Triangle Petroleum Provides Financial Results And Operational Update For Third Quarter Fiscal Year 2016

Dec 08, 2015, 16:14 ET from Triangle Petroleum Corporation

DENVER, Dec. 8, 2015 /PRNewswire/ -- Triangle Petroleum Corporation ("Triangle" or the "Company") (NYSE MKT: TPLM) today provides an operational update and reports its third quarter fiscal year 2016 financial results for the three-month period ended October 31, 2015 ("Q3 fiscal 2016" or "Q3 FY 2016").

Third Quarter Highlights for Fiscal Year 2016 (ended October 31, 2015)

  • Quarterly production volumes of ~1,259 Mboe (13,685 Boepd)
  • Consolidated cash flow from operations (before working capital changes) of $31.4 million and operating cash flow of $62.2 million
  • Consolidated adjusted revenue of $93.0 million including $27.9 million of cash receipts from hedge settlements
  • Consolidated adjusted EBITDA of $38.5 million
  • $293.0 million of total liquidity as of October 31, 2015 (+2% q/q), including $36.3 million of cash on hand and available borrowing capacity on the Triangle USA Petroleum ("TUSA") and RockPile Energy Services ("RockPile") credit facilities
  • TUSA and RockPile reduced debt by $26 million, or ~4%, including the repurchase and retirement of $10 million of face value of TUSA 6.75% Senior Notes and a net reduction in the outstanding balance of the combined TUSA and RockPile credit facilities of $16 million
  • TUSA and RockPile in full compliance with all financial covenants of respective credit facilities
  • TUSA generated adjusted revenue of $70.7 million in Q3 FY 2016 including $27.9 million of cash receipts from hedge settlements as compared to $80.8 million of comparable revenue in Q3 FY 2015 (-13% y/y)
  • TUSA's pre-hedge oil price differential declined ~16% q/q to $4.14/Bbl
  • Completed 2 gross (1.7 net) operated wells, maintaining inventory of 18 gross (15.8 net) operated wells waiting on completion as of October 31, 2015
  • Latest completion design delivering 15%+ and 25%+ improvement in 60- and 90-day cumulative production, respectively, over analogue offset wells over a broad geographic area
  • TUSA's cash operating expenses (LOE, Gathering, Transportation and Processing, production taxes, and G&A) per unit were $17.14/Boe in Q3 FY 2016 compared to $19.64/Boe in Q2 FY 2016 (-13% q/q) and $20.65/Boe in Q3 FY 2015 (-17% y/y)
  • RockPile generated $25.8 million of stand-alone revenue in Q3 FY 2016 as compared to $143.5 million in Q3 FY 2015 (-82% y/y)
  • RockPile had -$4.0 million of stand-alone EBITDA during the quarter as efforts to reduce operating and input costs were offset by lower utilization
    • Completed 27 wells in the quarter including 25 for third parties and 2 for TUSA
  • RockPile's Q4 FY 2016 activity levels are trending well ahead of Q3 FY 2016 supported by increased activity in legacy basins and the establishment of operations in new markets including the Permian Basin where one completion crew is active and other ancillary services are being provided

Segment Financial Results

Q3 FY 2016 stand-alone revenue and Adjusted-EBITDA (reference accompanying "Reconciliation Tables" and "Use of Segment Information and Non-GAAP Measures" disclosures at end of release).

Q3 FY 2016

Revenue

y/y % Change

Adj.-EBITDA

y/y % Change

E&P

$42.9

-47%

$49.1

-14%

RockPile

$25.8

-82%

($4.0)

-112%

Total

$68.7

-69%

$45.1

-51%


*Dollars in U.S. millions


*E&P revenue does not include realized hedge settlements


*Exploration and production operating segment ("E&P") Adjusted-EBITDA includes all exploration and production related business lines, and does not include TPC (parent company) other revenues and expenses

 

Q3 Fiscal 2016 Summary Consolidated Statement of Operations (in thousands)




Quarter Ended October 31,



2014


2015

Revenues





Oil, natural gas and natural gas liquids sales


$    80,139


$        42,871

Oilfield services(a)


94,057


22,273

Total revenues


174,196


65,144

Expenses





Lease operating expenses


7,317


10,135

Gathering, transportation and processing


4,380


6,537

Production taxes


8,637


4,052

Depreciation and amortization(a)


