EX-99.1 2 a15-13780_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

TRIANGLE PETROLEUM PROVIDES FINANCIAL RESULTS AND OPERATIONAL UPDATE FOR ALL BUSINESS SEGMENTS FOR FIRST QUARTER FISCAL YEAR 2016

 

DENVER, Colorado, June 8, 2015 — Triangle Petroleum Corporation (“Triangle” or the “Company”) (NYSE MKT: TPLM) today provides an operational update and reports its first quarter fiscal year 2016 financial results for the three-month period ended April 30, 2015 (“Q1 fiscal 2016” or “Q1 FY 2016”).

 

First Quarter Highlights for Fiscal Year 2016 (ended April 30, 2015)

 

·                  Quarterly production volumes of ~1,226 Mboe (13,775 Boepd)

·                  Increasing full fiscal year 2016 production guidance to a range of 11,500-13,500 Boepd

·                  No change to previously issued capital expenditure guidance

·                  Further increases to production guidance will be considered as fiscal year 2016 progresses

·                  Triangle USA Petroleum (“TUSA”) driving continued reduction in drilling and completion costs

·                  Leading edge AFEs of $7.3 million as of May 2015

·                  Consolidated cash flow from operations (before working capital changes) of $31.4 million, or $0.42 per fully diluted share; Operating cash flow of $39.3 million

·                  23% quarter over quarter decrease in consolidated cash general and administrative expenses

·                  Consolidated adjusted revenue of $137.8 million including $19.5 million of cash receipts from hedge settlements

·                  Consolidated adjusted-EBITDA of $38.8 million

·                  $305.0 million of total liquidity as of April 30, 2015, including $50.3 million of cash on hand and available borrowing capacity on the TUSA and RockPile Energy Services (“RockPile”) credit facilities

·                  RockPile’s estimated share of Williston Basin completion activity increased to approximately 15%, up from approximately 5% in Q1 fiscal 2015

·                  Completed record number of wells in quarter including 50 for third parties and 5 for TUSA

·                  RockPile generated over $5 million of stand-alone EBITDA in the month of April

·                  Completed 730 stages, which is 40% more stages than the previous single month record

·                  Caliber Midstream Phase I and Phase II system for Triangle complete and fully operational

·                  Proactively amended TUSA’s existing senior credit facility and modified certain covenants to further enhance TUSA’s financial flexibility

 


 

Segment Financial Results

 

Q1 fiscal 2016 stand-alone revenue and Adjusted-EBITDA (reference accompanying “Reconciliation Tables” and “Use of Segment Information and Non-GAAP Measures” disclosures at end of release).

 

Q1 FY 2016

 

Revenue

 

y/y% Change

 

Adj.-EBITDA

 

y/y% Change

 

E&P

 

$

47.8

 

-21

%

$

44.5

 

5

%

RockPile

 

$

80.6

 

31

%

$

3.5

 

-75

%

Total

 

$

128.4

 

5

%

$

48.0

 

-15

%

 

*Dollars in U.S. millions.

*E&P revenue does not include realized hedge settlements.

*Exploration and production operating segment (“E&P”) Adjusted-EBITDA includes all exploration and production related business lines, and does not include TPC (parent company) other revenues and expenses.

 

Segment Operational Update

 

·                  TUSA generated $47.8 million of revenue in Q1 FY 2016 excluding $19.5 million of cash receipts from hedge settlements as compared to $60.8 million of revenue in Q1 FY 2015 (-21% y/y). The contribution from year over year production growth partially offset a 54% drop in average pre-hedge realized prices to $38.97/Boe from $84.08/Boe

·                  Based on realized commodity prices in the month of May, current futures prices, and recent differentials, Q2 FY 2016 pre-hedge realized prices per Boe are trending 20% higher sequentially from Q1 FY 2016 actual pre-hedge realized prices of $38.97/Boe

·                  Spud 10 gross (7.3 net) and completed 5 gross (3.3 net) operated wells with a two-rig operated program in Q1 FY 2016

·                  Total of 23 gross (18.7 net) operated wells either in progress or waiting on completion as of April 30, 2015

