Sabine Oil & Gas LLC Announces Third Quarter 2013 Financial and Operational Results
HOUSTON, Nov. 20, 2013 /PRNewswire/ -- Sabine Oil & Gas LLC today reported its unaudited third quarter 2013 financial and operating results.
(Logo: http://photos.prnewswire.com/prnh/20130325/MM83201LOGO)
Key Results:
- Total production of 184 MMcfe/d represents a 12% increase over the prior quarter and a 48% increase over the third quarter of 2012. Record oil production of 4,161 Bbl/d represents a 26% increase over the prior quarter and a 445% increase over the third quarter of 2012.
- Oil and natural gas liquids production volumes comprised 57% of revenues and 31% of total production for the quarter.
- Adjusted EBITDA for the third quarter of 2013 was $81 million, representing a 25% increase over the prior quarter.
- Subsequent to the end of the third quarter, the borrowing base under our revolving credit facility was increased from $550 million to $675 million, a 23% increase.
- In the Eagle Ford Shale, the Company completed its first four pad-wells in the Sugarkane block in southern DeWitt County. The wells produced at an average rate per well of over 2,200 BOEPD for a 30-day period ("IP30"), with 16% oil and 57% liquids.
- Also in the Eagle Ford Shale, the Company completed its sixth well in northern DeWitt County (South Shiner Area), which had an IP30 of over 1,400 BOEPD, with 50% oil and 79% liquids. The prior five wells (completed in the first and second quarters of 2013) had an average IP30 of approximately 1,460 BOEPD, with 46% oil and 76% liquids.
- In the Eagle Ford in North Lavaca County (the North Shiner Area) , the Company began flowing back a well subsequent to quarter end with encouraging results. The well reached a 24-hour production rate of 1,398 BOEPD, with 75% oil and 92% liquids.
- During the third quarter, the Company entered into a joint development agreement in the Eagle Ford Shale in northern DeWitt and southern Lavaca Counties to earn up to 5,730 net acres by drilling and completing two wells by April of 2014.
- In North Texas, the Company completed three Granite Wash wells which had an average IP30 of over 1,470 BOEPD, with 61% oil and 82% liquids.
- In East Texas, the Company completed one Cotton Valley horizontal well during the quarter and one subsequent to quarter-end, for a total of four wells in 2013 to date. The four 2013 wells had an average IP30 of 11.1 MMcfe/d, with 29% liquids. The Company is encouraged by the strong economics of these and other recent Cotton Valley wells and our extensive drilling inventory in the play.
- Through the end of the third quarter, the Company has completed seven of the fifteen Haynesville Shale wells covered under the joint development agreement that was executed in the first quarter of 2013. The seven 2013 wells had an average IP30 of over 9.1 MMcf/d. The remaining eight wells are scheduled to be completed in 2014.
Commenting on the quarter's results, Sabine's Chief Executive Officer David Sambrooks noted "In the third quarter Sabine delivered excellent well results in all of our major plays – The Eagle Ford, Granite Wash, Cotton Valley and the Haynesville. Our well results drove impressive statistics for the quarter: 49% production growth over third quarter 2012, an increase in liquids production to 31% of total production compared to 14% in third quarter 2012 and a 25% increase in EBITDA compared to second quarter 2013. In addition to our production and EBITDA growth we added substantial inventory in the Eagle Ford during the quarter through the addition of approximately 8,000 acres contiguous to our current holdings, bringing our total Eagle Ford acreage position to approximately 30,000 acres."
Results of the Third Quarter 2013
Production volumes during the three months ended September 30, 2013 were 16.9 Bcfe, an increase of 5.46 Bcfe or approximately 48% from third 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 natural gas, oil and natural gas liquids increased from $41.6 million in the third quarter of 2012 to $96 million in the third quarter of 2013, an increase of 131%. This increase of $54.4 million was a result of an increase in average prices per Mcfe of 56%, coupled with an increase in production of 48%.
