Exhibit 99.1
Brigham Exploration Reports Year End Results Including Record 2003 Financial
Results and Strong Reserve Growth
AUSTIN, Texas, March 4 /PRNewswire-FirstCall/ -- Brigham Exploration
Company (Nasdaq: BEXP) today announced its financial results for the fiscal
year and quarter ended December 31, 2003 and its year-end reserve numbers.
Highlights from Brigham's performance for 2003 include:
* 7% growth in 2003 production over production in 2002;
* 131% growth in operating income to $21.8 million over operating
income in 2002 of $9.4;
* Record net income available to common for 2003 of $14.8 million over
a net loss in 2002 of $0.6 million;
* Reduced outstanding indebtedness by approximately $58 million,
resulting in a reduction in our debt to book capitalization from 63%
at year end 2002 to 26 % at year end 2003; and
* 11% growth in total proved reserves, including 20% growth in proved
developed reserves.
YEAR-END 2003 RESULTS
Average net daily production volumes for 2003 were 29.7 MMcfe per day
compared to 27.8 MMcfe per day in 2002. Revenues from the sale of oil and
natural gas, net of hedging, grew 47% to $51.5 million in 2003 compared to
$35.1 million last year. Approximately 86% ($14.2 million) of the increase in
revenues from the sale of oil and natural was due to a 38% increase in
Brigham's average realized sales price for oil and natural gas, with the
remainder coming from the increase in production volumes. Brigham's average
realized prices for 2003 were $4.92 per Mcf for natural gas and $28.17 per
barrel for oil compared to $3.21 per Mcf and $23.55 per barrel in 2002. Cash
settlements on hedging transactions in 2003 reduced revenue from the sale of
oil and natural gas by $6.7 million ($0.63 per Mcfe) compared to a reduction
of $1.8 million ($0.19 per Mcfe) in 2002.
Lease operating expenses for 2003 were $5.2 million ($0.49 per Mcfe)
compared to $3.8 million ($0.38 per Mcfe) in 2002. An increase in expenses
related to insurance, overhead fees and compressor rental and maintenance
represented approximately $0.05 of the increase in our lease operating
expenses per unit, while an increase in workover costs accounted for
approximately $0.07 of the increase. Production taxes increased 25% to
$2.5 million and were 15% higher on a per unit basis at $0.23 per Mcfe. The
increase in production taxes was primarily related to higher production
volumes and an increase in the sales price that Brigham received for its our
oil and natural gas.
General and administrative expenses for 2003 were $4.5 million compared to
$5.0 million in 2002. General and administrative expenses for 2002 included a
non-cash charge related to compensation expense of $596,000. Excluding this
non-cash charge, total general and administrative expenses increased 3% and on
a per unit basis decreased 5% to $0.42 per Mcfe.
Depletion of natural gas and oil properties for 2003 was $17.0 million
($1.59 per Mcfe) compared to $14.6 million ($1.46 per Mcfe) in 2002. An
increase in production volumes accounted for 42% of the increase, while an
increase in the Company's depletion rate accounted for the remaining 58%. The
increase in Brigham's depletion rate was due to an increase in finding and
development costs in 2003 and an increase in future development costs
associated with the Company's year-end 2003 reserves. Operating income grew
131% to $21.8 million in 2003 compared to $9.4 million last year.
Interest expenses for 2003 were $4.8 million and $0.45 per Mcfe on a per
unit basis, compared to $6.2 million and $0.62 in 2002. A lower weighted
average debt balance outstanding under Brigham's senior credit facility
combined with a decrease in the interest rate that it paid on those borrowings
were the primary reasons for the 23% decrease in interest expenses for 2003.
Brigham recorded a net income tax benefit in 2003. Management believes
that the Company will begin to utilize its NOLs and will have reversals of
existing temporary differences between book and taxable income. As a
consequence, the Company recognized an income tax benefit of $1.6 million in
the fourth quarter 2003. Net income available to common stockholders for 2003
was $14.8 million ($0.53 diluted earnings per share) compared to a net loss of
$576,000 ($0.04 diluted earnings per share) in 2002.
Brigham's capital expenditures for 2003 and 2002 were:
($'s in millions)
2003 2002
Drilling $35.1 $19.8
Land and G&G 6.0 3.0
Capitalized Cost 6.1 5.7
Proceeds from the sale of assets (0.4) (0.8)
Net capital expenditures $46.8 $27.7
FOURTH QUARTER 2003 RESULTS
Net daily production volumes for the fourth quarter 2003 were 29.5 MMcfe
per day and were flat when compared with production volumes in last year's
fourth quarter. Higher commodity prices in the fourth quarter 2003 led to an
11% increase in revenue from the sale of oil and natural gas.
