HOUSTON, May 9, 2013 /PRNewswire/ -- Endeavour
International Corporation (NYSE: END) (LSE: ENDV) today reported
first quarter 2013 net loss, as adjusted of $12.1 million compared to a net loss, as adjusted
of $15.4 million for the same period
in 2012. On a GAAP basis, net loss for the first quarter of 2013
was $14.0 million as compared to net
loss of $35.3 million for the same
quarter in 2012.
Sales volumes for the first quarter of 2013 were 7,186 barrels
of oil equivalent per day ("boepd"), compared to 4,174 boepd for
the same quarter in the prior year. First quarter 2013 sales
numbers were impacted by the timing of liftings at the Alba field,
where during the period there was only a single lifting. Physical
production for the first quarter of 2013 averaged 9,385 boepd
compared to 3,974 boepd for the same quarter of 2012.
Recent Business Highlights:
- North Sea:
- Drilling of the West Rochelle
well remains on schedule, with first production expected mid-year
2013
- The third production well at Bacchus began drilling in
March
- The Alba 2013 in-field drilling program commenced
- The Centurion South exploration well was drilled to total
depth
- Finance:
- The sale of the $107.5 million
Monetary Production Payment closed on April
30, 2013
- Strategic Review:
- Initiated in February, the review process remains on-going
"This quarter has been about execution and keeping our
development projects moving forward. The drilling of our production
wells at West Rochelle and Bacchus
continues on schedule. We have worked through a significant number
of the processing issues at Alba and expect to see better
production levels from the field in the second half of the year,"
said William L. Transier, chairman,
chief executive officer and president. "Our strategic review
process remains on-going. We intend to bring the process to
conclusion as soon as a thorough evaluation of all the options is
completed by our Board of Directors."
Operational Update
United Kingdom
In mid-February, the Transocean Prospect rig moved to the
West Rochelle field. Drilling of
the production well has reached total measured depth and final
completion of the well is in process. First production from the
West Rochelle well is expected in
mid-2013. The subsea pipeline and manifold infrastructure for the
field has been installed and the topside modifications to the Scott
Platform have also been completed. Endeavour has a 44% working
interest in the Rochelle
development.
At the Bacchus field, the Rowan Gorilla VII rig arrived in late
March to drill the third planned production well. Production
performance from the first two wells continues to be strong and
remains above original expectations. First production from the
third well is expected during the third quarter of 2013. Endeavour
has a 30% working interest in the Bacchus field.
At Alba, the year's drilling campaign commenced with three
development wells planned. The timing of the drilling program has
been accelerated into the first half of the year. The Company
expects the drilling, in combination with improvements in the
processing systems, to result in increased production levels from
the field during the second half of the year. During the first
quarter, production at the field was impacted by an unplanned
five-day shutdown and lower than expected production levels due to
continuing processing problems. Endeavour has a 25.68% working
interest in the Alba field.
Beginning in March, the Centurion South exploration well was
drilled to its planned total depth. The presence of hydrocarbon
bearing Fulmar reservoir sands was confirmed, although the section
was thinner than anticipated. The Company and its partners are
evaluating the results, as well as the overall commercial viability
of the combined Centurion discoveries. The prospect is a satellite
to the Centurion discovery which was drilled in 1984 and flow
tested at 5,200 boepd. The well is being plugged and abandoned.
Endeavour has a 33.3% working interested in the block.
Finance
On April 30, Endeavour closed on
the sale of a $107.5 million Monetary
Production Payment (the 'MPP') after receiving the required
approvals from the United Kingdom
regulators. The MPP will be satisfied out of the production from
the Alba and Bacchus fields.
Strategic Review Process
In February 2013, the Board of
Directors initiated a process to explore a broad range of strategic
alternatives to further enhance shareholder value. Data rooms were
opened in the U.K. and U.S. and the process is on-going. Endeavour
remains focused on executing its operational plans. While the
strategic review is continuing, the Company can provide no
assurance that the strategic review will result in the Company
changing its current business plan or completing any
transaction.