During the third quarter of 2013, the Company's realized average price for natural gas including hedges was $4.75 per Mcf, or $1.20 per Mcf higher than the Company's unhedged realized average price of $3.55 per Mcf. The Company's realized average price of oil including hedges was $95.49 per Bbl, or $7.03 per Bbl lower than the Company's unhedged realized average price of $102.52per Bbl. In the third quarter of 2013, our hedged volumes were approximately 78% of both our natural gas and oil volumes. Effective May 8th 2013, the Company elected to de-designate all commodity contracts that were previously designated as cash flow hedges and elected to discontinue hedge accounting prospectively. As a result of discontinuing hedge accounting, the Company recognized the settlements on derivative instruments for the third quarter of 2013 of $11.3 million under "Gain (loss) on derivative instruments" in the Other income (expense) section. In the third quarter of 2012, our hedged volumes were approximately 73% and 46% of our natural gas and oil volumes, respectively, which resulted in a realized gain on such derivative instruments of $26.4 million.
Lease operating expenses increased from $9.0 million in the third quarter of 2012 to $11.0 million in the third quarter of 2013, an increase of 22%. The increase in lease operating expense of $2.0 million is primarily due to our 2012 acquired properties with offsetting decreases due to the sale of our Rockies properties during the second quarter of 2012. Lease operating expenses decreased from $0.79 per Mcfe in the third quarter of 2012 to $0.65 per Mcfe in the third quarter of 2013. The decrease of $0.14 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 decreased from $4.4 million in the third quarter of 2012 to $4.3 million in the third quarter of 2013, a decrease of 3%. Marketing, gathering, transportation and other expenses decreased on a per unit basis from $0.39 per Mcfe in the third quarter of 2012 to $0.25 per Mcfe in the third quarter of 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 volumes from our 2013 completions in East Texas, and the sale of the Rockies assets.
Production and ad valorem taxes increased from $2.0 million in the third quarter of 2012 to $5.0 million in the third quarter of 2013, an increase of 153%. Production and ad valorem taxes increased on a per unit basis from $0.17 per Mcfe in the third quarter of 2012 to $0.30 per Mcfe in the third quarter of 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, which was offset by a slight decrease in our East Texas production. The Company also expects continuous volatility with production taxes as a result of timing of approval for high cost gas tax exemptions. Production taxes as a percentage of natural gas and oil revenues were 5% for the both the third quarter of 2013 and 2012.
General and administrative expenses increased from $5.1 million in the third quarter of 2012 to $5.9 million in the third quarter of 2013, an increase of $0.8 million, or 16%. This increase is primarily related to an increase in overhead and internal costs associated with our expanding business. General and administrative expenses decreased from $0.44 per Mcfe in the third quarter of 2012 to $0.35 per Mcfe in the third quarter of 2013.
DD&A increased from $20.3 million in the third quarter of 2012 to $37.5 million in the third quarter of 2013, an increase of $17.2 million. Depletion, depreciation, and amortization increased from $1.77 per Mcfe in the third quarter of 2012 to $2.22 per Mcfe in the third quarter of 2013, or an increase of 25%. Increase in the DD&A rate is primarily the result of our December 2012 acquisitions and increased production.
In the third quarter of 2012, there were non-cash impairment charges related to oil and natural gas properties of $233.5 million and impairments related to the write-down of carrying value of certain sizes of casing inventory of $0.4 million. There were no material impairments recognized in the third quarter of 2013 as a result of a favorable change in the average unweighted first day of the month pricing for the 12 months ended September 30, 2012 of $2.83 per MMbtu versus $3.60 per MMbtu as of September 30, 2013 as well as favorable performance from our 2013 development activities.
Interest expense increased from $11.4 million for the third quarter of 2012 to $25.3 million for the third quarter of 2013, an increase of $13.9 million, primarily as a result of the Term Loan. Additionally, as required under GAAP, we capitalized $3.2 million and $1.0 million of interest expense for the three months ended September 30, 2013 and 2012, respectively.
Net loss on derivative contracts was $5.3 million and $7.5 million for the third 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 nine months ended September 30, 2013
Production volumes during the nine months ended September 30, 2013 were 44.4 Bcfe, an increase 6.7 Bcfe or approximately 18% from the nine months ended September 30, 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, offset lower East Texas volumes and sale of the Rockies' assets.
Revenues from production of natural gas, oil and natural gas liquids increased from $129 million in the first nine months of 2012 to $244.9 million in the first nine months of 2013, an increase of 90%. This increase of $115.8 million was a result of an increase in average prices per Mcfe of 61% coupled with an increase in production of 18%.
