AUSTIN, TX -- (MARKET WIRE) -- 05/06/08 -- Brigham Exploration Company (NASDAQ: BEXP) today
announced financial results for the quarter ended March 31, 2008.
FIRST QUARTER 2008 RESULTS
Revenues from the sale of oil and natural gas including hedge settlements
but excluding unrealized mark-to-market hedging gains and losses for the
first quarter 2008 were up 2% to $30.4 million when compared to the first
quarter 2007. Higher realized prices increased revenues by $8.1 million,
while lower production volumes and lower hedging gains decreased revenues
by $6.0 million and $1.5 million, respectively. Our average net daily
production volumes for the first quarter 2008 were 32.2 MMcfe per day, down
22% when compared to the first quarter 2007.
Our average realized price for natural gas in the first quarter 2008 was
$9.07 per Mcf, which included a $0.24 per Mcf gain associated with the
settlement of our natural gas derivative contracts. This compares to an
average realized price in the first quarter 2007 of $7.76 which included a
$0.44 per Mcf gain due to the settlement of our natural gas derivative
contracts. During the first quarter 2008, our average realized price for
oil was $90.48 per barrel, which included a $5.02 per barrel loss due to
the settlement of our oil derivative contracts. This compares to an
average realized price in the first quarter 2007 of $55.68, which included
a $0.93 per barrel gain due to the settlement of our oil derivative
contracts.
Our first quarter production costs, which include costs for operating and
maintaining (O&M expense) our producing wells, expensed workovers, ad
valorem taxes and production taxes, were $1.47 per Mcfe compare to $0.71
per Mcfe in the first quarter 2007. This increase partially resulted from
a $0.42 per Mcfe increase in production taxes related to a $1.3 million
reduction in production tax abatements received in the first quarter 2008
versus that in the first quarter 2007. Production costs also increased
because of a $0.32 per Mcfe increase in expensed workovers. Unanticipated
workovers of two of our existing wells accounted for the bulk of the higher
expensed workover costs.
Per unit general and administrative (G&A) expense for the first quarter
2008 was $0.90 per Mcfe compared to $0.59 per Mcfe in the first quarter
2007. Lower production volumes and higher compensation costs accounted for
the bulk of the increase in per unit G&A expense.
Our depletion expense for the first quarter 2008 was $12.4 million ($4.30
per Mcfe) compared to $14.0 million ($3.76 per Mcfe) in the first quarter
2007. Our higher depletion rate increased depletion expense by $1.6
million while our lower production volumes decreased depletion expense by
$3.1 million. The increase in our depletion rate was a result of an
increase in the cost of reserve additions.
Our net interest expense for the first quarter 2008 was essentially flat
with that in the first quarter 2007. Our weighted average debt outstanding
for the first quarter 2008 was $182.8 million as compared to $171.7 million
for the comparable period last year.
We recorded deferred income tax expense of $1.0 million in the first
quarter of this year compared to deferred income tax expense of $1.0
million in the first quarter last year.
Our reported net income for the first quarter 2008 was $1.5 million ($0.03
per diluted share) versus net income of $1.9 million ($0.04 per diluted
share) for the same period last year. Our after-tax earnings in the first
quarter 2008 excluding the effect of our unrealized mark-to-market hedging
losses were $4.8 million ($0.11 per diluted share) and our after-tax
earnings in the first quarter 2007 excluding unrealized mark-to-market
hedging losses were $5.1 million ($0.11 per diluted share). After-tax
earnings excluding the above items is a non-GAAP measure and a
reconciliation of GAAP net income to after-tax earnings excluding the above
items is included in our accompanying financial tables found later in this
release.
SECOND QUARTER 2008 FORECASTS
The following forecasts and estimates of our second quarter 2008 production
volumes are forward-looking statements subject to the risks and
uncertainties identified in the "Forward-Looking Statements Disclosure" at
the end of this release. Heavy rainfalls have resulted in flooding
conditions in Southern Louisiana, including the Atchafalaya Basin where our
Bayou Postillion project is located. These unfavorable conditions have
necessitated shutting in two wells that we were previously forecasting
would have averaged net production of approximately 5 MMcfe per day in the
second quarter. We are currently estimating that from the date these two
wells went off line until production is reestablished that we will lose 36
days of second quarter production volumes. Including this impact, we
currently expect our second quarter 2008 production volumes to average
between 30 MMcfe per day and 34 MMcfe per day.
