Sabine Oil & Gas LLC Announces Fourth Quarter and Full Year 2013 Financial and Operational Results
HOUSTON, March 31, 2014 /PRNewswire/ -- Sabine Oil & Gas LLC ("Sabine" or the "Company") today reported its fourth quarter and full year 2013 financial and operating results.
(Logo: http://photos.prnewswire.com/prnh/20130325/MM83201LOGO)
Key 2013 Results and Events:
- Increased average daily production by 31% year-over-year to 175 MMcfe/d in 2013, up from 133 MMcfe/d in 2012. Oil production was 3,846 Bbl/d, a 343% increase over the prior year of 869 Bbl/d.
- Oil and natural gas liquids (collectively "liquids") production volumes comprised 54% of revenues and 31% of total production, (increase of 219% and 252%, respectively, over 2012).
- Adjusted EBITDA for the year ended December 31, 2013 was $296.1 million, representing a 52% increase over 2012.
- Added approximately 25,000 net acres in the Eagle Ford through acquisitions, joint ventures and grassroots leasing, resulting in a year end Eagle Ford position of approximately 34,000 net acres.
- In the Eagle Ford Shale, completed two four-well pad in the Sugarkane block in southern DeWitt County, with an average rate per well of over 2,300 BOEPD for a 30-day period ("IP30"), with 18% oil and 56% liquids.
- Also in the Eagle Ford Shale, completed ten wells in the Shiner Area in northern DeWitt County and southern Lavaca County, which averaged an IP30 of over 1,200 BOEPD, with 51% oil and 77% liquids.
- In East Texas, completed five Cotton Valley horizontal wells which had an average IP30 of over 10 MMcfe/d, with 29% liquids.
- Also in East Texas, completed seven of the fifteen Haynesville Shale wells covered under a joint development agreement which averaged IP30 of over 9 MMcf/d. Plan is to complete the remaining eight wells during 2014.
- In North Texas, completed five Granite Wash wells which had an average IP30 of over 1,100 BOEPD, with 67% oil and 77% liquids.
- Closed on the sale of our interests in our Cleveland Sand assets for an adjusted price of approximately $177 million. The sale closed in December and was accounted for as an adjustment to the full cost pool with no gain or loss recognized.
Commenting on the yearly results Sabine's Chief Executive Officer David Sambrooks noted: "In 2013, we delivered exceptional well results in all of our core operating areas. Excluding the Cleveland Sand asset which we sold at year-end, we completed a total of 35 wells in 2013, and achieved an overall average of 1,590 BOEPD IP 30, with 48% liquids. These outstanding well results drove down our total debt/ Adjusted EBITDA ratio from 6.2x in 4th quarter 2012 to 3.4x in 4th quarter 2013 (in each case, on an annualized basis), demonstrating the excellent financial results of our overall capital program. Sabine continues to achieve some of the best well results in the industry across all of our operating areas".
Results of the Fourth Quarter 2013
Production volumes during the three months ended December 31, 2013 were 19.4 Bcfe, an increase of 8.4 Bcfe or approximately 77% from fourth quarter 2012 production. The increase in production is primarily due to an increase in oil and natural gas liquids production attributable to our North Texas and South Texas acquisitions and our active and successful development program in these regions.
Revenues from production of oil, natural gas liquids and natural gas increased from $48.4 million in the fourth quarter of 2012 to $109.3 million in the fourth quarter of 2013, an increase of 126%. This increase of $60.9 million was a result of an increase in production of 77%, coupled with an increase in average prices per Mcfe of 28%.
During the fourth quarter of 2013, the Company's realized average price for natural gas including hedges was $4.69 per Mcf, or $1.07 per Mcf higher than the Company's unhedged realized average price of $3.62 per Mcf. The Company's realized average price of oil including hedges was $87.01 per Bbl, or $3.24 per Bbl lower than the Company's unhedged realized average price of $90.25 per Bbl. In the fourth quarter of 2013, our hedged volumes were approximately 69% and 79% of both our natural gas and oil volumes, respectively. The Company realized gain on such derivative instruments for the fourth quarter of 2013 of $12.2 million. In the fourth quarter of 2012, our hedged volumes were approximately 77% and 32% of our natural gas and oil volumes, respectively, which resulted in a realized gain on such derivative instruments of $21.7 million.