During the nine months ended September 30, 2013, the Company's realized average price for natural gas including hedges was $4.88 per Mcf, or $1.21 per Mcf higher than the Company's unhedged realized average price of $3.67 per Mcf. The Company's realized average price of oil including hedges was $92.37 per Bbl, or $4.11 per Bbl lower than the Company's unhedged realized average price of $96.48 per Bbl. In the first nine months of 2013, our hedged volumes were approximately 85% and 68% of our natural gas and oil volumes, respectively. Effective May 8th 2013, the Company elected to de-designate all commodity contracts that were previously designated as cash flow hedges and elected to discontinue hedge accounting prospectively. As a result of discontinuing hedge accounting, the Company recognized the settlements on derivative instruments from January 2013 to May of 2013 of $20.2 million under "Gain on derivative instruments" in the revenue section and recorded settlements on derivative instruments from June 2013 to September 2013 of $13.8 million under "Gain (loss) on derivative instruments" in the Other income (expense) section. In the first nine months of 2012, our hedged volumes were approximately 66% and 45% of our natural gas and oil volumes, respectively, which resulted in a realized gain on such derivative instruments of $83.2 million.
Lease operating expenses decreased from $32.3 million in the first nine months of 2012 to $30.7 million in the first nine months of 2013, a decrease of 5%. The decrease in lease operating expense of $1.6 million is primarily due to $3.1 million of one-time compliance and regulatory costs in the first nine months of 2012 applicable to our 2011 property acquisitions and the sale of our Rockies properties in the second quarter of 2012, with offsetting increases due to our December 2012 acquired properties. Lease operating expenses decreased from $0.86 per Mcfe in the first nine months of 2012 to $0.69 per Mcfe in the first nine months of 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 decreased from $13.2 million in the first nine months of 2012 to $12.5 million in the first nine months of 2013, a decrease of 5%. Marketing, gathering, transportation and other expenses decreased on a per unit basis from $0.35 per Mcfe in the first nine months of 2012 to $0.28 per Mcfe in the first nine months of 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 volumes from our 2013 completions in East, and the sale of the Rockies assets.
Production and ad valorem taxes increased from $5.1 million in the first nine months of 2012 to $12.6 million in the first nine months of 2013, an increase of 148%. Production and ad valorem taxes increased on a per unit basis from $0.13 per Mcfe in the first nine months of 2012 to $0.28 per Mcfe in the first nine months of 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, which was offset by a slight decrease in our East Texas production. The Company also expects continuous volatility with production taxes as a result of timing of approval for high cost gas tax exemptions. Production taxes as a percentage of natural gas and oil revenues were 5% and 4% for the first nine months of 2013 and 2012, respectively.
General and administrative expenses increased from $15.3 million in the first nine months of 2012 to $18.8 million in the first nine months of 2013, an increase of $3.5 million, or 23%, 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 increased from $0.41 per Mcfe in the first nine months of 2012 to $0.42 per Mcfe in the first nine months of 2013.
DD&A increased from $71.6 million in the first nine months of 2012 to $97.7 million in the first nine months of 2013, an increase of $26.1 million. Depletion, depreciation, and amortization increased from $1.90 per Mcfe in the first nine months of 2012 to $2.20 per Mcfe in the first nine months of 2013, or an increase of 16%. Increase in the DD&A rate is primarily the result of our December 2012 acquisitions and increased production.
In the first nine months of 2012, there were non-cash impairment charges related to oil and natural gas properties of $654.0 million, impairment charges for gas gathering and processing equipment of $11.5 million and impairment charges for other assets of $0.7 million. In the first nine months of 2013, there were non-cash impairment charges related to oil and natural gas properties of $12.7 million. These 2013 impairment charges were recognized in the first quarter of 2013. There were no material impairments recognized in the second and third quarters of 2013 as a result of favorable average unweighted first day of the month pricing for the 12 months ended September 30, 2012 of $2.83 per MMbtu versus $3.60 per MMbtu as of September 30, 2013 as well as favorable performance from our 2013 development activities.
Interest expense increased from $34.5 million for the first nine months of 2012 to $73.6 million for the first nine months of 2013, an increase of $39.1 million, primarily as a result of the Term Loan. Additionally, as required under GAAP, we capitalized $10.1 million and $3.2 million of interest expense for the first nine months of 2013 and 2012, respectively.
During the first nine months of 2013, net gain on derivatives contracts of $14.0 million compared to a net loss on derivatives of $11.4 million for the first nine months of 2012. The amount of future gain or loss recognized on derivative instruments is dependent upon future commodity prices.
The Company made a one- time payment to Nabors Industries Ltd. ("Nabors") in the amount of $10 million in order to satisfy Sabine Oil & Gas Holdings LLC's payment obligation to Nabors in conjunction with its equity interest sale in December 2012.
Debt/Liquidity
As of September 30, 2013, our borrowing base under our First Lien Credit Facility was $550 million, and we had an outstanding balance of approximately $348.7 million, net of cash on hand. As of November 7, 2013, our borrowing base has been re-determined and increased from $550 million to $675 million. After giving the effect to our re-determined borrowing base, we were able to incur approximately $310 million of secured indebtedness under our credit facility. As of November 20, 2013, the Company has drawn an additional $37 million and repaid $3 million and had an outstanding balance of $399 million.
Capital Expenditures
As of September 30, the Company has incurred capital expenditures of approximately $293 million, of which $249 million was incurred on drilling and completion activities and $44 million on leasing expenditures and other items. For the fourth quarter of 2013, the Company expects to expend approximately $125 million on drilling and completion activities and approximately $27 million on leasing and other activities.
Hedging:
For the remainder of 2013 (October - December), the Company has NYMEX hedges in place on approximately 124,300 MMbtu/d of its projected natural gas production, at a weighted average price of $4.81/ MMBtu, and 4,000 Bbl/day of oil production at a weighted average price of $95.83/bbl. For the calendar year of 2014, the Company has hedge contracts in place for 115,000 MMbtu/d of its projected natural gas production at a weighted average price of $4.31/MMbtu, and 3,800 Bbl/day of oil production at a weighted average price of $91.98/Bbl. For the calendar year of 2015, the Company has hedge contracts in place for 1,000 Bbl/d of oil production at $89.50/Bbl.
Sabine will host a conference call at 9:30 a.m. Central Time (10:30 a.m. Eastern Time) on November 20, 2013. To participate in the call, dial 1-888-606-5934 and international participants should dial 1-517-308-9375. The participant passcode is SABINE2013. A replay of the conference call will be available through the Company's website at http://www.sabineoil.com for the third quarter ended September 30, 2013.
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 Sand and Haynesville Shale in East Texas, and the Granite Wash and Cleveland Sand 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 and subsequent quarterly reports posted at www.sabineoil.com and other press releases.
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 |
Nine Months Ended |
|||||||
| September 30, |
September 30, |
|||||||
| 2013 |
2012 |
2013 |
2012 |
|||||
| Oil, natural gas and NGL sales by product (in thousands): |
||||||||
| Natural gas |
$ 41,378 |
$ 27,387 |
$ 115,495 |
$ 79,650 |
||||
| Oil |
39,250 |
6,934 |
90,404 |
21,059 |
||||
| NGL |
15,379 |
7,269 |
38,987 |
28,358 |
||||
| Total |
$ 96,007 |
$ 41,590 |
$ 244,886 |
$ 129,067 |
||||
| Production data: |
||||||||
| Natural gas (Bcf) |
11.66 |
9.81 |
31.45 |
32.20 |
||||
| Oil (MBbl) |
382.85 |
70.70 |
937.02 |
215.21 |
||||
| NGL (MBbl) |
489.74 |
200.88 |
1,214.54 |
689.95 |
||||
| Combined (Bcfe)(1) |
16.90 |
11.44 |
44.36 |
37.63 |
||||
| Average prices before effects of economic hedges (2): |
||||||||
| Natural gas (per Mcf) |
$3.55 |
$2.79 |
$3.67 |
$2.47 |
||||
| Oil (per Bbl) |
$102.52 |
$98.08 |
$96.48 |
$97.85 |
||||
| NGL (per Bbl) |
$31.40 |
$36.19 |
$32.10 |
$41.10 |
||||
| Combined (per Mcfe)(1) |
$5.68 |
$3.64 |
$5.52 |
$3.43 |
||||
| Average realized prices after effects of economic hedges (2): |
||||||||
| Natural gas (per Mcf) |
$4.75 |
$5.48 |
$4.88 |
$5.06 |
||||
| Oil (per Bbl) |
$95.49 |
$98.08 |
$92.37 |
$97.85 |
||||
| NGL (per Bbl) |
$31.40 |
$36.19 |
$32.10 |
$41.10 |
||||
| Combined (per Mcfe)(1) |
$6.35 |
$5.94 |
$6.29 |
$5.64 |
||||
| Average costs (per Mcfe)(1): |
||||||||
| Lease operating |
$0.65 |
$0.79 |
$0.69 |
$0.86 |
||||
| Workover |
$0.05 |
$0.04 |
$0.02 |
$0.05 |
||||
| Marketing, gathering, transportation and other |
$0.25 |
$0.39 |
$0.28 |
$0.35 |
||||
| Production and ad valorem taxes |
$0.30 |
$0.17 |
$0.28 |
$0.13 |
||||
| General and administrative |
$0.35 |
$0.44 |
$0.42 |
$0.41 |
||||
| Depletion, depreciation and amortization |
$2.22 |
$1.77 |
$2.20 |
$1.90 |
||||
| (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 cash settlements on commodity hedging transactions. Our calculation of such effects includes gains or losses on cash settlements for commodity derivatives. |
| Sabine Oil & Gas LLC |
|||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
|||||||||
| Three Months Ended September 30, |
Nine Months Ended June 30, |
||||||||
| 2013 |
2012 |
2013 |
2012 |
||||||
| (in thousands) |
|||||||||
| Revenues |
|||||||||
| Oil, natural gas and natural gas liquids sales |
$96,007 |
$41,590 |
$244,886 |
$129,067 |
|||||
| Gain on derivative instruments |
- |
27,060 |
20,209 |
85,135 |
|||||
| Other |
253 |
48 |
627 |
(53) |
|||||
| Total revenues |
$96,260 |
$68,698 |
$265,722 |
$214,149 |
|||||
| Operating expenses |
|||||||||
| Lease operating |
11,017 |
9,019 |
30,724 |
32,304 |
|||||
| Workover |
817 |
498 |
1,078 |
1,757 |
|||||
| Marketing, gathering, transportation and other |
4,286 |
4,429 |
12,506 |
13,217 |
|||||
| Production and ad valorem taxes |
4,996 |
1,976 |
12,564 |
5,059 |
|||||
| General and administrative |
5,882 |
5,058 |
18,812 |
15,292 |
|||||
| Depletion, depreciation and amortization |
37,518 |
20,296 |
97,695 |
71,592 |
|||||
| Accretion |
227 |
199 |
655 |
680 |
|||||
| Impairments |
2 |
233,923 |
12,725 |
666,223 |
|||||
| Loss on sale of assets |
- |
9,880 |
- |
9,880 |
|||||
| Total operating expenses |
64,745 |
285,278 |
186,759 |
816,004 |
|||||
| Other income (expenses) |
|||||||||
| Interest expense |
(25,329) |
(11,396) |
(73,625) |
(34,456) |
|||||
| Gain (loss) on derivative instruments |
5,932 |
(8,212) |
27,744 |
(13,340) |
|||||
| Other income (expenses) |
82 |
16 |
(9,879) |
(292) |
|||||
| Total other expenses |
(19,315) |
(19,592) |
(55,760) |
(48,088) |
|||||
| Net income (loss) including noncontrolling interests |
12,200 |
(236,172) |
23,203 |
(649,943) |
|||||
| Less: Net income (loss) applicable to noncontrolling interests |
- |
(14) |
- |
17 |
|||||
| Net income (loss) applicable to controlling interests |
$ 12,200 |
$ (236,186) |
$ 23,203 |
$ (649,926) |
|||||
| Sabine Oil & Gas LLC |
||||||||
| ADJUSTED EBITDA (unaudited) |
||||||||
| Three Months Ended |
Nine Months Ended |
|||||||
| September 30, |
September 30, |
|||||||
| 2013 |
2012 |
2013 |
2012 |
|||||
| (in thousands) |
||||||||
