Annual Reports

 
Quarterly Reports

 
8-K

  • 8-K (Feb 25, 2014)
  • 8-K (Feb 13, 2014)
  • 8-K (Jan 24, 2014)
  • 8-K (Jan 6, 2014)
  • 8-K (Nov 8, 2013)
  • 8-K (Oct 11, 2013)

 
Other

APPROACH RESOURCES INC 8-K 2012
Earnings Release

LOGO

 

LOGO

 

For Immediate Release

March 8, 2012

Approach Resources Inc.

Reports Fourth Quarter and Full Year 2011 Results

Fort Worth, Texas, MARCH 8, 2012 – Approach Resources Inc. (NASDAQ: AREX) today reported results for fourth quarter and full year 2011. Highlights for 2011, compared to 2010, include:

 

   

Total production increased 50% to 2.3 MMBoe (6.4 MBoe/d), made up of 55% oil and NGLs

 

   

Oil and NGL production increased 152% to 1.3 MMBbls

 

   

Revenues increased 88% to $108.4 million

 

   

Net income totaled $7.2 million, or $0.25 per diluted share

 

   

Adjusted net income (non-GAAP) increased 125% to $19.5 million, or $0.67 per diluted share

 

   

EBITDAX (non-GAAP) increased 85% to $79.4 million, or $2.72 per diluted share

2011 Financial Results

Production for 2011 totaled 2,338 MBoe (6.4 MBoe/d), compared to 1,556 MBoe (4.3 MBoe/d) in 2010, a 50% increase. Oil and NGL production for 2011 increased 152% to 1,280 MBbls, compared to 507 MBbls produced in 2010. Production for 2011 was 55% oil and NGLs and 45% natural gas, compared to 33% oil and NGLs and 67% natural gas in 2010.

Net income for 2011 was $7.2 million, or $0.25 per diluted share, on revenues of $108.4 million. This compares to net income for 2010 of $7.5 million, or $0.34 per diluted share, on revenues of $57.6 million. The $50.8 million increase in revenues in 2011 was attributable to an increase in production volumes ($48.6 million) and an increase in commodity prices ($2.2 million). Net income for 2011 included a realized gain on commodity derivatives of $3.4 million, an unrealized loss on commodity derivatives of $347,000 and impairment expense of $18.5 million.

Excluding the unrealized loss on commodity derivatives, impairment expense and related income taxes, adjusted net income (non-GAAP) for 2011 was $19.5 million, or $0.67 per diluted share, compared to $8.7 million, or $0.39 per diluted share, for 2010. See “Supplemental Non-GAAP Financial and Other Measures” below for our reconciliation of adjusted net income to net income.

EBITDAX (non-GAAP) for 2011 was $79.4 million, or $2.72 per diluted share, compared to $43 million, or $1.94 per diluted share, for 2010. See “Supplemental Non-GAAP Financial and Other Measures” below for our reconciliation of EBITDAX to net income.

Average realized prices for 2011, before the effect of commodity derivatives, were $88.18 per Bbl of oil, $51.39 per Bbl of NGLs and $3.92 per Mcf of natural gas, compared to $75.67 per Bbl of oil, $41.19 per Bbl of NGLs and $4.48 per Mcf of natural gas, for 2010. Our average realized price, including the effect of commodity derivatives, was $47.81 per Boe for 2011, compared to $40.72 per Boe for 2010.

Lease operating expense (“LOE”) for 2011 was $13.3 million, or $5.70 per Boe, compared to $8.6 million, or $5.50 per Boe, in 2010. The increase in LOE compared to 2010 was primarily due to the

 

 

INVESTOR CONTACT

Megan P. Hays

mhays@approachresources.com

817.989.9000

    

 

APPROACH RESOURCES INC.

One Ridgmar Centre

6500 West Freeway, Suite 800

Fort Worth, Texas 76116

www.approachresources.com

    


increase in our working interest in northwest Project Pangea. In February 2011, we acquired the remaining 38% working interest in northwest Project Pangea, which increased our working interest to approximately 100%. We also experienced an increase in well repair and maintenance expenses as well as generally higher service costs in 2011.

Severance and production taxes for 2011 were $5.8 million, or $2.48 per Boe, compared to $3 million, or $1.92 per Boe, in 2010. Severance and production taxes were approximately 5.4% and 5.2% of oil, NGL and gas sales for 2011 and 2010, respectively. The increase in severance and production taxes was driven mostly by the increase in oil, NGL and gas sales over 2010.

