Production Averages 483 Mmcfe/d; Grows 17% Quarter Over Quarter;
2009 Production Guidance Raised to 58% Year Over Year Growth
Haynesville Shale Position Now Approximately 325,000 Acres; Eagle
Ford Shale Holdings Reach Approximately 210,000 Acres HOUSTON, Aug.
4 /PRNewswire-FirstCall/ -- Petrohawk Energy Corporation
("Petrohawk" or the "Company") (NYSE:HK) today announced its second
quarter 2009 financial and operating results, including record
production, drilling cost reductions in the Haynesville Shale and
Eagle Ford Shale plays, and increased production guidance for 2009.
The Company also issued guidance for 2010 capital expenditures and
production. Petrohawk achieved continued improvements in drilling
results and notable operational efficiencies during the quarter,
contributing to above-plan production rates in the Haynesville
Shale and Eagle Ford Shale. In addition, better than expected
results from non-operated drilling contributed to production growth
in the Fayetteville Shale. The Company's production for the second
quarter averaged 483 million cubic feet equivalent per day
(Mmcfe/d), a 17% increase over first quarter 2009 and a 200 Mmcfe/d
(71%) increase over the same period one year ago. Total production
for the second quarter was 43.9 billion cubic feet of natural gas
equivalent (Bcfe), 94% of which was natural gas. This marks the
fourth consecutive quarter in which Petrohawk has achieved
double-digit quarter-over-quarter production growth. "This quarter,
our operations in two prominent U.S. shale plays, the Haynesville
and Eagle Ford Shales, made key strides in further establishing
productive areas and achieving operational efficiencies.
Operational improvements have resulted in lower average costs per
well and higher initial production rates which we believe will lead
to increased returns on investment," said Floyd C. Wilson,
Chairman, President and Chief Executive Officer. "Petrohawk's
operating staff has achieved these efficiencies early in the
development of these plays with great success. Additionally, we are
keeping pace with infrastructure requirements as we continue to
work marketing channels to sell gas at the best available prices.
"We continue to be fiscally conservative, expanding our portfolio
of hedges into 2011. Based on the combined effect of strong
quarterly performance and positive hedge positions, we stand in an
excellent position to continue our exciting pace of production and
reserve growth." During the quarter, the Company generated cash
flow from operations before changes in working capital of $140
million, or $0.50 per fully diluted common share (cash flow from
operations before changes in working capital is a non-GAAP
financial measure; see Condensed Consolidated Statements of Cash
Flows in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2009 for a reconciliation to net
cash provided by operating activities). Second quarter revenues
were $325 million, including a realized cash derivative gain of $98
million. During the second quarter, Petrohawk gained $2.34 per Mcf
from hedging, bringing realized natural gas prices to $5.62 per
Mcf. The Company also gained $2.92 per barrel from its hedging
program during the quarter, bringing realized oil prices to $56.64
per barrel. Before the effect of hedges, Petrohawk realized 94% of
NYMEX for its natural gas production and 90% of NYMEX for oil.
After adjusting for the effects of unrealized gains on derivatives,
net income for the quarter was $0.10 per fully diluted common
share, or $29 million after tax, versus $51 million, or $0.23 per
fully diluted common share one year ago (see Selected Item Review
and Reconciliation table for additional information). Before
excluding selected items, the Company reported a net loss of $22
million, or $0.08 per fully diluted common share, for the quarter.
Cash costs (including lease operating, gathering and
transportation, production taxes, workover, general and
administrative, and interest expense) were $2.97 per Mcfe for the
quarter, a 10% improvement over the prior quarter and 14% over the
same period one year ago. Depletion, depreciation and amortization
(DD&A) expense, a non-cash item, decreased significantly
following ceiling test impairments taken in the first quarter of
2009 and fourth quarter of 2008. Per unit DD&A expense for
second quarter of 2009 was $1.92 per Mcfe, a 43% reduction from the
same period one year ago. Lease operating expense was $0.43 per
Mcfe for the quarter compared to $0.44 per Mcfe in the prior
quarter and $0.50 per Mcfe in the same period one year ago.
Acquisition of Additional Acreage in Haynesville Shale and Eagle
Ford Shale Through August 1, 2009, Petrohawk has acquired or
committed to acquire additional acreage in key areas of the
Haynesville Shale including a prospective area in East Texas
(Shelby and Nacogdoches Counties) and under an expanded AMI with
EOG Resources in this region. In South Texas, additional leases
were acquired in both the Hawkville Field and undisclosed areas
outside of Hawkville Field that are prospective for the Eagle Ford
Shale. In Northwest Louisiana, the Company has drilled or is in the
process of drilling twenty-five wells within sections where acreage
has recently been acquired. By year end 2009, Petrohawk expects
that it will have drilled wells on approximately 40% of the
sections in Northwest Louisiana within which the Company has
acquired new acreage in 2009. Operational Update During the three
months ended June 30, 2009, the Company expended $327 million on
drilling, completions, seismic and infrastructure. Expenditures for
land were $55 million. The Company participated in the drilling of
30 operated and 102 non-operated wells during the quarter with a
success rate of 100%. Of the average 483 Mmcfe/d produced during
the quarter, 186 Mmcfe/d (39%) was produced from the Haynesville
Shale, 79 Mmcfe/d (16%) was produced from the Fayetteville Shale,
12 Mmcfe/d (2%) was produced from the Eagle Ford Shale, and 206
Mmcfe/d (43%) was produced from Petrohawk's conventional Cotton
Valley operations and other areas. For full year ended December 31,
2008, the Haynesville Shale accounted for 6% of production, the
Fayetteville Shale accounted for 16% of production, and the Eagle
Ford Shale contributed less than 1% of production. Based on the
positive performance of its drilling program year to date,
Petrohawk is increasing its previously stated guidance for 2009
average daily production to between 475 and 485 Mmcfe/d, a 58%
increase over 2008. Third quarter 2009 production is expected to
average between 495 and 505 Mmcfe/d, and fourth quarter 2009
production is expected to average between 525 and 535 Mmcfe/d. The
Company expects to increase average daily production by between 30%
and 40% over 2009, while spending approximately the same as 2009,
with no amounts budgeted for acquisitions. Haynesville Shale During
the quarter, the Company drilled a total of 13 operated and 19
non-operated wells in the Haynesville Shale. The initial production
rates for the 14 operated wells that were completed during the
second quarter wells ranged from 9.8 Mmcfe/d to 22.4 Mmcfe/d. These
wells had an average initial production rate of 17.3 Mmcfe/d and an
average flowing casing pressure of 6,600 pounds per square inch
(psi). All wells were tested on a 24/64" choke with the exception
of two that were tested on a 26/64" choke. The average initial
production rate for 42 operated Haynesville Shale completions to
date, which excludes two wells that were mechanically compromised,
is approximately 17.9 Mmcfe/d. Petrohawk utilized 10 horizontal
rigs and two pre-drill, or spudder, rigs on average in the
Haynesville Shale during the second quarter and exited the quarter
with 12 horizontal rigs running. At the end of the second quarter,
40 Company-operated wells were on production with gross production
of approximately 285 Mmcfe/d. After excluding two wells that
encountered mechanical issues, the Company had a total of 38
operated wells with at least 30 days of production. The average
first 30-day production rate of these 38 wells is 14.2 Mmcfe/d.
Petrohawk continues to experience drilling efficiencies in the
play. In the first half of 2009 the spud-to-rig release time
averaged 55 days, down from 59 days in the second half of 2008. The
second quarter average drilling days, excluding two wells that
encountered unusually difficult drilling conditions, was just over
46 days. Days from rig release to first sales decreased from
approximately 31 days in the fourth quarter 2008 to approximately
16 days in the second quarter 2009. With the ongoing benefit of the
decrease in drilling days, the various operational efficiencies
being achieved, and the continued effect of service cost
reductions, the forecast for drilling and completion costs in the
second half 2009 ranges between $8.5-$9.5 million per well. The
Company is constantly working to improve its drilling and
completion operations and efficiencies. Petrohawk is currently
evaluating 1) increasing the length of each frac stage and the
number of perforation clusters/stage while keeping the number of
perforations constant; 2) increasing the volume of proppant per
foot of lateral; 3) utilizing various proportions of 40/70 Ottawa
sand along with 40/70 Premium Resin Coated sand, 4) using 40/80
Hydroprop on an increasing number of wells and 5) increasing
proppant concentration. While some time will be required to
ascertain results, early data points to opportunities to improve
both cost and performance, as well as to modifications that could
potentially result in an even more effective completion procedure
for Haynesville Shale wells. To aid its drilling plans and acreage
assessment, Petrohawk has completed a field-wide geologic mapping
project which incorporates nearly 300 digital open hole logs that
have penetrated the Haynesville Shale across the play. A wide
variety of maps have been generated, with the most significant maps
plotting gas filled porosity and clay content as a percent of the
net pay zone. These maps indicate that a large area in northwest
Louisiana appears to contain the thickest and potentially most
productive Haynesville Shale section. Petrohawk currently controls
approximately 325,000 net acres in the play. Based on geologic
study and well results, Petrohawk believes its acreage position is
concentrated within the core of the Haynesville Shale play. Eagle
Ford Shale During the second quarter, Petrohawk drilled six
operated wells and participated in the drilling of one non-operated
well on the Company's Eagle Ford Shale position, known as Hawkville
Field, in South Texas. Initial production rates from the three
operated wells completed during the second quarter of 2009 averaged
9.3 Mmcfe/d. The average initial production rate for all eight
operated wells completed to date in the Eagle Ford Shale is 8.6
Mmcfe/d with a 6:1 gas to oil and natural gas liquids equivalency
ratio, which corresponds to an effective 10.6 Mmcfe/d on an 18:1
equivalency ratio, taking into account the Btu content of the
natural gas and natural gas liquids. Production rates have averaged
6.0 Mmcfe/d over the first 30 days of production for the seven
wells with at least 30 days of production history, or an effective
6.9 Mmcfe/d on an 18:1 Btu adjusted revenue equivalency ratio. Two
of the wells experienced modest curtailments during the first 30
days of production, and after normalizing those wells to their
estimated unrestricted production rates, the 30 day averages are
estimated to be 6.6 and 7.6 Mmcfe/d, respectively. During the
second quarter, Petrohawk operated two horizontal rigs in the field
and recently added a third. The following wells were completed
during the quarter: -- Henderson-Cenizo 874 #1H was completed on
April 27th at a rate of 9.1 Mmcf/d on a 25/64" choke with 4,012 psi
flowing casing pressure. -- Dora Martin 1716 #1H was completed on
May 26th at a rate of 9.7 Mmcf/d on a 24/64" choke with 4,215 psi
flowing casing pressure -- STS-Palmert 944 #1-H was completed on
June 17th at a rate of 9.1 Mmcf/d, on a 24/64" choke with 4,350 psi
flowing casing pressure. In addition to the above, the J.C. Martin
1850 #1H was completed on July 17th at a rate of 8.8 Mmcf/d and 50
Bc/d (9.1 Mmcfe/d) on a 24/64" choke with 3,710 psi flowing casing
pressure. Petrohawk has achieved both improved production
performance and drilling efficiencies in the field. The first three
wells drilled, which included pilot holes with extensive technical
data gathering as well as setting intermediate casing, averaged 53
days spud to total depth. The Company has now drilled a total of
six wells without setting intermediate casing and without drilling
a pilot hole, and these six wells reached total depth of
approximately 16,000' in an average of 18 days. As a result of this
decrease in drilling days, as well as significant decreases in
service sector costs, drilling and completion costs have been
reduced from approximately $12.0 million to approximately $5.0
million per well. These cost reductions have occurred while the
average lateral length has increased. The first three wells
averaged 3,620' with 10.7 frac stages while the last six wells
averaged 3,990' with 13.3 frac stages. The last well completed, the
J.C. Martin 1850 #1H, utilized 18 frac stages. Petrohawk is using a
similar approach in the Eagle Ford Shale to that in the Haynesville
Shale, where the Company is making controlled changes to the
original completion technique in an attempt to optimize
completions. Although early in the field's development, Petrohawk
is encouraged by these recent developments and believes additional
efficiencies remain to be gained. The very rapid success of the
Hawkville Field within the Eagle Ford Shale trend has enabled
Petrohawk to obtain a significant amount of geologic data pertinent
to the reservoir, allowing the Company to expand into other areas
of the trend where it believes the rock quality could compare
favorably to Hawkville Field. While building on its acreage
position in the area of the field that Petrohawk believes to be
commercially productive, the Company has also acquired acreage in
other areas, both along strike and updip to the shale formation in
the Hawkville Field. Petrohawk currently owns or has contractual
commitments to acquire approximately 210,000 net acres in the
trend. The Company expects to drill several exploratory wells in
the second half of 2009 to evaluate its new acreage. Fayetteville
Shale Petrohawk operated two horizontal rigs in the Fayetteville
Shale on average during the second quarter. The Company drilled
eleven operated wells and participated in sixty eight non-operated
wells during the period. Eight of the operated wells have been
completed to date with an average initial production rate of 1.2
Mmcfe/d. All of these wells were drilled in the far northern
portion of the play where drilling and completion costs are
currently approximately $1.8 million per well, with an average of
11 days spud to rig release, which has decreased from 15 days in
the fourth quarter 2008. Wells drilled during the second quarter
had an average lateral length of 3,170 feet with an average of 9.7
frac stages as compared to fourth quarter wells with an average
lateral length of 3,080 feet and 7.9 frac stages. One of the most
positive aspects of the Fayetteville Shale development has been the
growth of the non-operated component. Over the first half of 2009
net non-operated production has grown from 18.3 Mmcfe/d to 32.6
Mmcfe/d, a 78% increase since January 1, 2009. While the operated
component has declined from 52.9 Mmcfe/d to 47.7 Mmcfe/d as a
result of running only two rigs, overall net production from the
field has grown from 71.2 Mmcfe/d to 80.3 Mmcfe/d, or over 13%
production growth from January 1, 2009 to the end of the second
quarter. Planned Divestment of Permian Basin Properties The Company
has retained Bank of America Merrill Lynch to assist in the
potential sale of its Permian Basin properties. These assets are
currently producing approximately 31 Mmcfe/d. While no assurance
can be given that a transaction will be completed, Petrohawk's goal
is to complete a sale of these properties before the end of 2009.
Petrohawk Earnings Conference Call and Webcast Petrohawk will host
a conference call tomorrow, Wednesday, August 5, 2009 at 9:00 a.m.
EDT (8:00 a.m. CDT) to discuss second quarter 2009 financial and
operating results. To access, dial 800-644-8607 five to ten minutes
before the call begins. Please reference Petrohawk Energy
Conference ID 16272498. International callers may also participate
by dialing 706-679-8184. In addition, the call will be webcast live
on Petrohawk's website at http://www.petrohawk.com/. A replay of
the call will be available at that site through August 26, 2009.
Petrohawk Energy Corporation is an independent energy company
engaged in the acquisition, production, exploration and development
of natural gas and oil with properties concentrated in North
Louisiana, Arkansas, East Texas, South Texas, Oklahoma and the
Permian basin. For more information contact Joan Dunlap, Vice
President - Investor Relations, at 832-204-2737 or . For additional
information about Petrohawk, please visit our website at
http://www.petrohawk.com/. Additional Information for Investors
This press release contains information regarding initial and
30-day average rates of production that are subject to decline over
time and should not be regarded as reflective of sustained
production levels. Our current estimates are that the average rate
of production from our Haynesville Shale wells will decline
approximately 80% during the first twelve months of production.
Comparable rates of decline may be expected of shale wells in other
areas, but insufficient data exists to establish decline curves in
this and other areas with certainty. Accordingly, actual decline
rates may differ significantly. This press release contains
forward-looking information regarding Petrohawk that is intended to
be covered by the safe harbor "forward-looking statements" provided
by the Private Securities Litigation Reform Act of 1995, based on
Petrohawk's current expectations and forward-looking statements
include statements regarding estimates of future production,
capital expenditures and results of operations, and other
statements reflecting expectations, beliefs, plans, objectives,
assumptions, strategies or statements about future events or
performance (often, but not always, using words such as "expects",
"anticipates", "plans", "estimates", "potential", "possible",
"probable", or "intends", or stating that certain actions, events
or results "may", "will", "should", or "could" be taken, occur or
be achieved) and include, without limitation, estimated production
for 2009 and 2010 and estimated 2010 capital expenditures.
Management's assumptions and future performance are subject to a
wide range of business risks, uncertainties and actual levels of
capital expenditures, and there is no assurance that these
projections can or will be met. Forward-looking statements are
based on current expectations, estimates and projections that
involve a number of risks and uncertainties, which could cause
actual results to differ materially from those reflected in these
statements. These risks include, but are not limited to: the risks
of the oil and gas industry (for example, operational risks in
exploring for, developing and producing crude oil and natural gas;
risks and uncertainties involving geology of oil and gas deposits;
the uncertainty of reserve estimates; the uncertainty of estimates
and projections relating to future production, costs and expenses;
potential delays or changes in plans with respect to exploration or
development projects or capital expenditures; health, safety and
environmental risks and risks related to weather such as hurricanes
and other natural disasters); uncertainties as to the availability
and cost of financing; fluctuations in oil and gas prices; risks
associated with derivative positions; inability of our management
team to execute its plans to meet its goals, shortages of drilling
equipment, oil field personnel and services, unavailability of
gathering systems, pipelines and processing facilities and the
possibility that government policies may change or governmental
approvals may be delayed or withheld. Additional information on
these and other factors which could affect Petrohawk's operations
or financial results are included in the section entitled "Risk
Factors" in Petrohawk's Annual Report on Form 10-K and its reports
on Form 10-Q on file with the SEC. Investors are cautioned that any
forward-looking statements are not guarantees of future performance
and actual results or developments may differ materially from the
expectations in the forward-looking statements. Forward-looking
statements are based on the estimates and opinions of management at
the time the statements are made. Petrohawk does not assume any
obligation to update forward-looking statements should
circumstances or management's estimates or opinions change.
PETROHAWK ENERGY CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) (In thousands, except per share amounts)
Three Months Six Months Ended June 30, Ended June 30,
--------------- --------------- 2009 2008 2009 2008 ---- ---- ----
---- Operating revenues: Oil and natural gas $163,983 $304,633
$337,745 $519,571 Marketing 63,317 - 153,010 - ------ --- -------
--- Total operating revenues 227,300 304,633 490,755 519,571
------- ------- ------- ------- Operating expenses: Marketing
60,292 - 145,136 - Production: Lease operating 18,704 12,903 35,115
25,297 Workover and other 205 1,249 928 1,786 Taxes other than
income 12,537 14,036 24,717 25,000 Gathering, transportation and
other 22,633 10,944 43,127 20,467 General and administrative:
General and administrative 20,185 14,133 37,014 27,689 Stock-based
compensation 3,807 3,081 6,617 5,679 Depletion, depreciation and
amortization 84,435 86,694 198,691 169,821 Full cost ceiling
impairment - - 1,732,486 - --- --- --------- --- Total operating
expenses 222,798 143,040 2,223,831 275,739 ------- -------
--------- ------- Income (loss) from operations 4,502 161,593
(1,733,076) 243,832 Other (expenses) income: Net gain (loss) on
derivative contracts 16,006 (277,605) 197,928 (420,346) Interest
expense and other (55,880) (35,154) (111,948) (62,691) -------
------- -------- ------- Total other (expenses) income (39,874)
(312,759) 85,980 (483,037) ------- -------- ------ -------- Loss
before income taxes (35,372) (151,166) (1,647,096) (239,205) Income
tax benefit 13,368 58,400 625,339 90,827 ------ ------ -------
------ Net loss available to common stockholders $(22,004)
$(92,766) $(1,021,757) $(148,378) ======== ======== ===========
========= Net loss per share of common stock: Basic $(0.08) $(0.45)
$(3.84) $(0.76) ====== ====== ====== ====== Diluted $(0.08) $(0.45)
$(3.84) $(0.76) ====== ====== ====== ====== Weighted average shares
outstanding: Basic 274,146 206,490 266,145 195,060 ======= =======
======= ======= Diluted 274,146 206,490 266,145 195,060 =======
======= ======= ======= PETROHAWK ENERGY CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) June 30,
December 31, -------- ----------- 2009 2008 ---- ---- Assets:
Current assets $482,285 $648,432 Net oil and natural gas properties
3,798,937 5,071,287 Other noncurrent assets 1,550,395 1,187,610
--------- --------- Total assets $5,831,617 $6,907,329 ==========
========== Liabilities and stockholders' equity: Current
liabilities $629,363 $726,312 Long-term debt 2,398,101 2,283,874
Other noncurrent liabilities 36,689 492,233 Stockholders' equity
2,767,464 3,404,910 --------- --------- Total liabilities and
stockholders' equity $5,831,617 $6,907,329 ========== ==========
PETROHAWK ENERGY CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In thousands) Three Months Ended Six Months Ended June
30, June 30, ------------------ --------------------- 2009 2008
2009 2008 ---- ---- ---- ---- Cash flows from operating activities:
Net loss $(22,004) $(92,766) $(1,021,757) $(148,378) Adjustments to
reconcile net loss to net cash provided by operating activities:
Depletion, depreciation and amortization 84,435 86,694 198,691
169,821 Full cost ceiling impairment - - 1,732,486 (90,827) Income
tax benefit (13,368) (58,400) (625,339) 5,679 Stock-based
compensation 3,807 3,081 6,617 366,580 Net unrealized loss (gain)
on derivative contracts 82,346 229,065 (18,419) - Other 4,539 1,546
9,460 81 ----- ----- ----- -- Cash flow from operations before
changes in working capital 139,755 169,220 281,739 302,956 Changes
in working capital 30,003 58,184 44,377 (14,367) ------ ------
------ ------- Net cash provided by operating activities 169,758
227,404 326,116 288,589 ------- ------- ------- ------- Cash flows
from investing activities: Oil and natural gas capital expenditures
(357,428) (815,396) (748,102) (1,394,107) Proceeds received from
sale of oil and natural gas properties - 110,900 - 110,900
Marketable securities purchased (159,047) (1,116,098) (763,092)
(1,116,098) Marketable securities redeemed 425,065 626,387 869,081
626,387 Decrease in restricted cash - - - 269,837 Other operating
property and equipment expenditures (75,642) (16,603) (145,351)
(31,041) ------- ------- -------- ------- Net cash used in
investing activities (167,052) (1,210,810) (787,464) (1,534,122)
-------- ---------- -------- ---------- Cash flows from financing
activities: Proceeds from exercise of options and warrants 1,299
3,953 1,956 10,260 Proceeds from issuance of common stock - 758,713
385,000 1,069,213 Offering costs (43) (30,925) (9,031) (44,717)
Proceeds from borrowings 15,000 1,216,000 634,674 1,596,000
Repayment of borrowings (17,835) (952,401) (542,159) (1,367,401)
Debt issue costs (83) (18,559) (13,237) (18,559) Other - 501 - -
--- --- --- --- Net cash (used in) provided by financing activities