32,471


28,396

Impairment of oil and natural gas properties


-


261,000

Accretion of asset retirement obligations


259


75

Oilfield services(a)


70,805


21,700

Corporate and other stock-based compensation


1,587


7,259

E&P stock-based compensation


94


390

RockPile stock-based compensation


146


117

Corporate and other cash G&A expenses


3,693


4,477

E&P cash G&A expenses


2,896


855

RockPile cash G&A expenses


7,043


5,336

   Other


1,334


-

Total operating expenses


140,662


350,329






Operating Income (Loss)


33,534


(285,185)






Interest expense, net


(8,984)


(9,877)

Amortization of deferred loan costs


(479)


(852)

Gain on extinguishment of debt


-


4,175

Realized commodity derivative gains (losses)


688


27,857

Unrealized commodity derivative gains (losses)


19,134


(21,044)

Equity investment income (loss)


393


450

Gain (loss) on equity investment derivatives


742


(1,118)

Other income(a)


(330)


(1,405)

Total other income (expense)


11,164


(1,814)






Income (Loss) Before Income Taxes


44,698


(286,999)

Income tax provision (benefit)(b)


19,300


-

Net Income (Loss) Attributable to Common Stockholders


$    25,398


$    (286,999)






Net Income (Loss) per Common Share





Basic


$        0.30


$          (3.80)

Diluted(c)


$        0.26


$          (3.80)






Adjusted Net Income (Loss) per Common Share(d)





Basic


$        0.17


$          (0.11)

Diluted(c)


$        0.15


$          (0.11)






Weighted Average Common Shares





Basic


85,242


75,588

Diluted


102,954


75,588


 (a) Includes intercompany eliminations; reference Note 3 – Segment Reporting in our Q3 fiscal year 2016 Form 10-Q for additional details

 (b) The effective tax rate for the quarter ended October 31, 2014 was approximately 43.2%. Income tax provision is a non-cash expense

 (c) Includes interest expense add-back of $0.9 million net of income taxes and amounts capitalized in Q3 fiscal 2015 related to outstanding convertible note

 (d) Reference accompanying Reconciliation Tables and Use of Segment Information and Non-GAAP Measures at end of press release for additional detail

 

Q3 Fiscal 2016 Summary Consolidated Balance Sheet (in thousands)



January 31, 2015


October 31, 2015

Assets




Cash and equivalents

$                 67,871


$                  36,250

Other current assets

241,638


80,490

Net property and equipment

1,261,006


641,483

Other noncurrent assets

84,355


92,235

Total assets

$            1,654,870


$                850,458





Liabilities and Stockholders' Equity




 Current liabilities

$               271,842


$                139,034

 TUSA credit facility

119,272


189,272

 RockPile credit facility

104,887


54,130

 TUSA 6.75% notes due July 2022

429,500


415,889

 5% convertible note

135,877


141,037

Other notes and mortgages payable

10,102


12,566

Other noncurrent liabilities

38,372


5,055

Total stockholders' equity

545,018


(106,525)

Total liabilities and stockholders' equity

$            1,654,870


$                850,458

 

Q3 Fiscal 2016 Production Volumes and Average Pre-Hedging Realized Prices



Quarter Ended October 31, 


2014


2015

Production volumes




Crude oil (Mbbls)

947


987

Natural gas (MMcf)

654


814

Natural gas liquids (Mbbls)

69


136

Total barrels of oil equivalent (Mboe)

1,125


1,259





Average daily production volumes (Boe/d)

12,228


13,685





Average realized prices:




Crude oil ($ per Bbl)

$    79.11


$    40.74

Natural gas ($ per Mcf)

$      4.59


$      2.51

Natural gas liquids ($ per Bbl)

$    32.24


$      4.52

Total average realized price ($ per Boe)

$    71.22


$    34.05

 

Use of Segment Information and Non-GAAP Measures



(1)

The Company often provides financial metrics for Triangle's segments of operation. Revenues for each segment are disclosed in notes to the financial statements contained in the Company's Form 10-K and Form 10-Q filings, but the sum of those stand-alone revenues differ from Triangle's consolidated revenues for the corresponding reporting period. Triangle's consolidated revenues would reflect segment revenues reduced for intercompany sales (i.e. for RockPile services to Triangle's E&P segment).




