-----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, DdAAKSyU/vhYMLbo2iZDxcXGpa5Z68ZcavILQoUR+/dfS/EGvfIoSREH75yBezg9 YRl8HKzboXZDxLki21BuQw== 0000867665-04-000017.txt : 20040309 0000867665-04-000017.hdr.sgml : 20040309 20040309172826 ACCESSION NUMBER: 0000867665-04-000017 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040309 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040309 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ABRAXAS PETROLEUM CORP CENTRAL INDEX KEY: 0000867665 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 742584033 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16071 FILM NUMBER: 04658235 BUSINESS ADDRESS: STREET 1: 500 N LOOP 1604 E STE 100 CITY: SAN ANTONIO STATE: TX ZIP: 78232 BUSINESS PHONE: 2104904788 MAIL ADDRESS: STREET 1: 500 N LOOP 1604 EAST STE 100 CITY: SAN ANTONIO STATE: TX ZIP: 78232 8-K 1 ye2003results8k.txt 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 March 9, 2004 Abraxas Petroleum Corporation (Exact name of registrant as specified in its charter) Nevada (State of other jurisdiction of incorporation) 0-19118 74-2584033 (Commission File Number) (I.R.S. Employer Identification Number) 500 N. Loop 1604 East, Suite 100 San Antonio, Texas 78232 (Address of principal executive offices) Registrant's telephone number, including area code: 210-490-4788 Item 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibits. EXHIBIT NUMBER DESCRIPTION --------------- ------------------------------------------ 99.1 Press Release dated March 9, 2004. Item 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On March 9, 2004, Abraxas issued a press release announcing its results of operations and financial condition for the year ended December 31, 2003 The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. In accordance with SEC Release No. 33-8176, the information contained in such press release shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. The following information is being furnished pursuant to Item 12 "Disclosure of Results of Operations and Financial Condition." The Company's press release contains non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with United States generally accepted accounting principles, or GAAP. Pursuant to the requirements of Regulation G, the Company has provided quantitative reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures. SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ABRAXAS PETROLEUM CORPORATION By: /s/Chris Williford__________ Chris Williford Executive Vice President, Chief Financial Officer and Treasurer Dated: March 9, 2004 EX-99 2 abp2003earnings.txt EXHIBIT 99.1 NEWS RELEASE ABRAXAS ANNOUNCES Q4 AND YEAR 2003 FINANCIAL RESULTS SAN ANTONIO, TX (March 9, 2004) - Abraxas Petroleum Corporation (AMEX:ABP) today reported financial and operating results for the fourth quarter and the year-ended December 31, 2003. With production of 7.9 Bcfe for the year generating revenues of $39.0 million, the Company realized net income of $55.9 million ($1.55 per share on a dilutive basis). Not including the gain of $68.9 million the Company realized from the sale of its Canadian subsidiaries in January of 2003, continuing operations showed a net loss of $13.0 million ($0.36 per share). This compares to a loss of $118.5 million ($3.95 per share) in 2002. Abraxas lost $1.7 million ($.05 per share) in Q4 2003 compared to a loss of $5.7 million ($0.19 per share) in the same quarter of 2002. In January of 2003, the Company completed a series of financial transactions that ultimately reduced the Company's debt from approximately $300 million at December 31, 2002 to approximately $168 million (with debt at face value) at December 31, 2003 and reduced cash interest costs from approximately $34 million in 2002 to approximately $4 million in 2003. Subsequent to year-end 2003, the Company amended its senior credit agreement, increasing its size, reducing its costs, and providing additional operational flexibility. The most significant operating items affecting 2003 results included: o Capital spending of approximately $18 million during 2003 participating in 24 wells with a 95% success rate; o Continuation of development activities that resulted in replacing 218% of 2003 production and increasing reserves 15.9 Bcfe (prior to production) from year-end 2002 at a finding and development cost of $1.15 per Mcfe; o Realized price per Mcfe of $4.81 in 2003 compared to $2.73 for 2002; and o Daily production rates increasing by 26% from the beginning of 2003 (on retained assets) to December 31, 2003. The Company also issued the following details related to its year-end reserves to clarify its previous announcement on March 2, 2004: Bcfe % Proved Developed Producing 56.7 46.7 Proved Developed Non-Producing 9.6 8.0 ----- ----- Total Proved Developed 66.3 54.7 Proved Undeveloped 54.8 45.3 ----- ----- Total Proved 121.1 100.0 In addition, the Company announced its current hedge positions, which include a series of price floors for approximately 40% of its projected production through September 2004. These floors, comprised of a combination of oil and natural gas contracts over these months, provide a floor of approximately $22.50 per barrel for the oil contracts and $4.21 per Mcf for the natural gas contracts. These instruments do not restrict the Company from receiving any prices above these floor levels. Abraxas CEO, Bob Watson, commented, "2003 was an eventful year for Abraxas as we completed several transactions in January resulting in significant