PetroQuest Energy Announces 2011 Year-End and Fourth Quarter Results, Provides 2012 Guidance and Announces Entry Into Phase 2 of Its Joint Venture
LAFAYETTE, La., Feb. 28, 2012 /PRNewswire/ -- PetroQuest Energy, Inc. (NYSE: PQ) announced today net income available to common stockholders for the quarter ended December 31, 2011 of $2,830,000, or $0.04 per share, compared to fourth quarter 2010 net income available to common stockholders of $2,083,000, or $0.03 per share. For the year ended December 31, 2011, the Company reported net income available to common shareholders of $5,409,000, or $0.08 per share, compared to net income available to common shareholders of $41,987,000, or $0.66 per share, for the year ended December 31, 2010.
Discretionary cash flow for the fourth quarter of 2011 was $20,176,000 as compared to $23,428,000 for the comparable 2010 period. For the year ended December 31, 2011, discretionary cash flow was $93,395,000 compared to $119,668,000 for 2010. See the attached schedule for a reconciliation of net cash flow provided by operating activities to discretionary cash flow.
Oil and gas sales during the fourth quarter of 2011 were $38,040,000 as compared to $43,407,000 in the fourth quarter of 2010. For the year ended December 31, 2011, oil and gas sales decreased 10% to $160,486,000 as compared to $179,038,000 in the year ended December 31, 2010. Production for the fourth quarter and year ended December 31, 2011 was 1% higher and 2% lower, respectively, than production for the comparable periods of 2010. Stated on an Mcfe basis, unit prices received during the fourth quarter and the year ended December 31, 2011 were lower by 13% and 8%, respectively, as compared to the prices received during the comparable 2010 periods.
Lease operating expenses for the fourth quarter of 2011 were $1.06 per Mcfe as compared to $1.33 per Mcfe in the fourth quarter of 2010. Lease operating expenses during the fourth quarter of 2011 were lower due to the drilling of an additional water disposal well in the Woodford Shale, along with a decline in repairs and maintenance costs from the fourth quarter of 2010. For the year ended December 31, 2011, lease operating expenses totaled $1.28 per Mcfe as compared to $1.26 per Mcfe in 2010.
Depreciation, depletion and amortization ("DD&A") on oil and gas properties for the fourth quarter of 2011 was $1.81 per Mcfe as compared to $1.95 per Mcfe in the fourth quarter of 2010. The decline in fourth quarter DD&A was the result of significant reserve additions and the receipt of the $14 million performance payment from the Woodford joint venture in December 2011, which was credited to oil and gas properties. For the year ended December 31, 2011, DD&A on oil and gas properties increased to $1.89 per Mcfe from $1.88 per Mcfe for the comparable period of 2010.
Interest expense for the fourth quarter of 2011 decreased to $2,400,000, as compared to $2,616,000 in the fourth quarter of 2010. For the year ended December 31, 2011, interest expense was $9,648,000, compared to $9,952,000 for the comparable period of 2010.
For all of 2011, general and administrative expenses were $905,000 lower than 2010. Fourth quarter 2011 expenses were $1,333,000 higher than the comparable 2010 period as a result of higher incentive compensation expenses, including non-cash stock compensation.
Production taxes for the fourth quarter of 2011 totaled $1,030,000, as compared to $1,609,000 in the fourth quarter of 2010. For the year ended December 31, 2011, production taxes were $3,100,000 compared to $4,917,000 for the comparable period of 2010. The decreases during the 2011 periods were primarily due to refunds of taxes previously paid in Oklahoma and Texas as a result of horizontal well severance tax credits.
Other expense during the fourth quarter of 2011 included a non-recurring charge of $1,425,000 for a legal settlement related to a drilling rig contract.
