HOUSTON, March 5 /PRNewswire-FirstCall/ -- Dune Energy, Inc. (NYSE
Alternext US: DNE) today announced results for the fourth quarter
and calendar year 2008. Revenue and Production Revenue for the
fourth quarter totaled $22.1 million and $146.6 million for the
full year 2008. This compares with $35.4 million and $71.2 million
for the fourth quarter and full year 2007, respectively. Production
volumes in the fourth quarter were 216 Mbbls of oil and 1.45 Bcf of
natural gas, or 2.7 Bcfe and 11.4 Bcfe for the full year 2008. This
compares with 278 Mbbls of oil and 1.6 Bcf of natural gas, or 3.3
Bcfe for the fourth quarter of 2007, and 7.1 Bcfe for the full year
2007. In 2008, the average sales price per barrel of oil was
$99.87, and $9.62 per mcf for natural gas, as compared with $79.02
per barrel and $7.05 per mcf, respectively for 2007. The primary
reasons behind the increase in revenue were higher production and
higher average sales prices in 2008 versus 2007. However, prices in
the fourth quarter dropped to $55.87 per barrel and $6.96 per mcf
as compared with $123.81 per barrel of oil and $10.29 per mcf of
gas in the third quarter. Costs and Expenses Direct lease operating
expenses, for the fourth quarter totaled $6.6 million and $24.8
million for calendar 2008. This compares with $6.0 million and
$15.2 million for the fourth quarter and the full year 2007,
respectively. On an Mcfe produced basis this was $2.18 for 2008 and
$2.13 for 2007. In addition to direct operating expenses, total
field operating expenses include workovers, Ad valorem taxes,
production taxes and transportation. For 2008 these were $5.5
million or $0.48 per Mcfe, $1.3 million or $0.11 per Mcfe, $10.7
million or $0.94 per Mcfe and $1.3 million or $0.11 per Mcfe
respectively. Total field operating expense was $43.5 million for
2008 as compared to $28.6 million for 2007 or $3.82 and $4.00 per
Mcfe produced respectively. DD&A expense was $16.2 million for
the fourth quarter and $56.7 million for 2008. Cash G&A expense
totaled $2.1 million for the fourth quarter and $13.2 million for
2008. Cash G&A for 2007 was $14.1 million. The $0.9 million
decrease reflects fewer employees in 2008 and lower bonus levels
compared to 2007. Stock-based compensation was $5.3 million for the
full year 2008 and $8.1 million in 2007. Interest and financing
expense was $8.6 million for the fourth quarter and $35.0 million
for 2008 primarily associated with payment of interest on $300
million of Senior Secured notes. We recorded a $125.7 million
pre-tax non-cash impairment charge associated with oil and gas
properties in the fourth quarter of 2008. This non-cash charge was
related to dramatically lower commodity prices at year-end 2008.
The Company's bank covenants were not impacted by this charge.
Earnings Net loss totaled $127.0 million for the fourth quarter of
2008, and $241.7 million for the full year 2008 including the
$125.7 million impairment charge. This compares with a $43.6
million loss in 2007. Preferred stock dividends were $100.6 million
which included a $68.4 million charge in the second quarter of 2008
reflecting the change in the conversion price of the Preferred
stock from $3.00 a share to $1.75 a share. The Company recorded a
gain of $4.1 million on derivatives associated with its hedge
position. This gain consisted of a $13.4 million unrealized gain
offset by a $9.3 cash loss on settlements of hedges. Net loss per
share both basic and fully diluted for the year was $2.72, based on
88.8 million weighted average shares outstanding. 2008 Capital,
Year End Reserves and 2009 Budget Total capital expended in 2008
was $52.8 million. Of this total $8.8 million was for facilities
and leasehold improvements to enhance the producing capabilities of
our fields. $10.1 million was for capital workovers in various
fields and $33.8 million for drilling and completion costs. Year
end 2008 reserves, as prepared by DeGoyler and MacNaughton, were
8.2 million barrels of oil and 83.8 billion cubic feet of gas or
133 Bcfe. This compares to 175.3 Bcfe at year-end 2007. During 2008
we sold 32.1 Bcfe of Barnett Shale reserves, produced 12.8 Bcfe
including 1.4 Bcfe from the Barnett, added 13.5 Bcfe through
extensions and discoveries and recorded an 11.0 Bcfe negative
revision. For 2009 the board initially approved a $50 million
capital budget with the proviso that the capital spending remain
within available liquidity. As a result of the low commodity prices
of the first quarter of 2009, we currently plan to limit the
capital to between $35 and $40 million with our focus on projects
with high near term risk adjusted cash flow. James A. Watt,
President and Chief Executive Officer stated, "Even under current
commodity prices, we have the liquidity to invest in our field
operations. We have and continue to reduce controllable costs both
on an absolute and Mcfe basis. Our property base has significant
upside that can be developed prior to the maturity of our various
debt instruments. We will focus 2009 on the projects with the
highest near term cash flow and look to 2010 and beyond for a
higher percentage of exploratory projects." FORWARD-LOOKING
STATEMENTS: This document includes forward-looking statements.
