Exhibit 99.1
Abraxas Petroleum Corporation
500 N. Loop 1604 East, Suite 100, San Antonio, Texas 78232
P.O. Box 701007, San Antonio, Texas 78270-1007
Office: 210.490.4788 Exec/Acctg Fax: 210.490.8816
NEWS RELEASE
Abraxas Reports Fourth Quarter and Full-Year 2004 Results
SAN ANTONIO (March 23, 2005) - Abraxas Petroleum Corporation ("Abraxas")
(AMEX:ABP) today reported financial and operating results for the fourth quarter
and year-ended December 31, 2004. As a result of the Grey Wolf Exploration Inc.
("Grey Wolf") initial public offering ("IPO") that closed on February 28, 2005,
the information herein represents financial and operating results from
operations in the U.S. only as all of Grey Wolf's historical performance is
treated as a discontinued operation.
Production of 5.8 Bcfe for the year generated revenues of $33.9 million and net
income of $7.8 million or $0.22 per share from continuing operations. This
compares to a net loss from continuing operations of $14.1 million or $0.40 per
share for the prior year ended December 31, 2003. Abraxas posted net income of
$17.0 million ($0.47 per share) in the fourth quarter of 2004 compared to a loss
of $3.4 million ($0.10 per share) in the same quarter of 2003 from continuing
operations. The net income in the fourth quarter of 2004 (and full-year 2004)
included a $12.6 million gain on redemption of debt booked as a result of the
refinancing completed in October of 2004 and an income tax benefit of $6.1
million related to the gain on the sale of the Grey Wolf shares that Abraxas
owned. The actual gain on the sale of the Grey Wolf shares will be booked in the
first quarter of 2005 and will include a similar income tax expense of $6.1
million.
The most significant items related to 2004 results included:
o Restricted capital spending of $9.3 million during 2004, over half of
which was spent in the fourth quarter, compared to $9.2 million in
2003;
o Daily production rates declined a modest 6% amid capital restrictions;
o Realized price per Mcfe of $5.72 in 2004 compared to $4.82 in 2003;
o Global refinancing completed in October; and
o Preparation for expanded budget in 2005.
Subsequent to year-end, as a result of the secondary shares sold by Abraxas in
the Grey Wolf IPO, outstanding indebtedness under Abraxas' $25 million bridge
loan was reduced to approximately $5 million.
"For Abraxas, 2004 was a year of preparation - for a stronger balance sheet and
an expanded capital budget. So far, in 2005, we have significantly reduced the
leverage on our balance sheet to a manageable level through the Grey Wolf IPO,
and kicked off our capital development program with 6 wells in various stages of
drilling and completion," commented Bob Watson, Abraxas' President and CEO.
Abraxas invites your participation in a conference call on Thursday, March 24th,
at 10:00 a.m. CT to discuss the contents of this release and respond to
questions. Please call 1.800.500.0177 between 9:50 a.m. and 10:00 a.m. CT,
confirmation code 764281, 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 764281, beginning approximately 1:00 p.m. CT, March 24th,
through midnight CT, March 31st.
Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas
exploitation and production company with operations in Texas and Wyoming.
Safe Harbor for forward-looking statements: Statements in this release looking
forward in time involve known and unknown risks and uncertainties, which may
cause Abraxas' 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 Abraxas for
crude oil and natural gas. In addition, Abraxas' future crude oil and natural
gas production is highly dependent upon Abraxas' level of success in acquiring
or finding additional reserves. Further, Abraxas operates in an industry sector
where the value of securities is highly volatile and may be influenced by
economic and other factors beyond Abraxas' control. In the context of
forward-looking information provided for in this release, reference is made to
the discussion of risk factors detailed in Abraxas' filing with the Securities
and Exchange Commission during the past 12 months.
FOR MORE INFORMATION CONTACT:
Barbara M. Stuckey/Director of Corporate Development
Direct Telephone 210.757.9835
Main Telephone 210.490.4788
bstuckey@abraxaspetroleum.com
www.abraxaspetroleum.com
ABRAXAS PETROLEUM CORPORATION
QUARTER AND YEAR-END RESULTS
Three Months Ended Twelve Months Ended
(In thousands except per share data) December 31, December 31,
-------------------------------- -----------------------------
2004 2003 2004 2003
--------------- ------------- ------------ -----------
Financial Results:
- -----------------------------------------------------
Revenues $ 9,153 $ 7,187 $ 33,854 $ 30,380
EBITDA (a) 5,707 3,843 19,490 17,434
Cash Flow (Before Working Capital Changes) (a) 2,148 2,513 10,099 9,291
Net Income (Loss) from continuing operations 17,025 (3,431) 7,844 (14,104)
Income (Loss) Per Share from continuing operations
- Basic 0.47 (0.10) 0.22 (0.40)
Weighted Average Shares Outstanding 36.3 35.8 36.2 35.4
Production Per Day:
- -----------------------------------------------------
Crude Oil (Bbl/d) 595 605 602 603
NGL (Bbl/d) 24 27 24 26
Natural Gas (Mcf/d) 11,100 13,413 12,030 13,098
Mcfe/d 14,815 17,203 15,789 16,872
Realized Prices (net of hedge impact):
- -----------------------------------------------------
Crude Oil ($/Bbl) $46.81 $29.99 $40.12 $ 30.43
NGL ($/Bbl) 31.27 21.32 26.32 20.46
Natural Gas ($/Mcf) 6.14 4.29 5.45 4.77
Price per Mcfe 6.53 4.43 5.72 4.82
Expenses:
- -----------------------------------------------------
Lease Operating ($/Mcfe) $1.36 $1.23 $1.48 $1.35
General & Administrative ($/Mcfe) 1.00 0.78 0.89 0.65
Cash Interest ($/Mcfe) 2.51 0.63 1.32 0.59
Total Interest ($/Mcfe) 3.26 2.65 3.09 2.65
D/D/A ($/Mcfe) 1.33 1.23 1.25 1.24
- -----------------------------------------------------------------------------------------------------------------------
(a) See reconciliation of non-GAAP financial measures below
Note: The above quarterly and yearly results exclude impact from Grey Wolf
Exploration Inc.