For the second quarter 2008, lease operating expenses are projected to be
$0.95 per Mcfe based on the mid-point of our production guidance,
production taxes are projected to be approximately 3.85% to 3.95% of
pre-hedge oil and natural gas revenues, and general and administrative
expenses are projected to be $2.5 million ($0.93 to $0.82 per Mcfe).
MANAGEMENT COMMENTS
Gene Shepherd, Brigham's Chief Financial Officer, commented, "With our
continuous rig line in the Bakken, combined with up to two new Vicksburg
wells and one new southern Louisiana well impacting our second quarter
volumes, we believe we have the opportunity to resume sequential quarterly
production growth in the second quarter of 2008, despite the temporary shut
in of some of our Southern Louisiana production. Furthermore, the second
quarter of 2008 will be our first opportunity to see the benefits from both
our unconventional Williston Basin activities and our conventional Gulf
Coast activities enhancing and complementing one another.
CONFERENCE CALL INFORMATION
Our management will host a conference call to discuss operational and
financial results for the first quarter 2008 with investors, analysts and
other interested parties on Wednesday, May 7, at 10:00 a.m. Eastern Time.
To participate in the call, participants within the U.S. please dial
888-713-4215 and participants outside the U.S. please dial 617-213-4867.
The participant passcode for the call is 12965380. Participants may
pre-register for the call at
https://www.theconferencingservice.com/prereg/key.process?key=P8FVW9W8F.
Pre-registrants will be issued a pin number to use when dialing into the
live call which will provide quick access to the conference by bypassing
the operator upon connection. A telephone recording of the conference call
will be available to interested parties approximately two hours after the
call is completed through 12:00 p.m. Eastern Time on Saturday, June 7,
2008. To access the recording, domestic callers dial 888-286-8010 and
international callers dial 617-801-6888. The passcode for the conference
call playback is 74228745. In addition, a live and archived web cast of
the conference call will be available over the Internet at either
www.bexp3d.com or www.streetevents.com.
A copy of this press release and other financial and statistical
information about the periods covered by this press release and by the
conference call that will take place on Wednesday, May 7, 2008, will be
available on our website. To access the press release: go to
www.bexp3d.com and click on News Releases. The file with a copy of the
press release is named Brigham Exploration Reports First Quarter 2008
Results and is dated Tuesday, May 6, 2008. To access the other financial
and statistical information that will be covered by the conference call
that will take place on Wednesday, May 7, 2008, go to www.bexp3d.com and
click on Event Calendar. The file with the other financial and statistical
information is named Financial and Statistical Information for the First
Quarter 2008 Conference Call and is dated Tuesday, May 6, 2008.
ABOUT BRIGHAM EXPLORATION
Brigham Exploration Company is an independent exploration and production
company that applies 3-D seismic imaging and other advanced technologies to
systematically explore and develop onshore domestic natural gas and oil
provinces. For more information about Brigham Exploration, please visit
our website at www.bexp3d.com or contact Investor Relations at
512-427-3444.
FORWARD-LOOKING STATEMENTS DISCLOSURE
Except for the historical information contained herein, the matters
discussed in this news release are forward-looking statements within the
meaning of the federal securities laws. Important factors that could cause
our actual results to differ materially from those contained in the
forward-looking statements include our growth strategies, our ability to
successfully and economically explore for and develop oil and gas
resources, anticipated trends in our business‚ our liquidity and ability to
finance our exploration and development activities‚ market conditions in
the oil and gas industry‚ our ability to make and integrate acquisitions,
the impact of governmental regulation and other risks more fully described
in the company's filings with the Securities and Exchange Commission.
Forward-looking statements are typically identified by use of terms such as
"may," "will," "expect," "anticipate," "estimate" and similar words,
although some forward-looking statements may be expressed differently. All
forward-looking statements contained in this release, including any
forecasts and estimates, are based on management's outlook only as of the
date of this release, and we undertake no obligation to update or revise
these forward-looking statements, whether as a result of subsequent
developments or otherwise.
