Dune Energy Reports Fourth Quarter And Full Year 2013 Results

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Mar 07, 2014, 09:00 ET

HOUSTON, March 7, 2014 /PRNewswire/ -- Dune Energy, Inc. (OCTBB:DUNR) today announced results for the fourth quarter and calendar year 2013 and provided an operational update.

Revenue and Production

Revenue for the fourth quarter totaled $11.0 million and $53.6 million for the full year 2013. This compares with $12.0 million and $52.0 million for the fourth quarter and full year 2012, respectively. On an Mcfe basis revenue was $11.83 for 2013 and $9.88 for 2012. Production volumes in the fourth quarter were 1.0 Bcfe and 4.5 Bcfe for the full year 2013. This compares with 1.1 Bcfe for the fourth quarter of 2012, and 5.3 Bcfe for the full year 2012. In 2013, the average sales price of oil was $105.22 per barrel, and $4.03 per Mcf for natural gas, as compared with $105.54 per barrel and $3.20 per Mcf, respectively for 2012. Production declined almost 14% in 2013 as compared to 2012. Oil prices decreased less than 1% and gas prices increased 26% from 2012 levels. During 2012 oil accounted for 58% of the total production volumes on an Mcfe equivalent basis, however oil revenue accounted for 86% of the total revenue.

Costs and Expenses

Total operating expenses were $24.9 million for 2013 as compared to $26.0 million for 2012 or $5.51 and $4.93 per Mcfe produced respectively. This increase on a per Mcfe basis was reflective of lower production volumes in 2013 in our older fields with high fixed cost expenses. DD&A expense was $3.6 million for the fourth quarter and $16.8 million for 2013 or $3.71 per Mcfe. G&A expense totaled $3.6 million for the fourth quarter and $12.2 million for 2013. Included in this total is $2.2 million of stock based compensation. G&A for 2012 was $10.4 million including $1.7 million of stock based compensation. Interest and financing expense was $2.6 million for the fourth quarter and $10.1 million for 2013. Under the $200 million revolving credit facility $22 million was borrowed at year-end 2013 and $2 million in letters of credit were outstanding. At year-end 2013, the Company had $62.2 million outstanding in Floating Rate Senior Secured Notes due in 2016.

Earnings

Net loss totaled $13.3 million for the fourth quarter of 2013 and $47.0 million for the full year 2013. This compares with an $7.9 million loss in 2012. In 2013, an impairment of $31.4 million was recorded as a result of the impact of lower than expected future oil prices on the economic life of the Garden Island Bay field proved reserves.

Liquidity

At the end of the year we had $3.3 million in cash and $23.5 million available under our Credit Facility based on $47.5 million of availability. The $200 million revolving credit facility was amended on December 17, 2013 maintaining availability at $47.5 million. The EBITDAX to Total Debt Covenant was increased to 5.0 to 1.0 for the quarters ending December 31, 2013 and March 31, 2014. The covenant will return to the 4.0 to 1.0 ration on June 30, 2014. We were in compliance with all covenants at year-end 2013.

James A. Watt, President and CEO of the Company stated, "We continue to carefully manage our expenditures to maximize production volumes while staying within the covenant restraints of our credit agreements."

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FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning estimates of expected drilling and development wells and associated costs, statements relating to estimates of, and increases in, production, cash flows and values, statements relating to the continued advancement of Dune Energy, Inc.'s projects and other statements which are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although Dune Energy, Inc. believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that the Company's projects will experience technological and mechanical problems, geological conditions in the reservoir may not result in commercial levels of oil and gas production, changes in product prices and other risks disclosed in Dune's Annual report on Form 10-K filed with the U.S. Securities and Exchange Commission.

