-----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, WQd8of5g+b25sMWQiaJrCN1emzMq+MST4TmPmi1PUQiQ8TiAUKmby3dxbItVzGRE tOZgUCEG8diqhqtklvO1ng== 0000867665-06-000065.txt : 20060808 0000867665-06-000065.hdr.sgml : 20060808 20060808091720 ACCESSION NUMBER: 0000867665-06-000065 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060808 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060808 DATE AS OF CHANGE: 20060808 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: 061011069 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 q206earnings8k.txt _A 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 August 8, 2006 Date of Report (Date of earliest event reported) ABRAXAS PETROLEUM CORPORATION (Exact name of registrant as specified in its charter) Nevada 0-19118 74-2584033 (State or other jurisdiction of (Commission (IRS Employer incorporation) File Number) Identification No.) 500 N. Loop 1604 East, Suite 100 San Antonio, Texas 78232 (210) 490-4788 (Address of principal executive offices and Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Conditions. On August 8, 2006, the Company issued a press release announcing financial results for its second quarter 2006. A copy of the press release is attached hereto as Exhibit 99.1. The information contained in Item 2.02 of this Current Report (including Exhibit 99.1) is furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and is not incorporated by reference into any filing of the company, whether made before or after the date of this Current Report, regardless of any general incorporation language in the filing. Item 9.01 Financial Statements and Exhibits. (c) Exhibits. 99.1 Press Release dated August 8, 2006 entitled, "Abraxas Reports Second Quarter 2006 Results with Five Consecutive Quarters of Production Growth including a 41% Increase in Daily Production over Second Quarter 2005". SIGNATURES 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 hereunto duly authorized. Abraxas Petroleum Corporation By:/s/Chris Williford --------------------------------------- Chris Williford Executive Vice President, Chief Financial Officer and Treasurer Dated: August 8, 2006 Exhibit Index 99.1 Press Release dated August 8, 2006 entitled, "Abraxas Reports Second Quarter 2006 Results with Five Consecutive Quarters of Production Growth including a 41% Increase in Daily Production over Second Quarter 2005". EX-99 2 abpq2earnings.txt Exhibit 99.1 ABRAXAS PETROLEUM CORPORATION www.abraxaspetroleum.com 500 N. Loop 1604 East, Suite 100, San Antonio, Texas 78232 Office: 210.490.4788 Exec/Acctg Fax: 210.490.8816 NEWS RELEASE Abraxas Reports Second Quarter 2006 Results with Five Consecutive Quarters of Production Growth including a 41% Increase in Daily Production over Second Quarter 2005 SAN ANTONIO (Aug. 8, 2006) - Abraxas Petroleum Corporation (AMEX:ABP) today reported financial and operating results for the quarter and six months ended June 30, 2006 and provided an operational update. Daily production from the second quarter of 2006 increased 5% over the first quarter of 2006 marking five consecutive quarters of production growth. Results for the quarter ended June 30, 2006 included: o Production of 2.0 Bcfe, a 41% increase over Q2 2005; o Revenue of $13.3 million, a 38% increase over Q2 2005; o EBITDA (a) of $9.4 million, a 61% increase over Q2 2005; and o Cash flow (a) of $5.3 million, a 117% increase over Q2 2005. Results for the six months ended June 30, 2006 included: o Production of 3.8 Bcfe, a 42% increase over the same six-month period of 2005; o Revenue of $26.6 million, a 53% increase over the same six-month period of 2005; o EBITDA (a) of $18.6 million, a 82% increase over the same six-month period of 2005; and o Cash flow (a) of $10.6 million, a 184% increase over the same six-month period of 2005. (a) see reconciliation of non-GAAP financial measures below. Net earnings in the second quarter of 2006 were $983,000, or $0.02 per share, compared to a net loss in the same quarter of 2005 of $37,000, or less than ($0.01) per share, from continuing operations. Net earnings for the six months ended June 30, 2006 were $2.2 million, or $0.05 per share, as compared to a net loss during the same six-month period of 2005 of $973,000, or ($0.03) per share, from continuing operations. Continuing operations represent financial and operating results from operations in the U.S. only as all of Grey Wolf Exploration Inc.'s historical performance and results are treated as discontinued operations as a result of the sale of Grey Wolf shares owned by Abraxas in Grey Wolf's initial public offering that closed on February 28, 2005. Abraxas currently owns less than 1% of the outstanding capital stock of Grey Wolf. As anticipated, basis differentials during the quarter narrowed closer to historical ranges. The Company realized an oil differential of less than $1.30 and a gas differential of 20% to NYMEX (L3D) during the second quarter of 2006, compared to $1.95 