·                  Pre-hedge oil price differentials declined ~16% q/q to $7.68/Bbl, which represents the tightest differential we have reported since Q3 FY 2014

·                  TUSA cash operating expenses (LOE, Gathering, Transportation and Processing, production taxes, and G&A) per unit were $18.55/Boe in Q1 FY 2016 compared to $24.38/Boe in Q1 FY 2015 (-24% y/y)

 

·                  RockPile generated approximately $80.6 million of stand-alone revenue in Q1 fiscal 2016 as compared to $61.4 million in Q1 fiscal 2015 (+31% y/y)

·                  Backlog of approximately 27 wells at the end of Q1 fiscal 2016, including 22 for third-party operators

 


 

Q1 Fiscal 2016 Summary Consolidated Statement of Operations (in thousands)

 

 

 

Quarter Ended April 30,

 

 

 

2014

 

2015

 

Revenues

 

 

 

 

 

Oil, natural gas and natural gas liquids sales

 

$

60,834 

 

$

47,778 

 

Oilfield services(a)

 

$

38,948 

 

70,510 

 

Total revenues

 

99,782 

 

118,288 

 

Expenses

 

 

 

 

 

Lease operating expenses

 

4,726 

 

10,909 

 

Gathering, transportation and processing

 

3,802 

 

6,348 

 

Production taxes

 

6,348 

 

4,787 

 

Depreciation and amortization(a)

 

21,287 

 

37,806 

 

Impairment of oil and natural gas properties

 

—

 

192,000 

 

Accretion of asset retirement obligations

 

25 

 

57 

 

Oilfield services(a)

 

27,710 

 

65,464 

 

Corporate and other stock-based compensation

 

1,523 

 

2,136 

 

E&P stock-based compensation

 

395 

 

321 

 

RockPile stock-based compensation

 

90 

 

51 

 

Corporate and other cash G&A expenses

 

3,518 

 

4,977 

 

E&P cash G&A expenses

 

2,778 

 

748 

 

RockPile cash G&A expenses

 

5,097 

 

6,626 

 

Total operating expenses

 

77,299 

 

332,230 

 

 

 

 

 

 

 

Operating Income (Loss)

 

22,483 

 

(213,942

)

 

 

 

 

 

 

Interest expense, net

 

(2,672

)

(9,106

)

Amortization of deferred loan costs

 

(192

)

(616

)

Realized commodity derivative gains (losses)

 

(818

)

19,468 

 

Unrealized commodity derivative gains (losses)

 

(4,638

)

(33,442

)

Equity investment income (loss)

 

(126

)

188 

 

Gain (loss) on equity investment derivatives

 

10,454 

 

—

 

Gain on Caliber capital transactions

 

—

 

2,880 

 

Other income(a)

 

62 

 

930 

 

Total other income (expense)

 

2,070 

 

(19,698

)

 

 

 

 

 

 

Income (Loss) Before Income Taxes

 

24,553 

 

(233,640

)

Income tax provision (benefit)(b)

 

10,011 

 

(53,441

)

Net Income (Loss) Attributable to Common Stockholders

 

$

14,542 

 

$

(180,199

)

 

 

 

 

 

 

Net Income (Loss) per Common Share

 

 

 

 

 

Basic

 

$

0.17 

 

$

(2.39

)

Diluted(c)

 

$

0.15 

 

$

(2.39

)

 

 

 

 

 

 

Adjusted Net Income (Loss) per Common Share(d)

 

 

 

 

 

Basic

 

$

0.13 

 

$

(0.09

)

Diluted(c)

 

$

0.12 

 

$

(0.09

)

 

 

 

 

 

 

Weighted Average Common Shares

 

 

 

 

 

Basic

 

85,952 

 

75,256 

 

Diluted

 

103,314 

 

75,256 

 

 

(a) Includes intercompany eliminations; reference Note 3 — Segment Reporting in our fiscal year 2015 Form 10-K for additional details

 

(b) The tax benefit for the quarter ended April 30, 2015 is associated with the establishment of a full valuation allowance against our net deferred tax assets. The effective tax rate for the quarter ended April 30, 2014 was approximately 40.8%. Income tax provision is a non-cash expense

 

