Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported
financial and operating results for the three and nine months
ended September 30, 2018.
Financial Highlights for the Three Months
Ended September 30, 2018
The three months ended September 30, 2018 resulted in:
- Production of 926 MBoe (10,070
Boepd)
- Revenue of $41.6 million
- Net income of $1.8 million, or $0.01
per share
- Adjusted net income(a) (excluding
certain non-cash items) of $8.6 million, or $0.05 per share
- EBITDA(a) of $22.3 million
- Adjusted EBITDA per bank loan covenants
of $22.4 million(a)
(a) See reconciliation of non-GAAP financial measures below.
Operational Highlights for the Three
Months Ended September 30, 2018:
Williston Basin, North Dakota
Drilling operations on the Abraxas four well Lillibridge NW Pad
continued as planned. On the four well Ravin NE Pad, the fracture
treatment (frac) is expected to be completed this week despite road
closures caused by weather. Once the Ravin NE Pad fracture
treatment is complete, Abraxas will place back on production the
six remaining wells shut-in for frac protection along with the
eight new wells on the Ravin Central and Ravin NE Pads.
Delaware Basin, West Texas
Drilling operations on the Abraxas two well Creosote Pad
continued as planned. Abraxas owns approximately 80% working
interest in the Creosote Pad. The two well Mesquite Pad, in which
Abraxas owns 73% working interest, is producing approximately 1,800
Boepd. The fracture treatment on the one well Pecan 47 Pad, in
which Abraxas owns 100% working interest is scheduled to commence
this week. All these pads call for 4,800' laterals.
Abraxas continues to acquire bolt-on acreage to its existing
acreage block. With transactions currently in progress, Abraxas now
holds over 11,000 net acres, excluding over 2,200 acres of minerals
owned in southern Pecos County.
Capital Budget
The Board of Directors of Abraxas have approved a Capital Budget
for 2019 of $108 million. The budget entails a continuation of a
one rig program in the Bakken to drill and/or complete 13 wells
($39 million), a continuation of a one rig program in the Delaware
Basin to drill and/or complete 12 wells ($58 million), and $11
million for acreage and facilities. This budget is designed to
generate free cash flow during 2019. Abraxas plans to issue
additional guidance for 2019 when results from the recently
completed Bakken wells and one soon to be completed Delaware well
are known.
2018 Production and Guidance
Update:
2018 Operating
Guidance
Operating Costs
Low
High
LOE ($/Boe) $4.00 $6.00 Production Tax (% Rev) 8.0%
9.0% Cash G&A ($mm) $8.5 $12.5 Production (boepd) 10,000
11,000
Vice President and Chief Financial
Officer
On November 6, 2018, the Board of Directors of Abraxas Petroleum
(“Abraxas” or the “Company”) named Steven P. Harris as Vice
President and Chief Financial Officer of the company.
Mr. Harris will continue to report to Bob Watson, Chairman,
President and Chief Executive Officer of Abraxas. Mr. Harris joined
Abraxas on June 19, 2018, as Director, Finance and Capital Markets.
Mr. Harris brings over 20 years of financial and leadership
experience to Abraxas. Most recently, Mr. Harris was with Sundance
Energy where he assisted Sundance’s Business Development and
Investor Relations efforts. From 2008 through 2017, Mr. Harris was
a Managing Director and headed the U.S. Energy Investment Banking
division of Canaccord Genuity in Houston, Texas.
Prior to joining Canaccord Genuity, Mr. Harris served in
the Business Development Group at El Paso Exploration and
Production. Mr. Harris earned his Bachelor of Business
Administration from the University of Texas at Austin and
a Master of Business Administration from the Rice University
Jesse H. Jones Graduate School of Management.
Bob Watson, President and CEO of Abraxas, commented, “Since
joining the Company, Steve has been instrumental in sourcing and
evaluating various forms of financing, negotiating certain
acquisitions and divestitures across the Company’s portfolio of
assets, and establishing significant capital market relationships
to further enhance the Company’s strategic growth objectives.”
