Exhibit 99.1
NEWS RELEASE
ABRAXAS ANNOUNCES FOURTH CONSECUTIVE QUARTER OF PRODUCTION
GROWTH AND PROFIT FOR SECOND QUARTER
SAN ANTONIO, TX (August 11, 2004) - Abraxas Petroleum Corporation (AMEX:ABP)
today reported financial and operating results for the second quarter of 2004.
The Company announced production for the second quarter of 2004 of 24.5 million
cubic feet equivalents (MMcfe) per day, up 35% from Q2 2003 production of 18.1
MMcfe per day and a sequential production increase of 4% over Q1 2004. The
production increase for the quarter marked the fourth consecutive quarter in
which the Company has increased production. The Company posted a net profit in
Q2 2004 of $372,000 ($.01 per share) compared to a loss of $2.3 million in Q2
2003 (($.07) per share).
The most significant items related to Q2 2004 results included:
o Natural gas production increased 38% from Q2 2003 due to continuing
development activities,
o Revenues increased 46% from Q2 2003 due to production increase and
higher price realizations,
o Profitability achieved despite impact to LOE and G&A from non-recurring
items and financing costs expensed in Q2,
o Non-cash stock based compensation expense recovery of $2.3 million in
Q2 2004,
o Capital expenditures of only $2.9 million for Q2 due to indenture
constraints,and
o EBITDA of $6.6 million, an increase of 33% from Q2 2003.
The Company also announced its updated hedge positions, which include a series
of price floors for approximately 40% of its projected production through
January 2005. These floors, comprised of a combination of oil and natural gas
contracts over these months, provide an average floor of approximately $24.33
per barrel for the oil contracts and $4.33 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, "The quarter just ended marks the fourth
consecutive quarter in which we have posted a production increase. We think this
fact testifies to the quality of our assets especially considering the
limitations on us regarding how much capital we can spend on development. The
inability to achieve a consent from our bondholders to provide relief from this
restriction, at a cost that made sense to all of our stakeholders, has not
deterred us from working on strategies that will allow us to accelerate
development of our projects. Strong production increases and continuing high
price realizations contributed to our bottom line profit for the quarter and
allowed us to generate significant cash flow above our capex needs that was
utilized to pay down debt."
Abraxas invites your participation in a conference call on Thursday August 12,
at 10:00 a.m. CDT to discuss the contents of this release and respond to
questions. Please call 1-800-946-0785 between 9:50 a.m. and 10:00 a.m. CDT,
confirmation code 726770, 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 726770, beginning approximately 1:00 p.m. CDT, August 12,
through midnight CDT, August 19.
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 Six Months
(In thousands except per share data) Ended June 30, Ended June 30,
2004 2003 2004 2003
---- ---- ---- ----
Operations Data:
Revenues $12,267 $8,430 $23,202 $21,541
EBITDA 6,613 4,985 12,694 13,808
Net Income(Loss) 372 (2,346) (5,185) 60,356
Net Income(Loss) Per Share - Basic .01 (.07) (0.14) 1.73
Weighted Ave. Shares Outstanding 36.1 35.6 36.1 34.9
Production:
Crude Oil (BPD) 713 636 708 681
NGL (BPD) 149 58 147 141
Natural Gas (MCFPD) 19,340 13,977 18,941 17,885
MMCFEPD 24.5 18.1 24.1 22.8
Prices (net of hedge impact):
Crude Oil ($/BBL) $37.09 $28.53 $35.65 $31.03
NGL's ($/BBL) 30.97 22.10 30.25 24.64
Natural Gas ($/MCF) 5.23 5.11 5.04 5.12
Price per MCFE 5.40 5.00 5.20 5.09
Expenses:
Lease Operating ($/MCFE) $1.48 $1.25 $1.52 $1.16
General & Administrative ($/MCFE) .99 .75 .81 .64
Cash Interest ($/MCFE) .52 .57 .68 .58
Total Interest ($/MCFE) 1.91 2.32 2.14 2.27
D/D/A ($/MCFE) 1.44 1.39 1.43 1.32
Balance Sheet Data (In $000s)
June 30, 2004 December 31, 2003
Cash $1,491 $493
Working Capital (Deficit) (786) (2,444)
Plant/Property/Equipment, Net 111,115 111,563
Total Assets 125,580 126,437
Long-Term Debt 192,387 184,649
Shareholders Equity (Deficit) (78,372) (72,203)
Common Shares Outstanding (Millions) 36.3 35.9
Key quarterly results are summarized below:
Amounts (In $000s)
Three Months Ended
June 30, 2004 June 30, 2003