impact on our balance sheet and our operations going forward. Our retained assets in Canada, coupled with our growing inventory of U.S. projects allowed us to continue our development success and demonstrate a meaningful increase in production and reserves as we exited 2003. As we entered 2004, the Company participated in the drilling of two horizontal wells in the Ladyfern area of British Columbia. These wells have recently been tested at a combined rate of 11.1 MMcfpd 1.4 MMcfpd net to our interest with initial production expected by the end of March. We look forward to continuing this development success in 2004 and beyond. Our new amended credit facility provides further flexibility in managing our assets and maximizing value to our shareholders. We realize there is still more work ahead to improve our balance sheet in 2004 enabling us to continue to reduce debt and to accelerate development of assets, which now include over 170 identified projects that represent potential reserves not currently booked in our year-end reserve total. With the continuing strength of the commodity markets and our improving operational outlook, 2004 looks like a continued year of growth for Abraxas." As a result of fina80l 2003 financial results and current market conditions, Abraxas has updated its operating and financial guidance for year 2004 as follows: Production: Bcfe (approximately 80% gas) 8 - 9 Price Differentials (Pre Hedge): $ Per Bbl 0.86 $ Per Mcf 0.64 Lifting Costs, $ Per Mcfe 1.29 G&A, $ Per Mcfe 0.60 Capital Expenditures ($ Millions) 10.00 The Company estimated January 2004 production at approximately 22.8 Mcfe per day. Abraxas invites your participation in a conference call on Wednesday, March 10th, at 9:00 am CT to discuss the contents of this release and respond to questions. Please call 1-800-946-0719 between 8:50 am and 9:00 am CT, confirmation code 786241, if you would like to participate in the call. There will be a replay of the conference call available by calling 1-888-203-1112, confirmation code 786241, beginning approximately 11:00 am CT Wednesday, March 10th, through midnight CT Tuesday, March 16th. Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploitation and production company. The Company operates in Texas, Wyoming and western Canada. Safe Harbor for forward-looking statement: Statements in this release looking forward in time involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to be materially different from any future performance suggested in this release. Such factors may include, but may not be necessarily limited to, changes in the prices received by the Company for crude oil and natural gas. In addition, the Company's future crude oil and natural gas production is highly dependent upon the Company's level of success in acquiring or finding additional reserves. Further, the Company operates in an industry sector where the value of securities is highly volatile and may be influenced by economic and other factors beyond the Company's control. In the context of forward-looking information provided for in this release, reference is made to the discussion of risk factors detailed in the Company's filing with the Securities and Exchange Commission during the past 12 months. FOR MORE INFORMATION CONTACT: Janice Herndon/Manager Corp. Communications Telephone 210.490.4788 jherndon@abraxaspetroleum.com www.abraxaspetroleum.com
ABRAXAS PETROLEUM CORPORATION YEAR-END RESULTS Three Months Twelve Months (In thousands except per share data) Ended December 31, Ended December 31, 2003 2002(1) 2003 2002(1) ---- ------- ---- ------- Operations Data: Revenues $9,048 $17,217 $39,019 $54,320 EBITDA 4,858 10,748 23,451 31,629 Cash Flow (Before Working Capital Changes) 3,459 1,256 13,923 (3,597) Net Income(Loss) (1,734) (5,700) 55,920 (3) (118,527)(2) Net Income(Loss) Per Share (Basic) (.05) (.19) 1.58 (3.95) Weighted Ave. Shares Outstanding 35.8 30.0 35.4 30.0 Production: Crude Oil (BPD) 781 834 689 801 NGL (BPD) 64 649 102 663 Natural Gas (MCFPD) 16,523 40,877 16,957 42,336 MMCFEPD 21.6 49.8 21.7 51.1 Prices (net of hedge impact): Crude Oil ($/BBL) $29.73 $30.16 $30.32 $24.34 NGL's ($/BBL) 25.49 22.26 24.47 17.94 Natural Gas ($/MCF) 4.30 3.47 4.78 2.55 Price per MCFE 4.44 3.65 4.81 2.73 Expenses: Lease Operating ($/MCFE) $1.23 $.88 $1.21 $.82 General & Administrative ($/MCFE) .82 .50 .67 .37 Cash Interest ($/MCFE) .54 1.82 .55 1.83 Total Interest ($/MCFE) 2.06 1.82 2.14 1.83 D/D/A ($/MCFE) 1.48 1.21 1.33 1.42
(1) 2002 Results include impact from Canadian operations sold in January, 2003 (2) Net loss for 2002 includes a $116 million proved property impairment due to lower realized prices at period end (3) Includes gain on sale of Canadian subsidiaries of $68.9 million Balance Sheet Data (In $000s) December 31, 2003 December 31, 2002 Cash $493 $4,882 Working Capital (Deficit) (2,444) (65,609) Plant/Property/Equipment, Net 111,563 150,394 Total Assets 126,437 181,425 Long-Term Debt 184,649 236,943 Shareholders Equity (Deficit) (72,203) (142,254) Common Shares Outstanding (Millions) 35.9 30.0