(c) Includes interest expense add-back of $0.9 million net of income taxes and amounts capitalized Q1 fiscal 2015 related to outstanding convertible note

 

(d) Reference accompanying Reconciliation Tables and Use of Segment Information and Non-GAAP Measures at end of press release for additional detail

 


 

Q1 Fiscal 2016 Summary Consolidated Balance Sheet (in thousands)

 

 

 

January 31, 2015

 

April 30, 2015

 

Assets

 

 

 

 

 

Cash and equivalents

 

$

67,871 

 

$

50,277 

 

Other current assets

 

241,638 

 

160,222 

 

Net property and equipment

 

1,261,006 

 

1,099,434 

 

Other noncurrent assets

 

84,355 

 

87,840 

 

Total assets

 

$

1,654,870 

 

$

1,397,773

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities

 

$

271,842 

 

$

200,881 

 

5% convertible note

 

135,877 

 

137,576 

 

TUSA credit facility

 

119,272 

 

146,272 

 

TUSA 6.75% notes due July 2022

 

429,500 

 

429,500 

 

RockPile credit facility

 

104,887 

 

99,016.2 

 

Other notes and mortgages payable

 

10,102 

 

9,982 

 

Other noncurrent liabilities

 

38,372 

 

7,256 

 

Total stockholders’ equity

 

545,018 

 

367,290 

 

Total liabilities and stockholders’ equity

 

$

1,654,870 

 

$

1,397,773.2 

 

 

Q1 Fiscal 2016 Production Volumes and Average Pre-Hedging Realized Prices

 

 

 

Quarter Ended April 30, 

 

 

 

2014

 

2015

 

Production volumes

 

 

 

 

 

Crude oil (Mbbls)

 

598 

 

1,025 

 

Natural gas (MMcf)

 

441 

 

739 

 

Natural gas liquids (Mbbls)

 

52 

 

78 

 

Total barrels of oil equivalent (Mboe)

 

724 

 

1,226 

 

 

 

 

 

 

 

Average daily production volumes (Boe/d)

 

8,135 

 

13,775 

 

 

 

 

 

 

 

Average realized prices:

 

 

 

 

 

Crude oil ($ per Bbl)

 

$

90.88 

 

$

43.36 

 

Natural gas ($ per Mcf)

 

$

8.21 

 

$

3.23 

 

Natural gas liquids ($ per Bbl)

 

$

54.87 

 

$

12.18 

 

Total average realized price ($ per Boe)

 

$

84.08 

 

$

38.97 

 

 


 

 

Use of Segment Information and Non-GAAP Measures

 

(1)   The Company often provides financial metrics for Triangle’s segments of operation. Revenues for each segment are disclosed in notes to the financial statements contained in the Company’s Form 10-K and Form 10-Q filings, but the sum of those stand-alone revenues differ from Triangle’s consolidated revenues for the corresponding reporting period. Triangle’s consolidated revenues would reflect segment revenues reduced for intercompany sales (i.e. for RockPile services to Triangle’s E&P segment).

 

Triangle also believes that stand-alone segment revenue assists investors in measuring RockPile’s performance as a stand-alone company without eliminating, on a consolidated basis, certain revenues attributable to services for Triangle’s economic interests in wells operated by Triangle’s E&P segment.

 

(2)   Adjusted-EBITDA represents income before interest expense, income taxes, depreciation and amortization, other non-cash items, and non-recurring items. Adjusted-EBITDA is not a calculation based upon generally accepted accounting principles in the U.S. (“GAAP”). Triangle has presented Adjusted-EBITDA by segment because it regularly reviews Adjusted-EBITDA by segment as a measure of the segment’s operating performance. Triangle also believes Adjusted-EBITDA assists investors in comparing segment performance on a consistent basis without regard to interest expense, income taxes, depreciation and amortization, other non-cash items, and non-recurring items which can vary significantly depending upon many factors.

 

The total of Adjusted-EBITDA by segment is not indicative of Triangle’s consolidated Adjusted-EBITDA, which reflects other matters such as (i) additional parent company administrative costs, (ii) intercompany eliminations, (iii) paid-in-kind interest expense on the convertible notes, and (iv) the use of the equity method, rather than consolidation, for Triangle’s investment in Caliber. The Adjusted-EBITDA measures presented in the “Reconciliation Tables” may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.

