Dune Energy Reports Fourth Quarter And Full Year 2012 Results -Updates Operations And Year-End Reserves
HOUSTON, March 8, 2013 /PRNewswire/ -- Dune Energy, Inc. (OCTBB:DUNR) today announced results for the fourth quarter and calendar year 2012 and provided an operational update.
Revenue and Production
Revenue for the fourth quarter totaled $12.0 million and $52.0 million for the full year 2012. This compares with $14.5 million and $62.9 million for the fourth quarter and full year 2011, respectively. Production volumes in the fourth quarter were 1.1 Bcfe and 5.3 Bcfe for the full year 2012. This compares with 1.3 Bcfe for the fourth quarter of 2011, and 5.8 Bcfe for the full year 2011. In 2012, the average sales price of oil was $105.54 per barrel, and $3.20 per Mcf for natural gas, as compared with $102.64 per barrel and $4.58 per Mcf, respectively for 2011. Production declined almost 10% in 2012 as compared to 2011. Oil prices increased 3% and gas prices decreased 30% from 2011 levels. During 2012 oil accounted for 47% of the total production volumes on an Mcfe equivalent basis, however oil revenue accounted for 83% of the total revenue.
Costs and Expenses
Total operating expenses were $26.0 million for 2012 as compared to $26.1 million for 2011 or $4.93 and $4.48 per Mcfe produced respectively. This increase on a per Mcfe basis was reflective of lower production volumes in 2012 in our older fields with high fixed cost expenses. DD&A expense was $3.9 million for the fourth quarter and $14.1 million for 2012 or $2.67 per Mcfe. G&A expense totaled $2.8 million for the fourth quarter and $10.4 million for 2012. G&A for 2011 was $9.6 million. Included in G&A was $1.7 million of stock based compensation in 2012 and $0.5 million in 2011. Cash G&A was $8.7 million in 2012 and $9.1 million in 2011. Interest and financing expense was $2.6 million for the fourth quarter and $9.8 million for 2012. As part of the restructuring on December 22, 2011 the term loan was repaid and replaced with a $200 million revolving credit facility under which $28 million was borrowed at year-end 2012 and $2 million in letters of credit were outstanding. Also as part of the restructuring, the $300 million of Senior Secured notes were reduced to $3.0 million at year-end 2011 and new notes of $49.5 million with a maturity of 2016 were added. This amount has increased to $55.4 million as of December 31, 2012 due to the notes payment-in-kind feature.
Earnings
Net loss available to common shareholders totaled $3.7 million for the fourth quarter of 2012 and $7.9 million for the full year 2012. This compares with an $80.6 million loss in 2011. Preferred stock dividends were $20.2 million in 2011. The preferred stock was eliminated as part of the December 22, 2011 restructuring so there were no preferred stock dividends in 2012.
Liquidity
At the end of the year we had $22.8 million in cash and $22 million available under our Credit Facility based on $50 million of availability. Such availability is subject to an EBITDAX to Total Debt Covenant of 4.0 to 1.0 beginning at the end of the first quarter of 2013. Such covenants may limit our availability under the revolver. The availability is also subject to a semiannual redetermination based on the Company's reserve report.
Year-End 2012 Reserves
Year-end 2012 proved reserves were 6,585 MBO and 50.6 Bcf or 90.1 Bcfe. PV @ 10% value of these reserves in accordance with applicable financial and reporting standards of the SEC are $260.6 million. Year-end 2011 proved reserve were 5,654 MBO and 45.5 Bcf or 79.5 Bcfe. PV @ 10% value of these reserves at year-end 2011 using the same methodology as above was $249.9 million. On a Bcfe basis reserves increased 13.3%. The majority of the increase occurred in our Leeville field where approximately 20 Proved undeveloped locations were identified using new 3-D seismic data. As described below the Company has initiated a multi well program to develop these PUD reserves.