Exploration expense for 2011 was $9.5 million, or $4.08 per Boe, compared to $2.6 million, or $1.66 per Boe, in 2010. Exploration expense for 2011 and 2010 includes costs related to 3-D seismic data acquisition in the Permian Basin. Exploration expense for 2011 and 2010 also includes lease extensions and expirations in the Permian Basin.

Impairment expense for 2011 was $18.5 million, compared to $2.6 million in 2010. Due to ongoing, low natural gas prices and to the further decline in natural gas prices during the three months ended December 31, 2011, we recorded an impairment expense to our oil and gas properties in the East Texas Basin of $15.2 million in 2011. We also recorded an impairment expense of $3.3 million for the remaining carrying costs associated with our unproved properties in Northern New Mexico. The 2010 impairment expense was due to a write down of carrying costs associated with our unproved properties in Southwest Kentucky.

General and administrative expense (“G&A”) for 2011 was $17.9 million, or $7.66 per Boe, compared to $11.4 million, or $7.34 per Boe, for 2010. The increase in G&A was primarily due to salaries and benefits and share-based compensation.

Depletion, depreciation and amortization expense (“DD&A”) for 2011 was $32.5 million, or $13.89 per Boe, compared to $22.2 million, or $14.28 per Boe, for 2010. The increase in DD&A over the prior year was primarily due to an increase in production and capital expenditures in 2011, partially offset by an increase in estimated proved developed reserves. The decrease in DD&A per Boe compared to 2010 was primarily attributable to an increase in estimated proved developed reserves, partially offset by an increase in production and capitalized costs over 2010.

Fourth Quarter 2011 Financial Results

Production for fourth quarter 2011 totaled 649 MBoe (7.1 MBoe/d), compared to 436 MBoe (4.7 MBoe/d) in fourth quarter 2010, a 49% increase. Oil and NGL production for fourth quarter 2011 increased 146% to 396 MBbls, compared to 161 MBbls produced in fourth quarter 2010. Production for fourth quarter 2011 was 61% oil and NGLs and 39% natural gas, compared to 37% oil and NGLs and 63% natural gas in fourth quarter 2010.

Net loss for fourth quarter 2011 was $9.3 million, or $0.30 per diluted share, on revenues of $31.1 million. This compares to net income for fourth quarter 2010 of $261,000, or $0.01 per diluted share, on revenues of $16.3 million. The $14.8 million increase in revenues in fourth quarter 2011 was attributable to an increase in production volumes ($15 million), partially offset by a decrease in commodity prices ($203,000). Net loss for fourth quarter 2011 included a realized gain on commodity derivatives of $1.7 million, an unrealized loss on commodity derivatives of $4.2 million and impairment expense of $18.5 million.

 

 

 

2


Excluding the unrealized loss on commodity derivatives, impairment expense and related income taxes, adjusted net income (non-GAAP) for fourth quarter 2011 was $5.8 million, or $0.19 per diluted share, compared to $3.4 million, or $0.13 per diluted share, for fourth quarter 2010. See “Supplemental Non-GAAP Financial and Other Measures” below for our reconciliation of adjusted net income to net income.

EBITDAX (non-GAAP) for fourth quarter 2011 was $22.8 million, or $0.74 per diluted share, compared to $12.1 million, or $0.48 per diluted share, for fourth quarter 2010. See “Supplemental Non-GAAP Financial and Other Measures” below for our reconciliation of EBITDAX to net income.

Average realized prices for fourth quarter 2011, before the effect of commodity derivatives, were $85.56 per Bbl of oil, $51.71 per Bbl of NGLs and $3.19 per Mcf of natural gas, compared to $80.91 per Bbl of oil, $44.27 per Bbl of NGLs and $3.90 per Mcf of natural gas, for fourth quarter 2010. Our average realized price, including the effect of commodity derivatives, was $50.63 per Boe for fourth quarter 2011, compared to $42.34 per Boe for fourth quarter 2010.

LOE for fourth quarter 2011 was $3.5 million, or $5.41 per Boe, compared to $2.5 million, or $5.77 per Boe, in fourth quarter 2010. The increase in LOE compared to fourth quarter 2010 was primarily due to the increase in our working interest in northwest Project Pangea. In February 2011, we acquired the remaining 38% working interest in northwest Project Pangea, which increased our working interest to approximately 100%. We also experienced an increase in well repair and maintenance expenses as well as generally higher service costs in the 2011 period.

