-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EI1ZuMX0QJ55Olpvh57LtrtVXfhobLk8JKoYojiIlCDGyJIcesKX46bvaMpsNyJX iqvN6uh0GYqlQIN2hGkj/A== 0000950134-00-001759.txt : 20000310 0000950134-00-001759.hdr.sgml : 20000310 ACCESSION NUMBER: 0000950134-00-001759 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000224 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000309 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRIGHAM EXPLORATION CO CENTRAL INDEX KEY: 0001034755 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 752692967 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-22433 FILM NUMBER: 564187 BUSINESS ADDRESS: STREET 1: 6300 BRIDGE POINT PARKWAY STREET 2: BLDG 2 SUITE 500 CITY: AUSTIN STATE: TX ZIP: 78730 BUSINESS PHONE: 5124273300 MAIL ADDRESS: STREET 1: 6300 BRIDGE POINT PARKWAY STREET 2: BLDG 2 SUITE 500 CITY: AUSTIN STATE: TX ZIP: 78730 8-K 1 FORM 8-K 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 --------------- Date of Report (Date of earliest event reported): FEBRUARY 24, 2000 BRIGHAM EXPLORATION COMPANY (Exact name of registrant as specified in its charter) DELAWARE 000-22433 75-2692967 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.)
6300 BRIDGEPOINT PARKWAY BUILDING TWO, SUITE 500 AUSTIN, TEXAS 78730 (Address, including zip code, of principal executive offices) Registrant's telephone number, including area code: (512) 427-3300 ================================================================================ 2 Item 5. OTHER EVENTS. On February 24, 2000, Brigham Exploration Company (the "Company") announced initial production results from two wells completed in its Gulf Coast exploration projects. On March 7, 2000, the Company announced its proved reserve estimates as of December 31, 1999, its finding costs and drilling results for 1999, capital budget for 2000, and operational and financial results for the fourth quarter and fiscal year ended December 31, 1999. Copies of the Company's press releases that provide these announcements are attached hereto as Exhibit 99.1, 99.2 and 99.3. Item 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits
Item Number Exhibit ----------- ------- 99.1* Press Release dated February 24, 2000. 99.2* Press Release dated March 7, 2000. 99.3* Press Release dated March 7, 2000.
- ------- * filed herewith. 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BRIGHAM EXPLORATION COMPANY Date: March 9, 2000 By: /s/ Curtis F. Harrell --------------------- Curtis F. Harrell Chief Financial Officer 4 INDEX TO EXHIBITS
Exhibit Number Description -------- ----------- 99.1 Press Release dated February 24, 2000. 99.2 Press Release dated March 7, 2000. 99.3 Press Release dated March 7, 2000.
EX-99.1 2 PRESS RELEASE DATED FEBRUARY 24, 2000 1 EXHIBIT 99.1 [BRIGHAM LOGO] NEWS RELEASE FOR IMMEDIATE RELEASE BRIGHAM PROVIDES UPDATE ON RECENT WELL COMPLETIONS ================================================================================ Austin, TX -- (Business Wire) - February 24, 2000 -- Brigham Exploration Company (NASDAQ:BEXP) today announced initial production results for two wells recently completed in its Gulf Coast exploration projects. HOME RUN FIELD DISCOVERY As previously disclosed, Brigham discovered a potentially significant new Vicksburg field, the Home Run Field, in its Diablo Project in Brooks County, Texas during the fourth quarter of 1999. The Palmer State #2 well was drilled to a depth of 12,550 feet and encountered 210 net feet of sand with greater than 15% density log porosity in four Lower Vicksburg sand intervals. During a six-week period beginning in late December, Brigham perforated, fracture stimulated and tested each of these four zones with average daily flow rates ranging from 2.2 to 7.4 MMcf of natural gas and 130 to 430 barrels of condensate per zone. Receipt of regulatory approvals from the Texas Railroad Commission was delayed until mid-February, and the Company subsequently performed commingling operations to produce the Palmer State #2 well from all four Lower Vicksburg zones. On February 20th, the Palmer State #2 began flowing to sales as a commingled producer. Currently, the well is producing at a rate of 10.1 MMcf of natural gas and 650 barrels of condensate per day, or 14 MMcfe total (4.1 MMcfe net to Brigham's revenue interest), with a flowing tubing pressure of 6,400 psi. While the Palmer State #2 is capable of producing at significantly higher rates, Brigham intends to monitor and evaluate actual production results to determine the optimal rate at which to produce the well. Brigham operates the Palmer State #2 well and has retained a 