Exhibit 99.1
[LOGO] NEWS RELEASE
BRIGHAM FOR IMMEDIATE RELEASE
Exploration Company
BRIGHAM EXPLORATION REPORTS STRONG SECOND QUARTER & PROVIDES THIRD QUARTER
FORECAST
================================================================================
Austin, TX -- August 12, 2003 -- Brigham Exploration Company (NASDAQ:BEXP)
today announced its financial results for the quarter ended June 30, 2003.
Highlights of Brigham's financial performance for the quarter include:
o Production volumes increased 6% over second quarter 2002 volumes to
average 28.9 MMcfe/d;
o 38% growth in revenue over revenue in the second quarter 2002 due to
increased production and higher realized natural gas and oil prices ($4.66
vs. $3.57 per Mcfe); and
o 116% increase in operating income to $4.9 million in the second quarter
2003 versus $2.3 million in the second quarter 2002.
SECOND QUARTER 2003 RESULTS
Average net daily production for the second quarter 2003 was 28.9 MMcfe/d,
compared to 27.3 MMcfe/d for the second quarter last year. Year to date,
Brigham's net daily production has averaged 30.1 MMcfe/d, relative to
26.3MMcfe/d in 2002.
Revenue from the sale of oil and natural gas during the second quarter
2003 was $12.1 million. This represents a 38% increase over revenue from the
sale of oil and natural gas during last year's second quarter. Approximately 84%
of the increase in revenue for the second quarter 2003 was due to an increase in
Brigham's average realized sales price for oil and natural gas and 16% was due
to an increase in production volumes.
Production costs, which include lease operating expenses, ad valorem taxes
and production taxes, for the second quarter 2003 were $2.1 million, up 60% when
compared to last year's second quarter production costs of $1.3 million. An
increase in lease operating expenses, due to an increase in workover activity,
represented approximately 49% of the increase. Higher ad valorem taxes, due to
higher property valuations, represented approximately 12% of the increase and
higher production taxes, due to an increase in Brigham's realized pre-hedge
sales price for natural gas and oil, represented 39% of the increase.
General and administrative expenses for the second quarter 2003 were $1.2
million compared to $1.7 million in the second quarter last year. General and
administrative expenses for the second quarter 2002 included a charge for
non-cash compensation expense of $596,000. Excluding this non-cash charge,
general and administrative expenses for the second quarter 2003 were up 6%.
Depletion expenses for the second quarter 2003 were $3.8 million compared to
$3.4 million in the second quarter last year. Approximately 49% of the increase
in depletion expenses was due to an increase in production volumes while 51% of
the increase was the due to a 6% increase in Brigham's depletion rate.
Lower average outstanding debt balances for the quarter combined with a
decrease in Brigham's weighted average interest rate on its outstanding debt
resulted in a 25% decrease in Brigham's interest expense for the second quarter
2003. Interest expense for the second quarter 2003 was $1.2 million compared to
$1.6 million during last year's second quarter. Brigham's weighted average
interest rate on its outstanding borrowings for the second quarter 2003 was 5.9%
and its weighted average outstanding debt balance was $77.5 million.
Net income to common stockholders for the second quarter 2003 was $2.4
million ($0.10 diluted earnings per share) compared to $61,000 ($0.00 diluted
earnings per share) in the second quarter last year.
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Exhibit 99.1
Net capital expenditures for oil and natural gas activities for the second
quarter 2003 were $9.9 million. This included $7.5 million for drilling, $1.2
million for land and geological and geophysical activities, and $1.4 million in
capitalized interest and overhead expenses. Brigham also received $201,000 in
reimbursements and proceeds from participants in Brigham generated projects
during the second quarter 2003.
THIRD QUARTER 2003 FORECAST
The following forecasts and estimates of Brigham's third quarter 2003
results are forward looking statements subject to the risks and uncertainties
identified in the "Forward Looking Statements Disclosure" at the end of this
release.