Forward-looking statements include, but are not limited to,
statements concerning estimates of expected drilling and
development wells and associated costs, statements relating to
estimates of, and increases in, production, cash flows and values,
statements relating to the continued advancement of Dune Energy,
Inc.'s projects and other statements which are not historical
facts. When used in this document, the words such as "could,"
"plan," "estimate," "expect," "intend," "may," "potential,"
"should," and similar expressions are forward-looking statements.
Although Dune Energy, Inc. believes that its expectations reflected
in these forward-looking statements are reasonable, such statements
involve risks and uncertainties and no assurance can be given that
actual results will be consistent with these forward-looking
statements. Important factors that could cause actual results to
differ from these forward-looking statements include the potential
that the Company's projects will experience technological and
mechanical problems, geological conditions in the reservoir may not
result in commercial levels of oil and gas production, changes in
product prices and other risks disclosed in Dune's Annual report on
Form 10-K filed with the U.S. Securities and Exchange Commission.
Dune Energy, Inc. Consolidated Balance Sheets December 31,
------------ 2008 2007 ---- ---- ASSETS Current assets: Cash
$15,491,532 $16,771,726 Accounts receivable, net of reserve for
doubtful accounts of $396,629 and $396,629 14,477,918 31,474,433
Assets held for sale - 76,492,464 Prepayments and other current
assets 6,910,422 6,764,741 Derivative assets 4,015,219 837,664
------------ ----------- Total current assets 40,895,091
132,341,028 ------------ ----------- Oil and gas properties, using
successful efforts accounting - proved 578,074,569 518,036,814 Less
accumulated depreciation, depletion, amortization and impairment
(222,876,172) (41,529,191) ------------ ----------- Net oil and gas
properties 355,198,397 476,507,623 ------------ -----------
Property and equipment, net of accumulated depreciation of
$1,406,927 and $416,324 2,086,313 2,632,400 Deferred financing
costs, net of accumulated amortization of $970,068 and $371,353
1,621,657 2,220,372 Deposit - related party - 500,000 Other assets
2,250,868 2,229,723 ------------ ------------ TOTAL ASSETS
$402,052,326 $616,431,146 ============ ============ LIABILITIES AND
STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable
$21,662,965 $56,648,904 Accrued liabilities 20,038,900 30,948,966
Current debt 2,013,699 2,053,691 Preferred stock dividend payable
2,446,985 1,899,330 Derivative liabilities - 4,131,078 ------------
------------ Total current liabilities 46,162,549 95,681,969
Long-term debt, net of discount of $10,393,213 and $12,755,924
289,606,787 287,244,076 Deferred taxes - 29,929,436 Other long-term
liabilities 15,732,483 16,762,462 ------------ ------------ Total
liabilities 351,501,819 429,617,943 ------------ ------------
Commitments and contingencies - - Redeemable convertible preferred
stock, net of discount of $9,179,927 and $10,943,172, liquidation
preference of $1,000 per share, 750,000 shares designated, 236,805
and 227,918 shares issued and outstanding 227,625,073 216,974,828
STOCKHOLDERS' DEFICIT Preferred stock, $.001 par value, 1,000,000
