Exhibit 99.1
NEWS RELEASE
ABRAXAS ANNOUNCES YEAR-OVER-YEAR AND SEQUENTIAL GROWTH ON CONTINUING OPERATIONS
SAN ANTONIO, TX (May 13, 2004) - Abraxas Petroleum Corporation (AMEX:ABP) today
reported financial and operating results for the first quarter of 2004. The
Company announced production for the first quarter of 2004 of 23.6 million cubic
feet equivalents (MMcfe) per day, up 17% from first quarter 2003 production of
20.1 MMcfe per day from operations excluding Canadian assets sold in January
2003, and a sequential production increase of 9% over Q4 2003. The Company
posted a net loss in Q1 2004 of $5.6 million (($.15) per share) compared to a
loss of $5.1 million in Q1 2003 (($.15) per share) excluding impact from sold
assets and the gain reflected from the sale of those assets.
In January of 2003, the Company sold a significant portion of its Canadian
operations and reported a $67 million gain from the sale. On the attached
Consolidated Statements of Operations, the Company has attempted to show the
historical results of operations for Q1 2003 by eliminating the operations
impact from the sold assets and the gain from the sale of those operations. The
Company believes the resulting comparison between the first quarters of 2003 and
2004 are more meaningful to the reader. The other tabular and text disclosure in
this release, related to the 2003 period, also excludes the impact from those
operations and subsequent sale thereof, unless stated otherwise.
The most significant items impacting 2004 results included:
o Natural gas production increased 20% from Q1 2003 due to continuing
development activities,
o Revenues increased 11% from Q1 2003 due to production increase,
o Non-recurring financing fee expense of $1.0 million in Q1 2004 related
to amending the Company's senior credit agreement, and
o Non-cash stock based compensation expense of $2.1 million in 2004.
The Company also announced its updated hedge positions, which include a series
of price floors for approximately 40% of its projected production through
December 2004. These floors, comprised of a combination of oil and natural gas
contracts over these months, provide an average floor of approximately $24.50
per barrel for the oil contracts and $4.29 per Mcf for the natural gas
contracts. These instruments do not restrict the Company from receiving prices
above these floor levels.
Abraxas CEO, Bob Watson, commented, "Our increasing production rates continue to
validate our business plan and demonstrate our progress. Q1 LOE was negatively
impacted by start-up costs related to unlocking stranded gas in our Canadian
operations but, with these costs subsiding after the summer, we expect our
previously provided guidance for full-year 2004 to still be in line. Increasing
production rates and strong commodity prices will comfortably provide adequate
cash flow to fund our capital-spending program for the year. The Company is
continuing to explore strategies that will allow us to increase our capital
spending above our restricted limit of $10 million and develop our large
inventory of projects."
Abraxas invites your participation in a conference call on Friday, May 14, at
10:00 a.m. CDT to discuss the contents of this release and respond to questions.
Please call 1-888-857-6932 between 9:50 a.m. and 10:00 a.m. CDT, confirmation
code 248358, if you would like to participate in the call. There will be a
replay of the conference call available by calling 1-888-203-1112, confirmation
code 248358, beginning approximately 1:00 p.m. CDT, May 14, through midnight
CDT, May 20.
Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas
exploitation and production company. The Company operates in Texas, Wyoming and
western Canada.
Safe Harbor for forward-looking statement: Statements in this release looking
forward in time involve known and unknown risks and uncertainties, which may
cause the Company's actual results in future periods to be materially different
from any future performance suggested in this release. Such factors may include,
but may not be necessarily limited to, changes in the prices received by the
Company for crude oil and natural gas. In addition, the Company's future crude
oil and natural gas production is highly dependent upon the Company's level of
success in acquiring or finding additional reserves. Further, the Company
operates in an industry sector where the value of securities is highly volatile
and may be influenced by economic and other factors beyond the Company's
control. In the context of forward-looking information provided for in this
release, reference is made to the discussion of risk factors detailed in the
Company's filing with the Securities and Exchange Commission during the past 12
months.