| Net income (loss) applicable to controlling interests |
$ 12,200 |
$ (236,186) |
$ 23,203 |
$ (649,926) |
||||
| Reconciliation to derive Adjusted EBITDA (1): |
||||||||
| Interest, net of capitalized interest |
25,329 |
11,396 |
73,625 |
34,456 |
||||
| Depletion, depreciation and amortization |
37,518 |
20,296 |
97,695 |
71,592 |
||||
| Impairments |
2 |
233,923 |
12,725 |
666,223 |
||||
| Other (2) |
- |
- |
10,001 |
333 |
||||
| Rent expense and amortization of deferred rent |
(27) |
(133) |
(222) |
(399) |
||||
| Accretion |
227 |
199 |
655 |
680 |
||||
| Gain on derivative instruments |
(5,654) |
(18,834) |
(47,094) |
(71,753) |
||||
| Option premium amortization |
(278) |
(14) |
(859) |
(42) |
||||
| Derivative instruments settlements received |
11,271 |
26,362 |
33,981 |
83,235 |
||||
| Net loss (income) applicable to noncontrolling interests |
- |
14 |
- |
(17) |
||||
| Loss of sale of assets |
- |
9,880 |
- |
9,880 |
||||
| Adjusted EBITDA (1) |
$ 80,588 |
$ 46,903 |
$ 203,710 |
$ 144,262 |
||||
| Pro forma adjustments (3) |
- |
20,375 |
- |
56,756 |
||||
| Adjusted Pro forma EBITDA (1) (3) |
$ 80,588 |
$ 67,278 |
$ 203,710 |
$ 201,018 |
||||
| 1. |
Adjusted EBITDA is a non-GAAP financial measure. We use Adjusted EBITDA as a supplemental financial measure. Adjusted EBITDA is 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 is a measure of performance calculated in accordance with GAAP. Adjusted 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 provides no information regarding a company's capital structure, borrowings, interest costs, capital expenditures, and working capital movement or tax position. Adjusted 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 Adjusted EBITDA is 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 |
|
| • |
is 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. |
The Company was requested by Holdings to make a distribution of $10 million to Nabors, in June 2013 which is reflected in "Other income (expense)" in the Consolidated statement of Operations. |
|
| 3. |
Pro forma adjustments reflect the impact of net revenues and operating expenses of acquisitions as they have occurred as of the beginning of the fiscal year of acquisitions. |
|
| Sabine Oil & Gas LLC |
|||||
| Selected Balance Sheet Data (unaudited) |
|||||
| September 30, |
December 31, |
||||
| 2013 |
2012 |
||||
| (in thousands) |
|||||
| Assets: |
|||||
| Total current assets |
$ 119,765 |
$ 98,371 |
|||
| Total property plant and equipment, net |
1,529,766 |
1,345,626 |
|||
| Other non-current assets |
208,608 |
211,058 |
|||
| Total assets |
$ 1,858,139 |
$ 1,655,055 |
|||
| Liabilities and member's capital: |
|||||
| Total current liabilities |
$ 198,568 |
$ 85,920 |
|||
| Credit facility |
365,000 |
405,000 |
|||
| Term loan |
644,861 |
490,127 |
|||
| Senior notes |
347,882 |
347,411 |
|||
| Other non-current liabilities |
28,952 |
36,748 |
|||
| Total Liabilities |
1,585,263 |
1,365,206 |
|||
| Member's capital |
272,876 |
289,849 |
|||
| Total Liabilities and member's capital |
$ 1,858,139 |
$ 1,655,055 |
|||
| Selected Cash Flow Data |
|||||
| Nine Months Ended September 30, |
|||||
| 2013 |
2012 |
||||
| (in thousands) |
|||||
| Net cash provided by operating activities |
$ 139,771 |
$ 106,973 |
|||
| Net cash used in investing activities |
(237,531) |
(88,762) |
|||
| Net cash provided by (used in) financing activities |
107,845 |
(20,183) |
|||
| Net increase (decrease) in cash and cash equivalents |
10,085 |
(1,972) |
|||
| Cash and cash equivalents, beginning of period |
6,193 |
4,306 |
|||
| Cash and cash equivalents, end of period |
$ 16,278 |
$ 2,334 |
|||
SOURCE Sabine Oil & Gas LLC
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