and 30%, respectively, that the Company realized during the first quarter of 2006. "I am very pleased to announce that we have increased production from 14.2 MMcfepd to 21.4 MMcfepd since the first quarter of 2005. This 51% increase in production has been achieved exclusively through the drill bit, as we continue to explore and exploit the many opportunities that we have identified on our existing leasehold. As a result, we believe we are well positioned to meet our 2006 production guidance," commented Bob Watson, Abraxas' President and CEO. Operations In South Texas, the Simek-Cook #1 was recently completed in the Wilcox formation and placed on-line at approximately 1.0 MMcfepd. In the Oates SW Field of West Texas, completion operations continue on the Hudgins #37-1H, a horizontal Devonian re-entry, and the La Escalera #5-1, a Lower Wolfcamp test. The La Escalera #2 is currently shut-in after the Atoka formation was deemed not commercial; this well will be evaluated for other potentially productive zones. In Wyoming, some of the accumulated oil in inventory at the end of the first quarter was sold during the second quarter, whereas the remainder will be sold during the third quarter. The Company continues to monitor production rates on the four vertical wells drilled in late 2005, while analyzing the different fracture treatments employed. Abraxas owns a 100% working interest in all of the above-mentioned wells. Conference Call Abraxas invites you to participate in a conference call on Tuesday, August 8th, at 2:00 p.m. CT to discuss the contents of this release and respond to questions. Please dial 1.866.203.3436, passcode 33204543, 10 minutes before the scheduled start time, if you would like to participate in the call. The conference call will also be webcast live on the Internet and can be accessed directly on the Company's website at www.abraxaspetroleum.com under the section entitled "Event Calendar". In addition to the audio webcast replay, a podcast and transcript of the conference call will be posted on the "Event Calendar" section of the Company's website approximately 24 hours after the conclusion of the call, and will be accessible for at least 60 days. Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploitation and production company with operations in Texas and Wyoming. Safe Harbor for forward-looking statements: Statements in this release looking forward in time involve known and unknown risks and uncertainties, which may cause Abraxas' 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 Abraxas for natural gas and crude oil. In addition, Abraxas' future natural gas and crude oil production is highly dependent upon Abraxas' level of success in acquiring or finding additional reserves. Further, Abraxas operates in an industry sector where the value of securities is highly volatile and may be influenced by economic and other factors beyond Abraxas' control. In the context of forward-looking information provided for in this release, reference is made to the discussion of risk factors detailed in Abraxas' filings with the Securities and Exchange Commission during the past 12 months. FOR MORE INFORMATION CONTACT: Barbara M. Stuckey/Director of Corporate Development Direct Telephone 210.757.9835 Main Telephone 210.490.4788 bstuckey@abraxaspetroleum.com www.abraxaspetroleum.com
ABRAXAS PETROLEUM CORPORATION QUARTER-END RESULTS (UNAUDITED) Three Months Ended Six Months Ended (In thousands except per share data) June 30, June 30, ------------------------------------ ------------------------------ 2006 2005 2006 2005 ---------------- ---------------- -------------- ------------ Financial results: - ------------------------------------------------- Revenues $ 13,304 $ 9,627 $ 26,609 $ 17,449 EBITDA (a) 9,432 5,841 18,589 10,221 Cash flow (a) 5,342 2,460 10,554 3,717 Earnings (loss) from continuing operations 983 (37) 2,203 (973) Earnings (loss) per share from continuing operations - basic $ 0.02 $ 0.00 $ 0.05 $ (0.03) Weighted average shares outstanding 42,569 37,821 42,524 37,216 Production per day: ------------------------------------------------ Crude oil (Bbl) 559 535 539 555 Natural gas (Mcf) 18,080 12,024 17,684 11,388 Mcfe 21,431 15,234 20,917 14,716 Realized prices (net of hedge impact): - ------------------------------------------------- Crude oil (Bbl) $ 66.09 $ 49.43 $ 62.97 $ 48.25 Natural gas (Mcf) 5.78 6.33 6.14 5.83 Price per Mcfe 6.60 6.73 6.81 6.33 Expenses: - ------------------------------------------------- Lease operating ($ per Mcfe) $ 0.94 $ 1.15 $ 0.92 $ 1.11 Production taxes (% of revenue) 7% 10% 8% 11% General and administrative, excluding stock-based compensation ($ per Mcfe) 0.48 0.79 0.54 0.77 Cash interest ($ per Mcfe) 2.10 2.44 2.12 2.44 D/D/A ($ per Mcfe) 1.92 1.31 1.88 1.32 - -------------------------------------------------
(a) See reconciliation of non-GAAP financial measures below. Note: The above results exclude impact from Grey Wolf Exploration Inc.