(1,662) 977,282 457,203 1,244,796 ------ ------- ------- ---------
Net increase (decrease) in cash 1,044 (6,124) (4,145) (737) Cash at
beginning of period 1,694 7,199 6,883 1,812 ----- ----- ----- -----
Cash at end of period $2,738 $1,075 $2,738 $1,075 ====== ======
====== ====== PETROHAWK ENERGY CORPORATION SELECTED OPERATING DATA
(Unaudited) (In thousands, except per unit and per share amounts)
Three Months Six Months Ended June 30, Ended June 30,
--------------- --------------- 2009 2008 2009 2008 ---- ---- ----
---- Production: Natural gas - Mmcf 41,485 23,413 76,076 44,936
Crude oil - MBbl 407 385 821 750 Natural gas equivalent - Mmcfe
43,927 25,720 81,002 49,433 Daily production - Mmcfe 483 283 448
272 Average price per unit: Realized oil price - as reported $53.72
$117.85 $45.85 $106.66 Realized impact of derivatives 2.92 (38.01)
4.22 (28.55) ---- ------ ---- ------ Net realized oil price (Bbl)
$56.64 $79.84 $50.07 $78.11 ====== ====== ====== ====== Realized
gas price - as reported $3.28 $10.99 $3.77 $9.72 Realized impact of
derivatives 2.34 (1.51) 2.31 (0.75) ---- ----- ---- ----- Net
realized gas price (Mcf) $5.62 $9.48 $6.08 $8.97 ===== ===== =====
===== Cash flow from operations (1) 139,755 169,220 281,739 302,956
Cash flow from operations - per share (diluted) 0.50 0.80 1.05 1.52
Average cost per Mcfe: Production: Lease operating 0.43 0.50 0.43
0.51 Workover and other - 0.05 0.01 0.04 Taxes other than income
0.29 0.55 0.31 0.51 Gathering, transportation and other 0.52 0.43
0.53 0.41 General and administrative: General and administrative
0.46 0.55 0.46 0.56 Stock-based compensation 0.09 0.12 0.08 0.11
Depletion 1.84 3.33 2.37 3.39 (1) Represents cash flow from
operations before changes in working capital. See the Consolidated
Statements of Cash Flows for a reconciliation from this non-GAAP
financial measure to the most comparable GAAP financial measure.
PETROHAWK ENERGY CORPORATION SELECTED ITEM REVIEW AND
RECONCILIATION (Unaudited) (In thousands, except per share amounts)
Three Months Ended Six Months Ended June 30, June 30, --------
-------- 2009 2008 2009 2008 ---- ---- ---- ---- Unrealized loss
(gain) on derivatives:(1) Natural gas $77,472 $190,476 $(24,684)
$323,511 Crude oil 7,154 39,432 8,545 43,069 Interest (2,280) (843)
(2,280) - ------ ---- ------ --- Total mark-to-market noncash
charge 82,346 229,065 (18,419) 366,580 Full cost ceiling impairment
- - 1,732,486 - Expense of deferred financing costs(2) - - 911 -
Master limited partnership withdrawal - 3,352 - 3,352 Senior
revolving credit facility reduction - 782 - 782 --- --- --- ---
Total selected items, before tax 82,346 233,199 1,714,978 370,714
Income tax effect of selected items (31,308) (89,898) (652,035)
(142,910) ------- ------- -------- -------- Selected items, net of
tax 51,038 143,301 1,062,943 227,804 Net loss available to common
stockholders, as reported (22,004) (92,766) (1,021,757) (148,378)
------- ------- ------- ------- Net income available to common
stockholders, excluding selected items $29,034 $50,535 $41,186
$79,426 ======= ======= ======= ======= Basic net loss per share of
common stock, as reported $(0.08) $(0.45) $(3.84) $(0.76) Impact of
selected items 0.19 0.69 3.99 1.17 ---- ---- ---- ---- Basic net
income per share of common stock, excluding selected items $0.11
$0.24 $0.15 $0.41 ===== ===== ===== ===== Diluted net loss per
share of common stock, as reported $(0.08) $(0.45) $(3.84) $(0.76)
Impact of selected items 0.18 0.68 3.96 1.15 ---- ---- ---- ----
Diluted net income per share of common stock, excluding selected
items $0.10 $0.23 $0.12 $0.39 ===== ===== ===== ===== (1)
Represents the unrealized loss (gain) associated with the mark-to-
market valuation of outstanding derivative positions at June 30,
2009 and 2008. (2) Represents non-cash charges related to the
write-off of debt issue costs in conjunction with decreases in the
Company's borrowing base under its senior revolving credit
facility. DATASOURCE: Petrohawk Energy Corporation CONTACT: Joan
Dunlap, Vice President - Investor Relations of Petrohawk Energy
Corporation, +1-832-204-2737, Web Site: http://www.petrohawk.com/
Copyright