DELAWARE | 001-32681 | 72-1440714 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
400 E. Kaliste Saloom Rd., Suite 6000 Lafayette, Louisiana |
70508 |
|
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Production: |
||||||||||||||||
Oil (Bbls) |
130,144 | 190,070 | 445,457 | 488,996 | ||||||||||||
Gas (Mcf) |
6,073,776 | 6,194,862 | 17,847,061 | 18,252,378 | ||||||||||||
Ngl (Mcfe) |
584,786 | 614,260 | 1,658,323 | 1,823,317 | ||||||||||||
Total Production (Mcfe) |
7,439,426 | 7,949,542 | 22,178,126 | 23,009,671 | ||||||||||||
Total Daily Production (MMcfe) |
80.9 | 86.4 | 81.2 | 84.3 | ||||||||||||
Sales: |
||||||||||||||||
Total oil sales |
$ | 13,508,377 | $ | 14,552,796 | $ | 46,403,861 | $ | 37,840,190 | ||||||||
Total gas sales |
19,865,595 | 27,506,045 | 60,481,702 | 83,846,822 | ||||||||||||
Total ngl sales |
5,606,335 | 4,170,453 | 15,560,225 | 13,944,203 | ||||||||||||
Total oil and gas sales |
$ | 38,980,307 | $ | 46,229,294 | $ | 122,445,788 | $ | 135,631,215 | ||||||||
Average sales prices: |
||||||||||||||||
Oil (per Bbl) |
$ | 103.80 | $ | 76.57 | $ | 104.17 | $ | 77.38 | ||||||||
Gas (per Mcf) |
3.27 | 4.44 | 3.39 | 4.59 | ||||||||||||
Ngl (per Mcfe) |
9.59 | 6.79 | 9.38 | 7.65 | ||||||||||||
Per Mcfe |
5.24 | 5.82 | 5.52 | 5.89 |
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Guidance for | ||
Description | 4th Quarter 2011 | |
Production volumes (MMcfe/d) |
84 88 | |
Percent Gas |
82% | |
Percent Oil |
10% | |
Percent NGL |
8% | |
Expenses: |
||
Lease operating expenses (per Mcfe) |
$1.20 $1.30 | |
Production taxes (per Mcfe) |
$0.20 $0.25 | |
Depreciation, depletion and amortization (per Mcfe) |
$1.90 $2.00 | |
General and administrative (in millions) |
$5.0 $5.5 | |
Interest expense (in millions) |
$2.5 $2.7 | |
2011 Capital Expenditures (in millions) |
$130 $140 * |
* | Excludes $28 million in leasehold acquisition costs funded with cash on hand |
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September 30, | December 31, | |||||||
2011 | 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 22,269 | $ | 63,237 | ||||
Revenue receivable |
5,299 | 13,386 | ||||||
Joint interest billing receivable |
46,839 | 12,193 | ||||||
Other receivable |
13,963 | 13,795 | ||||||
Prepaid drilling costs |
4,353 | 789 | ||||||
Drilling pipe inventory |
4,983 | 11,711 | ||||||
Hedge asset |
4,178 | | ||||||
Other current assets |
3,929 | 1,827 | ||||||
Total current assets |
105,813 | 116,938 | ||||||
Property and equipment: |
||||||||
Oil and gas properties: |
||||||||
Oil and gas properties, full cost method |
1,544,614 | 1,433,642 | ||||||
Unevaluated oil and gas properties |
75,481 | 54,851 | ||||||
Accumulated depreciation, depletion and amortization |
(1,237,075 | ) | (1,175,553 | ) | ||||
Oil and gas properties, net |
383,020 | 312,940 | ||||||
Gas gathering assets, net of accumulated depreciation and
amortization of $1,720 and $1,496, respectively |
2,457 | 2,681 | ||||||
Total property and equipment |
385,477 | 315,621 | ||||||
Other assets, net of accumulated depreciation and amortization
of $7,641 and $6,435, respectively |
6,133 | 6,958 | ||||||
Total assets |
$ | 497,423 | $ | 439,517 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable to vendors |
$ | 57,080 | $ | 23,847 | ||||
Advances from co-owners |
25,889 | 7,963 | ||||||
Oil and gas revenue payable |
6,402 | 7,220 | ||||||
Accrued interest and preferred stock dividend |
2,435 | 6,575 | ||||||
Asset retirement obligation |
2,483 | 1,517 | ||||||
Other accrued liabilities |
10,338 | 10,719 | ||||||
Total current liabilities |
104,627 | 57,841 | ||||||
10% Senior Notes |
150,000 | 150,000 | ||||||
Asset retirement obligation |
24,867 | 23,075 | ||||||
Deferred income taxes |
1,132 | | ||||||
Other liabilities |
| 439 | ||||||
Commitments and contingencies |
||||||||
Stockholders equity: |
||||||||
Preferred stock, $.001 par value; authorized 5,000
shares; issued and outstanding 1,495 shares |
1 | 1 | ||||||
Common stock, $.001 par value; authorized 150,000
shares; issued and outstanding 62,071 and 61,565
shares, respectively |
62 | 62 | ||||||
Paid-in capital |
268,915 | 266,907 | ||||||
Accumulated other comprehensive income (loss) |
2,959 | (1,089 | ) | |||||
Accumulated deficit |
(55,140 | ) | (57,719 | ) | ||||
Total stockholders equity |
216,797 | 208,162 | ||||||
Total liabilities and stockholders equity |
$ | 497,423 | $ | 439,517 | ||||
5
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues: |
||||||||||||||||
Oil and gas sales |
$ | 38,980 | $ | 46,229 | $ | 122,446 | $ | 135,631 | ||||||||
Net gas gathering revenue |
49 | 45 | 161 | 164 | ||||||||||||
39,029 | 46,274 | 122,607 | 135,795 | |||||||||||||
Expenses: |
||||||||||||||||
Lease operating expenses |
10,376 | 9,742 | 30,085 | 28,457 | ||||||||||||
Production taxes |
1,446 | 361 | 2,070 | 3,308 | ||||||||||||
Depreciation, depletion and amortization |
14,696 | 14,739 | 43,415 | 43,467 | ||||||||||||
Ceiling test writedown |
| | 18,907 | | ||||||||||||
General and administrative |
4,990 | 5,581 | 13,668 | 15,906 | ||||||||||||
Accretion of asset retirement obligation |
433 | 424 | 1,612 | 1,300 | ||||||||||||
Interest expense |
2,299 | 3,147 | 7,248 | 7,336 | ||||||||||||
34,240 | 33,994 | 117,005 | 99,774 | |||||||||||||
Gain on legal settlement |
| | | 12,400 | ||||||||||||
Loss on early extinguishment of debt |
| (5,973 | ) | | (5,973 | ) | ||||||||||
Other income (expense) |
(40 | ) | 218 | 237 | 229 | |||||||||||
Income from operations |
4,749 | 6,525 | 5,839 | 42,677 | ||||||||||||
Income tax expense (benefit) |
(265 | ) | 299 | (594 | ) | (1,081 | ) | |||||||||
Net income |
5,014 | 6,226 | 6,433 | 43,758 | ||||||||||||
Preferred stock dividend |
1,287 | 1,287 | 3,854 | 3,854 | ||||||||||||
Net income available to common stockholders |
$ | 3,727 | $ | 4,939 | $ | 2,579 | $ | 39,904 | ||||||||
Earnings per common share: |
||||||||||||||||
Basic |
||||||||||||||||
Net income per share |
$ | 0.06 | $ | 0.08 | $ | 0.04 | $ | 0.63 | ||||||||
Diluted |
||||||||||||||||
Net income per share |
$ | 0.06 | $ | 0.08 | $ | 0.04 | $ | 0.63 | ||||||||
Weighted average number of common shares: |
||||||||||||||||
Basic |
62,041 | 61,446 | 61,876 | 61,372 | ||||||||||||
Diluted |
62,415 | 61,814 | 62,278 | 61,744 | ||||||||||||
6
Nine Months Ended | ||||||||
September 30, | ||||||||
2011 | 2010 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 6,433 | $ | 43,758 | ||||
Adjustments to reconcile net income to net cash provided by
operating activities: |
||||||||
Deferred tax benefit |
(594 | ) | (1,081 | ) | ||||
Depreciation, depletion and amortization |
43,415 | 43,467 | ||||||
Ceiling test writedown |
18,907 | | ||||||
Non-cash gain on legal settlement |
| (4,164 | ) | |||||
Loss on early extinguishment of debt |
| 5,973 | ||||||
Accretion of asset retirement obligation |
1,612 | 1,300 | ||||||
Share based compensation expense |
2,985 | 5,863 | ||||||
Amortization costs and other |
461 | 1,124 | ||||||
Payments to settle asset retirement obligations |
(551 | ) | (5,672 | ) | ||||
Changes in working capital accounts: |
||||||||
Revenue receivable |
8,087 | 6,807 | ||||||
Joint interest billing receivable |
(34,646 | ) | (384 | ) | ||||
Prepaid drilling and pipe costs |
3,164 | 3,504 | ||||||
Accounts payable and accrued liabilities |