2013 Operations Summary YTD and Capital Program
Operations Update
At our Garden Island Bay field we completed the following four capital projects designed to increase production: recompletion of the SL 214 #915 into the G-1 A and G-2 sands; cased hole evaluation of the SL 214 #916 well; pipeline installation at the SL 214 #145 well; and, tubing replacement and recompletion of the SL 214 #551 well. Although the SL 214 #916 well was unproductive, the other projects were all successful and are currently yielding new production of 300-400 BOPD net to the Company. Since initiating a drilling program in the Leeville filed late in 2012, we have, to date, run casing for future production on the following new wells: the Heirs of Abraham, the LeFort #1, the LL&E #344 ST #1 and the LL&E #342. Completion operations and facilities construction are underway in all these projects with production anticipated to commence late in the first quarter or early in the second quarter. The Heirs of Abraham well is planned as a single completion in the NF 96 sand at 11,212 feet; the LeFort #1 is anticipated to be a dual completion in the 95E and NF 96 sands at 10,500 and 10,700 feet respectively. The LL&E # 342 is anticipated to be a dual completion in the 192 sand and the 163 sand at 5,400 feet and 5,700 feet respectively, and the LL&E #344 ST #1 is anticipated to be a single completion in the NF 96 sand at 10,250 feet. These six completions from the four well bores are all anticipated to be oil producing with rates net to the Company's 40% interest expected to flow in the range of 50-100 Boe/day each. The original hole of the #344 found noncommercial pay and was instead sidetracked to become the successful LL&E 344 ST #1. Currently drilling are the LL&E #340 ST #1, which is targeting the 95 sand at 8,500 feet, and the SL 20783 # 1 exploratory which expects to reach the Cib. Carst. sands at approximately 20,000 feet.
2013 Capital Budget
The Board of Directors approved a capital budget of $64 million for 2013. This budget will accommodate the drilling program in our Leeville, Garden Island Bay and Chocolate Bayou fields in the first half of the year, as well as projects in other fields within our portfolio during the latter part of the year. The budget assumes we will receive the additional $20 million of new equity from our major shareholders under the $50 million equity financing announced in December of 2012. Further, it assumes increased availability under our $200 million revolving credit facility at the mid-year redetermination. The current availability is $50 million.
James A. Watt, President and CEO of the Company, stated, "Initial work at our Garden Island Bay field has successfully increased production and drilling results to date are very encouraging in our Leeville field with production to commence soon. This increased production and resultant cash flow will fund our planned drilling operations for the remainder of the year."
Click here for more information: http://www.duneenergy.com/news.html?b=1683&1=1
FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning estimates of expected drilling and development wells and associated costs, statements relating to estimates of, and increases in, production, cash flows and values, statements relating to the continued advancement of Dune Energy, Inc.'s projects and other statements which are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although Dune Energy, Inc. believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that the Company's projects will experience technological and mechanical problems, geological conditions in the reservoir may not result in commercial levels of oil and gas production, changes in product prices and other risks disclosed in Dune's Annual report on Form 10-K filed with the U.S. Securities and Exchange Commission.
CONTACT: Investors, Steven J. Craig, Sr. Vice President Investor Relations and Administration, Dune Energy, Inc., +1-713-229-6300
| Dune Energy, Inc. |
||||
| Consolidated Balance Sheets |
||||
| Successor |
||||
| December 31, |
||||
| 2012 |
2011 |
|||
| ASSETS |
||||
| Current assets: |
||||
| Cash |
$ 22,793,916 |
$ 20,393,672 |
||
| Restricted cash |
- |
17,184 |
||
| Accounts receivable |
6,723,233 |
8,107,009 |
||
| Current derivative asset |
765,992 |
- |
||
| Prepayments and other current assets |
5,160,533 |
2,556,373 |
||
| Total current assets |
35,443,674 |
