PetroQuest Energy Announces 2009 Year-End and Fourth Quarter Results
LAFAYETTE, La., Feb. 24 /PRNewswire-FirstCall/ -- PetroQuest Energy, Inc. (NYSE: PQ) announced today a net loss available to common stockholders for the quarter ended December 31, 2009 of ($40,572,000), or ($0.66) per share, compared to fourth quarter 2008 net loss available to common stockholders of ($154,794,000), or ($3.14) per share. For the year ended December 31, 2009, the Company reported a net loss available to common shareholders of ($95,330,000), or ($1.72) per share, compared to net loss available to common shareholders of ($102,100,000), or ($2.08) per share, for the year ended December 31, 2008. The Company recorded a non-cash ceiling test write-down of $53 million for the fourth quarter of 2009 and $156 million for the year-ended December 31, 2009, as compared to the ceiling test write-downs of $247 million and $266 million during the fourth quarter and year end periods of 2008, respectively.
Discretionary cash flow for the fourth quarter of 2009 was $36,783,000 as compared to $45,224,000 for the comparable 2008 period. For the year ended December 31, 2009, discretionary cash flow was $146,801,000 compared to $233,534,000 for 2008. See the attached schedule for a reconciliation of net cash flow provided by operating activities to discretionary cash flow.
Oil and gas sales during the fourth quarter of 2009 were $53,852,000 as compared to $66,203,000 in the fourth quarter of 2008. For the year ended December 31, 2009, oil and gas sales decreased 29% to $218,644,000 as compared to $308,623,000 in the year ended December 31, 2008. Production for the fourth quarter and year ended December 31, 2009 was 20% lower and 1% higher, respectively, than production for the comparable periods of 2008. Stated on an Mcfe basis, unit prices (including the effects of hedging) received during the fourth quarter and the year ended December 31, 2009 were higher by 2% and lower by 30%, respectively, as compared to the prices received during the comparable 2008 periods.
Lease operating expenses for the fourth quarter of 2009 were $1.24 per Mcfe as compared to $1.36 per Mcfe in the fourth quarter of 2008. For the year ended December 31, 2009, lease operating expenses decreased to $1.13 per Mcfe from $1.32 per Mcfe in 2008. The declines during the 2009 periods are primarily due to the Company's cost reduction efforts combined with lower services and materials costs.
Depreciation, depletion and amortization ("DD&A") on oil and gas properties for the fourth quarter of 2009 was $2.16 per Mcfe as compared to $4.02 per Mcfe in the fourth quarter of 2008. For the year ended December 31, 2009, DD&A on oil and gas properties decreased 37% to $2.44 per Mcfe from $3.89 per Mcfe for the comparable period of 2008. The declines in DD&A are primarily the result of the non-cash ceiling test write-downs of our proved oil and gas properties during 2008 and 2009.
General and administrative expenses increased $492,000 and decreased $4,380,000 for the fourth quarter and year ended December 31, 2009, as compared to the respective 2008 periods. The decrease during 2009 is primarily due to lower employee related costs.
The following table sets forth certain information with respect to the oil and gas operations of the Company for the three-month periods and years ended December 31, 2009 and 2008:
Three Months Ended Year Ended
------------------ ----------
December 31, December 31,
------------ ------------
2009 2008 2009 2008
Production:
Oil (Bbls) 149,448 176,062 600,124 680,571
Gas (Mcf) 6,653,426 8,385,301 30,598,092 29,708,204
Total Production (Mcfe) 7,550,114 9,441,673 34,198,836 33,791,630
Total Daily Production
(MMcfe/d) 82.1 102.6 93.7 92.3
Sales:
Total oil sales $12,122,430 $12,986,929 $41,150,657 $66,349,344
Total gas sales 41,729,249 53,216,059 177,493,256 242,273,860
Total oil and gas
Sales $53,851,679 $66,202,988 $218,643,913 $308,623,204
Average sales prices:
Oil (per Bbl) $81.11 $73.76 $68.57 $97.49
Gas (per Mcf) 6.27 6.35 5.80 8.16
Per Mcfe 7.13 7.01 6.39 9.13
The above sales and average sales prices include increases related to gas hedges of $16,918,000 and $5,378,000 and oil hedges of $877,000 and $2,380,000 for the three months ended December 31, 2009 and 2008, respectively. The above sales and average sales prices include increases (reductions) related to gas hedges of $74,333,000 and ($6,160,000) and oil hedges of $5,559,000 and ($2,124,000) for the years ended December 31, 2009 and 2008, respectively.
