NEWS RELEASE
July 29, 1996
AMERICAN EXPLORATION COMPANY ANNOUNCES
SECOND QUARTER RESULTS AND A 14 PERCENT INCREASE
IN GAS PRODUCTION FROM THE FIRST QUARTER
HOUSTON, TX - American Exploration Company (ASE:AX) today announced a net
loss of $4.8 million, or $0.40 per common share for the second quarter of 1996.
Results for the second quarter included $5.6 million of exploration expense
relating to a significant increase in drilling, seismic and geological activity.
Cash flow from operations before changes in working capital and preferred
dividends for the second quarter of 1996 totaled $8.6 million.
For the second quarter of 1995, American reported net income of $0.5
million, or $0.05 per common share. Results for the second quarter of 1995
included virtually no exploration expense. Cash flow from operations for the
second quarter of 1995 totaled $8.7 million.
Commenting, Mark Andrews, Chairman and CEO, said, "In July of last year,
we sold our interest in the Sawyer Field. Although the Sawyer sale reduced total
revenues in the second quarter of 1996 versus the second quarter of 1995, we are
pleased that production from new activity, lower operating costs and higher
price realizations have allowed us to achieve almost the same cash flow while
being significantly less financially leveraged. Our bank debt at the end of the
second quarter totaled $25 million compared with $62 million at the same time
last year.
"During the second quarter, American increased gas production 14 percent
over first quarter 1996 levels, with most of the increase relating to activity
in the Gulf of Mexico. Cash flow increased 21 percent from first quarter 1996
levels as a result of higher production and lower costs per unit produced.
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"The net loss for the second quarter was due to a significant increase in
exploration activity. As a successful efforts company, exploration related
seismic, geological and dryhole costs are expensed as incurred rather than
capitalized. During the quarter, American drilled 10 exploration wells, five of
which were successful, and drilled 16 development wells, 14 of which were
successful. American plans to drill at least seven exploration wells during the
third quarter and has recently placed High Island Block 13-L on production at
over 7,000 Mcf per day (approximately 4,000 Mcf net)."
American Exploration Company is a Houston-based independent oil and gas
company with operations focused primarily onshore in the Gulf Coast area and
offshore in the Gulf of Mexico. American's common and preferred shares are
listed on the American Stock Exchange under the symbols AX and AX.PR.C.
###
Summary financial information follows
Contact: Frank Murphy
Vice President - Corporate Finance
(713) 756-6269
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AMERICAN EXPLORATION COMPANY
SUMMARIZED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------------- --------------------
1996 1995 1996 1995
-------- -------- -------- --------
REVENUES:
OIL AND GAS SALES ........................ $ 17,260 $ 20,327 $ 33,173 $ 38,159
OTHER REVENUES, NET ...................... 31 398 683 1,403
-------- -------- -------- --------
TOTAL REVENUES ........................ 17,291 20,725 33,856 39,562
-------- -------- -------- --------
COSTS AND EXPENSES:
PRODUCTION AND OPERATING ................. 5,214 6,762 10,196 13,524
DEPRECIATION, DEPLETION AND AMORTIZATION . 7,023 7,820 13,473 15,552
GENERAL AND ADMINISTRATIVE ............... 1,542 1,498 3,183 2,983
TAXES OTHER THAN INCOME .................. 1,304 1,708 2,616 3,138
EXPLORATION .............................. 5,563 40 7,151 160
-------- -------- -------- --------
TOTAL COSTS AND EXPENSES ............ 20,646 17,828 36,619 35,357
-------- -------- -------- --------
INCOME (LOSS) FROM OPERATIONS .............. (3,355) 2,897 (2,763) 4,205
INTEREST EXPENSE AND OTHER, NET ............ (957) (1,907) (1,764) (3,710)
-------- -------- -------- --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM .... (4,312) 990 (4,527) 495
EXTRAORDINARY GAIN ON EXTINGUISHMENT OF DEBT -- -- -- 2,456
-------- -------- -------- --------
NET INCOME (LOSS) .......................... (4,312) 990 (4,527) 2,951
PREFERRED STOCK DIVIDENDS .................. (450) (450) (900) (900)
-------- -------- -------- --------
NET INCOME (LOSS) TO COMMON STOCK .......... $ (4,762) $ 540 $ (5,427) $ 2,051
======== ======== ======== ========
NET INCOME (LOSS) PER COMMON SHARE ......... $ (.40) $ .05 $ (.46) $ .17
======== ======== ======== ========
AVERAGE SHARES OUTSTANDING ................. 11,811 11,814 11,812 11,811
======== ======== ======== ========
SUMMARY CASH FLOW INFORMATION
(IN THOUSANDS)
(UNAUDITED)
FOR THE SIX MONTHS
ENDED JUNE 30,
-------------------------
1996 1995
------- -------
OPERATING CASH FLOWS:
BEFORE WORKING CAPITAL ................... $15,737 $16,020
AFTER WORKING CAPITAL .................... 11,929 15,807
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SUMMARY PRODUCTION INFORMATION
(UNAUDITED)
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
---------------- ----------------
1996 1995 1996 1995
------- ------- ------- -------
AVERAGE SALES PRICE:
GAS ($/MCF) ............................ $ 1.87 $ 1.74 $ 1.87 $ 1.71
OIL ($/BBL) ............................ 16.83 17.39 16.70 16.98
BOE ($/BBL) ............................ 13.11 12.33 13.13 12.06
AVERAGE DAILY PRODUCTION:
GAS (MMCF) ............................. 57.5 79.0 54.0 76.5
OIL (MBBLS) ............................ 4.9 4.9 4.9 4.7
MBOE ................................... 14.5 18.1 13.9 17.5
OPERATING COSTS PER BOE:
LEASE OPERATING EXPENSES ............... $ 3.96 $ 4.10 $ 4.04 $ 4.28
SEVERANCE AND AD VALOREM TAXES ......... .39 .65 .44 .62
DEPLETION, DEPRECIATION AND AMORTIZATION 5.33 4.75 5.33 4.92
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