Production from Continuing Operations: Crude oil per
day (Bblpd) 3,629 3,967 3,356 4,030 Natural gas per day (Mcfpd)
8,321 8,154 8,145 8,229 Natural gas liquids per day (Bblpd) 939 678
873 618 Crude oil equivalent per day (Boepd) 5,955 6,004 5,586
6,020 Crude oil equivalent (MBoe) 548 552 1,531 1,643
Realized Prices, net of realized hedging activity: Crude oil ($ per
Bbl) $ 34.92 $ 43.81 $ 37.97 $ 49.15 Natural gas ($ per Mcf) 1.32
2.02 1.10 2.39 Natural gas liquids ($ per Bbl) 2.83 5.07 2.90 9.32
Crude oil equivalent ($ per Boe) 23.58 32.26 24.86 37.12
Expenses: Lease operating ($ per Boe) $ 8.40 $ 9.48 $ 8.89 $ 10.83
Production taxes (% of oil and gas revenue) 8.6 % 9.8 % 10.4 % 9.8
% General and administrative, excluding stock-based compensation ($
per Boe) 3.64 3.29 3.81 3.71 Cash interest ($ per Boe) 1.55 1.53
1.94 1.43
Depreciation, depletion and amortization
($ per Boe)
11.63 18.40 11.72 18.89
(a) See reconciliation of non-GAAP financial
measures below.
BALANCE SHEET DATA
(In thousands)
September 30, 2016 December 31, 2015
Cash $ — $ 3,540 Working capital (a) (17,755 ) (18,967 )
Property and equipment – net 145,322 224,838 Total assets 162,742
267,872 Long-term debt 93,680 138,402 Stockholders’ equity
23,022 84,465 Common shares outstanding 135,088 106,346
(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
Three Months Ended Nine Months Ended (In
thousands except per share data) September 30, September 30,
2016 2015 2016
2015 Revenues: Oil and gas
production $ 13,972 $ 16,075 $ 34,517 $ 53,658 Other 4
2 31 24 13,976
16,077 34,548 53,682 Operating costs and expenses: Lease operating
4,599 5,236 13,609 17,806 Production and ad valorem taxes 1,200
1,569 3,602 5,255 Rig expense 192 — 534 — Depreciation, depletion,
and amortization 6,371 10,165 17,932 31,044 Impairment 3,806 59,891
67,626 59,891 General and administrative (including stock-based
compensation of $768, $835, $2,410 and $3,085, respectively)
2,760 2,654 8,238 9,190
18,928 79,515 111,541
123,186 Operating loss (4,952 ) (63,438 )
(76,993 ) (69,504 ) Other (income) expense: Interest income
— — (1 ) (1 ) Interest expense 960 992 3,350 2,784 Amortization of
deferred financing fees 151 161 763 481 (Gain) loss on derivative
contracts (2,429 ) (12,219 ) 10,346 (13,097 ) (Gain) on sale of
assets (374 ) — (374 ) —
(1,692 ) (11,066 ) 14,084 (9,833
) Loss from continuing operations before income tax (3,260 )
(52,372 ) (91,077 ) (59,671 ) Income tax (expense) benefit —
— — — Net loss
from continuing operations (3,260 ) (52,372 ) (91,077 ) (59,671 )
Net loss from discontinued operations - net of tax —
— — (20 ) Net loss $ (3,260 ) $
(52,372 ) $ (91,077 ) $ (59,691 ) Net loss per common
share - basic $ (0.02 ) $ (0.50 ) $ (0.77 ) $ (0.57 ) Net
loss per common share - diluted $ (0.02 ) $ (0.50 ) $ (0.77 ) $
(0.57 ) Weighted average shares outstanding: Basic 133,546
104,614 118,274 104,561 Diluted 133,546 104,614 118,274 104,561
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, 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 if
contracted drilling operations are performed in connection with
properties in which Abraxas holds an ownership interest, instead,
the results of Raven Drilling’s operations are credited to the full
cost pool. No drilling operations were performed after February
2016. Therefore January and February 2016 activity for Raven
Drilling has been credited back to the full cost pool; however,
March through September 2016 activity is already included within
Abraxas' operations. 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 loss for the
periods presented.
