Credo Reports Restated Financial Results for the Quarter Ended January 31, 2012
March 26 2012 - 7:00AM
Credo Petroleum Corporation (Nasdaq:CRED), an oil and gas
exploration and production company with significant assets in the
North Dakota Bakken and Three Forks, Kansas, Nebraska, the Texas
Panhandle and Oklahoma, today reported that it will restate
financial results for its first fiscal quarter of 2012. The
information reported in this press release is subject to final
review by the Company's independent accountants.
The financial statement adjustments are expected to reduce net
income reported for the first quarter ended January 31, 2012 by
$127,000, or $.01 per share. Restated net income is expected
to be $913,000, or $.09 per share, compared to $1,040,000, or $.10
per share, previously reported. Restated EBITDA for the first
quarter is expected to decline $99,000 to $3,743,000, compared to
$3,842,000 as previously reported. The adjustments are also
expected to reduce working capital at January 31, 2011 from
$1,708,000 to a working capital deficit of $4,410,000.
Alford B. Neely, Chief Financial Officer, stated, "Subsequent to
first quarter-end, we received late billings primarily from certain
operators of our Bakken and Three Forks wells which covered costs
that were incurred by the operators during the three months ended
January 31, 2012 but which were not timely billed to the
Company. The related adjustments are primarily due to the
accrual of those Bakken and Three Forks well costs."
With respect to the accrual of estimated well costs, the Company
is required to accrue an estimated liability for well costs when
those costs are actually incurred by the operators, regardless of
when the costs are billed to the Company by the
operators. There is a time delay between when such well costs
are incurred and when they are billed and become payable because
the operator must receive the bills from its vendors and then bill
the Company for its share. In the Bakken and Three Forks
project, such time delays by some operators have been significant,
making it difficult for the Company to estimate the point-in-time
liabilities that should be accrued. Certain of the costs which
are re-billed to the Company's partners affect total current assets
and total current liabilities but do not affect
working capital.
With respect to the effect on working capital, the Company has
previously reported that it expects to finance a portion of its
$35,000,000 fiscal 2012 capital expenditure budget with bank
borrowings. The accrual of liabilities for estimated well
costs incurred but not yet billed by the operators is expected to
cause a working capital deficit because the Company will not draw
down its line of credit until the bills are actually received and
become payable. This use of just-in-time financing will
minimize the Company's borrowing costs but will also result in a
working capital deficit during periods when the Company uses bank
borrowing to finance a portion of its drilling budget.
The unaudited financial highlights included at the end of this
press release show the Company's first quarter results as reported,
the expected adjustments to the various line items, and the
expected restated first quarter results. An amended first
quarter Form 10Q reflecting the adjustments is expected to be filed
next week.
Michael D. Davis, interim Chief Executive Officer, commented,
"Our Bakken and Three Forks drilling project is Credo's flagship
drilling play and provides enormous growth potential for the
Company. It is also our most challenging project primarily
because we are not the operator of the wells. Therefore, we
are not in control of such things as well timing, costs, and
billings. Those issues are manageable and are far less
important than our ability to participate with highly experienced
Bakken and Three Forks operators in the drilling and production of
such complex and expensive wells. At first quarter end, we did
not anticipate extensive delays in receiving bills from our
operators, however, we are confident that we can identify those
situations in the future and make reasonable estimates of unbilled
costs."
EBITDA is not a GAAP measure of operating performance. The
Company uses this non-GAAP performance measure primarily to compare
its performance with other companies in the industry that make a
similar disclosure. The Company believes that this performance
measure may also be useful to investors for the same
purpose. Investors should not consider this measure in
isolation or as a substitute for operating income or any other
measure for determining the Company's operating performance that is
calculated in accordance with GAAP. In addition, because
EBITDA is not a GAAP measure, it may not necessarily be comparable
to similarly titled measured employed by other companies. A
reconciliation between EBITDA and net income at January 31, 2012 is
provided in the table below.
|
|
Expected |
Expected |
Reconciliation of EBITDA |
As Reported |
Adjustments |
After Adjustment |
|
|
|
|
Net Income |
1,040,000 |
(127,000) |
913,000 |
Add Back: |
|
|
|
Income Tax Expense |
489,000 |
(12,000) |
477,000 |
Depreciation, Depletion
and |
|
|
|
Amortization Expense |
1,832,000 |
40,000 |
1,872,000 |
Unrealized Derivative
Losses |
481,000 |
-- |
481,000 |
|
|
|
|
EBITDA |
3,842,000 |
(99,000) |
3,743,000 |
This press release includes certain statements that may be
deemed to be "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended. All statements included in this press release, other
than statements of historical facts, address matters that the
Company reasonably expects, believes or anticipates will or may
occur in the future. Such statements are subject to various
assumptions, risks and uncertainties, many of which are beyond the
control of the Company. Investors are cautioned that any such
statements are not guarantees of future performance and that actual
results or developments may differ materially from those described
in the forward-looking statements. Investors are encouraged to
read the "Forward-Looking Statements" and "Risk Factors" sections
included in the Company's Annual Report on Form 10-K for more
information. Although the Company may from time to time
voluntarily update its prior forward looking statements, it
disclaims any commitment to do so except as required by securities
laws.
