Exhibit 99.1
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For Immediate Release | Contact Information |
Monday, March 16, 2009 | Investors: Roberto R. Thomae |
(210) 496-5300 ext. 214, bthomae@txco.com | |
Media: Paul Hart | |
(210) 496-5300 ext. 264, pdhart@txco.com |
TXCO Resources Reports 2008 Results
SAN ANTONIO -- March 16, 2009 -- TXCO Resources Inc. (Nasdaq:TXCO) today provided financial and operating results for the year and quarter ended December 31, 2008, and filed its annual report on Form 10-K with the Securities and Exchange Commission.
Sharp declines in crude oil and natural gas prices in late 2008 significantly reduced TXCO's revenues, net income and cash flow, continuing into first-quarter 2009. For 2008, revenues rose to $143.7 million from $93.9 million in 2007, while crude oil and natural gas sales totaled $127.6 million, up from $81.8 million in the prior year. Year-end 2008 assets stood at $486.9 million, up from $354.6 million at the end of 2007.
Operating income was $19.6 million, compared with $10.4 million in 2007. The Company reported a net loss attributable to common stock of $0.47 million, equal to $0.01 per share, compared with net income of $0.94 million, or $0.03 per share, in the prior year.
Net cash provided by operating activities rose to $100.6 million from $69.4 million in 2007. Ebitda -- earnings before income taxes, interest expense, depreciation, depletion, amortization, impairment and abandonment expense -- was $89.6 million, or $2.59 per share, compared with $52.9 million, or $1.52 per share a year earlier. Ebitdax -- Ebitda plus exploration expense -- was $92.4 million, or $2.67 per share, compared with $54.2 million, or $1.56 per share. All per-share amounts are on a diluted basis. See the accompanying table for a reconciliation of these non-GAAP financial measures.
Impairment expense was sharply higher, reflecting suspension of TXCO's San Miguel oil sands pilot projects and the commodity price declines. Depreciation, depletion and amortization expense also rose due to full-year inclusion of Output Exploration costs (TXCO acquired Output in April 2007), plus higher finding costs, depletion rates and costs related to new wells placed on production during 2008.
Fourth-Quarter Results
For the fourth quarter of 2008, TXCO had a net loss attributable to common stock of $18.0 million, or $0.51 per share, compared with net income of $1.8 million, $0.05 per share, in the 2007 quarter. Revenues for the three months were $21.0 million, compared with $32.1 million a year earlier. Oil and gas sales were $18.4 million, compared with $28.9 million for fourth-quarter 2007.
Liquidity Issues/Going Concern
The financial statements reported in TXCO's Form 10-K for the 2008 fiscal year contain a "going concern" qualification in the opinion of the Company's independent auditors, Akin, Doherty, Klein & Feuge P.C. The auditors have included in their opinion an explanatory paragraph indicating that TXCO's working capital deficiency, non-compliance with its current ratio debt covenant under its bank credit facilities, and violation of a provision in its certificates of designations for its Series D and Series E preferred stock giving the holders of the preferred stock the right to demand redemption of such stock, raise substantial doubt about TXCO's ability to continue as a going concern.
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During 2008, TXCO engaged in the largest capital expenditure program in its history. Costs incurred in the development and purchase of oil and gas properties increased from $117 million in 2007 to $182 million in 2008. While pursuing its drilling program, costs to drill escalated throughout the summer followed by an unprecedented collapse in commodity prices. The time lag between incurring drilling costs and the resulting increase in revenues from new production, combined with deteriorating economic conditions, have created severe cash flow constraints for TXCO.
As a result, TXCO has recently experienced substantial difficulties in meeting short-term cash needs, particularly its vendor commitments. TXCO reported $49.7 million in trade payables at year-end 2008, of which approximately $4.1 million are currently 60 days or more past due. TXCO's failure to reach accommodations with these vendors could result in the filing of liens or the withdrawal of trade credit, and could limit its ability to conduct operations on Company properties.
As announced previously, TXCO determined in preparing its 2008 financial statements that it was in violation of the current ratio covenant of its bank credit facilities. As a result of this default, its lenders may, among other things, declare all or any part of the unpaid principal and accrued interest under its bank credit facilities immediately due and payable. Consequently in accordance with GAAP, $153.0 million in long-term debt was reclassified as a current liability. TXCO's lenders currently are not permitting it to make additional borrowings under its bank credit facilities. If TXCO's lenders demanded repayment and TXCO failed to repay the amounts due under the bank credit facilities, the lenders could exercise their remedies under the bank credit facilities, including foreclosing on substantially all TXCO's assets, which TXCO pledged as collateral to secure its obligations under the bank credit facilities. These circumstances could require TXCO to seek relief through a filing under the U.S. Bankruptcy Code. TXCO is in discussions with its lenders regarding a waiver of the current ratio covenant and other arrangements through which the lenders would refrain from exercising their rights under the bank credit facilities as a result of the default. However, there can be no assurance that TXCO will be able to obtain such a waiver or obtain other relief from its lenders.
