Exhibit 99.1
TRIANGLE PETROLEUM PROVIDES FINANCIAL RESULTS AND OPERATIONAL UPDATE FOR third QUARTER FISCAL YEAR 2016
DENVER, Colorado, December 8, 2015 – Triangle Petroleum Corporation (“Triangle” or the “Company”) (NYSE MKT: TPLM) today provides an operational update and reports its third quarter fiscal year 2016 financial results for the three-month period ended October 31, 2015 (“Q3 fiscal 2016” or “Q3 FY 2016”).
Third Quarter Highlights for Fiscal Year 2016 (ended October 31, 2015)
| · | | Quarterly production volumes of ~1,259 Mboe (13,685 Boepd) |
| · | | Consolidated cash flow from operations (before working capital changes) of $31.4 million and operating cash flow of $62.2 million |
| · | | Consolidated adjusted revenue of $93.0 million including $27.9 million of cash receipts from hedge settlements |
| · | | Consolidated adjusted EBITDA of $38.5 million |
| · | | $293.0 million of total liquidity as of October 31, 2015 (+2% q/q), including $36.3 million of cash on hand and available borrowing capacity on the Triangle USA Petroleum (“TUSA”) and RockPile Energy Services (“RockPile”) credit facilities |
| · | | TUSA and RockPile reduced debt by $26 million, or ~4%, including the repurchase and retirement of $10 million of face value of TUSA 6.75% Senior Notes and a net reduction in the outstanding balance of the combined TUSA and RockPile credit facilities of $16 million |
| · | | TUSA and RockPile in full compliance with all financial covenants of respective credit facilities |
| · | | TUSA generated adjusted revenue of $70.7 million in Q3 FY 2016 including $27.9 million of cash receipts from hedge settlements as compared to $80.8 million of comparable revenue in Q3 FY 2015 |
(-13% y/y)
| · | | TUSA’s pre-hedge oil price differential declined ~16% q/q to $4.14/Bbl |
| · | | Completed 2 gross (1.7 net) operated wells, maintaining inventory of 18 gross (15.8 net) operated wells waiting on completion as of October 31, 2015 |
| · | | Latest completion design delivering 15%+ and 25%+ improvement in 60- and 90-day cumulative production, respectively, over analogue offset wells over a broad geographic area |
| · | | TUSA’s cash operating expenses (LOE, Gathering, Transportation and Processing, production taxes, and G&A) per unit were $17.14/Boe in Q3 FY 2016 compared to $19.64/Boe in Q2 FY 2016 (-13% q/q) and $20.65/Boe in Q3 FY 2015 (-17% y/y) |
| · | | RockPile generated $25.8 million of stand-alone revenue in Q3 FY 2016 as compared to $143.5 million in Q3 FY 2015 (-82% y/y) |
| · | | RockPile had -$4.0 million of stand-alone EBITDA during the quarter as efforts to reduce operating and input costs were offset by lower utilization |
— Completed 27 wells in the quarter including 25 for third parties and 2 for TUSA
| · | | RockPile’s Q4 FY 2016 activity levels are trending well ahead of Q3 FY 2016 supported by increased activity in legacy basins and the establishment of operations in new markets including the Permian Basin where one completion crew is active and other ancillary services are being provided |
Segment Financial Results
Q3 FY 2016 stand-alone revenue and Adjusted-EBITDA (reference accompanying “Reconciliation Tables” and “Use of Segment Information and Non-GAAP Measures” disclosures at end of release).
