Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported
financial and operating results for the three months ended
June 30, 2017.
Financial and Operating Results for the
Three Months Ended June 30, 2017
The three months ended June 30, 2017 resulted in:
- Production of 471 MBoe (5,172
Boepd)
- Revenue of $13.2 million
- Net income of $7.2 million, or $0.04
per share
- Adjusted net income(a) (excluding
certain non-cash items) of $2.1 million, or $0.01 per share
- EBITDA(a) of $8.1 million
- Adjusted EBITDA per bank loan covenants
of $8.8 million(a)
(a) See reconciliation of non-GAAP financial
measures below.
Net income for the three months ended June 30, 2017 was
$7.2 million, or $0.04 per share, compared to a net loss of $46.9
million, or $0.40 per share, for the three months ended
June 30, 2016.
Operational Update
Delaware Basin
In Ward County, Texas, the Caprito 98-201H and Caprito 98-301HR
were successfully fracture stimulated and are currently flowing
back at very encouraging rates. Abraxas is flowing both wells back
using a more conservative choke management protocol after observing
the practices of offsetting operators. The objective of this
protocol is to enhance the performance and ultimate recovery from
the well. To date the performance of these wells is exceeding that
of the Company’s first Wolfcamp A2 completion in the Caprito
99-302H. Furthermore, the performance of the Company’s first
Wolfcamp A1 test in the Caprito 98-201H is exceeding that of the
two Wolfcamp A2 completions in the Caprito 98-301HR and Caprito
99-302H. Abraxas will furnish 30-day IP rates when they are
available. Following the acquisition of additional working
interests at Caprito (expected to close in August 2017), Abraxas
estimates it will own a working interest of approximately 98% in
the Caprito 98-201H and 98-301HR.
Abraxas successfully drilled and cased the Caprito 83-304H and
Caprito 83-404H to total depths of 16,387 and 16,590 feet,
respectively. The Caprito 83-304H is targeting the Wolfcamp A2 zone
and the Caprito 83-404H is targeting the Wolfcamp B zone.
Completion of these wells is scheduled for September 2017.
Following the acquisition of additional working interests at
Caprito (expected to close in August 2017), Abraxas estimates it
will own a working interest of approximately 100% in the Caprito
83-304H and Caprito 83-404H.
Abraxas recently spud the Caprito 82-101H and Caprito 82-202H.
The Caprito 82-101H is targeting the Third Bone Spring zone and the
Caprito 82-202H is targeting the Wolfcamp A1 zone. Abraxas
estimates it owns a working interest of approximately 62% and 100%
in the Caprito 82-101H and Caprito 82-202H, respectively.
Williston Basin
At Abraxas’ North Fork prospect, in McKenzie County, North
Dakota, the Stenehjem 6H and 8H wells targeting the Three Forks
averaged 1,143 Boepd (861 barrels of oil per day, 1,692 Mcf of
natural gas per day) (1) over their first 30 days of production.
The Stenehjem 7H and 9H wells targeting the Middle Bakken averaged
1,148 Boepd (854 barrels of oil per day, 1,761 Mcf of natural gas
per day) (1) over their first 30 days of production. Abraxas owns a
working interest of approximately 75% in the Stenehjem 6H-9H.
The Yellowstone 2H-4H wells, in which Abraxas owns a 52% working
interest, are now scheduled for an October 2017 completion.
Eagle Ford/Austin Chalk
In Atascosa County, Texas, the Shut Eye 1H, in which Abraxas
owns a 100% working interest, is now scheduled for a September 2017
completion.
Delaware Basin Acquisition
Abraxas is on schedule to close the Company’s Delaware Basin
acquisition announced July 13, 2017. After adjustments for title
defects Abraxas will be exchanging $3.2 million in cash, 2.0
million shares of Abraxas Petroleum Common Stock, Abraxas’ Pecos
County Ranch and ½ Abraxas’ owned minerals under the ranch for 918
net mineral acres (798 net mineral acres with Bone Spring and
Wolfcamp rights) and 130 Boepd of production in Ward, Reeves,
Winkler and Pecos Counties, Texas.
Second Quarter Production
Production for the second quarter of 2017 averaged approximately
5,172 Boepd (2,873 barrels of oil per day, 7,817 Mcf of natural gas
per day, 996 barrels of NGL per day). Production was adversely
impacted by downtime in the Bakken associated with shutting in
wells due to the Stenehjem 6H-9H completions and curtailed volumes
in South Texas and the Permian Basin.
