Abraxas Announces Third Quarter 2015 Results
Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported financial and
operating results for the three and nine months ended September 30, 2015.
On October 31, 2014 we closed on the sale of our interest in Canadian
Abraxas Petroleum, ULC (“Canadian Abraxas”), a wholly-owned Canadian
subsidiary of Abraxas Petroleum Corporation. As a result of the
disposal of Canadian Abraxas, the results of operations of Canadian
Abraxas are reflected in our Financial Statements and in this document
as “Discontinued Operations” and our remaining operations are referred
to in our Financial Statements and in this document as “Continuing
Operations” or “Continued Operations.” Unless otherwise noted,
all disclosures are for continuing operations.
Financial and Operating Results for the Three
Months Ended September 30, 2015
The three months ended September 30, 2015 resulted in:
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Production of 552 MBoe (6,004 Boepd)
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Revenue of $17.8 million inclusive of realized hedge settlements
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Adjusted EBITDA(a) of $10.0 million inclusive of Raven
Drilling
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Adjusted discretionary cash flow(a) of $9.2 million
inclusive of Raven Drilling
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Net loss of $52.4 million, or $0.50 per share
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Adjusted net loss(a), excluding certain non-cash items and
inclusive of Raven Drilling of $2.7 million, or $(0.03) per share
(a) See reconciliation of non-GAAP financial measures below.
Net loss for the three months ended September 30, 2015 was $52.4
million, or $0.50 per share, compared to net income of $25.4 million, or
$0.24 per share, for the three months ended September 30, 2014.
Adjusted net loss, excluding certain non-cash items, for the three
months ended September 30, 2015 was $2.7 million, or $(0.03) per share,
compared to an adjusted net income, excluding certain non-cash items, of
$16.1 million or $0.15 per share for the three months ended
September 30, 2014. For the three months ended September 30, 2015 and
2014, adjusted net income (loss) excludes the unrealized gain on
derivative contracts of $10.5 million and $10.0 million, respectively.
Included in adjusted net income (loss) is the net income for the
quarters ended September 30, 2015 and September 30, 2014 from our
subsidiary, Raven Drilling, LLC of $0.2 million and $0.6 million,
respectively. For the three months ended September 30, 2015 adjusted net
loss excludes the loss attributable to the ceiling test impairment of
$59.9 million.
Pursuant to SEC Regulation S-X, no income is recognized for Raven
Drilling, LLC. Contractual drilling services performed in connection
with properties in which Abraxas holds an ownership interest cannot be
recognized as income, rather it is credited to the full cost pool and
recognized through lower amortization as reserves are produced.
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,
and require 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 September 30, 2014 were $91.16 per
barrel compared to $45.09 on September 30, 2015; therefore, the
mark-to-market valuation changed considerably period to period.
Comments
Bob Watson, Abraxas' President and CEO, commented, “Our focus on driving
down cash expenses benefited our financials as lease operating expenses
(LOE) came in below the low end of the range at $9.48/Boe. We continue
to look for ways to optimize the portfolio and drive costs out of the
business, which with success will allow us to maintain solid operating
margins despite the distressed commodity price environment.
“Despite significant shut in time associated with the postponed Bakken
fracs and gas capture issues, our production steadied late in the third
quarter. Looking into the fourth quarter, we will benefit from the
addition of high margin barrels following the successful completion of
three additional wells in the Bakken/Three Forks. Furthermore, the
planned third party infrastructure expansion in the Bakken scheduled for
the fourth quarter should eliminate the volatile production performance
we experienced in 2015. We look forward to updating the street with
updated 2015 guidance when we achieve stabilized rates from our new
completions.”
Conference Call
Abraxas Petroleum Corporation (NASDAQ:AXAS) will host its third quarter
2015 earnings conference call at 11 AM ET on November 4, 2015. To
participate in the conference call, please dial 888.680.0892 and enter
the passcode 94482371. 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 until December 2, 2015
by dialing 888.286.8010 and entering the passcode 31071155 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 Rocky Mountain, Permian Basin and onshore Gulf Coast 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.
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ABRAXAS PETROLEUM CORPORATION
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CONSOLIDATED
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FINANCIAL HIGHLIGHTS
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(In thousands except per share data)
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Three Months Ended September 30,
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Nine Months Ended September 30,
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2015
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2014
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2015
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2014
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Financial Results:
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Revenues
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$
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16,077
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$
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43,874
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$
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53,682
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$
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102,584
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Adjusted EBITDA(a)
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10,043
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31,804
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35,189
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70,861
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Adjusted discretionary cash flow(a)
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9,161
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31,342
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32,711
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69,171
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Capital expenditures
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12,931
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44,733
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52,614
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137,462
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Net income (loss)
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(52,372
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25,399
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(59,691
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33,137
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Net income (loss) per share – basic
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$
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(0.50
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$
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0.24
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$
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(0.57
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$
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0.34
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Net income (loss) per share – diluted
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$
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(0.50
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$
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0.24
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$
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(0.57
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$
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0.33
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Adjusted net income (loss), excluding certain non-cash items(a)
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(2,726
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16,124
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(4,031
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33,749
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Adjusted net income (loss), excluding certain non-cash items(a) ,
per share – basic
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$
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(0.03
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$
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0.15
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$
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(0.04
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$
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0.35
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Adjusted net income (loss), excluding certain non-cash items(a),
per share – diluted
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$
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(0.03
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$
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0.15
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$
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(0.04
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)
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$
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0.34
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Weighted average shares outstanding – basic
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104,614
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104,408
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104,561
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96,742
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Weighted average shares outstanding – diluted
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104,614
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107,671
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104,561
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99,531
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Production from Continuing Operations:
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Crude oil per day (Bblpd)
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3,967
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4,743
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4,030
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3,570
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Natural gas per day (Mcfpd)
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8,154
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9,086
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8,229
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7,645
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Natural gas liquids per day (Bblpd)
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678
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752
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618
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517
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Crude oil equivalent per day (Boepd)
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6,004
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7,010
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6,020
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5,361
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Crude oil equivalent (MBoe)
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552
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645
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1,643
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1,463
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Realized Prices, net of realized hedging activity:
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Crude oil ($ per Bbl)
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$
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43.81
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$
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86.81
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$
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49.15
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$
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88.24
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Natural gas ($ per Mcf)
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2.02
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3.86
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2.39
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4.21
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Natural gas liquids ($ per Bbl)
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5.07
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32.11
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9.32
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36.25
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Crude oil equivalent ($ per Boe)
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32.26
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67.19
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37.12
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68.26
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Expenses:
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Lease operating ($ per Boe)
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$
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9.48
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$
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11.06
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$
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10.83
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$
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12.55
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Production taxes (% of oil and gas revenue)
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9.8
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%
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8.5
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%
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9.8
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%
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8.6
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%
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General and administrative, excluding stock-based compensation ($
per Boe)
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3.29
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2.79
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3.71
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4.01
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Cash interest ($ per Boe)
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1.53
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0.63
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1.43
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1.03
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Depreciation, depletion and amortization ($ per Boe)
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18.40
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21.45
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18.89
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20.80
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(a) See reconciliation of non-GAAP financial measures below.
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BALANCE SHEET DATA
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(In thousands)
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September 30, 2015
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December 31, 2014
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Cash
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$
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—
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$
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3,772
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Working capital (a)
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(21,463
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(52,832
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Property and equipment – net
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284,420
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322,879
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Total assets
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322,423
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374,899
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Long-term debt
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124,991
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76,554
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Stockholders’ equity
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151,058
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207,495
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Common shares outstanding
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106,346
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106,187
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(a)
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Excludes current maturities of long-term debt and current derivative
assets and liabilities in accordance with our loan covenants.
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ABRAXAS PETROLEUM CORPORATION
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CONSOLIDATED
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STATEMENTS OF OPERATIONS
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(In thousands except per share data)
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Three Months Ended September 30,
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Nine Months Ended September 30,
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2015
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2014
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2015
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2014
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Revenues:
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Oil and gas production
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$
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16,075
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$
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43,865
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$
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53,658
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$
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102,521
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Other
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2
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9
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24
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63
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16,077
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43,874
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53,682
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102,584
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Operating costs and expenses:
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Lease operating
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5,236
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7,131
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17,806
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18,361
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Production and ad valorem taxes
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1,569
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3,744
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5,255
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8,786
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Depreciation, depletion, and amortization
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10,165
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13,836
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31,044
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30,441
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Impairment
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59,891
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—
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59,891
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—
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General and administrative (including stock-based compensation of
$835, $582, $3,085, and $2,050, respectively)
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2,654
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2,379
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9,190
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7,915
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79,515
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27,090
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123,186
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65,503
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Operating (loss) income
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(63,438
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)
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16,784
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(69,504
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)
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37,081
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Other (income) expense:
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Interest income
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—
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—
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(1
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(1
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Interest expense
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992
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548
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2,784
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1,927
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Amortization of deferred financing fees
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161
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150
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481
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779
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(Gain) loss on derivative contracts - realized
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(1,745
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)
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534
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(6,899
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)
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2,624
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(Gain) on derivative contracts - unrealized
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(10,474
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)
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(9,979
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)
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(6,198
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)
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(1,899
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)
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Other
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—
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(8
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)
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—
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|
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(8
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)
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(11,066
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)
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(8,755
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)
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(9,833
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)
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3,422
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(Loss) income from continuing operations before income tax
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(52,372
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)
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25,539
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(59,671
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)
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33,659
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Income tax (expense) benefit
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|
|
—
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|
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|
|
—
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|
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|
|
—
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|
—
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Net (loss) income from continuing operations
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(52,372
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)
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25,539
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|
(59,671
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)
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33,659
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Net loss from discontinued operations - net of tax
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|
|
—
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|
|
|
|
(140
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)
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|
|
|
(20
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)
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|
|
|
(522
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)
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Net (loss) income
|
|
|
$
|
(52,372
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)
|
|
|
$
|
25,399
|
|
|
|
$
|
(59,691
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)
|
|
|
$
|
33,137
|
|
|
|
|
|
|
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|
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Net (loss) income per common share - basic
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|
|
|
|
|
|
|
|
|
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|
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Continuing operations
|
|
|
$
|
(0.50
|
)
|
|
|
$
|
0.24
|
|
|
|
$
|
(0.57
|
)
|
|
|
$
|
0.35
|
|
Discontinued operations
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
(0.01
|
)
|
Net (loss) income per common share - basic
|
|
|
$
|
(0.50
|
)
|
|
|
$
|
0.24
|
|
|
|
$
|
(0.57
|
)
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per common share - diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
(0.50
|
)
|
|
|
$
|
0.24
|
|
|
|
$
|
(0.57
|
)
|
|
|
$
|
0.34
|
|
Discontinued operations
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
(0.01
|
)
|
Net (loss) income per common share - diluted
|
|
|
$
|
(0.50
|
)
|
|
|
$
|
0.24
|
|
|
|
$
|
(0.57
|
)
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
104,614
|
|
|
|
|
104,408
|
|
|
|
|
104,561
|
|
|
|
|
96,742
|
|
Diluted
|
|
|
|
104,614
|
|
|
|
|
107,671
|
|
|
|
|
104,561
|
|
|
|
|
99,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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"), discretionary cash flow and EBITDA are appropriate measures of
Abraxas' ability to satisfy capital expenditure obligations and working
capital requirements. Discretionary cash flow and EBITDA are non-GAAP
financial measures as defined under SEC rules. Abraxas' discretionary
cash flow and 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. As
discretionary cash flow and EBITDA exclude some, but not all items that
affect net income and may vary among companies, the discretionary cash
flow and EBITDA presented below may not be comparable to similarly
titled measures of other companies. Management believes that operating
income (loss) calculated in accordance with GAAP is the most directly
comparable measure to discretionary cash flow; therefore, operating
income (loss) is utilized as the starting point for the discretionary
cash flow reconciliation.
Discretionary cash flow is defined as operating income (loss) plus
depreciation, depletion and amortization expenses, non-cash expenses and
impairments, cash portion of other income (expense) less cash interest.
Adjusted discretionary cash flow is defined as discretionary cash flow,
plus cash flow from Raven Drilling’s operations. Accounting rules do not
permit the inclusion of the net income and other components of Raven
Drilling’s operations to be included in our consolidated results of
operations and cash flow, instead, the results of Raven Drilling’s
operations are credited to the full cost pool. Accordingly, for purposes
of adjusted discretionary cash flow, Raven Drilling’s cash flow is added
back. The following table provides a reconciliation of discretionary
cash flow and adjusted discretionary cash flow to operating income
(loss) for the periods presented.
|
|
|
|
|
|
|
(In thousands)
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Operating income (loss)
|
|
|
$
|
(63,438
|
)
|
|
|
$
|
16,784
|
|
|
|
$
|
(69,504
|
)
|
|
|
$
|
37,081
|
|
Depreciation, depletion and amortization
|
|
|
|
10,165
|
|
|
|
|
13,836
|
|
|
|
|
31,044
|
|
|
|
|
30,441
|
|
Impairment
|
|
|
|
59,891
|
|
|
|
|
—
|
|
|
|
|
59,891
|
|
|
|
|
—
|
|
Stock-based compensation
|
|
|
|
835
|
|
|
|
|
582
|
|
|
|
|
3,085
|
|
|
|
|
2,050
|
|
Realized gain (loss) on derivative contracts (a)
|
|
|
|
1,745
|
|
|
|
|
(534
|
)
|
|
|
|
7,346
|
|
|
|
|
(2,624
|
)
|
Cash interest
|
|
|
|
(847
|
)
|
|
|
|
(406
|
)
|
|
|
|
(2,357
|
)
|
|
|
|
(1,506
|
)
|
Discretionary cash flow
|
|
|
$
|
8,351
|
|
|
|
$
|
30,262
|
|
|
|
$
|
29,505
|
|
|
|
$
|
65,442
|
|
Cash flow from Raven Drilling operations
|
|
|
|
810
|
|
|
|
|
1,080
|
|
|
|
|
3,206
|
|
|
|
|
3,729
|
|
Adjusted discretionary cash flow
|
|
|
$
|
9,161
|
|
|
|
$
|
31,342
|
|
|
|
$
|
32,711
|
|
|
|
$
|
69,171
|
|
|
|
|
(a)
|
|
Realized gain (loss) on derivative contracts does not include a loss
of $0.4 million for the nine months ended 2015 related to the
monetization of the July-December 2015 fixed price oil swaps. The
monetization resulted in cash proceeds of $4.6 million.
|
|
|
|
EBITDA is defined as net income (loss) plus interest expense,
depreciation, depletion and amortization expenses, deferred income taxes
and other non-cash items. Adjusted EBITDA includes all of the components
of EBITDA plus Raven Drilling’s EBITDA. Accounting rules do not permit
the inclusion of the net income and other components of Raven Drilling’s
operations to be included in our consolidated results of operations,
instead, the results of Raven Drilling’s operations are credited to the
full cost pool. Accordingly, for purposes of Adjusted EBITDA, Raven
Drilling’s EBITDA is added back. The following table provides a
reconciliation of EBITDA and Adjusted EBITDA to net income (loss) for
the periods presented.