Under the terms of TXCO's certificates of designations for its Series D and Series E preferred stock, the default under the bank credit facilities results in the holders of the Series D and Series E preferred stock having a right to demand redemption of their preferred stock. Consequently $66.9 million, representing the stated value of the preferred stock at December 31, 2008, was reclassified as a current liability. However under the terms of the certificates of designations, TXCO's obligation to pay the redemption price of any preferred stock demanded to be redeemed is suspended until the earlier of (a) October 31, 2012, or (b) the date that all of TXCO's obligations under the bank facilities have been satisfied.
As a result of the $153.0 million in long-term debt and $66.9 million in preferred stock being reclassified to current liabilities and the outstanding trade payables of $49.7 million, TXCO reported a working capital deficiency of $256.9 million at year-end 2008. TXCO's ability to continue as a going concern will depend on its ability to generate additional sources of capital in the near future, of which there can be no assurance.
Substantially all of the Company's assets are pledged, and extreme volatility in energy prices and a deteriorating global economy, have significantly hindered its ability to raise debt and equity capital. Management is pursuing options to improve liquidity by implementing several cost-reduction measures, including staff reductions and shutting down certain operations.
As previously announced, TXCO retained Goldman, Sachs & Co. to perform a strategic alternatives review. This review is designed to enhance stockholder value, which may include sale of certain assets, issuance of stock, additional debt or other securities, or a merger or sale of the Company. No formal decisions have been made and no agreements have been reached at this time. There can be no assurance that any particular alternative will be pursued or that any transaction will occur, or on what terms. TXCO does not expect to disclose developments from this review unless its board of directors approves a definitive transaction.
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Proved Reserves
TXCO's estimated net proved reserves at year-end 2008 stood at 81.7 bcfe, a 10.1 bcfe decrease from 91.8 bcfe at year-end 2007. Production during 2008 totaled 9.2 bcfe, with the remaining 0.9 bcfe decline attributable to the sharp commodity price decline, plus the third-quarter 2008 sale of 15 non-core properties, largely offset by new reserves added by drilling.
Estimated, pre-tax future net cash flows discounted at 10 percent (PV-10) for proved reserves at year-end 2008 were $137.5 million, based on adjusted commodity prices of $41.25 per barrel for crude oil and $5.245 per mmBtu for natural gas. A year earlier, TXCO's 2007 PV-10 of $373 million was based on adjusted commodity prices of $92.75 per barrel and $6.445 per mmBtu, respectively. See the accompanying table for a reconciliation of this non-GAAP financial measure. The Company's reserve life index was 8.9 years, compared with 11.5 years at year-end 2007. Its reserve mix was 56 percent oil and 44 percent gas, of which approximately 53 percent was proved developed.
In late 2008, the SEC issued new regulations for disclosing the quantity and value of proved reserves, effective December 31, 2009. A key change in the SEC's modernizing of its regulations allows exploration and production companies to use average commodity prices throughout the year to calculate the value of proved reserves versus the current method of year-end prices.
Using these new pricing guidelines, TXCO's total proved reserves at December 31, 2008, would have been 88.5 bcfe valued at a pre-tax PV-10 of $415.3 million. These values are based on average 2008 benchmark NYMEX prices of $98.79 per barrel for oil and $8.59 per mmBtu for gas. No reconciliation has been made of this non-GAAP measure as the standardized measure has not been computed under the new rules.
These reserve estimates were prepared by the independent engineering firms of DeGolyer and MacNaughton and William M. Cobb & Associates Inc. in accordance with SEC and Financial Accounting Standards Board requirements.
Operations Update
TXCO has significantly reduced drilling in light of current commodity prices and liquidity constraints. It is moving ahead with a limited drilling program, focused on high-impact projects, particularly the Maverick Basin's Pearsall and Eagle Ford shale gas resource plays. It currently has two rigs operating.
In tests following a multi-stage fracture stimulation, the Briscoe Catarina West 1H (50 percent working interest through completion) flowed at rates as high as 6 mmcfde from the Eagle Ford with a high liquids content. On the Pearsall play, a multi-stage frac is under way on the San Pedro Ranch 2 (50% WI through completion) following mechanical delays. Targeting the Georgetown formation, the Burr C 7-231XH (50% WI) flowed at rates as high at 1.9 mmcfe with high liquids content in tests.