31,074,238 |
||
| Oil and gas properties, using successful efforts accounting - proved |
239,233,653 |
210,199,348 |
||
| Less accumulated depreciation, depletion and amortization |
(13,806,672) |
- |
||
| Net oil and gas properties |
225,426,981 |
210,199,348 |
||
| Property and equipment, net of accumulated depreciation of $256,380 and $ - |
71,080 |
230,074 |
||
| Deferred financing costs, net of accumulated amortization of $771,061 and $19,449 |
2,428,453 |
2,915,229 |
||
| Noncurrent derivative asset |
397,886 |
- |
||
| Other assets |
2,692,797 |
3,006,564 |
||
| 5,590,216 |
6,151,867 |
|||
| TOTAL ASSETS |
$ 266,460,871 |
$ 247,425,453 |
||
| LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
| Current liabilities: |
||||
| Accounts payable |
$ 6,987,857 |
$ 6,759,073 |
||
| Accrued liabilities |
12,529,899 |
10,042,683 |
||
| Current maturities of long-term debt |
1,623,541 |
4,557,857 |
||
| Total current liabilities |
21,141,297 |
21,359,613 |
||
| Long-term debt |
83,429,862 |
88,503,991 |
||
| Other long-term liabilities |
13,860,597 |
12,630,676 |
||
| Total liabilities |
118,431,756 |
122,494,280 |
||
| Commitments and contingencies |
- |
- |
||
| STOCKHOLDERS' EQUITY |
||||
| Preferred stock, $.001 par value, 1,000,000 shares authorized, |
||||
| 250,000 shares undesignated, no shares issued and outstanding |
- |
- |
||
| Common stock, $.001 par value, 4,200,000,000 shares authorized, |
||||
| 59,022,445 and 38,579,630 shares issued |
59,022 |
38,580 |
||
| Treasury stock, at cost (1,056 and 235 shares) |
(1,914) |
(552) |
||
| Additional paid-in capital |
155,824,868 |
124,893,145 |
||
| Accumulated deficit |
(7,852,861) |
- |
||
| Total stockholders' equity |
148,029,115 |
124,931,173 |
||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 266,460,871 |
$ 247,425,453 |
||
| Dune Energy, Inc. |
|||||
| Consolidated Statements of Operations |
|||||
| Successor |
Predecessor |
||||
| Company |
Company |
||||
| For the Year ended December 31, |
|||||
| 2012 |
2011 |
||||
| Oil and gas revenues |
$ 51,968,654 |
$ 62,891,627 |
|||
| Other revenues |
173,250 |
- |
|||
| Total revenues |
52,141,904 |
62,891,627 |
|||
| Operating expenses: |
|||||
| Lease operating expense and production taxes |
25,960,588 |
26,084,239 |
|||
| Accretion of asset retirement obligation |
1,461,756 |
1,317,516 |
|||
| Depletion, depreciation and amortization |
14,063,052 |
22,076,347 |
|||
| General and administrative expense |
10,390,043 |
9,602,222 |
|||
| Impairment of oil and gas properties |
- |
18,087,128 |
|||
| Exploration expense |
- |
6,119,943 |
|||
| Loss on settlement of asset retirement obligation liability |
1,657,999 |
497,647 |
|||
| Total operating expense |
53,533,438 |
83,785,042 |
|||
| Operating loss |
(1,391,534) |
(20,893,415) |
|||
| Other income (expense): |
|||||
| Other income |
828,151 |
45,156 |
|||
| Interest expense |
(9,765,239) |
(39,566,366) |
|||
| Gain on derivative instruments |
2,475,761 |
- |
|||
| Total other income (expense) |
(6,461,327) |
(39,521,210) |
|||
| Net loss |
(7,852,861) |
(60,414,625) |
|||
| Preferred stock dividend |
- |
(20,212,916) |
|||
| Net loss available to common shareholders |
$ (7,852,861) |
$ (80,627,541) |
|||
| Net loss per share: |
|||||
| Basic and diluted |
$ (0.20) |
$ (166.79) |
|||
| Weighted average shares outstanding: |
|||||
| Basic and diluted |
40,027,622 |
483,413 |
|||
| Dune Energy, Inc. |
|||||
| Consolidated Statements of Cash Flows |
|||||
| Successor |
Predecessor |
||||
| Company |
Company |
||||
| For the Year ended December 31, |
|||||
| 2012 |
2011 |
||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
|||||
| Net loss |
$ (7,852,861) |
$ (60,414,625) |
|||
| Adjustments to reconcile net loss to net cash used in |
|||||
| operating activities: |
|||||
| Depletion, depreciation and amortization |
14,063,052 |
22,076,347 |
|||
| Amortization of deferred financing costs and debt discount |
751,612 |
3,833,870 |
|||
| Stock-based compensation |
1,721,531 |
506,210 |
|||
| Accretion of asset retirement obligation |
1,461,756 |
1,317,516 |
|||
| Loss on settlement of asset retirement obligation liability |
1,657,999 |
497,647 |
|||
| Unrealized gain on derivative instruments |
(1,163,878) |
- |
|||
| Impairment of oil and gas properties |
- |
18,087,128 |
|||
| Changes in: |
|||||
| Accounts receivable |
1,382,414 |
1,743,725 |
|||
| Prepayments and other assets |