|
|
|
|
|
|
|
(In thousands)
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Net income (loss)
|
|
|
$
|
(52,372
|
)
|
|
|
$
|
25,399
|
|
|
|
$
|
(59,691
|
)
|
|
|
$
|
33,137
|
|
Net interest expense
|
|
|
|
992
|
|
|
|
|
548
|
|
|
|
|
2,783
|
|
|
|
|
1,926
|
|
Depreciation, depletion and amortization
|
|
|
|
10,165
|
|
|
|
|
13,836
|
|
|
|
|
31,044
|
|
|
|
|
30,441
|
|
Amortization of deferred financing fees
|
|
|
|
161
|
|
|
|
|
150
|
|
|
|
|
481
|
|
|
|
|
779
|
|
Stock-based compensation
|
|
|
|
835
|
|
|
|
|
582
|
|
|
|
|
3,085
|
|
|
|
|
2,050
|
|
Impairment
|
|
|
|
59,891
|
|
|
|
|
—
|
|
|
|
|
59,891
|
|
|
|
|
—
|
|
Unrealized (gain) on derivative contracts
|
|
|
|
(10,474
|
)
|
|
|
|
(9,979
|
)
|
|
|
|
(6,198
|
)
|
|
|
|
(1,899
|
)
|
Realized loss on derivative monetization
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
447
|
|
|
|
|
—
|
|
Loss from discontinued operations
|
|
|
|
—
|
|
|
|
|
140
|
|
|
|
|
20
|
|
|
|
|
522
|
|
Other non cash items
|
|
|
|
—
|
|
|
|
|
(8
|
)
|
|
|
|
—
|
|
|
|
|
(8
|
)
|
EBITDA
|
|
|
$
|
9,198
|
|
|
|
$
|
30,668
|
|
|
|
$
|
31,862
|
|
|
|
$
|
66,948
|
|
Raven Drilling EBITDA
|
|
|
|
845
|
|
|
|
|
1,136
|
|
|
|
|
3,327
|
|
|
|
|
3,913
|
|
Adjusted EBITDA
|
|
|
$
|
10,043
|
|
|
|
$
|
31,804
|
|
|
|
$
|
35,189
|
|
|
|
$
|
70,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
$
|
9,198
|
|
|
|
$
|
30,668
|
|
|
|
$
|
31,862
|
|
|
|
$
|
66,948
|
|
Monetized derivative contracts
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
4,610
|
|
|
|
|
—
|
|
Adjusted EBITDA per bank covenants
|
|
|
$
|
9,198
|
|
|
|
$
|
30,668
|
|
|
|
$
|
36,472
|
|
|
|
$
|
66,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
This release also includes a discussion of “adjusted net income (loss),
excluding certain non-cash items,” which is 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 and net income
related to Raven Drilling, LLC capitalized to the full cost pool, to net
income (loss) for the periods presented. 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.
|
|
|
|
|
|
|
(In thousands)
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(52,372
|
)
|
|
|
$
|
25,399
|
|
|
|
$
|
(59,691
|
)
|
|
|
$
|
33,137
|
|
Impairment
|
|
|
|
59,891
|
|
|
|
|
—
|
|
|
|
|
59,891
|
|
|
|
|
—
|
|
Net income related to Raven Drilling
|
|
|
|
229
|
|
|
|
|
564
|
|
|
|
|
1,500
|
|
|
|
|
1,989
|
|
Unrealized (gain) on derivative contracts
|
|
|
|
(10,474
|
)
|
|
|
|
(9,979
|
)
|
|
|
|
(6,198
|
)
|
|
|
|
(1,899
|
)
|
Realized loss on derivative monetization
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
447
|
|
|
|
|
—
|
|
Loss from discontinued operations
|
|
|
|
—
|
|
|
|
|
140
|
|
|
|
|
20
|
|
|
|
|
522
|
|
Adjusted net income (loss), excluding certain non-cash items
|
|
|
$
|
(2,726
|
)
|
|
|
$
|
16,124
|
|
|
|
$
|
(4,031
|
)
|
|
|
$
|
33,749
|
|
Adjusted net income (loss), excluding certain non-cash items, per
share – basic
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
0.15
|
|
|
|
$
|
(0.04
|
)
|
|
|
$
|
0.35
|
|
Adjusted net income (loss), excluding certain non-cash items, per
share – diluted
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
0.15
|
|
|
|
$
|
(0.04
|
)
|
|
|
$
|
0.34
|
|
Net income (loss) per share – basic
|
|
|
$
|
(0.50
|
)
|
|
|
$
|
0.24
|
|
|
|
$
|
(0.57
|
)
|
|
|
$
|
0.34
|
|
Net income (loss) per share – diluted
|
|
|
$
|
(0.50
|
)
|
|
|
$
|
0.24
|
|
|
|
$
|
(0.57
|
)
|
|
|
$
|
0.33
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20151104005263/en/ Copyright Business Wire 2015
Source: Business Wire
(November 4, 2015 - 7:15 AM EST)
News by QuoteMedia
www.quotemedia.com
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