BALANCE SHEET DATA
(In thousands) December 31, 2004 December 31, 2003
------------------------- ------------------------
Cash $1,284 $-
Working Capital (Deficit) (b) (3,857) (2,023)
Plant/Property/Equipment, Net 78,077 76,021
Total Assets 152,685 126,437
Long-Term Debt 126,425 184,649
Shareholders Equity (Deficit) (53,464) (72,203)
Common Shares Outstanding (Millions) 36.5 35.9
(b) Continuing operations only
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data) Year Ended December 31
----------------------------------------------------------
2002 2003 2004
------------------ ------------------ -------------------
Revenues:
Oil and gas production revenues .................... $20,835 $29,710 $33,073
Rig revenues ....................................... 635 663 771
Other ............................................. 71 7 10
------------------ ------------------ -------------------
21,541 30,380 33,854
Operating costs and expenses:
Lease operating and production taxes ............... 7,639 8,342 8,567
Depreciation, depletion, and amortization .......... 9,194 7,608 7,213
Proved property impairment ......................... 28,178 - -
Rig operations ..................................... 567 609 671
General and administrative ......................... 4,045 3,995 5,126
Stock-based compensation............................ - 1,106 1,305
------------------ ------------------ -------------------
49,623 21,660 22,882
------------------ ------------------ -------------------
Operating income (loss)................................ (28,082) 8,720 10,972
Other (income) expense:
Interest income .................................... (92) (30) (10)
Amortization of deferred financing fees ............ 1,325 1,630 1,848
Interest expense ................................... 24,689 16,323 17,867
Financing costs..................................... 967 4,406 1,657
Gain on debt redemption ............................ - - (12,561)
Other .............................................. 201 100 387
------------------ ------------------ -------------------
27,090 22,429 9,188
------------------ ------------------ -------------------
Income (loss) from continuing operations before
cumulative effect of accounting change.............. (55,172) (13,709) 1,784
Cumulative effect of accounting change ................ - 395 -
------------------ ------------------ -------------------
Net income (loss) from continuing operations before
income tax ......................................... (55,172) (14,104) 1,784
Deferred income tax benefit............................ - - (6,060)
------------------ ------------------ -------------------
Net income (loss) from continuing operations .......... (55,172) (14,104) 7,844
Net income (loss) from discontinued operations......... (63,355) 70,024 3,323
------------------ ------------------ -------------------
Net income (loss)................................... $(118,527) $55,920 $11,167
================== ================== ===================
Basic earnings (loss) per common share:
Net earnings (loss) from continuing operations... $(1.84) $(0.39) $0.22
Discontinued operations (loss).................. (2.11) 1.98 0.09
Cumulative effect of accounting change........... - (0.01) -
------------------ ------------------ -------------------
Net income (loss) per common share - basic ......... $(3.95) $1.58 $0.31
================== ================== ===================
Diluted earnings (loss) per common share:
Net earnings (loss) from continuing operations... $(1.84) $(0.38) $0.20
Discontinued operations (loss).................. (2.11) 1.94 0.09
Cumulative effect of accounting change........... - (0.01) -
------------------ ------------------ -------------------
Net income (loss) per common share - diluted....... $(3.95) $1.55 $0.29
================== ================== ===================
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 expenses, 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.
(In thousands) Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------------- -------------------------------
2004 2003 2004 2003
-------------- --------------- ------------- --------------
Operating income (loss) $3,712 $1,263 $10,972 $8,720
Depletion, depreciation and amortization 1,811 1,940 7,213 7,608
Non-cash stock based compensation expense
184 640 1,305 1,106
Financing costs (16) (224) (1,657) (4,406)
Cash portion of other expense (126) (102) (126) (100)
Cash interest (3,417) (1,004) (7,608) (3,637)
- -------------------------------------------------------------------------------------------------------------------
Cash Flow $2,148 $2,513 $10,099 $9,291
- -------------------------------------------------------------------------------------------------------------------
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 - see consolidated statements of
operations for a reconciliation of net income (loss) to operating income (loss).
(In thousands) Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------------- -------------------------------
2004 2003 2004 2003
-------------- ---------------- ------------- -------------
Operating income (loss) $3,712 $1,263 $10,972 $8,720
Depletion, depreciation and amortization 1,811 1,940 7,213 7,608
Non-cash stock based compensation expense
184 640 1,305 1,106
- -------------------------------------------------------------------------------------------------------------------
EBITDA $5,707 $3,843 $19,490 $17,434
- --------------------------------------------------------------------------------------------------------------------
Note:The above cash flow and EBITDA reconciliations exclude impact from
Grey Wolf Exploration Inc.