Exhibit 99.1
News Release
For Immediate Release
Investor Contact:
Steven J. Craig
Sr. Vice President Investor Relations and Administration
713-229-6300
DUNE ENERGY REPORTS THIRD QUARTER 2010 FINANCIAL RESULTS
Houston, Texas, November 10, 2010 - Dune Energy, Inc. (OTCBB:DUNR) today announced results for the third quarter of 2010.
Revenue and Production
Revenue from continuing operations for the third quarter totaled $15.6 million as compared with $11.3 million for the third quarter of 2009. Production volumes in the third quarter were 148 Mbbls of oil and 0.9 Bcf of natural gas, or 1.8 Bcfe. This compares with 123 Mbbls of oil and 0.9 Bcf of natural gas, or 1.6 Bcfe for the third quarter of 2009. In the third quarter of 2010, the average sales price per barrel of oil was $74.91, and $4.87 per Mcf for natural gas, as compared with $66.91 per barrel and $3.44 per Mcf, respectively for the third quarter of 2009. The primary reason behind the increase in revenue was higher average sales prices in the third quarter of 2010 versus the third quarter of 2009. Average price received per Mcfe produced was $8.59 in the third quarter of 2010 versus $6.90 in the third quarter of 2009 or a 24% increase.
Costs and Expenses
Total lease operating expense from continuing operations for the third quarter totaled $5.2 million versus $6.7 million for the third quarter of 2009. Cash G&A expense totaled $2.1 million for the third quarter of 2010 versus $2.3 million for the third quarter of 2009. The $0.2 million decrease reflects a continued focus on cost controls. Interest financing expense was $9.1 million for the third quarter of 2010 versus $8.8 million for the third quarter of 2009. We incurred a gain of $0.1 million on hedging during the third quarter of 2010 versus a $1.1 million loss in the third quarter of 2009.
Earnings
Net loss totaled $9.1 million for the third quarter of 2010 and $11.3 million for the third quarter of 2009. The third quarter of 2010 included a $0.1 million loss on discontinued operations in the South Florence field. Preferred stock dividends were $6.5 million in the third quarter of 2010 versus $9.7 million in the third quarter of 2009. These dividends were paid in kind (PIK) and as such do not represent a cash payment. Net loss per share, both basic and fully diluted, for the quarter was $.39, based on 40.4 million weighted average shares outstanding as compared with a loss of $0.71 per share in the third quarter of 2009 with 29.6 million weighted average shares outstanding, both share amounts reflect a 1 for 5 reverse split completed in December of 2009. The increased outstanding common shares are associated with the conversion of preferred shares into common shares primarily in the fourth quarter of 2009.
Liquidity
At the end of the quarter, cash was $13.8 million versus $15.0 million at year end 2009. The net of accounts receivable over accounts payable was $6.6 million in the current quarter, compared to $3.3 million at year end 2009. Currently there are no borrowings against the Revolver and $8.5 million issued in standby letters of credit.
James A. Watt, President and Chief Executive Officer stated, “We anticipate closing our two previously announced joint ventures before the end of the month. These closings will provide an additional $8 million of liquidity. This will provide liquidity for the December 1, 2010 interest payment on our $300 million of 10 1/2% Senior Secured notes and for participation in drilling the 19,500 foot deep subsalt well at Garden Island Bay.”
Click here for more information:http://www.duneenergy.com/news.html?b=1683&1=1
FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements that are intended to be covered by “forward-looking statements” safe harbor provided by the Private Securities Litigation Reform Act of 1995. All statements included in this press release that address activities, events or developments that Dune Energy expects, believes or anticipates will or may occur in the future are 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 that 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.
SOURCE Dune Energy, Inc.
CONTACT: Investors, Steven J. Craig, Sr. Vice President Investor Relations and Administration, Dune Energy, Inc., +1-713-229-6300
Dune Energy, Inc.