ABRAXAS PETROLEUM CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31 ---------------------------------------------------------- 2001 2002 2003 ---------------------------------------------------------- (In thousands except per share data) Revenues: Oil and gas production revenues ......................... $ 73,201 $ 50,862 $ 38,105 Gas processing revenues.................................. 2,438 2,420 133 Rig revenues ............................................ 756 635 663 Other .................................................. 848 403 118 ------------------- -------------- ----------------- 77,243 54,320 39,019 Operating costs and expenses: Lease operating and production taxes .................... 18,616 15,240 9,599 Depreciation, depletion, and amortization ............... 32,484 26,539 10,803 Proved property impairment .............................. 2,638 115,993 - Rig operations .......................................... 702 567 609 General and administrative .............................. 6,445 6,884 5,360 Stock-based compensation................................. (2,767) - 1,106 ------------------- -------------- ---------------- 58,118 165,223 27,477 ------------------- -------------- ---------------- Operating income (loss)..................................... 19,125 (110,903) 11,542 Other (income) expense: Interest income ......................................... (78) (92) (30) Amortization of deferred financing fees ................. 2,268 2,095 1,678 Interest expense ........................................ 31,523 34,150 16,955 Financing costs.......................................... - 967 4,406 Loss on sale of equity investment ....................... 845 - - Gain on sale of foreign subsidiaries..................... - - (68,933) Other ................................................... 207 201 774 ------------------- --------------- ---------------- 34,765 37,321 (45,150) ------------------- --------------- ---------------- Income (loss) before cumulative effect of accounting change and taxes................................................ (15,640) (148,224) 56,692 Income tax expense (benefit): Current ................................................. 505 - - Deferred ................................................ 1,897 (29,697) 377 Minority interest in income of foreign subsidiary (2001 prior to purchase)....................................... 1,676 - - Cumulative effect of accounting change...................... - - 395 ------------------- --------------- ---------------- Net income (loss)........................................ $ (19,718) $ (118,527) $ 55,920 =================== =============== ================ Basic earnings (loss)per common share: Net earnings (loss)................................... $ (0.76) $ (3.95) $ 1.59 Cumulative effect of accounting change................ - - (0.01) ------------------- --------------- ---------------- Net income (loss) per common share - basic .............. $ (0.76) $ (3.95) $ 1.58 =================== =============== ================ Diluted earnings (loss) per common share: Net earnings (loss)................................... $ (0.76) $ (3.95) $ 1.56 Cumulative effect of accounting change................ - - (0.01) ------------------- --------------- ---------------- Net income (loss) per common share - diluted............ $ (0.76) $ (3.95) $ 1.55 =================== =============== ================
Reconciliation of Non-GAAP Financial Measures To fully assess Abraxas' operating results, management believes that, although not prescribed under generally accepted accounting principles ("GAAP"), discretionary cash flow and EBITDA are appropriate measures of Abraxas' ability to satisfy capital expenditure obligations and working capital requirements. Cash flow and EBITDA are non-GAAP financial measures as defined under SEC rules. Abraxas' cash flow and EBITDA should not be considered in isolation or as a substitute for other financial measurements prepared in accordance with GAAP or as a measure of the Company's profitability or liquidity. As cash flow and EBITDA exclude some, but not all, items that affect net income and may vary among companies, the cash flow and EBITDA presented below may not be comparable to similarly titled measures of other companies. Management believes that operating income (loss) calculated in accordance with GAAP is the most directly comparable measure most similar to cash flow and EBITDA. Cash flow is defined as operating income (loss) plus depletion, depreciation and amortization expense, non-cash expenses, cash gains (losses) on the settlement of non-hedge derivatives and cash portion of other income (expense) and cash interest. The following table provides a reconciliation of cash flow to operating income (loss) for the periods presented.
Three Months Twelve Months Ended December 31, Ended December 31, 2003 2002 2003 2002 ------ ---- ---- ---- Operating income (loss) $1,275 $5,221 $11,542 $(110,903) Depletion, depreciation and amortization 2,943 5,529 10,803 26,539 Non-cash stock based comp. expense 640 - 1,106 - Proved Property Impairment - (2) - 115,993 Financing Costs (224) (967) (4,406) (967) Other Expense (102) (201) (774) (201) Cash interest (1,073) (8,324) (4,348) (34,058) Cash Flow $3,459 $1,256 $13,923 $(3,597)
EBITDA is defined as net income (loss) plus interest expense, depletion, depreciation and amortization expenses, deferred income taxes and other non- cash items. The following table provides a reconciliation of EBITDA to operating income (loss) for the periods presented.
Three Months Twelve Months Ended December 31, Ended December 31, 2003 2002 2003 2002 ---- ---- ---- ---- Operating income (loss) $1,275 $5,221 $11,542 $(110,903) Depletion, depreciation and amortization 2,943 5,529 10,803 26,539 Proved Property Impairment - (2) - 115,993 Non-cash stock based comp. expense 640 - 1,106 - EBITDA $4,858 $10,748 $23,451 $31,629
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