Lease operating expenses increased from $8.7 million in the fourth quarter of 2012 to $11.8 million in the fourth quarter of 2013, an increase of 36%. The increase in lease operating expense of $3.1 million is primarily due to our 2012 acquired properties. Lease operating expenses decreased on a per unit basis from $0.79 per Mcfe in the fourth quarter of 2012 to $0.61 per Mcfe in the fourth quarter of 2013. The decrease of $0.18 per Mcfe is primarily due to the commencement of lower cost production in South Texas and North Texas following our December 2012 acquisitions in these areas as well as a lower realized cost on our higher volume East Texas 2013 completions.
Marketing, gathering, transportation and other expenses increased from $4.3 million in the fourth quarter of 2012 to $5.0 million in the fourth quarter of 2013, an increase of 18%. Marketing, gathering, transportation and other expenses decreased on a per unit basis from $0.39 per Mcfe in the fourth quarter of 2012 to $0.26 per Mcfe in the fourth quarter of 2013. The decrease of $0.13 per Mcfe is primarily associated with our South Texas and North Texas regions resulting from our 2012 acquisitions and current year development activities, as well as a reduction in fees on a per unit of production basis attributable to volumes from our 2013 completions in East Texas.
Production and ad valorem taxes increased from $(0.7) million in the fourth quarter of 2012 to $5.3 million in the fourth quarter of 2013, an increase of 898%. The increase is primarily related to increased production in our South Texas and North Texas regions which are incurring higher production taxes on oil and natural gas liquids production, and reduced tax credits attributed to high cost gas exemptions. The Company expects to experience continued variability in its production taxes as a result of well types and amount, and timing of approval, of high cost gas tax exemptions.
General and administrative expenses increased from $6.1 million in the fourth quarter of 2012 to $8.6 million in the fourth quarter of 2013, an increase of $2.5 million, or 41%. This increase is primarily related to an increase in overhead and internal costs associated with our expanding business. General and administrative expenses decreased on a per unit basis from $0.56 per Mcfe in the fourth quarter of 2012 to $0.45 per Mcfe in the fourth quarter of 2013.
DD&A increased from $23.2 million in the fourth quarter of 2012 to $42.9 million in the fourth quarter of 2013, an increase of $19.6 million. Depletion, depreciation, and amortization increased on a per unit basis from $2.12 per Mcfe in the fourth quarter of 2012 to $2.21 per Mcfe in the fourth quarter of 2013.The increase in the DD&A expense is principally due to the increase in production volumes quarter over quarter.
In the fourth quarter of 2012, there were non-cash impairment charges related to oil and natural gas properties of $41.3 million and impairments related to other assets of $0.5 million. In the fourth quarter of 2013, the Company recorded an impairment charge related to other assets for $1.1 million.
Interest expense increased from $14.9 million for the fourth quarter of 2012 to $25.8 million for the fourth quarter of 2013, an increase of $10.9 million, primarily as a result of the Term Loan. Additionally, as required under GAAP, we capitalized $2.9 million and $1.0 million of interest expense for the three months ended December 31, 2013 and 2012, respectively.
The Company recognized a loss on derivative contracts of $19.5 million and $10.7 million for the fourth quarter of 2013 and 2012, respectively. The amount of future gain or loss recognized on derivative instruments is dependent upon future commodity prices.
Results of the Year ended December 31, 2013
Production volumes during the year ended December 31, 2013 were 63.8 Bcfe, an increase of 15.1 Bcfe or 31% compared to production of 48.6 Bcfe during the year ended December 31, 2012. The increase in production is primarily due to our North Texas and South Texas acquisitions and our active and successful development program in these regions.
Revenues from production of oil, natural gas liquids and natural gas increased from $177.4 million in 2012 to $354.2 million in 2013, an increase of 100%. This increase of $176.8 million was a result of an increase in average prices per Mcfe of 52%, coupled with an increase in production of 31%.