Guidance Update
Despite Abraxas’ adoption of a controlled flowback protocol on
the recent Caprito completions, current production is averaging
over 9,000 Boepd. As these two wells ramp up to expected levels,
Abraxas expects to meet or exceed the Company’s originally
forecasted 2017 exit rate of 9,500 Boepd in the coming weeks.
Abraxas is adjusting the Company’s target exit rate to
approximately 10,750 Boepd. Abraxas is adjusting guidance for 2017
to account for the Company’s current planned completion schedule
and well performance.
Abraxas is also providing 2018 and 2019 production and Capital
Expenditure guidance for the first time. The 2018 and 2019 guidance
assumes a two-rig program, with one rig operating in the
Bakken/Three Forks on the Company’s current development plan and a
second rig operating on the Company’s Ward County assets. The 2018
and 2019 Capital Expenditure guidance provided below assumes
current wells costs and working interests. The guidance assumes a
one rig Wolfcamp program will result in the drilling and completion
of eight to nine gross wells per year on the Company’s Ward County
assets. Management expects increased drilling efficiencies to drive
the ultimate number of wells drilled and completed per year higher.
This guidance does not assume any additional acquisitions or
divestitures or activity on any other assets.
The 2017, 2018 and 2019 capital expenditure budget is subject to
change depending upon a number of factors, including the
availability of drilling equipment and personnel, economic and
industry conditions at the time of drilling, prevailing and
anticipated prices for oil and gas, the availability of sufficient
capital resources for drilling prospects, the Company’s financial
results, the availability of leases on reasonable terms and the
ability of the Company to obtain permits for drilling
locations.
2017E
2018E 2019E
Low High
Production Total (Boepd) 7,800 8,200 11,500 12,750 % Oil 61%
68% 69% % NGL 16% 13% 11% % Natural Gas 23% 19% 20%
CAPEX ($mm)
$120 (2)
$90 $90
Exit Rate (Boepd)
10,750
Comments
Bob Watson, President and CEO of Abraxas, commented, “As
expected, second quarter 2017 volumes dipped due to well shut-ins
in the Bakken from offsetting completions. Unfortunately, we were
also plagued by gas curtailments in South Texas and in the Permian,
which negatively impacted the quarter. With the past now behind us,
we expect to approach our anticipated year-end exit rate in the
next few weeks. This bodes for a much stronger than anticipated
second half 2017 production outlook as evidenced by our increased
anticipated exit rate to 10,750 Boepd.
“We are pleased to have uncovered a deep inventory of high rate
of return wells on our Ward County assets. This, alongside our
always predictable Bakken/Three Forks development, gives us comfort
to provide the street with a more detailed picture of what we
forecast internally at Abraxas with just a two-rig drilling program
and assuming current efficiencies. These projections obviously will
put us in a position to maintain a strong balance sheet and remain
acquisitive. Our focus remains on continuing to expand our Delaware
position to meaningful scale on attractive terms as we have
demonstrated to date.
“Since January 2017, we added over 2,500 core Wolfcamp/Bone
Spring acres in the Delaware Basin at a reasonable cost. We
divested several non-core assets and will continue to streamline
this portfolio heading forward. We also achieved our goal of
building our production base to a critical mass by year end four
months ahead of expectations. Most importantly, we accomplished all
of this while maintaining a best in class balance sheet. I couldn’t
be more proud of our team and we look forward to continuing to
execute on our stated 2017 goals.”
(1) The 30-day average rates represent the highest 30 days of
production and do not include the impact of natural gas liquids and
shrinkage at the processing plant and include flared gas.
(2) Includes $110 million in cash and $10 million in shares and
Abraxas’ Coyanosa Draw ranch used as consideration in August 2017
Ward County acquisition.
