Dune Energy Reports Fourth Quarter And Full Year 2013 Results

News provided by

Dune Energy, Inc.

Mar 07, 2014, 09:00 ET

HOUSTON, March 7, 2014 /PRNewswire/ -- Dune Energy, Inc. (OCTBB:DUNR) today announced results for the fourth quarter and calendar year 2013 and provided an operational update.

Revenue and Production

Revenue for the fourth quarter totaled $11.0 million and $53.6 million for the full year 2013.  This compares with $12.0 million and $52.0 million for the fourth quarter and full year 2012, respectively.  On an Mcfe basis revenue was $11.83 for 2013 and $9.88 for 2012.  Production volumes in the fourth quarter were 1.0 Bcfe and 4.5 Bcfe for the full year 2013.  This compares with 1.1 Bcfe for the fourth quarter of 2012, and 5.3 Bcfe for the full year 2012.  In 2013, the average sales price of oil was $105.22 per barrel, and $4.03 per Mcf for natural gas, as compared with $105.54 per barrel and $3.20 per Mcf, respectively for 2012.  Production declined almost 14% in 2013 as compared to 2012.  Oil prices decreased less than 1% and gas prices increased 26% from 2012 levels.  During 2012 oil accounted for 58% of the total production volumes on an Mcfe equivalent basis, however oil revenue accounted for 86% of the total revenue.

Costs and Expenses

Total operating expenses were $24.9 million for 2013 as compared to $26.0 million for 2012 or $5.51 and $4.93 per Mcfe produced respectively.  This increase on a per Mcfe basis was reflective of lower production volumes in 2013 in our older fields with high fixed cost expenses.  DD&A expense was $3.6 million for the fourth quarter and $16.8 million for 2013 or $3.71 per Mcfe.  G&A expense totaled $3.6 million for the fourth quarter and $12.2 million for 2013.  Included in this total is $2.2 million of stock based compensation.  G&A for 2012 was $10.4 million including $1.7 million of stock based compensation.  Interest and financing expense was $2.6 million for the fourth quarter and $10.1 million for 2013.  Under the $200 million revolving credit facility $22 million was borrowed at year-end 2013 and $2 million in letters of credit were outstanding.  At year-end 2013, the Company had $62.2 million outstanding in Floating Rate Senior Secured Notes due in 2016.

Earnings

Net loss totaled $13.3 million for the fourth quarter of 2013 and $47.0 million for the full year 2013.  This compares with an $7.9 million loss in 2012.  In 2013, an impairment of $31.4 million was recorded as a result of the impact of lower than expected future oil prices on the economic life of the Garden Island Bay field proved reserves.

Liquidity

At the end of the year we had $3.3 million in cash and $23.5 million available under our Credit Facility based on $47.5 million of availability.  The $200 million revolving credit facility was amended on December 17, 2013 maintaining availability at $47.5 million.  The EBITDAX to Total Debt Covenant was increased to 5.0 to 1.0 for the quarters ending December 31, 2013 and March 31, 2014.  The covenant will return to the 4.0 to 1.0 ration on June 30, 2014.  We were in compliance with all covenants at year-end 2013.

James A. Watt, President and CEO of the Company stated, "We continue to carefully manage our expenditures to maximize production volumes while staying within the covenant restraints of our credit agreements."  

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.

Investor Contact:
Steven J. Craig
Sr. Vice President Investor Relations and Administration
713-229-6300

 Dune Energy, Inc. 

 Consolidated Balance Sheets 












December 31,


2013

2012

 ASSETS 



 Current assets: 



    Cash 

$      3,251,371

$     22,793,916

    Accounts receivable 

7,258,425

6,723,233

    Current derivative asset 

7,544

765,992

    Prepayments and other current assets 

1,398,947

5,160,533

 Total current assets 

11,916,287

35,443,674





 Oil and gas properties, using successful efforts accounting - proved 

293,745,839

239,233,653

 Less accumulated depreciation, depletion, amortization and impairment 

(61,927,723)

(13,806,672)

 Net oil and gas properties 

231,818,116

225,426,981





 Property and equipment, net of accumulated depreciation of $227,207 and $256,380 

152,903

71,080

 Deferred financing costs, net of accumulated amortization of $1,586,904 and $771,061 

1,835,743

2,428,453

 Noncurrent derivative asset 

-

397,886

 Other assets 

3,783,312

2,692,797


5,771,958

5,590,216

 TOTAL ASSETS 

$  249,506,361

$   266,460,871





 LIABILITIES AND STOCKHOLDERS' EQUITY 



 Current liabilities: 



    Accounts payable 

$    10,139,205

$       6,987,857

    Accrued liabilities 

9,895,057

12,529,899

    Current maturities of long-term debt 

994,895

1,623,541

 Total current liabilities 

21,029,157

21,141,297

 Long-term debt 

84,180,940

83,429,862

 Other long-term liabilities 

21,449,651

13,860,597

 Total liabilities 

126,659,748

118,431,756





 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,  



    72,644,643 and 59,022,445 shares issued 

72,645

59,022

 Treasury stock, at cost (145,270 and 1,056 shares) 

(223,821)

(1,914)

 Additional paid-in capital 

177,832,574

155,824,868

 Accumulated deficit 

(54,834,785)

(7,852,861)

 Total stockholders' equity 

122,846,613

148,029,115

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 

$  249,506,361

$   266,460,871

 Dune Energy, Inc. 