34% working and 29% net revenue interest in the Diablo Project. Brigham plans to drill at least five additional locations in this project in 2000, at least three of which will be developmental locations to the Palmer State #2 on the same fault block, the first of which should spud in March. Two of the five locations are exploratory wells planned to test fault blocks that are immediately adjacent to Brigham's Home Run Field discovery. FRIO BRIGHT SPOT PLAY DISCOVERY In its Southwest Danbury Project in Brazoria County, Texas, Brigham has successfully completed another well in its Frio bright spot play. Brigham's prospects in this play are supported by 3-D seismic direct detection techniques including various amplitude attributes, such as amplitude versus offset (AVO) analysis. In this project, Brigham recently completed and tested its third consecutive well in the Upper Frio interval at a depth of approximately 10,700 feet. The Brigham-operated well, in which it retains a 56% working and 43% net revenue interest, began flowing to sales in mid-February. The well is currently producing at a rate of 2.9 MMcf of natural gas and 280 barrels of oil per day with a flowing tubing pressure of 2,800 psi. Brigham intends to spud an offset location to this Upper Frio discovery in April. In addition, the Company has twelve other amplitude-related prospects in this project area, at least three of which should be drilled in 2000. Brigham intends to release its year-end proved reserve estimates and financial results for the fourth quarter and full year 1999 during the week of March 6th. ABOUT BRIGHAM EXPLORATION Brigham Exploration Company (www.bexp3d.com) is an independent exploration and production company that applies 3-D seismic imaging and other advanced technologies to systematically explore and develop onshore domestic natural gas and oil provinces. 2 Page 2 FORWARD LOOKING STATEMENTS DISCLOSURE Except for the historical information contained herein, the matters discussed in this news release are forward looking statements that are based upon current expectations. Important factors that could cause actual results to differ materially from those in the forward looking statements include risks inherent in exploratory drilling activities, the timing and extent of changes in commodity prices, unforeseen engineering and mechanical or technological difficulties in drilling wells, availability of drilling rigs, land issues, federal and state regulatory developments and other risks more fully described in the company's filings with the Securities and Exchange Commission. Contact: Christopher A. Phelps, Vice President - Finance & Strategic Planning (512) 427-3300 / investor@bexp3d.com EX-99.2 3 PRESS RELEASE DATED MARCH 7, 2000 1 EXHIBIT 99.2 [BRIGHAM LOGO] NEWS RELEASE FOR IMMEDIATE RELEASE BRIGHAM EXPLORATION ACHIEVES RECORD LOW FINDING COSTS IN 1999; PROVIDES OVERVIEW OF CAPITAL BUDGET FOR 2000 ================================================================================ Austin, TX -- (Business Wire) - March 7, 2000 -- Brigham Exploration Company (NASDAQ:BEXP) today announced that it achieved an all-in average finding cost in its 1999 exploration program of $0.53 per Mcfe, which is the lowest level in the Company's history. Brigham also provided a review of its 1999 drilling activity and an overview of its planned $25 million capital budget for 2000. YEAR-END 1999 PROVED RESERVES AND FINDING COSTS Brigham's estimated net proved reserve volumes at December 31, 1999 totaled 84 Bcfe, approximately 78% of which are natural gas and 48% are proved developed. During 1999, Brigham added 37 Bcfe of net proved reserves primarily through drilling activities in its Anadarko Basin and Gulf Coast 3-D seismic projects. The Company's year-end 1999 proved reserve volumes represent an 18% increase over its 71 Bcfe estimated at mid-year 1999, which were reduced by the sales of properties with estimated net proved reserves of 36 Bcfe in June 1999. Brigham's drilling program generated net proved reserve additions that replaced 590% of its 6.3 Bcfe of net volumes produced during the year. Despite the Company's property sales in June 1999, which generated proceeds of $17.1 million, the present value of Brigham's estimated proved reserves, calculated in accordance with SEC guidelines ("PV10% Value"), increased 40% to $114.5 million at year-end 1999 from $81.7 million at year-end 1998. The PV10% Value at year-end 1999 was calculated based on a Henry Hub natural gas price of $2.35 per MMBtu and a Koch West Texas Intermediate posted oil price of $22.75 per barrel. Net capital expenditures incurred in exploration and development operations during 1999 totaled $14.3 million, approximately 75% of which related to drilling activities. As a result, Brigham's average finding costs for 1999 (including revisions to prior reserve estimates) were $0.38 per Mcfe based only on drilling expenditures and $0.53 per Mcfe based on total net capital expenditures, each of which represent the lowest annual finding costs achieved by Brigham. 