Severance and production taxes for fourth quarter 2011 were $1.6 million, or $2.44 per Boe, compared to $944,000, or $2.17 per Boe, in fourth quarter 2010. Severance and production taxes were approximately 5.1% and 5.8% of oil, NGL and gas sales for fourth quarter 2011 and 2010, respectively. The increase in severance and production taxes was driven mostly by the increase in oil, NGL and gas sales over fourth quarter 2010. The decrease in severance and production taxes as a percent of oil, NGL and gas sales was primarily due to a change in our production mix and timing of estimated refunds.

Exploration expense for fourth quarter 2011 was $2.7 million, or $4.11 per Boe, compared to $345,000, or $0.79 per Boe, in fourth quarter 2010. Exploration expense for fourth quarter 2011 and 2010 includes costs related to 3-D seismic data acquisition in the Permian Basin.

Impairment expense for fourth quarter 2011 was $18.5 million, compared to $2.6 million in fourth quarter 2010. Due to ongoing, low natural gas prices and to the further decline in natural gas prices during the three months ended December 31, 2011, we recorded an impairment expense to our oil and gas properties in the East Texas Basin of $15.2 million in 2011. We also recorded an impairment expense of $3.3 million for the remaining carrying costs associated with our unproved properties in Northern New Mexico.

G&A for fourth quarter 2011 was $6 million, or $9.28 per Boe, compared to $3.5 million, or $8.07 per Boe, for fourth quarter 2010. The increase in G&A was primarily due to an increase in salaries and benefits and share-based compensation.

 

 

 

3


DD&A for fourth quarter 2011 was $10.1 million, or $15.53 per Boe, compared to $5.5 million, or $12.72 per Boe, for fourth quarter 2010. The increase in DD&A over the prior year period was primarily due to an increase in capital expenditures and production volumes in fourth quarter 2011.

Capital Expenditures

Costs incurred during 2011 totaled $285.8 million, and included $192.5 million for exploration and development drilling, $70.8 million for the purchase of additional working interest in northwest Project Pangea and $22.5 million for acreage acquisitions.

Our capital budget for 2012 is $190 million. Substantially all of our 2012 capital expenditures will be allocated to drilling and development of our Wolffork oil shale resource play in the Permian Basin. Our 2012 capital budget is subject to change depending upon a number of factors, including economic and industry conditions at the time of drilling, prevailing and anticipated prices for oil, NGLs and gas, the availability of sufficient capital resources for drilling prospects, our financial results and the availability of lease extensions and renewals on reasonable terms.

The table below sets forth the Company’s current production and operating costs and expenses guidance for 2012. The guidance is forward-looking information that is subject to a number of risks and uncertainties, many of which are beyond the Company’s control.

 

     2012  
     Guidance  

Production:

  

Total (MBoe)

     2,800 – 3,000   

Percent oil and NGLs

     65%   

Operating costs and expenses (per Boe):

  

Lease operating

   $ 4.50 – 5.50   

Severance and production taxes

   $ 2.50 – 4.00   

Exploration

   $ 4.00 – 5.00   

General and administrative

   $ 5.25 – 6.25   

Depletion, depreciation and amortization

   $ 12.00 – 15.00   

Capital expenditures (in millions)

     Approximately $190   

Operations Update

During 2011, we drilled a total of 71 gross (66.2 net) wells, of which 18 gross (18 net) were waiting on completion at December 31, 2011. We also recompleted 10 gross (10 net) wells in the Wolffork in 2011. We currently are operating two rigs targeting the horizontal Wolfcamp Shale and one rig targeting the vertical Wolffork.

 

 

 

4


Liquidity and Commodity Derivatives Update

At December 31, 2011, we had a $300 million revolving credit agreement with a $260 million borrowing base and $43.8 million outstanding. At December 31, 2011, our liquidity and long-term debt to capital ratio were $216.2 million and 8.6%, respectively. See “Supplemental Non-GAAP Financial and Other Measures” below for our calculation of “liquidity” and “long-term debt to capital ratio.”

We enter into commodity derivatives positions to reduce the risk of commodity price fluctuations. Please refer to the “Unaudited Commodity Derivatives Information” table below for a detailed summary of the Company’s current derivatives positions.

Fourth Quarter and Full Year 2011 Conference Call

Approach will host a conference call on Friday, March 9, 2012, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss fourth quarter and full year 2011 financial and operating results. The conference call can be accessed by dialing (800) 510-9661 (U.S. domestic) or (617) 614-3452 (International). Additionally, the conference call will be broadcast live over the internet and can be accessed through the Investor Relations section of the Company’s website, www.approachresources.com. The webcast will be archived for replay on the Company’s website until June 6, 2012.