Conference Call
Abraxas Petroleum Corporation (NASDAQ:AXAS) will host its third
quarter 2018 earnings conference call at 3 PM ET on Thursday
November 8, 2018. To participate in the conference call, please
dial 844.347.1028 and enter the passcode 9385155. 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 8, 2018 by dialing 855.859.2056 and
entering the passcode 9385155 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 EndedSeptember 30,
Nine Months EndedSeptember 30,
(In thousands except per share data) 2018
2017 2018 2017
Financial Results: Revenue $ 41,625 $ 24,722 $ 113,171 $ 56,676 Net
income (loss) 1,777 (770 ) 2,002 20,115 Net income (loss) per share
- basic $ 0.01 $ (0.00 ) $ 0.01 $ 0.13 Net income (loss) per share
- diluted $ 0.01 $ (0.00 ) $ 0.01 $ 0.12 Capital expenditures -
acquisitions 14,635 - 36,404 - Capital expenditures - drilling and
completion 36,974 50,910 91,326 91,363 Total capital expenditures
51,609 50,910 127,730 91,363 EBITDA(a) 22,252 15,698 63,740 35,550
Adjusted net income, excluding certain non-cash items(a) 8,617
6,103 26,642 13,156 Adjusted net income, excluding certain non-cash
items, per share - basic(a) $ 0.05 $ 0.04 $ 0.16 $ 0.08 Adjusted
net income, excluding certain non-cash items, per share -
diluted(a) $ 0.05 $ 0.04 $ 0.16 $ 0.08 Liquidity(a) 53,750 51,569
53,750 51,569 Weighted average shares outstanding - basic 165,392
163,508 165,083 160,031 Weighted average shares outstanding -
diluted 167,629 163,508 167,865 161,597 Production from
Continuing Operations: Crude oil per day (Bblpd) 6,542 5,270 6,025
3,969 Natural gas per day (Mcfpd) 12,797 12,006 12,754 10,089
Natural gas liquids per day (Bblpd) 1,395 1,474 1,428 1,269 Crude
oil equivalent per day (Boepd) 10,070 8,745 9,579 6,920 Crude oil
equivalent (Mboe) 926 805 2,615 1,889 Realized Prices, net
of realized hedging activity: Crude oil ($ per Bbl) $ 50.36 $ 46.88
$ 51.02 $ 47.51 Natural gas ($ per Mcf) 1.61 1.72 1.69 1.82 Natural
gas liquids ($ per Bbl) 20.86 11.03 17.27 10.27 Crude oil
equivalent ($per Boe) 37.66 32.47 36.92 31.78 Expenses:
Lease operating ($ per Boe) $ 7.26 $ 5.08 $ 6.51 $ 6.16 Production
taxes (% of oil and gas revenue) 8.6 % 8.3 % 8.1 % 8.5 % General
and administrative, excluding stock-based compensation ($ per Boe)
$ 2.33 $ 5.35 $ 2.48 $ 4.34 Cash interest ($ per Boe) 2.11 0.94
1.78 0.81 Depreciation, depletion and amortization ($ per Boe)
11.89 9.79 11.41 9.35 (a) See reconciliation of non-GAAP financial
measures below.