| | | | |
Q3 FY 2016 | Revenue | y/y % Change | Adj.-EBITDA | y/y % Change |
E&P | $42.9 | -47% | $49.1 | -14% |
RockPile | $25.8 | -82% | ($4.0) | -112% |
Total | $68.7 | -69% | $45.1 | -51% |
*Dollars in U.S. millions. *E&P revenue does not include realized hedge settlements. |
*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. |
Q3 Fiscal 2016 Summary Consolidated Statement of Operations (in thousands)
| | | | |
| | Quarter Ended October 31, |
| | 2014 | | 2015 |
Revenues | | | | |
Oil, natural gas and natural gas liquids sales | | $ 80,139 | | $ 42,871 |
Oilfield services(a) | | 94,057 | | 22,273 |
Total revenues | | 174,196 | | 65,144 |
Expenses | | | | |
Lease operating expenses | | 7,317 | | 10,135 |
Gathering, transportation and processing | | 4,380 | | 6,537 |
Production taxes | | 8,637 | | 4,052 |
Depreciation and amortization(a) | | 32,471 | | 28,396 |
Impairment of oil and natural gas properties | | - | | 261,000 |
Accretion of asset retirement obligations | | 259 | | 75 |
Oilfield services(a) | | 70,805 | | 21,700 |
Corporate and other stock-based compensation | | 1,587 | | 7,259 |
E&P stock-based compensation | | 94 | | 390 |
RockPile stock-based compensation | | 146 | | 117 |
Corporate and other cash G&A expenses | | 3,693 | | 4,477 |
E&P cash G&A expenses | | 2,896 | | 855 |
RockPile cash G&A expenses | | 7,043 | | 5,336 |
Other | | 1,334 | | - |
Total operating expenses | | 140,662 | | 350,329 |
| | | | |
Operating Income (Loss) | | 33,534 | | (285,185) |
| | | | |
Interest expense, net | | (8,984) | | (9,877) |
Amortization of deferred loan costs | | (479) | | (852) |
Gain on extinguishment of debt | | - | | 4,175 |
Realized commodity derivative gains (losses) | | 688 | | 27,857 |
Unrealized commodity derivative gains (losses) | | 19,134 | | (21,044) |
Equity investment income (loss) | | 393 | | 450 |
Gain (loss) on equity investment derivatives | | 742 | | (1,118) |
Other income(a) | | (330) | | (1,405) |
Total other income (expense) | | 11,164 | | (1,814) |
| | | | |
Income (Loss) Before Income Taxes | | 44,698 | | (286,999) |
Income tax provision (benefit)(b) | | 19,300 | | - |
Net Income (Loss) Attributable to Common Stockholders | | $ 25,398 | | $ (286,999) |
| | | | |
Net Income (Loss) per Common Share | | | | |
Basic | | $ 0.30 | | $ (3.80) |
Diluted(c) | | $ 0.26 | | $ (3.80) |
| | | | |
Adjusted Net Income (Loss) per Common Share(d) | | | | |
Basic | | $ 0.17 | | $ (0.11) |
Diluted(c) | | $ 0.15 | | $ (0.11) |
| | | | |
Weighted Average Common Shares | | | | |
Basic | | 85,242 | | 75,588 |
Diluted | | 102,954 | | 75,588 |
(a) Includes intercompany eliminations; reference Note 3 – Segment Reporting in our Q3 fiscal year 2016 Form 10-Q for additional details
(b) The effective tax rate for the quarter ended October 31, 2014 was approximately 43.2%. Income tax provision is a non-cash expense
(c) Includes interest expense add-back of $0.9 million net of income taxes and amounts capitalized in Q3 fiscal 2015 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
Q3 Fiscal 2016 Summary Consolidated Balance Sheet (in thousands)
| | | | |
| | January 31, 2015 | | October 31, 2015 |
Assets | | | | |
Cash and equivalents | | $ 67,871 | | $ 36,250 |
Other current assets | | 241,638 | | 80,490 |
Net property and equipment | | 1,261,006 | | 641,483 |
Other noncurrent assets | | 84,355 | | 92,235 |
Total assets | | $ 1,654,870 | | $ 850,458 |
| | | | |
Liabilities and Stockholders' Equity | | | | |
Current liabilities | | $ 271,842 | | $ 139,034 |
TUSA credit facility | | 119,272 | | 189,272 |
RockPile credit facility | | 104,887 | | 54,130 |
TUSA 6.75% notes due July 2022 | | 429,500 | | 415,889 |
5% convertible note | | 135,877 | | 141,037 |
Other notes and mortgages payable | | 10,102 | | 12,566 |
Other noncurrent liabilities | | 38,372 | | 5,055 |
Total stockholders' equity | | 545,018 | | (106,525) |
Total liabilities and stockholders' equity | | $ 1,654,870 | | $ 850,458 |
Q3 Fiscal 2016 Production Volumes and Average Pre-Hedging Realized Prices
| | | | |
| | Quarter Ended October 31, |
| | 2014 | | 2015 |
Production volumes | | | | |
Crude oil (Mbbls) | | 947 | | 987 |
Natural gas (MMcf) | | 654 | | 814 |