Triangle also believes that stand-alone segment revenue assists investors in measuring RockPile's performance as a stand-alone company without eliminating, on a consolidated basis, certain revenues attributable to services for Triangle's economic interests in wells operated by Triangle's E&P segment. 



(2)

Adjusted-EBITDA represents income before interest expense, income taxes, depreciation and amortization, other non-cash items, and non-recurring items. Adjusted-EBITDA is not a calculation based upon generally accepted accounting principles in the U.S. ("GAAP"). Triangle has presented Adjusted-EBITDA by segment because it regularly reviews Adjusted-EBITDA by segment as a measure of the segment's operating performance. Triangle also believes Adjusted-EBITDA assists investors in comparing segment performance on a consistent basis without regard to interest expense, income taxes, depreciation and amortization, other non-cash items, and non-recurring items which can vary significantly depending upon many factors. 




The total of Adjusted-EBITDA by segment is not indicative of Triangle's consolidated Adjusted-EBITDA, which reflects other matters such as (i) additional parent company administrative costs, (ii) intercompany eliminations, (iii) paid-in-kind interest expense on the 5% convertible note, and (iv) the use of the equity method, rather than consolidation, for Triangle's investment in Caliber.  The Adjusted-EBITDA measures presented in the "Reconciliation Tables" may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.




Triangle believes that net income before income taxes is the performance measure calculated and presented in accordance with GAAP that is most directly comparable to Adjusted-EBITDA. Net income before income taxes will be significantly affected by consolidated interest expense and full-cost pool amortization. Such amortization varies with changes in proved reserves, well costs during the year, and future plans in developing proved undeveloped reserves.



(3)

Adjusted net income (loss) is defined as net income (loss) applicable to common stockholders adjusted to exclude certain charges or amounts in order to provide users of this financial information with additional meaningful comparisons between current results and the results of prior periods. Triangle presents this measure because (i) it is consistent with the manner in which the Company's performance is measured relative to the performance of its peers, (ii) this measure is more comparable to earnings estimates provided by securities analysts, and (iii) charges or amounts excluded cannot be reasonably estimated and guidance provided by the Company excludes information regarding these types of items. These adjusted amounts are not a measure of financial performance under GAAP. We believe that net income (loss) is the performance measure calculated and presented in accordance with GAAP that is most directly comparable to adjusted net income (loss).

 

About Triangle

Triangle (NYSE MKT: TPLM) is an independent energy company with a strategic focus on developing the Bakken Shale and Three Forks formations in the Williston Basin of North Dakota and Montana. For more information, visit Triangle's website at www.trianglepetroleum.com.

Conference Call Information

As previously announced, Triangle will host a conference call Wednesday, December 9, 2015 at 8:30 AM MT (10:30 AM ET) to provide an operational update and financial results of Triangle's Q3 fiscal 2016, followed immediately by a question and answer session. A live webcast of the conference call can be accessed by visiting the following link: https://www.webcaster4.com/Webcast/Page/1137/11854. Alternatively, interested parties may dial-in using the conference call number (888) 347-6610. International parties may dial-in using (412) 902-4292. The Company recommends dialing into the conference call at least ten minutes before the scheduled start time. A recording of the conference call will be available through December 16, 2015 at (877) 344-7529 (conference # 10076479). For international participants, the replay dial-in number is (412) 317-0088 (conference # 10076479).

Q3 Fiscal 2016 Segment Income and Elimination (in thousands)




Exploration and
Production



Oilfield
Services



Corporate and
Other(a)



 Eliminations
and Other



Consolidated
Total

Revenues















Oil, natural gas and natural gas liquids sales

$

42,871


$

-


$

-


$

-


$

42,871

Oilfield services for third parties


-



21,922



-



351



22,273

Intersegment revenues


-



3,881



-



(3,881)



-

Total Revenues


42,871



25,803



-



(3,530)



65,144
















Expenses















LOE, GTP, Production Taxes and other expenses


20,724



-



-



-



20,724

Depreciation, amortization and accretion


21,469



6,797



420



(215)