Approach Resources Inc. is an independent oil and gas company with core operations, production and reserves located in the Permian Basin in West Texas. The Company targets multiple oil and liquids-rich formations in the Permian Basin, where the Company operates approximately 145,000 net acres. The Company’s estimated proved reserves as of December 31, 2011, total 77.0 million Boe, made up of 61% oil and NGLs and 39% natural gas. For more information about the Company, please visit www.approachresources.com. Please note that the Company routinely posts important information about the Company under the Investor Relations section of its website.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of management regarding the Company’s 2012 capital budget, development program and production and operating expenses guidance. These statements are based on certain assumptions made by the Company based on management’s experience, perception of historical trends and technical analyses, current conditions, anticipated future developments and other factors believed to be appropriate and reasonable by management. When used in this press release, the words “will,” “potential,” “believe,” “estimate,” “intend,” “expect,” “may,” “should,” “anticipate,” “could,” “plan,” “predict,” “project,” “profile,” “model” or their negatives, other similar expressions or the statements that include those words, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Further information on such assumptions, risks and uncertainties is available in the Company’s Securities and Exchange Commission (“SEC”) filings. The Company’s SEC filings are available on the Company’s website at www.approachresources.com. Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to

 

 

 

5


correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

For a glossary of oil and gas terms and abbreviations used in this release, please see our Annual Report on Form 10-K filed with the SEC on March 11, 2011.

 

 

 

6


UNAUDITED RESULTS OF OPERATIONS

 

     Three Months  Ended
December 31,
     Year Ended
December  31,
 
     2011      2010      2011      2010  

Revenues (in thousands)

           

Oil

   $ 14,671       $ 6,010       $ 42,463       $ 18,640   

NGLs

     11,613         3,866         41,029         10,765   

Gas

     4,839         6,414         24,895         28,176   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total oil, NGL and gas sales

     31,123         16,290         108,387         57,581   

Realized gain on commodity derivatives

     1,720         2,171         3,375         5,784   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total oil, NGL and gas sales including derivative impact

   $ 32,843       $ 18,461       $ 111,762       $ 63,365   
  

 

 

    

 

 

    

 

 

    

 

 

 

Production

           

Oil (MBbls)

     171         74         482         246   

NGLs (MBbls)

     225         87         798         261   

Gas (MMcf)

     1,516         1,644         6,345         6,290   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total (MBoe)

     649         436         2,338         1,556   

Total (MBoe/d)

     7.1         4.7         6.4         4.3   

Average prices

           

Oil (per Bbl)

   $ 85.56       $ 80.91       $ 88.18       $ 75.67   

NGLs (per Bbl)

     51.71         44.27         51.39         41.19   

Gas (per Mcf)

     3.19         3.90         3.92         4.48   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total (per Boe)

   $ 47.98       $ 37.36       $ 46.37       $ 37.00   

Realized gain on commodity derivatives (per Boe)

     2.65         4.98         1.44         3.72   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total including derivative impact (per Boe)

   $ 50.63       $ 42.34       $ 47.81       $ 40.72   

Costs and expenses (per Boe)

           

Lease operating(1)

   $ 5.41       $ 5.77       $ 5.70       $ 5.50   

Severance and production taxes

     2.44         2.17         2.48         1.92   

Exploration

     4.11         0.79         4.08         1.66   

Impairment

     28.48         6.01         7.90         1.68   

General and administrative

     9.28         8.07         7.66         7.34   

Depletion, depreciation and amortization

     15.53         12.72         13.89         14.28   

 

(1) Lease operating expense per Boe includes ad valorem taxes.