BALANCE SHEET DATA (In thousands) June 30, 2006 December 31, 2005 ------------------------ ----------------------- Cash $ 52 $ 42 Working capital (deficit) (5,479) (4,880) Property and equipment - net 116,661 105,248 Total assets 131,559 121,866 Long-term debt 136,633 129,527 Stockholders' equity (deficit) (20,858) (23,701) Common shares outstanding 42,596 42,007
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands except per share data) Three Months Ended Six Months Ended June 30, June 30, ------------------------------------ -------------------------------- 2006 2005 (a) 2006 2005 (a) ------------------- ---------------- ----------------- -------------- Revenues: Oil and gas production revenues ................ $ 12,869 $ 9,336 $ 25,795 $ 16,861 Rig revenues ................................... 429 283 805 579 Other ......................................... 6 8 9 9 ------------------- ---------------- ----------------- -------------- 13,304 9,627 26,609 17,449 Operating costs and expenses: Lease operating ................................ 1,835 1,595 3,488 2,965 Production taxes ............................... 881 927 2,050 1,835 Depreciation, depletion, and amortization ...... 3,737 1,817 7,136 3,515 Rig operations ................................. 219 166 430 384 General and administrative (including stock- based compensation of $199, $16, $370 and $41) ..................................... 1,136 1,114 2,422 2,085 ------------------- ---------------- ----------------- -------------- 7,808 5,619 15,526 10,784 ------------------- ---------------- ----------------- -------------- Operating income .................................. 5,496 4,008 11,083 6,665 Other (income) expense: Interest income ................................ - - (1) (1) Interest expense ............................... 4,115 3,407 8,086 6,541 Amortization of deferred financing fees ........ 398 403 795 854 Other .......................................... - 235 - 244 ------------------- ---------------- ----------------- -------------- 4,513 4,045 8,880 7,638 ------------------- ---------------- ----------------- -------------- Earnings (loss) from continuing operations ........ 983 (37) 2,203 (973) Net income (loss) from discontinued operations (net of $6,060 income tax expense in 2005)...... - (27) - 12,894 ------------------- ---------------- ----------------- -------------- Net earnings (loss) ............................ $ 983 $ (64) $ 2,203 $ 11,921 =================== ================ ================= ============== Basic earnings (loss) per common share: Net earnings (loss) from continuing $ 0.02 $ - $ 0.05 $ (0.03) operations................................... Discontinued operations .................... - - - 0.35 ------------------- ---------------- ----------------- -------------- Net earnings (loss) per common share - basic ... $ 0.02 $ - $ 0.05 $ 0.32 =================== ================ ================= ============== Diluted earnings (loss) per common share: Net earnings (loss) from continuing $ 0.02 $ - $ 0.05 $ (0.03) operations................................... Discontinued operations .................... - - - 0.35 ------------------- ---------------- ----------------- -------------- Net earnings (loss) per common share - diluted $ 0.02 $ - $ 0.05 $ 0.32 Weighted average shares outstanding: Basic ....................................... 42,569 37,821 42,524 37,216 Diluted .................................... 44,073 39,435 44,119 37,216
(a) Reflects retrospective adoption of SFAS 123R. 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 to cash flow and EBITDA; therefore, operating income (loss) is utilized as the starting point for these reconciliations. Cash flow is defined as operating income (loss) plus depletion, depreciation and amortization expenses, 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 Ended Six Months Ended (In thousands) June 30, June 30, ---------------------------------- -------------------------------- 2006 2005 2006 2005 ---------------- -------------- ------------- --------------- Operating income $ 5,496 $ 4,008 $ 11,083 $ 6,665 Depletion, depreciation and amortization 3,737 1,817 7,136 3,515 Stock-based compensation 199 16 370 41 Cash portion of other expense - - - (9) Cash interest (4,090) (3,381) (8,035) (6,495) - ----------------------------------------------------------------------------------------------------------------- Cash Flow $ 5,342 $ 2,460 $ 10,554 $ 3,717 - -----------------------------------------------------------------------------------------------------------------
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 - see consolidated statements of operations for a reconciliation of net income (loss) to operating income (loss).
(In thousands) Three Months Ended Six Months Ended June 30, June 30, ---------------------------------- -------------------------------- 2006 2005 2006 2005 ----------------- ------------- ------------- --------------- Operating income $ 5,496 $ 4,008 $ 11,083 $ 6,665 Depletion, depreciation and amortization 3,737 1,817 7,136 3,515 Stock-based compensation 199 16 370 41 - ----------------------------------------------------------------------------------------------------------------- EBITDA $ 9,432 $ 5,841 $ 18,589 $ 10,221 - -----------------------------------------------------------------------------------------------------------------
Note: The above cash flow and EBITDA reconciliations exclude impact from Grey Wolf Exploration Inc. -----END PRIVACY-ENHANCED MESSAGE-----