Conference Call
Abraxas Petroleum Corporation (NASDAQ:AXAS) will host its second
quarter 2017 earnings conference call at 11 AM ET on August 9,
2017. To participate in the conference call, please dial
844.778.4143 and enter the passcode 54295695. 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 September 6, 2017 by dialing 855.859.2056 and
entering the passcode 54295695 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 EndedJune 30,
Six Months EndedJune 30,
2017 2016 2017 2016 Financial
Results: Revenues $ 13,152 $ 11,008 $ 31,954 $ 20,572 Net income
(loss) 7,195 (46,937 ) 20,885 (87,817 ) Net income (loss) per share
– basic 0.04 (0.40 ) 0.13 (0.80 ) Net income (loss) per share –
diluted 0.04 (0.40 ) 0.13 (0.80 ) Capital expenditures 29,496 4,079
40,453 5,666 EBITDA(a) 8,135 2,275 19,853 9,225 Adjusted net income
(loss), excluding certain non-cash items(a) 2,124 (5,928 ) 7,054
(6,631 ) Adjusted net income (loss), excluding certain non-cash
items(a) , per share – basic $ 0.01 $ (0.05 ) $ 0.04 $ (0.06 )
Adjusted net income (loss), excluding certain non-cash items(a),
per share – diluted $ 0.01 $ (0.05 ) $ 0.04 $ (0.06 ) Liquidity(a)
84,402 36,590 84,402 36,590 Weighted average shares outstanding –
basic 162,357 116,120 158,259 110,415 Weighted average shares
outstanding – diluted 163,805 116,120 159,942 110,415
Production from Continuing Operations: Crude oil per day (Bblpd)
2,873 2,844 3,308 3,218 Natural gas per day (Mcfpd) 7,817 7,561
9,115 8,056 Natural gas liquids per day (Bblpd) 996 779 1,165 839
Crude oil equivalent per day (Boepd) 5,172 4,883 5,992 5,399 Crude
oil equivalent (MBoe) 471 444 1,085 983 Realized Prices, net
of realized hedging activity: Crude oil ($ per Bbl) $ 48.54 $ 34.53
$ 48.02 $ 39.72 Natural gas ($ per Mcf) 1.49 0.95 1.88 0.98 Natural
gas liquids ($ per Bbl) 8.39 3.46 9.78 2.94 Crude oil equivalent ($
per Boe) 30.84 22.14 31.28 25.58 Expenses: Lease operating
($ per Boe) $ 7.27 $ 9.58 $ 6.95 $ 9.17 Production taxes (% of oil
and gas revenue) 8.8 % 11.2 % 8.7 % 11.7 % General and
administrative, excluding stock-based compensation ($ per Boe) $
4.08 $ 4.31 $ 3.58 $ 3.90 Cash interest ($ per Boe) 0.83 2.28 0.72
2.16
Depreciation, depletion and amortization
($ per Boe)
9.38 12.76 9.02 11.76
(a) See reconciliation of non-GAAP
financial measures below.
BALANCE SHEET DATA
(In thousands) June 30, 2017 December 31, 2016 Cash $
652 $ — Working capital (19,474 ) (7,178 ) Property and equipment –
net 165,905 136,311 Total assets 187,137 161,648 Long-term
debt 34,487 96,616 Stockholders’ equity 106,362 18,505 Common
shares outstanding 163,850 135,094 Working capital per bank
loan covenants (a) (23,621 ) (4,064 ) (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)
Three Months EndedJune 30,
Six Months EndedJune 30,
2017 2016 2017 2016 Revenues:
Oil and gas production $ 13,136 $ 11,004 $ 31,923 $ 20,545 Other
16 4 31 27
13,152 11,008 31,954 20,572 Operating costs and expenses: Lease
operating 3,421 4,259 7,539 9,010 Production and ad valorem taxes
1,158 1,227 2,778 2,402 Rig expense — 263 — 342 Depreciation,
depletion, and amortization 4,415 5,669 9,789 11,561 Impairment —
28,735 — 63,820 General and administrative (including stock-based
compensation of $979, $835, $1,749, and $1,643 respectively)
2,898 2,753 5,635 5,478
11,892 42,906 25,741
92,613 Operating income (loss) 1,260 (31,898 )
6,213 (72,041 ) Other (income) expense: Interest income (1 )
(1 ) (1 ) (1 ) Interest expense 501 1,152 1,008 2,390 Amortization
of deferred financing fees 117 448 254 612 (Gain) loss on
derivative contracts (6,450 ) 13,440 (15,831 ) 12,775 (Gain) on
sale of non-oil and gas assets (102 ) —
(102 ) — (5,935 ) 15,039
(14,672 ) 15,776 Income (loss) before income tax
7,195 (46,937 ) 20,885 (87,817 ) Income tax benefit —
— — — Net income (loss) $
7,195 $ (46,937 ) $ 20,885 $ (87,817 )