Brigham currently expects third quarter 2003 production volumes to average
between 27.5 and 31.5 MMcfe/d, 65% of which consists of natural gas. For the
third quarter 2003, lease-operating expenses, including ad valorem taxes, are
projected to be $0.39 per Mcfe and Brigham estimates that it will spend an
additional $157,000 for workover operations. Production taxes are projected to
be 5.5% of pre-hedge oil and natural gas revenues, net general and
administrative expenses are projected to be $1.2 million ($0.42 to $0.48 per
Mcfe), depletion expenses are projected to be $1.46 per Mcfe, depreciation and
amortization expenses are projected to be $192,000 and accretion of asset
retirement obligation is expected to be $36,000.
Based on these production and cost estimates and an assumed average NYMEX
prices of $ 4.99 per MMBtu for natural gas and $28.07 per barrel for oil, and
taking into account current hedging contracts outstanding, Brigham forecasts
revenue of between $11.0 and $12.8 million and operating income of between $4.2
and $5.2 million for the third quarter 2003.
CONFERENCE CALL INFORMATION
Brigham management will host a conference call to discuss the Company's
second quarter 2003 operational and financial results with investors, analysts
and other interested parties on Wednesday, August 13th, at 9:00 a.m. Central
time. To participate in the call, participants within the U.S. please dial
888-396-2384 and participants outside the U.S. please dial 617-847 -8711. The
participant passcode for the call is 22408886. A telephone recording of the
conference call will be available to interested parties approximately two hours
after the call is completed through 11:59 p.m. Central time on Wednesday, August
27th. To access the recording, domestic callers dial 888-286-8010 and
international callers dial 617-801-6888. The passcode for the conference call
playback is 26309650. In addition, a live and archived web cast of the
conference call will be available over the Internet at either www.bexp3d.com or
www.streetevents.com.
A copy of this press release and other financial and statistical
information about the periods covered by this press release and by the
conference call that will take place on August 13, 2003, will be available on
the Brigham's website under the investor relations section. To access go to
www.bexp3d.com click on the investor relations tab and then click on news
releases 2003. The file with a copy of the press release is named Brigham
Exploration Reports Strong Second Quarter and Provides Third Quarter Guidance
and is dated August 12, 2003. The file with the other financial and statistical
information is named Other Financial and Statistical Information for Second
Quarter 2003 Conference Call and is dated August 12, 2003.
ABOUT BRIGHAM EXPLORATION
Brigham Exploration Company is an independent exploration and production
company that applies 3-D seismic imaging and other advanced technologies to
systematically explore and develop onshore domestic natural gas and oil
provinces. For more information about Brigham Exploration, please visit our
website at www.bexp3d.com or contact Investor Relations at 512-427-3444.
FORWARD LOOKING STATEMENTS DISCLOSURE
Except for the historical information contained herein, the matters
discussed in this news release are forward looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 that are based upon
current expectations. Important factors that could cause actual results to
differ materially from those in the forward looking statements include risks
inherent in exploratory drilling activities, the timing and extent of changes in
commodity prices, unforeseen engineering and
5
Exhibit 99.1
mechanical or technological difficulties in drilling wells, availability of
drilling rigs, land issues, federal and state regulatory developments and other
risks more fully described in the company's filings with the Securities and
Exchange Commission. All forward looking statements contained in this release,
including any forecasts and estimates, are based on management's outlook only as
of the date of this release, and we undertake no obligation to update or revise
these forward looking statements, whether as a result of subsequent developments
or otherwise.