Management Perspective
"TXCO's leasehold assets have excellent prospects but currently we face extraordinary challenges following the unprecedented collapse in oil and gas prices that occurred late last year," said Chairman and CEO James E. Sigmon. "We are moving ahead, within current financial constraints, to drill the Eagle Ford, Pearsall, Georgetown and other highly prospective plays. We're taking aggressive and prudent actions to re-set financial obligations of the Company and to our stakeholders. We also are continuing our strategic alternatives review. Our goal continues to be converting the extensive potential of our large acreage position with multiple plays into stockholder value."
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Conference Call
TXCO has scheduled a conference call to update investors on recent events for 9 a.m. CDT (10 a.m. EDT), Thursday, March 19, 2009. The call will be broadcast live via the Company's Web site at http://www.txco.com/concall.html, and by telephone at (877) 387-9209 (U.S./Canada) and (706) 643-3820 (international), passcode 86336244. A replay will be available through Friday, March 20, at (800) 642-1687 (U.S./Canada) and (706) 645-9291 (international), same passcode, and for 30 days at http://www.txco.com/concall.html.
About TXCO Resources
TXCO Resources is an independent oil and gas enterprise with interests in the Maverick Basin, the onshore Gulf Coast region and the Marfa Basin of Texas, and the Midcontinent region of western Oklahoma. TXCO's business strategy is to build stockholder value by acquiring undeveloped mineral interests and internally developing a multi-year drilling inventory through the use of advanced technologies, such as 3-D seismic and horizontal drilling. It accounts for its oil and gas operations under the successful efforts method of accounting and trades its common stock on Nasdaq's Global Select Market under the symbol "TXCO." Additional information, including recent regulatory filings and investor presentations, is available at the Company's Web site, www.txco.com.
Forward-Looking Statements
Statements in this press release that are not historical, including statements regarding TXCO's or management's intentions, hopes, beliefs, expectations, representations, projections, estimations, plans or predictions of the future, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include those relating to estimated financial results, bank credit and working capital availability, expected prices, production volumes, well test results, reserve levels and number of drilling locations expected, drilling plans, including the timing, category, number, depth, cost and/or success of wells to be drilled, expected geological formations or the availability of specific services, equipment or technologies. It is important to note that actual results may differ materially from the results predicted in any such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, our ability to obtain capital on reasonable terms, or at all, to fund our working capital or other needs; the adequacy of our liquidity and our ability to meet our cash commitments, working capital needs, and lender and vendor obligations and our commitments to pay dividends on our preferred stock; general market conditions; adverse capital and credit market conditions; uncertainty about the effectiveness of the U.S. Government's plan to stabilize financial markets; the impairment of financial institutions; results of our strategic alternatives review; vendor relations; the costs and accidental risks inherent in exploring and developing new oil and natural gas reserves; the price for which such reserves and production can be sold; fluctuation in prices of oil and natural gas; the uncertainties inherent in estimating quantities of proved reserves and cash flows; competition; actions by third-party co-owners in properties in which we also own an interest; acquisitions of properties and businesses; operating hazards; environmental concerns affecting the drilling of oil and natural gas wells; impairment of oil and gas properties due to depletion or other causes; dependence on key personnel, the outcome of litigation; and hedging decisions, including whether or not to hedge. TXCO undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. More information about potential factors that could affect TXCO's operating and financial results is included in TXCO's annual report on Form 10-K for the year ended December 31, 2008. This report and all previously filed documents are on file at the Securities and Exchange Commission and can be viewed on TXCO's Web site at www.txco.com. Copies are available from TXCO without charge.