CREDO
PETROLEUM CORPORATION FINANCIAL
HIGHLIGHTS |
|
|
|
|
|
|
|
|
|
Condensed
Operating Information for the First Quarter Ended January 31,
2012 |
|
|
|
|
|
|
|
|
|
|
|
As Reported |
Expected
Adjustments |
Expected After
Adjustments |
|
|
|
|
|
REVENUES: |
|
|
|
|
Oil Sales |
$ 5,031,000 |
$ -- |
$ 5,031,000 |
|
Natural gas sales |
790,000 |
-- |
790,000 |
|
|
5,821,000 |
-- |
5,821,000 |
|
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
Oil and natural gas
production |
1,187,000 |
83,000 |
1,270,000 |
|
Depreciation, depletion and
amortization |
1,832,000 |
40,000 |
1,872,000 |
|
General and administrative |
750,000 |
16,000 |
766,000 |
|
|
3,769,000 |
139,000 |
3,908,000 |
|
|
|
|
|
|
Income from Operations |
2,052,000 |
(139,000 ) |
1,913,000 |
|
|
|
|
|
|
Other Income and (Expense) |
|
|
|
|
Realized and unrealized
(losses) |
|
|
|
|
from derivative
contracts |
(525,000 ) |
-- |
(525,000 ) |
|
Investment and other
income |
2,000 |
-- |
2,000 |
|
|
(523,000 ) |
-- |
(523,000 ) |
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES |
1,529,000 |
(139,000 ) |
1,390,000 |
|
|
|
|
|
|
INCOME TAXES |
(489,000 ) |
12,000 |
(477,000 ) |
|
|
|
|
|
|
NET INCOME |
$ 1,040,000 |
$ (127,000 ) |
$ 913,000 |
|
|
|
|
|
|
EARNINGS PER SHARE - BASIC |
$0.10 |
($0.01 ) |
$0.09 |
|
|
|
|
|
|
EARNINGS PER SHARE -
DILUTED |
$0.10 |
($0.01 ) |
$0.09 |
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF
SHARES OF COMMON STOCK AND DILUTIVE SECURITIES |
|
|
|
|
Basic |
10,041,000 |
|
10,041,000 |
|
Diluted |
10,078,000 |
|
10,078,000 |
|
|
|
|
|
|
|
|
CREDO
PETROLEUM CORPORATION FINANCIAL
HIGHLIGHTS |
|
|
|
Condensed
Balance Sheet Information as of January 31, 2012 |
|
|
|
|
|
|
|
|
As Reported |
Expected
Adjustments |
Expected After
Adjustments |
Cash and Short-term Investments |
$ 2,165,000 |
$ -- |
$ 2,165,000 |
Other Current Assets |
4,355,000 |
2,094,000 |
6,449,000 |
Oil and Natural Gas Properties, Net |
50,504,000 |
5,979,000 |
56,483,000 |
Intangible Assets |
3,033,000 |
-- |
3,033,000 |
Other Assets |
1,925,000 |
-- |
1,925,000 |
|
|
|
|
|
$ 61,982,000 |
$ 8,073,000 |
$ 70,055,000 |
|
|
|
|
|
|
|
|
Current Liabilities |
$ 4,812,000 |
$ 8,212,000 |
$ 13,024,000 |
Deferred Income Taxes |
4,994,000 |
(12,000 ) |
4,982,000 |
Asset Retirement Obligations |
1,120,000 |
-- |
1,120,000 |
Stockholders' Equity |
51,056,000 |
(127,000 ) |
50,929,000 |
|
|
|
|
|
$ 61,982,000 |
$ 8,073,000 |
$ 70,055,000 |
CONTACT: Michael D. Davis
Chief Operating Officer
and CEO (Interim)
or
Alford B. Neely
Chief Financial Officer
303-297-2200
Website:www.credopetroleum.com
iShares Trust (NASDAQ:CRED)
Historical Stock Chart
From Jun 2024 to Jul 2024
iShares Trust (NASDAQ:CRED)
Historical Stock Chart
From Jul 2023 to Jul 2024