American Eagle Energy Announces Operations Update and Reports
Results for First Quarter 2014
DENVER, CO--(Marketwired -
May 13, 2014) - American Eagle Energy Corporation
(NYSEMKT: AMZG) ("American Eagle" or
the "Company"), announces operational update and financial results
for the first quarter ended March 31, 2014. The Company intends to
file its Quarterly Report on Form 10-Q with the U.S. Securities and
Exchange Commission on or before Thursday, May 15, 2014.
Highlights
- Closed separate transactions to bring the Company's average
working interest in the total Spyglass area to 68% and the proved
Spyglass area to 67% resulting in a total of 45,600 net acres in
the Spyglass area;
- Added seven (3.0 net) operated wells to production that
included a mix of Bakken and Three Forks wells in central and
eastern Spyglass and a step-out well in western Spyglass;
- April net production averaged approximately 2,250 barrels of
oil equivalent per day ("BOEPD");
- American Eagle reports first quarter 2014 oil production of
148,048 barrels of oil equivalent ("BOE"), or an average of 1,645
BOEPD. First quarter production was up 69% from 972 BOEPD (87,471
BOE) year-over-year for the quarter ended March 31, 2013 ("YOY")
but down 12% from 1,879 BOEPD (172,829 BOE) quarter-over-quarter
for the period ended December 31, 2013 ("QOQ") due to severe cold
weather;
- Quarterly oil and gas sales of $12.5 million, up 64% YOY and
down 7% QOQ;
- Adjusted EBITDA* of $7.4 million;
- Adjusted Cash Flow* of $4.6 million or $0.24 per diluted share;
and
- Adjusted Net Income* of $0.8 million or $0.04 per diluted
share.
* Non-GAAP financial measure. Please see Adjusted EBITDA,
Adjusted Cash Flow and Adjusted Net Income descriptions and tables
later in this earnings release for a reconciliation of these
measures to their nearest comparable GAAP measure.
Management Comments
Brad Colby, President and CEO of American Eagle, said, "Despite
the extremely cold winter in North Dakota, our operations team
continued to move forward and successfully drilled, completed and
brought onto production approximately seven (3.0 net) operated
wells (four Bakken and three Three Forks) during the quarter. Our
new wells added to production a number of Bakken wells which
continued to successfully de-risk and delineate our Spyglass Bakken
well locations and should be additive to future reserve reports. We
also tested the far western Spyglass acreage with an American Eagle
operated well that our JV partner financed. While the initial
results on the test well were below other operated wells, we are
still evaluating performance and have seen recent improvements in
production rates. We are currently producing approximately 2,250
BOEPD and are completing wells that should be additive to second
quarter results. The remainder of our 2014 development plan
continues to focus on higher working interest wells in central and
eastern Spyglass."
First Quarter 2014 Financial and Operational Results
For the quarter ended March 31, 2014, the Company had oil and
gas sales of $12.5 million, which represented an increase of 64%
from $7.6 million when compared to the first quarter ended March
31, 2013 and a decrease of 7% from $13.5 million when compared to
the fourth quarter ended December 31, 2013. This increase in
revenue on a YOY basis is due primarily to production from 35 gross
(16.3 net) operated wells in the Spyglass area producing in the
Three Forks and Bakken formations during the first quarter 2014,
compared to production from 13 gross (3.3 net) operated wells at
the end of March 31, 2013 and 28 gross (13.7 net) operated wells as
of December 31, 2013. The decrease in revenue on a QOQ basis is due
primarily to the impact of severe cold weather in North Dakota. Oil
represented 98% of revenue and 95% of production during the first
quarter 2014.
Adjusted EBITDA for first quarter 2014 was $7.4 million, up 52%
from $4.9 million for the first quarter ended March 31, 2013 but
down 2% from $7.6 million for the fourth quarter ended December 31,
2013. The increase in Adjusted EBITDA on a YOY basis is due
primarily to higher revenues from increased production which
increased 69% YOY and a 1% increase in realized oil price when
including the positive effect of hedges during the quarter, which
was partially offset by higher lease operating expenses ("LOE") per
BOE and a higher differential when comparing realized oil price to
benchmark oil prices such as West Texas Intermediate ("WTI"). The
modest 2% decrease in Adjusted EBITDA on a QOQ basis is due
primarily to a 12% decrease in average daily oil equivalent
production and higher LOE per BOE, which was partially offset by
higher realized oil prices and lower general and administrative
expenses per BOE.
