Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported
financial and operating results for the three and twelve months
ended December 31, 2016.
Financial and Operating Results for the
Three Months Ended December 31, 2016
The three months ended December 31, 2016 resulted in:
- Production of 732 MBoe (7,955
Boepd)
- Revenue of $22.0 million
- Net loss of $5.3 million, or $0.04 per
share
- Adjusted net income(a), excluding
certain non-cash items of $1.0 million, or $0.01 per share
- EBITDA(a) of $9.5 million
- Adjusted EBITDA per bank loan covenants
of $9.5 million(a)
(a) See reconciliation of non-GAAP financial
measures below.
Net loss for the three months ended December 31, 2016 was
$5.3 million, or $0.04 per share, compared to a net loss of $67.4
million, or $0.64 per share, for the three months ended
December 31, 2015.
Financial and Operating Results for the
Twelve Months Ended December 31, 2016
The twelve months ended December 31, 2016 resulted in:
- Production of 2.3 MMBoe (6,181
Boepd)
- Revenue of $56.6 million
- Net loss of $96.4 million, or $0.79 per
share
- Adjusted net loss(a), excluding certain
non-cash items of $9.0 million, or $0.07 per share
- EBITDA(a) of $24.0 million
- Adjusted EBITDA per bank loan covenants
of $40.1 million(a)
(a) See reconciliation of non-GAAP financial
measures below.
Net loss for the twelve months ended December 31, 2016 was
$96.4 million, or $0.79 per share, compared to a net loss of $127.1
million, or $1.21 per share, for the twelve months ended
December 31, 2015.
Operational Update
Permian/Delaware Basin
In Ward County, Texas, Abraxas is currently drilling a two well
pad in the Caprito 98-201H and Caprito 98-301HR. The Caprito
98-301HR will target the Wolfcamp A2 zone and replaces the Caprito
98-301H, which was abandoned due to a surface issue. The Caprito
98-201H will target an additional prospective zone in the Wolfcamp
A1. Abraxas owns a working interest of approximately 88% in the
Caprito 98-201H and 98-301HR, respectively.
Following the drilling of the Caprito 98-201H and 301HR, Abraxas
will drill a second two well pad targeting the Wolfcamp A2 and the
Wolfcamp B. Following these two completions, Abraxas will drill a
third two well pad targeting the Wolfcamp A1 and Third Bone Spring.
Following the results of these wells, we believe that we will have
potentially derisked four prospective horizons allowing for an
efficient development of the Company’s Caprito acreage in the
Delaware Basin.
Williston Basin
At Abraxas’ North Fork prospect, in McKenzie County, North
Dakota, we have drilled the lateral sections of the Stenehjem 6H,
8H and 9H. Abraxas is currently drilling the lateral of the
Stenehjem 7H. Abraxas' working interest in the Stenehjem 6H-9H is
approximately 75%.
Following the completion of these wells, Abraxas plans to
mobilize the rig to the Company’s Yellowstone unit to spud a three
well pad. Abraxas anticipates having a 52% working interest in
these wells.
Eagle Ford/Austin Chalk
In Atascosa County, Texas, Abraxas plans to combine the
Company’s Shut Eye and Red Eye units. The new combined unit will be
the Shut Eye unit where Abraxas plans to drill the Shut Eye 1H
targeting the Eagle Ford with a 100% working interest. Abraxas is
currently sourcing a rig to drill this well.
Comments
Bob Watson, President and CEO of Abraxas, commented, “Abraxas
achieved superb financial results despite a difficult operating
environment in 2016. We are quite pleased our 2016 cash operating
expenses all came in toward the lower end of our guidance range.
January 2017 financial results continue to reflect this improvement
with cash expenses coming in at the low end of our 2017 guidance
range. We have also seen a tremendous improvement in natural gas
and NGL realizations in January 2017.