The Company's realized average price for natural gas including hedges was $4.82 per Mcf, or $1.16 per Mcf higher than the Company's unhedged realized average price of $3.66 per Mcf. The Company's realized average price of oil including hedges was $90.59 per Bbl, or $3.82 per Bbl lower than the Company's unhedged realized average price of $94.41 per Bbl. In 2013, our hedged volumes were approximately 80% of natural gas volumes and 71% of oil volumes, which resulted in a realized gain on such derivative instruments for $46.2 million. In 2012, our hedged volumes were approximately 69% and 40% of our natural gas and oil volumes, respectively, which resulted in a realized gain on such derivative instruments of $104.9 million.
Lease operating expenses increased from $41.0 million in 2012 to $42.5 million in 2013, an increase of 4%. The increase in lease operating expense of $1.5 million is primarily due to our December 2012 acquired properties. Lease operating expenses decreased on a per unit basis from $0.84 per Mcfe in 2012 to $0.67 per Mcfe in 2013. The decrease of $0.17 per Mcfe is primarily due to the commencement of lower cost production in South Texas and North Texas following our December 2012 acquisitions in these areas as well as a lower realized cost on our higher volume East Texas 2013 completions.
Marketing, gathering, transportation and other expenses increased from $17.5 million in 2012 to $17.6 million in 2013. Marketing, gathering, transportation and other expense decreased on a per unit basis from $0.36 per Mcfe in 2012 to $0.28 per Mcfe in 2013. The per unit basis decrease is primarily associated with our North Texas and South Texas regions resulting from our 2012 acquisitions and current year development activities, as well as a reduction in fees on a per unit of production basis attributable to our 2012 sales of our Rockies assets and volumes from our 2013 completions in East Texas Production and ad valorem taxes increased from $4.4 million in 2012 to $17.8 million in 2013, an increase of 305%.
Production and ad valorem taxes increased on a per unit basis from $0.09 per Mcfe in 2012 to $0.28 per Mcfe in 2013. The increase is primarily related to increased production in our North Texas and South Texas regions which are incurring higher production taxes on oil and natural gas liquids production, and not earning much of the tax credits attributed to high cost gas exemptions for our wells in 2013 compared to 2012. The Company expects to experience continued variability in its production taxes as a result of well types and amount, and timing of approval, of high cost gas tax exemptions. Production taxes as a percentage of natural gas and oil revenues were 5% and 3% for 2013 and 2012, respectively.
General and administrative expenses increased from $21.4 million in 2012 to $27.5 million in 2013, an increase of $6.1 million, or 28%, as a result of increased legal and consulting fees related to various current year projects and higher overhead associated with our growing business. General and administrative expenses decreased on a per unit basis from $0.44 per Mcfe in 2012 to $0.43 per Mcfe in 2013.
DD&A increased from $91.4 million in 2012 to $137.1 million in 2013, an increase of $45.7 million and 50%. Depletion, depreciation, and amortization increased on a per unit basis from $1.88 per Mcfe in 2012 to $2.15 per Mcfe in 2013. The increase in the DD&A expense is primarily the result of increase production volumes as a result of our drilling program and our December 2012 acquisitions.
In 2012, there were non-cash impairment charges related to oil and natural gas properties of $641.8 million, impairment charges for gas gathering and processing equipment of $21.4 million and impairment charges for other assets of $1.2 million. In 2013, there were impairment charges related to other assets of $1.1 million. There were no impairments related to oil and natural gas properties recognized in 2013 as a result of favorable average unweighted first day of the month pricing for the year ended December 31, 2012 of $2.76 per MMbtu versus $3.67 per MMbtu as of December 31, 2013 as well as favorable performance from our 2013 development activities.
Interest expense increased from $49.4 million in 2012 to $99.5 million in 2013, an increase of $50.1 million, or 101%, primarily as a result of the Term Loan. Additionally, as required under GAAP, we capitalized $13.0 million and $4.3 million of interest expense for the years ended December 31, 2013 and 2012, respectively.
The Company recognized a loss on derivative contracts of $46.5 million and $75.7 million for the year ended December 31, 2013 and 2012, respectively. The amount of future gain or loss recognized on derivative instruments is dependent upon future commodity prices.
Change in Auditors and Restatements of previously issued financial statements
On December 19, 2013, the Company dismissed PricewaterhouseCoopers LLP ("PwC") as the Company's independent registered public accounting firm effective immediately. Contemporaneous with the determination to dismiss PwC, the Company engaged Deloitte & Touche LLP ("D&T") as the Company's independent registered public accounting firm for the year ended December 31, 2013. Additionally, D&T was engaged to re-audit the Company's consolidated financial statements as of and for the year ended December 31, 2012 and PwC will be reissuing their audit opinion covering the Company's consolidated financial statements as of and for the year ended December 31, 2011.