The following updates guidance for the first quarter of 2010:
Guidance for
Description 1st Quarter 2010
----------- ----------------
Production volumes (MMcfe/d) 83 - 88
Percent gas 89%
Expenses:
Lease operating expenses (per Mcfe) $1.20 - $1.30
Production taxes (per Mcfe) $0.25 - $0.30
Depreciation, depletion and amortization
(per Mcfe) $2.10 - $2.20
General and administrative (in millions) $4.0 - $4.5
Interest expense (in millions) $1.5 - $2.0
The following updates guidance for the full year of 2010:
Guidance for
Description Full Year 2010
----------- --------------
Production volumes (MMcfe/d) 84 - 92
Percent gas 88%
Expenses:
Lease operating expenses (per Mcfe) $1.20 - $1.30
Production taxes (per Mcfe) $0.25 - $0.30
Depreciation, depletion and amortization
(per Mcfe) $2.10 - $2.20
General and administrative (in millions) $18 - $20
Interest expense (in millions) $7 - $8
2010 Capital Expenditures (in millions) $120 - $140
Management Statement
"With our significantly improved balance sheet and liquidity position, we are resuming our long-lived growth focused strategy during 2010, where over the past five years we have realized long-lived compounded annual growth rates in production and reserves of 51% and 25%, respectively," said Charles T. Goodson, Chairman, Chief Executive Officer and President. "Our transition story continues and we have moved from being solely a Gulf Coast focused Company, with 77% of our 2009 proved reserves and 51% of our expected 2010 production coming from long-lived assets."
About the Company
PetroQuest Energy, Inc. is an independent energy company engaged in the exploration, development, acquisition and production of oil and natural gas reserves in the Arkoma Basin, East Texas, South Louisiana and the shallow waters of the Gulf of Mexico. PetroQuest trades on the New York Stock Exchange under the ticker PQ.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are our ability to find oil and natural gas reserves that are economically recoverable, the volatility of oil and natural gas prices and significantly depressed natural gas prices since the middle of 2008, the uncertain economic conditions in the United States and globally, the decline in the values of our properties that have resulted in and may in the future result in additional ceiling test write-downs, our ability to replace reserves and sustain production, our estimate of the sufficiency of our existing capital sources, our ability to raise additional capital to fund cash requirements for future operations, the uncertainties involved in prospect development and property acquisitions or dispositions and in projecting future rates of production or future reserves, the timing of development expenditures and drilling of wells, hurricanes and other natural disasters, the impact of governmental regulation and the operating hazards attendant to the oil and gas business. In particular, careful consideration should be given to cautionary statements made in the various reports PetroQuest has filed with the Securities and Exchange Commission. PetroQuest undertakes no duty to update or revise these forward-looking statements.
PETROQUEST ENERGY, INC.