 

 

 

7


APPROACH RESOURCES INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except shares and per-share amounts)

 

     Three Months Ended
December 31,
    Year Ended
December 31,
 
     2011     2010     2011     2010  

REVENUES:

        

Oil, NGL and gas sales

   $ 31,123      $ 16,290      $ 108,387      $ 57,581   

EXPENSES:

        

Lease operating

     3,508        2,517        13,328        8,555   

Severance and production taxes

     1,584        944        5,806        2,990   

Exploration

     2,669        345        9,546        2,589   

Impairment

     18,476        2,622        18,476        2,622   

General and administrative

     6,022        3,520        17,900        11,422   

Depletion, depreciation and amortization

     10,080        5,547        32,475        22,224   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     42,339        15,495        97,531        50,402   
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING (LOSS) INCOME

     (11,216     795        10,856        7,179   

OTHER:

        

Interest expense, net

     (1,010     (557     (3,402     (2,189

Realized gain on commodity derivatives

     1,720        2,171        3,375        5,784   

Unrealized (loss) gain on commodity derivatives

     (4,168     (2,093     (347     788   

(Loss) gain on sale of oil and gas properties, net of foreign currency transaction loss

     (243     —          248        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

(LOSS) INCOME BEFORE INCOME TAX (BENEFIT) PROVISION

     (14,917     316        10,730        11,562   

INCOME TAX (BENEFIT) PROVISION

     (5,632     55        3,488        4,100   
  

 

 

   

 

 

   

 

 

   

 

 

 

NET (LOSS) INCOME

   $ (9,285   $ 261      $ 7,242      $ 7,462   
  

 

 

   

 

 

   

 

 

   

 

 

 

(LOSS) EARNINGS PER SHARE:

        

Basic

   $ (0.30   $ 0.01      $ 0.25      $ 0.34   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.30   $ 0.01      $ 0.25      $ 0.34   
  

 

 

   

 

 

   

 

 

   

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

        

Basic

     30,511,637        24,797,209        28,930,792        22,065,797   

Diluted

     30,511,637        25,010,188        29,158,598        22,214,070   

 

 

 

8


UNAUDITED SELECTED FINANCIAL DATA

 

Unaudited Consolidated Balance Sheet Data

   December 31,     December 31,  
(in thousands)    2011     2010  

Cash and cash equivalents

   $ 301      $ 23,465   

Other current assets

     11,085        17,865   

Property and equipment, net, successful efforts method

     595,284        369,210   

Other assets

     1,224        2,549   
  

 

 

   

 

 

 

Total assets

   $ 607,894      $ 413,089   
  

 

 

   

 

 

 

Current liabilities

   $ 43,625      $ 29,240   

Long-term debt

     43,800        —     

Other long-term liabilities

     53,020        50,903   

Stockholders’ equity

     467,449        332,946   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 607,894      $ 413,089   
  

 

 

   

 

 

 

Unaudited Consolidated Cash Flow Data

   Year Ended December 31,  
(in thousands)    2011     2010  

Net cash provided (used) by:

    

Operating activities

   $ 95,770      $ 42,377   

Investing activities

   $ (284,758   $ (91,346

Financing activities

   $ 165,843      $ 69,748   

Effect of foreign currency translation

   $ (19   $ 1   

UNAUDITED COMMODITY DERIVATIVES INFORMATION

 

Commodity and Time Period

   Contract
Type
   Volume Transacted    Contract Price

Crude Oil

        

Crude Oil – 2012

   Collar    700 Bbls/d    $85.00/Bbl – $97.50/Bbl

Crude Oil – 2012

   Collar    500 Bbls/d    $90.00/Bbl – $106.10/Bbl

Crude Oil – 2013

   Collar    650 Bbls/d    $90.00/Bbl – $105.80/Bbl

Crude Oil – 2014

   Collar    550 Bbls/d    $90.00/Bbl – $105.50/Bbl

Natural Gas Liquids

        

Natural Gasoline – February 2012 – December 2012

   Swap    225 Bbls/d    $ 95.55/Bbl

Normal Butane – March 2012 – December 2012

   Swap    225 Bbls/d    $ 73.92/Bbl

Natural Gas

        

Natural Gas – 2012

   Call    230,000 MMBtu/month    $ 6.00/MMBtu

 

 

 

9


Supplemental Non-GAAP Financial and Other Measures

This release contains certain financial measures that are non-GAAP measures. We have provided reconciliations below of the non-GAAP financial measures to the most directly comparable GAAP financial measures and on the Non-GAAP Financial Information page in the Investor Relations section of our website at www.approachresources.com

Adjusted Net Income

This release contains the non-GAAP financial measures adjusted net income and adjusted net income per diluted share, which excludes (1) impairment expense, (2) unrealized loss (gain) on commodity derivatives, (3) loss (gain) on sale of oil and gas properties and (4) related income taxes. The amounts included in the calculation of adjusted net income and adjusted net income per diluted share below were computed in accordance with GAAP. We believe adjusted net income and adjusted net income per diluted share are useful to investors because they provide readers with a more meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. However, these measures are 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. The following table provides a reconciliation of adjusted net income to net income for the three months and year ended December 31, 2011 and 2010, respectively (in thousands, except per-share amounts).