1999 DRILLING ACTIVITY Brigham spud 6 gross and 2.3 net wells in its Anadarko Basin and Gulf Coast exploration provinces during the fourth quarter of 1999, representing an average working interest of 38%. Of these wells, the Company has completed 5 gross (2.3 net) wells and plugged 1 gross (0.0 net) wells, resulting in completion rates of 83% and 100% on a gross and net basis, respectively. For the full year 1999, Brigham participated in the drilling of 27 gross (8.8 net) wells, approximately 70% of which were completed. Highlights from Brigham's 1999 drilling program include: o Home Run Field Vicksburg Discovery: The most significant drilling discovery by Brigham in 1999 was the Brigham-operated Palmer State #2 well, which confirmed the 1,100 acre Home Run Field in Brooks County, Texas. As previously announced, Brigham fracture stimulated the four Lower Vicksburg pay intervals identified in the Palmer State #2 during the first six weeks of 2000. The Company subsequently began full production from all four commingled zones in late February 2000, and the well is currently producing at a combined total daily rate of 16 MMcfe, or 4.7 MMcfe net to Brigham's revenue interest. Proved reserves attributed to the well are 14.1 Bcfe (74% natural gas), or 4.1 Bcfe net to Brigham's interest. The Company's net cost to drill and complete the well was approximately $1 million, resulting in a drilling cost of $0.24 per proved developed producing Mcfe. Further, the PV10% Value of net proved developed reserves attributed to the well is $9.7 million, or more than nine times the drilling and completion investment. Brigham's 3-D interpretative mapping indicates that the Home Run Field reservoirs have over 500 feet of structural relief and cover approximately 1,100 acres, with estimated gross potential reserves ranging from 80 Bcfe to over 200 Bcfe. The Company expects to spud a development well in mid-March, with five total wells currently planned for the project area in 2000. 2 Page 2 o Gulf Coast Frio Discoveries: Brigham achieved drilling success in its expanding Frio play in Brazoria County, Texas with the completion of two wells spud during 1999 that added proved reserves of 12.4 gross Bcfe, or 6.6 Bcfe net to the Company's revenue interests. As previously announced, the most recent Frio discovery began production in mid-February and is currently producing at a daily rate of 4.7 MMcfe (66% natural gas), or 2.0 MMcfe net to Brigham's revenue interest. During 2000, Brigham plans to perform a workover of the earlier discovery to restore production from a dually completed Upper Frio interval currently behind pipe, and to spud two additional Frio bright spot tests in this project. o Anadarko Basin Morrow Play: Brigham has completed all five of its wells drilled in 1999 in its Arnett Project in Ellis, County Oklahoma, resulting in the discovery of 11.3 gross Bcfe of proved developed reserves, or 5.4 Bcfe net to the Company's revenue interests. Capitalizing on these Lower Morrow sandstone discoveries, Brigham plans to drill three additional locations in this project during the first half of 2000. PLANNED 2000 CAPITAL BUDGET The Company's planned 2000 capital budget is estimated to be $25 million, which consists of approximately $20 million (or 80% of total budgeted expenditures) for drilling. Brigham's 2000 drilling program is designed to capitalize on its low 1999 finding costs and recent drilling discoveries, and is therefore focused in its Anadarko Basin and Gulf Coast 3-D seismic projects. The Company estimates that it will drill 30 to 40 wells during 2000, with an approximate 60%/40% allocation between its Gulf Coast and Anadarko Basin provinces. Drilling expenditures are estimated to be allocated approximately 75%/25% to its Gulf Coast and Anadarko Basin provinces. Brigham's planned drilling activity for 2000 consists of a blend of exploratory and developmental drilling locations with approximately 55% of its $20 million drilling budget allocated for exploration and the remaining 45% for development. The planned activity includes: o Targeting approximately 20% of the Company's 2000 drilling budget towards its Home