“Operationally, our execution in 2016 was also on point. Despite
approximately 175 Boepd of divestitures over the course of 2016,
our production guidance also came in at the approximate midpoint of
guidance. This was achieved on a capital expenditure budget that
came in 21% and 9% below original and revised guidance for the
year.
“Post our recent equity offering we now boast a best-in-class
balance sheet. As of March 10, 2017, we are $18 million drawn on
our $115 million borrowing base. Our balance sheet and robust cash
flow position will allow us to execute on our current program to
run one full-time rig in the Bakken and one full-time rig in the
Permian. Both those rigs are currently drilling and all operations
remain on schedule. Abraxas also continues to pursue several
cost-effective bolt-on acquisition opportunities in the Delaware
Basin. Importantly, we look forward to accomplishing all of this
without compromising our balance sheet.”
Conference Call
Abraxas Petroleum Corporation (NASDAQ:AXAS) will host its fourth
quarter and full year 2016 earnings conference call at 11 AM ET on
March 15, 2017. To participate in the conference call, please dial
844.778.4143 and enter the passcode 56250056. Additionally, a live
listen only webcast of the conference call can be accessed under
the investor relations section of the Abraxas website at
www.abraxaspetroleum.com. A replay of the conference call will be
available through April 12, 2017 by dialing 855.859.2056 and
entering the passcode 56250056 or can be accessed under the
investor relations section of the Abraxas website.
Abraxas Petroleum Corporation is a San Antonio based crude oil
and natural gas exploration and production company with operations
across the Permian Basin, Rocky Mountain, and South Texas regions
of the United States.
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 crude oil and natural gas. In addition, Abraxas’ future crude
oil and natural gas 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.
ABRAXAS PETROLEUM
CORPORATION CONSOLIDATED FINANCIAL
HIGHLIGHTS (In thousands except per share data)
Three Months EndedDecember 31,
Twelve Months EndedDecember 31,
2016 2015 2016 2015 Financial
Results: Revenues $ 22,007 $ 13,348 $ 56,555 $ 67,030 Net loss
(5,301 ) (67,419 ) (96,378 ) (127,110 ) Net loss per share – basic
$ (0.04 ) $ (0.64 ) $ (0.79 ) $ (1.21 ) Net loss per share –
diluted $ (0.04 ) $ (0.64 ) $ (0.79 ) $ (1.21 ) Capital
expenditures 7,031 16,777 31,663 69,391 EBITDA(a) 9,493 7,162
24,028 38,558 Adjusted net income (loss), excluding certain
non-cash items(a) 984 (2,345 ) (8,959 ) (7,876 ) Adjusted net
income (loss), excluding certain non-cash items(a) , per share –
basic $ 0.01 $ (0.02 ) $ (0.07 ) $ (0.08 ) Adjusted net income
(loss), excluding certain non-cash items(a), per share – diluted $
0.01 $ (0.02 ) $ (0.07 ) $ (0.08 ) Weighted average shares
outstanding – basic 133,597 104,703 122,132 104,605 Weighted
average shares outstanding – diluted 133,597 104,703 122,132
104,605 Production from Continuing Operations: Crude oil per
day (Bblpd) 4,923 3,696 3,750 3,946 Natural gas per day (Mcfpd)
10,087 8,352 8,633 8,260 Natural gas liquids per day (Bblpd) 1,350
753 993 652 Crude oil equivalent per day (Boepd) 7,955 5,841 6,181
5,975 Crude oil equivalent (MBoe) 732 537 2,262 2,181
Realized Prices, net of realized hedging activity: Crude oil ($ per
Bbl) $ 40.16 $ 42.32 $ 38.70 $ 47.54 Natural gas ($ per Mcf) 1.65
1.62 1.26 2.19 Natural gas liquids ($ per Bbl) 6.90 4.39 4.27 7.89
Crude oil equivalent ($ per Boe) 28.12 29.66 25.92 35.28
Expenses: Lease operating ($ per Boe) $ 6.28 $ 9.80 $ 8.05 $ 10.58
Production taxes (% of oil and gas revenue) 8.4 % 10.7 % 9.7 % 10.0
% General and administrative, excluding stock-based compensation ($
per Boe) $ 6.20 $ 3.30 $ 4.58 $ 3.61 Cash interest ($ per Boe) 1.17
1.83 1.69 1.53
Depreciation, depletion and amortization
($ per Boe)
8.88 14.28 10.80 17.76
(a) See reconciliation of non-GAAP
financial measures below.