Natural gas liquids (Mbbls) | | 69 | | 136 |
Total barrels of oil equivalent (Mboe) | | 1,125 | | 1,259 |
| | | | |
Average daily production volumes (Boe/d) | | 12,228 | | 13,685 |
| | | | |
Average realized prices: | | | | |
Crude oil ($ per Bbl) | | $ 79.11 | | $ 40.74 |
Natural gas ($ per Mcf) | | $ 4.59 | | $ 2.51 |
Natural gas liquids ($ per Bbl) | | $ 32.24 | | $ 4.52 |
Total average realized price ($ per Boe) | | $ 71.22 | | $ 34.05 |
Use of Segment Information and Non-GAAP Measures
| (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 performance as a stand-alone company 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 company administrative costs, (ii) intercompany eliminations, (iii) paid-in-kind interest expense on the 5% convertible note, 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.
Triangle believes 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. Triangle presents 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). |
About Triangle
Triangle (NYSE MKT: TPLM) is an independent energy company with a strategic focus on developing the Bakken Shale and Three Forks formations in the Williston Basin of North Dakota and Montana. For more information, visit Triangle's website at www.trianglepetroleum.com.
Conference Call Information
As previously announced, Triangle will host a conference call Wednesday, December 9, 2015 at 8:30 AM MT (10:30 AM ET) to provide an operational update and financial results of Triangle’s Q3 fiscal 2016, followed immediately by a question and answer session. A live webcast of the conference call can be accessed by visiting the following link: https://www.webcaster4.com/Webcast/Page/1137/11854. Alternatively, interested parties may dial-in using the conference call number (888) 347-6610. International parties may dial-in using (412) 902-4292. The Company recommends dialing into the conference call at least ten minutes before the scheduled start time. A recording of the conference call will be available through December 16, 2015 at (877) 344-7529 (conference # 10076479). For international participants, the replay dial-in number is (412) 317-0088 (conference # 10076479).
Q3 Fiscal 2016 Segment Income and Elimination (in thousands)
| | | | | | | | | | | | | | |
| Exploration and
Production | | Oilfield
Services | | Corporate
and Other(a) | | Eliminations
and Other | | Consolidated
Total |
Revenues | | | | | | | | | | | | | | |
Oil, natural gas and natural gas liquids sales | $ | 42,871 | | $ | - | | $ | - | | $ | - | | $ | 42,871 |
Oilfield services for third parties | | - | | | 21,922 | | | - | | | 351 | | | 22,273 |
Intersegment revenues | | - | | | 3,881 | | | - | | | (3,881) | | | - |
Total Revenues | | 42,871 | | | 25,803 | | | - | | | (3,530) | | | 65,144 |
| | | | | | | | | | | | | | |
Expenses | | | | | | | | | | | | | | |
LOE, GTP, Production Taxes and other expenses | | 20,724 | | | - | | | - | | | - | | | 20,724 |
Depreciation, amortization and accretion | | 21,469 | | | 6,797 | | | 420 | | | (215) | | | 28,471 |
Impairment of oil and natural gas properties | | 261,000 | | | - | | | - | | | - | | | 261,000 |
Cost of oilfield services | | - | | | 24,664 | | | - | | | (2,964) | | | 21,700 |
General and administrative | | 1,245 | | | 5,453 | | | 11,736 | | | - | | | 18,434 |
Total operating expenses | | 304,438 | | | 36,914 | | | 12,156 | | | (3,179) | | | 350,329 |
| | | | | | | | | | | | | | |
Operating Income | | (261,567) | | | (11,111) | | | (12,156) | | | (351) | | | (285,185) |
Other income (expense), net | | 2,991 | | | (2,062) | | | (2,298) | | | (445) | | | (1,814) |
Net Income (Loss) Before Income Taxes | $ | (258,576) | | $ | (13,173) | | $ | (14,454) | | $ | (796) | (b) | $ | (286,999) |
(a) Corporate and Other includes Triangle's 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 results from Triangle's investment in Caliber, including any changes in the fair value of equity investment derivatives. Other than Caliber, these subsidiaries have limited activity
(b) $0.8 million RockPile, Caliber, and other services consolidated elimination results in a $0.8 million reduction in oil and natural gas property expenditures.