Three Months Ended Nine Months Ended
(In thousands)
September 30, September 30, 2016
2015 2016 2015
Operating loss $ (4,952 ) $ (63,438 ) $ (76,993 ) $ (69,504 )
Depreciation, depletion and amortization 6,371 10,165 17,932 31,044
Impairment 3,806 59,891 67,626 59,891 Stock-based compensation 768
835 2,410 3,085 Realized (loss) gain on derivative contracts(a)
(1,055 ) 1,745 3,536 7,346 Cash interest (850
) (847 ) (2,968 )
(2,357 ) Discretionary cash flow $ 4,088 $ 8,351 $ 11,543 $ 29,505
Cash flow from Raven Drilling operations(b) —
810 (203 )
3,206 Adjusted discretionary cash flow
$ 4,088 $ 9,161 $ 11,340
$ 32,711 (a) For the nine months ended
September 30, 2016 realized gain on derivative contracts does not
include a loss $0.3 million related to the monetization of various
2016 contracts. Cumulative proceeds from these monetizations were
$14.4 million. For the nine months ended September 30, 2015
realized gain on derivative contracts does not include a loss of
$0.4 million related to the monetization of our June to December
2015 fixed price swaps. This monetization resulted in cash proceeds
of $4.6 million. (b) March 2016 through September 2016 Raven
Drilling cash flow is already included in Operating Loss.
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 for 2015 and
January & February 2016. 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 loss for the periods presented.
Three Months Ended Nine Months Ended
(In thousands)
September 30, September 30, 2016
2015 2016 2015 Net
loss $ (3,260 ) $ (52,372 ) $ (91,077 ) $ (59,691 ) Net interest
expense 960 992 3,349 2,783 Depreciation, depletion and
amortization 6,371 10,165 17,932 31,044 Amortization of deferred
financing fees 151 161 763 481 Stock-based compensation 768 835
2,410 3,085 Impairment 3,806 59,891 67,626 59,891 Unrealized (gain)
loss on derivative contracts (3,484 ) (10,474 ) 13,533 (6,198 )
(Gain) on sale of assets (374 ) — (374 ) — Realized loss on
derivative monetization — — 349 447 Loss from discontinued
operations — —
— 20 EBITDA $
4,938 $ 9,198 $ 14,511 $ 31,862 Raven Drilling EBITDA(a)
— 845 (186
) 3,327 Adjusted EBITDA $
4,938 $ 10,043 $ 14,325
$ 35,189 EBITDA $ 4,938 $ 9,198 $ 14,511 $
31,862 Monetized derivative contracts — — 14,370 4,610 Expenses
related to equity offering/loan amendments 82
— 1,747
— Adjusted EBITDA per bank covenants
$ 5,020 $ 9,198 $ 30,628
$ 36,472
(a) March 2016 through September 2016 Raven Drilling EBITDA is
already included in Net loss.
This release also includes a discussion of “adjusted net 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 loss, excluding ceiling test
impairment and unrealized changes in derivative contracts and net
income (loss) related to Raven Drilling, LLC for 2015 and January
and February 2016 capitalized to the full cost pool, to net loss
for the periods presented. Management believes that net loss
calculated in accordance with GAAP is the most directly comparable
measure to adjusted net loss, excluding certain non-cash items.
Three Months Ended Nine Months Ended
(In thousands)
September 30, September 30, 2016
2015 2016 2015 Net
loss $ (3,260 ) $ (52,372 ) $ (91,077 ) $ (59,691 ) Impairment
3,806 59,891 67,626 59,891 Net income (loss) related to Raven
Drilling(a) — 229 (592 ) 1,500 Unrealized (gain) loss on derivative
contracts (3,484 ) (10,474 ) 13,533 (6,198 ) Realized loss on
derivative monetization — — 349 447 Loss from discontinued
operations — — — 20 (Gain) on sale of assets
(374 ) — (374 )
— Adjusted net loss, excluding certain non-cash items
$ (3,312 ) $ (2,726 ) $ (10,535 )
$ (4,031 ) Adjusted net loss, excluding certain
non-cash items, per share – basic $ (0.02 )
$ (0.03 ) $ (0.09 ) $ (0.04 ) Adjusted net
loss, excluding certain non-cash items, per share – diluted
$ (0.02 ) $ (0.03 ) $ (0.09 ) $
(0.04 ) Net loss per share – basic $ (0.02 )
$ (0.50 ) $ (0.77 ) $ (0.57 ) Net loss per
share – diluted $ (0.02 ) $ (0.50 ) $
(0.77 ) $ (0.57 )
(a) March 2016 through September 2016 Raven Drilling net income
is already included in Net loss.
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version on businesswire.com: http://www.businesswire.com/news/home/20161108006066/en/
Abraxas Petroleum CorporationGeoffrey King, 210-490-4788Vice
President – Chief Financial Officergking@abraxaspetroleum.comwww.abraxaspetroleum.com
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