 

Triangle believes that net income before income taxes is the performance measure calculated and presented in accordance with GAAP that is most directly comparable to Adjusted-EBITDA. Net income before income taxes will be significantly affected by consolidated interest expense and full-cost pool amortization. Such amortization varies with changes in proved reserves, well costs during the year, and future plans in developing proved undeveloped reserves.

 

(3)   Adjusted net income (loss) is defined as net income (loss) applicable to common stockholders adjusted to exclude certain charges or amounts in order to provide users of this financial information with additional meaningful comparisons between current results and the results of prior periods. Triangle presents this measure because (i) it is consistent with the manner in which the Company’s performance is measured relative to the performance of its peers, (ii) this measure is more comparable to earnings estimates provided by securities analysts, and (iii) charges or amounts excluded cannot be reasonably estimated and guidance provided by the Company excludes information regarding these types of items. These adjusted amounts are not a measure of financial performance under GAAP. We believe that net income (loss) is the performance measure calculated and presented in accordance with GAAP that is most directly comparable to adjusted net income (loss).

 


 

About Triangle

 

Triangle (NYSE MKT: TPLM) is an independent energy company with a strategic focus on developing the Bakken Shale and Three Forks formations in the Williston Basin of North Dakota and Montana. For more information, visit Triangle’s website at www.trianglepetroleum.com.

 

Conference Call Information

 

As previously announced, Triangle will host a conference call Tuesday, June 9, 2015 at 8:30 AM MT (10:30 AM ET) to provide an operational update and financial results of Triangle’s Q1 fiscal 2016, followed immediately by a question and answer session. A live webcast of the conference call can be accessed by visiting the following link: http://www.videonewswire.com/event.asp?id=102401. Alternatively, interested parties may dial-in using the conference call number (888) 347-6610. International parties may dial-in using (412) 902-4292. The Company recommends dialing into the conference call at least ten minutes before the scheduled start time. A recording of the conference call will be available through June 20, 2015 at (877) 344-7529 (conference # 10066265). For international participants, the replay dial-in number is (412) 317-0088 (conference # 10066265).

 

Q1 Fiscal 2016 Segment Income and Elimination (in thousands)

 

 

 

Exploration and
Production

 

Oilfield
Services

 

Corporate
and Other(a)

 

Eliminations
and Other

 

Consolidated
Total

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Oil, natural gas and natural gas liquids sales

 

$

47,778 

 

$

—

 

$

—

 

$

—

 

$

47,778 

 

Oilfield services for third parties

 

—

 

71,090 

 

—

 

(580

)

70,510 

 

Intersegment revenues

 

—

 

9,504 

 

—

 

(9,504

)

—

 

Total Revenues

 

47,778 

 

80,594 

 

—

 

(10,084

)

118,288 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

LOE, GTP, Production Taxes and other expenses

 

22,101 

 

—

 

—

 

—

 

22,101 

 

Depreciation and amortization

 

29,299 

 

9,489 

 

325 

 

(1,307

)

37,806 

 

Impairment of oil and natural gas properties

 

192,000 

 

—

 

—

 

—

 

192,000 

 

Cost of oilfield services

 

—

 

70,586 

 

1,238 

 

(6,360

)

65,464 

 

General and administrative

 

1,069 

 

6,677 

 

7,113 

 

—

 

14,859 

 

Total operating expenses

 

244,469 

 

86,752 

 

8,676 

 

(7,667

)

332,230 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

(196,691

)

(6,158

)

(8,676

)

(2,417

)

(213,942

)

Other income (expense), net

 

(21,002

)

(875

)

2,686 

 

(507

)

(19,698

)

Net Income (Loss) Before Income Taxes

 

$

(217,693

)

$

(7,033

)

$

(5,990

)

$

(2,924

)(b)

$

(233,640

)

 

(a) Corporate and Other includes Triangle’s corporate office and several subsidiaries that management does not consider to be part of the exploration and production or oilfield services segments.  Also included are results from Triangle’s investment in Caliber, including any changes in the fair value of equity investment derivatives.  Other than Caliber, these subsidiaries have limited activity

 

(b) $2.9 million RockPile, Caliber, and other services consolidated elimination results in a $2.9 million reduction in oil and natural gas property expenditures.