shares authorized, 250,000 shares undesignated, no shares issued
and outstanding - - Common stock, $.001 par value, 300,000,000
shares authorized, 96,129,047 and 79,258,174 shares issued and
outstanding 96,129 79,258 Treasury stock, at cost (34,009 and 0
shares) 8,332 - Additional paid-in capital 50,139,148 56,079,580
Accumulated other comprehensive loss (3,709,177) (3,831,228)
Accumulated deficit (223,608,998) (82,489,235) ------------
----------- Total stockholders' deficit (177,074,566) (30,161,625)
------------ ----------- TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT $402,052,326 $616,431,146 ============ ============ Dune
Energy, Inc. Consolidated Statements of Operations For the Year
Ended December 31, ------------------------------- 2008 2007 2006
---- ---- ---- (As adjusted) Revenues $146,599,698 $71,199,940
$3,360,066 ------------ ------------ ------------ Operating
expenses: Lease operating expense and production taxes 43,501,273
28,603,072 768,054 Exploration expense 114,950 383,391 2,024,431
Accretion of asset retirement obligation 911,012 887,344 24,848
Depletion, depreciation and amortization 56,692,441 29,871,772
3,430,909 General and administrative expense 18,470,758 22,140,782
4,823,582 Bad debt expense - 396,629 - Loss on impairment of
investment - 3,192,250 - Impairment of oil and gas properties
125,694,000 - 6,911,697 ------------ ------------ ------------
Total operating expense 245,384,434 85,475,240 17,983,521
------------ ------------ ------------ Operating loss (98,784,736)
(14,275,300) (14,623,455) ------------ ------------ ------------
Other income(expense): Interest income 501,591 1,672,459 217,405
Interest expense (35,022,056) (31,070,721) (6,730,450) Other
expense - - (494,458) Gain (loss) on derivative liabilities
4,071,507 (1,896,644) (33,733) ------------ ------------
------------ Total other income(expense) (30,448,958) (31,294,906)
(7,041,236) ------------ ------------ ------------ Loss from
continuing operations before income taxes (129,233,694)
(45,570,206) (21,664,691) Income tax benefit 20,505,873 15,949,572
- ------------ ------------ ------------ Loss from continuing
operations (108,727,821) (29,620,634) (21,664,691) ------------
------------ ------------ Discontinued operations: Income (loss)
from operations of Barnett Shale Properties (including impairment
of $43,895,525 in 2008 and $24,499,632 in 2006) (41,815,505)
1,876,966 (23,890,677) Income tax benefit (expense) 9,423,563
(656,938) - ------------- ------------ ------------ Income (loss)
on discontinued operations (32,391,942) 1,220,028 (23,890,677)
------------- ------------ ------------ Net loss (141,119,763)
(28,400,606) (45,555,368) Preferred stock dividend (100,597,155)
(15,196,346) - ------------- ------------ ------------ Net loss
available to common shareholders $(241,716,918) $(43,596,952)
$(45,555,368) ============= ============ ============ Net loss per
share: Basic and diluted from continuing operations $(2.36) $(0.62)
$(0.37) Basic and diluted from discontinued operations (0.36) 0.02
(0.41) ------------- ------------ ------------- Total basic and
diluted $(2.72) $(0.60) $(0.78) ============= ============
============= Weighted average shares outstanding: Basic and
diluted 88,818,086 72,083,522 58,583,932 Dune Energy, Inc.