(Financial Information and Selected Operational Tables Follow)
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TXCO RESOURCES INC. (Unaudited) | |||||
December 31 | |||||
(in thousands) | 2008 | 2007 | |||
Assets | |||||
Current Assets | |||||
Cash and equivalents | $12,236 | $9,831 | |||
Accounts receivable: | |||||
Joint interest owners | 13,833 | 4,167 | |||
Oil and natural gas sales | 6,808 | 13,785 | |||
Federal income tax | - | 4,974 | |||
Derivative settlements | 1,586 | - | |||
Accrued derivative asset | 5,916 | - | |||
Prepaid expenses and other | 4,470 | 2,989 | |||
Total Current Assets | 44,849 | 35,746 | |||
Property and Equipment, net - successful efforts method of accounting for oil and natural gas properties | 433,126 | 314,941 | |||
Other Assets | |||||
Deferred financing fees | 2,950 | 2,613 | |||
Other assets | 1,143 | 1,307 | |||
Accrued derivative asset | 4,782 | - | |||
Total Other Assets | 8,875 | 3,920 | |||
Total Assets | $486,850 | $354,607 |
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TXCO RESOURCES INC. Condensed Consolidated Balance Sheets (Unaudited) | |||||
December 31 | |||||
(in thousands, except shares and per share amounts) | 2008 | 2007 | |||
Liabilities And Stockholders' Equity | |||||
Current Liabilities | |||||
Accounts payable, trade | $49,661 | $11,345 | |||
Other payables and accrued liabilities | 25,114 | 39,916 | |||
Undistributed revenue | 3,262 | 2,401 | |||
Notes payable | 1,518 | 399 | |||
Bank debt | 153,000 | - | |||
Redeemable preferred stock | 66,909 | - | |||
Derivative settlements payable | - | 475 | |||
Preferred dividends payable | - | 397 | |||
Accrued derivative obligation | 2,324 | 4,725 | |||
Total Current Liabilities | 301,788 | 59,658 | |||
Long-Term Liabilities | |||||
Long-term debt, net of current portion | - | 100,000 | |||
Deferred income taxes | 19,602 | 12,007 | |||
Accrued derivative obligation | 1,162 | 3,993 | |||
Asset retirement obligation | 8,569 | 4,233 | |||
Total Long-Term Liabilities | 29,333 | 120,233 | |||
Commitments and Contingencies | - | - | |||
Stockholders' Equity | |||||
Preferred stock; authorized 10,000,000 shares; Series A & B, -0- shares issued and outstanding; Series C, -0- and 55,000 shares issued and outstanding; Series D, 56,909 and -0- shares issued and outstanding; Series E, 20,000 and -0- shares issued and outstanding | - | 1 | |||
Common stock, par value $0.01 per share; authorized 100,000,000 shares, issued 37,420,953 and 34,269,038 shares, and outstanding 37,254,100 and 34,150,619 | 374 | 343 | |||
Additional paid-in capital | 148,534 | 177,030 | |||
Retained earnings | 3,088 | 3,561 | |||
Accumulated other comprehensive income (loss) net of tax | 4,759 | (5,754 | ) | ||
Less treasury stock, at cost, 166,853 shares and 118,419 shares | (1,026 | ) | (465 | ) | |
Total Stockholders' Equity | 155,729 | 174,716 | |||
Total Liabilities and Stockholders' Equity | $486,850 | $354,607 |
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TXCO RESOURCES INC. Condensed Consolidated Statements of Operations (Unaudited) | ||||||||
Years Ended December 31 | ||||||||
(in thousands, except earnings per share data) | 2008 | 2007 | 2006 | |||||
Revenues | ||||||||
Oil and natural gas sales | $127,551 | $81,753 | $56,520 | |||||
Gas gathering operations | 14,155 | 11,958 | 15,853 | |||||
Other operating income | 2,030 | 195 | 45 | |||||
Total Revenues | 143,736 | 93,906 | 72,418 | |||||
Costs and Expenses | ||||||||
Lease operations | 18,939 | 14,105 | 7,248 | |||||
Drilling operations | 1,058 | - | - | |||||
Production taxes | 6,572 | 4,672 | 2,551 | |||||
Exploration expenses | 2,825 | 1,222 | 2,968 | |||||
Impairment and abandonments | 13,931 | 1,983 | 1,722 | |||||
Gas gathering operations | 14,615 | 13,257 | 16,255 | |||||
Depreciation, depletion and amortization | 52,434 | 36,202 | 23,840 | |||||
General and administrative | 13,788 | 12,058 | 7,298 | |||||