 

     Three Months Ended
December 31,
    Year Ended
December  31,
 
     2011     2010     2011     2010  
Net (loss) income    $ (9,285   $ 261      $ 7,242      $ 7,462   
Adjustments for certain items:         

Impairment

     18,476        2,622        18,476        2,622   

Unrealized loss (gain) on commodity derivatives

     4,168        2,093        347        (788

Loss (gain) on sale of oil and gas properties, net of foreign currency transaction loss

     243        —          (248     —     

Related income tax effect

     (7,782     (1,603     (6,316     (623
  

 

 

   

 

 

   

 

 

   

 

 

 
Adjusted net income    $ 5,820      $ 3,373      $ 19,501      $ 8,673   
  

 

 

   

 

 

   

 

 

   

 

 

 
Adjusted net income per diluted share    $ 0.19      $ 0.13      $ 0.67      $ 0.39   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDAX

We define EBITDAX as net income, plus (1) exploration expense, (2) impairment expense, (3) depletion, depreciation and amortization expense, (4) share-based compensation expense, (5) unrealized loss (gain) on commodity derivatives, (6) loss (gain) on sale of oil and gas properties, (7) interest expense and (8) income taxes. EBITDAX is not a measure of net income or cash flow as determined by GAAP. The amounts included in the calculation of EBITDAX were computed in accordance with GAAP. EBITDAX is presented herein and reconciled to the GAAP measure of net income because of its wide acceptance by the investment community as a financial indicator of a company’s ability to internally fund development and exploration activities. This measure 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. The following table provides a reconciliation of EBITDAX to net income for the three months and year ended December 31, 2011 and 2010, respectively (in thousands, except per-share amounts).

 

 

 

 

10


     Three Months  Ended
December 31,
     Year Ended
December  31,
 
     2011     2010      2011     2010  
Net (loss) income    $ (9,285   $ 261       $ 7,242      $ 7,462   

Exploration

     2,669        345         9,546        2,589   

Impairment

     18,476        2,622         18,476        2,622   

Depletion, depreciation and amortization

     10,080        5,547         32,475        22,224   

Share-based compensation

     1,046        585         4,683        2,628   

Unrealized loss (gain) on commodity derivatives

     4,168        2,093         347        (788

Loss (gain) on sale of oil and gas properties, net of foreign currency transaction loss

     243        —           (248     —     

Interest expense, net

     1,010        557         3,402        2,189   

Income tax (benefit) provision

     (5,632     55         3,488        4,100   
  

 

 

   

 

 

    

 

 

   

 

 

 
EBITDAX    $ 22,775      $ 12,065       $ 79,411      $ 43,026   
  

 

 

   

 

 

    

 

 

   

 

 

 
EBITDAX per diluted share    $ 0.74      $ 0.48       $ 2.72      $ 1.94   
  

 

 

   

 

 

    

 

 

   

 

 

 

Liquidity

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. The table below summarizes our liquidity at December 31, 2011 and 2010 (in thousands).

 

     Year Ended December 31,  
     2011     2010  

Borrowing base

   $ 260,000      $ 150,000   

Cash and cash equivalents

     301        23,465   

Long-term debt

     (43,800     —     

Unused letters of credit

     (350     (350
  

 

 

   

 

 

 
Liquidity    $ 216,151      $ 173,115   
  

 

 

   

 

 

 

Long-Term Debt-to-Capital

Long-term debt-to-capital ratio is calculated as of December 31, 2011, and by dividing long-term debt (GAAP) by the sum of total stockholders’ equity (GAAP) and long-term debt (GAAP). We use the long-term debt-to-capital ratio as a measurement of our overall financial leverage. However, this ratio has limitations. This ratio can vary from year to year for the Company and can vary among companies based on what is or is not included in the ratio on a company’s financial statements. This ratio is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information

 

 

 

11


contained in our financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website. The table below summarizes our long-term debt-to-capital ratio at December 31, 2011 and 2010 (in thousands).

 

     Year Ended December 31,  
     2011     2010  

Long-term debt

   $ 43,800      $ —     

Total stockholders’ equity

     467,449        332,946   
  

 

 

   

 

 

 
   $ 511,249      $ 332,946   
Long-term debt-to-capital      8.6     —  
  

 

 

   

 

 

 

 

 

 

12

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki