EXHIBIT 99.1
NEWS RELEASE
ABRAXAS REPORTS THIRD QUARTER 2004 RESULTS
SAN ANTONIO, TX (November 12, 2004) - Abraxas Petroleum Corporation (AMEX:ABP)
today reported financial and operating results for the third quarter of 2004.
The Company announced production for the third quarter of 2004 of 22.9 million
cubic feet equivalents (MMcfe) per day, up 16% from Q3 2003 production of 19.6
MMcfe per day. The Company posted a net loss in Q3 2004 of $1.6 million (($.05)
per share), which included a $1.4 million non-cash item related to stock based
compensation expense, compared to a loss of $2.7 million in Q3 2003 (($.08) per
share).
The most significant items related to Q3 2004 results included:
o Natural gas production increased 15% from Q3 2003 due to continuing
development activities.
o Revenues increased 40% from Q3 2003 due to production increase and
higher price realizations.
o Net loss narrowed by 39% from Q3 2003, even though $1.4 million in
non-cash stock based compensation expense was booked in the third
quarter 2004.
o Capital expenditures limited by indenture constraints, which were
removed in October of 2004.
o EBITDA of $7.7 million, an increase of 61% from Q3 2003.
The Company also announced its updated hedge positions, which include a series
of price floors for approximately 40% of its projected production through
December 2005. These floors, comprised of a combination of oil and natural gas
contracts over these months, provide an average floor of approximately $24.83
per barrel for the oil contracts and $4.81 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 recently announced refinancing
resulted in Q3 being the final quarter that the Company was burdened by the
operating restrictions associated with our old debt. The previous limitation on
our capital expenditures made it difficult for us to aggressively develop our
assets and contributed to our slight decrease in production from Q2 to Q3. Going
forward we are enthusiastic about our ability to spend capital to exploit our
significant undeveloped asset base on a timeline that makes sense operationally,
as opposed to a fixed schedule dictated by an outdated financing agreement. "
Abraxas invites your participation in a conference call on Monday, November 15,
at 10:00 a.m. CST to discuss the contents of this release and respond to
questions. Please call 1-800-458-9009 between 9:50 a.m. and 10:00 a.m. CST,
confirmation code 961897, 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 or
719-457-0820, confirmation code 961897, beginning approximately 1:00 p.m. CST,
November 15, through midnight CST, November 22.
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 Nine Months
(In thousands except per share data) Ended September 30, Ended September 30,
2004 2003 2004 2003
---- ---- ---- ----
Operations Data:
Revenues $11,783 $8,430 $34,985 $29,971
EBITDA(1) 7,718 4,786 20,412 18,595
Cash Flow(Before Working Capital Changes)(1) 6,466 2,572 14,574 10,441
Net Income(Loss) (1,643) (2,702) (6,828) 57,654
Net Income(Loss) Per Share - Basic (.05) (.08) (0.19) 1.63
Weighted Ave. Shares Outstanding 36.3 35.8 36.2 35.2
Production:
Crude Oil (BPD) 675 613 697 658
NGL (BPD) 155 64 150 115
Natural Gas (MCFPD) 17,886 15,566 18,587 17,103
MMCFEPD 22.9 19.6 23.7 21.7
Prices (net of hedge impact):
Crude Oil ($/BBL) $42.37 $29.52 $37.84 $30.55
NGL's ($/BBL) 35.32 22.72 32.00 24.27
Natural Gas ($/MCF) 5.07 4.50 5.05 4.93
Price per MCFE 5.46 4.57 5.28 4.93
Expenses:
Lease Operating ($/MCFE) $1.25 $1.31 $1.44 $1.21
General & Administrative ($/MCFE) .60 .63 .74 .63
Cash Interest ($/MCFE) .56 .53 .65 .56
Total Interest ($/MCFE) 2.05 2.16 2.11 2.17
D/D/A ($/MCFE) 1.49 1.34 1.45 1.32
(1) See reconciliation of non-GAAP financial measures below
Balance Sheet Data (In $000s)
September 30, 2004 December 31, 2003
Cash $3,601 $493
Working Capital (Deficit) (3,487) (2,444)
Plant/Property/Equipment, Net 114,233 111,563
Total Assets 129,067 126,437
Long-Term Debt 190,516 184,649
Shareholders Equity (Deficit) (76,387) (72,203)
Common Shares Outstanding (Millions) 36.3 35.9
Key quarterly results are summarized below:
Amounts (In $000s)
Three Months Ended
September 30, 2004 September 30, 2003
Revenues $11,783 $8,430
Operating Income 3,202 2,694
Net Income (Loss) (1,643) (2,702)
Earnings (Loss) Per Share (Basic) (.05) (.08)
EBITDA(1) 7,718 4,786
