Black Ridge Oil & Gas Announces First Quarter 2014 Financial and Operational Results

MINNETONKA, Minn., May 13, 2014 /PRNewswire/ -- Black Ridge Oil & Gas, Inc. ("the Company") (OTCQB: ANFC), a growth-oriented exploration and production (E&P) company focused on non-operated Bakken and Three Forks properties, today announced financial and operating results for the three months ended March 31, 2014.

First Quarter 2014 Highlights

• Production average of 525 barrels of oil equivalent per day ("Boe/d") for the first quarter of 2014, representing 117% growth from the first quarter of 2013 and 47% growth compared to the fourth quarter of 2013
• Adjusted EBITDA increased to $2.4 million compared to $982 thousand for the first quarter of 2013, representing a 142% increase
• Oil and gas sales, excluding the effect of derivatives, totaled $4.0 million, an increase of 111% compared to the first quarter of 2013; total revenues, including the effect of derivatives, increased 94% to $3.7 million compared to the same period a year ago
• The Company participated in the completion of 35 gross (0.64 net) wells, resulting in a total of 188 gross (5.51 net) producing wells as of March 31, 2014
• As of March 31, 2014, the Company was participating in an additional 51 gross (2.02 net) wells that were preparing to drill, drilling, awaiting completion or completing

First Quarter 2014 Operational Results

Production for the first quarter of 2014 totaled 47.2 thousand barrels of oil equivalent ("MBoe"), averaging 525 Boe/d. This represents 117% growth from the first quarter of 2013 and 47% growth compared to the fourth quarter of 2013 on a Boe/d basis.

In the first quarter of 2014, the Company participated in the completion of 35 gross (0.64 net) wells, compared to 7 gross (0.29 net) wells in the first quarter of 2013. Well additions continue to be driven by development in both the Stockyard Creek and Corral Creek prospects.

As of March 31, 2014, the Company had participated in a total of 188 gross (5.51 net) producing wells, compared to 73 gross (2.59 net) wells in the first quarter of 2013, representing an increase of 113% on a net well basis. 

In addition to the 5.51 net producing wells, the Company owned working interests in 51 gross (2.02 net) wells that were preparing to drill, drilling, awaiting completion, or completing as of March 31, 2014.

The Company controlled approximately 10,370 net mineral acres in the Bakken and Three Forks formations in North Dakota and eastern Montana as of the end of the first quarter of 2014.

Management Comment

"We are pleased with the first quarter results and incremental production growth, particularly in light of the harsh winter conditions that resulted in slowed development and increased well downtime," commented Ken DeCubellis, Black Ridge's Chief Executive Officer. "As we look toward the rest of 2014, we are excited about the quantity and quality of recently completed wells and wells currently in our drilling and completing inventory. The Stockyard Creek prospect is performing above expectations, highlighted by the recently completed Blackdog 3-13-14H, which produced an average of 1,009 barrels of oil per day over its first 30 days online. The Company is well positioned to deliver significant production growth and increased shareholder value in the coming months and years."

First Quarter 2014 Financial Results

Revenues for the first quarter of 2014 increased 94% to $ 3.7 million compared to $1.9 million for the first quarter of 2013, driven primarily by the 117% increase in production. Average realized prices on a Boe basis decreased 5%, after the effect of settled derivatives, in the first quarter of 2014 compared to the first quarter of 2013. Also included in 2014 revenues was a mark-to-market loss on unsettled derivatives of $0.2 million. The Company had no derivatives in the first quarter of 2013.

For the first quarter of 2014, the Company's realized oil price was $87.99 per barrel of oil, before the effect of settled derivatives. The Company's realized price was 11% per barrel below the NYMEX WTI benchmark in the first quarter of 2014. For the first quarter of 2014, the Company's realized price for natural gas, including natural gas liquids, was $9.58 per MCF, as compared to $6.68 per MCF in the first quarter of 2013, an increase of 43%. The realized price, including settled derivatives, was $82.91/Boe, a 5% decrease from the first quarter of 2013, but a 2% increase over the fourth quarter of 2013.

Production expenses increased to $507 thousand in the first quarter of 2014 from $269 thousand in the first quarter of 2013, driven primarily by the Company's production growth. On a per unit basis, this equated to a decrease in production expenses to $10.75/Boe in the first quarter of 2014 from $12.33/Boe in the first quarter of 2013.

Production taxes increased to $405 thousand in the first quarter of 2014 from $219 thousand in the first quarter of 2013, driven primarily by increased production. For the first quarter of 2014, production taxes averaged 10.1% of oil and gas sales as compared to 11.5% for the first quarter of 2013. Increases in the percentage of gas sales to oil sales and increases in the percentage of oil sales in lower production tax jurisdictions are pushing production taxes as a percentage of oil and gas sales lower.

General and administrative ("G&A") expenses increased to $771 thousand for the first quarter of 2014 from $604 thousand for the first quarter of 2013. On a per Boe basis, G&A expenses decreased 41% from $27.68/Boe for the first quarter of 2013 to $16.33/Boe for the first quarter of 2014.