The following table sets forth certain information with respect to the oil and gas operations of the Company for the three-month periods and years ended December 31, 2011, and 2010:
Three Months Ended December 31, |
Year Ended December 31, |
||||
2011 |
2010 |
2011 |
2010 |
||
Production: |
|||||
Oil (Bbls) |
126,639 |
174,306 |
572,096 |
663,302 |
|
Gas (Mcf) |
6,615,872 |
6,249,162 |
24,462,933 |
24,501,540 |
|
Ngl (Mcfe) |
629,524 |
646,554 |
2,287,847 |
2,469,871 |
|
Total Production (Mcfe) |
8,005,230 |
7,941,552 |
30,183,356 |
30,951,223 |
|
Total Daily Production (Mmcfe/d) |
87.0 |
86.3 |
82.7 |
84.8 |
|
Sales: |
|||||
Total oil sales |
$ 13,660,565 |
$ 14,875,244 |
$ 60,064,426 |
$ 52,715,434 |
|
Total gas sales |
18,182,671 |
23,270,498 |
78,664,373 |
107,117,320 |
|
Total ngl sales |
6,196,692 |
5,261,523 |
21,756,917 |
19,205,726 |
|
Total oil and gas sales |
$ 38,039,928 |
$ 43,407,265 |
$ 160,485,716 |
$ 179,038,480 |
|
Average sales prices: |
|||||
Oil (per Bbl) |
$ 107.87 |
$ 85.34 |
$ 104.99 |
$ 79.47 |
|
Gas (per Mcf) |
2.75 |
3.72 |
3.22 |
4.37 |
|
Ngl (per Mcfe) |
9.84 |
8.14 |
9.51 |
7.78 |
|
Per Mcfe |
4.75 |
5.47 |
5.32 |
5.78 |
|
The above sales and average sales prices include increases to revenue related to the settlement of gas hedges of $1,745,000 and $6,701,000 and oil hedges of $19,000 and $0 for the quarters ended December 31, 2011, and 2010, respectively. The above sales and average sales prices include increases (reductions) to revenue related to the settlement of gas hedges of $2,609,000 and $17,538,000 and oil hedges of ($192,000) and $0 for the years ended December 31, 2011, and 2010, respectively.
The following provides guidance for the first quarter and full year of 2012:
Guidance for |
||
Description |
1st Quarter 2012 |
|
Production volumes (MMcfe/d) |
86 - 90 |
|
Percent Gas |
83% |
|
Percent Oil |
10% |
|
Percent NGL |
7% |
|
Expenses: |
||
Lease operating expenses (per Mcfe) |
$1.20 - $1.30 |
|
Production taxes (per Mcfe) |
$0.10 - $0.15 |
|
Depreciation, depletion and amortization (per Mcfe) |
$1.90 - $2.00 |
|
General and administrative (in millions) (1) |
$5.5 - $6.0 |
|
Interest expense (in millions) |
$2.3 - $2.5 |
|
(1) Includes non-cash stock compensation estimate of $1.95 MM |
||
Guidance for |
||
Description |
Full Year 2012 |
|
Production volumes (MMcfe/d) |
87 - 92 |
|
Percent Gas |
80% |
|
Percent Oil |
9% |
|
Percent NGL |
11% |
|
Expenses: |
||
Lease operating expenses (per Mcfe) |
$1.15 - $1.25 |
|
Production taxes (per Mcfe) |
$0.10 - $0.15 |
|
Depreciation, depletion and amortization (per Mcfe) |
$1.90 - $2.00 |
|
General and administrative (in millions) (1) |
$21 -$23 |
|
Interest expense (in millions) |
$9 - $10 |
|
2012 Capital Expenditures (in millions) |
$90 - $100 |
|
(1) Includes non-cash stock compensation estimate of $6.5 - $7.0 MM |
||
Joint Venture Update
During February 2012, the Company amended its Woodford Shale joint development agreement ("JDA") to accelerate the entry into Phase 2 effective March 1, 2012 and modify the drilling carry ratio. Under the amended JDA, the Phase 2 drilling carry has been expanded to provide for development in both the Mississippian Lime and the Woodford Shale plays whereby the Company will pay 25% of the cost to drill and complete wells and receive a 50% ownership interest. The Phase 2 drilling carry totals approximately $93 million and will be subject to extensions in one-year intervals. The Company continues to drill its liquids rich Woodford wells under the Phase 1 drilling carry, of which the Company estimates $16.6 million remained at December 31, 2011. Once the Phase 1 drilling carry has been expended, which is expected to occur during the second quarter of 2012, the Company will be able to utilize the Phase 2 drilling carry to continue operations in the Woodford concurrently with the utilization of a portion of the Phase 2 drilling carry in the Mississippian Lime.
Operations Update
In northern Oklahoma, after finishing coring operations, the Company has completed its first saltwater disposal well, and is currently drilling its initial horizontal ( ~ 3,600 foot lateral) Mississippian Lime well (WI - 48%) in Pawnee County, Oklahoma. The well is expected to reach total depth in approximately four weeks with completion operations expected to commence during the second quarter. The Company expects to add a second rig during the second quarter and plans to drill 12-15 wells in the Mississippian Lime during 2012, but could accelerate its activity with positive results from early wells.