Consolidated Statements of Cash Flows For the Year Ended December
31, 2008 2007 2006 ---- ---- ---- (As adjusted) CASH FLOWS FROM
OPERATING ACTIVITIES Net loss $(141,119,763) $(28,400,606)
$(45,555,368) Adjustments to reconcile net loss to net cash used in
operating activities: Loss (income) from discontinued operations
32,391,942 (1,220,028) 23,890,677 Depletion, depreciation and
amortization 56,692,441 29,871,772 3,430,909 Amortization of
deferred financing costs and debt discount 2,961,426 7,030,353
2,148,282 Stock-based compensation 5,282,671 8,071,142 1,324,714
Realized gain on sale of investment (146,210) Loss on impairment of
investment - 3,192,250 - Impairment of oil and gas properties
125,694,000 - 6,911,697 Exploration expense 114,950 383,390
2,024,431 Bad debt expense - 396,629 - Accretion of asset
retirement obligation 911,012 887,344 24,848 Loss (gain) on
derivative liabilities (13,358,724) 2,948,403 33,733 Deferred tax
benefit (20,505,873) (15,949,572) - Changes in: Accounts receivable
16,082,845 (10,339,830) (2,253,961) Prepayments and other assets
(2,448,783) (2,297,871) (27,515) Payments made to settle asset
retirement obligations (1,208,920) - - Accounts payable and accrue
liabilities (45,146,857) 51,364,642 3,431,762 -----------
---------- ---------- NET CASH PROVIDED BY (USED IN) CONTINUING
OPERATIONS 16,196,157 45,938,018 (4,615,791) NET CASH PROVIDED BY
DISCONTINUED OPERATIONS 7,304,552 8,269,090 2,977,414 -----------
---------- ---------- NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 23,500,709 54,207,108 (1,638,377) ----------- ----------
---------- CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of
Goldking, net of $1,155,720 cash received - (309,344,280) -
Investment in proved and unproved properties (52,750,005)
(105,357,440) (4,526,017) Deposits 500,000 Proceeds from sale of
investment 424,098 Purchase of furniture and fixtures (546,886)
(1,114,340) (23,640) Increase in other assets (21,145) (72,034)
(500,000) Increase in deposit - related party - - (500,000)
----------- ------------ ----------- NET CASH USED IN INVESTING
ACTIVITIES - CONTINUING OPERATIONS (52,393,938) (415,888,094)
(5,549,657) NET CASH USED IN INVESTING ACTIVITIES - DISCONTINUED
OPERATIONS 27,653,027 (47,246,404) (32,802,273) -----------
------------ ----------- NET CASH USED IN INVESTING ACTIVITIES
(24,740,911) (463,134,498) (38,351,930) ----------- ------------
----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from
convertible preferred stock - 203,677,812 - Proceeds from long-term
debt 28,100,000 356,909,062 37,101,223 Proceeds from short-term
debt 2,589,057 3,038,007 - Proceeds from sale of common stock, net
- - 22,103,232 Proceeds from exercise of options - - 100,000
Payment on long-term debt issuance costs - (6,286,413) (993,563)
Payment on preferred stock issuance costs - (1,053,156) Payments on
long-term debt (28,100,000) (104,771,263) (18,500,000) Payments on
long-term debt -related parties - (27,423,932) - Payments on
short-term debt (2,629,049) (1,965,706) - ----------- ------------
----------- NET CASH PROVIDED BY FINANCING ACTIVITIES (39,992)
422,124,411 39,810,892 ----------- ------------ ----------- NET
CHANGE IN CASH BALANCE (1,280,194) 13,197,021 (179,415) Cash
balance at beginning of period 16,771,726 3,574,705 3,754,120
----------- ------------ ----------- Cash balance at end of period
$15,491,532 $16,771,726 $3,574,705 =========== ============
=========== SUPPLEMENTAL DISCLOSURES Interest paid $32,060,629
$21,340,567 $2,150,597 Income taxes paid - - - NON-CASH DISCLOSURES
Common stock issued for conversion of debt $ - $2,692,250 $ -
Common stock issued for purchase of Goldking - 18,000,000 -
Redeemable convertible preferred stock dividends 98,833,909
13,817,330 - Asset retirement obligation revision 7,402,701
2,736,914 273,719 Deferred taxes associated with acquisition -
45,222,070 - Accretion of discount on preferred stock 1,763,246
1,379,016 - Purchase price adjustment for asset retirement
obligation - 1,418,557 - Common stock issued for conversion of
preferred stock 16,441,000 - - Common stock issued for cashless
exercise of options 59 73 - DATASOURCE: Dune Energy, Inc. CONTACT:
Investors, Steven J. Craig, Sr. Vice President Investor Relations
and Administration of Dune Energy, Inc., +1-713-229-6300
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