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,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
Assets
|
Current
Assets:
|
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
80,781
|
|
$
|
59,185
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|
Restricted
cash
|
|
178
|
|
|
178
|
|
Accounts
receivable
|
|
30,173
|
|
|
46,003
|
|
Prepaid
expenses and other current assets
|
|
40,562
|
|
|
20,995
|
|
|
Total
Current Assets
|
|
151,694
|
|
|
126,361
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|
|
|
|
|
|
|
|
Property
and Equipment, Net
|
|
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
|
|
58,509
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|
|
49,906
|
|
|
|
|
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Total
Assets
|
$
|
1,502,251
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$
|
1,442,472
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Liabilities and Stockholders'
Equity
|
Current
Liabilities:
|
|
|
|
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Accounts
payable
|
$
|
44,731
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|
$
|
60,153
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|
Current
maturities of debt
|
|
-
|
|
|
15,713
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|
Accrued
expenses and other
|
|
150,948
|
|
|
90,100
|
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Total
Current Liabilities
|
|
195,679
|
|
|
165,966
|
|
|
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|
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Long-Term
Debt
|
|
862,249
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843,793
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Deferred
Taxes
|
|
154,354
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|
|
141,887
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Other
Liabilities
|
|
155,961
|
|
|
147,692
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Total
Liabilities
|
|
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
|
|
43,703
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|
|
43,703
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|
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|
|
|
|
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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
|
Revenues
|
$
|
57,672
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$
|
15,166
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|
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Cost of
Operations:
|
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|
|
|
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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
|
|
|
7,906
|
|
Impairment
of oil and gas properties
|
|
3,534
|
|
|
15,740
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General
and administrative
|
|
5,482
|
|
|
5,323
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Total
Expenses
|
|
49,453
|
|
|
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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|
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Derivatives:
|
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|
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|
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|
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Unrealized
gains (losses)
|
|
1,580
|
|
|
(4,779)
|
|
Interest
expense
|
|
(21,438)
|
|
|
(19,707)
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Letter of
credit fees
|
|
(11,380)
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|
|
-
|
|
Interest
income and other
|
|
9,882
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|
(2,668)
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Total
Other Expense
|
|
(21,356)
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|
|
(27,154)
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|
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|
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Loss
Before Income Taxes
|
|
(13,137)
|
|
|
(45,855)
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|
|
|
|
|
|
Income Tax
Expense (Benefit)
|
|
909
|
|
|
(10,593)
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|
|
|
|
|
|
Net
Loss
|
|
(14,046)
|
|
|
(35,262)
|
Preferred
Stock Dividends
|
|
456
|
|
|
456
|
|
|
|
|
|
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Net Loss
to Common Stockholders
|
$
|
(14,502)
|
|
$
|
(35,718)
|
|
|
|
|
|
|
|
|
|
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Basic and
Diluted Net Loss per Common Share
|
$
|
(0.31)
|
|
$
|
(0.94)
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|
|
|
|
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Weighted
Average Number of Common Shares Outstanding:
|
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|
|
Basic and
Diluted
|
|
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,
|
|
2013
|
|
2012
|
Cash Flows
from Operating Activities:
|
|
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|
|
|
|
Net
loss
|
$
|
(14,046)
|
|
$
|
(35,262)
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|
Adjustments to reconcile net loss to net cash
provided by (used in) operating
activities:
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|
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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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Deferred
tax expense (benefit)
|
|
128
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|
(9,014)
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Unrealized
(gains) losses on derivatives
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|
(1,580)
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4,779
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Amortization of non-cash compensation
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|
832
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|
1,559
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Amortization of loan costs and discount
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|
3,439
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|
3,669
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|
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Non-cash
interest expense
|
|
2,274
|
|
|
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
|
|
|
(15,950)
|
Net Cash
Provided by (Used in) Operating Activities
|
|
47,605
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|
|
(21,153)
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|
|
|
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|
|
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Cash Flows
From Investing Activities:
|
|
|
|
|
|
|
Capital
expenditures
|
|
(58,257)
|
|
|
(23,242)
|
|
Acquisitions
|
|
(817)
|
|
|
(8,017)
|
|
Increase
in restricted cash
|
|
-
|
|
|
(493,434)
|
Net Cash
Used in Investing Activities
|
|
(59,074)
|
|
|
(524,693)
|
|
|
|
|
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|
|
Cash Flows
From Financing Activities:
|
|
|
|
|
|
|
Repayments
of borrowings
|
|
-
|
|
|
(588)
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|
Borrowings
under debt agreements, net of debt discount
|
|
-
|
|
|
480,000
|
|
Financing
costs paid
|
|
(9,935)
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|
|
(21,005)
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|
Proceeds
from issuance of monetary production payment
|
|
43,000
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|
-
|
|
Dividends
paid
|
|
-
|
|
|
(416)
|
|
Other
financing
|
|
-
|
|
|
5
|
Net Cash
Provided by Financing Activities
|
|
33,065
|
|
|
457,996
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|
|
|
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|
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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Endeavour International Corporation
Operating Statistics
(Unaudited)
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
Physical production volume (BOE per day)
(1)
|
|
|
|
|
|
|
|
|
United
Kingdom
|
|
|
7,862
|
|
|
893
|
|
|
United
States
|
|
|
1,523
|
|
|
3,081
|
|
|
Total
|
|
|
9,385
|
|
|
3,974
|
|
|
|
|
|
|
|
|
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
|
|
|
(1)
|
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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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.
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|
(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.
|
SOURCE Endeavour International Corporation