Cash Flow (Before Working Capital Changes)(1) 6,466 2,572
Average Oil Price 42.37 29.52
Average Gas Price (after hedge) 5.07 4.50
(1) See reconciliation of non-GAAP financial measures below
44
Abraxas Petroleum Corporation
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ -------------------------------
2004 2003 2004 2003
--------------- ------------- ---------------- --------------
(in thousands, except per share data)
Revenue:
Oil and gas production revenues............. $ 11,478 $ 8,244 $ 34,249 $ 29,277
Gas processing revenues..................... - - - 132
Rig revenues................................ 214 156 518 495
Other....................................... 91 30 218 67
--------------- -------------- ---------------- --------------
11,783 8,430 34,985 29,971
Operating costs and expenses:
Lease operating and production taxes........ 2,646 2,372 9,318 7,164
Depreciation, depletion, and amortization... 3,141 2,418 9,398 7,861
Rig operations.............................. 174 129 442 443
General and administrative.................. 1,245 1,143 4,813 3,769
Stock-based compensation.................... 1,375 (326) 1,122 467
--------------- -------------- ---------------- --------------
8,581 5,736 25,093 19,704
--------------- -------------- ---------------- --------------
Operating income .............................. 3,202 2,694 9,892 10,267
Other (income) expense:
Interest income............................. (4) (5) (12) (22)
Interest expense............................ 4,313 3,911 13,700 12,921
Amortization of deferred financing fees..... 468 433 1,380 1,244
Financing cost.............................. 68 581 1,641 4,182
Gain on sale of foreign subsidiaries........ - (298) - (67,258)
Other expense............................... - 774 11 774
--------------- -------------- ---------------- --------------
4,845 5,396 16,720 (48,159)
--------------- -------------- ---------------- --------------
Earnings (loss) before cumulative effect of (1,643) (2,702) (6,828) 58,426
accounting change and taxes.................
Cumulative effect of accounting change......... - - - (395)
Income tax expense ............................ - - - (377)
--------------- -------------- ---------------- --------------
Net earnings (loss)............................ $ (1,643) $ (2,702) $ (6,828) $ 57,654
=============== ============== ================ ==============
Basic earnings (loss) per common share:
Net earnings (loss)......................... (0.05) (0.08) (0.19) 1.64
Cumulative effect of accounting change...... - - - (0.01)
--------------- -------------- ---------------- --------------
Net earnings (loss) per common share--basic..... $ (0.05) $ (0.08) $ (0.19) $ 1.63
=============== ============== ================ ==============
Diluted earnings (loss) per common share:
Net earnings (loss)......................... (0.05) (0.08) (0.19) 1.61
Cumulative effect of accounting change...... - - - (0.01)
--------------- -------------- ---------------- --------------
Net earnings (loss) per common share--diluted... $ (0.05) $ (0.08) $ (0.19) $ 1.60
=============== ============== ================ ==============
45
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.
Cash flow is defined as operating income (loss) plus depletion, depreciation and
amortization expense, non-cash expenses, cash gains (losses) on the settlement
of non-hedge derivatives and cash portion of other income (expense) and cash
interest. The following table provides a reconciliation of cash flow to
operating income (loss) for the periods presented.
Three Months Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
------ ------ ------ ----
Operating income (loss) $3,202 $2,694 $9,892 $10,267
Depletion, depreciation and amortization 3,141 2,418 9,398 7,861
Non-cash stock based comp. expense (income) 1,375 (326) 1,122 467
Financing Costs (68) (581) (1,641) (4,182)
Cash portion of other expense -- (674) (11) (674)
Cash interest (1,184) (959) (4,186) (3,298)
Cash Flow $6,466 $2,572 $14,574 $10,441
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 Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
---- ---- ---- ----
Operating income $3,202 $2,694 $9,892 $10,267
Depletion, depreciation and 3,141 2,418 9,398 7,861
amortization
Non-cash stock based comp. expense (income) 1,375 (326) 1,122 467
EBITDA $7,718 $4,786 $20,412 $18,595