Contact: John Turner, Manager - Finance & Investor Relations
(512) 427-3300
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Exhibit 99.1
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2002 2003 2002 2003
-------- --------- -------- --------
Revenues:
Oil and natural gas sales $ 8,769 $ 12,127 $ 15,203 $ 26,766
Other revenue 17 43 27 81
-------- -------- -------- --------
$ 8,786 $ 12,170 $ 15,230 $ 26,847
Costs and expenses:
Lease operating 796 1,270 1,667 2,244
Production taxes 499 806 852 1,744
General and administrative 1,718 1,187 2,682 2,326
Depletion of oil and natural gas properties 3,394 3,799 6,531 7,901
Depreciation and amortization 101 160 204 257
Accretion of asset retirement obligation -- 37 -- 71
-------- -------- -------- --------
$ 6,508 $ 7,259 $ 11,936 $ 14,543
-------- -------- -------- --------
Operating income $ 2,278 $ 4,911 $ 3,294 $ 12,304
Interest expense (1,649) (1,224) (3,070) (2,506)
Interest income 74 7 93 28
Other income (expense) (a) 79 (281) (169) (170)
-------- -------- -------- --------
Income before income taxes and cumulative
effect of change in accounting principle $ 782 $ 3,413 $ 148 $ 9,656
Income tax expense -- -- -- --
-------- -------- -------- --------
Income before cumulative effect of change in
accounting principle $ 782 $ 3,413 $ 148 $ 9,656
Cumulative effect of accounting change -- -- -- 268
-------- -------- -------- --------
Net income $ 782 $ 3,413 $ 148 $ 9,924
Preferred stock dividend & accretion 721 1,028 1,419 2,023
-------- -------- -------- --------
Net income (loss) to common $ 61 $ 2,385 $ (1,271) $ 7,901
======== ======== ======== ========
Net income (loss) to common per share:
Basic $ 0.00 $ 0.12 $ (0.08) $ 0.40
Diluted 0.00 0.10 (0.08) 0.30
Wt. Avg. common shares outstanding:
Basic 16,038 20,087 16,027 19,898
Diluted 17,760 30,037 16,027 32,090
(a) Includes the following: Non-cash gains
(losses) due to the change in the
fair market value of derivative contracts
that did not qualify as hedges of: $ 635 $ -- $ 384 $ --
Non-cash gains (losses) for ineffective
portion of hedging contracts of: -- (281) -- (170)
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BRIGHAM EXPLORATION COMPANY
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2002 2003 2002 2003
------ ------ ------ ------
Average net daily production:
Natural gas (MMcf) 16.7 17.0 15.8 16.7
Oil (Bbls) 1,778 1,990 1,749 2,243
Equivalent natural gas (MMcfe) (6:1) 27.3 28.9 26.3 30.1
Total net production:
Natural gas (MMcf) 1,499 1,528 2,844 3,000
Oil (MBbls) 160 179 315 402
Equivalent natural gas (MMcfe) (6:1) 2,460 2,602 4,733 5,412
% Natural gas 61% 59% 60% 55%
Sales prices:
Natural gas ($/Mcf) (a) $ 3.30 $ 4.72 $ 2.92 $ 5.12
Oil ($/Bbl) (a) 23.90 27.45 21.95 28.39
Weighted average ($/Mcfe) (6:1) 3.57 4.66 3.21 4.95
(a) Includes the effects of hedging gains (losses) of:
Natural gas ($/Mcf) $ (0.21) $(0.88) $ 0.01 $(1.28)
Oil ($/Bbl) (1.69) (2.07) (1.02) (2.98)
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands) (unaudited)
12/31/2002 06/30/2003
---------- ----------
Assets:
Current assets $ 33,322 $ 28,610
Oil and gas properties, at cost, net 164,980 177,306
Other property and equipment, at cost, net 1,234 1,263
Other non-current assets 2,523 3,491
-------- --------
Total assets $202,059 $210,670
======== ========
Liabilities and stockholders' equity:
Current liabilities $ 34,010 $ 35,823
Notes payable 60,000 53,000
Senior subordinated notes, net 21,797 22,382
Other non-current liabilities 186 2,486