Lease operating expenses for the fourth quarter 2003 were $1.2 million and
13% lower than lease operating expenses in the fourth quarter last year. On a
per unit basis, lease operating expenses for the fourth quarter 2003 were
$0.44 per Mcfe compared to $0.50 per unit in last year's fourth quarter. A
decrease in ad valorem taxes was the primary reason for the decrease in both
Brigham's total lease operating expenses and its lease operating expenses on a
per unit basis. Production tax expense for the fourth quarter 2003 was
$180,000 compared to $650,000 in the fourth quarter last year. On a per unit
basis, production taxes for the fourth quarter 2003 were $0.07 per Mcfe
compared to $0.24 per Mcfe in last year's fourth quarter. A reclassification
of a credit that the Company received from the settlement of its gas imbalance
liability with one of its participants was the reason for the decrease in both
its total production taxes and production taxes on a per unit basis. The
credit, which based on preliminary settlement information was booked in the
third quarter 2003 as additional revenue, has been reclassified out of revenue
as a reduction to production taxes in the fourth quarter. The impact of the
reclassification from revenue to production taxes gives Brigham's fourth
quarter the appearance of low commodity price realizations and low total and
per unit production taxes.
General and administrative expenses for the fourth quarter 2003 decreased
9% when compared to general and administrative expenses for the fourth quarter
last year. General and administrative expenses on a per unit basis decreased
9% in the fourth quarter 2003 to $0.41 per Mcfe.
Depletion expense for the fourth quarter 2003 was $5.1 million ($1.93 per
Mcfe) compared to $4.5 million ($1.68 per Mcfe) in the fourth quarter last
year. An increase in Brigham's depletion rate was the primary reason for the
increase in depletion expense. Operating income grew 42% to $3.9 million in
the fourth quarter 2003 compared to $2.7 million in the fourth quarter last
year.
A lower weighted average debt balance outstanding under Brigham's senior
credit facility combined with a decrease in the interest rate that it paid on
those borrowings were the primary reasons for the 23% decrease in interest
expenses for the fourth quarter 2003. Interest expenses for the fourth
quarter 2003 were $1.2 million and $0.45 per Mcfe on a per unit basis,
compared to $1.6 million and $0.58 in 2002.
Brigham recorded an income tax benefit of $1.6 million in the fourth
quarter 2003 and reported net income available to common stockholders of
$2.3 million ($0.10 per diluted share) for the fourth quarter 2003 versus a
net loss of $294,000 ($0.02 per diluted share) for the prior year period.
Brigham's capital expenditures during the fourth quarter of 2003 and 2002
were:
($'s in millions)
Three Months Ended
December 31,
2003 2002
Drilling $14.5 $7.6
Land and G&G 2.6 1.4
Capitalized Cost 1.5 1.7
Proceeds from the sale of assets (0.0) (0.2)
Net capital expenditures $18.6 $10.5
FIRST QUARTER 2004 FORECAST
The following forecasts and estimates of Brigham's first quarter 2004
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 first quarter 2004 production volumes to average
between 32 and 33 MMcfe per day (68% natural gas). For the first quarter
2004, lease operating expenses are projected to be $0.45 per Mcfe, production
taxes are projected to be approximately 5.5% of pre-hedge oil and gas
revenues, and general and administrative expenses are projected to be
$1.1 million ($0.38 to $0.37 per Mcfe).
Based on these production and cost estimates, assumed average NYMEX prices
of $5.69 per MMBtu for natural gas and $33.24 per barrel for oil, and taking
into account current hedging contracts outstanding, Brigham forecasts that its
revenue will be between $15.6 and $16.1 million and operating income will be
between $7.5 and $7.8 million for the first quarter 2004.
Gene Shepherd, Brigham's Chief Financial Officer, commented, "We are
pleased with the our operating performance during 2003. Revenues, operating
income and net income were all up substantially, due to strong commodity
prices, modest production growth and flat per unit cash costs, which include
operating, production tax, G&A and interest expenses. Furthermore, we have
substantially strengthened and simplified our balance sheet through the
completion of our new three-year credit facility, completion of our equity
offering, conversion of the CSFB warrants and preferred stock to common stock,
and renegotiation of the terms on our senior subordinated notes. Despite our
strong 2003 results, we have a lot of work in front of us in terms of
executing on our 2004 accelerated drilling program."
