2014

Cross Border Announces First Quarter 2012 Financial Results

SAN ANTONIO, May 16, 2012 /PRNewswire/ -- Cross Border Resources, Inc. (OTCQX: XBOR), ("Cross Border" or "the Company"), a San Antonio-based oil and gas exploration and production company, today announced its financial results for the first quarter ended March 31, 2012.

(Logo: http://photos.prnewswire.com/prnh/20110523/AQ07208LOGO )

First Quarter 2012 Financial and Operating Highlights

  • Oil and gas revenues increased by 128% year-over-year to $3.6 million, up from $1.6 million in the first quarter of 2011.
  • Production volume totaled 41,477 barrels of oil equivalent ("boe"), an increase of 91% compared to 21,772 boe in the first quarter of 2011.
  • Average daily production sold during the first quarter of 2012 was 456 barrels of oil equivalent per day ("boepd") compared to 242 boepd for the first quarter of 2011. The daily average sales rate for March 2012 was 750 boepd.
  • Adjusted EBITDA increased 277.4% year-over-year to $2.0 million, up from $0.5 million in the first quarter of 2011.

Results of Operations for the Quarter Ended March 31, 2012

Revenues

Oil and gas revenues for the quarter ended March 31, 2012 were $3.6 million as compared to $1.6 million for the quarter ended March 31, 2011. The increase of $2.0 million, or 128%, was primarily due to increased production from wells added year-over-year, and a year-over-year increase in the average prices for crude oil.

Sales volume totaled 41,477 boe for the quarter, an increase of 91% compared to 21,772 boe for the same period of 2011. The increase was primarily driven by increased production from wells added period-over-period. Average daily sales for the quarter were 456 boepd, compared to 242 boepd for the same period of 2011. Cross Border's definition of daily sales represents only what volumes were sold in each respective year and does not account for stored inventory.

During the first three months of 2012, we participated in seven gross (one net) new wells.  As of April 30, 2012, three of the seven new wells had been placed on production, while four were awaiting completion. Additionally, three of the four wells that began during 2011 and were awaiting completion at year-end 2011 were successfully completed during the first quarter of 2012.

Cross Border's average realized crude oil sales price for the quarter ended March 31, 2012 was $98.46 per barrel, compared to $89.19 in the same period of 2011. The Company's average realized natural gas sales price for the first quarter of 2012 was $5.86 per 1,000 cubic feet ("mcf"), compared to $6.22 per mcf for the same period of 2011.

Income from Operations

Operating income for the quarter ended March 31, 2012 amounted to $1.4 million as compared to an operating loss of $143,079 for the prior-year quarter. Operating expenses for the quarter ended March 31, 2012 totaled $2.2 million, up 25.5% from $1.7 million in the quarter ended March 31, 2011. The increase, primarily a result of costs related to additional wells brought online year-over-year, was partially offset by a 23.0% decrease in general and administrative expenses.  

Net Income

Net income for the quarter ended March 31, 2012 was $658,145 as compared to a net loss of $154,916 for the same period in 2011. Net income per diluted share was $0.04 for the first quarter of 2012.   

Adjusted EBITDA

Adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") totaled $2.0 million, or $0.13 per fully diluted share, an increase of 277.4% compared to adjusted EBITDA of $0.5 million in the first quarter of 2011.

Adjusted EBITDA, a non-GAAP performance measure, is defined as net earnings before interest, income taxes, depreciation, depletion, amortization, abandonment and mark-to-market gains/losses on derivatives. Adjusted EBITDA does not represent, and should not be considered an alternative to GAAP measurements, and Cross Border's calculations thereof may not be comparable to similarly titled measures reported by other companies. Cross Border's management does not view adjusted EBITDA in isolation and also uses other measurements, such as net earnings (loss) and revenues to measure operating performance. A complete reconciliation of EBITDA to GAAP accounting standards can be found in this press release under the financial table "Reconciliation to GAAP."

Liquidity and Capital Resources

As of March 31, 2012, the Company's current assets were $4.1 million and current liabilities were $3.3 million. Cash and cash equivalents totaled $70,412 as of March 31, 2012. The Company's shareholders' equity at March 31, 2012 was $18.2 million. The Company generated $2.1 million from operating activities for the three months ended March 31, 2012, compared to $3.3 million for the same period of 2011. The Company used $5.9 million for investing activities for the quarter ended March 31, 2012, compared to $4.4 million for the same period of 2011. The Company generated $3.3 million from financing activities for the quarter ended March 31, 2012, compared to $0.9 million for the same period of 2011. 

About Cross Border Resources

Information about the Company is available on its website, www.xbres.com.

Forward-Looking Statements

This news release contains forward-looking statements that are not historical facts and are subject to risks and uncertainties. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined, and assumptions of management. Forward-looking statements are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "aims", "potential", "goal", "objective", "prospective", and similar expressions or that events or conditions "will", "would", "may", "can", "could" or "should" occur. Information concerning oil or natural gas reserve estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed.

Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially include misinterpretation of data, inaccurate estimates of oil and natural gas reserves, the uncertainty of the requirements demanded by environmental agencies, the Company's ability to raise financing for operations, breach by parties with whom the Company has contracted, inability to maintain qualified employees or consultants because of compensation or other issues, competition for equipment, inability to obtain drilling permits, potential delays or obstacles in drilling operations and interpreting data, the likelihood that no commercial quantities of oil or gas are found or recoverable, and our ability to participate in the exploration of, and successful completion of development programs on all aforementioned prospects and leases. Additional information risks for the Company can be found in the Company's filings with the U.S. Securities and Exchange Commission.

Contacts:

Investor Relations Contact:
Jon Cunningham
RedChip Companies, Inc.
Tel: +1-800-733-2447, Ext. 107
jon@redchip.com
http://www.redchip.com

Company Contact:
Cross Border Resources, Inc.
Nancy Stephenson
nancy@xbres.com

 






Cross Border Resources, Inc.
Condensed Balance Sheets








March 31,


December 31,



2012


2011



(Unaudited)



ASSETS










Current Assets:





Cash and cash equivalents


$

70,412


$

472,967

Accounts receivable - production



2,905,931



1,184,544

Prepaid expenses and other current assets



1,061,393



1,808,944

Current tax asset



21,737



21,737

   Total Current Assets



4,059,473



3,488,192








 Property and Equipment







   Oil and gas properties (successful efforts method)



36,288,899



30,540,978

Less accumulated depletion and depreciation



(10,415,884)



(9,870,830)

   Net Property and Equipment



25,873,015



20,670,148








Other Assets:







   Other property and equipment, net of accumulated depreciation of

      $134,408 and  $ 126,473 in 2012 and 2011, respectively



88,053



95,988

   Deferred bond costs, net of accumulated amortization of $503,854 and

      $344,300 in 2012 and 2011, respectively



-



159,554

   Deferred bond discount, net of accumulated amortization of $186,560 and

      $127,483 in 2012 and 2011, respectively



-



59,077

   Deferred financing costs, net of accumulated amortization of $39,739 and

      $26,355 in 2012 and 2011, respectively



174,887



64,746

   Intangible assets, net of accumulated amortization of $247,020  and

      $197,616 in 2012 and 2011, respectively



1,729,137



1,778,541

   Goodwill



1,395,807



1,395,807

   Other



54,324



54,324

      Total Other Assets



3,442,208



3,608,037








TOTAL ASSETS


$

33,374,696


$

27,766,377









 






Cross Border Resources, Inc.
Condensed Balance Sheets








March 31,


December 31,



2012


2011



(Unaudited)



LIABILITIES AND STOCKHOLDERS' EQUITY










Current Liabilities:





Accounts payable - trade


$

1,081,770


$

103,759

Accounts payable - revenue distribution



236,915



143,215

Interest payable



63,173



112,659

Accrued expenses



614,094



418,290

Deferred revenues



-



32,479

Notes payable - current



764,278



764,278

Bonds payable – current portion



-



570,000

Creditors payable – current portion



300,000



186,761

Derivative liability – current portion



248,816



56,908

   Total Current Liabilities



3,309,046



2,388,349








Non-Current Liabilities:







Asset retirement obligations



1,191,149



1,186,260

Deferred income tax liability



21,737



21,737

Line of credit



9,300,000



2,381,000

Derivative liability, net of current portion



258,675



28,086

Bonds payable, net of current portion



-



2,825,000

Creditors payable, net of current portion



1,052,783



1,352,783

   Total Non-Current Liabilities



11,824,344



7,794,866








TOTAL LIABILITIES



15,133,390



10,183,215








STOCKHOLDERS' EQUITY







Common stock , $0.001 par value, 36,363,637 shares authorized,

   16,151,946 shares issued and outstanding at March 31, 2012 and

   December 31, 2011



16,152



16,152

Additional paid-in capital



32,617,689



32,617,690

Retained earnings (accumulated deficit)



(14,392,535)



(15,050,680)

TOTAL STOCKHOLDERS' EQUITY



18,241,306



17,583,162








TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

33,374,696


$

27,766,377









 






Cross Border Resources, Inc.
Condensed Statements of Operations
For the years ended March 31, 2012 and 2011

(unaudited)







2012


2011

REVENUES AND GAINS:






Oil and gas sales

$

3,573,746


$

1,566,813

Other


32,479



32,479

Total Revenues And Gains

$

3,606,225


$

1,599,292







OPERATING EXPENSES:






   Operating costs


688,535



153,063

   Production taxes


160,371



105,456

   Depreciation, depletion, and amortization


661,469



584,290

   Accretion expense


4,889



26,416

   General and administrative


671,070



873,146

Total Operating Expenses


2,186,334



1,742,371







GAIN (LOSS) FROM OPERATIONS


1,419,891



(143,079)







OTHER INCOME (EXPENSE):