Run Field area, including three development wells to the Palmer State #2 and two exploratory wells to test similar Lower Vicksburg objectives in fault blocks directly adjacent to Brigham's Home Run Field discovery. The next Home Run Field development well should spud in the next ten days. o Ten to fifteen 3-D seismic amplitude-supported exploratory Frio tests in several of its Gulf Coast projects, at least two of which are planned to spud in March. o An exploratory test of a Springer-aged stratigraphic prospect in its Anadarko Basin province that would extend a channel that has produced in excess of 128 gross Bcfe to date. This prospect targets estimated gross unrisked potential reserves of 18 Bcfe, and Brigham retains a 71% working interest in the exploratory well which is currently drilling and expected to reach total depth in mid-April. o An exploratory well that targets a large 3-D delineated Springer structure with over 140 Bcfe of potential reserves in the Anadarko Basin. Brigham has an 18% working interest in this 13,000 foot test spud in early January, which could establish as many as ten potential offset locations. This well was recently completed in the targeted Springer objective and production test results are expected within the next week. o Offset drilling locations in its Morrow and Douglas natural gas plays in the Anadarko Basin. One Douglas well is currently drilling and three Morrow wells should spud within the next sixty days. o A deep proved undeveloped test offsetting a 16 Bcfe well that targets a potentially significant Hunton structure in the Mountain Front play in the western portion of the Anadarko Basin. Brigham expects to fund its planned capital expenditures during 2000 through a combination of cash flow from operations and its recently completed debt and equity financing transactions that provide a total of $18.5 million to $23.5 million in committed capital availability. 3 Page 3 MANAGEMENT COMMENT Bud Brigham, the Company's Chairman, CEO and President, stated, "Two of our most significant goals for 1999 were to secure additional liquidity for our drilling program and to achieve optimal drilling results by concentrating our activity in areas where we achieved previous 3-D seismic drilling success. We believe our results demonstrate that we have effectively accomplished each of these objectives. Our liquidity objectives were completed through a combination of asset sales, the majority of which were non-producing assets, and financing transactions which culminated in our recently secured funding of our planned 2000 activity." Brigham continued, "Our 1999 drilling program, which generated a major field discovery, validates the value that exists in our deep prospect inventory. While our historical drilling costs in the Gulf Coast and the Anadarko Basin are low relative to industry at $0.62 and $0.56 per Mcfe, respectively, we achieved our lowest drilling cost to date in 1999 at only $0.38 per Mcfe. Further, we are benefiting from our substantial prior investments in 3-D seismic data and undeveloped acreage, since the majority of our current capital investments go directly to drilling, resulting in our extremely low all-in average finding cost of $0.53 per Mcfe during 1999." Brigham further stated, "We believe that our 2000 drilling program provides our Company with outstanding value added economics, and therefore the opportunity to significantly expand our proved developed reserves, production volumes and cash flow. This balanced program provides an attractive mix of lower risk development drilling projects, highlighted by our planned Home Run Field activity, and several high potential exploratory opportunities. We look forward to implementing this exciting exploration and development program that builds upon our drilling accomplishments in 1999, and we therefore expect to deliver tangible growth in shareholder value in 2000." ABOUT BRIGHAM EXPLORATION Brigham Exploration Company (www.bexp3d.com) is an independent exploration and production company that applies 3-D seismic imaging and other advanced technologies to systematically explore and develop onshore domestic natural gas and oil provinces. FORWARD LOOKING STATEMENTS DISCLOSURE Except for the historical information contained herein, the matters discussed in this news release are forward looking statements that are based upon current expectations. The Company's actual capital expenditures in 2000 may differ from the estimates discussed herein. Important factors that could cause actual results to differ materially from those in the forward looking statements