The Company is the final stages of constructing surface facilities for its La Cantera #1 discovery and expects production to commence in approximately one week. In addition, the Company recently spud its La Cantera #2 (WI – 24%) prospect 1/2 mile north of La Cantera #1. The Company expects to reach total depth of 18,900 feet on this potentially high impact well during the third quarter.
Management Statement
"The decision by our joint venture partner to accelerate the Phase 2 drilling carry and align our interests in the Woodford Shale and the Mississippian Lime is a testament to the success and flexibility of this partnership," said Charles T. Goodson, Chairman, Chief Executive Officer and President. "The partnership is currently drilling its initial Mississippian Lime well in Pawnee County. With positive initial results, having the Phase 2 drilling carry available provides us the ability to accelerate development, which we believe could significantly enhance our liquids production profile."
About the Company
PetroQuest Energy, Inc. is an independent energy company engaged in the exploration, development, acquisition and production of oil and natural gas reserves in Oklahoma, Texas, the Gulf Coast Basin, Arkansas and Wyoming. PetroQuest's common stock trades on the New York Stock Exchange under the ticker PQ.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are our ability to find oil and natural gas reserves that are economically recoverable, the volatility of oil and natural gas prices and significantly depressed natural gas prices since the middle of 2008, the uncertain economic conditions in the United States and globally, the declines in the values of our properties that have resulted in and may in the future result in additional ceiling test write-downs, our ability to replace reserves and sustain production, our estimate of the sufficiency of our existing capital sources, our ability to raise additional capital to fund cash requirements for future operations, the uncertainties involved in prospect development and property acquisitions or dispositions and in projecting future rates of production or future reserves, the timing of development expenditures and drilling of wells, hurricanes and other natural disasters, changes in laws and regulations as they relate to our operations, including our fracing operations in shale plays or our operations in the Gulf of Mexico, and the operating hazards attendant to the oil and gas business. In particular, careful consideration should be given to cautionary statements made in the various reports PetroQuest has filed with the Securities and Exchange Commission. PetroQuest undertakes no duty to update or revise these forward-looking statements.
Click here for more information: http://www.petroquest.com/news.html?=BizID=1690&1=1
PETROQUEST ENERGY, INC. Consolidated Statements of Income (Unaudited) (Amounts In Thousands, Except Per Share Data) |
|||||
Three Months Ended December 31, |
Year Ended December 31, |
||||
2011 |
2010 |
2011 |
2010 |
||
Revenues: |
|||||
Oil and gas sales |
$ 38,040 |
$ 43,407 |
$ 160,486 |
$ 179,038 |
|
Gas gathering revenue, net of expense |
53 |
61 |
214 |
225 |
|
38,093 |
43,468 |
160,700 |
179,263 |
||
Expenses: |
|||||
Lease operating expenses |
8,486 |
10,555 |
38,571 |
39,012 |
|
Production taxes |
1,030 |
1,609 |
3,100 |
4,917 |
|
Depreciation, depletion and amortization |
14,828 |
15,859 |
58,243 |
59,326 |
|
Ceiling test writedown |
- |
- |
18,907 |
- |
|
General and administrative |
6,768 |
5,435 |
20,436 |
21,341 |
|
Accretion of asset retirement obligation |
437 |
6 |
2,049 |
1,306 |
|
Interest expense |
2,400 |
2,616 |
9,648 |
9,952 |
|
33,949 |
36,080 |
150,954 |
135,854 |
||
Gain on legal settlement |
- |
- |
- |
12,400 |
|
Loss on early extinguishment of debt |
- |
- |
- |
(5,973) |
|
Other income (expense) |
(1,245) |
1,309 |
(1,008) |
(1,080) |
|
Income from operations |
2,899 |
6,079 |
8,738 |
48,756 |
|
Income tax expense (benefit) |
(1,216) |
2,711 |
(1,810) |
