Triangle Petroleum Provides Financial And Operational Results For Third Quarter Fiscal Year 2015

Q3 FY2015

Revenue

q/q % Change

Adj.-EBITDA

q/q % Change

E&P

$80.1

-

$57.3

6%

RockPile

$143.8

41%

$34.7

21%

Caliber

$4.6

56%

$2.9

26%

Total

$228.5

23%

$94.8

11%

*Dollars in U.S. millions.

*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.

*Caliber revenue and Adjusted-EBITDA represents Triangle's approximately 32% ownership share of the partnership.

Three Months Ended October 31,

2014

2013

Revenues

Oil, natural gas and natural gas liquids sales

$             80,139

$             55,477

Oilfield services

94,057

33,072

Total Revenues

174,196

88,549

Expenses

Production taxes

8,637

6,161

Lease operating expenses

7,454

4,443

Gathering, transportation and processing

4,380

1,443

Oilfield services^(a)

70,857

29,164

Depreciation and amortization

32,581

18,609

Accretion of asset retirement obligations

149

983

Corporate and Other stock-based compensation

1,588

1,981

E&P stock-based compensation

93

328

RockPile stock-based compensation

146

148

Corporate and Other cash G&A expenses

3,426

2,385

E&P cash G&A expenses

2,896

2,594

RockPile cash G&A expenses

7,310

3,150

System Conversion Costs

1,334

-

Total operating expenses

140,851

71,389

Operating Income

33,345

17,160

Gain (loss) on equity investment derivatives

742

35,832

Gain (loss) from commodity derivative activities

19,822

2,123

Interest expense

(9,463)

(1,992)

Income (loss) from equity investment

393

-

Interest income

39

53

Other income

(180)

15

Total other income

11,353

36,030

Net Income Before Income Taxes

44,698

53,190

Income tax provision^(b)

(19,300)

(5,969)

Net Income (Loss) Attributable to Common Stockholders

$             25,398

$            47,221

Net Income per Common Share

Basic

$                 0.30

$                 0.60

Diluted^(c)

$                 0.26

$                 0.50

Adjusted Net Income per Common Share^(d)

Basic

$                 0.17

$                 0.16

Diluted^(c)

$                 0.15

$                 0.14

Weighted Average Common Shares

Basic

85,242

79,059

Diluted

102,954

96,042

(a) Includes intercompany eliminations; reference Note 4 – Segment Reporting in our Q3 fiscal 2015 Form 10-Q for additional details.

(b) The effective tax rate for the three months ended October 31, 2014 is approximately 43%, which differs from the statutory income tax rate due to permanent book to tax differences. Income tax provision is primarily a non-cash expense, with a cash tax expense component of approximately $0.3 million.

(c) Includes interest expense add-back of $0.9 million and $0.9 million net of income taxes and amounts capitalized in Q3 fiscal 2015 and Q3 fiscal 2014, respectively, 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.

October 31, 2014

January 31, 2014

Assets

Cash and equivalents

$                 53,236

$                 81,750

Other current assets

225,228

114,048

Net property and equipment

1,180,054

753,880

Other noncurrent assets

91,853

77,906

Total assets

$            1,550,371

$            1,027,584

Liabilities and Stockholders' Equity

Current liabilities

$               284,873

$               159,368

5% convertible note

134,200

129,290

Long-term debt

544,375

205,067

Other noncurrent liabilities

51,183

10,697

Total stockholders' equity

535,740

523,162

Total liabilities and stockholders' equity

$            1,550,371

$            1,027,584

(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 and Caliber's performance as stand-alone companies 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 administrative costs, (ii) intercompany eliminations, (iii) paid-in-kind interest expense on the convertible notes 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.

We believe 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. We present 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).