Total Costs and Expenses | 124,162 | 83,499 | 61,882 | |||||
Income from Operations | 19,574 | 10,407 | 10,536 | |||||
Other Income (Expense) | ||||||||
Interest expense | (8,997 | ) | (9,686 | ) | (269 | ) | ||
Interest income | 187 | 329 | 550 | |||||
(Loss) gain on sale of assets | (1,016 | ) | 1 | (8 | ) | |||
Loan fee amortization | (1,198 | ) | (554 | ) | (216 | ) | ||
Derivative mark-to-market gain | - | - | 1,995 | |||||
Derivative settlements loss | - | - | (2,686 | ) | ||||
Total Other Income (Expense), Net | (11,024 | ) | (9,910 | ) | (634 | ) | ||
Income before income taxes | 8,550 | 497 | 9,902 | |||||
Income tax expense (benefit) -- | current | 488 | (5,301 | ) | 1,232 | |||
deferred | 2,180 | 4,458 | 1,429 | |||||
Net Income | 5,882 | 1,340 | 7,241 | |||||
Preferred dividends | 6,355 | 397 | - | |||||
Net Income (Loss) Available to Common Stockholders | $ (473 | ) | $943 | $7,241 | ||||
Earnings (Loss) Per Share: | ||||||||
Basic | $(0.01 | ) | $0.03 | $0.23 | ||||
Diluted | $(0.01 | ) | $0.03 | $0.22 | ||||
Weighted average number of common shares outstanding: | ||||||||
Basic | 34,635 | 33,422 | 31,916 | |||||
Diluted | 34,635 | 34,740 | 33,247 |
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TXCO RESOURCES INC. Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||
Years Ended December 31 | |||||||
(in thousands) | 2008 | 2007 | 2006 | ||||
Operating Activities: | |||||||
Net income | $5,882 | $1,340 | $7,241 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 53,631 | 36,756 | 24,056 | ||||
Impairments, abandonments and dry hole costs | 13,931 | 2,436 | 1,722 | ||||
Loss (gain) on sale of assets | 1,016 | (1 | ) | 8 | |||
Deferred tax expense | 2,180 | 4,458 | 1,560 | ||||
Excess tax benefits from stock-based compensation | (1,453 | ) | - | - | |||
Non-cash compensation expense | 3,626 | 2,824 | 1,207 | ||||
Non-cash derivative mark-to market (gain) | - | - | (1,995 | ) | |||
Non-cash change in components of Other Comprehensive Income | - | 1,524 | 806 | ||||
Changes in operating assets and liabilities: | |||||||
Receivables | (4,275 | ) | (8,820 | ) | 213 | ||
Prepaid expenses and other | (2,852 | ) | (6,027 | ) | 747 | ||
Accounts payable and accrued expenses | 23,898 | 35,590 | (2,342 | ) | |||
Current income taxes receivable (payable) | 4,977 | (688 | ) | (8,499 | ) | ||
Net cash provided by operating activities | 100,561 | 69,392 | 24,724 | ||||
Investing Activities: | |||||||
Development and purchases of oil and natural gas properties | (181,565 | ) | (117,311 | ) | (52,927 | ) | |
Purchase of subsidiary | - | (95,994 | ) | - | |||
Purchase of other equipment | (3,164 | ) | (3,105 | ) | (6,941 | ) | |
Proceeds from sale of assets | 7,383 | 6,001 | 23 | ||||
Net cash used by investing activities | (177,346 | ) | (210,409 | ) | (59,845 | ) | |
Financing Activities: | |||||||
Proceeds from bank credit facility | 75,700 | 168,500 | 13,450 | ||||
Payments on bank credit facility | (21,700 | ) | (70,851 | ) | (11,100 | ) | |
Payments on installment and other obligations | (599 | ) | (577 | ) | (489 | ) | |
Proceeds from installment and other obligations | 717 | 710 | 494 | ||||
Issuance of preferred stock, net of expenses | 32,233 | 52,777 | - | ||||
Purchase of lower call option | (11,617 | ) | (21,569 | ) | - | ||
Proceeds from sale of upper call option | 9,357 | 17,852 | - | ||||
Payment of preferred stock dividends | (4,262 | ) | - | - | |||
Proceeds from issuance of common stock, net of expenses | 33 | 145 | 29,956 | ||||
Cost of shares retired upon option exercises | (2,414 | ) | - | - | |||
Excess tax benefits from stock-based compensation | 1,453 | - | - | ||||
Proceeds from exercise of stock options | 850 | 198 | 609 | ||||
Purchase of treasury shares | (561 | ) | (219 | ) | - | ||
Net cash provided by financing activities | 79,190 | 146,966 | 32,920 | ||||