The reports of PwC on the Company's consolidated financial statements as of and for the years ended December 31, 2012 and 2011 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the years ended December 31, 2012 and 2011, and through December 19, 2013, there were no (a) disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to PwC's satisfaction, would have caused PwC to make reference to the subject matter thereof in connection with its reports for such years; or (b) reportable events, as described under Item 304(a)(1)(v) of Regulation S-K.
In conjunction with the completion of the independent audit by D&T of the Company as of and for the year ended December 31, 2013 and the re-audit of 2012, the Company will be restating its previously issued consolidated financial statements as of and for the years ended December 31, 2012 and 2011, principally to make adjustments with respect to the accounting for certain derivative financial transactions that were previously accounted for as cash flow hedges in both years and to reverse the Gain on bargain purchase recorded in 2012. The net impact to the 2012 and 2011 Consolidated Statement of Operations is an increase to Net Loss of $1MM for 2012 and an increase to Net Income for 2011 of $58MM. In addition, the Company's previously reported quarterly consolidated financial statements for March 31, 2013, June 30, 2013 and the year to date period for September 30, 2013 were also adjusted to reflect the prior year restatement treatment of the accounting for derivative financial transactions. The expected net impact to the Consolidated Statement of Operations for these periods is $15MM additional loss, $7MM additional income and $14MM additional loss, respectively. During the second quarter of 2013, the election was made to de-designate the Company's derivative financial transactions and report all valuation changes to the derivative financial transactions on a mark-to-market basis thus all future reporting of the Company's financial results will be consistent with the restated periods.
The adjustments described for 2013, 2012 and 2011 have no impact to Adjusted EBITDA or cash flows from operating, investing or financing activities as the adjustments are all non-cash entries. After giving effect to the adjustments, the Company continues to be in compliance with all financial covenants contained within the Company's first lien credit facility.
The restatement of 2011, the re-audit of 2012 and audit of 2013 will be included in the Company's annual report for the year ended 2013.
Debt/Liquidity
The Company exited the year with $250 million drawn on its First Lien Credit Facility, providing $370 million of available liquidity as the Company entered 2014. The Company's borrowing base is currently at $620 million. As of March 31, 2014, the Company has drawn an additional $130 million, has repaid $25 million and had an outstanding balance of $355 million. The Company's borrowing base is currently being re-determined and is expected to be increased from $620 million to $700 million effective April 2, 2014.
Hedging
As of March 31, 2014, the Company has NYMEX hedges in place for the calendar year of 2014 on approximately 135,000 MMbtu/d of its projected natural gas production, at a weighted average price of $4.28/ MMBtu, and 3,980 Bbl/day of oil production at a weighted average price of $92.16/bbl. For the calendar year of 2015, the Company has hedge contracts in place for 115,000 MMbtu/d of its projected natural gas production at a weighted average price of $4.18/MMbtu, and 2,190 Bbl/day of oil production at a weighted average price of $90.26/Bbl.
Year-End Reserves:
Year-end 2013 proved reserves, as determined by the Company's independent reserve engineers and calculated pursuant to SEC guidelines, declined by 14% from 981 Bcfe to 839 Bcfe. The changes in proved reserves from 2012 proved reserves include the sale of 168 Bcfe of reserves associated with the previously mentioned Cleveland Sand asset sale, upward revisions of approximately 19 Bcfe and 6 Bcfe that resulted from favorable pricing and performance revisions, respectively, and downward revisions of 82 Bcfe due to a decrease in proved undeveloped locations booked by the Company in 2013 versus 2012. The downward revision is predominantly due to reducing our booked Cotton Valley Sand inventory from 47 locations year end 2012 to 27 locations year end 2013, or roughly three years of drilling activity at our current level of one rig. Booked locations for our Cotton Valley Sand inventory, as well as our inventory in other plays, is largely dependent on activity level due to SEC reserve rules. The Company added approximately 148 Bcfe of proved reserves in 2013 as a result of our drilling program, representing a 234% production replacement ratio.