Exploration and
Production

RockPile's Pressure
Pumping and Other
Services^(a)

Corporate 
and Other^(b)

 Eliminations
and Other

Consolidated
Total

Revenues

Oil, natural gas and natural gas liquids sales

$

80,139

$

-

$

-

$

-

$

80,139

Oilfield services for third parties

-

96,810

-

(2,753)

94,057

Intersegment revenues

-

46,941

-

(46,941)

-

Total revenues

80,139

143,751

-

(49,694)

174,196

Expenses

Prod. taxes, LOE, and other expenses

20,620

-

-

-

20,620

Depreciation and amortization

27,998

6,249

125

(1,791)

32,581

Cost of oilfield services

-

102,762

-

(31,905)

70,857

General and administrative

4,323

7,456

5,014

-

16,793

Total operating expenses

52,941

116,467

5,139

(33,696)

140,851

Income (loss) from operations

27,198

27,284

(5,139)

(15,998)

33,345

Other income (expense), net

12,263

(695)

443

(658)

11,353

Net income (loss) before income taxes

$

39,461

$

26,589

$

(4,696)

$

(16,656)

^(c)

$

(a) RockPile's Pressure Pumping and Other Services includes a small amount of non-pressure pumping related intersegment oilfield services revenue.

(b) Corporate and Other includes our 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 our results from our investment in Caliber, including any changes in the fair value of our equity investment derivatives.  Other than our investment in Caliber, these subsidiaries have limited activity.

(c) $16.7 million RockPile, Caliber, and other services consolidated elimination results in a $16.7 million reduction in oil and natural gas property expenditures.

*Reference Note 4 – Segment Reporting in our Q3 fiscal 2015 Form 10-Q for additional details

a)   

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

Q3 Fiscal 2015

Q3 Fiscal 2014

Net income attributable to common stockholders

$             25,398

$             47,221

(Gain) loss on equity investment derivatives

(742)

(35,832)

(Gain) loss on commodity derivatives

(19,822)

(2,123)

Realized gain (loss) on commodity derivatives

688

(602)

System Conversion Costs

1,334

-

Tax impact^(a)

8,006

4,333

Adjusted net income

$             14,862

$             12,996

Adjusted net income per common

Basic

$                 0.17

$                 0.16

Diluted^(b)

$                 0.15

$                 0.14

Weighted average common shares

Basic

85,242

79,059

Diluted

102,954

96,042

(a) Tax impact is computed as pre tax-effected adjusting items multiplied by the Company's effective tax rate.

(b) Includes interest expense add-back of $0.9 million and $0.9 million net of income taxes and amounts capitalized in Q3 fiscal 2015 and Q3 fiscal 2014, respectively, 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").

Q3 Fiscal 2015

Q2 Fiscal 2015

Net income before income taxes

$              39,461

$              28,865

Depreciation and amortization

27,998

23,439

Net interest expense

7,379

3,351

Stock-based compensation

93

344

Accretion of asset retirement obligations

149

41

System Conversion Costs

1,334

-

(Gain) loss on commodity derivatives

(19,822)

921

Realized gain (loss) on commodity derivatives

688

(2,954)

Adjusted-EBITDA

$              54,008

c)

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

Q3 Fiscal 2015

Q2 Fiscal 2015

Net income before income taxes ^(a)

$              26,715

$              22,453

Depreciation and amortization

6,120

4,690

Stock-based compensation

146

127

Net interest expense

572

564

Other

1,112

930

Adjusted-EBITDA

$              34,665

$              28,764

*RockPile Adjusted-EBITDA calculated per RockPile credit facility.

(a) Does not include other non-RockPile oilfield services.

d)

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

Q3 Fiscal 2015

Q2 Fiscal 2015

Net income before income taxes

$             1,113

$                881

Depreciation and amortization

894

510

Warrant amortization expense

210

171

Net interest expense

251

114

Net well connect fees billed^(a)

391

588

Adjusted-EBITDA

$        2,858

$             2,264

*Caliber Adjusted-EBITDA represents Triangle's approximately 32% ownership share of the partnership, before intercompany eliminations.

(a) Well connect fees are recorded as deferred revenue when completed and amortized over the expected term of the underlying production for revenue recognition purposes.  The adjustment to EBITDA represents well connect fees billed, net of revenue recognized during the period.