Change in Cash and Equivalents | 2,405 | 5,949 | (2,201 | ) | |||
Cash and Equivalents at Beginning of Year | 9,831 | 3,882 | 6,083 | ||||
Cash and Equivalents at End of Year | $12,236 | $9,831 | $3,882 | ||||
Supplemental Disclosures: | |||||||
Cash paid for interest | $10,850 | $7,855 | $213 | ||||
Cash paid for income taxes | 132 | 415 | 10,581 |
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TXCO RESOURCES INC. SELECTED QUARTERLY FINANCIAL INFORMATION SELECTED FINANCIAL INFORMATION - BALANCE SHEET | ||||||||
2008 | 2007 | |||||||
4TH | 4TH | |||||||
(in thousands) | QUARTER | QUARTER | ||||||
Current Assets | $ 44,849 | $ 35,746 | ||||||
Property and Equipment - Net | 433,126 | 314,941 | ||||||
Other Assets | 8,875 | 3,920 | ||||||
Total Assets | $ 486,850 | $ 354,607 | ||||||
Current Liabilities | $ 301,788 | $ 59,658 | ||||||
Long-Term Liabilities | 29,333 | 120,233 | ||||||
Stockholders' Equity | 155,729 | 174,716 | ||||||
Total Liabilities and Stockholders' Equity | $ 486,850 | $ 354,607 |
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TXCO RESOURCES INC. SELECTED QUARTERLY FINANCIAL INFORMATION SELECTED FINANCIAL INFORMATION - INCOME STATEMENT | ||||||||||
2008 | 2007 | |||||||||
4TH | 4TH | |||||||||
(in thousands, except per share data) | QUARTER | QUARTER | ||||||||
Revenues | ||||||||||
Oil and gas natural sales | $ 18,404 | $ 28,880 | ||||||||
Gas gathering operations | 2,205 | 3,086 | ||||||||
Other | 416 | 111 | ||||||||
Total Revenues | 21,025 | 32,077 | ||||||||
Costs and Expenses | ||||||||||
Lease operations | 5,561 | 4,071 | ||||||||
Drilling operations | (53) | |||||||||
Production taxes | 727 | 1,657 | ||||||||
Exploration expenses | 1,338 | 300 | ||||||||
Impairments and abandonments | 12,812 | 1,693 | ||||||||
Gas gathering operations | 2,615 | 3,587 | ||||||||
Depreciation, depletion and amortization | 13,367 | 10,985 | ||||||||
General and administrative | 2,973 | 4,062 | ||||||||
Total Costs and Expenses | 39,340 | 26,355 | ||||||||
Income (loss) from Operations | (18,315) | 5,722 | ||||||||
Other Income (Expense) | ||||||||||
Interest income | 45 | 91 | ||||||||
Interest expense | (2,495) | (3,319) | ||||||||
Loan fee amortization | (305) | (210) | ||||||||
Derivative mark-to-market gain | - | - | ||||||||
Derivative settlements (loss) | - | - | ||||||||
Gain on sale of assets | (234) | 1 | ||||||||
Total Other Income (Expense) | (2,989) | (3,437) | ||||||||
Income (loss) before income tax | (21,304) | 2,285 | ||||||||
Income tax (benefit) expense | (5,790) | 118 | ||||||||
Net Income (Loss) | (15,514) | 2,167 | ||||||||
Preferred dividends | 2,531 | 397 | ||||||||
Net Income (Loss) Available to Common Stockholders | $ (18,045) | $ 1,770 |
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TXCO RESOURCES INC. SELECTED QUARTERLY FINANCIAL INFORMATION SELECTED FINANCIAL INFORMATION - INCOME STATEMENT (continued) | |||||||||||||
2008 | 2007 | ||||||||||||
4TH | 4TH | ||||||||||||
(in thousands, except per share data) | QUARTER | QUARTER | |||||||||||
EBITDA* | $ 8,778 | $ 20,039 | |||||||||||
EBITDAX* | $ 10,116 | $ 20,339 | |||||||||||
Earnings per share -- Reported | |||||||||||||
Basic | $ (0.51) | $ 0.05 | |||||||||||
Diluted | $ (0.51) | $ 0.05 | |||||||||||
EBITDA per share | |||||||||||||
Basic | $ 0.25 | $ 0.60 | |||||||||||
Diluted | $ 0.25 | $ 0.57 | |||||||||||
EBITDAX per share | |||||||||||||
Basic | $ 0.28 | $ 0.61 | |||||||||||
Diluted | $ 0.28 | $ 0.58 | |||||||||||
Weighted average number of common shares outstanding | |||||||||||||
Basic | 35,694 | 33,619 | |||||||||||
Diluted | 35,694 | 34,984 | |||||||||||
Sales volumes - Oil and Natural Gas | |||||||||||||
Natural Gas (MMcf) | 238 | 607 | |||||||||||
Oil (MBbl) | 284 | 295 | |||||||||||
Equivalent (MMcfe) | 1,942 | 2,376 | |||||||||||
* Please see the last page of this press release for a reconciliation of these non-GAAP financial measures.