Investor Contact:
Steven J. Craig
Sr. Vice President Investor Relations and Administration
713-229-6300

Dune Energy, Inc.
Consolidated Balance Sheets


	December 31,
	2013	2012
ASSETS
Current assets:
Cash	$ 3,251,371	$ 22,793,916
Accounts receivable	7,258,425	6,723,233
Current derivative asset	7,544	765,992
Prepayments and other current assets	1,398,947	5,160,533
Total current assets	11,916,287	35,443,674

Oil and gas properties, using successful efforts accounting - proved	293,745,839	239,233,653
Less accumulated depreciation, depletion, amortization and impairment	(61,927,723)	(13,806,672)
Net oil and gas properties	231,818,116	225,426,981

Property and equipment, net of accumulated depreciation of $227,207 and $256,380	152,903	71,080
Deferred financing costs, net of accumulated amortization of $1,586,904 and $771,061	1,835,743	2,428,453
Noncurrent derivative asset	-	397,886
Other assets	3,783,312	2,692,797
	5,771,958	5,590,216
TOTAL ASSETS	$ 249,506,361	$ 266,460,871

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$ 10,139,205	$ 6,987,857
Accrued liabilities	9,895,057	12,529,899
Current maturities of long-term debt	994,895	1,623,541
Total current liabilities	21,029,157	21,141,297
Long-term debt	84,180,940	83,429,862
Other long-term liabilities	21,449,651	13,860,597
Total liabilities	126,659,748	118,431,756

Commitments and contingencies	-	-

STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value, 1,000,000 shares authorized,
250,000 shares undesignated, no shares issued and outstanding	-	-
Common stock, $.001 par value, 4,200,000,000 shares authorized,
72,644,643 and 59,022,445 shares issued	72,645	59,022
Treasury stock, at cost (145,270 and 1,056 shares)	(223,821)	(1,914)
Additional paid-in capital	177,832,574	155,824,868
Accumulated deficit	(54,834,785)	(7,852,861)
Total stockholders' equity	122,846,613	148,029,115
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 249,506,361	$ 266,460,871

Dune Energy, Inc.
Consolidated Statements of Operations



	For the Year ended December 31,
	2013	2012
Revenues:
Oil and gas revenues	$ 53,581,176	$ 51,968,654
Other revenues	1,927,590	173,250
Total revenues	55,508,766	52,141,904

Operating expenses:
Lease operating expense and production taxes	24,916,246	25,960,588
Accretion of asset retirement obligation	1,754,106	1,461,756
Depletion, depreciation and amortization	16,790,444	14,063,052
General and administrative expense	12,231,093	10,390,043
Impairment of oil and gas properties	31,370,000	-
Remediation costs	4,586,000	-
Loss (gain)on settlement of asset retirement obligation liability	(427,731)	1,657,999
Total operating expense	91,220,158	53,533,438

Operating loss	(35,711,392)	(1,391,534)
Other income(expense):
Other income	807	828,151
Interest expense	(10,086,691)	(9,765,239)
Gain (loss) on derivative instruments	(1,184,648)	2,475,761
Total other income(expense)	(11,270,532)	(6,461,327)
Net loss	$ (46,981,924)	$ (7,852,861)

Net loss per share:
Basic and diluted	$ (0.71)	$ (0.20)

Weighted average shares outstanding:
Basic and diluted	66,620,128	40,027,622

Dune Energy, Inc.
Consolidated Statements of Cash Flows


	For the Year ended December 31,
	2013	2012

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (46,981,924)	$ (7,852,861)
Adjustments to reconcile net loss to net cash used in operating activities:
Depletion, depreciation and amortization	16,790,444	14,063,052
Amortization of deferred financing costs	815,843	751,612
Stock-based compensation	2,254,845	1,721,531
Accretion of asset retirement obligation	1,754,106	1,461,756
Loss (gain)on settlement of asset retirement obligation liability	(427,731)	1,657,999
Unrealized loss (gain) on derivative instruments	1,156,334	(1,163,878)
Impairment of oil and gas properties	31,370,000	-
Remediation costs	4,586,000	-
Changes in:
Accounts receivable	(727,665)	1,382,414
Prepayments and other assets	3,761,586	(2,604,160)
Payments made to settle asset retirement obligations	(1,552,060)	(3,590,824)
Accounts payable and accrued liabilities	5,460,584	3,099,902
NET CASH PROVIDED BY OPERATING ACTIVITIES	18,260,362	8,926,543