 Consolidated Statements of Operations 

















For the Year ended December 31, 


2013

2012

 Revenues: 



    Oil and gas revenues 

$   53,581,176

$   51,968,654

    Other revenues 

1,927,590

173,250

 Total revenues 

55,508,766

52,141,904





 Operating expenses: 



    Lease operating expense and production taxes 

24,916,246

25,960,588

    Accretion of asset retirement obligation  

1,754,106

1,461,756

    Depletion, depreciation and amortization 

16,790,444

14,063,052

    General and administrative expense 

12,231,093

10,390,043

    Impairment of oil and gas properties 

31,370,000

-

    Remediation costs 

4,586,000

-

    Loss (gain)on settlement of asset retirement obligation liability 

(427,731)

1,657,999

 Total operating expense 

91,220,158

53,533,438





 Operating loss 

(35,711,392)

(1,391,534)

 Other income(expense): 



    Other income 

807

828,151

    Interest expense 

(10,086,691)

(9,765,239)

    Gain (loss) on derivative instruments 

(1,184,648)

2,475,761

 Total other income(expense) 

(11,270,532)

(6,461,327)

 Net loss 

$  (46,981,924)

$    (7,852,861)





 Net loss per share: 



    Basic and diluted 

$             (0.71)

$             (0.20)





 Weighted average shares outstanding: 



    Basic and diluted 

66,620,128

40,027,622

 Dune Energy, Inc. 

 Consolidated Statements of Cash Flows 












For the Year ended December 31, 


2013

2012





 CASH FLOWS FROM OPERATING ACTIVITIES 



 Net loss 

$   (46,981,924)

$   (7,852,861)

 Adjustments to reconcile net loss to net cash used in operating activities: 



    Depletion, depreciation and amortization 

16,790,444

14,063,052

    Amortization of deferred financing costs 

815,843

751,612

    Stock-based compensation 

2,254,845

1,721,531

    Accretion of asset retirement obligation 

1,754,106

1,461,756

    Loss (gain)on settlement of asset retirement obligation liability 

(427,731)

1,657,999

    Unrealized loss (gain) on derivative instruments 

1,156,334

(1,163,878)

    Impairment of oil and gas properties 

31,370,000

-

    Remediation costs 

4,586,000

-

    Changes in: 



       Accounts receivable 

(727,665)

1,382,414

       Prepayments and other assets 

3,761,586

(2,604,160)

       Payments made to settle asset retirement obligations 

(1,552,060)

(3,590,824)

       Accounts payable and accrued liabilities 

5,460,584

3,099,902

 NET CASH PROVIDED BY OPERATING ACTIVITIES 

18,260,362

8,926,543





 CASH FLOWS FROM INVESTING ACTIVITIES 



 Investment in proved and unproved properties 

(49,476,447)

(21,791,346)

 Decrease in restricted cash 

-

17,184

 Purchase of furniture and fixtures 

(150,650)

(97,386)

 Decrease (increase) in other assets 

(1,090,515)

313,767

 NET CASH USED IN INVESTING ACTIVITIES 

(50,717,612)

(21,557,781)





 CASH FLOWS FROM FINANCING ACTIVITIES 



 Proceeds from short-term debt 

1,215,983

2,087,410

 Proceeds from long-term debt 

13,000,000

12,000,000

 Proceeds from sale of common stock 

20,000,000

30,000,000

 Increase in long-term debt issuance costs 

(223,133)

(198,924)

 Increase in common stock issuance costs 

(233,516)

(835,278)

 Payments on short-term debt  

(1,844,629)

(5,021,726)

 Payments on long-term debt  

(19,000,000)

(23,000,000)

 NET CASH PROVIDED BY FINANCING ACTIVITIES 

12,914,705

15,031,482





 NET CHANGE IN CASH BALANCE 

(19,542,545)

2,400,244

    Cash balance at beginning of period 

22,793,916

20,393,672

    Cash balance at end of period 

$       3,251,371

$   22,793,916





 SUPPLEMENTAL DISCLOSURES 



 Interest paid 

$       2,462,475

$     2,923,566

 Income taxes paid 

-

-





 NON-CASH INVESTING AND FINANCIAL DISCLOSURES 



 Accrued interest converted to long-term debt 

$       6,751,077

$     5,925,871

 Non-cash investment in proved and unproved properties in accounts payable 

-

5,541,969

 Revisions to asset retirement obligations 

5,034,739

1,700,990

Dune Energy, Inc.

Consolidated Statements of Changes in Stockholders' Equity (Deficit)

Years ended December 31, 2013 and 2012

























Additional


Total


Common Stock

Treasury Stock

Paid-In

Accumulated

Stockholders'


Shares

Amount

Shares

Amount

Capital

Deficit

Equity (Deficit)

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

Issuance of common stock

12,499,992

12,500

-

-

19,987,500

-

20,000,000

Purchase of treasury stock

-

-

(144,214)

(221,907)

-

-

(221,907)

Restricted stock issued

1,187,487

1,188

-

-

(1,188)

-

-

Restricted stock cancelled

(65,281)

(65)

-

-

65

-

-

Stock-based compensation

-

-

-

-

2,254,845

-

2,254,845

Common stock issuance costs

-

-

-

-

(233,516)

-

(233,516)

Net loss

-

-

-

-

-

(46,981,924)

(46,981,924)

Balance at December 31, 2013

72,644,643

$        72,645

(145,270)

$    (223,821)

$ 177,832,574

$ (54,834,785)

$ 122,846,613

SOURCE Dune Energy, Inc.

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