include risks inherent in exploratory drilling activities, the timing and extent of changes in commodity prices, unforeseen engineering and mechanical or technological difficulties in drilling wells, availability of drilling rigs, land issues, availability of sufficient capital resources by the Company and its project participants, federal and state regulatory developments and other risks more fully described in the Company's filings with the Securities and Exchange Commission. Contact: Christopher A. Phelps, Vice President - Finance & Strategic Planning (512) 427-3300 / investor@bexp3d.com EX-99.3 4 PRESS RELEASE DATED MARCH 7, 2000 1 EXHIBIT 99.3 [BRIGHAM LOGO] NEWS RELEASE FOR IMMEDIATE RELEASE BRIGHAM EXPLORATION REPORTS IMPROVED 1999 FINANCIAL RESULTS ================================================================================ Austin, TX -- (Business Wire) - March 7, 2000 -- Brigham Exploration Company (NASDAQ:BEXP) today announced its financial results for the quarter and fiscal year ended December 31, 1999. Significant highlights of Brigham's 1999 financial performance include: o Net production volumes increased 4% on an equivalent basis in the fourth quarter 1999 relative to the fourth quarter 1998, despite the sale of producing reserves in mid-1999 and a significantly reduced drilling budget during 1999; o Higher realized oil and gas sales prices contributed to production revenue growth of 63% in the fourth quarter and 9% for the full year 1999 vs. comparable periods in 1998; o Significant year-over-year growth in EBITDA - 543% in the fourth quarter and 43% for the year - due to improved realized sales prices and reduced unit operating costs; and o Continuing improvement in per unit G&A expenses - $0.52 per Mcfe in the fourth quarter 1999 vs. $0.92 per Mcfe in the fourth quarter 1998. FOURTH QUARTER 1999 RESULTS Average net daily production volumes for the fourth quarter 1999 were 16.5 MMcfe, an increase of 4% from the fourth quarter 1998. Excluding net volumes attributable to properties sold by Brigham effective as of June 30, 1999, the Company's average net daily production would have been 12.6 MMcfe for the fourth quarter 1998, resulting in comparable year-over-year production growth of 31% over those adjusted volumes. This production growth primarily resulted from the completion of wells drilled in the early portion of Brigham's 1999 drilling program combined with recompletion and workover projects performed by the Company on certain producing wells. Significant drilling discoveries made by the Company late in 1999 did not materially contribute to fourth quarter volumes and will not contribute a full quarter of production until the second quarter of 2000. Net natural gas production in the fourth quarter 1999 was 1.0 Bcf, an 11% decrease over the same period in 1998, while net oil production in the current year quarter was 80 MBbls, a 61% increase from the prior year quarter. The decrease in net natural gas production was primarily the result of the Company's producing property divestitures effective June 30, 1999. The significant increases in oil production were attributable to workovers and other production stimulation operations and the resumption of production for certain non-operated oil wells that were shut-in during the fourth quarter 1998. Natural gas comprised 68% of Brigham's equivalent fourth quarter 1999 production volumes. Natural gas and oil sales for the fourth quarter 1999 were $4.1 million, or a 63% increase from the same period last year. The Company's average realized natural gas and oil equivalent sales price increased 58% in the fourth quarter 1999 as compared to the average realized sales price in the prior year quarter resulting from improved market prices for both natural gas and crude oil. Brigham's average natural gas sales price for the fourth quarter 1999 was $2.22 per Mcf compared to $1.65 per Mcf in the fourth quarter 1998 (a 36% increase), while the Company's average oil sales price for the fourth quarter 1999 was $23.38 per Bbl compared to $13.06 per Bbl in the prior year period (a 79% increase). Losses on natural gas hedging transactions of $485,000, or $0.48 per Mcf, negatively impacted Brigham's net realized natural gas sales price and revenues during the fourth quarter 1999, while natural gas hedging gains of $281,000, or $0.25 per Mcf, contributed positively to the Company's average realized natural gas sales price and revenues during the prior year period. In late September 1999, Brigham sold call options on a portion of its future oil and natural gas production to enable the Company to increase its effective fixed swap price by an average of $0.57 per MMBtu on its existing natural gas hedging contracts during the months of October 1999 through January 2000. For accounting purposes, the improvement in the Company's average realized natural gas sales price attributable to these transactions is not reflected in reported revenues. Rather, it is reflected in (i) other income (expense) on the income statement, and (ii) amortization of deferred loss on derivatives instruments and market value adjustment for derivatives instruments on the cash flow statement. 