Consolidated Balance Sheets
(Unaudited)
| | | | | | | | |
| | | September 30,
2010 | | | December 31,
2009 | |
ASSETS | | | | | | | | |
Current assets: | | | | | | | | |
| | |
Cash | | $ | 13,825,501 | | | $ | 15,053,571 | |
| | |
Accounts receivable | | | 10,650,137 | | | | 15,026,945 | |
| | |
Assets held for sale | | | — | | | | 36,526,883 | |
| | |
Prepayments and other current assets | | | 659,739 | | | | 2,724,666 | |
| | |
Derivative asset | | | 55,253 | | | | — | |
| | | | | | | | |
| | |
Total current assets | | | 25,190,630 | | | | 69,332,065 | |
| | | | | | | | |
| | |
Oil and gas properties, using successful efforts accounting - proved | | | 536,720,692 | | | | 541,705,920 | |
| | |
Less accumulated depreciation, depletion, amortization and impairment | | | (271,266,207 | ) | | | (245,531,157 | ) |
| | | | | | | | |
| | |
Net oil and gas properties | | | 265,454,485 | | | | 296,174,763 | |
| | | | | | | | |
| | |
Property and equipment, net of accumulated depreciation of $2,759,271 and $2,247,220 | | | 697,234 | | | | 1,215,123 | |
Deferred financing costs, net of accumulated amortization of $2,437,971 and $1,565,280 | | | 1,287,415 | | | | 1,026,445 | |
| | |
Other assets | | | 4,088,845 | | | | 4,427,826 | |
| | | | | | | | |
| | | 6,073,494 | | | | 6,669,394 | |
| | | | | | | | |
| | |
TOTAL ASSETS | | $ | 296,718,609 | | | $ | 372,176,222 | |
| | | | | | | | |
| | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | |
Current liabilities: | | | | | | | | |
| | |
Accounts payable | | $ | 4,013,536 | | | $ | 11,760,370 | |
| | |
Accrued liabilities | | | 24,534,710 | | | | 21,656,922 | |
| | |
Derivative liability | | | — | | | | 1,596,545 | |
| | |
Short-term debt | | | — | | | | 1,579,308 | |
| | |
Preferred stock dividend payable | | | 1,940,000 | | | | 1,985,000 | |
| | | | | | | | |
| | |
Total current liabilities | | | 30,488,246 | | | | 38,578,145 | |
| | |
Long-term debt, net of discount of $5,584,103 and $7,737,553 | | | 294,415,897 | | | | 316,262,447 | |
| | |
Other long-term liabilities | | | 18,560,274 | | | | 17,640,000 | |
| | | | | | | | |
| | |
Total liabilities | | | 343,464,417 | | | | 372,480,592 | |
| | | | | | | | |
| | |
Commitments and contingencies | | | — | | | | — | |
| | |
Redeemable convertible preferred stock, net of discount of $5,522,265 and $7,205,812, liquidation preference of $1,000 per share, 750,000 shares designated, 207,262 and 192,050 shares issued and outstanding | | | 201,739,735 | | | | 184,844,188 | |
| | |
STOCKHOLDERS’ DEFICIT | | | | | | | | |
Preferred stock, $.001 par value, 1,000,000 shares authorized, 250,000 shares undesignated, no shares issued and outstanding | | | — | | | | — | |
Common stock, $.001 par value, 300,000,000 shares authorized, 40,343,892 and 39,801,796 shares issued and outstanding | | | 40,344 | | | | 39,802 | |
| | |
Treasury stock, at cost (100,785 and 68,089 shares) | | | (52,056 | ) | | | (48,642 | ) |
| | |
Additional paid-in capital | | | 82,227,041 | | | | 97,600,721 | |
| | |
Accumulated deficit | | | (330,700,872 | ) | | | (282,740,439 | ) |
| | | | | | | | |
| | |
Total stockholders’ deficit | | | (248,485,543 | ) | | | (185,148,558 | ) |
| | | | | | | | |
| | |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | | $ | 296,718,609 | | | $ | 372,176,222 | |
| | | | | | | | |
Dune Energy, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three months ended
September 30, | | | Nine months ended