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three Months Ended
March 31,
------------------
2008 2007
-------- --------
Revenues:
Oil and natural gas sales $ 30,510 $ 28,486
Hedging settlements (62) 1,424
-------- --------
30,448 29,910
Unrealized hedging gains (losses) (5,394) (4,916)
-------- --------
25,054 24,994
Other revenue 17 27
-------- --------
Total Revenue 25,071 25,021
-------- --------
Costs and expenses:
Lease operating 2,986 2,569
Production taxes 1,283 71
General and administrative 2,593 2,178
Depletion of oil and natural gas properties 12,443 13,959
Depreciation and amortization 147 163
Accretion of discount on asset retirement obligations 91 117
-------- --------
19,543 19,057
-------- --------
Operating income 5,528 5,964
-------- --------
Other income (expense):
Interest expense, net (3,419) (3,417)
Interest income 75 131
Other income (expense) 307 190
-------- --------
(3,037) (3,096)
-------- --------
Income before income taxes $ 2,491 $ 2,868
Income tax expense:
Current -- --
Deferred (964) (995)
-------- --------
(964) (995)
-------- --------
Net income $ 1,527 $ 1,873
======== ========
Net income per share available to common stockholders:
Basic $ 0.03 $ 0.04
======== ========
Diluted $ 0.03 $ 0.04
======== ========
Weighted average shares outstanding:
Basic 45,261 45,051
======== ========
Diluted 45,770 45,430
======== ========
BRIGHAM EXPLORATION COMPANY
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended
March 31,
------------------
2008 2007
-------- --------
Average net daily production:
Natural gas (MMcf) 24.4 33.1
Oil (Bbls) 1,298 1,352
Equivalent natural gas (MMcfe) (6:1) 32.2 41.2
Total net production:
Natural gas (MMcf) 2,193 2,982
Oil (MBbls) 117 122
Equivalent natural gas (MMcfe) (6:1) 2,894 3,712
% Natural gas 76% 80%
Sales price:
Natural gas ($/Mcf) $ 8.83 $ 7.32
Oil ($/Bbl) 95.50 54.75
Equivalent natural gas ($/Mcfe) (6:1) 10.54 7.67
Sales price including derivative settlement gains
(losses):
Natural gas ($/Mcf) $ 9.07 $ 7.76
Oil ($/Bbl) 90.48 55.68
Equivalent natural gas ($/Mcfe) (6:1) 10.52 8.05
Sales price including derivative settlement gains
(losses) and unrealized gains (losses):
Natural gas ($/Mcf) $ 6.71 $ 6.23
Oil ($/Bbl) 88.45 52.78
Equivalent natural gas ($/Mcfe) (6:1) 8.66 6.73
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
2008 2007
------------- -------------
Assets:
Current assets $ 29,562 $ 32,505
Oil and natural gas properties, net (full cost
method) 543,267 510,207
Other property and equipment, net 1,072 1,034
Other non-current assets 5,038 4,682
------------- -------------
Total assets $ 578,939 $ 548,428
============= =============
Liabilities and stockholders' equity:
Current liabilities $ 59,657 $ 41,718
Senior notes 158,551 158,492
Senior credit facility 19,000 10,000
Mandatorily redeemable preferred stock,
Series A 10,101 10,101
Deferred income tax liability 42,609 41,625
Other non-current liabilities 7,806 7,465
------------- -------------
Total liabilities $ 297,724 $ 269,401
Stockholders' equity 281,215 279,027
------------- -------------
Total liabilities and stockholders' equity $ 578,939 $ 548,428
============= =============
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended
March 31,
------------------
2008 2007
-------- --------
Cash flows from operating activities:
Net income $ 1,527 $ 1,873
Depletion, depreciation and amortization 12,590 14,122
Accretion of discount on ARO 91 117
Amortization of deferred loan fees and debt issuance
costs 255 214
Non-cash stock compensation 414 421
Market value adjustments for derivatives instruments 5,394 4,916
Deferred income tax expense 964 995
Other noncash items (28) --
Changes in operating assets and liabilities 7,128 (7,074)
-------- --------
Cash flows provided by operating activities $ 28,335 $ 15,584
Cash flows used by investing activities (45,034) (48,222)
Cash flows (used) provided by financing activities 9,002