Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported
financial and operating results for the three and twelve months
ended December 31, 2018.
Financial Highlights for the
Three Months Ended December 31, 2018
The three months ended December 31, 2018 resulted in:
- Production of 965 MBoe (10,493
Boepd)
- Revenue of $36.0 million
- Net income of $55.8 million, or $ 0.34
per share
- Adjusted net income(a) (excluding
certain non-cash items) of $4.1 million, or $ 0.02 per share
- EBITDA(a) of $20.1 million
- Adjusted EBITDA per bank loan covenants
of $20.1 million(a)
(a) See reconciliation of non-GAAP financial measures
below.
Financial Highlights for the Twelve Months
Ended December 31, 2018
The twelve months ended December 31, 2018 resulted in:
- Production of 3.6 MMBoe (9,809
Boepd)
- Revenue of $149.2 million
- Net income of $57.8 million, or $ 0.35
per share
- Adjusted net income(a) (excluding
certain non-cash items) of $30.7 million, or $ 0.19 per share
- EBITDA(a) of $83.9 million
- Adjusted EBITDA per bank loan covenants
of $84.2 million(a)
(a) See reconciliation of non-GAAP financial measures
below.
Operational Highlights for the Three
Months Ended December 31, 2018:
Williston Basin, North Dakota
Western North Dakota has experienced one of the coldest winters
on record. Abraxas has experienced several days when all
surface work was shut down due to temperatures and wind chill that
put personnel safety and equipment reliability in
jeopardy. The Ravin NE Pad is still under production
restriction due to a natural gas pipeline installation delay
requiring the flaring of all gas production from this pad. The
pipeline is scheduled to be in service within the next two weeks at
which point we are expecting normal production operations to be
resumed. The Abraxas Raven Rig#1 is scheduled to be started up
within the next several months to begin drilling operations on the
six well Jore Extension Pad.
Delaware Basin, West Texas
In the Delaware Basin of West Texas, the Company has
successfully drilled, completed and started flowback on the two
well Creosote Pad in Ward County, where Abraxas now owns an
approximate 95% working interest. The Wolfcamp A-1 and A-2 were
targeted with a 26 stage fracture treatment (frac) in 5,000’
laterals. The one well Hackberry pad has been successfully
drilled and a 26 stage fracture treatment in the Wolfcamp A-1 is
scheduled to start next Monday. Abraxas owns an approximate
75% working interest in this 5,000’ lateral well located in Winkler
County. The Company is currently drilling a two well pad,
Woodberry, in which we own a 100% working interest. The
Woodberry Pad adjoins our Caprito block in Ward County.
Year End 2018 Reserves
The Company’s total proved reserves at December 31, 2018 were
67.2 million barrels of oil equivalent (MMBOE), an increase of 2.8%
over year end 2017 after production of 3.6 MMBOE and property
divestitures of 3.8 MMBOE. The SEC PV10 (a non-GAAP measure) was
approximately $689 million. SEC pricing was $65.56 per barrel
for oil and $3.03 per mcf for gas. Proved developed reserves were
24.6 MMBOE, or 37% of the total. Oil represented 63% of total
proved reserves, natural gas 22%, and natural gas liquids 15%.
A summary of the Company’s estimated proved reserves at year-end
2018, which were prepared in accordance with Securities and
Exchange Commission (“SEC”) guidelines by LaRoche Petroleum
Consultants, Ltd. (“LaRoche”), an independent petroleum engineering
firm, are shown in the table below.
Year-End 2018 SEC
Proved Reserves
Reserve Category
Oil(MBbls)
Gas(MMcf)
NGL(MBbls)
Total(Mboe)
PV-10 ($ inthousands)
Proved Developed 13,586 43,271 3,804 24,602 381,879 Proved
Undeveloped 28,651 46,473 6,230 42,626 307,418 Total 42,237 89,744
10,034 67,228 689,297 Note: PV-10 is a non-GAAP financial measure.
See "Non-GAAP Financial Measures."
A reconciliation of proved reserves from the end of 2017 is
shown below.
Oil Equivalents (Mboe) Proved
Reserves at December 31, 2017 65,351 Revision to previous estimates
(6,570 ) Extensions and discoveries 14,979 Purchases of minerals in
place 877 Sales of minerals in place (3,829 ) Production (3,580 )
Proved Reserves at December 31, 2018 67,228
In addition, total probable reserves at year end 2018 were
approximately 107 MMBOE an increase of 34 MMBOE or 47% over year
end 2017. A number of these probable reserves would qualify as
proved undeveloped (PUD) from an engineering standpoint, but cannot
be included as proved due to the SEC rules as to timing and capital
availability. The SEC PV10 of these probable reserves was
approximately $461 million.
Divestiture Activities
The marketing process for the North Dakota assets by Petrie
Partners has begun, and a number of parties have expressed interest
and/or are evaluating the opportunity. Although it’s too early
to speculate on the outcome of this process, the Company is
encouraged with the interest and activity to date. Abraxas
expects to be in a position to offer more substantive commentary on
the marketing efforts in the near future and will provide
feedback at that time.
Comments
Bob Watson, CEO, commented, “Our ongoing drilling and completion
operation in the Delaware Basin has been successful in proving up
more locations than we can technically book as proved undeveloped
under the current SEC rules, but it has been pleasing
nonetheless. Our employees in North Dakota have done an
excellent job in keeping production up under very harsh conditions.
We appreciate their efforts.”
Conference Call
Abraxas Petroleum Corporation (NASDAQ:AXAS) will host its fourth
quarter and year end 2018 earnings conference call at 3 PM ET on
Thursday March 14, 2019. To participate in the conference call,
please dial 844.347.1028 and enter the passcode 9495807.
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 13, 2019 by dialing
855.859.2056 and entering the passcode 9495807 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
Three Months EndedDecember 31,
Twelve Months EndedDecember 31,
(In thousands except per share data) 2018
2017 2018 2017
Financial Results: Revenue $ 35,996 $ 29,588 $ 149,167 $ 86,264 Net
income (loss) 55,819 (4,109 ) 57,821 16,006 Net income (loss) per
share - basic $ 0.34 $ (0.02 ) $ 0.35 $ 0.10 Net income (loss) per
share - diluted $ 0.33 $ (0.02 ) $ 0.34 $ 0.10 Capital expenditures
- acquisitions 5,061 31,409 41,465 31,409 Capital expenditures -
drilling and completion 38,905 12,306 130,231 103,669 Total capital
expenditures 43,966 43,715 171,696 135,078 EBITDA(a) 20,116 17,589
83,856 53,139 Adjusted net income, excluding certain non-cash
items(a) 4,081 7,149 30,723 20,305 Adjusted net income, excluding
certain non-cash items, per share - basic(a) $ 0.02 $ 0.04 $ 0.19 $
0.13 Adjusted net income, excluding certain non-cash items, per
share - diluted(a) $ 0.02 $ 0.04 $ 0.18 $ 0.12 Liquidity(a) 20,617
52,368 20,617 52,368 Weighted average shares outstanding - basic
165,843 164,411 165,635 161,141 Weighted average shares outstanding
- diluted 167,829 166,519 167,689 162,844 Production from
Continuing Operations: Crude oil per day (Bblpd) 7,206 5,325 6,323
4,311 Natural gas per day (Mcfpd) 12,010 12,334 12,567 10,655
Natural gas liquids per day (Bblpd) 1,285 1,407 1,392 1,304 Crude
oil equivalent per day (Boepd) 10,493 8,788 9,809 7,391 Crude oil
equivalent (Mboe) 965 808 3,580 2,698 Realized Prices, net
of realized hedging activity: Crude oil ($ per Bbl) $ 45.16 $ 49.86
$ 57.51 $ 48.24 Natural gas ($ per Mcf) 1.78 1.78 1.71 1.81 Natural
gas liquids ($ per Bbl) 13.00 16.59 16.28 11.99 Crude oil
equivalent ($ per Boe) 34.65 35.37 36.31 32.86 Expenses:
Lease operating ($ per Boe) $ 7.54 $ 4.41 $ 6.79 $ 5.63 Production
taxes (% of oil and gas revenue) 8.0 % 8.1 % 8.1 % 8.4 % General
and administrative, excluding stock-based compensation ($ per Boe)
$ 3.30 $ 5.99 $ 2.70 $ 4.83 Cash interest ($ per Boe) 2.50 1.19
1.97 0.93 Depreciation, depletion and amortization ($ per Boe)
13.38 10.59 11.94 9.72 (a) See reconciliation of non-GAAP
financial measures below.
ABRAXAS PETROLEUM
CORPORATION CONSOLIDATED BALANCE SHEET
DATA (In thousands)
December 31,2018
December 31,2017
Cash $ 867 $ 1,618 Working capital (13,632 ) (34,361 ) Property and
equipment - net 363,218 237,767 Total assets 425,890 273,806
Long-term debt - less current maturities 183,091 87,354
Stockholders' equity 166,510 106,308 Common shares outstanding
166,714 165,890 Working capital per bank loan covenants(a)
(22,351 ) (23,262 ) (a) Excludes current maturities of
long-term debt and current derivative assets and liabilities in
accordance with our bank loan covenants. This working capital
calculation excludes the unused commitment amount which is included
for our current ratio calculation. As of December 31, 2018, the
Company was in violation of its current ratio covenant under its
credit facility and a waiver was obtained.