Revenues $12,267 $8,430
Operating Income 5,707 1,927
Net Income (Loss) 372 (2,346)
Earnings (Loss) Per Share (Basic) .01 (.07)
EBITDA 6,613 4,985
Average Oil Price 37.09 28.53
Average Gas Price (after hedge) 5.23 5.11
Total Assets at June 30 125,580 122,069
Abraxas Petroleum Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2004 2003 2004 2003
-------- -------- -------- --------
Revenue:
Oil and gas production revenues .................................. $ 12,039 $ 8,261 $ 22,771 $ 21,033
Gas processing revenues .......................................... -- -- -- 132
Rig revenues ..................................................... 129 158 304 339
Other ............................................................ 99 11 127 37
-------- -------- -------- --------
12,267 8,430 23,202 21,541
Operating costs and expenses:
Lease operating and production taxes ............................. 3,305 2,066 6,672 4,792
Depreciation, depletion, and amortization ........................ 3,222 2,301 6,257 5,443
Rig operations ................................................... 123 148 268 314
General and administrative ....................................... 2,226 1,231 3,568 2,627
Stock-based compensation ......................................... (2,316) 757 (253) 792
-------- -------- -------- --------
6,560 6,503 16,512 13,968
-------- -------- -------- --------
Operating income (loss) ............................................. 5,707 1,927 6,690 7,573
Other (income) expense:
Interest income .................................................. (2) (7) (8) (17)
Interest expense ................................................. 4,268 3,846 9,387 9,010
Amortization of deferred financing fee ........................... 467 434 912 811
Financing cost ................................................... 602 -- 1,573 3,601
Gain on sale of foreign subsidiaries ............................. -- -- -- (66,960)
Other ............................................................ -- -- 11 --
-------- -------- -------- --------
5,335 4,273 11,875 (53,555)
-------- -------- -------- --------
Earnings (loss) before cumulative effect of
accounting change and taxes ...................................... 372 (2,346) (5,185) 61,128
Cumulative effect of accounting change .............................. -- -- -- (395)
Income tax (expense) benefit ........................................ -- -- -- (377)
-------- -------- -------- --------
Net earnings (loss) ................................................. $ 372 $ (2,346) $ (5,185) $ 60,356
======== ======== ======== ========
Basic earnings (loss) per common share:
Net earnings (loss) .............................................. $ 0.01 $ (0.07) $ (0.14) $ 1.74
Cumulative effect of accounting change ........................... -- -- -- (0.01)
-------- -------- -------- --------
Net earnings (loss) per common share - basic ........................ $ 0.01 $ (0.07) $ (0.14) $ 1.73
======== ======== ======== ========
Diluted earnings (loss) per common share:
Net earnings (loss) .............................................. $ 0.01 $ (0.07) $ (0.14) $ 1.72
Cumulative effect of accounting change ........................... -- -- -- (0.01)
-------- -------- -------- --------
Net earnings (loss) per common share - diluted ...................... $ 0.01 $ (0.07) $ (0.14) $ 1.71
======== ======== ======== ========
Reconciliation of Non-GAAP Financial Measures
To fully assess Abraxas' operating results, management believes that, although
not prescribed under generally accepted accounting principles ("GAAP"), EBITDA
is an appropriate measure of Abraxas' ability to satisfy capital expenditure
obligations and working capital requirements. EBITDA is a non-GAAP financial
measures as defined under SEC rules. Abraxas' 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 EBITDA excludes some, but not all, items that affect net income
and may vary among companies, the 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 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 Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
---- ---- ---- ----
Operating income (loss) $5,707 $1,927 $6,690 $7,573
Depletion, depreciation and
mortization 3,222 2,301 6,257 5,443
Non-cash stock based comp.
expense (income) (2,316) 757 (253) 792
EBITDA $6,613 $4,985 $12,694 $13,808