Proved reserves consisted of 588.3 Bcf of natural gas, and 16.9 Mbbls of oil and 25.0 Mbbls of natural gas liquids. The pre-tax present value ("PV 10") of the Company's proved reserves discounted at 10% and using the year end SEC pricing was $1,351 million, which is an increase of $441 million compared to the PV 10 at year-end 2012 of $910 million.
The following table reflects the changes in the proved reserves estimates from year-end 2012 to 2013:
| Oil (Mbbls) |
NGLS (Mbbls) |
Gas (Bcf) |
Total (Bcfe) |
|
| Proved Reserves, December 31, 2012 |
16.0 |
29.4 |
709.0 |
980.8 |
| Revisions of previous estimates |
0.1 |
- |
(58.3) |
(57.4) |
| Extensions and discoveries |
6.9 |
5.4 |
73.7 |
147.5 |
| Production |
(1.4) |
(1.8) |
(44.0) |
(63.4) |
| Sales of minerals in place |
(4.7) |
(7.9) |
(92.1) |
(168.2) |
| Proved Reserves, December 31, 2013 |
16.9 |
25.0 |
588.3 |
839.3 |
Sabine Oil & Gas LLC is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States. Our current operations are principally located in the Eagle Ford Shale in South Texas, the Cotton Valley and Haynesville Shale in East Texas, and the Granite Wash in the Texas Panhandle.
This press release includes "forward-looking statements." 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. These statements include, but are not limited to forward-looking statements about plans, strategies, objectives and anticipated financial and operating results of the Company, including the Company's drilling program, production, hedging activities, capital expenditure levels and other guidance. These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. 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. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating natural gas and oil reserves and in projecting future rates of production, cash flow, access to capital and the timing of development expenditures. For a detailed list of the Company's risk factors, please consult the Company's Annual Report, subsequent quarterly reports and other press releases posted at www.sabineoil.com.
Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.
| Sabine Oil & Gas LLC |
|||||||
| Operational and Financial Statistics (unaudited) |
|||||||
| Three Months Ended |
Year Ended |
||||||
| December 31, |
December 31, |
||||||
| 2013 |
2012 |
2013 |
2012 |
||||
| Oil, natural gas and NGL sales by product (in thousands): |
|||||||
| Oil |
$42,109 |
$9,284 |
$132,513 |
$30,343 |
|||
| NGL |
20,785 |
8,599 |
59,772 |
36,957 |
|||
| Natural gas |
46,443 |
30,473 |
161,938 |
110,122 |
|||
| Total |
$ 109,337 |
$ 48,356 |
$ 354,223 |
$ 177,422 |
|||
| Production data: |
|||||||
| Oil (MBbl) |
466.60 |
101.86 |
1,403.62 |
317.07 |
|||
| NGL (MBbl) |
627.93 |
241.31 |
1,842.47 |
931.26 |
|||
| Natural gas (Bcf) |
12.84 |
8.92 |
44.29 |
41.12 |
|||
| Combined (Bcfe)(1) |
19.41 |
10.98 |
63.77 |
48.61 |
|||
| Average prices before effects of economic hedges (2): |
|||||||
| Oil (per Bbl) |
$90.25 |
$91.15 |
$94.41 |
$95.70 |
|||
| NGL (per Bbl) |
$33.10 |
$35.63 |
$32.44 |
$39.68 |
|||
| Natural gas (per Mcf) |
$3.62 |
$3.42 |
$3.66 |
$2.68 |
|||
| Combined (per Mcfe)(1) |
$5.63 |
$4.40 |
$5.55 |
$3.65 |
|||
| Average realized prices after effects of economic hedges (2): |
|||||||
| Oil (per Bbl) |
$87.01 |
$91.15 |
$90.59 |
$95.79 |
|||
| NGL (per Bbl) |
$33.10 |
$35.63 |
$32.44 |
$39.68 |
|||
| Natural gas (per Mcf) |
$4.69 |
$5.84 |
$4.82 |
$5.23 |
|||
| Combined (per Mcfe)(1) |
$6.27 |
$6.38 |
$6.28 |
$5.81 |
|||
| Average costs (per Mcfe)(1): |
|||||||
| Lease operating |
$0.61 |
$0.79 |
$0.67 |
$0.84 |
|||
| Workover |
$0.06 |
$0.08 |
$0.03 |
$0.05 |
|||