FOR MORE INFORMATION CONTACT:
Janice Herndon/Manager Corp. Communications
Telephone 210.490.4788
jherndon@abraxaspetroleum.com
www.abraxaspetroleum.com
ABRAXAS PETROLEUM CORPORATION
QUARTER-END RESULTS
(UNAUDITED)
Three Months
Ended March 31,
Operations Data: 2004 2003(1)
---- -------
(In thousands except per share data)
Revenues $10,935 $9,836
EBITDA 6,081 6,093
Net Income(Loss) (5,557) (5,131)
Net Income(Loss) Per Share - Basic (.15) (.15)
Weighted Ave. Shares Outstanding 36.0 34.2
Production:
Crude Oil (BPD) 703 700
NGL (BPD) 146 44
Natural Gas (MCFPD) 18,543 15,626
MMCFEPD 23.6 20.1
Prices (net of hedge impact):
Crude Oil ($/BBL) $34.19 $33.33
NGL's ($/BBL) 29.52 26.28
Natural Gas ($/MCF) 4.83 5.29
Price per MCFE 4.99 5.34
Expenses:
Lease Operating ($/MCFE) $1.57 $1.30
General & Administrative ($/MCFE) .62 .68
Cash Interest ($/MCFE) .86 .39
Total Interest ($/MCFE) 2.38 2.72
D/D/A ($/MCFE) 1.41 1.30
(1)2003 results do not include sold operations, comprised of Canadian
subsidiaries sold January 23, 2003 or the gain from the sale of such
subsidiaries
Balance Sheet Data (In $000s)
March 31, 2004 December 31, 2003
Cash $1,393 $493
Working Capital (Deficit) (5,378) (2,444)
Plant/Property/Equipment, Net 112,309 111,563
Total Assets 126,041 126,437
Long-Term Debt 186,971 184,649
Shareholders Equity (Deficit) (75,828) (72,203)
Common Shares Outstanding (Millions) 36.0 35.9
Key quarterly results are summarized below:
Amounts (In $000s)
Three Months Ended
March 31, 2004 March 31, 2003(1)
Revenues $10,935 $9,836
Operating Income 983 3,707
Net Income (Loss) (5,557) (5,131)
Earnings (Loss) Per Share (Basic) (.15) (.15)
EBITDA 6,081 6,093
Average Oil Price (after hedge) 34.19 33.33
Average Gas Price (after hedge) 4.83 5.29
Total Assets at March 31 126,041 117,674
(1)2003 results do not include sold operations, comprised of Canadian
subsidiaries sold January 23, 2003 or the gain on sale of such
subsidiaries
Abraxas Petroleum Corporation and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Three Months Ending March 31, 2003 Three Months
As reported on Sold Continuing Ending
Form 10Q/A Ops & Gain(1) Operations March 31, 2004
------------------- ----------------- ----------------- -------------------
(In thousands except per share data)
Revenue:
Oil and gas production revenues ...................$ 12,772 $ 3,119 $ 9,653 $ 10,732
Gas processing revenues ........................... 132 132 - -
Rig revenues ...................................... 181 - 181 175
Other ............................................ 26 24 2 28
------------------- ----------------- ----------------- -------------------
13,111 3,275 9,836 10,935
Operating costs and expenses:
Lease operating and production taxes .............. 2,726 379 2,347 3,367
Depreciation, depletion, and amortization ......... 3,142 792 2,350 3,035
Proved property impairment......................... - - - -
Rig operations .................................... 166 - 166 145
General and administrative ........................ 1,395 165 1,230 1,342
Stock-based compensation .......................... 36 - 36 2,063
------------------- ----------------- ----------------- -------------------
7,465 1,336 6,129 9,952
------------------- ----------------- ----------------- -------------------
Operating income ..................................... 5,646 1,939 3,707 983
Other (income) expense:
Interest income ................................... (10) - (10) (6)
Interest expense .................................. 5,164 641 4,523 5,119
Amortization of deferred financing fees............ 377 48 329 445
Financing cost..................................... 3,601 - 3,601 971
Gain on sale of foreign subsidiaries............... (66,960) (66,960) - -
Other (income) expense............................. - - - 11
------------------- ----------------- ----------------- -------------------
(57,828) (66,271) 8,443 6,540
------------------- ----------------- ----------------- -------------------
Earnings (loss) before cumulative effect of
accounting change and taxes ....................... 63,474 68,210 (4,736) (5,557)
Cumulative effect of accounting change................ (395) - (395) -
------------------- ----------------- ----------------- -------------------
Earnings (loss) before taxes.......................... 63,079 68,210 (5,131) (5,557)
Income tax expense ................................... 377 377 - -
------------------- ----------------- ----------------- -------------------
Net earnings (loss) .............................. $ 62,702 $ 67,833 $ (5,131) $ (5,557)
=================== ================= ================= ===================
Basic earnings (loss) per common share:
Net earnings (loss)............................. $ 1.84 $ 1.98 $ (0.14) $ (0.15)
Cumulative effect of accounting change.......... (0.01) - (0.01) -
------------------- ----------------- ----------------- -------------------
Net earnings (loss) per common share - basic....... $ 1.83 $ 1.98 $ (0.15) $ (0.15)
=================== ================= ================= ===================
Diluted earnings (loss) per common share:
Net earnings (loss)............................. $ 1.83 $ 1.97 $ (0.14) $ (0.15)
Cumulative effect of accounting change.......... (0.01) - (0.01) -
------------------- ----------------- ----------------- -------------------
Net earnings (loss) per common share - diluted.... $ 1.82 $ 1.97 $ (0.15) $ (0.15)
=================== ================= ================= ===================
(1) Represents results of sold Canadian operations from Jan. 1, 2003 until Jan.
22, 2003 and the gain recognized from the sale of the properties
Reconciliation of Non-GAAP Financial Measures
To fully assess Abraxas' operating results, management believes that, although
not prescribed under generally accepted accounting principles ("GAAP"),
discretionary cash flow and EBITDA are appropriate measures of Abraxas' ability
to satisfy capital expenditure obligations and working capital requirements.
Cash flow and EBITDA are non-GAAP financial measures as defined under SEC rules.
Abraxas' cash flow and EBITDA should not be considered in isolation or as a
substitute for other financial measurements prepared in accordance with GAAP or
as a measure of the Company's profitability or liquidity. As cash flow and
EBITDA exclude some, but not all, items that affect net income and may vary
among companies, the cash flow and EBITDA presented below may not be comparable
to similarly titled measures of other companies. Management believes that
operating income (loss) calculated in accordance with GAAP is the most directly
comparable measure most similar to cash flow and EBITDA.
EBITDA is defined as net income (loss) plus interest expense, depletion,
depreciation and amortization expenses, deferred income taxes and other non-
cash items. The following table provides a reconciliation of EBITDA to operating
income (loss) for the periods presented.
Three Months
Ended March 31,
2004 2003
---- ----
Operating income (loss) $983 $3,707
Depletion, depreciation and amortization 3,035 2,350
Non-cash stock based comp. expense 2,063 36
EBITDA $6,081 $6,093