1,630 |
|
Net income |
4,115 |
3,368 |
10,548 |
47,126 |
|
Preferred stock dividend |
1,285 |
1,285 |
5,139 |
5,139 |
|
Net income available to common stockholders |
$ 2,830 |
$ 2,083 |
$ 5,409 |
$ 41,987 |
|
Earnings per common share: |
|||||
Basic |
|||||
Net income per share |
$ 0.04 |
$ 0.03 |
$ 0.08 |
$ 0.67 |
|
Diluted |
|||||
Net income per share |
$ 0.04 |
$ 0.03 |
$ 0.08 |
$ 0.66 |
|
Weighted average number of common shares: |
|||||
Basic |
62,115 |
61,542 |
61,937 |
61,415 |
|
Diluted |
62,462 |
61,927 |
62,325 |
61,789 |
|
PETROQUEST ENERGY, INC. Consolidated Balance Sheets (Unaudited) (Amounts in Thousands) |
|||
December 31, |
|||
2011 |
2010 |
||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 22,263 |
$ 63,237 |
|
Revenue receivable |
15,860 |
13,386 |
|
Joint interest billing receivable |
47,445 |
12,193 |
|
Other receivable |
- |
13,795 |
|
Hedge asset |
6,418 |
- |
|
Prepaid drilling costs |
2,900 |
789 |
|
Drilling pipe inventory |
4,070 |
11,711 |
|
Other current assets |
2,965 |
1,827 |
|
Total current assets |
101,921 |
116,938 |
|
Property and equipment: |
|||
Oil and gas properties: |
|||
Oil and gas properties, full cost method |
1,600,546 |
1,433,642 |
|
Unevaluated oil and gas properties |
70,408 |
54,851 |
|
Accumulated depreciation, depletion and amortization |
(1,265,603) |
(1,175,553) |
|
Oil and gas properties, net |
405,351 |
312,940 |
|
Gas gathering assets |
4,177 |
4,177 |
|
Accumulated depreciation and amortization of gas gathering assets |
(1,794) |
(1,496) |
|
Total property and equipment |
407,734 |
315,621 |
|
Other assets, net of accumulated depreciation and amortization |
|||
of $8,066 and $6,435, respectively |
6,511 |
6,958 |
|
Total assets |
$ 516,166 |
$ 439,517 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Accounts payable to vendors |
$ 50,750 |
$ 26,097 |
|
Advances from co-owners |
33,867 |
7,963 |
|
Oil and gas revenue payable |
13,764 |
7,220 |
|
Accrued interest and preferred stock dividend |
6,167 |
6,575 |
|
Hedge liability |
- |
1,089 |
|
Asset retirement obligation |
3,110 |
1,517 |
|
Other accrued liabilities |
8,250 |
7,380 |
|
Total current liabilities |
115,908 |
57,841 |
|
10% Senior Notes |
150,000 |
150,000 |
|
Asset retirement obligation |
27,317 |
23,075 |
|
Deferred income taxes |
551 |
- |
|
Other liabilities |
- |
439 |
|
Commitments and contingencies |
|||
Stockholders' equity: |
|||
Preferred stock, $.001 par value; authorized 5,000 |
|||
shares; issued and outstanding 1,495 shares |
1 |
1 |
|
Common stock, $.001 par value; authorized 150,000 |
|||
shares; issued and outstanding 62,148 and 61,565 |
|||
shares, respectively |
62 |
62 |
|
Paid-in capital |
270,606 |
266,907 |
|
Accumulated other comprehensive income (loss) |
4,031 |
(1,089) |
|
Accumulated deficit |
(52,310) |
(57,719) |
|
Total stockholders' equity |
222,390 |
208,162 |
|
Total liabilities and stockholders' equity |
$ 516,166 |
$ 439,517 |
|
PETROQUEST ENERGY, INC. Consolidated Statements of Cash Flows (Unaudited) (Amounts in Thousands) |
||||
Year Ended December 31, |
||||
2011 |
2010 |
2009 |
||
Cash flows from operating activities: |
||||
Net income (loss) |
$ 10,548 |
$ 47,126 |
$ (90,190) |
|
Adjustments to reconcile net income (loss) to net cash |
||||
provided by operating activities: |
||||
Deferred tax expense (benefit) |
(1,810) |
1,630 |
(14,635) |
|
Depreciation, depletion and amortization |
58,243 |
59,326 |
84,772 |
|
Ceiling test writedown |
18,907 |
- |
156,134 |
|
Non-cash gain on legal settlement |
- |
(4,164) |
- |
|
Loss on early extinguishment of debt |
- |
5,973 |
- |
|
Gain on sale of assets |
- |
- |
(485) |
|
Accretion of asset retirement obligation |
2,049 |
1,306 |
2,452 |
|
Pipe inventory impairment |
- |
- |
913 |
|
Share-based compensation expense |
4,833 |
7,137 |
6,328 |
|
Amortization costs and other |
625 |
1,334 |
1,512 |
|
Payments to settle asset retirement obligations |
(905) |
(6,274) |
(1,803) |
|
Changes in working capital accounts: |
||||
Revenue receivable |