Shepherd further added, "Succeeding in 2004 and generating strong reserve
and production growth will purely be a function of execution risk, as we now
have the balance sheet and financial flexibility that enables us to take
advantage of our deep inventory of prospects. We know which prospects we will
be drilling over the course of 2004 and we are already seeing positive results
in terms of production growth. We look forward to reporting on our results
after a full 12 months of accelerated drilling activity."
2003 PROVED RESERVES & FINDING COSTS
Brigham's estimated net proved reserve volumes at December 31, 2003
totaled 134 Bcfe, which represents an 11% increase from the 121 Bcfe that it
reported at year-end 2002. Brigham's estimated net proved developed reserves
at December 31, 2003 totaled 67 Bcfe, which represents a 20% increase over its
56 Bcfe of net proved developed reserves at year-end 2002. During 2003,
Brigham added approximately 23.8 Bcfe in total proved reserves in its Anadarko
Basin, Texas Gulf Coast and West Texas 3-D seismic projects. Approximately 20
Bcfe or 84% of these adds were proved developed. Brigham's 2003 drilling
program generated net proved reserve additions that replaced 223% of its 10.7
Bcfe of net reserve volumes produced during the year. Approximately 82% of
Brigham's year-end 2003 reserve volumes are natural gas and 50% are proved
developed, up from 46% proved developed at year-end 2002.
At year-end 2003, the present value ("PV10% Value") of Brigham's estimated
proved reserves was $344 million. Brigham's PV10% Value at year-end 2002 was
$307 million. Higher reserve volumes and higher year-end oil and gas prices
resulted in the 12% increase in the PV10% Value for 2003. Brigham's PV10%
Value for 2003 was calculated using a Henry Hub natural gas price of $5.83 per
MMBtu and a West Texas Intermediate Sweet price of $32.55 per barrel versus a
Henry Hub natural gas price of $4.74 per MMBtu and a West Texas Intermediate
Sweet price of $31.25 per barrel that were used for the 2002 year-end.
Brigham's capital expenditures for 2003 totaled $46.8 million (including
capitalized G&A and interest), approximately 75% of which related to drilling
activities. For 2003, Brigham's average finding costs for reserves added,
including revisions to prior estimates, were $1.97 per Mcfe, based on total
capital expenditures. Excluding revisions, Brigham's finding costs were $1.62
per Mcfe based on total capital expenditures. Brigham's three-year average
finding costs for reserves added, including revisions to prior estimates, were
$1.50 per Mcfe based on total capital expenditures.
Bud Brigham, the Chairman and CEO stated, "Unfortunately, our all sources
finding costs were higher than historical, though still attractive given the
value of our reserves, the low production costs and associated strong margins.
Our principal objective has been to convert our non-producing assets to
production and cash flow to capitalize on this extended window of strong
commodity prices. Given that, in 2003 we aggressively drilled our proved
undeveloped locations and we efficiently grew our proved developed reserves.
Thus, our 2003 drilling finding and development costs were closer to our
historical at $1.30 per proved developed Mcfe. On the other hand, we were not
as productive in 2003 as we had been in recent years at adding proved
undeveloped reserves through our exploration activities."
Bud Brigham further stated, "We are focused on execution. Our accelerated
drilling program has positively impacted our production growth thus far in
2004. Our ongoing field development should continue to provide relatively
predictable developed reserve and production additions. In addition, our
exploration program, including six relatively high potential tests planned for
2004, gives us the opportunity to grow our proved developed reserves as well
as add to our inventory of development locations, and thus generate low all
sources finding costs consistent with our historical results."
Equivalent Reserves
(Bcfe)
2003 Beginning Reserves 121,070
Discoveries & Extensions 28,879
Revisions of Previous Estimates (5,093)
Production (10,674)
2003 Ending Reserves 134,182
CONFERENCE CALL INFORMATION
Brigham management will host a conference call to discuss its operational
and financial results for the fourth quarter and FY 2003 with investors,
analysts and other interested parties on Friday, March 5th, at 9:00 a.m.
Central time. To participate in the call, participants within the U.S. please
dial 800-884-5695 and participants outside the U.S. please dial 617-786 -2960.