Earnings Conference Call, Thursday,
May 9, 2013 at 9:00 a.m., Central
Time, 3:00 p.m. British Summer
Time
Endeavour International will host a conference call and web cast
to discuss its 2013 first quarter financial and operating results
on Thursday, May 9, 2013 at
9 a.m. Central Time, 3 p.m. British Summer Time. A supporting slide
deck for the conference call is available on the home page of
Endeavour's website at www.endeavourcorp.com and under the Investor
Relations section in conjunction with the details for the
conference call. To participate and ask questions during the
conference call, dial the local country telephone number and the
confirmation code 3076749. The toll-free numbers are
800-756-4697 in the United
States and 0-808-101-1152 in the United Kingdom. Other international callers
should dial 913-981-5517 (tolls apply). To listen
only to the live audio web cast access Endeavour's home page at
www.endeavourcorp.com. A replay will be available beginning at
12:00 p.m. Central Time on
May 9, 2013 through 12:00 p.m. on May 16,
2013 by dialing toll free 888-203-1112 (U.S.)
or 719-457-0820 (international), confirmation code
3076749.
Endeavour International Corporation is an oil and gas
exploration and production company focused on the acquisition,
exploration and development of energy reserves in the North Sea and
the United States. For more
information, visit www.endeavourcorp.com.
Additional information for investors:
Certain statements in this news release should be regarded as
"forward-looking" statements within the meaning of the securities
laws. These statements speak only as of the date made. Such
statements are subject to assumptions, risk and uncertainty. Actual
results or events may vary materially.
The Securities and Exchange Commission (SEC) permits oil and
gas companies, in their filings with the SEC, to disclose not only
proved reserves, but also probable reserves and possible reserves
that meet the SEC's definitions for such terms, and price and cost
sensitivities for such reserves, and prohibits disclosure of
resources that do not constitute such reserves. We use may use
certain terms in our news releases, such as "reserve potential,"
that the SEC's guidelines strictly prohibit us from including in
filings with the SEC. These estimates are by their nature more
speculative than estimates of proved, probable and possible
reserves and accordingly are subject to substantially greater risk
of being actually realized. In addition, we do not represent that
the probable or possible reserves described herein meet the
recoverability thresholds established by the SEC in its new
definitions. Investors are urged to also consider closely the
disclosure in our filings with the SEC, available from our website
at www.endeavourcorp.com. Endeavour is also subject
to the requirements of the London Stock Exchange and considers the
disclosures in this release to be appropriate and/or required under
the guidelines of that exchange.
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Endeavour
International Corporation
Condensed
Consolidated Balance Sheets
(Unaudited)
(Amounts in
thousands)
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March
31,
|
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December
31,
|
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2013
|
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2012
|
|
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Assets
|
|
Current Assets:
|
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|
|
|
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Cash and cash
equivalents
|
$
|
80,781
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$
|
59,185
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Restricted cash
|
|
178
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178
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Accounts receivable
|
|
30,173
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|
46,003
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Prepaid expenses and other
current assets
|
|
40,562
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|
20,995
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Total Current Assets
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151,694
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126,361
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Property and Equipment,
Net
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1,032,810
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|
1,003,441
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Goodwill
|
|
259,238
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262,764
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Other Assets
|
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58,509
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49,906
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Total Assets
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$
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1,502,251
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$
|
1,442,472
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Liabilities
and Stockholders' Equity
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Current Liabilities:
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Accounts payable
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$
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44,731
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$
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60,153
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Current maturities of
debt
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|
-
|
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|
15,713
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Accrued expenses and
other
|
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150,948
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|
90,100
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Total Current
Liabilities
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|
195,679
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|
165,966
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Long-Term Debt
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862,249
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843,793
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Deferred Taxes
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|
154,354
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141,887
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Other Liabilities
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|
155,961
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|
147,692
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Total Liabilities
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1,368,243
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|
1,299,338
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Commitments and
Contingencies
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Series C Convertible Preferred
Stock
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43,703
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43,703
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Stockholders' Equity
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|
90,305
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99,431
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Total Liabilities and
Stockholders' Equity
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$
|
1,502,251
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$
|
1,442,472
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Endeavour
International Corporation
Condensed
Consolidated Statement of Operations
(Unaudited)
(Amounts in
thousands, except per share data)
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Three Months
Ended
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March
31,
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2013
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2012
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Revenues
|
$
|
57,672
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$
|
15,166
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Cost of Operations:
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Operating expenses
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17,490
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|
4,898
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Depreciation, depletion and
amortization
|
|
22,947
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7,906
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Impairment of oil and gas
properties
|
|
3,534
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|
|
15,740
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General and
administrative
|
|
5,482
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|
|
5,323
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Total Expenses
|
|
49,453
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|
|
33,867
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Income (Loss) From
Operations
|
|
8,219
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|
|
(18,701)
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Other Income
(Expense):
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Derivatives:
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Unrealized gains
(losses)
|
|
1,580
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|
|
(4,779)
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Interest expense
|
|
(21,438)
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|
|
(19,707)
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|
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Letter of credit fees
|
|
(11,380)
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|
|
-
|
|
|
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Interest income and
other
|
|
9,882
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|
|
(2,668)
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Total Other Expense
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|
(21,356)
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|
|
(27,154)
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Loss Before Income
Taxes
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|
(13,137)
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|
|
(45,855)
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|
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|
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|
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Income Tax Expense
(Benefit)
|
|
909
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|
|
(10,593)
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Net Loss
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|
(14,046)
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|
|
(35,262)
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Preferred Stock
Dividends
|
|
456
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|
456
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Net Loss to Common
Stockholders
|
$
|
(14,502)
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|
$
|
(35,718)
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Basic and Diluted Net Loss per
Common Share
|
$
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(0.31)
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|
$
|
(0.94)
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Weighted Average Number of
Common Shares Outstanding:
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Basic and Diluted
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|
47,060
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|
37,854
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Endeavour
International Corporation
Condensed
Consolidated Statement of Cash Flows
(Unaudited)
(Amounts in
thousands)
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Three Months
Ended March 31,
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2013
|
|
2012
|
|
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Cash Flows from Operating
Activities:
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Net loss
|
$
|
(14,046)
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|
$
|
(35,262)
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|
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Adjustments to reconcile net
loss to net cash provided by (used in) operating
activities:
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Depreciation, depletion and
amortization
|
|
22,947
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|
|
7,906
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Impairment of oil and gas
properties
|
|
3,534
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|
15,740
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|
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Deferred tax expense
(benefit)
|
|
128
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(9,014)
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Unrealized (gains) losses on
derivatives
|
|
(1,580)
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|
4,779
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Amortization of non-cash
compensation
|
|
832
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1,559
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Amortization of loan costs and
discount
|
|
3,439
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|