(2,474) |
3,071 |
3,617 |
|
Joint interest billing receivable |
(35,252) |
(401) |
11,937 |
|
Prepaid drilling and pipe costs |
5,530 |
9,180 |
14,828 |
|
Accounts payable and accrued liabilities |
34,599 |
3,368 |
(51,375) |
|
Advances from co-owners |
25,904 |
4,301 |
(1,687) |
|
Other |
(2,907) |
(1,269) |
(496) |
|
Net cash provided by operating activities |
117,890 |
131,644 |
121,822 |
|
Cash flows from investing activities: |
||||
Investment in oil and gas properties |
(194,536) |
(103,926) |
(63,420) |
|
Investment in gas gathering assets |
- |
- |
(204) |
|
Proceeds from sale of unevaluated properties |
28,461 |
22,473 |
- |
|
Proceeds from sale of oil and gas properties and other |
14,000 |
35,000 |
7,451 |
|
Net cash used in investing activities |
(152,075) |
(46,453) |
(56,173) |
|
Cash flows from financing activities: |
||||
Net payments for share based compensation |
(1,133) |
(210) |
(366) |
|
Deferred financing costs |
(517) |
(12) |
(114) |
|
Proceeds from common stock offering |
- |
- |
38,036 |
|
Costs of common stock offering |
- |
- |
(258) |
|
Payment of preferred stock dividend |
(5,139) |
(5,137) |
(5,139) |
|
Repayment of bank borrowings |
(22,000) |
(29,000) |
(101,000) |
|
Proceeds from bank borrowings |
22,000 |
- |
- |
|
Redemption of 10 3/8% Senior Notes |
- |
(150,000) |
- |
|
Costs to redeem 10 3/8% Senior Notes |
- |
(4,187) |
- |
|
Proceeds from issuance of 10% Senior Notes |
- |
150,000 |
- |
|
Costs to issue 10% Senior Notes |
- |
(4,180) |
- |
|
Net cash used in financing activities |
(6,789) |
(42,726) |
(68,841) |
|
Net increase (decrease) in cash and cash equivalents |
(40,974) |
42,465 |
(3,192) |
|
Cash and cash equivalents at beginning of period |
63,237 |
20,772 |
23,964 |
|
Cash and cash equivalents at end of period |
$ 22,263 |
$ 63,237 |
$ 20,772 |
|
Supplemental disclosure of cash flow information |
||||
Cash paid during the period for: |
||||
Interest |
$ 16,017 |
$ 11,195 |
$ 20,335 |
|
Income taxes |
$ 51 |
$ 192 |
$ 227 |
|
PETROQUEST ENERGY, INC. Non-GAAP Disclosure Reconciliation (Amounts In Thousands) |
|||||||
Three Months Ended |
Year Ended |
||||||
December 31, |
December 31, |
||||||
2011 |
2010 |
2011 |
2010 |
||||
Net income |
$ 4,114 |
$ 3,368 |
$ 10,548 |
$ 47,126 |
|||
Reconciling items: |
|||||||
Deferred tax expense (benefit) |
(1,216) |
2,711 |
(1,810) |
1,630 |
|||
Depreciation, depletion and amortization |
14,828 |
15,859 |
58,243 |
59,326 |
|||
Ceiling test writedown |
- |
- |
18,907 |
- |
|||
Non-cash gain on legal settlement |
- |
- |
- |
(4,164) |
|||
Loss on early extinguishment of debt |
- |
- |
- |
5,973 |
|||
Accretion of asset retirement obligation |
437 |
6 |
2,049 |
1,306 |
|||
Share based compensation expense |
1,848 |
1,274 |
4,833 |
7,137 |
|||
Amortization expense and other |
165 |
210 |
625 |
1,334 |
|||
Discretionary cash flow |
20,176 |
23,428 |
93,395 |
119,668 |
|||
Changes in working capital accounts |
6,955 |
12,624 |
25,400 |
18,250 |
|||
Settlement of asset retirement obligations |
(354) |
(602) |
(905) |
(6,274) |
|||
Net cash flow provided by operating activities |
$ 26,777 |
$ 35,450 |
$ 117,890 |
$ 131,644 |
|||
Note: |
Management believes that discretionary cash flow is relevant and useful information, which is commonly used by analysts, investors and other interested parties in the oil and gas industry as a financial indicator of an oil and gas company's ability to generate cash used to internally fund exploration and development activities and to service debt. Discretionary cash flow is not a measure of financial performance prepared in accordance with generally accepted accounting principles ("GAAP") and should not be considered in isolation or as an alternative to net cash flow provided by operating activities. In addition, since discretionary cash flow is not a term defined by GAAP, it might not be comparable to similarly titled measures used by other companies. |
|
SOURCE PetroQuest Energy, Inc.
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article