EX-99 2 newsrelease.htm


ABRAXAS PETROLEUM CORPORATION

www.abraxaspetroleum.com

 

Exhibit 99.1

NEWS RELEASE

 

Abraxas Reports Third Quarter 2007 Results

 

SAN ANTONIO (November 8, 2007) – Abraxas Petroleum Corporation (AMEX:ABP) today reported financial and operating results for the quarter and nine months ended September 30, 2007 and provided an operational update. For reporting purposes, results are consolidated and include Abraxas Petroleum Corporation and its subsidiaries, and Abraxas Energy Partners, L.P. and its subsidiaries.

 

The third quarter of 2007 resulted in:

 

•

Production of 1.7 Bcfe;

 

•

Revenue of $13.7 million;

 

•

EBITDA (a) of $9.0 million;

 

•

Cash flow (a) of $8.5 million; and

 

•

Net income of $3.0 million, or $0.06 per share.

 

The nine months ended September 30, 2007 resulted in:

 

•

Production of 5.2 Bcfe;

 

•

Revenue of $40.2 million;

 

•

EBITDA (a) of $25.3 million;

 

•

Cash flow (a) of $18.0 million; and

 

•

Net income of $59.2 million, or $1.30 per share.

 

(a) see reconciliation of non-GAAP financial measures below.

 

Net income in the third quarter of 2007 was $3.0 million, or $0.06 per share compared to net income in the same quarter of 2006 of $589,000, or $0.01 per share. Net income for the nine months ended September 30, 2007 was $59.2 million, or $1.30 per share compared to net income during the same nine-month period of 2006 of $2.8 million, or $0.07 per share. Included in net income for the nine months ended September 30, 2007 was recognition of a pre-tax gain in the amount of $58.5 million as a result of the transactions previously announced on May 25, 2007.

 

In addition to the consolidated financial statements provided herein and to provide greater transparency, we have included a summary of Abraxas Petroleum’s financials on a stand-alone basis.

 

Operations

South Texas:

 

•

In Bee County, the Sutherland #1, which was drilled during the second quarter of 2007, was recently completed as a new gas discovery in the Wilcox formation at approximately 9,700’ and placed on-line. The well is currently producing approximately 1.5 MMcf and 25 barrels of condensate per day. Abraxas Petroleum owns an approximate 55% working interest in this well.

 

500 N. Loop 1604 East, Suite 100

San Antonio, Texas 78232

Phone: 210.490.4788 Fax: 210.490.8816

 

•      In Karnes County, the Gisler #1, which is currently scheduled to spud during the fourth quarter of 2007 will target the Wilcox formation at a total depth of approximately 12,700’. Abraxas Petroleum will own an approximate 63% working interest in this well.

 

 

•

In San Patricio County, the Welder #85 was drilled to the base of the Frio sands at a total depth of 9,000’ and placed on production. The well is currently producing approximately 50 barrels of oil equivalent per day. Abraxas Energy owns a 100% working interest in this well.

 

In Wyoming, we are still waiting on approval for our drilling permits.

 

“The third quarter was a quarter of strategic planning after the successful formation of Abraxas Energy Partners, L.P. and the closing of the private placements during the later part of the second quarter which effectively reduced Abraxas’ stand-alone debt by 100% and on a consolidated basis by 72%. Our complete opportunity set was reviewed as we gear up for a very active 2008 targeting development and production growth in a number of our West Texas oil fields. We are pleased with the results of the Sutherland well as it re-affirms our technical ability to internally generate prospects based on 3-D interpretation,” commented Bob Watson, Abraxas’ President and CEO.

 

Conference Call

Abraxas invites you to participate in a conference call on Friday, November 9, 2007, at 10:00 a.m. CT to discuss the contents of this release and respond to questions. Please dial 1.866.383.8119, passcode 25487477, 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 Investor Relations. In addition to the audio webcast replay, a podcast and transcript of the conference call will be posted on the Investor Relations 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 exploration 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/Vice President - Corporate Development

Direct Telephone 210.757.9835

Main Telephone 210.490.4788

bstuckey@abraxaspetroleum.com

www.abraxaspetroleum.com

 

 

ABRAXAS PETROLEUM CORPORATION

CONSOLIDATED

 

QUARTER-END RESULTS

(UNAUDITED)

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2007

 

2006

 

2007

 

2006

 

Financial Results (In thousands except per share data):

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

13,667

 

$

13,216

 

$

40,191

 

$

39,825

 

EBITDA (a)

 

 

9,036

 

 

9,312

 

 

25,307

 

 

27,538

 

Cash flow (a)

 

 

8,533

 

 

4,899

 

 

17,991

 

 

15,090

 

Net income

 

 

2,998

 

 

589

 

 

59,158

 

 

2,792

 

Net income per share – basic

 

$

0.06

 

$

0.01

 

$

1.30

 

$

0.07

 