Depletion, depreciation, amortization, and accretion ("DD&A") totaled $1.6 million in the first quarter of 2014 compared to $0.7 million in the first quarter of 2013. Depletion expense, the largest component of DD&A, was $33.61/Boe in the first quarter of 2014 compared to $32.09/Boe in the first quarter of 2013.

Interest expense in the first quarter of 2014 was $1.1 million as compared to $0.2 million in the first quarter of 2013, primarily driven by increased borrowings as we financed acquisitions and well development.

The Company reported net loss attributable to common stockholders of $382 thousand, or $(0.01) per basic and diluted common share for the first quarter of 2014, compared to net income of $ 314 thousand, or $0.01 per basic and diluted common share, for the first quarter of 2013.

The Company recorded adjusted EBITDA of $2.4 million in the first quarter of 2014, an increase of 142% as compared to adjusted EBITDA of $0.9 million in the first quarter of 2013. Adjusted EBITDA is a non-GAAP financial measure. Please refer to the reconciliation in this release for additional information about this measure.

Liquidity Position

The Company ended the first quarter of 2014 with $38.9 million drawn on its Senior and Subordinate Credit Facilities. Subsequent to March 31, 2014, the Company announced an increase in availability under the facilities to $50 million from $43 million. The Company intends to fund future development through operating cash flow and additional borrowings from the existing credit facilities.

Well Update

Producing Wells:  The following table sets forth Bakken and Three Forks wells in which Black Ridge holds a participating interest that were completed or acquired during the quarter ending March 31, 2014.

"Drilling" Wells: The following table sets forth Bakken and Three Forks wells in which Black Ridge holds a participating interest that are either preparing to drill, drilling, awaiting completion or completing as of March 31, 2014.

Non-GAAP Financial Measures

In addition to reporting net income (loss) as defined under GAAP, we also present Adjusted Net Income (Loss) and Adjusted EBITDA. We define Adjusted Net Income (Loss) as net income, excluding net losses on the mark-to-market of derivatives, net of tax. We define Adjusted EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depreciation, depletion and amortization, (iv) accretion of abandonment liability, (v) losses on the mark-to-market of derivatives, and (vi) non-cash expenses relating to share based payments recognized under ASC Topic 718. We believe the use of non-GAAP financial measures provides useful information to investors regarding our current financial performance; however, Adjusted Net Income (Loss) and Adjusted EBITDA do not represent, and should not be considered alternatives to GAAP measurements. We believe these measures are useful in evaluating our fundamental core operating performance. Specifically, we believe the non-GAAP Adjusted Net Income (Loss) and Adjusted EBITDA results provide useful information to both management and investors by excluding certain income and expenses that our management believes are not indicative of our core operating results. Although we use Adjusted Net Income (Loss) and Adjusted EBITDA to manage our business, including the preparation of our annual operating budget and financial projections, we believe that non-GAAP financial measures have limitations and do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures. A reconciliation of Adjusted Net Income (Loss) and Adjusted EBITDA to Net Income, GAAP, is included below:

Financial and Statistical Data Tables

Following are the financial highlights for the comparative three month period ended March 31, 2014 and 2013. The following information is based on GAAP reported earnings, with additional required disclosures included in the Company's Form 10-Q:

Cautionary Statement as to Forward-Looking Statements

Certain statements contained herein, which are not historical, are forward-looking statements that are subject to risks and uncertainties not known or disclosed herein that could cause actual results to differ materially from those expressed herein. These statements may include projections and other "forward-looking statements" within the meaning of the federal securities laws. Any such projections or statements reflect Black Ridge Oil & Gas current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from those projected. Important factors that could cause the actual results to differ materially from those projected include, without limitation, general economic or industry conditions nationally and/or in the communities in which our Company conducts business, volatility in commodity prices for crude oil and natural gas, environmental risks, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital or have access to debt financing, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, increases in operator costs, other economic, competitive, governmental, regulatory and technical factors affecting our Company's operations, products, services and prices and other risks inherent in the Company's businesses that are detailed in the Company's Securities and Exchange Commission ("SEC") filings. Readers are encouraged to review these risks in the Company's SEC filings.

About the Company

Black Ridge Oil & Gas is an oil and gas exploration and production company based in Minnetonka, Minnesota. Black Ridge's focus is exclusive to the Williston Basin Bakken and Three Forks trend in North Dakota and Montana. Black Ridge Oil & Gas controls approximately 10,370 net acres in the Bakken and/or Three Forks development. For additional information, visit the Company's website at www.blackridgeoil.com.

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Contact

Black Ridge Oil & Gas, Inc.

Brenda Blume, Director of Investor and Public Relations
952-582-4303

Ken DeCubellis, Chief Executive Officer
952-426-1241
www.blackridgeoil.com

SOURCE Black Ridge Oil & Gas, Inc.