Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported
financial and operating results for the three and twelve months
ended December 31, 2017.
Financial and Operating Results for the
Three Months Ended December 31, 2017
The three months ended December 31, 2017 resulted in:
- Production of 808 MBoe (8,788
Boepd)
- Revenue of $29.6 million
- Net loss of $4.1 million, or $0.02 per
share
- Adjusted net income(a) (excluding
certain non-cash items) of $7.1 million, or $0.04 per share
- EBITDA(a) of $17.6 million
- Adjusted EBITDA per bank loan covenants
of $17.8 million(a)
(a) See reconciliation of non-GAAP financial
measures below.
Financial and Operating Results for the
Twelve Months Ended December 31, 2017
The twelve months ended December 31, 2017 resulted in:
- Production of 2.7 MMBoe (7,391
Boepd)
- Revenue of $86.3 million
- Net income of $16.0 million, or $0.10
per share
- Adjusted net income(a) (excluding
certain non-cash items) of $20.3 million, or $0.13 per share
- EBITDA(a) of $53.1 million
- Adjusted EBITDA per bank loan covenants
of $58.0 million(a)
(a) See reconciliation of non-GAAP financial
measures below.
Operational Update
Delaware Basin
In Ward County, Texas, Abraxas recently drilled and cased three
wells and is drilling the fourth well on the Company’s 660’
downspacing test at Caprito. The four-well downspacing test
consists of two Wolfcamp A2 wells, the Caprito 99-301H and Caprito
99-311H, and two Wolfcamp A1 wells, the Caprito 99-202H and Caprito
99-211H. With success, Abraxas' assumed well spacing will move from
1320’ spacing to the apparent industry norm 660’ spacing in the
Wolfcamp A1 and A2. These wells are scheduled for an April
completion date. Abraxas owns a 57.8% working interest in the
Caprito 99-301H, Caprito 99-311H, Caprito 99-202H and Caprito
99-211H.
Abraxas' next pad will be the Greasewood 201H and 301H. These
locations are four sections north of our Caprito acreage and will
test the Wolfcamp A1 and A2. Abraxas owns a 100% working interest
in these wells.
On February 28, 2018, Abraxas closed on the acquisition of 944
net acres in Winkler County for $14.3 million. Abraxas' combined
net Bone Spring/Wolfcamp acreage position now consists of 9,211 net
acres.
Williston Basin
At Abraxas' North Fork prospect, in McKenzie County, North
Dakota, the Company recently drilled and cased the Yellowstone
5H-7H wells in which the Company owns a 52% working interest. These
wells are scheduled for a June completion date. Abraxas also
recently drilled and cased the Lillibridge 9H-12H wells in which
the Company owns a 25-29% working interest. These wells are
scheduled for a July completion date. Abraxas' next pad will be the
Ravin 9H-12H in which we estimate we will own a 50% working
interest.
Comments
Bob Watson, President and CEO of Abraxas, commented, “2017 was a
year of tremendous accomplishments for Abraxas. In early 2017,
Abraxas commenced and executed a successful equity offering with
four distinct goals: de-risk four zones on our Ward
County assets, add Bone Spring/Wolfcamp acres in the
Delaware Basin at a reasonable cost, grow our production base to
critical mass and maintain our balance sheet. We are happy to
report that we successfully de-risked the Wolfcamp A1, Wolfcamp A2,
Wolfcamp B and Third Bone Spring on our acreage position in Ward
County. Since January 2017, we added approximately 4,000 net Bone
Spring/Wolfcamp acres to our Delaware Basin position. We reached
critical mass with our production base as evidenced by our 11,480
Boepd production average during the month of January 2018. Finally,
we ended the year with a solid balance sheet that will enable us to
continue our two rig program and remain acquisitive in the Delaware
Basin.
“Our goals for 2018 remain largely unchanged. We will look to
continue to expand our acreage position in the Delaware Basin at a
reasonable cost while protecting our balance sheet, streamline our
portfolio by continuing to divest non-core assets, further
delineate our acreage position by drilling outside of Caprito and
test downspacing to the industry norm 660 feet between wells in the
same zone. Ultimately, success on these fronts will position
Abraxas for an optimal multi-year, high return and focused
development program in the Delaware Basin. We look forward to
updating the street on the results of these efforts in the near
future."
Conference Call
Abraxas Petroleum Corporation (NASDAQ:AXAS) will host its fourth
quarter and year end 2017 earnings conference call at 11 AM ET on
March 14, 2018. To participate in the conference call, please dial
844.347.1028 and enter the passcode 7399815. 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 11, 2018 by dialing 855.859.2056 and
entering the passcode 7399815 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.