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TXCO RESOURCES INC. SELECTED QUARTERLY FINANCIAL INFORMATION SELECTED FINANCIAL INFORMATION - CASH FLOWS | ||||||||||
2008 | 2007 | |||||||||
4TH | 4TH | |||||||||
(in thousands) | QUARTER | QUARTER | ||||||||
Net income (loss) | $ (15,514) | $ 2,167 | ||||||||
Adjustments to reconcile net income to | ||||||||||
net cash provided by operating activities: | ||||||||||
Depreciation, depletion and amortization | 13,672 | 11,194 | ||||||||
Impairments, abandonments and dry hole costs | 12,812 | 1,693 | ||||||||
Loss (gain) on sale of assets | 234 | (1) | ||||||||
Deferred tax (benefit) expense | (6,198) | 119 | ||||||||
Non-cash change in components of other comprehensive income | - | - | ||||||||
Non-cash compensation expense | 913 | 1,640 | ||||||||
Non-cash derivative mark-to-market (gain) loss | - | - | ||||||||
Changes in operating assets and liabilities | 31,589 | 25,244 | ||||||||
Net cash provided by operating activities | $ 37,508 | $ 42,056 | ||||||||
Capital Expenditures | $ 53,685 | $ 49,170 |
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TXCO RESOURCES INC. SELECTED OPERATING DATA | |||||||
Three Months Ended | Year Ended | ||||||
($'s in thousands, except average prices) | 9/30/08 | 12/31/08 | 12/31/07 | 12/31/08 | 12/31/07 | ||
Net cash provided (used) in operating activities | $39,132 | $37,508 | $42,056 | $100,561 | $69,392 | ||
Average common shares outstanding for diluted earnings per share | 35,553 | 35,694 | 34,984 | 34,635 | 35,715 | ||
Ebitdax * | $28,306 | $10,116 | $20,339 | $92,390 | $54,162 | ||
Ebitda * | $28,030 | $8,778 | $20,039 | $89,564 | $52,939 | ||
Current ratio | 0.74 | 0.55 | 0.60 | 0.55 | 0.60 | ||
Debt to asset ratio | 27.9% | 31.7% | 28.3% | 31.7% | 28.3% | ||
Sales | |||||||
Oil: | |||||||
Sales, in mBbl | 293 | 284 | 295 | 1,132 | 974 | ||
Average realized sales price per barrel, excluding hedging impact of: | $112.92 -9.86 | $54.05 +6.89 | $86.72 -4.51 | $97.43 -5.06 | $71.11 -1.64 | ||
Natural Gas: | |||||||
Sales, in mmcf | 705 | 238 | 607 | 2,422 | 2,125 | ||
Average realized sales price per mcf, excluding hedging impact of: | $10.37 -0.36 | $3.98 +0.63 | $7.60 +0.05 | $9.61 -0.12 | $7.26 -0.64 | ||
Equivalent Basis: | |||||||
Sales in mBOE | 410 | 324 | 396 | 1,536 | 1,328 | ||
Average realized sales price per BOE, excluding hedging impact of: | $98.40 -7.66 | $50.35 +6.52 | $76.21 -3.29 | $86.98 -3.92 | $63.77 -2.23 | ||
Sales in mmcfe | 2,462 | 1,942 | 2,376 | 9,214 | 7,971 | ||
Average realized sales price per mcfe, excluding hedging impact of: | $16.40 -1.28 | $8.39 +1.09 | $12.70 -0.55 | $14.50 -0.66 | $10.63 -0.37 | ||
Other Operating Data | |||||||
Total lifting costs | $7,010 | $5,919 | $5,520 | $25,378 | $18,558 | ||
Total lifting costs per BOE | $17.08 | $18.29 | $13.94 | $16.52 | $13.97 | ||
Total lifting costs per mcfe | $2.85 | $3.05 | $2.32 | $2.75 | $2.33 | ||
Sales volume -oil properties -mBbl | 286 | 273 | 286 | 1,094 | 955 | ||
Oil prop. lifting costs-oil (Including Production & Severance Tax) | $4,995 | $4,962 | $4,208 | $19,754 | $13,742 | ||
Oil prop. lifting costs per barrel | $17.47 | $18.20 | $14.72 | $18.06 | $14.39 | ||
Glen Rose Porosity sales volume -mBbl | 218 | 215 | 213 | 812 | 705 | ||
Glen Rose Porosity lifting costs per barrel | $9.61 | $8.65 | $8.58 | $10.20 | $8.99 | ||
Sales volume -- natural gas properties -mmcf | 634 | 275 | 530 | 2,238 | 2,048 | ||
Natural gas prop. lifting costs-gas (Including Production & Severance Tax) | $1,646 | $1,234 | $730 | $6,027 | $2,354 | ||
Natural gas prop. lifting costs per mcf | $2.60 | $4.48 | $1.38 | $2.69 | $1.15 | ||
Total depletion cost per BOE | $31.37 | $40.56 | $30.73 | $33.96 | $27.06 | ||
Total depletion cost per mcfe | $5.23 | $6.76 | $5.12 | $5.66 | $4.50 | ||
* Please see the last page of this press release for a reconciliation of these non-GAAP financial measures. |