2 Page 2 Lease operating expenses for the fourth quarter 1999 were $580,000, an 8% reduction from the fourth quarter 1998. Also lower in the current year quarter, net general and administrative expenses were $771,000 in the fourth quarter 1999, or a significant 41% reduction from the fourth quarter 1998. Depletion expenses were $2.0 million ($1.34 per Mcfe), or a 50% decrease from the prior year quarter due to Brigham's improved drilling results during 1999. Interest expense increased to $2.7 million in the fourth quarter 1999 from $2.4 million in the prior year period as a result of increased borrowings and higher effective interest rates. Earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) increased 543% to $3.3 million in the fourth quarter 1999 from $512,000 in the fourth quarter 1998, while operating cash flow for the fourth quarter 1999 was $2.8 million ($0.19 per diluted share), an increase from a loss of $891,000 ($0.07 per diluted share) for the same period in 1998. The Company reported a net loss of $2.2 million ($0.15 per diluted share) for the fourth quarter 1999 compared to a net loss of $31.6 million ($2.38 per diluted share) for the prior year period. The net loss during the fourth quarter 1998 included a $25.9 million ($1.95 per diluted share) non-cash capitalized ceiling impairment charge. YEAR-END 1999 RESULTS Net equivalent production volumes totaled 6.3 Bcfe (67% natural gas) for the full year 1999 compared with 6.6 net Bcfe produced in 1998. Adjusted for the Company's proved reserve sales effective June 30, 1999, Brigham achieved comparable year-over-year production volume growth of 3%. Natural gas and oil sales for 1999 totaled $15 million compared to $13.8 million last year, an increase of 9% despite the Company's mid-year producing property divestitures, which generated proceeds of $17.1 million. Brigham's average realized natural gas and oil equivalent sales price increased 15% to $2.39 per Mcfe in 1999 from $2.08 per Mcfe in the prior year. Average realized sales prices during 1999 were $2.11 per Mcf for natural gas and $17.79 per Bbl for oil compared with average realized sales prices during 1998 of $2.04 per Mcf and $12.85 per Bbl, respectively. Despite the Company's sales of producing properties at mid-year and its reduced drilling budget relative to 1998, Brigham achieved growth in EBITDA, operating cash flow and net income during 1999. EBITDA for 1999 increased 43% to $9.5 million from $6.6 million last year, while operating cash flow increased to $7.5 million ($0.53 per diluted share) in 1999, a 245% increase from $2.2 million ($0.17 per diluted share) for 1998. The Company reported a net loss of $21.6 million ($1.53 per diluted share) for 1999, partially attributable to a non-cash $12.2 million loss associated with its property divestitures in mid-1999. Under full-cost accounting rules, the Company was required to recognize this loss in the second quarter 1999 despite the economic gain actually realized on the sales. Excluding this one-time charge, Brigham's net loss for 1999 would have been $9.4 million ($0.67 per diluted share). This compares to a loss of $33.3 million ($2.64 per diluted share) for 1998, which included a $25.9 million ($2.05 per diluted share) non-cash capitalized ceiling impairment charge recognized during the fourth quarter 1998. CURRENT DAILY PRODUCTION INCREASED FROM FOURTH QUARTER 1999 Brigham currently estimates its average net daily production volumes to be approximately 20 MMcfe, or 21% higher than its average daily production during the fourth quarter 1999. This growth in daily production volumes is primarily attributable to the late February additions of the recently completed Palmer State #2 well in Brigham's Home Run Field discovery in Brooks County, Texas and a well in Brigham's Frio play in Brazoria County, Texas. Following the completion of its recently announced financing transactions, Brigham has spud 3 wells and has plans to spud an additional 10 wells in the next 60 days in its Anadarko Basin and Gulf Coast 3-D projects, which would contribute to production volumes beginning in the second and third quarters of 2000. MANAGEMENT COMMENT Curtis Harrell, Brigham's Chief Financial Officer, stated, "In many ways 1999 was a year of transition for our company. Activity levels were down significantly as we focused on the sale of assets and a series of related financing transactions. We were also successful in the implementation of various measures to reduce overhead and other fixed components of our cost structure. As a result, we begin 2000 with an improved cost structure and the necessary capital to fund a drilling budget twice that of 1999." 