Abraxas Reports Full Year 2006 Results with Increased Production, Revenue, EBITDA...
Abraxas Reports Full Year 2006 Results with Increased Production, Revenue, EBITDA... ABP.AAbraxas Reports Full Year 2006 Results with Increased Production, Revenue, EBITDA and Cash FlowSAN ANTONIO--(Business Wire)--Abraxas Petroleum Corporation (AMEX:ABP) today reported financialand operating results for the twelve months ended December 31, 2006and provided an operational update. Results for the year ended December 31, 2006 included:
-- Production of 7.7 Bcfe, a 26% increase over 2005; -- Production of 7.7 Bcfe, a 26% increase over 2005;
-- Revenue of $51.7 million, a 6% increase over 2005; -- Revenue of $51.7 million, a 6% increase over 2005;
-- EBITDA (a) of $35.0 million, a 12% increase over 2005; and -- EBITDA (a) of $35.0 million, a 12% increase over 2005; and
-- Cash flow (a) of $18.4 million, a 6% increase over 2005. -- Cash flow (a) of $18.4 million, a 6% increase over 2005.
(a) See reconciliation of non-GAAP financial measures below. Net earnings for the year ended December 31, 2006 were $1.2million, or $0.03 per share, as compared to net earnings in 2005 of$6.3 million, or $0.16 per share, from continuing operations.Continuing operations represent financial and operating results fromoperations in the U.S. only as all of Grey Wolf Exploration Inc.'shistorical performance and results are treated as discontinuedoperations as a result of the sale of Grey Wolf shares owned byAbraxas in Grey Wolf's initial public offering that closed on February28, 2005. Abraxas currently owns less than 1% of the outstandingcapital stock of Grey Wolf. "I am pleased to announce that in 2006 we increased production,revenue, EBITDA and cash flow over 2005 levels. Net earnings werelower in 2006 due to higher interest and depreciation, depletion andamortization (D/D/A) expenses - the higher D/D/A is a direct result ofthe increased drilling costs that have plagued the industry over thepast year. Our preliminary budget for 2007 includes roughly 20 to 30projects, which will focus on improving our reserve ratio through theconversion of proved undeveloped and probable / possible reserves tothe proved developed category. Based on our current plans, coupledwith relatively strong commodity prices, I believe we are poised tohave a great 2007," commented Bob Watson, Abraxas' President and CEO. Operations In the Oates SW Field of Pecos County, Texas, a rig is currentlyscheduled to move this week onto the Manzanita #1H (ABP: 100% WI) todrill the horizontal lateral in the Devonian formation. The verticalportion of the well was previously cleaned out with a Company-ownedworkover rig. In the Abraxas Cherry Canyon Field of Ward County Texas, theCaprito 83 #12 (ABP: 81% WI) was completed in the Bell & Cherry Canyonsands - the Bell Canyon is currently being tested. After testing iscomplete, the bridge plug will be pulled and the Bell Canyon will becommingled with the Cherry Canyon. The Caprito 82 #12 (ABP: 64% WI)was completed in the Cherry Canyon and a pumping unit is currentlybeing installed on the well. In the Brooks Draw Field of Converse & Niobrara Counties, Wyoming,we are in the process of permitting several horizontal wells to targetthe Mowry Shale (ABP: 100% WI); while we address various land issueson several other locations. "We have begun the initial phase of production testing on theCaprito wells and look forward to definitive results in the nearfuture. In Wyoming, we are very encouraged by the initial resultsother operators have achieved by drilling horizontally in the MowryShale and their stated plans of a continuous drilling program during2007. We anticipate that our initial drilling permits will be approvedby mid-summer, with drilling operations to commence soon thereafter.Lastly, we anticipate that the drilling of the lateral section on theManzanita #1H well in the Oates SW Field will be underway by nextweek," commented Bob Watson, Abraxas' President and CEO. Conference Call Abraxas invites you to participate in a conference call onTuesday, March 13, 2007, at 10:00 a.m. CT to discuss the contents ofthis release and respond to questions. Please dial 1.800.599.9795,passcode 35589430, 10 minutes before the scheduled start time, if youwould like to participate in the call. The conference call will alsobe webcast live on the Internet and can be accessed directly on theCompany's website at www.abraxaspetroleum.com under the InvestorRelations section. In