ABRAXAS
PETROLEUM CORPORATION CONSOLIDATED STATEMENTS
OF OPERATIONS Twelve Months Ended December 31, (In
thousands except per share data) 2018
2017 2016 Revenues: Oil $ 132,904 $
73,584 $ 50,965 Gas 7,854 6,898 3,978 Natural gas liquids 8,272
5,707 1,550 Other 137 75 62
149,167 86,264 56,555 Operating costs and expenses: Lease
operating 24,300 15,197 18,205 Production and ad valorem taxes
12,023 7,228 5,454 Rig expense - - 664 Depreciation, depletion,
amortization and accretion 43,275 26,677 24,922 Impairment - -
67,626 General and administrative (including stock-based
compensation of $2,366, $3,238 and $3,194 respectively)
12,041 16,276 13,562
91,639 65,378 130,433 Operating
income (loss) 57,528 20,886 (73,878 ) Other (income)
expense: Interest income (1 ) (1 ) (1 ) Interest expense 7,053
2,497 3,828 Amortization of deferred financing fees 440 423 1,019
(Gain) loss on derivative contracts (8,060 ) 1,849 18,028 Loss
(gain) on sale of non-oil and gas assets 181 (102 ) (374 ) Other
94 214 - (293 )
4,880 22,500 Income (loss) before
income tax 57,821 16,006 (96,378 ) Income tax (expense) benefit
- - - Net income (loss) $
57,821 $ 16,006 $ (96,378 ) Net income (loss)
per common share - basic $ 0.35 $ 0.10 $ (0.79 ) Net income
(loss) per common share - diluted $ 0.34 $ 0.10 $ (0.79 )
Weighted average shares outstanding: Basic 165,635 161,141 122,132
Diluted 167,689 162,844 122,132
ABRAXAS PETROLEUM
CORPORATIONRECONCILIATION 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
defined as net income plus interest expense, deferred income taxes,
depreciation, depletion and amortization expenses, impairments,
unrealized gains and losses on derivative contracts, and
stock-based compensation. 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.
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.
The following table provides a reconciliation of EBITDA and
Adjusted EBITDA to net income for the periods presented.
Three Months EndedDecember 31,
Twelve Months EndedDecember 31,
(In thousands) 2018 2017
2018 2017 Net income (loss) $ 55,819 $ (4,109
) $ 57,821 $ 16,006 Net interest expense 2,409 959 7,052 2,496
Depreciation, depletion, amortization and accretion 13,034 8,673
43,275 26,677 Amortization of deferred financing fees 120 69 440
423 Stock-based compensation 472 739 2,366 3,238 Unrealized (gain)
loss on derivative contracts (51,738 )
11,258 (27,098 ) 4,299 EBITDA
$ 20,116 $ 17,589 $ 83,856
$ 53,139 EBITDA $ 20,116 $ 17,589 $ 83,856 $
53,139 Expenses related to equity offering/loan
amendments/permitted acquisitions 8
164 325 4,856
Adjusted EBITDA per bank loan covenants $ 20,124
$ 17,753 $ 84,181 $ 57,995
This release also includes a discussion of “adjusted net income,
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, excluding ceiling
test impairment and unrealized changes in derivative contracts.
Management believes that net income calculated in accordance with
GAAP is the most directly comparable measure to adjusted net
income, excluding certain non-cash items. The calculation of
adjusted net income, 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 a gain
or loss based on the calculated value difference from the previous
period-end valuation for open contracts. For example, NYMEX oil
prices on December 29, 2017 were $60.42 per barrel compared to
$45.41 on December 31, 2018; therefore, the mark-to-market
valuation changed considerably from period to period.
Three Months EndedDecember 31,
Twelve Months EndedDecember 31,
(In thousands) 2018 2017
2018 2017 Net income (loss) $ 55,819 $ (4,109
) $ 57,821 $ 16,006 Unrealized (gain) loss on derivative contracts
(51,738 ) 11,258
(27,098 ) 4,299 Adjusted net income, excluding
certain non-cash items $ 4,081 $ 7,149
$ 30,723 $ 20,305 Net income per share - basic
$ 0.34 $ (0.02 ) $ 0.35 $
0.10 Net income per share - diluted $ 0.33 $
(0.02 ) $ 0.34 $ 0.10 Adjusted net income,
excluding certain non-cash items, per share - basic $ 0.02
$ 0.04 $ 0.19 $ 0.13
Adjusted net income, excluding certain non-cash items, per share -
diluted $ 0.02 $ 0.04 $ 0.18
$ 0.12
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)
December 31,2018
December 31,2017
Borrowing base $ 200,000 $ 135,000 Cash and cash equivalents 867
1,618 Revolving credit facility- outstanding borrowings (180,000 )
(84,000 ) Outstanding letters of credit (250 )
(250 ) Liquidity $ 20,617 $ 52,368
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190313005815/en/
Steven P. HarrisVice President - Chief Financial
OfficerTelephone
210.490.4788sharris@abraxaspetroleum.comwww.abraxaspetroleum.com
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