ABRAXAS PETROLEUM CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
Three Months Ended Twelve Months Ended
(In thousands except per share data)
December 31, December 31, 2017
2016 2017 2016
Financial Results: Revenues $ 29,588 $ 22,007 $ 86,264 $
56,555 Net (loss) income (4,109 ) (5,301 ) 16,006 (96,378 ) Net
(loss) income per share – basic $ (0.02 ) $ (0.04 ) $ 0.10 $ (0.79
) Net (loss) income per share – diluted $ (0.02 ) $ (0.04 ) $ 0.10
$ (0.79 ) Capital expenditures 43,715 7,031 135,078 31,663
EBITDA(a) 17,589 9,493 53,139 24,028 Adjusted net income (loss),
excluding certain non-cash items(a) 7,149 984 20,305 (8,585 )
Adjusted net income (loss), excluding
certain non-cash items(a), per share – basic
$ 0.04 $ 0.01 $ 0.13 $ (0.07 ) Adjusted net income (loss),
excluding certain non-cash items(a), per share – diluted $ 0.04 $
0.01 $ 0.12 $ (0.07 ) Liquidity(a) 52,368 21,750 52,368 21,750
Weighted average shares outstanding – basic 164,411 133,597 161,141
122,132 Weighted average shares outstanding – diluted 166,519
133,597 162,844 122,132 Production from Continuing
Operations: Crude oil per day (Bblpd) 5,325 4,923 4,311 3,750
Natural gas per day (Mcfpd) 12,334 10,087 10,655 8,633 Natural gas
liquids per day (Bblpd) 1,407 1,350 1,304 993 Crude oil equivalent
per day (Boepd) 8,788 7,955 7,391 6,181 Crude oil equivalent (MBoe)
808 732 2,698 2,262 Realized Prices, net of realized hedging
activity: Crude oil ($ per Bbl) $ 49.86 $ 40.16 $ 48.24 $ 38.70
Natural gas ($ per Mcf) 1.78 1.65 1.81 1.26 Natural gas liquids ($
per Bbl) 16.59 6.90 11.99 4.27 Crude oil equivalent ($ per Boe)
35.37 28.12 32.86 25.92 Expenses: Lease operating ($ per
Boe) $ 4.41 $ 6.28 $ 5.63 $ 8.05 Production taxes (% of oil and gas
revenue) 8.1 % 8.4 % 8.4 % 9.7 % General and administrative,
excluding stock-based compensation ($ per Boe) $ 5.99 $ 6.20 $ 4.83
$ 4.58 Cash interest ($ per Boe) 1.19 1.17 0.93 1.69
Depreciation, depletion and amortization
($ per Boe)
10.59 8.88 9.72 10.80
(a) See reconciliation of non-GAAP
financial measures below.
BALANCE SHEET DATA
(In thousands) December 31, 2017
December 31, 2016 Cash $ 1,618 $ — Working capital (34,361 )
(7,178 ) Property and equipment – net 237,767 136,311 Total assets
273,806 161,648 Long-term debt 87,354 96,616 Stockholders’
equity 106,308 18,505 Common shares outstanding 165,890 135,094
Working capital per bank loan covenants (a) (23,262 ) (4,064
)
(a) Excludes current maturities of long-term debt and current
derivative assets and liabilities in accordance with our bank loan
covenants.
This working capital calculation excludes the unused commitment
amount which is included for our current ratio calculation.
ABRAXAS PETROLEUM CORPORATION CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands except per share data)
Twelve Months Ended December 31, 2017
2016 2015
Revenues: Oil $ 73,584 $ 50,965 $ 59,270 Gas 6,898 3,978
5,854 Natural gas liquids 5,707 1,550
1,878 86,189 56,493 67,002 Other 75
62 28 86,264 56,555 67,030 Operating
costs and expenses: Lease operating 15,197 18,205 23,074 Production
and ad valorem taxes 7,228 5,454 6,679 Rig expense — 664 —
Depreciation, depletion, and amortization 26,226 24,431 38,721
Impairment — 67,626 128,573 General and administrative (including
stock-based compensation of $3,238, $3,194, and $3,912,
respectively) 16,276 13,562
11,788 64,927 129,942
208,835 Operating income (loss) 21,337 (73,387 ) (141,805 )
Other (income) expense: Interest income (1 ) (1 ) (2 )
Interest expense 2,948 4,319 3,906 Amortization of deferred
financing fees 423 1,019 643 (Gain) on sale of properties (102 )
(374 ) — Loss (gain) on derivative contracts 1,849 18,028 (19,301 )
Other 214 — 318
5,331 22,991 (14,436 ) Income (loss)
before income tax 16,006 (96,378 ) (127,369 ) Income tax benefit
— — 279 Net income (loss)
16,006 (96,378 ) (127,090 ) Loss from discontinued operations - net
of tax — — (20 ) Net Income
(loss) $ 16,006 $ (96,378 ) $ (127,110 ) Net income
(loss) per common share - basic $ 0.10 $ (0.79 ) $ (1.21 )
Net income (loss) per common share - diluted $ 0.10 $ (0.79
) $ (1.21 ) Weighted average shares outstanding: Basic
161,141 122,132 104,605 Diluted 162,844 122,132 104,605
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
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. 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.