Consolidated Statements of Income
(Unaudited)
(Amounts In Thousands, Except Per Share Data)
Three Months Ended Year Ended
------------------ ----------
December 31, December 31,
------------ ------------
2009 2008 2009 2008
Revenues:
Oil and gas sales $53,852 $66,203 $218,644 $308,623
Gas gathering
revenue 59 61 231 5,335
53,911 66,264 218,875 313,958
Expenses:
Lease operating
expenses 9,370 12,847 38,541 44,665
Production taxes 1,460 2,803 4,656 12,292
Depreciation,
depletion and
amortization 16,643 38,231 84,772 134,340
Ceiling test
write-down 52,552 246,776 156,134 266,156
Gas gathering costs 10 94 191 2,309
General and
administrative 5,705 5,213 18,869 23,249
Accretion of asset
retirement obligation 748 423 2,452 1,317
Interest expense 2,520 2,829 12,615 9,327
----- ----- ------ -----
89,008 309,216 318,230 493,655
Gain on sale of
assets - 135 485 26,812
Other income
(expense) (52) (83) (5,955) 344
Loss from operations (35,149) (242,900) (104,825) (152,541)
Income tax expense
(benefit) 4,137 (89,391) (14,635) (55,581)
----- ------- ------- -------
Net loss (39,286) (153,509) (90,190) (96,960)
Preferred stock dividend 1,286 1,285 5,140 5,140
Net loss available to
common stockholders $(40,572) $(154,794) $(95,330) $(102,100)
-------- --------- -------- ---------
Loss per common share:
Basic $(0.66) $(3.14) $(1.72) $(2.08)
====== ====== ====== ======
Diluted $(0.66) $(3.14) $(1.72) $(2.08)
Weighted average number of
common shares:
Basic 61,155 49,295 55,363 48,971
Diluted 61,155 49,295 55,363 48,971
====== ====== ====== ======
PETROQUEST ENERGY, INC.
Consolidated Balance Sheets
(Unaudited)
(Amounts in Thousands)
December 31,
------------
2009 2008
---- ----
ASSETS
Current assets:
Cash and cash equivalents $20,772 $23,964
Revenue receivable 16,457 20,074
Joint interest billing receivable 11,792 24,259
Hedging asset 2,796 40,571
Prepaid drilling costs 2,383 11,523
Drilling pipe inventory 19,297 25,898
Other current assets 1,619 1,530
----- -----
Total current assets 75,116 147,819
------ -------
Property and equipment:
Oil and gas properties:
Oil and gas properties, full
cost method 1,296,177 1,225,304
Unevaluated oil and gas properties 108,079 119,847
Accumulated depreciation, depletion
and amortization (1,082,381) (832,290)
---------- --------
Oil and gas properties, net 321,875 512,861
Gas gathering assets 4,848 4,644
Accumulated depreciation and amortization of
gas gathering assets (1,198) (900)
------ ----
Total property and equipment 325,525 516,605
------- -------
Other assets, net of accumulated
depreciation and amortization
of $8,342 and $6,237, respectively 9,818 5,825
----- -----
Total assets $410,459 $670,249
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable to vendors $27,113 $70,643
Advances from co-owners 3,662 5,349
Oil and gas revenue payable 7,886 15,305
Accrued interest and preferred
stock dividend 3,133 3,696
Asset retirement obligation 4,517 8,590
Other accrued liabilities 4,106 4,094
----- -----
Total current liabilities 50,417 107,677
Bank debt 29,000 130,000
10 3/8% Senior Notes 149,267 148,998
Asset retirement obligation 19,399 17,043
Deferred income taxes - 28,845
Other liabilities 271 199
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value;
authorized 5,000
shares; issued and outstanding
1,495 shares 1 1
Common stock, $.001 par value;
authorized 150,000
shares; issued and outstanding
61,177 and 49,319
shares, respectively 61 49
Paid-in capital 259,981 216,253
Accumulated other
comprehensive income 1,768 25,560
Accumulated deficit (99,706) (4,376)
------- ------
Total stockholders' equity 162,105 237,487
------- -------
Total liabilities and
stockholders' equity $410,459 $670,249
======== ========
PETROQUEST ENERGY, INC.