CASH FLOWS FROM INVESTING ACTIVITIES
Investment in proved and unproved properties	(49,476,447)	(21,791,346)
Decrease in restricted cash	-	17,184
Purchase of furniture and fixtures	(150,650)	(97,386)
Decrease (increase) in other assets	(1,090,515)	313,767
NET CASH USED IN INVESTING ACTIVITIES	(50,717,612)	(21,557,781)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term debt	1,215,983	2,087,410
Proceeds from long-term debt	13,000,000	12,000,000
Proceeds from sale of common stock	20,000,000	30,000,000
Increase in long-term debt issuance costs	(223,133)	(198,924)
Increase in common stock issuance costs	(233,516)	(835,278)
Payments on short-term debt	(1,844,629)	(5,021,726)
Payments on long-term debt	(19,000,000)	(23,000,000)
NET CASH PROVIDED BY FINANCING ACTIVITIES	12,914,705	15,031,482

NET CHANGE IN CASH BALANCE	(19,542,545)	2,400,244
Cash balance at beginning of period	22,793,916	20,393,672
Cash balance at end of period	$ 3,251,371	$ 22,793,916

SUPPLEMENTAL DISCLOSURES
Interest paid	$ 2,462,475	$ 2,923,566
Income taxes paid	-	-

NON-CASH INVESTING AND FINANCIAL DISCLOSURES
Accrued interest converted to long-term debt	$ 6,751,077	$ 5,925,871
Non-cash investment in proved and unproved properties in accounts payable	-	5,541,969
Revisions to asset retirement obligations	5,034,739	1,700,990

Dune Energy, Inc.
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
Years ended December 31, 2013 and 2012

					Additional		Total
	Common Stock		Treasury Stock		Paid-In	Accumulated	Stockholders'
	Shares	Amount	Shares	Amount	Capital	Deficit	Equity (Deficit)
Balance at December 31, 2011	38,579,630	$ 38,580	(235)	$ (552)	$ 124,893,145	$ -	$ 124,931,173
Issuance of common stock	18,749,997	18,750	-	-	29,981,250	-	30,000,000
Purchase of treasury stock	-	-	(821)	(1,362)	-	-	(1,362)
Restricted stock issued	1,716,433	1,716	-	-	(1,716)	-	-
Restricted stock cancelled	(23,615)	(24)	-	-	24	-	-
Stock-based compensation	-	-	-	-	1,721,531	-	1,721,531
Common stock issuance costs	-	-	-	-	(835,278)	-	(835,278)
Long-term debt issuance costs	-	-	-	-	65,912	-	65,912
Net loss	-	-	-	-	-	(7,852,861)	(7,852,861)
Balance at December 31, 2012	59,022,445	$ 59,022	(1,056)	$ (1,914)	$ 155,824,868	$ (7,852,861)	$ 148,029,115
Issuance of common stock	12,499,992	12,500	-	-	19,987,500	-	20,000,000
Purchase of treasury stock	-	-	(144,214)	(221,907)	-	-	(221,907)
Restricted stock issued	1,187,487	1,188	-	-	(1,188)	-	-
Restricted stock cancelled	(65,281)	(65)	-	-	65	-	-
Stock-based compensation	-	-	-	-	2,254,845	-	2,254,845
Common stock issuance costs	-	-	-	-	(233,516)	-	(233,516)
Net loss	-	-	-	-	-	(46,981,924)	(46,981,924)
Balance at December 31, 2013	72,644,643	$ 72,645	(145,270)	$ (223,821)	$ 177,832,574	$ (54,834,785)	$ 122,846,613