26,914 | (55 | ) | |||||
Advances from co-owners |
17,926 | (2,162 | ) | |||||
Other |
(3,000 | ) | (2,084 | ) | ||||
Net cash provided by operating activities |
91,113 | 96,194 | ||||||
Cash flows used in investing activities: |
||||||||
Investment in oil and gas properties |
(141,687 | ) | (78,015 | ) | ||||
Proceeds from sale of unevaluated properties |
14,461 | 22,473 | ||||||
Proceeds from sale of oil and gas properties |
| 35,000 | ||||||
Net cash used in investing activities |
(127,226 | ) | (20,542 | ) | ||||
Cash flows used in financing activities: |
||||||||
Net payments for share based compensation |
(977 | ) | (223 | ) | ||||
Deferred financing costs |
(24 | ) | (8 | ) | ||||
Proceeds from issuance of 10% Sr. Notes |
| 150,000 | ||||||
Costs to issue 10% Sr. Notes |
| (4,117 | ) | |||||
Redemption of 10 3/8% Sr. Notes |
| (150,000 | ) | |||||
Costs to redeem 10 3/8% Sr. Notes |
| (4,187 | ) | |||||
Payment of preferred stock dividend |
(3,854 | ) | (3,852 | ) | ||||
Proceeds from bank borrowings |
22,000 | | ||||||
Repayment of bank borrowings |
(22,000 | ) | (29,000 | ) | ||||
Net cash used in financing activities |
(4,855 | ) | (41,387 | ) | ||||
Net (decrease) increase in cash and cash equivalents |
(40,968 | ) | 34,265 | |||||
Cash and cash equivalents, beginning of period |
63,237 | 20,772 | ||||||
Cash and cash equivalents, end of period |
$ | 22,269 | $ | 55,037 | ||||
Supplemental disclosure of cash flow information: |
||||||||
Cash paid during the period for: |
||||||||
Interest |
$ | 15,870 | $ | 10,923 | ||||
Income taxes |
$ | 51 | $ | 192 | ||||
7
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income |
$ | 5,014 | $ | 6,226 | $ | 6,433 | $ | 43,758 | ||||||||
Reconciling items: |
||||||||||||||||
Deferred tax expense (benefit) |
(265 | ) | 299 | (594 | ) | (1,081 | ) | |||||||||
Depreciation, depletion and amortization |
14,696 | 14,739 | 43,415 | 43,467 | ||||||||||||
Ceiling test writedown |
| | 18,907 | | ||||||||||||
Non-cash gain on legal settlement |
| | | (4,164 | ) | |||||||||||
Loss on early extinguishment of debt |
| 5,973 | | 5,973 | ||||||||||||
Accretion of asset retirement obligation |
433 | 424 | 1,612 | 1,300 | ||||||||||||
Share based compensation expense |
1,068 | 2,111 | 2,985 | 5,863 | ||||||||||||
Amortization expense and other |
153 | 337 | 461 | 1,124 | ||||||||||||
Discretionary cash flow |
21,099 | 30,109 | 73,219 | 96,240 | ||||||||||||
Changes in working capital accounts |
10,161 | 50 | 18,445 | 5,626 | ||||||||||||
Settlement of asset retirement obligations |
(38 | ) | (283 | ) | (551 | ) | (5,672 | ) | ||||||||
Net cash provided by operating activities |
$ | 31,222 | $ | 29,876 | $ | 91,113 | $ | 96,194 | ||||||||
Note: | Management believes that discretionary cash flow is relevant and useful information, which
is commonly used by analysts, investors and other interested parties in the oil and gas
industry as a financial indicator of an oil and gas companys ability to generate cash used to
internally fund exploration and development activities and to service debt. Discretionary
cash flow is not a measure of financial performance prepared in accordance with generally
accepted accounting principles (GAAP) and should not be considered in isolation or as an
alternative to net cash flow provided by operating activities. In addition, since
discretionary cash flow is not a term defined by GAAP, it might not be comparable to similarly
titled measures used by other companies. |
8
PETROQUEST ENERGY, INC. |
||||
Date: November 3, 2011 | By: | /s/ J. Bond Clement | ||
J. Bond Clement | ||||
Executive Vice President, Chief Financial Officer and Treasurer |
9