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TXCO Resources Inc. EBITDA And EBITDAX Reconciliation To Net Income And Net Cash Provided For The Periods Indicated | |||||
Fourth Quarter of | Full Year | ||||
($ Thousands) | 2008 | 2007 | 2008 | 2007 | |
Net cash provided by operating activities per CF Stmt | 37,508 | 42,056 | 100,561 | 69,392 | |
Change in operating assets and liabilities | 31,589 | 25,245 | 21,748 | 20,056 | |
Operating CF before change in operating assets & liabilities | 5,919 | 16,811 | 78,813 | 49,337 | |
Deferred income taxes | 6,198 | (119) | (2,180) | (4,458) | |
Cash portion of net interest expense | 2,450 | 3,228 | 8,810 | 9,357 | |
Excess tax benefit from stock-based compensation | - | - | 1,453 | - | |
Derivative settlements loss | - | - | - | 1,524 | |
Income tax | (5,790) | 119 | 2,668 | (843) | |
Exploration costs | 1,339 | 300 | 2,825 | 1,222 | |
Dry hole costs | - | - | - | (454) | |
Change in components of other comprehensive income | - | - | - | (1,524) | |
Ebitdax | 10,116 | 20,339 | 92,390 | 54,162 | |
Less: Exploration costs | 1,339 | 300 | 2,825 | 1,222 | |
Ebitda | 8,778 | 20,039 | 89,564 | 52,939 | |
Less: | |||||
Loss (Gain) on sale of assets | 234 | (1) | 1,016 | (1) | |
Income tax expense | (5,790) | 119 | 2,668 | (843) | |
Impairment & abandonments | 12,812 | 1,693 | 13,931 | 1,983 | |
Derivative Loss (Gain) | - | - | - | 1,524 | |
Interest, net | 2,450 | 3,228 | 8,810 | 9,357 | |
Non cash compensation | 913 | 1,639 | 3,626 | 2,824 | |
DD&A | 13,672 | 11,194 | 53,631 | 36,756 | |
Net Income (Loss) | (15,514) | 2,167 | 5,882 | 1,340 | |
EBITDAX is earnings before income taxes, interest, depreciation, depletion, amortization, impairment, abandonment and exploration expense. EBITDA equals EBITDAX less exploration expense. We believe EBITDA and EBITDAX provide a more complete analysis of TXCO's operating performance and debt servicing ability relative to other companies, and of our ability to fund capital expenditure and working capital requirements. | |||||
These measures are widely used by investors and rating agencies. EBITDA, with certain negotiated adjustments, is referenced in TXCO's financial covenants and required in reporting under our credit facility. EBITDA and EBITDAX are not measures of financial performance under GAAP. Accordingly, they should not be considered as substitutes for net income, income from operations, or cash flow provided by operating activities prepared in accordance with GAAP. | |||||
Columns may not foot due to rounding. |
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TXCO Resources Inc. Detail of PV-10 and Reconciliation to Standardized Measure at December 31 (Unaudited) | ||
($ in thousands) | 2008 | 2007 |
PV-10 Value of Estimated Future Net Revenues | $ 137,461 | $ 373,028 |
Present value of estimated income tax benefit | -- | 63,058 |
Standardized measure | $ 137,461 | $ 309,970 |
PV-10 Value is considered a non-GAAP financial measure as defined in Item 10(e) of Regulation S-K. Therefore, we are including the disclosures required by Item 10(e) of Regulation S-K with respect to PV-10 Value. These disclosures include the following reconciliation to the most directly comparable GAAP financial measure ("standardized measure"), and discussion of how management uses the measure and why it is useful to investors.
· | it presents the discounted future net cash flows attributable to our proved reserves before corporate future income taxes, and |
· | it is a useful measure for evaluating the relative monetary significance of our oil and natural gas properties. |
Further, investors may utilize the measure as a basis for comparison of the relative size and value of our reserves to other companies. We use this measure when assessing the potential return on investment related to our oil and natural gas properties. The PV-10 Value and the standardized measure of discounted future net cash flows are not intended to represent the current market value of our estimated oil and natural gas reserves.
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