   Bond issuance amortization


(159,553)



(4,664)

   Gain (loss) on derivatives


(473,913)



30,266

   Interest expense


(131,758)



(105,156)

   Miscellaneous other income (expense)


3,478



42,019

Total Other Income (Expense)


(761,746)



(37,535)







GAIN (LOSS) BEFORE INCOME TAXES


658,145



(180,614)







Current tax benefit (expense)


(222,869)



30,868

Deferred tax benefit (expense)


222,869



(5,170)

   Income tax benefit (expense)


-



25,698







NET INCOME (LOSS)

$

658,145


$

(154,916)







NET GAIN (LOSS) PER SHARE:






Basic and diluted

$

0.04


$

(0.01)

WEIGHTED AVERAGE SHARES OUTSTANDING:






Basic and diluted


16,151,946



12,476,945












Cross Border Resources, Inc.
Condensed Statements of Cash Flows
For the years ended March 31, 2012 and 2011

(unaudited)







Three Months Ended March 31,


2012


2011

CASH FLOWS FROM OPERATING ACTIVITIES






Net income (loss)

$

658,145


$

(154,916)

Adjustments to reconcile net income (loss) to cash used by operating activities:






Depreciation, depletion, amortization


661,469



571,694

Accretion


4,889



26,416

Share-based compensation


-



30,492

Amortization of debt discount and deferred financing costs


218,631



17,260

Changes in operating assets and liabilities:






Accounts receivable


(1,721,387)



(104,914)

Prepaid expenses and other current assets


698,382



3,492,054

Accounts payable


1,022,225



(321,381)

Derivative asset/liability


422,497



-

Accrued expenses


195,570



(201,175)

Deferred income tax


-



(25,698)

Deferred revenue


(32,479)



(32,479)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES


2,127,942



3,297,353







CASH FLOWS FROM INVESTING ACTIVITIES






Cash impact of merger, net


-



(62,797)

Capital expenditures - oil and gas properties


(5,867,736)



(4,285,954)

Capital expenditures - other assets


-



(45,146)

NET CASH USED IN INVESTING ACTIVITIES


(5,867,736)



(4,393,897)







CASH FLOWS FROM FINANCING ACTIVITIES






Net borrowings (payments) on line of credit


6,919,000



1,212,500

Proceeds from renewing notes


-



128,037

Repayments of bonds


(3,395,000)



(190,000)

Repayments to creditors


(186,761)



(266,760)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES


3,337,239



883,777







NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


(402,555)



(212,767)

Cash and cash equivalents, beginning of period


472,967



975,123

Cash and cash equivalents, end of period

$

70,412


$

762,356







SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:






Interest paid

$

101,154


$

174,341

Income taxes paid

$

-


$

-







 




Cross Border Resources, Inc.

Summary Operating Statistics

(Unaudited)





Three Months


Ended March 31,


2012


2011







Revenues & Sales






Oil & Gas Sales

$

3,573,746


$

1,566,813

Gain on Sale of Oil & Gas Properties


-



-

Total revenue

$

3,606,225


$

1,599,292

Net Income (Loss)

$

658,145


$

(154,916)







Net Income Per Share






Basic & Diluted

$

0.04


$

(0.01)

Average Number of Shares Outstanding


16,151,946



12,476,945

Basic & Diluted












Production Volumes






Oil (Bbls)


32,415



13,287

Gas (mcf)


54,370



50,911

  Total Barrels of Oil Equivalent (boe)


41,477



21,772







Average Barrels of Oil Equivalent per day (boepd)


456



242







Oil (Bbls)


78.2%



61.0%

Gas (mcf)


21.8%



39.0%

  Total Barrels of Oil Equivalent (boe)


100.0%



100.0%







Average sales price:






  Gas ($ per mcf)

$

5.86


$

6.22

  Oil ($ per bbl)

$

98.46


$

89.19

Average cost of production:






  Average production cost ($/boe)

$

15.62


$

7.25

  Average production taxes ($/boe)

$

3.86


$

5.45







Depletion Expense

$

531,000


$

545,741

Depletion Expense  ($/boe)

$

12.80


$

25.07







Non-GAAP Adjusted EBITDA

$

2,038,311


$

540,137

Non GAAP Adjusted EBITDA Per Share
     Basic & Diluted

$

0.13


$

0.04







 



Cross Border Resources, Inc.

Reconciliation to GAAP

(unaudited)




Three Months


Ended March 31,


2012


2011

Net income (loss)

$

658,145


$

(154,916)

Interest expense and other


291,311



109,820

Income tax expense (benefit)


-



(25,698)

Accretion of asset retirement obligations


4,889



26,416

Depreciation, depletion, and amortization


661,469



584,290

Stock-based compensation


-



30,492

Mark-to-market loss on commodity swaps


422,497



(30,267)






-

Adjusted EBITDA

$

2,038,311


$

540,137







 

SOURCE Cross Border Resources, Inc.



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