| Marketing, gathering, transportation and other |
$0.26 |
$0.39 |
$0.28 |
$0.36 |
|||
| Production and ad valorem taxes |
$0.27 |
($0.06) |
$0.28 |
$0.09 |
|||
| General and administrative |
$0.45 |
$0.56 |
$0.43 |
$0.44 |
|||
| Depletion, depreciation and amortization |
$2.21 |
$2.12 |
$2.15 |
$1.88 |
|||
| (1) |
Oil production was converted at six Mcf per Bbl to calculate combined production and per Mcfe amounts. |
| (2) |
Average prices shown in the table reflect prices both before and after the effects of our realized commodity hedging transactions. Our calculation of such effects includes realized gains or losses on cash settlements for commodity derivatives. |
| Sabine Oil & Gas LLC |
|||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
|||||||||
| Three Months Ended December 31, |
Year Ended December 31, |
||||||||
| 2013 |
2012 |
2013 |
2012 |
||||||
| (in thousands) |
|||||||||
| Revenues |
|||||||||
| Oil, natural gas and natural gas liquids sales |
$109,337 |
$48,355 |
$354,223 |
$177,422 |
|||||
| Other |
128 |
77 |
755 |
24 |
|||||
| Total revenues |
109,465 |
48,432 |
354,978 |
177,446 |
|||||
| Operating expenses |
|||||||||
| Lease operating |
11,767 |
8,707 |
42,491 |
41,011 |
|||||
| Workover |
1,082 |
881 |
2,160 |
2,638 |
|||||
| Marketing, gathering, transportation and other |
5,061 |
4,274 |
17,567 |
17,491 |
|||||
| Production and ad valorem taxes |
5,260 |
(659) |
17,824 |
4,400 |
|||||
| General and administrative |
8,657 |
6,142 |
27,469 |
21,434 |
|||||
| Depletion, depreciation and amortization |
42,889 |
23,246 |
137,068 |
91,353 |
|||||
| Accretion |
296 |
182 |
952 |
862 |
|||||
| Impairments |
1,119 |
41,806 |
1,125 |
664,438 |
|||||
| Total operating expenses |
76,131 |
84,579 |
246,656 |
843,627 |
|||||
| Other income (expenses) |
|||||||||
| Interest expense |
(25,846) |
(14,931) |
(99,471) |
(49,387) |
|||||
| Gain (loss) on derivative instruments |
(6,963) |
10,962 |
814 |
29,267 |
|||||
| Other income (expenses) |
791 |
(206) |
912 |
(498) |
|||||
| Total other expenses |
(32,018) |
(4,175) |
(97,745) |
(20,618) |
|||||
| Net income (loss) including noncontrolling interests |
1,316 |
(40,322) |
10,577 |
(686,799) |
|||||
| Less: Net income applicable to noncontrolling interests |
- |
- |
- |
17 |
|||||
| Net income (loss) applicable to controlling interests |
$ 1,316 |
$(40,322) |
$ 10,577 |
$(686,782) |
|||||
| Sabine Oil & Gas LLC |
|||||||
| ADJUSTED EBITDA (unaudited) |
|||||||
| Three Months Ended |
Year Ended |
||||||
| December 31, |
December 31, |
||||||
| 2013 |
2012 |
2013 |
2012 |
||||
| (in thousands) |
|||||||
| Net income (loss) applicable to controlling interests |
$ 1,316 |
$(40,322) |
$ 10,577 |
$(686,782) |
|||
| Reconciliation to derive Adjusted EBITDA (1): |
|||||||
| Interest, net of capitalized interest |
25,846 |
14,931 |
99,471 |
49,387 |
|||
| Depletion, depreciation and amortization |
42,889 |
23,246 |
137,068 |
91,353 |
|||
| Impairments |
1,119 |
41,806 |
1,125 |
664,438 |
|||
| Other |
1,738 |
266 |
1,739 |
599 |
|||
| Amortization of deferred rent |
(27) |
(133) |
(249) |
(532) |
|||
| Accretion |
296 |
182 |
952 |
862 |
|||
| Loss on derivative instruments |
19,482 |
10,721 |
46,545 |
75,734 |
|||
| Option premium amortization |
(295) |
(14) |
(1,171) |
(56) |
|||
| Net income applicable to noncontrolling interests |
- |
- |
- |
(17) |
|||
| Adjusted EBITDA (1) |
$ 92,364 |
$ 50,683 |
$ 296,057 |
$ 194,986 |
|||
| Pro forma adjustments (2) |
(6,518) |
16,956 |
(37,476) |
73,712 |
|||
| Adjusted Pro forma EBITDA (1) (2) |
$ 85,846 |
$ 67,639 |
$ 258,581 |
$ 268,698 |
|||
| 1. |