ABRAXAS PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEET DATA (In
thousands)
September 30,2018
December 31,2017
Cash $ - $ 1,618 Working capital (49,434 ) (34,361 ) Property and
equipment - net 332,328 237,767 Total assets 381,493 273,806
Long-term debt - less current maturities 149,159 87,354
Stockholders' equity 110,218 106,308 Common shares outstanding
166,610 165,890 Working capital per bank loan covenants(a)
(26,795 ) (23,262 ) (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
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
(In thousands except per share data) 2018 2017
2018 2017 Revenues: Oil $
37,039 $ 21,339 $ 100,505 $ 48,153 Gas 1,897 1,873 5,882 4,918
Natural gas liquids 2,677 1,495 6,735
3,559 41,613 24,707 113,122 56,630 Other
12 15 49 46 41,625
24,722 113,171 56,676 Operating costs and expenses: Lease operating
6,724 4,089 17,023 11,628 Production and ad valorem taxes 3,569
2,045 9,167 4,823 Depreciation, depletion, and amortization 11,011
7,877 29,846 17,666 General and administrative (including
stock-based compensation of $428, $750, $1,894 and $2,499
respectively) 2,586 5,057 8,379
10,692 23,890 19,068
64,415 44,809 Operating income 17,735 5,654
48,756 11,867 Other (income) expense: Interest income - - (1
) (1 ) Interest expense 2,083 868 5,039 1,876 Amortization of
deferred financing fees 113 100 320 354 Loss (gain) on derivative
contracts 13,568 5,456 41,215 (10,375 ) Loss (gain) on sale of
non-oil and gas assets 194 - 181
(102 ) 15,958 6,424 46,754
(8,248 ) Income (loss) before income tax 1,777 (770 )
2,002 20,115 Income tax (expense) benefit - -
- - Net income (loss) $ 1,777 $ (770 )
$ 2,002 $ 20,115 Net income (loss) per common
share - basic $ 0.01 $ (0.00 ) $ 0.01 $ 0.13 Net income
(loss) per common share - diluted $ 0.01 $ (0.00 ) $ 0.01 $ 0.12
Weighted average shares outstanding: Basic 165,392 163,508
165,083 160,031 Diluted 167,629 163,508 167,865 161,597
ABRAXAS PETROLEUM
CORPORATIONRECONCILIATION 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 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 for the periods presented.
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
(In thousands) 2018 2017 2018
2017 Net income (loss) $ 1,777 $ (770 ) $
2,002 $ 20,115 Net interest expense 2,083 868 5,038 1,875
Depreciation, depletion and amortization 11,011 7,877 29,846 17,666
Amortization of deferred financing fees 113 100 320 354 Stock-based
compensation 428 750 1,894 2,499 Unrealized loss (gain) on
derivative contracts 6,840 6,873
24,640 (6,959 ) EBITDA $ 22,252
$ 15,698 $ 63,740 $ 35,550
EBITDA $ 22,252 $ 15,698 $ 63,740 $ 35,550 Expenses related
to equity offering/loan amendments/permitted acquisitions
105 199 317
4,692 Adjusted EBITDA per bank loan covenants $
22,357 $ 15,897 $ 64,057 $ 40,242
This release also includes a discussion of “adjusted net income,
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, excluding ceiling
test impairment and unrealized changes in derivative contracts.
Management believes that net income calculated in accordance with
GAAP is the most directly comparable measure to adjusted net
income, excluding certain non-cash items. The calculation of
adjusted net income, 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 a gain
or loss based on the calculated value difference from the previous
period-end valuation for open contracts. For example, NYMEX oil
prices on September 30, 2017 were $51.67 per barrel compared to
$73.25 on September 28, 2018; therefore, the mark-to-market
valuation changed considerably from period to period.
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
(In thousands) 2018 2017 2018
2017 Net income (loss) $ 1,777 $ (770 ) $
2,002 $ 20,115 Unrealized loss (gain) on derivative contracts
6,840 6,873 24,640
(6,959 ) Adjusted net income, excluding certain
non-cash items $ 8,617 $ 6,103 $ 26,642
$ 13,156 Net income per share - basic $ 0.01
$ (0.00 ) $ 0.01 $ 0.13 Net income per
share - diluted $ 0.01 $ (0.00 ) $ 0.01
$ 0.12 Adjusted net income, excluding certain non-cash
items, per share - basic $ 0.05 $ 0.04
$ 0.16 $ 0.08 Adjusted net income, excluding certain
non-cash items, per share - diluted $ 0.05 $ 0.04
$ 0.16 $ 0.08
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)
September 30,2018
September 30,2017
Borrowing base $ 200,000 $ 115,000 Cash and cash equivalents - 819
Revolving credit facility- outstanding borrowings (146,000 )
(64,000 ) Outstanding letters of credit (250 )
(250 ) Liquidity $ 53,750 $ 51,569
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181107005851/en/
Abraxas Petroleum CorporationSteven P. Harris, 210-490-4788Vice
President - Chief Financial
Officersharris@abraxaspetroleum.comwww.abraxaspetroleum.com
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