(2,604,160) |
(13,425) |
|||
| Payments made to settle asset retirement obligations |
(3,590,824) |
(743,611) |
|||
| Accounts payable and accrued liabilities |
3,099,902 |
14,412,362 |
|||
| NET CASH PROVIDED BY OPERATING ACTIVITIES |
8,926,543 |
1,303,144 |
|||
| CASH FLOWS FROM INVESTING ACTIVITIES |
|||||
| Investment in proved and unproved properties |
(21,791,346) |
(18,302,410) |
|||
| Decrease in restricted cash |
17,184 |
15,736,258 |
|||
| Purchase of furniture and fixtures |
(97,386) |
(85,004) |
|||
| Decrease in other assets |
313,767 |
705,682 |
|||
| NET CASH USED IN INVESTING ACTIVITIES |
(21,557,781) |
(1,945,474) |
|||
| CASH FLOWS FROM FINANCING ACTIVITIES |
|||||
| Proceeds from short-term debt |
2,087,410 |
2,018,387 |
|||
| Proceeds from long-term debt |
12,000,000 |
- |
|||
| Proceeds from sale of common stock |
30,000,000 |
- |
|||
| Increase in long-term debt issuance costs |
(198,924) |
(3,098,232) |
|||
| Increase in common stock issuance costs |
(835,278) |
- |
|||
| Payments on short-term debt |
(5,021,726) |
(1,869,448) |
|||
| Payments on long-term debt |
(23,000,000) |
- |
|||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
15,031,482 |
(2,949,293) |
|||
| NET CHANGE IN CASH BALANCE |
2,400,244 |
(3,591,623) |
|||
| Cash balance at beginning of period |
20,393,672 |
23,670,192 |
|||
| Cash balance at end of period |
$ 22,793,916 |
$ 20,078,569 |
|||
| SUPPLEMENTAL DISCLOSURES |
|||||
| Interest paid |
$ 2,923,566 |
$ 20,734,335 |
|||
| Income taxes paid |
- |
- |
|||
| NON-CASH INVESTING AND FINANCIAL DISCLOSURES |
|||||
| Accrued interest converted to long-term debt |
$ 5,925,871 |
$ - |
|||
| Non-cash investment in proved and unproved properties in accounts payable |
5,541,969 |
- |
|||
| Revisions to asset retirement obligations |
1,700,990 |
- |
|||
| Redeemable convertible preferred stock dividends |
- |
17,852,000 |
|||
| Accretion of discount on preferred stock |
- |
2,360,916 |
|||
| Common stock issued for conversion of preferred stock |
- |
62,288,000 |
|||
| Dune Energy, Inc. |
||||||||||||||
| Consolidated Statements of Changes in Stockholders' Equity (Deficit) |
||||||||||||||
| Years ended December 31, 2012 and 2011 |
||||||||||||||
| Additional |
Total |
|||||||||||||
| Common Stock |
Treasury Stock |
Paid-In |
Accumulated |
Stockholders' |
||||||||||
| Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Equity (Deficit) |
||||||||
| Balance at December 31, 2010 |
419,127 |
$ 419 |
(1,284) |
$ (62,920) |
$ 81,082,184 |
$ (358,270,640) |
$ (277,250,957) |
|||||||
| Conversion of preferred stock |
71,186 |
71 |
62,287,929 |
62,288,000 |
||||||||||
| Purchase of treasury stock |
(1,146) |
(12,115) |
(12,115) |
|||||||||||
| Restricted stock issued |
- |
|||||||||||||
| Restricted stock cancelled |
(1,124) |
(1) |
1 |
- |
||||||||||
| Stock-based compensation |
506,210 |
506,210 |
||||||||||||
| Preferred stock dividends |
(17,852,000) |
(17,852,000) |
||||||||||||
| Accretion of discount on preferred stock |
(2,360,916) |
(2,360,916) |
||||||||||||
| Net loss |
(60,414,625) |
(60,414,625) |
||||||||||||
| Equity adjustment due to debt restructure |
(489,189) |
(489) |
2,430 |
75,035 |
(123,663,408) |
418,685,265 |
295,096,403 |
|||||||
| - |
$ - |
- |
$ - |
$ - |
$ - |
$ - |
||||||||
| Successor Company: |
||||||||||||||
| Purchase of treasury stock |
(235) |
(552) |
(552) |
|||||||||||
| Equity adjustment due to debt restructure |
38,579,630 |
38,580 |
124,893,145 |
124,931,725 |
||||||||||
| Balance at December 31, 2011 |
38,579,630 |
$ 38,580 |
(235) |
$ (552) |
$ 124,893,145 |
$ - |
$ 124,931,173 |
|||||||
| Issuance of common stock |
18,749,997 |
18,750 |
29,981,250 |
30,000,000 |
||||||||||
| Purchase of treasury stock |
(821) |
(1,362) |
(1,362) |
|||||||||||
| Restricted stock issued |
1,716,433 |
1,716 |
(1,716) |
- |
||||||||||
| Restricted stock cancelled |
(23,615) |
(24) |
24 |
- |
||||||||||
| Stock-based compensation |
1,721,531 |
1,721,531 |
||||||||||||
| Common stock issuance costs |
(835,278) |
(835,278) |
||||||||||||
| Long-term debt issuance costs |
65,912 |
65,912 |
||||||||||||
| Net loss |
(7,852,861) |
(7,852,861) |
||||||||||||
| Balance at December 31, 2012 |
59,022,445 |
$ 59,022 |
(1,056) |
$ (1,914) |
$ 155,824,868 |
$ (7,852,861) |
$ 148,029,115 |
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SOURCE Dune Energy, Inc.
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