Total liabilities $115,993 $113,691
Series A Preferred Stock, mandatorily redeemable 19,540 21,144
Series B Preferred Stock, mandatorily redeemable 4,777 5,196
Stockholders' equity 61,749 70,639
-------- --------
Total liabilities and stockholders' equity $202,059 $210,670
======== ========
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Exhibit 99.1
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2002 2003 2002 2003
--------- -------- --------- ---------
Cash flows from operating activities:
Net income $ 782 $ 3,413 $ 148 $ 9,924
Depletion, depreciation and amortization 3,495 3,959 6,735 8,158
Accretion of asset retirement obligation -- 37 -- 71
Interest paid through issuance of add'l senior sub. notes 270 289 497 585
Amortization of deferred loan fees 299 280 585 533
Non-cash compensation expense 596 -- 596 --
Cumulative effect of adoption of accounting principle -- -- -- (268)
Market value adjustment for derivatives instruments (635) 281 (384) 170
Changes in operating assets and liabilities 1,218 197 1,879 4,345
-------- -------- -------- --------
Net cash provided by operating activities $ 6,025 $ 8,456 $ 10,056 $ 23,518
Cash flows used by investing activities (8,193) (9,875) (13,193) (19,214)
Cash flows (used) provided by financing activities 48 (2,835) 3,725 (7,391)
-------- -------- -------- --------
Net increase (decrease) in cash and cash equivalents $ (2,120) $ (4,254) $ 588 $ (3,087)
======== ======== ======== ========
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2002 2003 2002 2003
---------- --------- --------- --------
Revenues:
Oil and natural gas sales $ 3.57 $ 4.66 $ 3.21 $ 4.95
Other revenue 0.01 0.02 0.01 0.01
-------- -------- -------- --------
$ 3.58 $ 4.68 $ 3.22 $ 4.96
Costs and expenses:
Lease operating 0.32 0.49 0.35 0.41
Production taxes 0.20 0.31 0.18 0.32
General and administrative 0.70 0.46 0.57 0.43
Depletion of natural gas and oil properties 1.38 1.46 1.38 1.46
Depreciation and amortization 0.04 0.06 0.04 0.05
Accretion of asset retirement obligation -- 0.01 -- 0.01
-------- -------- -------- --------
$ 2.64 $ 2.79 $ 2.52 $ 2.68
-------- -------- -------- --------
Operating income $ 0.94 $ 1.89 $ 0.70 $ 2.28
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Exhibit 99.1
BRIGHAM EXPLORATION COMPANY
SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF AUGUST 12, 2003
(unaudited)
Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005
------- ------- ------- ------- ------- ------- ------- -------
Natural Gas Swaps: MMBtu/d 6,500 4,500 3,250 2,500 1,500 1,000 -- --
$/MMBtu $3.867 $4.039 $4.963 $4.252 $4.180 $4.360 $ -- $ --
Natural Gas Collars: MMBtu/d -- -- 3,000 2,000 1,500 1,000 1,000 1,000
Floor - $/MMbtu $ -- $ -- $4.000 $4.000 $4.000 $4.000 $4.000 $4.000
Ceiling - $/MMbtu $ -- $ -- $9.900 $5.450 $5.390 $5.620 $7.250 $5.400
Natural Gas Floors: MMBtu/d 5,000 5,000 -- -- -- -- -- --
$/MMBtu $4.500 $4.500 $ -- $ -- $ -- $ -- $ -- $ --
Crude Oil Swaps: Bbls/d 600 450 325 225 150 100 -- --
$/Bbl $23.77 $23.21 $25.35 $24.52 $23.91 $23.80 $ -- $ --
Crude Oil Collars: Bbls/d -- -- 150 100 100 100 100 --
Floor - $/Bbl $ -- $ -- $23.00 $23.00 $23.00 $23.00 $23.00 $ --
Ceiling - $/Bbl $ -- $ -- $27.74 $26.64 $25.91 $25.39 $25.07 $ --
Note: Hedged volumes and prices reflected in this table represent average
contract amounts for the quarterly periods presented; natural gas hedge
prices and crude oil hedge contract prices are based on NYMEX pricing.
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