Net income (loss) per common share - basic $ 0.04 $ (0.40 ) $ 0.13
$ (0.80 ) Net income (loss) per common share - diluted $
0.04 $ (0.40 ) $ 0.13 $ (0.80 ) Weighted average shares
outstanding: Basic 162,357 116,120 158,259 110,415 Diluted 163,805
116,120 159,942 110,415
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 income (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 EndedJune 30,
Six Months EndedJune 30,
2017 2016 2017 2016 Net income (loss) $
7,195 $ (46,937 ) $ 20,885 $ (87,817 ) Net interest expense 500
1,151 1,007 2,389 Depreciation, depletion and amortization 4,415
5,669 9,789 11,561 Amortization of deferred financing fees 117 448
254 612 Impairment — 28,735 — 63,820 Stock-based compensation 979
835 1,749 1,643 Unrealized (gain) loss on derivative contracts
(5,071 ) 12,374
(13,831 ) 17,017 EBITDA
$ 8,135 $ 2,275 $ 19,853
$ 9,225 EBITDA $ 8,135 $ 2,275 $ 19,853
$ 9,225 Realized loss on derivative monetization — (100 ) — 349
Monetized derivative contracts — 10,010 — 14,370 Expenses related
to equity offering/loan amendments 703
1,666 4,493
1,666 Adjusted EBITDA per bank loan covenants
$ 8,838 $ 13,851 $ 24,346
$ 25,610
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 income (loss), excluding
ceiling test impairment and unrealized changes in derivative
contracts. Management believes that net income (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 record an
unrealized gain or loss based on the calculated value difference
from the previous period-end valuation. For example, NYMEX oil
prices on June 30, 2016 were $48.33 per barrel compared to
$46.04 on June 30, 2017; therefore, the mark-to-market
valuation changed considerably from period to period.
(In thousands)
Three Months EndedJune 30,
Six Months EndedJune 30,
2017 2016 2017 2016 Net income (loss) $
7,195 $ (46,937 ) $ 20,885 $ (87,817 ) Impairment — 28,735 — 63,820
Unrealized (gain) loss on derivative contracts (5,071 ) 12,374
(13,831 ) 17,017 Realized loss on derivative monetization
— (100 ) —
349 Adjusted net income (loss),
excluding certain non-cash items $ 2,124
$ (5,928 ) $ 7,054 $ (6,631 )
Net income (loss) per share – basic $ 0.04
$ (0.40 ) $ 0.13 $ (0.80 ) Net
income (loss) per share – diluted $ 0.04
$ (0.40 ) $ 0.13 $ (0.80 )
Adjusted net income (loss), excluding certain non-cash items, per
share – basic $ 0.01 $ (0.05 ) $
0.04 $ (0.06 ) Adjusted net income (loss),
excluding certain non-cash items, per share – diluted
$ 0.01 $ (0.05 ) $ 0.04 $
(0.06 )
Liquidity is calculated by adding the net funds available under
our revolving credit facility and cash and cash equivalents. We use
liquidity as an indicator of the Company's ability to fund
development and exploration activities. However, this measurement
has limitations. This measurement can vary from year-to-year for
the Company and can vary among companies based on what is or is not
included in the measurement on a company's financial statements.
This measurement is provided in addition to, and not as an
alternative for, and should be read in conjunction with, the
information contained in our financial statements prepared in
accordance with GAAP (including the notes), included in our SEC
filings and posted on our website.
(In thousands) June 30, 2017
June 30, 2016 Borrowing base $ 115,000 $ 130,000 Cash and
cash equivalents 652 1,840 Revolving credit facility - outstanding
borrowings (31,000 ) (95,000 ) Outstanding letters of credit
(250 ) (250 ) Liquidity
$ 84,402 $ 36,590
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170808006508/en/
Abraxas Petroleum CorporationGeoffrey King, 210-490-4788Vice
President – Chief Financial Officergking@abraxaspetroleum.comwww.abraxaspetroleum.com
Abraxas Petroleum (CE) (USOTC:AXAS)
Historical Stock Chart
From Apr 2024 to May 2024
Abraxas Petroleum (CE) (USOTC:AXAS)
Historical Stock Chart
From May 2023 to May 2024