Adjusted EBITDA and Adjusted Pro Forma EBITDA are non-GAAP financial measures. We use Adjusted EBITDA and Adjusted Pro Forma EBITDA as supplemental financial measures. These measures are calculated in a manner consistent with the indenture governing our 2017 Notes and our senior secured revolving credit facility as net income (loss) before interest, taxes, depreciation and amortization, as further adjusted to include other adjustments, such as impairment, accretion expense, non-cash hedge gains or losses and other non-cash charges and pro forma adjustments for acquisitions and divestitures that may not be comparable to similarly titled measures, employed by other companies. Adjusted EBITDA and Adjusted Pro Forma EBITDA should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. Adjusted EBITDA and Adjusted Pro Forma EBITDA provide no information regarding a company's capital structure, borrowings, interest costs, capital expenditures, and working capital movement or tax position. Adjusted EBITDA and Adjusted Pro Forma EBITDA do not represent funds available for discretionary use because those funds are required for debt service, capital expenditures, working capital, and other commitments and obligations. However, our management team believes that these measures are useful to an investor in evaluating our company because these measures: |
| • |
are widely used by investors in the natural gas and oil industry to measure a company's operating performance without regard to items excluded from the calculation of such term, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired, among other factors; |
| • |
help investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our capital structure from our operating structure; and |
| • |
are used by our management team for various purposes, including strategic planning and forecasting. Adjusted EBITDA is also the basis for covenants under the indenture governing our 2017 Notes regulating future debt issuance and restricted payments and pursuant to maintenance covenants under our senior secured revolving credit facility. |
| 2. |
Pro forma adjustments reflect the impact of net revenues and expenses of our recent acquisitions and divestment as they have occurred as of the beginning of the fiscal year of acquisitions or divesture. |
| Sabine Oil & Gas LLC |
|||
| Selected Balance Sheet Data (unaudited) |
|||
| December 31, |
December 31, |
||
| 2013 |
2012 |
||
| (in thousands) |
|||
| Assets: |
|||
| Total current assets |
$ 93,921 |
$ 98,371 |
|
| Total property plant and equipment, net |
1,380,042 |
1,256,210 |
|
| Other non-current assets |
204,756 |
205,978 |
|
| Total assets |
$ 1,678,719 |
$ 1,560,559 |
|
| Liabilities and member's capital: |
|||
| Total current liabilities |
$ 209,327 |
$ 85,920 |
|
| Credit facility |
250,000 |
405,000 |
|
| Term loan |
645,272 |
490,127 |
|
| Senior notes |
348,040 |
347,411 |
|
| Other non-current liabilities |
25,070 |
31,668 |
|
| Total Liabilities |
1,477,709 |
1,360,126 |
|
| Member's capital |
201,010 |
200,433 |
|
| Total Liabilities and member's capital |
$ 1,678,719 |
$ 1,560,559 |
|
| Selected Cash Flow Data (unaudited) |
|||
| Year Ended December 31, |
|||
| 2013 |
2012 |
||
| (in thousands) |
|||
| Net cash provided by operating activities |
$ 217,198 |
$ 144,166 |
|
| Net cash used in investing activities |
(193,809) |
(687,385) |
|
| Net cash provided by (used in) financing activities |
(17,761) |
545,106 |
|
| Net increase in cash and cash equivalents |
5,628 |
1,887 |
|
| Cash and cash equivalents, beginning of period |
6,193 |
4,306 |
|
| Cash and cash equivalents, end of period |
$ 11,821 |
$ 6,193 |
|
SOURCE Sabine Oil & Gas LLC
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