 

*Reference Note 3 — Segment Reporting in our Q1 fiscal year 2016 Form 10-Q for additional details

 


 

Reconciliation Tables (in thousands)

 

A.    Consolidated Adjusted net income per common stockholder (reference disclosure (3) in “Use of Segment Information and Non-GAAP Measures”).

 

 

 

Quarter Ended April 30,

 

 

 

2014

 

2015

 

Net Income (Loss) Attributable to Common Stockholders

 

$

14,542 

 

$

(180,199

)

Impairment of oil and natural gas properties

 

—

 

192,000 

 

Unrealized (gain) loss on commodity derivatives

 

4,638 

 

33,442 

 

(Gain) loss on equity investment derivatives

 

(10,454

)

—

 

Gain on Caliber capital transactions

 

—

 

(2,880

)

Tax benefit associated with reversal of deferred tax liability

 

—

 

(53,441

)

Tax adjustment(a)

 

2,373 

 

4,210 

 

Adjusted Net Income (Loss)

 

$

11,099 

 

$

(6,868

)

 

 

 

 

 

 

Adjusted Net Income (Loss) Per Common Share

 

 

 

 

 

Basic

 

$

0.13 

 

$

(0.09

)

Diluted(b)

 

$

0.12 

 

$

(0.09

)

 

 

 

 

 

 

Weighted Average Common Shares

 

 

 

 

 

Basic

 

85,952 

 

75,256 

 

Diluted

 

103,314 

 

75,256 

 

 

(a) Tax adjustment is calculated by applying Company’s effective tax rate of 40.8% for Q1 fiscal 2015 to pre-tax effected adjusting items and expected Q1 fiscal 2016 statutory tax rate of 38.0% to adjusted pre-tax loss

 

(b) Includes interest expense add-back of $0.9 million net of income taxes and amounts capitalized for Q1 fiscal 2015 related to outstanding convertible note

 

B.    E&P stand-alone Adjusted-EBITDA (reference disclosure (1) and (2) in “Use of Segment Information and Non-GAAP Measures”).

 

 

 

Quarter Ended April 30,

 

 

 

2014

 

2015

 

Net Income (Loss) Before Income Taxes

 

$

16,040 

 

$

(217,693

)

Depreciation and amortization

 

20,153 

 

29,299 

 

Impairment of oil and natural gas properties

 

—

 

192,000 

 

Net interest expense

 

942 

 

6,521 

 

Stock-based compensation

 

395 

 

321 

 

Accretion of asset retirement obligations

 

25 

 

57 

 

Other

 

169 

 

507 

 

Unrealized commodity derivative losses (gains)

 

4,638 

 

33,442 

 

Adjusted-EBITDA

 

$

42,362 

 

$

44,454 

 

 


 

C.    Oilfield Services stand-alone Adjusted-EBITDA (reference disclosure (1) and (2) in “Use of Segment Information and Non-GAAP Measures”).

 

 

 

Quarter Ended April 30,

 

 

 

2014

 

2015

 

Net Income (Loss) Before Income Taxes

 

$

8,437 

 

$

(7,033

)

Depreciation and amortization

 

3,590 

 

9,489 

 

Stock-based compensation

 

90 

 

51 

 

Net interest expense

 

507 

 

787 

 

Other

 

1,176 

 

219 

 

Adjusted-EBITDA

 

$

13,800 

 

$

3,513 

 

 

*RockPile Adjusted-EBITDA calculated per RockPile credit facility

 

Forward-Looking Statements Disclosure

 

The information presented in this press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors that could cause actual results to differ materially from the results contemplated by the forward-looking statements include, but are not limited to, the risks discussed in the Company’s annual report on Form 10-K and its other filings with the Securities and Exchange Commission. The forward-looking statements in this press release are made as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement as a result of new information, future developments, or otherwise.

 

Contact

 

Triangle Petroleum Corporation
Joe Magner, Vice President, Capital Markets
303-260-7125
info@trianglepetroleum.com