addition to the audio webcast replay, a podcastand transcript of the conference call will be posted on the InvestorRelations section of the Company's website approximately 24 hoursafter the conclusion of the call, and will be accessible for at least60 days. Abraxas Petroleum Corporation is a San Antonio based crude oil andnatural gas exploitation and production company with operations inTexas and Wyoming. Safe Harbor for forward-looking statements: Statements in thisrelease looking forward in time involve known and unknown risks anduncertainties, which may cause Abraxas' actual results in futureperiods to be materially different from any future performancesuggested in this release. Such factors may include, but may not benecessarily limited to, changes in the prices received by Abraxas fornatural gas and crude oil. In addition, Abraxas' future natural gasand crude oil production is highly dependent upon Abraxas' level ofsuccess in acquiring or finding additional reserves. Further, Abraxasoperates in an industry sector where the value of securities is highlyvolatile and may be influenced by economic and other factors beyondAbraxas' control. In the context of forward-looking informationprovided for in this release, reference is made to the discussion ofrisk factors detailed in Abraxas' filings with the Securities andExchange Commission during the past 12 months.-0-*T
ABRAXAS PETROLEUM CORPORATION
QUARTER AND YEAR-END RESULTS
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- ------------------- 2006 2005 2006 2005 --------- --------- --------- ---------Financial results: (In thousands except per share data)------------------------------------------------------------Revenues $ 11,899 $ 17,012 $ 51,723 $ 48,625EBITDA (a) 7,112 11,017 34,966 31,265Cash flow (a) 2,955 7,223 18,361 17,275Earnings (loss) from continuing operations (1,546) 3,460 1,246 6,271Earnings (loss) per share from continuing operations - basic $ (0.04) $ 0.08 $ 0.03 $ 0.16Weighted average shares outstanding - basic 42,663 42,002 42,579 39,367Production:------------------------------------------------------------Crude oil per day (Bopd) 551 534 549 533Natural gas per day (Mcfpd) 17,272 16,469 17,849 13,541Natural gas equivalents per day (Mcfepd) 20,578 19,676 21,144 16,736Natural gas equivalents (Bcfe) 1.89 1.81 7.72 6.11Realized prices (net of hedge impact):------------------------------------------------------------Crude oil (Bbl) $ 55.76 $ 57.18 $ 62.10 $ 53.27Natural gas (Mcf) 5.43 9.12 5.78 7.48Price per Mcfe 6.05 9.18 6.49 7.75Expenses:------------------------------------------------------------Lease operating ($ per Mcfe) $ 1.01 $ 1.16 $ 0.94 $ 1.12Production taxes (% of revenue) 11.7% 6.9% 8.7% 8.7%General and administrative, excluding stock-based compensation ($ per Mcfe) 0.67 1.39 0.54 0.90Cash interest ($ per Mcfe) 2.20 2.10 2.15 2.28D/D/A ($ per Mcfe) 1.92 1.82 1.86 1.46------------------------------------------------------------(a) See reconciliation of non-GAAP financial measures below.Note: The above results exclude impact from Grey Wolf Exploration Inc.*T-0-*T BALANCE SHEET DATA(In thousands) December 31, 2006 December 31, 2005 ------------------- -------------------Cash $ 43 $ 42Working capital (deficit) (3,719) (4,880)Property and equipment - net 104,957 105,248Total assets 117,486 121,866Long-term debt 127,614 129,527Stockholders' equity (deficit) (21,619) (23,701)Common shares outstanding 42,727 42,007*T-0-*T CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands except per share data) Year Ended December 31, ----------------------------- 2006 2005 2004 --------- --------- ---------Revenues: Oil and gas production revenues $ 50,094 $ 47,314 $ 33,073 Rig revenues 1,613 1,295 771 Other 16 16 10 --------- --------- --------- 51,723 48,625 33,854Operating costs and expenses: Lease operating 7,291 6,870 5,489 Production taxes 4,485 4,224 3,078 Depreciation, depletion, and amortization 14,393 8,914 7,213 Rig operations 819 756 671 General and administrative (including stock- based compensation of $998, $247 and $112) 5,160 5,757 5,238 --------- --------- --------- 32,148 26,521 21,689 --------- --------- ---------Operating income 19,575 22,104 12,165Other (income) expense: Interest income (29) (19) (10) Interest expense 16,767 13,989 17,867 Amortization of deferred financing fees 1,591 1,589 1,848 Financing costs - - 1,657 Gain on debt redemption - - (12,561) Other - 274 387 --------- --------- --------- 18,329 15,833 9,188 --------- --------- ---------Net earnings from continuing operations before income tax 1,246 6,271 2,977Deferred income tax benefit - - (6,060) --------- --------- ---------Net earnings from continuing operations 1,246 6,271 9,037Net earnings from discontinued operations - 12,846 3,323 --------- --------- ---------Net earnings $ 1,246 $ 19,117 $ 12,360 ========= ========= =========Basic earnings per common share: Net earnings from continuing operations $ 0.03 $ 0.16 $ 0.25 Discontinued operations - 0.33 0.09 --------- --------- ---------Net earnings per common share - basic $ 0.03 $ 0.49 $ 0.34 ========= ========= =========Diluted earnings per common share: Net earnings from continuing operations $ 0.03 $ 0.15 $ 0.23 Discontinued operations - 0.31 0.09 --------- --------- ---------Net earnings per common share - diluted $ 0.03 $ 0.46 $ 0.32 ========= ========= =========Weighted average shares outstanding: Basic 42,579 39,367 36,222 Diluted 43,862 41,164 38,895*T RECONCILIATION OF NON-GAAP FINANCIAL MEASURES To fully assess Abraxas' operating results, management believesthat, although not prescribed under generally accepted accountingprinciples ("GAAP"), discretionary cash flow and EBITDA areappropriate measures of Abraxas' ability to satisfy capitalexpenditure obligations and working capital requirements. Cash flowand EBITDA are non-GAAP financial measures as defined under SEC rules.Abraxas' cash flow and EBITDA should not be considered in isolation oras a substitute for other financial measurements prepared inaccordance with GAAP or as a measure of the Company's profitability orliquidity. As cash flow and EBITDA exclude some, but not all, itemsthat affect net income and may vary among companies, the cash flow andEBITDA presented below may not be comparable to similarly titledmeasures of other companies. Management believes that operating incomecalculated in accordance with GAAP is the most directly comparablemeasure to cash flow and EBITDA; therefore, operating income isutilized as the starting point for these reconciliations. Cash flow is defined as operating income plus depletion,depreciation and amortization expenses, non-cash expenses and cashportion of other expense and cash interest. The following tableprovides a reconciliation of cash flow to operating income for theperiods presented.-0-*T Three Months Ended Twelve Months Ended(In thousands) December 31, December 31, ------------------- ------------------- 2006 2005 2006 2005 --------- --------- --------- ---------Operating income $ 3,066 $ 7,534 $ 19,575 $ 22,104Depletion, depreciation and amortization 3,626 3,292 14,393 8,914Stock-based compensation 420 191 998 247Cash portion of other expense - - - (39)Cash interest (4,157) (3,794) (16,605) (13,951)--------------------------------------------------------------------------------------------------------------------------------------------Cash Flow $ 2,955 $ 7,223 $ 18,361 $ 17,275--------------------------------------------------------------------------------------------------------------------------------------------*T EBITDA is defined as net income plus interest expense, depletion,depreciation and amortization expenses, deferred income taxes andother non-cash items. The following table provides a reconciliation ofEBITDA to operating income for the periods presented - seeconsolidated statements of operations for a reconciliation of netincome to operating income.-0-*T Three Months Ended Twelve Months Ended(In thousands) December 31, December 31, ------------------- ------------------- 2006 2005 2006 2005 --------- --------- --------- ---------Operating income $ 3,066 $ 7,534 $ 19,575 $ 22,104Depletion, depreciation and amortization 3,626 3,292 14,393 8,914Stock-based compensation 420 191 998 247--------------------------------------------------------------------------------------------------------------------------------------------EBITDA $ 7,112 $ 11,017 $ 34,966 $ 31,265--------------------------------------------------------------------------------------------------------------------------------------------Note: The above cash flow and EBITDA reconciliations exclude impact from Grey Wolf Exploration Inc.*TAbraxas Petroleum CorporationBarbara M. Stuckey, 210-757-9835 or 210-490-4788Director of Corporate Developmentbstuckey@abraxaspetroleum.comwww.abraxaspetroleum.comCopyright Business Wire 2007 (C) Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nBW135596a
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