*Reference Note 3 – Segment Reporting in our Q3 fiscal year 2016 Form 10-Q for additional details
Reconciliation Tables (in thousands)
| A. | | Consolidated Adjusted net income per common stockholder (reference disclosure (3) in “Use of Segment Information and Non-GAAP Measures”). |
| | | | |
| | Quarter Ended October 31, |
| | 2014 | | 2015 |
Net Income (Loss) Attributable to Common Stockholders | | $ 25,398 | | $ (286,999) |
Impairment of oil and natural gas properties | | - | | 261,000 |
Unrealized (gain) loss on commodity derivatives | | (19,134) | | 21,044 |
(Gain) loss on equity investment derivatives | | (742) | | 1,118 |
Gain on extinguishment of debt | | - | | (4,175) |
System conversion costs | | 1,334 | | - |
Tax adjustment(a) | | 8,007 | | - |
Adjusted Net Income (Loss) | | $ 14,863 | | $ (8,012) |
| | | | |
Adjusted Net Income (Loss) Per Common Share | | | | |
Basic | | $ 0.17 | | $ (0.11) |
Diluted(b) | | $ 0.15 | | $ (0.11) |
| | | | |
Weighted Average Common Shares | | | | |
Basic | | 85,242 | | 75,588 |
Diluted | | 102,954 | | 75,588 |
(a) Tax adjustment is calculated by applying Company's effective tax rate of 43.2% for Q3 fiscal 2015 to pre-tax effected adjusting items
(b) Includes interest expense add-back of $0.9 million net of income taxes and amounts capitalized for Q3 fiscal 2015 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”). |
| | | | | | |
| | | Quarter Ended October 31, |
| | | 2014 | | | 2015 |
Net Income (Loss) Before Income Taxes | | | $ 37,057 | | | $ (258,576) |
Depreciation and amortization | | | 30,291 | | | 21,394 |
Impairment of oil and natural gas properties | | | - | | | 261,000 |
Net interest expense | | | 6,846 | | | 7,241 |
Stock-based compensation | | | 94 | | | 390 |
Accretion of asset retirement obligations | | | 259 | | | 75 |
Other | | | 1,813 | | | (3,419) |
Unrealized commodity derivative losses (gains) | | | (19,134) | | | 21,044 |
Adjusted-EBITDA | | | $ 57,227 | | | $ 49,149 |
| C. | | Oilfield Services stand-alone Adjusted-EBITDA (reference disclosure (1) and (2) in “Use of Segment Information and Non-GAAP Measures”). |
| | | | |
| | Quarter Ended October 31, |
| | 2014 | | 2015 |
Net Income (Loss) Before Income Taxes | | $ 26,829 | | $ (13,173) |
Depreciation and amortization | | 6,119 | | 6,797 |
Stock-based compensation | | 146 | | 117 |
Net interest expense | | 572 | | 793 |
Other | | 999 | | 1,456 |
Adjusted-EBITDA(c) | | $ 34,665 | | $ (4,010) |
(c) RockPile Adjusted-EBITDA calculated per RockPile credit facility
Forward-Looking Statements Disclosure
The information presented in this press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors that could cause actual results to differ materially from the results contemplated by the forward-looking statements include, but are not limited to, the risks discussed in the Company's annual report on Form 10-K and its other filings with the Securities and Exchange Commission. The forward-looking statements in this press release are made as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement as a result of new information, future developments, or otherwise.
Contact
Triangle Petroleum Corporation
Joe Magner, Vice President, Capital Markets
303-260-7125
info@trianglepetroleum.com