3 Page 3 Harrell further stated, "Our Company continues to benefit from its prior investments in 3-D seismic and land assets with 80% of our 2000 capital budget directed towards drilling. We therefore have an excellent opportunity in 2000 to accelerate our growth in production volumes and reserves at extremely attractive all-in finding costs. With an improved cost structure and higher commodity prices, EBITDA margins should continue to improve from the record levels realized in the fourth quarter of 1999." CONFERENCE CALL INFORMATION Brigham management will host a conference call to discuss the Company's year-end 1999 financial and operational results with investors, analysts and other interested parties on Wednesday, March 8th, at 9:00 a.m. Central time. To participate in the call, please dial 800-340-5810 and ask for the Brigham Exploration conference call (conference identification number 14513509). A recording of the conference call will be available to interested parties approximately one hour after the call is completed through 5:00 p.m. Central time on Thursday, March 9th. To access the recording, please dial 800-633-8284 and enter 14513509 as the conference playback identification number. ABOUT BRIGHAM EXPLORATION Brigham Exploration Company (www.bexp3d.com) is an independent exploration and production company that applies 3-D seismic imaging and other advanced technologies to systematically explore and develop onshore domestic natural gas and oil provinces. FORWARD LOOKING STATEMENTS DISCLOSURE Except for the historical information contained herein, the matters discussed in this news release are forward looking statements that are based upon current expectations. The Company's actual capital expenditures in 2000 may differ from the estimates discussed herein. Important factors that could cause actual results to differ materially from those in the forward looking statements include risks inherent in exploratory drilling activities, the timing and extent of changes in commodity prices, unforeseen engineering and mechanical or technological difficulties in drilling wells, availability of drilling rigs, land issues, availability of sufficient capital resources by the Company and its project participants, federal and state regulatory developments and other risks more fully described in the Company's filings with the Securities and Exchange Commission. Contact: Christopher A. Phelps, Vice President - Finance and Strategic Planning (512) 427-3300 / investor@bexp3d.com 4 Page 4 BRIGHAM EXPLORATION COMPANY SUMMARY CONSOLIDATED BALANCE SHEETS (in thousands)(unaudited)
Three Months Ended December 31, Twelve Months Ended December 31, ------------------------------- -------------------------------- 1998 1999 1998 1999 ------------- ---------------- --------------- --------------- Revenues: Natural gas and oil sales $ 2,507 $ 4,096 $ 13,799 $ 14,992 Workstation revenue 68 38 390 285 2,575 4,134 14,189 15,277 Costs and expenses: Lease operating 630 580 2,172 2,259 Production taxes 145 283 850 968 General and administrative 1,310 771 4,672 3,481 Depletion of natural gas and oil properties 3,970 1,982 8,483 7,792 Capitalized ceiling impairment 25,926 -- 25,926 -- Depreciation and amortization 125 127 413 525 Amortization of stock compensation 74 11 372 1 -------- ------- -------- -------- 32,180 3,754 42,888 15,026 -------- ------- -------- -------- Operating income (loss) (29,605) 380 (28,699) 251 Interest expense (2,386) (2,727) (5,968) (9,697) Interest income 22 42 136 176 Other income (expense) -- 111 -- (163) Loss on sale of natural gas and oil properties -- -- -- (12,195) -------- ------- -------- -------- Net loss before income taxes (31,969) (2,194) (34,531) (21,628) Income tax benefit 322 -- 1,186 -- -------- ------- -------- -------- Net loss $(31,647) $(2,194) $(33,345) $(21,628) ======== ======= ======== ======== Net loss per share: Basic / Diluted $ (2.38) $ (0.15) $ (2.64) $ (1.53) Wt. avg. common shares outstanding: Basic / Diluted 13,306 14,518 12,626 14,152