September 30, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | | |
Revenues | | $ | 15,600,205 | | | $ | 11,336,319 | | | $ | 48,521,721 | | | $ | 35,281,958 | |
| | | | | | | | | | | | | | | | |
| | | | |
Operating expenses: | | | | | | | | | | | | | | | | |
Lease operating expense and production taxes | | | 5,259,215 | | | | 6,694,513 | | | | 19,478,783 | | | | 20,194,385 | |
Accretion of asset retirement obligation | | | 456,101 | | | | 392,237 | | | | 1,376,250 | | | | 1,192,058 | |
Depletion, depreciation and amortization | | | 7,534,943 | | | | 4,340,993 | | | | 21,935,896 | | | | 17,349,362 | |
General and administrative expense | | | 2,382,323 | | | | 3,060,245 | | | | 8,731,220 | | | | 11,692,710 | |
Impairment of oil and gas properties | | | — | | | | — | | | | 16,071,871 | | | | — | |
| | | | | | | | | | | | | | | | |
| | | | |
Total operating expense | | | 15,632,582 | | | | 14,487,988 | | | | 67,594,020 | | | | 50,428,515 | |
| | | | | | | | | | | | | | | | |
| | | | |
Operating income (loss) | | | (32,377 | ) | | | (3,151,669 | ) | | | (19,072,299 | ) | | | (15,146,557 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Other income (expense): | | | | | | | | | | | | | | | | |
| | | | |
Interest income | | | — | | | | 12,270 | | | | 612 | | | | 38,079 | |
| | | | |
Interest expense | | | (9,063,778 | ) | | | (8,814,933 | ) | | | (27,174,230 | ) | | | (26,234,441 | ) |
Gain (loss) on derivative liabilities | | | 63,877 | | | | (1,137,767 | ) | | | 1,759,141 | | | | (1,261,322 | ) |
| | | | | | | | | | | | | | | | |
Total other income (expense) | | | (8,999,901 | ) | | | (9,940,430 | ) | | | (25,414,477 | ) | | | (27,457,684 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Loss on continuing operations | | | (9,032,278 | ) | | | (13,092,099 | ) | | | (44,486,776 | ) | | | (42,604,241 | ) |
Income (loss) on discontinued operations | | | (63,528 | ) | | | 1,831,485 | | | | (3,473,657 | ) | | | 2,905,131 | |
| | | | | | | | | | | | | | | | |
| | | | |
Net loss | | | (9,095,806 | ) | | | (11,260,614 | ) | | | (47,960,433 | ) | | | (39,699,110 | ) |
| | | | |
Preferred stock dividend | | | (6,504,810 | ) | | | (9,657,788 | ) | | | (19,376,286 | ) | | | (28,990,268 | ) |
| | | | | | | | | | | | | | | | |
Net loss available to common shareholders | | $ | (15,600,616 | ) | | $ | (20,918,402 | ) | | $ | (67,336,719 | ) | | $ | (68,689,378 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Net loss per share: | | | | | | | | | | | | | | | | |
Basic and diluted from continuing operations | | $ | (0.39 | ) | | $ | (0.77 | ) | | $ | (1.58 | ) | | $ | (2.86 | ) |
Basic and diluted from discontinued operations | | | — | | | | 0.06 | | | | (0.09 | ) | | | 0.12 | |
| | | | | | | | | | | | | | | | |
Total basic and diluted | | $ | (0.39 | ) | | $ | (0.71 | ) | | $ | (1.67 | ) | | $ | (2.74 | ) |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
| | | | |
Basic and diluted | | | 40,365,873 | | | | 29,632,574 | | | | 40,327,091 | | | | 25,010,097 | |
| | | | |
Comprehensive loss: | | | | | | | | | | | | | | | | |
| | | | |
Net loss | | $ | (9,095,806 | ) | | $ | (11,260,614 | ) | | $ | (47,960,433 | ) | | $ | (39,699,110 | ) |
Other comprehensive income | | | — | | | | 924,218 | | | | — | | | | 2,772,654 | |
| | | | | | | | | | | | | | | | |
Comprehensive loss | | $ | (9,095,806 | ) | | $ | (10,336,396 | ) | | $ | (47,960,433 | ) | | $ | (36,926,456 | ) |
| | | | | | | | | | | | | | | | |