Weighted average shares outstanding – basic

 

 

48,814

 

 

42,584

 

 

45,524

 

 

42,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production:

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil per day (Bopd)

 

 

522

 

 

567

 

 

540

 

 

549

 

Natural gas per day (Mcfpd)

 

 

15,317

 

 

18,752

 

 

15,876

 

 

18,044

 

Natural gas equivalents per day (Mcfepd)

 

 

18,448

 

 

22,157

 

 

19,115

 

 

21,335

 

Natural gas equivalents (Bcfe)

 

 

1.70

 

 

2.04

 

 

5.22

 

 

5.82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized Prices, net of realized hedge effect:

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil (Bbl)

 

$

67.98

 

$

66.62

 

$

61.05

 

$

64.24

 

Natural gas (Mcf)

 

 

6.58

 

 

5.46

 

 

6.37

 

 

5.83

 

Natural gas equivalent (Mcfe)

 

 

7.38

 

 

6.33

 

 

7.01

 

 

6.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating ($ per Mcfe)

 

$

1.16

 

$

0.92

 

$

1.11

 

$

0.92

 

Production taxes (% of oil and gas revenue)

 

 

7.5

%

 

8.2

%

 

8.6

%

 

8.2

%

General and administrative, excluding stock-based compensation ($ per Mcfe)

 

 

0.56

 

 

0.41

 

 

0.57

 

 

0.50

 

Cash interest ($ per Mcfe)

 

 

0.30

 

 

2.16

 

 

1.40

 

 

2.14

 

Depreciation, depletion and amortization
($ per Mcfe)

 

 

2.13

 

 

1.78

 

 

1.99

 

 

1.85

 

 

 

(a)

See reconciliation of non-GAAP financial measures below

 

BALANCE SHEET DATA

 

(In thousands)

September 30, 2007

 

December 31, 2006

 

 

 

 

Cash

$             13,359

 

$                             43

Working capital (deficit)

14,755

 

(3,719)

Property and equipment – net

107,769

 

104,957

Total assets

134,858

 

117,486

 

 

 

 

Long-term debt

35,000

 

127,614

Stockholders’ equity (deficit)

59,084

 

(21,619)

Common shares outstanding

48,919

 

42,727

 

 

ABRAXAS PETROLEUM CORPORATION

STAND-ALONE

 

QUARTER-END RESULTS

(UNAUDITED)

 

 

 

 

 

Three Months Ended September 30,

 

 

 

 

 

 

 

2007

 

 

 

Financial Results (In thousands except per share data):

 

 

 

 

 

 

 

 

Revenues

 

 

 

$

4,800

 

(

a)

Net income

 

 

 

 

2,935

 

(

a)

Net income per share – basic

 

 

 

$

0.06

 

 

 

Weighted average shares outstanding – basic

 

 

 

 

48,814

 

 

 

 

 

 

 

 

 

 

 

 

Production:

 

 

 

 

 

 

 

 

Crude oil per day (Bopd)

 

 

 

 

180

 

 

 

Natural gas per day (Mcfpd)

 

 

 

 

2,558

 

 

 

Natural gas equivalents per day (Mcfepd)

 

 

 

 

3,637

 

 

 

Natural gas equivalents (Bcfe)

 

 

 

 

0.33

 

 

 

 

 

 

 

 

 

 

 

 

Realized Prices, net of realized hedge effect:

 

 

 

 

 

 

 

 

Crude oil (Bbl)

 

 

 

$

69.56

 

 

 

Natural gas (Mcf)

 

 

 

 

5.21

 

 

 

Natural gas equivalent (Mcfe)

 

 

 

 

7.10

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

Lease operating ($ per Mcfe)

 

 

 

$

1.39

 

 

 

Production taxes (% of oil and gas revenue)

 

 

 

 

0.0

%

(

b)

General and administrative, excluding stock-based compensation ($ per Mcfe)

 

 

 

 

1.63

 

 

 

Cash interest (income) ($ per Mcfe)

 

 

 

 

(0.48

)

 

 

Depreciation, depletion and amortization
($ per Mcfe)

 

 

 

 

1.80

 

 

 

 

(a) Includes cash distributions from the partnership attributable to the third quarter of 2007

(b) Severance tax credit for a well in South Texas for taxes paid over the past 18 months

 

BALANCE SHEET DATA

 

(In thousands)

 

September 30, 2007

 

 

 

 

 

 

Cash

 

$

11,375

 

Working capital

 

 

7,993

 

Property and equipment - net

 

 

19,743

 

Total assets

 

 

71,377

 

 

 

 

 

 

Long-term debt

 

 

—

 

Stockholders’ equity

 

 

58,316

 

Common shares outstanding

 

 

48,919

 

 

 

 

ABRAXAS PETROLEUM CORPORATION

CONSOLIDATED

 

STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

(In thousands except per share data)

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2007

 