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in Thousands)
Year Ended December 31,
-----------------------
2009 2008 2007
---- ---- ----
Cash flows from operating
activities:
Net income (loss) $(90,190) $(96,960) $40,619
Adjustments to reconcile
net income (loss) to net
cash provided by operating
activities:
Deferred tax
expense
(benefit) (14,635) (55,581) 23,664
Depreciation,
depletion and
amortization 84,772 134,340 119,969
Ceiling test
write-down 156,134 266,156 -
Gain on sale of
assets (485) (26,812) -
Accretion of
asset retirement
obligation 2,452 1,317 923
Pipe inventory
impairment 913 - -
Share-based
compensation
expense 6,328 9,582 9,818
Amortization costs
and other 1,512 1,492 1,187
Payments to settle asset
retirement obligations (1,803) (19,377) (6,058)
Changes in working capital accounts:
Revenue receivable 3,617 2,746 (1,053)
Joint interest billing
receivable 11,937 (1,323) (2,864)
Prepaid drilling and
pipe costs 14,828 (35,973) 3,438
Accounts payable and
accrued liabilities (51,375) (4,567) 37,050
Advances from co-owners (1,687) (7,521) (521)
Other (496) 1,542 (2,443)
---- ----- ------
Net cash provided by operating
activities 121,822 169,061 223,729
------- ------- -------
Cash flows from investing
activities:
Investment in oil and gas
properties (63,420) (325,936) (233,436)
Investment in gas
gathering assets (204) (6,204) (2,968)
Proceeds from sale of
gathering assets, net
of expenses - 43,170 -
Proceeds from sale of oil
and gas properties and
other 7,451 2,256 1,277
----- ----- -----
Net cash used in investing
activities (56,173) (286,714) (235,127)
------- -------- --------
Cash flows from financing
activities:
Net proceeds from (payments
for) share based
compensation (366) 1,597 (99)
Deferred financing costs (114) (1,450) (98)
Proceeds from common stock
offering 38,036 - -
Costs of common stock
offering (258) - -
Payment of preferred stock
dividend (5,139) (5,439) -
Repayment of bank
borrowings (101,000) (128,000) (70,000)
Proceeds from bank
borrowings - 258,000 23,000
Proceeds from preferred
stock offering - - 74,750
Costs of preferred stock
offering - - (4,041)
--- --- ------
Net cash provided by (used in)
financing activities (68,841) 124,708 23,512
------- ------- ------
Net increase (decrease) in
cash and cash equivalents (3,192) 7,055 12,114
Cash and cash
equivalents at
beginning of period 23,964 16,909 4,795
------ ------ -----
Cash and cash
equivalents at end
of period $20,772 $23,964 $16,909
======= ======= =======
Supplemental disclosure of cash
flow information
Cash paid during the period for:
Interest $20,335 $17,851 $19,238
======= ======= =======
Income taxes $227 $- $-
==== === ===
PETROQUEST ENERGY, INC.
Non-GAAP Disclosure Reconciliation
(Amounts In Thousands)
Three Months Ended Year Ended
------------------ ----------
December 31, December 31,
------------ ------------
2009 2008 2009 2008
Net loss $(39,286) $(153,509) $(90,190) $(96,960)
Reconciling items:
Deferred tax expense
(benefit) 4,137 (89,391) (14,635) (55,581)
Gain on sale of
assets - (135) (485) (26,812)
Depreciation,
depletion and
amortization 16,643 38,231 84,772 134,340
Ceiling test
write-down 52,552 246,776 156,134 266,156
Accretion of
asset retirement
obligation 748 423 2,452 1,317
Share based compensation
expense 1,594 2,392 6,328 9,582
Amortization expense
and other 395 437 2,425 1,492
Discretionary cash flow 36,783 45,224 146,801 233,534
Changes in working
capital accounts (1,344) (59,480) (23,176) (45,096)
Settlement of
asset retirement
obligations (256) (2,602) (1,803) (19,377)
---- ------ ------ -------
Net cash flow provided by
(used in) operating
activities $35,183 $(16,858) $121,822 $169,061
======= ======== ======== ========
Note: Management believes that discretionary cash flow is relevant and
useful information, which is commonly used by analysts, investors
and other interested parties in the oil and gas industry as a
financial indicator of an oil and gas company's ability to generate
cash used to internally fund exploration and development activities
and to service debt. Discretionary cash flow is not a measure of
financial performance prepared in accordance with generally
accepted accounting principles ("GAAP") and should not be
considered in isolation or as an alternative to net cash flow
provided by operating activities. In addition, since discretionary
cash flow is not a term defined by GAAP, it might not be comparable
to similarly titled measures used by other companies.
SOURCE PetroQuest Energy, Inc.
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