American Eagle added seven gross (3.0 net) operated wells to
production during the quarter ended March 31, 2014. American
Eagle's first quarter 2014 realized oil price per barrel prior to
the effect of hedges was positively impacted by a lower
differential discount of about $11.57 relative to WTI due to an
agreement that locks in a $10.75 discount to WTI for all 2014
operated oil production and compares with a differential discount
of approximately $17.04 during the fourth quarter 2013. Lease
operating expenses for the quarter ended March 31, 2014 were $15.36
per BOE, which were higher than normal due to weather conditions
and increased workovers. The higher production and revenue helped
to reduce per unit general and administrative expenses ("G&A")
on a YOY and QOQ basis, as G&A, excluding stock-based
compensation, was $10.56 per BOE during the first quarter 2014
compared to $12.23 per BOE the previous year and $15.07 per BOE the
previous quarter. Adjusted EBITDA per BOE for the quarter ended
March 31, 2014 was $50.29, compared to $56.13 per BOE for the first
quarter ended March 31, 2013 and $44.16 per BOE for the fourth
quarter ended December 31, 2013.
|
|
|
Three Months Ended |
|
Mar. 31, |
Dec. 31, |
Sep. 30, |
Jun. 30, |
Mar. 31, |
|
2014 |
2013 |
2013 |
2013 |
2013 |
Crude
Oil Revenues ($000s) |
$ |
12,267 |
$ |
13,272 |
$ |
11,585 |
$ |
10,366 |
$ |
7,628 |
Natural
Gas Revenues ($000s) |
$ |
72 |
$ |
114 |
$ |
26 |
$ |
4 |
$ |
1 |
Natural
Gas Liquids Revenues ($000s) |
$ |
206 |
$ |
115 |
$ |
28 |
$ |
0 |
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
Net Production: |
|
|
|
|
|
|
|
|
|
|
Crude
Oil (Barrels) |
|
140,841 |
|
164,923 |
|
123,343 |
|
117,000 |
|
87,440 |
Crude
Oil Mix |
|
95% |
|
95% |
|
98% |
|
100% |
|
100% |
Natural
Gas (Mcf) |
|
11,370 |
|
20,055 |
|
6,333 |
|
981 |
|
187 |
Natural
Gas Liquids (Barrels) |
|
5,312 |
|
4,563 |
|
944 |
|
0 |
|
0 |
|
|
|
|
|
|
|
|
|
|
|
Total
Net Production (BOE) |
|
148,048 |
|
172,829 |
|
125,343 |
|
117,164 |
|
87,471 |
Quarter-Over-Quarter Increase |
|
-14% |
|
38% |
|
7% |
|
34% |
|
44% |
|
|
|
|
|
|
|
|
|
|
|
Average
Daily Production (BOEPD) |
|
1,645 |
|
1,879 |
|
1,362 |
|
1,288 |
|
972 |
Quarter-Over-Quarter Increase |
|
-12% |
|
38% |
|
6% |
|
32% |
|
47% |
|
|
|
|
|
|
|
|
|
|
|
Average Sales Prices: |
|
|
|
|
|
|
|
|
|
|
Crude
Oil Per Barrel |
$ |
87.10 |
$ |
80.48 |
$ |
93.92 |
$ |
88.60 |
$ |
87.23 |
Effect
of Settled Oil Derivatives Per Barrel |
$ |
0.82 |
$ |
4.16 |
$ |
0.94 |
$ |
0.00 |
$ |
0.00 |
Crude
Oil Net of Settled Derivatives Per Barrel |
$ |
87.92 |
$ |
84.64 |
$ |
94.86 |
$ |
88.60 |
$ |
87.23 |
Natural
Gas Per Mcf |
$ |
6.37 |
$ |
5.67 |
$ |
4.09 |
$ |
4.39 |
$ |
5.70 |
Natural
Gas Liquids Per Barrel |
$ |
38.83 |
$ |
25.27 |
$ |
29.67 |
$ |
0.00 |
$ |
0.00 |
Realized Price Per BOE |
$ |
85.52 |
$ |
82.10 |
$ |
93.78 |
$ |
88.51 |
$ |
87.21 |
|
|
|
|
|
|
|
|
|
|
|
Average
Per BOE: |
|
|
|
|
|
|
|
|
|
|
Lease
Operating Expenses |
$ |
15.36 |
$ |
13.59 |
$ |
14.09 |
$ |
15.31 |
$ |
9.27 |
Production Taxes |
$ |
9.32 |
$ |
9.28 |
$ |
10.28 |
$ |
9.89 |
$ |
9.58 |
G&A Expenses, Excluding Stock-Based Compensation |
$ |
10.56 |
$ |
15.07 |
$ |
12.04 |
$ |
8.31 |
$ |
12.23 |
Total |
$ |
35.24 |
$ |
37.94 |
$ |
36.41 |
$ |
33.51 |
$ |
31.08 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA per BOE |
$ |
50.29 |
$ |
44.16 |
$ |
57.36 |
$ |
54.99 |
$ |
56.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Well Development Activity
Since the Company's March 26, 2014 operations update, it has
continued to drill and complete wells successfully. In that update,
American Eagle released preliminary results on wells that had not
yet produced for a full 30 days. The first full 30 days of
production on these wells is listed below:
|
|
|
|
|
|
|
|
|
|
|
Well |
|
Formation |
|
30-Day IP RateBOEPD1 |
|
Lateral LengthFeet |
|
ApproximateDSU2 Acres |
|
Infill Numberin DSU2 |
Tangedal 13-31-164-101 (30 & 31) |
|
Three Forks |
|
363 |
|
5,784 |
|
800 |
|
1st well in DSU, 1st Three Forks |
Janice 2-3- 163-101 (3 & 10) |
|
Bakken |
|
276 |
|
9,473 |
|
1,280 |
|
4th well in DSU, 1st Bakken |
1 IP Rate BOEPD is calculated taking the cumulative
production from each well divided by the number of days each well
has been on production. Results above are based on the first 30
days of production. |
2 Drill spacing unit ("DSU") |
|
The initial results from the Tangedal 13-31 Three Forks well
seem to confirm and expand the good quality area of the reservoir
in the north central portion of the Spyglass acreage as was
previously established by the offset wells, Lynda 15-32 to the east
and the Stanley 8-1E to the south. The Janice 2-3 well-established,
good Middle Bakken production in a DSU in the middle of the eastern
Spyglass acreage.
Since the Company's March 26, 2014 operations update, there are
five additional operated wells that have produced an average of 30
days. The operated wells are listed below from the most easterly
well listed first and moving to the west with the most westerly
well listed last:
|
|
|
|
|
|
|
|
|
|
|
Well |
|
Formation |
|
30-Day IP RateBOEPD1 |
|
Lateral LengthFeet |
|
ApproximateDSU2 Acres |
|
Infill Numberin DSU2 |
Harvard State 16-36S-163-101 (1 & 12) |
|
Bakken |
|
190 |
|
9,924 |
|
1,280 |
|
4th well in DSU, 2nd Bakken |
Uncompahgre State 14-36-164-101 (25 & 36) |
|
Bakken |
|
233 |
|
5,885 |
|
800 |
|
3rd well in DSU, 1st Bakken |
Blackwatch 2-2N-164-101 (26 & 35) Carry |
|
Bakken |
|
194 |
|
6,023 |
|
800 |
|
4thwell in DSU, 2nd Bakken |
Taylor 16-1E-163-101 (5 & 6) Farm-Out |
|
Bakken |
|
358 |
|
9,915 |
|
1,280 |
|
2nd well in DSU, 1st Bakken |
Haugen 15-12- 163-103 (1 & 12) Farm-Out |
|
Three Forks |
|
91 |
|
9,677 |
|
1,280 |
|
1st well in DSU, 1st Three Forks |
1 IP Rate BOEPD is calculated taking the cumulative
production from each well divided by the number of days each well
has been on production. Results above are based on the first 30
days of production. |
2 Drill spacing unit ("DSU") |
|
The Taylor 16-1E well is a Bakken well and part of the Farm-Out
well program with the JV partner that is in the central portion of
the Spyglass acreage in the same DSU as the Stanley (Three Forks)
well and exhibits similarly strong production results as the other
wells in the surrounding area.
The Haugen 15-12 step-out well is a Three Forks completion and
part of the Farm-Out well program with the JV partner. It is
designed to test the far western edge of the Spyglass area close to
the Montana border. The Haugen 15-12 produced an average of 91
BOEPD during the first 20 days of production with an apparent
water-cut in excess of 90%. The well has shown some chemical
emulsion problems that have resulted in fluctuating oil rates
ranging from 60 to 192 barrels of oil per day. Although the initial
results are disappointing, the Company is still evaluating the
improving production trend observed over the last 10 days and will
incorporate the production results over the next 30 to 60 days into
the interpretation of the prospectivity of the Three Forks zone as
we approach the western edge of our acreage position.
In addition to the wells listed above, the Company has one
operated well that is producing but has not yet produced for 30
cumulative days, four operated wells that are in various stages of
completion, one operated well that is awaiting completion, and two
wells that are being drilled. Below is a list of operated wells
that have spud but have not yet produced for 30 cumulative
days:
|
|
|
|
|
|
|
|
|
|
|
Well |
|
Formation |
|
Status |
|
LateralLength |
|
ApproximateDSU1 Acres |
|
Infill Numberin DSU1 |
Braelynne 2-2N 164-101 (26 & 35) Carry |
|
Bakken |
|
Producing (< 30 days) |
|
Short |
|
800 |
|
5th well in DSU, 3rd Bakken |
Ella 3-15-163-102 (15 & 22) Farm-Out |
|
Three Forks |
|
Completing |
|
Long |
|
1,280 |
|
1st well in DSU, 1st Three Forks |
La Plata State 2-16- 163-101 (16 & 21) Carry |
|
Three Forks |
|
Completing |
|
Long |
|
1,280 |
|
2nd well in DSU, 2nd Three Forks |
Shelly 3-2N-164-102 (26 & 35) |
|
Three Forks |
|
Completing |
|
Short |
|
800 |
|
1st well in DSU, 1st Three Forks |
Warren 4-2-163-101 (2 & 11) |
|
Bakken |
|
Completing |
|
Long |
|
1,280 |
|
4th well in DSU, 1st Bakken |
Murielle 9-1E-163-101 (5 & 6) |
|
Three Forks |
|
Awaiting Completion |
|
Long |
|
1,280 |
|
3rd well in DSU, 2nd Three Forks |
Richard 2-13N-163-101 (1 & 12) |
|
Three Forks |
|
Drilling |
|
Long |
|
1,280 |
|
5th well in DSU, 3rd Bakken |
George 3-1-163-102 (1 & 12) |
|
Three Forks |
|
Drilling |
|
Long |
|
1,280 |
|
1st well in DSU, 1st Three Forks |
1 Drill spacing unit
("DSU") |
|
American Eagle plans to announce results of the wells once it
has achieved approximately 30 days of cumulative production. The
Company anticipates releasing results for wells in an operations
update that will likely be after the end of June 2014, but before
announcing second quarter 2014 operational results in August.
Operated Well Development Guidance
American Eagle currently has two rigs drilling in its Spyglass
area. Thus far during the second quarter, the Company has spud two
gross operated wells, is in the process of completing four gross
operated wells and anticipates drilling and completing an
additional two gross operated wells. At the current pace of
development, American Eagle estimates that approximately six gross
operated wells will be spud, completed and brought onto production
each quarter.
For the remainder of 2014, American Eagle plans to drill a mix
of Three Forks and Middle Bakken wells, with a weighting towards
Three Forks wells. The Company will focus on developing wells with
high working interests and giving effect for the increased working
interests now expects to drill and complete a total of 24 gross (16
net) operated wells during 2014 for approximately $97 million.
American Eagle also plans to participate in the development of
non-operated wells in its Spyglass area and spend approximately $3
million to participate in less than one non-operated well. The
Company's total well development budget for 2014 is approximately
$100 million.
2014 Production Volume Guidance
American Eagle has reaffirmed its production volume guidance to
exit 2014 at over 3,000 BOEPD. As weather in the Williston Basin
has recently improved, production volumes are expected to return to
normal levels during second quarter 2014 with the added benefit of
higher working interests that now average 68% in the Spyglass area
following the acquisitions completed in March 2014. The Company
estimates that its current production is approximately 2,250 BOEPD.
American Eagle anticipates significant QOQ production volume growth
during the third and fourth quarters of 2014 and overall is
comfortable with consensus estimates for 2014 production
volumes.
Liquidity and Shares Outstanding
As of March 31, 2014, American Eagle had approximately $50.1
million in cash, $108.0 million total debt outstanding and 30.4
million shares of common stock outstanding. American Eagle believes
that its cash on hand, cash flow from operations, and anticipated
additional availability under the $200 million credit facility
driven by increased proved producing reserves should adequately
fund its two-rig drilling program to drill 16 net operated wells
per year in 2014 and well development at a similar pace in
2015.
Conference Call
American Eagle will host a conference call on Wednesday, May 14,
2014 at 10:00 a.m. Eastern Time (8:00 a.m. Mountain Time) to
discuss financial and operational results for the quarter.
|
American Eagle Energy Corporation 1Q 2014 Financial
and Operational Results Conference Call |
Date: |
|
Wednesday, May 14, 2014 |
Time: |
|
10:00 a.m. Eastern Time9:00 a.m. Central Time8:00 a.m.
Mountain Time7:00 a.m. Pacific Time |
Webcast: |
|
Live and rebroadcast over the Internet at American Eagle
website |
Website: |
|
www.americaneagleenergy.com |
Telephone Dial-In: |
|
877-407-9171 (toll-free) and 201-493-6757
(international) |
Telephone Replay: |
|
Available through Wednesday, May 21,
2014877-660-6853 (toll-free) and 201-612-7415
(international)Passcode: 13572777 |
|
|
|
ABOUT AMERICAN EAGLE ENERGY CORPORATION
American Eagle Energy Corporation is an independent exploration
and production operator that is focused on acquiring acreage and
developing wells in the Williston Basin of North Dakota, targeting
the Bakken and Three Forks shale oil formations. The Company is
based in Denver, CO. More information about American Eagle can be
found at www.americaneagleenergy.com or by contacting investor
relations at 303-798-5235 or ir@amzgcorp.com. Company filings with
the Securities and Exchange Commission can be obtained free of
charge at the SEC's website at www.sec.gov.
SAFE HARBOR
This press release may contain forward-looking statements
regarding future events and the Company's future results that are
subject to the safe harbors created under the Securities Act of
1933 (the "Securities Act") and the Securities Exchange Act of 1934
(the "Exchange Act"). All statements other than statements of
historical facts included in this press release regarding the
Company's financial position, business strategy, plans and
objectives of management for future operations, industry
conditions, and indebtedness covenant compliance are
forward-looking statements. When used in this report,
forward-looking statements are generally accompanied by terms or
phrases such as "estimate," "project," "predict," "believe,"
"expect," "anticipate," "possible," "target," "plan," "intend,"
"seek," "goal," "will," "should," "may" or other words and similar
expressions that convey the uncertainty of future events or
outcomes. Items contemplating or making assumptions about,
actual or potential future sales, market size, collaborations, and
trends or operating results also constitute such forward-looking
statements.
Forward-looking statements involve inherent risks and
uncertainties and important factors (many of which are beyond the
Company's control) that could cause actual results to differ
materially from those set forth in the forward-looking statements,
including the amount we may invest, the location, and the scale of
the drilling projects in which we intend to participate; our
beliefs with respect to the potential value of drilling projects;
our beliefs with regard to the impact of environmental and other
regulations on our business; our beliefs with respect to the
strengths of our business model; our assumptions, beliefs, and
expectations with respect to future market conditions; our plans
for future capital expenditures; and our capital needs, the
adequacy of our capital resources, and potential sources of
capital.
The Company has based these forward-looking statements on its
current expectations and assumptions about future
events. While management considers these expectations and
assumptions to be reasonable, they are inherently subject to
significant business, economic, competitive, regulatory, and other
risks, contingencies, and uncertainties, most of which are
difficult to predict and many of which are beyond the Company's
control. The Company does not assume any obligations to update any
of these forward-looking statements.
|
AMERICAN EAGLE ENERGY CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(UNAUDITED) |
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2014 |
|
2013 |
Current assets: |
|
|
|
|
|
|
|
Cash |
|
$ |
50,081,532 |
|
$ |
31,850,161 |
|
Trade receivables |
|
|
8,955,900 |
|
|
17,919,518 |
|
Income tax receivable |
|
|
25,000 |
|
|
- |
|
Prepaid expenses |
|
|
213,858 |
|
|
68,194 |
|
|
Total current assets |
|
|
59,276,290 |
|
|
49,837,873 |
Equipment and leasehold improvements,
net of accumulated depreciation and amortization
of $356,524 and $322,437, respectively |
|
|
221,598 |
|
|
173,516 |
Oil and gas properties,
full-cost method - subject to amortization, net of
accumulated depletion of $16,312,547 and
$12,849,063, respectively |
|
|
237,324,350 |
|
|
155,145,039 |
Oil and gas properties,
full-cost method - not subject to amortization |
|
|
2,487,322 |
|
|
2,487,158 |
Marketable securities |
|
|
1,016,024 |
|
1,049,944 |
Other assets |
|
|
7,123,972 |
|
|
7,503,612 |
|
|
|
|
|
|
|
Total assets |
|
$ |
307,449,556 |
|
$ |
216,197,142 |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
53,830,430 |
|
$ |
41,842,068 |
|
Current derivative liability |
|
|
1,260,380 |
|
|
64,737 |
|
Current portion of long-term debt |
|
|
4,800,000 |
|
|
3,000,000 |
|
|
Total current liabilities |
|
|
59,890,810 |
|
|
44,906,805 |
Asset retirement obligation |
|
|
1,293,720 |
|
|
1,059,689 |
Noncurrent portion of long-term debt |
|
|
103,200,000 |
|
|
105,000,000 |
Noncurrent derivative liability |
|
|
1,377,331 |
|
|
749,872 |
Deferred taxes |
|
|
4,755,465 |
|
|
5,385,954 |
Total liabilities |
|
|
170,517,326 |
|
|
157,102,320 |
Stockholders' equity: |
|
|
|
|
|
|
|
Common stock, $.001 par
value, 48,611,111 shares authorized, 30,370,537 and
17,712,151 shares outstanding |
|
|
30,371 |
|
|
17,712 |
|
Additional paid-in capital |
|
|
145,937,382 |
|
|
67,197,521 |
|
Accumulated other comprehensive income
(loss) |
|
|
107,588 |
|
|
(5,747) |
|
Accumulated deficit |
|
|
(9,143,111) |
|
|
(8,114,664) |
Total stockholders' equity |
|
|
136,932,230 |
|
|
59,094,822 |
Total liabilities and stockholders' equity |
|
$ |
307,449,556 |
|
$ |
216,197,142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERICAN EAGLE ENERGY CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
(UNAUDITED) |
|
|
|
|
|
|
|
For the Three-Month Periods |
|
|
Ended March 31, |
|
|
2014 |
|
2013 |
|
|
|
|
|
Oil and gas revenues |
|
$ |
12,545,479 |
|
$ |
7,628,707 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Oil and gas production costs |
|
|
3,652,876 |
|
|
1,648,534 |
|
General and administrative expenses |
|
|
2,017,538 |
|
|
1,307,333 |
|
Depreciation, depletion and amortization |
|
|
3,635,919 |
|
|
1,274,923 |
|
Impairment of oil and gas properties |
|
|
- |
|
|
1,525,027 |
|
|
Total operating expenses |
|
|
9,306,333 |
|
|
5,755,817 |
|
|
|
|
|
|
|
Total operating income |
|
|
3,239,146 |
|
|
1,872,890 |
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
Interest income |
|
|
641 |
|
|
3,156 |
|
Dividend income |
|
|
15,797 |
|
|
17,240 |
|
Interest expense |
|
|
(3,214,952) |
|
|
(418,340) |
|
Realized gains on derivatives |
|
|
115,648 |
|
|
- |
|
Unrealized loss on derivatives |
|
|
(1,823,102) |
|
|
(27,507) |
|
|
Total other income (expense) |
|
|
(4,905,968) |
|
|
(425,451) |
|
|
|
|
|
|
|
Income (loss) before taxes |
|
|
(1,666,822) |
|
|
1,447,439 |
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
|
(638,375) |
|
|
1,092,092 |
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(1,028,447) |
|
$ |
355,347 |
|
|
|
|
|
|
|
Net income (loss) per common share: |
|
|
|
|
|
|
|
Basic |
|
$ |
(0.06) |
|
$ |
0.03 |
|
Diluted |
|
$ |
(0.06) |
|
$ |
0.03 |
|
|
|
|
|
|
|
Weighted average number of shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
18,556,695 |
|
|
12,472,642 |
|
Diluted |
|
|
18,556,695 |
|
|
12,889,584 |
|
|
|
|
|
|
|
|
|
|
AMERICAN EAGLE ENERGY CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(UNAUDITED) |
|
|
|
|
For the Three-Month Periods |
|
Ended March 31, |
|
2014 |
2013 |
Cash flows from operating activities: |
|
|
|
|
Net income (loss) |
$ |
(1,028,447) |
$ |
355,347 |
|
Adjustments to reconcile net income (loss) to net cash
provided by operating activities: |
|
|
|
|
|
|
Non-cash transactions: |
|
|
|
|
|
|
|
Stock-based compensation |
|
454,026 |
|
237,348 |
|
|
|
Depreciation, depletion and amortization |
|
3,635,919 |
|
1,274,923 |
|
|
|
Accretion of discount on asset retirement
obligation |
|
21,906 |
|
2,631 |
|
|
|
Amortization of deferred financing costs |
|
379,640 |
|
45,231 |
|
|
|
Provision for deferred income tax expense
(benefit) |
|
(630,489) |
|
1,091,636 |
|
|
|
Impairment of oil and gas properties |
|
- |
|
1,525,027 |
|
|
|
Unrealized loss on derivatives |
|
1,823,102 |
|
27,507 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Income taxes receivable |
|
(25,000) |
|
- |
|
|
|
Trade receivables |
|
4,374,671 |
|
5,510,325 |
|
|
|
Prepaid expense |
|
(145,785) |
|
(67,381) |
|
|
|
Accounts payable |
|
(1,475,176) |
|
481,359 |
Net cash from operating activities |
|
7,384,367 |
|
10,483,953 |
Cash flows used for investing activities: |
|
(67,349,728) |
|
(13,923,555) |
|
Additions to oil and gas properties |
|
|
|
|
|
Additions to equipment and leasehold improvements |
|
(82,169) |
|
(3,453) |
|
Purchases of equity securities |
|
(8,940) |
|
- |
|
Decrease in amounts due to Carry Agreement partner |
|
- |
|
(2,450,723) |
Net cash used for investing activities |
|
(67,440,837) |
|
(16,377,731) |
Cash flows from financing activities: |
|
|
|
|
|
Proceeds from issuance of stock |
|
78,298,494 |
|
4,000,000 |
|
Proceeds from issuance of long-term debt |
|
- |
|
2,000,000 |
|
Repayment of long-term debt |
|
- |
|
(970,803) |
Net cash from financing activities |
|
78,298,494 |
|
5,029,197 |
Effect of exchange rate changes on cash |
|
(10,653) |
|
(83,425) |
Net change in cash |
|
18,231,371 |
|
(948,006) |
Cash - beginning of period |
|
31,850,161 |
|
19,057,727 |
Cash - end of period |
$ |
50,081,532 |
$ |
18,109,721 |
|
|
|
|
|
|
|
|
|
|
For the Three-Month Periods |
|
Ended March 31, |
|
|
2014 |
|
2013 |
|
|
|
|
|
Net income (loss) |
|
$ |
(1,028,447) |
|
$ |
355,347 |
|
|
|
|
|
|
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
Unrealized gains (losses) on securities, net of
tax |
|
|
(42,860) |
|
|
(1,587) |
|
Foreign currency translation adjustments |
|
|
156,195 |
|
|
(99,958) |
|
|
|
|
|
|
|
Comprehensive income (loss) |
|
$ |
(915,112) |
|
$ |
253,802 |
|
|
|
|
|
|
|
Non-GAAP Financial Measures
Adjusted EBITDA
In addition to reporting net income (loss) as defined under
GAAP, American Eagle also presents net earnings before interest
income, dividend income, interest expense, income taxes, depletion,
depreciation, and amortization, non-cash expenses related to
stock-based compensation, impairment of oil and gas properties,
loss on early extinguishment of debt, and unrealized loss (gain)
from mark-to-market on derivatives recognized under ASC Topic 718
("Adjusted EBITDA"), which is a non-GAAP performance measure.
Adjusted EBITDA consists of net earnings after adjustment for those
items described in the table below. Adjusted EBITDA does not
represent, and should not be considered an alternative to GAAP
measurements, such as net income (loss) (its most directly
comparable GAAP measure), and the calculations thereof may not be
comparable to similarly titled measures reported by other
companies. By eliminating the items described below, American Eagle
believes the measure is useful in evaluating its fundamental core
operating performance. The Company also believes that Adjusted
EBITDA is useful to investors because similar measures are
frequently used by securities analysts, investors, and other
interested parties in their evaluation of companies in similar
industries. American Eagle's management uses Adjusted EBITDA to
manage its business, including in preparing its annual operating
budget and financial projections. Management does not view Adjusted
EBITDA in isolation and also uses other measurements, such as net
income (loss) and revenues to measure operating performance. The
following table provides a reconciliation of net income (loss) to
Adjusted EBITDA for the periods presented:
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31,2014 |
|
December 31,2013 |
|
September 30,2013 |
|
June 30,2013 |
|
March 31,2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
|
|
($1,028,447 |
) |
|
($462,160 |
) |
|
($936,237 |
) |
$ |
2,637,484 |
|
$ |
355,347 |
|
Less:
Interest income |
|
|
(641 |
) |
|
(6,964 |
) |
|
(1,700 |
) |
|
(1,472 |
) |
|
(3,156 |
) |
Less:
Dividend income |
|
|
(15,797 |
) |
|
(16,523 |
) |
|
(16,697 |
) |
|
(16,982 |
) |
|
(17,240 |
) |
Add:
Interest expense |
|
|
3,214,952 |
|
|
3,207,039 |
|
|
1,315,865 |
|
|
414,797 |
|
|
418,340 |
|
Add:
Income tax expense (benefit) |
|
|
(638,375 |
) |
|
130,056 |
|
|
(646,123 |
) |
|
1,192,691 |
|
|
1,092,092 |
|
Add:
Depletion, depreciation and amortization |
|
|
3,635,919 |
|
|
4,158,124 |
|
|
2,524,039 |
|
|
2,116,378 |
|
|
1,274,923 |
|
Add:
Stock-based compensation |
|
|
454,026 |
|
|
375,756 |
|
|
302,842 |
|
|
287,172 |
|
|
237,348 |
|
Add:
Impairment of oil and gas properties |
|
|
- |
|
|
206,508 |
|
|
- |
|
|
- |
|
|
1,525,027 |
|
Add:
Loss on early extinguishment of debt |
|
|
- |
|
|
- |
|
|
3,713,972 |
|
|
- |
|
|
- |
|
Add:
Unrealized (gain) loss on derivatives |
|
|
1,823,102 |
|
|
39,569 |
|
|
934,287 |
|
|
(186,754 |
) |
|
27,507 |
|
Adjusted EBITDA |
|
$ |
7,444,739 |
|
$ |
7,631,405 |
|
$ |
7,190,248 |
|
$ |
6,443,314 |
|
$ |
4,910,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Cash Flow
In addition to reporting net income (loss) as defined under
GAAP, American Eagle also presents cash flow after paying interest
expense ("Adjusted Cash Flow"), which is a non-GAAP performance
measure. Adjusted Cash Flow consists of Adjusted EBITDA after
adjustment for those items described in the table below. Adjusted
EBITDA does not represent, and should not be considered an
alternative to GAAP measurements, such as net income (loss) (its
most directly comparable GAAP measure), and the calculations
thereof may not be comparable to similarly titled measures reported
by other companies. By eliminating the items described below,
American Eagle believes the measure is useful in evaluating its
fundamental core operating performance. The Company also believes
that Adjusted Cash Flow is useful to investors because similar
measures are frequently used by securities analysts, investors, and
other interested parties in their evaluation of companies in
similar industries. American Eagle's management uses Adjusted Cash
Flow to manage its business, including in preparing its annual
operating budget and financial projections. Management does not
view Adjusted Cash Flow in isolation and also uses other
measurements, such as net income (loss) and revenues to measure
operating performance. The following table provides a
reconciliation of Adjusted EBITDA to Adjusted Cash Flow for the
periods presented:
|
|
|
|
|
|
Three Months Ended |
|
|
March 31,2014 |
|
|
December 31,2013 |
|
|
September 30,2013 |
|
|
June 30,2013 |
|
|
March 31,2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1) |
$ |
7,444,739 |
|
$ |
7,631,405 |
|
$ |
7,190,248 |
|
$ |
6,443,314 |
|
$ |
4,910,188 |
|
Less:
Interest expense |
|
(3,214,952 |
) |
|
(3,207,039 |
) |
|
(1,315,865 |
) |
|
(414,797 |
) |
|
(418,340 |
) |
Add:
Amortization of deferred financing |
|
379,640 |
|
|
327,922 |
|
|
161,758 |
|
|
66,944 |
|
|
45,231 |
|
Adjusted Cash Flow |
$ |
4,609,427 |
|
$ |
4,752,288 |
|
$ |
6,036,141 |
|
$ |
6,095,461 |
|
$ |
4,537,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Cash Flow per share - basic |
$ |
0.25 |
|
$ |
0.34 |
|
$ |
0.46 |
|
$ |
0.49 |
|
$ |
0.36 |
|
Adjusted Cash Flow per share - diluted |
$ |
0.24 |
|
$ |
0.33 |
|
$ |
0.44 |
|
$ |
0.47 |
|
$ |
0.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - basic |
|
18,556,695 |
|
|
13,961,688 |
|
|
13,223,608 |
|
|
12,517,087 |
|
|
12,472,642 |
|
Weighted average shares - diluted |
|
19,205,118 |
|
|
14,598,836 |
|
|
13,732,595 |
|
|
12,992,218 |
|
|
12,889,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See previous table for reconciliation of net
income (loss) to Adjusted EBITDA. |
|
|
|
|
|
|
|
|
|
Adjusted Income
In addition to reporting net income (loss) as defined under
GAAP, American Eagle also presents net earnings before the
impairment of oil and gas properties, loss on early extinguishment
of debt, and the effect of unrealized loss (gain) from
mark-to-market on derivatives ("adjusted income (loss)"), which is
a non-GAAP performance measure. Adjusted income (loss) consists of
net earnings after adjustment for those items described in the
table below. Adjusted income (loss) does not represent, and should
not be considered an alternative to GAAP measurements, such as net
income (loss), and the calculations thereof may not be comparable
to similarly titled measures reported by other companies. By
eliminating the items described below, American Eagle believes the
measure is useful in evaluating its fundamental core operating
performance. The Company also believes that adjusted income (loss)
is useful to investors because similar measures are frequently used
by securities analysts, investors, and other interested parties in
their evaluation of companies in similar industries. American
Eagle's management uses adjusted income (loss) to manage its
business, including in preparing its annual operating budget and
financial projections. Management does not view adjusted income
(loss) in isolation and also uses other measurements, such as net
income (loss) and revenues to measure operating performance. The
following table provides a reconciliation of net income (loss), to
adjusted income (loss) for the periods presented:
|
|
|
Three Months Ended |
March 31,2014 |
|
December 31,2013 |
|
September 30,2013 |
|
June 30,2013 |
|
March 31,2013 |
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
|
($1,028,447 |
) |
($462,160 |
) |
|
($936,237 |
) |
$ |
2,637,484 |
|
$ |
355,347 |
Add:
Impairment of oil and gas properties |
|
- |
|
206,508 |
|
|
- |
|
|
- |
|
|
1,525,027 |
Add:
Loss on early extinguishment of debt |
|
- |
|
- |
|
|
3,713,972 |
|
|
- |
|
|
- |
Add:
Unrealized lossed on derivatives |
|
1,823,102 |
|
39,569 |
|
|
934,287 |
|
|
(186,754 |
) |
|
27,507 |
Adjusted Income / (Loss) |
$ |
794,655 |
|
($216,083 |
) |
$ |
3,712,022 |
|
$ |
2,450,730 |
|
$ |
1,907,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Income per share - basic |
$ |
0.04 |
|
($0.02 |
) |
$ |
0.28 |
|
$ |
0.20 |
|
$ |
0.15 |
Adjusted Income per share - diluted |
$ |
0.04 |
|
($0.01 |
) |
$ |
0.27 |
|
$ |
0.19 |
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - basic |
|
18,556,695 |
|
13,961,688 |
|
|
13,223,608 |
|
|
12,517,087 |
|
|
12,472,642 |
Weighted average shares - diluted |
|
19,205,118 |
|
14,598,836 |
|
|
13,732,595 |
|
|
12,992,218 |
|
|
12,889,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORPORATE CONTACT: Marty Beskow, CFA Vice President of Capital
Markets and Strategy American Eagle Energy Corporation 720-330-8378
ir@amzgcorp.com www.americaneagleenergy.com
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