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.
The following table provides a reconciliation of EBITDA and
Adjusted EBITDA to net income (loss) for the periods presented.
Three Months Ended Twelve Months Ended
(In thousands)
December 31, December 31, 2017
2016 2017 2016 Net (loss)
income $ (4,109 ) $ (5,301 ) $ 16,006 $ (96,378 ) Net interest
expense 1,072 969 2,947 4,318 Depreciation, depletion and
amortization 8,560 6,500 26,226 24,431 Amortization of deferred
financing fees 69 256 423 1,019 Impairment — — — 67,626 Stock-based
compensation 739 784 3,238 3,194 Unrealized loss on derivative
contracts 11,258
6,285 4,299 19,818 EBITDA
$ 17,589 $ 9,493 $ 53,139
$ 24,028 EBITDA $ 17,589 $ 9,493 $
53,139 $ 24,028 Realized loss on derivative monetization — — — 349
Monetized derivative contracts — — — 14,370 Expenses related to
equity offering/loan amendments/permitted acquisitions
164 29
4,856 1,776 Adjusted EBITDA per bank
loan covenants $ 17,753 $ 9,522
$ 57,995 $ 40,523
This release also includes a discussion of “adjusted net income
(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 income (loss), excluding
ceiling test impairment and unrealized changes in derivative
contracts. 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. 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 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, 2016 were $53.72 per barrel compared to
$60.42 on December 29, 2017; therefore, the mark-to-market
valuation changed considerably from period to period.
Three Months Ended Twelve Months Ended
(In thousands)
December 31, December 31, 2017
2016 2017 2016 Net (loss)
income $ (4,109 ) $ (5,301 ) $ 16,006 $ (96,378 ) Impairment — — —
67,626 Unrealized loss on derivative contracts 11,258 6,285 4,299
19,818 Realized loss on derivative monetization
— — —
349 Adjusted net income (loss), excluding
certain non-cash items $ 7,149 $
984 $ 20,305 $ (8,585 ) Net (loss) income per
share – basic $ (0.02 ) $ (0.04 ) $
0.10 $ (0.79 ) Net (loss) income per share – diluted
$ (0.02 ) $ (0.04 ) $ 0.10
$ (0.79 ) Adjusted net income (loss), excluding certain
non-cash items, per share – basic $ 0.04
$ 0.01 $ 0.13 $ (0.07 ) Adjusted
net income (loss), excluding certain non-cash items, per share –
diluted $ 0.04 $ 0.01 $
0.12 $ (0.07 )
Liquidity is calculated by adding the net funds available under
our revolving credit facility and cash and cash equivalents. We use
liquidity as an indicator of the Company's ability to fund
development and exploration activities. However, this measurement
has limitations. This measurement can vary from year-to-year for
the Company and can vary among companies based on what is or is not
included in the measurement on a company's financial statements.
This measurement is provided in addition to, and not as an
alternative for, and should be read in conjunction with, the
information contained in our financial statements prepared in
accordance with GAAP (including the notes), included in our SEC
filings and posted on our website.
(In thousands) December 31, 2017
December 31, 2016 Borrowing base $ 135,000 $ 115,000 Cash
and cash equivalents 1,618 — Revolving credit facility -
outstanding borrowings (84,000 ) (93,000 ) Outstanding letters of
credit (250 ) (250 )
Liquidity $ 52,368 $ 21,750
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180313006433/en/
Abraxas Petroleum CorporationGeoffrey King, 210-490-4788Vice
President – Chief Financial Officergking@abraxaspetroleum.comwww.abraxaspetroleum.com
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