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA (unaudited)
Three Months Ended December 31, Twelve Months Ended December 31, ------------------------------- -------------------------------- 1998 1999 1998 1999 ------------- ---------------- --------------- --------------- Avg. net daily production: Natural gas (MMcf) 12.5 11.1 11.9 11.7 Oil (Bbls) 551.0 887 1,100 960 Equivalent natural gas (MMcfe) (6:1) 15.8 16.5 18.5 17.4 Total net production: Natural gas (MMcf) 1,125 1,003 4,269 4,197 Oil (MBbls) 50 80 396 346 Equivalent natural gas (MMcfe) (6:1) 1,422 1,482 6,644 6,270 % Natural gas 79% 68% 64% 67% Sales prices: Natural gas ($/Mcf) (a) $ 1.65 $ 2.22 $ 2.04 $ 2.11 Oil ($/Bbl) $ 13.06 $23.38 $12.85 $17.79 Equivalent natural gas ($/Mcfe) (6:1) $ 1.76 $ 2.76 $ 2.08 $ 2.39 Other financial data: EBITDA ($000) (b) $ 512.0 $3,293 $6,631 $9,456 Operating cash flow ($000) (c) $ (891) $2,757 $2,182 $7,532 Operating cash flow per diluted share(c) $ (0.07) $ 0.19 $ 0.17 $ 0.53
(a) Includes the effects of natural gas hedging gains and losses. (b) Net income (loss) plus interest expense, DD&A expenses, deferred income taxes and other non-cash items. (c) Net income (loss) plus DD&A expenses, deferred income taxes and other non-cash items. 5 Page 5 BRIGHAM EXPLORATION COMPANY SUMMARY CONSOLIDATED BALANCE SHEETS (in thousands)(unaudited)
December 31, December 31, 1998 1999 ------------ ------------ Assets: Current assets $ 10,797 $ 8,264 Natural gas and oil properties, at cost, net 134,317 112,066 Other property and equipment, at cost, net 2,014 1,686 Other non-current assets 3,388 3,667 -------- -------- Total assets $150,516 $125,683 ======== ======== Liabilities and stockholders' equity: Current liabilities $ 23,513 $ 17,744 Notes payable 59,000 56,000 Senior subordinated notes, net 35,786 41,341 Other non-current liabilities 7,536 1,600 -------- -------- Total liabilities 125,835 116,685 Stockholders' equity 24,681 8,998 -------- -------- Total liabilities and stockholders' equity $150,516 $125,683 ======== ========
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
Three Months Ended December 31, Twelve Months Ended December 31, ------------------------------- -------------------------------- 1998 1999 1998 1999 ------------- ---------------- --------------- --------------- Cash flows from operating activities: Net loss $(31,647) $(2,194) $(33,345) $(21,628) Depletion, depreciation and amortization 4,095 2,109 8,896 8,317 Capitalized ceiling impairment 25,926 -- 25,926 -- Interest paid through issuance of add'l senior sub. notes 507 1,431 507 5,459 Amortization of deferred stock compensation 74 11 372 1 Amortization of deferred loan fees 263 579 726 1,739 Amortization of discount on senior subordinated notes 212 181 286 575 Amortization of deferred loss on derivatives instruments -- 759 -- 759 Market value adjustment for derivatives instruments -- (119) -- 115 Loss on sale of natural gas and oil properties -- -- -- 12,195 Changes in deferred income tax liability (321) -- (1,186) -- -------- ------- -------- -------- Operating cash flow (891) 2,757 2,182 7,532 Changes in working capital and other items 12,144 240 12,592 (4,954) -------- ------- -------- -------- Cash flows provided by operating activities 11,253 2,997 14,774 2,578 Cash flows (used) provided by investing activities (31,780) (4,468) (86,227) 1,644 Cash flows (used) provided by financing activities 21,845 832 72,321 (4,049) -------- ------- -------- -------- Net increase (decrease) in cash and cash equivalents $ 1,318 $ (639) $ 868 $ 173 ======== ======= ======== ========
SUMMARY PER MCFE DATA (unaudited)
Three Months Ended December 31, Twelve Months Ended December 31, ------------------------------- -------------------------------- 1998 1999 1998 1999 ------------- ---------------- --------------- --------------- Revenues: Natural gas and oil sales $ 1.76 $2.76 $ 2.08 $2.39 Workstation revenue 0.05 0.03 0.06 0.05 ------- ----- ------ ----- 1.81 2.79 2.14 2.44 Costs and expenses: Lease operating 0.44 0.39 0.33 0.36 Production taxes 0.10 0.19 0.13 0.15 General and administrative 0.92 0.52 0.70 0.56 Depletion of natural gas and oil properties 2.79 1.34 1.28 1.24 Capitalized ceiling impairment 18.23 0.00 3.90 0.00 Depreciation and amortization 0.09 0.09 0.06 0.08 Amortization of stock compensation 0.05 0.01 0.06 0.00 ------- ----- ------ ----- 22.62 2.54 6.46 2.39 ------- ----- ------ ----- Operating income $(20.81) $0.25 $(4.32) $0.05 ======= ===== ====== =====
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