 

 

2006

 

2007

 

 

 

2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and gas production revenues

 

$

10,959

 

 

 

$

12,711

 

$

35,151

 

 

 

$

37,860

 

Realized hedge income

 

 

1,573

 

 

 

 

183

 

 

1,447

 

 

 

 

466

 

Unrealized hedge income (loss)

 

 

690

 

 

 

 

(47

)

 

2,506

 

 

 

 

316

 

Rig revenues

 

 

443

 

 

 

 

363

 

 

1,082

 

 

 

 

1,168

 

Other

 

 

2

 

 

 

 

6

 

 

5

 

 

 

 

15

 

 

 

 

13,667

 

 

 

 

13,216

 

 

40,191

 

 

 

 

39,825

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating

 

 

1,971

 

 

 

 

1,882

 

 

5,792

 

 

 

 

5,370

 

Production taxes

 

 

819

 

 

 

 

1,047

 

 

3,023

 

 

 

 

3,097

 

Depreciation, depletion, and amortization

 

 

3,611

 

 

 

 

3,631

 

 

10,367

 

 

 

 

10,767

 

Rig operations

 

 

199

 

 

 

 

178

 

 

572

 

 

 

 

608

 

General and administrative (including stock- based compensation of $204, $208, $748
and $578)

 

 

1,156

 

 

 

 

1,052

 

 

3,739

 

 

 

 

3,474

 

 

 

 

7,756

 

 

 

 

7,790

 

 

23,493

 

 

 

 

23,316

 

Operating income

 

 

5,911

 

 

 

 

5,426

 

 

16,698

 

 

 

 

16,509

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(167

)

 

 

 

(1

)

 

(234

)

 

 

 

(2

)

Interest expense

 

 

699

 

 

 

 

4,440

 

 

7,634

 

 

 

 

12,526

 

Amortization of deferred financing fees

 

 

62

 

 

 

 

398

 

 

609

 

 

 

 

1,193

 

Loss on debt extinguishment

 

 

—

 

 

 

 

—

 

 

6,455

 

 

 

 

—

 

Gain on sale of assets

 

 

—

 

 

 

 

—

 

 

(58,498

)

 

 

 

—

 

 

 

 

594

 

 

 

 

4,837

 

 

(44,034

)

 

 

 

13,717

 

Income before income tax and minority interest

 

 

5,317

 

 

 

 

589

 

 

60,732

 

 

 

 

2,792

 

Income tax expense

 

 

—

 

 

 

 

—

 

 

715

 

 

 

 

—

 

Income before minority interest

 

 

5,317

 

 

 

 

589

 

 

60,017

 

 

 

 

2,792

 

Minority interest

 

 

(2,319

)

 

 

 

—

 

 

(859

)

 

 

 

—

 

Net income

 

$

2,998

 

 

 

$

589

 

$

59,158

 

 

 

$

2,792

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - basic

 

$

0.06

 

 

 

$

0.01

 

$

1.30

 

 

 

$

0.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - diluted

 

$

0.06

 

 

 

$

0.01

 

$

1.29

 

 

 

$

0.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

48,814

 

 

 

 

42,584

 

 

45,524

 

 

 

 

42,550

 

Diluted

 

 

49,244

 

 

 

 

43,911

 

 

45,870

 

 

 

 

44,045

 

 

 

ABRAXAS PETROLEUM CORPORATION

CONSOLIDATED

 

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 calculated in accordance with GAAP is the most directly comparable measure to cash flow and EBITDA; therefore, operating income 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, unrealized (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 for the periods presented.

 

(in thousands)

 

Three Month Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2007

 

2006

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

5,911

 

$

5,426

 

$

16,698

 

$

16,509

 

Unrealized hedge loss (income)

 

 

(690

)

 

47

 

 

(2,506

)

 

(316

)

Depletion, depreciation and amortization

 

 

3,611

 

 

3,631

 

 

10,367

 

 

10,767

 

Stock-based compensation

 

 

204

 

 

208

 

 

748

 

 

578

 

Cash interest

 

 

(503

)

 

(4,413

)

 

(7,316

)

 

(12,448

)

Cash flow

 

$

8,533

 

$

4,899

 

$

17,991

 

$

15,090

 

 

 

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 for the periods presented – see consolidated statements of operations for a reconciliation of net income to operating income.

 

 


(in thousands)

 

Three Month Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2007

 

2006

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

5,911

 

$

5,426

 

$

16,698

 

$

16,509

 

Unrealized hedge loss (income)

 

 

(690

)

 

47

 

 

(2,506

)

 

(316

)

Depletion, depreciation and amortization

 

 

3,611

 

 

3,631

 

 

10,367

 

 

10,767

 

Stock-based compensation

 

 

204

 

 

208

 

 

748

 

 

578

 

EBITDA

 

$

9,036

 

$

9,312

 

$

25,307

 

$

27,538