|
3,669
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Non-cash interest
expense
|
|
2,274
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|
|
3,528
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Other
|
|
(4,723)
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|
|
1,892
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Changes in operating assets and
liabilities
|
|
34,800
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|
|
(15,950)
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Net Cash Provided by (Used in)
Operating Activities
|
|
47,605
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|
(21,153)
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Cash Flows From Investing
Activities:
|
|
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|
|
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|
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Capital expenditures
|
|
(58,257)
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|
|
(23,242)
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Acquisitions
|
|
(817)
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|
|
(8,017)
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Increase in restricted
cash
|
|
-
|
|
|
(493,434)
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Net Cash Used in Investing
Activities
|
|
(59,074)
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|
|
(524,693)
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|
Cash Flows From Financing
Activities:
|
|
|
|
|
|
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|
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Repayments of
borrowings
|
|
-
|
|
|
(588)
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Borrowings under debt
agreements, net of debt discount
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|
-
|
|
|
480,000
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|
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Financing costs paid
|
|
(9,935)
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|
|
(21,005)
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Proceeds from issuance of
monetary production payment
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|
43,000
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|
|
-
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Dividends paid
|
|
-
|
|
|
(416)
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|
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Other financing
|
|
-
|
|
|
5
|
|
|
Net Cash Provided by Financing
Activities
|
|
33,065
|
|
|
457,996
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash
and Cash Equivalents
|
|
21,596
|
|
|
(87,850)
|
|
|
Cash and Cash Equivalents,
Beginning of Period
|
|
59,185
|
|
|
106,036
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End
of Period
|
$
|
80,781
|
|
$
|
18,186
|
|
|
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|
|
|
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|
|
|
|
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Endeavour
International Corporation
Operating
Statistics
(Unaudited)
|
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|
|
|
|
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Three
Months Ended
|
|
|
|
|
March
31,
|
|
|
|
|
2013
|
|
2012
|
|
Sales volume (1)
|
|
|
|
|
|
|
|
|
Oil and condensate sales
(Mbbls):
|
|
|
|
|
|
|
|
|
|
United Kingdom
|
|
|
508
|
|
|
96
|
|
|
|
United States
|
|
|
-
|
|
|
1
|
|
|
|
Total
|
|
|
508
|
|
|
97
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas sales (MMcf):
|
|
|
|
|
|
|
|
|
|
United Kingdom
|
|
|
11
|
|
|
21
|
|
|
|
United States
|
|
|
821
|
|
|
1,677
|
|
|
|
Total
|
|
|
832
|
|
|
1,698
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil equivalent sales
(MBOE)
|
|
|
|
|
|
|
|
|
|
United Kingdom
|
|
|
510
|
|
|
100
|
|
|
|
United States
|
|
|
137
|
|
|
280
|
|
|
|
Total
|
|
|
647
|
|
|
380
|
|
|
|
|
|
|
|
|
|
|
|
Total BOE per day
|
|
|
7,186
|
|
|
4,174
|
|
|
|
|
|
|
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|
|
Physical production volume (BOE
per day) (1)
|
|
|
|
|
|
|
|
|
|
United Kingdom
|
|
|
7,862
|
|
|
893
|
|
|
|
United States
|
|
|
1,523
|
|
|
3,081
|
|
|
|
Total
|
|
|
9,385
|
|
|
3,974
|
|
|
|
|
|
|
|
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Realized Price, before and after
derivatives
|
|
|
|
|
|
|
|
|
Oil and condensate price ($ per
Bbl)
|
|
$
|
108.40
|
|
$
|
116.99
|
|
|
Gas price ($ per Mcf)
|
|
$
|
3.13
|
|
$
|
2.25
|
|
|
Equivalent oil price ($ per
BOE)
|
|
$
|
89.17
|
|
$
|
39.92
|
|
|
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(1)
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We record oil revenues using the
sales method and use the entitlements method to account for sale of
gas production. Physical production may differ from sales
volumes based on the timing of tanker liftings for our
international sales.
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|
|
|
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|
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Endeavour
International Corporation
|
|
Reconciliation of GAAP to
Non-GAAP Measures
|
|
(Unaudited)
|
|
(Amounts in
thousands)
|
|
|
|
As required under Regulation G
of the Securities Exchange Act of 1934, provided below are
reconciliations of net income (loss) to the following non-GAAP
financial measures: net income, as adjusted and Adjusted
EBITDA. We use these non-GAAP measures as key metrics for our
management and to demonstrate our ability to internally fund
capital expenditures and service debt. The non-GAAP measures
are useful in comparisons of oil and gas exploration and production
companies as they exclude non-operating fluctuations in assets and
liabilities.
|
|
|
|
|
(amounts in
thousands)
|
First
Quarter
|
|
|
March
31,
|
|
|
2013
|
2012
|
|
Net loss
|
$
|
(14,046)
|
$
|
(35,262)
|
|
Impairment of oil and gas
properties (net of tax) (1)
|
|
3,534
|
|
15,740
|
|
Unrealized loss on derivatives
(net of tax) (2)
|
|
(1,580)
|
|
4,148
|
|
|
|
|
|
|
|
Net Loss as
Adjusted
|
$
|
(12,092)
|
$
|
(15,374)
|
|
|
|
|
|
|
|
Net loss
|
$
|
(14,046)
|
$
|
(35,262)
|
|
Unrealized loss on
derivatives
|
|
(1,580)
|
|
4,779
|
|
Net interest expense
|
|
21,422
|
|
19,651
|
|
Letter of credit fees
|
|
11,380
|
|
-
|
|
Depreciation, depletion and
amortization
|
|
22,947
|
|
7,906
|
|
Impairment of oil and gas
properties
|
|
3,534
|
|
15,740
|
|
Income tax expense
(benefit)
|
|
909
|
|
(10,593)
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$
|
44,566
|
$
|
2,221
|
|
|
|
|
|
|
| |
|
|
|
|
|
(1)
|
Since the impairments related to
U.S. oil and gas properties, we recognized no tax benefits as there
was no assurance that we could generate any U.S. taxable
earnings.
|
|
(2)
|
Net of tax (benefit) expense of
none and $631, respectively.
|
|
|
|
| |