28,471

Impairment of oil and natural gas properties


261,000



-



-



-



261,000

Cost of oilfield services


-



24,664



-



(2,964)



21,700

General and administrative


1,245



5,453



11,736



-



18,434

Total operating expenses


304,438



36,914



12,156



(3,179)



350,329
















Operating Income


(261,567)



(11,111)



(12,156)



(351)



(285,185)

Other income (expense), net


2,991



(2,062)



(2,298)



(445)



(1,814)

Net Income (Loss) Before Income Taxes

$

(258,576)


$

(13,173)


$

(14,454)


$

(796)

(b)

$

(286,999)


(a) Corporate and Other includes Triangle's corporate office and several subsidiaries that management does not consider to be part of the exploration and production or oilfield services segments.  Also included are results from Triangle's investment in Caliber, including any changes in the fair value of equity investment derivatives.  Other than Caliber, these subsidiaries have limited activity

(b) $0.8 million RockPile, Caliber, and other services consolidated elimination results in a $0.8 million reduction in oil and natural gas property expenditures.

*Reference Note 3– Segment Reporting in our Q3 fiscal year 2016 Form 10-Q for additional details

 

Reconciliation Tables (in thousands)



A.    

Consolidated Adjusted net income per common stockholder (reference disclosure (3) in "Use of Segment Information and Non-GAAP Measures").

 


Quarter Ended October 31,


2014


2015

Net Income (Loss) Attributable to Common Stockholders

$    25,398


$    (286,999)

Impairment of oil and natural gas properties

-


261,000

Unrealized (gain) loss on commodity derivatives

(19,134)


21,044

(Gain) loss on equity investment derivatives

(742)


1,118

Gain on extinguishment of debt

-


(4,175)

System conversion costs

1,334


-

Tax adjustment(a)

8,007


-

Adjusted Net Income (Loss)

$    14,863


$        (8,012)





Adjusted Net Income (Loss) Per Common Share




Basic

$        0.17


$          (0.11)

Diluted(b)

$        0.15


$          (0.11)





Weighted Average Common Shares




Basic

85,242


75,588

Diluted

102,954


75,588


 (a) Tax adjustment is calculated  by applying Company's effective tax rate of 43.2% for Q3 fiscal 2015 to pre-tax effected adjusting items

 (b) Includes interest expense add-back of $0.9 million net of income taxes and amounts capitalized for Q3 fiscal 2015 related to outstanding convertible note

 

B.    

E&P stand-alone Adjusted-EBITDA (reference disclosure (1) and (2) in "Use of Segment Information and Non-GAAP Measures").

 


Quarter Ended October 31,


2014


2015

Net Income (Loss) Before Income Taxes

$ 37,057


$ (258,576)

Depreciation and amortization

30,291


21,394

Impairment of oil and natural gas properties

-


261,000

Net interest expense

6,846


7,241

Stock-based compensation

94


390

Accretion of asset retirement obligations

259


75

Other

1,813


(3,419)

Unrealized commodity derivative losses (gains)

(19,134)


21,044

Adjusted-EBITDA

$ 57,227


$    49,149

 

C.    

Oilfield Services stand-alone Adjusted-EBITDA (reference disclosure (1) and (2) in "Use of Segment Information and Non-GAAP Measures").

 


Quarter Ended October 31,


2014


2015

Net Income (Loss) Before Income Taxes

$ 26,829


$ (13,173)

Depreciation and amortization

6,119


6,797

Stock-based compensation

146


117

Net interest expense

572


793

Other

999


1,456

Adjusted-EBITDA(c)

$ 34,665


$   (4,010)


(C) RockPile Adjusted-EBITDA calculated per RockPile credit facility

 

Forward-Looking Statements Disclosure

The information presented in this press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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 forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors that could cause actual results to differ materially from the results contemplated by the forward-looking statements include, but are not limited to, the risks discussed in the Company's annual report on Form 10-K and its other filings with the Securities and Exchange Commission. The forward-looking statements in this press release are made as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement as a result of new information, future developments, or otherwise.

Contact
Triangle Petroleum Corporation
Joe Magner, Vice President, Capital Markets
303-260-7125
info@trianglepetroleum.com

 

SOURCE Triangle Petroleum Corporation



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