BALANCE SHEET DATA
(In thousands) December 31, 2016 December 31, 2015
Cash $ — $ 3,540 Working capital (7,178 ) (2,395 ) Property and
equipment – net 136,311 224,838 Total assets 161,648 267,872
Long-term debt 96,616 138,402 Stockholders’ equity 18,505 84,465
Common shares outstanding 135,094 106,346 Working capital
per bank loan covenants (a) (4,064 ) (18,967 )
(a) Excludes current maturities of long-term debt and current
derivative assets and liabilities in accordance with our bank loan
covenants.
ABRAXAS PETROLEUM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (In
thousands except per share data) Twelve Months Ended December 31,
2016 2015 2014 Revenues: Oil and
gas production $ 56,493 $ 67,002 $ 133,701 Other 62
28 75 56,555 67,030 133,776 Operating
costs and expenses: Lease operating 18,205 23,074 25,875 Production
and ad valorem taxes 5,454 6,679 11,462 Rig expense 664 —
Depreciation, depletion, and amortization 24,431 38,721 43,139
Impairment 67,626 128,573 — General and administrative (including
stock-based compensation of $3,194, $3,912, and $2,703,
respectively) 13,562 11,788
13,378 129,942 208,835
93,854 Operating (loss) income (73,387 ) (141,805 ) 39,922
Other (income) expense: Interest income (1 ) (2 ) (2 )
Interest expense 4,319 3,906 2,570 Amortization of deferred
financing fees 1,019 643 934 Loss (gain) on derivative contracts
18,028 (19,301 ) (25,237 ) (Gain) on sale of properties (374 ) —
Other — 318 (7 ) 22,991
(14,436 ) (21,742 ) (Loss) income from
continuing operations before income tax (96,378 ) (127,369 ) 61,664
Income tax benefit — 279 287
Net (loss) income from continuing operations (96,378 )
(127,090 ) 61,951 Net (loss) income from discontinued operations -
net of tax — (20 ) 1,318 Net
loss $ (96,378 ) $ (127,110 ) $ 63,269 Net
(loss) income per common share - basic $ (0.79 ) $ (1.21 ) $ 0.64
Net (loss) income per common share - diluted $ (0.79 ) $
(1.21 ) $ 0.62 Weighted average shares outstanding: Basic
122,132 104,605 98,835 Diluted 122,132 104,605 101,468
ABRAXAS PETROLEUM CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
To fully assess Abraxas’ operating results, management believes
that, although not prescribed under generally accepted accounting
principles ("GAAP") in the United States of America, EBITDA is an
appropriate measure of Abraxas' ability to satisfy capital
expenditure obligations and working capital requirements. EBITDA is
a non-GAAP financial measure as defined under SEC rules. 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. EBITDA
excludes some, but not all items that affect net income and may
vary among companies. The EBITDA presented below may not be
comparable to similarly titled measures of other companies.
EBITDA is defined as net income (loss) plus interest expense,
deferred income taxes, depreciation, depletion and amortization
expenses, impairments, unrealized gains and losses on derivative
contracts, and stock-based compensation. The following table
provides a reconciliation of EBITDA to net loss for the periods
presented.
We have also disclosed Adjusted EBITDA per bank loan covenants.
Adjusted EBITDA per bank loan covenants is a non-GAAP financial
measure as defined under SEC rules. Our management believes that
information regarding Adjusted EBITDA per bank loan covenants is
material to an understanding of our financial condition and
liquidity. Adjusted EBITDA per bank loan covenants 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. Adjusted EBITDA per bank
loan covenants presented below may not be comparable to similarly
titled measures of other companies.