Dune Energy, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
| | | | | | | | |
| | | Nine months ended
September 30, | |
| | | 2010 | | | 2009 | |
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | |
| | |
Net loss | | $ | (47,960,433 | ) | | $ | (39,699,110 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | |
| | |
Loss (income) on discontinued operations | | | 3,473,657 | | | | (2,905,131 | ) |
| | |
Depletion, depreciation and amortization | | | 21,935,896 | | | | 17,349,362 | |
| | |
Impairment of oil and gas properties | | | 16,071,871 | | | | — | |
| | |
Amortization of deferred financing costs and debt discount | | | 3,026,141 | | | | 2,408,777 | |
| | |
Stock-based compensation | | | 1,477,410 | | | | 3,313,135 | |
| | |
Accretion of asset retirement obligation | | | 1,376,250 | | | | 1,192,058 | |
| | |
Loss (gain) on derivative liabilities | | | (1,651,797 | ) | | | 7,418,357 | |
Changes in: | | | | | | | | |
| | |
Accounts receivable | | | 5,130,533 | | | | 3,928,512 | |
| | |
Prepayments and other assets | | | 2,064,927 | | | | 2,780,838 | |
| | |
Payments made to settle asset retirement obligations | | | (218,481 | ) | | | (553,287 | ) |
| | |
Accounts payable and accrued liabilities | | | (5,025,218 | ) | | | (3,598,292 | ) |
| | | | | | | | |
| | |
NET CASH USED IN CONTINUED OPERATIONS | | | (299,244 | ) | | | (8,364,781 | ) |
| | |
NET CASH PROVIDED BY DISCONTINUED OPERATIONS | | | 2,857,240 | | | | 6,746,935 | |
| | | | | | | | |
| | |
NET CASH USED IN OPERATING ACTIVITIES | | | 2,557,996 | | | | (1,617,846 | ) |
| | | | | | | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | |
| | |
Investment in proved and unproved properties | | | (6,746,352 | ) | | | (9,011,836 | ) |
| | |
Purchase of furniture and fixtures | | | (13,704 | ) | | | (4,452 | ) |
| | |
Decrease in other assets | | | 338,980 | | | | 1,079,778 | |
| | | | | | | | |
| | |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES - CONTINUED OPERATIONS | | | (6,421,076 | ) | | | (7,936,510 | ) |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES - DISCONTINUED OPERATIONS | | | 29,347,980 | | | | (1,070,507 | ) |
| | | | | | | | |
| | |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | | | 22,926,904 | | | | (9,007,017 | ) |
| | | | | | | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | |
| | |
Proceeds from short-term debt | | | 6,000,000 | | | | 17,000,000 | |
Increase in loan costs | | | (1,133,662 | ) | | | — | |
Payments on short-term debt | | | (31,579,308 | ) | | | (2,013,699 | ) |
| | | | | | | | |
| | |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | | | (26,712,970 | ) | | | 14,986,301 | |
| | | | | | | | |
| | |
NET CHANGE IN CASH BALANCE | | | (1,228,070 | ) | | | 4,361,438 | |
| | |
Cash balance at beginning of period | | | 15,053,571 | | | | 15,491,532 | |
| | | | | | | | |
| | |
Cash balance at end of period | | $ | 13,825,501 | | | $ | 19,852,970 | |
| | | | | | | | |
| | |
SUPPLEMENTAL DISCLOSURES | | | | | | | | |
| | |
Interest paid | | $ | 16,327,192 | | | $ | 15,864,575 | |
| | |
Income taxes paid | | | — | | | | — | |
| | |
NON-CASH DISCLOSURES | | | | | | | | |
| | |
Common stock issued for conversion of preferred stock | | $ | 2,448,000 | | | $ | 52,753,000 | |
| | |
Redeemable convertible preferred stock dividends | | | 17,692,739 | | | | 27,530,781 | |
| | |
Accretion of discount on preferred stock | | | 1,683,547 | | | | 1,459,487 | |