(In thousands)
Three Months EndedDecember 31,
Twelve Months EndedDecember 31,
2016 2015 2016 2015 Net loss $ (5,301 )
$ (67,419 ) $ (96,378 ) $ (127,110 ) Net interest expense 969 1,121
4,318 3,904 Income tax (benefit) — (279 ) — (279 ) Depreciation,
depletion and amortization 6,500 7,677 24,431 38,721 Amortization
of deferred financing fees 256 162 1,019 643 Impairment — 68,682
67,626 128,573 Stock-based compensation 784 826 3,194 3,912
Unrealized loss (gain) on derivative contracts
6,285 (3,608 ) 19,818
(9,806 ) EBITDA $ 9,493
$ 7,162 $ 24,028 $ 38,558
EBITDA $ 9,493 $ 7,162 $ 24,028 $ 38,558 (Gain) on
sale of properties — — (374 ) — Realized loss on derivative
monetization — — 349 447 Loss from discontinued operations — — — 20
Other non cash items — 318 — 318 Monetized derivative contracts — —
14,370 4,610 Expenses related to equity offering/loan amendments
29 —
1,776 — Adjusted EBITDA per bank
loan covenants $ 9,522 $ 7,480
$ 40,149 $ 43,953
This release also includes a discussion of “adjusted net loss,
excluding certain non-cash items,” which is also a non-GAAP
financial measure as defined under SEC rules. The following table
provides a reconciliation of adjusted net loss, excluding ceiling
test impairment and unrealized changes in derivative contracts.
Management believes that net loss calculated in accordance with
GAAP is the most directly comparable measure to adjusted net income
(loss), excluding certain non-cash items. The calculation of
adjusted net income (loss), excluding certain non cash items
presented below may not be comparable to similarly titled measures
of other companies.
Unrealized gains or losses on derivative contracts are based on
mark-to-market valuations which are non-cash in nature and may
fluctuate drastically from period to period. As commodity prices
fluctuate, these derivative contracts are valued against current
market prices at the end of each reporting period in accordance
with Accounting Standards Codification 815: Derivatives and Hedging
as amended and interpreted, which requires Abraxas to either record
an unrealized gain or loss based on the calculated value difference
from the previous period-end valuation. For example, NYMEX oil
prices on December 31, 2015 were $37.04 per barrel compared to
$53.72 on December 31, 2016; therefore, the mark-to-market
valuation changed considerably from period to period.
(In thousands)
Three Months EndedDecember 31,
Twelve Months EndedDecember 31,
2016 2015 2016 2015 Net loss $ (5,301 )
$ (67,419 ) $ (96,378 ) $ (127,110 ) Impairment — 68,682 67,626
128,573 Unrealized loss (gain) on derivative contracts 6,285 (3,608
) 19,818 (9,806 ) Realized loss on derivative monetization — — 349
447 Loss from discontinued operations — — — 20 (Gain) on sale of
properties — —
(374 ) — Adjusted net
income (loss), excluding certain non-cash items $ 984
$ (2,345 ) $ (8,959 ) $ (7,876 )
Net loss per share – basic $ (0.04 ) $
(0.64 ) $ (0.79 ) $ (1.21 ) Net loss per share –
diluted $ (0.04 ) $ (0.64 ) $ (0.79 )
$ (1.21 ) Adjusted net income (loss), excluding
certain non-cash items, per share – basic $ 0.01
$ (0.02 ) $ (0.07 ) $ (0.08 )
Adjusted net income (loss), excluding certain non-cash items, per
share – diluted $ 0.01 $ (0.02 )
$ (0.07 ) $ (0.08 )
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version on businesswire.com: http://www.businesswire.com/news/home/20170314006352/en/
Abraxas Petroleum CorporationGeoffrey King, 210-490-4788Vice
President – Chief Financial Officergking@abraxaspetroleum.comwww.abraxaspetroleum.com
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