The participant passcode for the call is 34328647. 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 Friday,
March 19th. 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 20084599. 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 March 5, 2004, will be available
on our website. To access the press release go to www.bexp3d.com and click on
News Releases. The file with a copy of the press release is named Brigham
Exploration Reports Year End Results Including Record 2003 Financial Results &
Strong Reserve Growth and is dated March 4, 2004. To access the other
financial and statistical information that will be covered by the conference
call that will take place on March 5, 2004, go to www.bexp3d.comand click on
Event Calendar. The file with the other financial and statistical information
is named Financial and Statistical Information for the Fourth Quarter
Conference Call and is dated November March 4, 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 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 / investor@bexp3d.com
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
Revenues: (unaudited)
Oil and natural gas
sales $11,598 $10,463 $51,545 $35,100
Other 19 34 132 76
$11,617 $10,497 $51,677 $35,176
Costs and expenses:
Lease operating 1,163 1,331 5,200 3,759
Production taxes 180 650 2,477 1,977
General and
administrative (a) 1,080 1,190 4,500 4,971
Depletion of natural
gas and oil properties 5,119 4,476 16,972 14,594
Depreciation and
amortization 180 133 629 440
Accretion of discount
on ARO 32 -- 142 --
$7,754 $7,780 $29,920 $25,741
Operating income $3,863 $2,717 $21,757 $9,435
Interest expense, net (1,199) (1,554) (4,815) (6,238)
Interest income 9 14 45 119
Debt conversion expense -- (630) -- (630)
Other income (expense)(b) (351) (54) (601) (310)
Income before income $2,322 $493 $16,386 $2,376
taxes & cumulative
effect of adoption of
accounting principle
Income tax benefit 1,636 -- 1,636 --
Cumulative effect of
adoption of accounting
principle -- -- 268 --
Net income $3,958 $493 $18,290 $2,376
Preferred stock dividends
& accretion 360 787 3,448 2,952
Net income (loss) to common $3,598 ($294) $14,842 ($576)
Net income (loss) to
common per share:
Basic $0.11 $(0.02) $0.64 $(0.04)
Diluted $0.10 $(0.02) $0.53 $(0.04)
Wt. Avg. common shares
outstanding:
Basic 32,346 16,436 23,363 16,138
Diluted 38,457 16,436 34,354 16,138
(a) Includes non-cash
charge related to
stock compensation
expense of: -- -- -- ($596)
(b) Includes non-cash
gains/(losses) related
to our derivative
contracts: ($419) ($15) ($669) $263
BRIGHAM EXPLORATION COMPANY
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
Avg. net daily production: (unaudited)
Natural gas (MMcf) 19.0 16.5 17.7 16.1
Oil (Bbls) 1,754 2,186 1,999 1,947
Equivalent natural gas (MMcfe)
(6:1) 29.5 29.6 29.7 27.8
Total net production:
Natural gas (MMcf) 1,708 1,484 6,356 5,791
Oil (MBbls) 158 197 720 701
Equivalent natural gas (MMcfe)
(6:1) 2,655 2,664 10,674 9,996
% Natural gas 64% 56% 60% 58%
Sales prices:
Natural gas ($/Mcf) (a) $4.23 $3.75 $4.92 $3.21
Oil ($/Bbl) (a) 27.67 24.88 28.17 23.55
Equivalent natural gas
($/Mcfe) (6:1) 4.37 3.93 4.83 3.51
(a) Includes the effects of
hedging gains (losses) of:
Natural gas ($/Mcf) ($0.13) ($0.44) ($0.76) ($0.12)
Oil ($/Bbl) (2.09) (2.03) (2.62) (1.62)
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2003 2002
Assets:
Current assets $20,835 $33,322
Natural gas and oil properties, net (full
cost method) 197,311 164,980
Other property and equipment, net 1,219 1,234
Other non-current assets 4,851 2,523
Total assets $224,216 $202,059
Liabilities and stockholders' equity:
Current liabilities $35,579 $34,010
Notes payable 19,000 60,000
Senior subordinated notes 20,000 21,797
Redeemable preferred stock, Series A 8,794 --
Redeemable preferred stock, Series B -- --
Other non-current liabilities 2,498 186
Total liabilities $85,871 $115,993
Redeemable preferred stock, Series A -- 19,540
Redeemable preferred stock, Series B -- 4,777
Stockholders' equity 138,345 61,749
Total liabilities and stockholders' equity $224,216 $202,059
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
(unaudited)
Cash flows from operating
activities:
Net income $3,958 $493 $18,290 $2,376
Depletion, depreciation and
amortization 5,299 4,609 17,601 15,034
Accretion of discount on ARO 32 -- 142 --
Interest paid through issuance
of add'l senior sub. notes 308 291 1,196 1,076
Interest paid through issuance
of add'l redeemable
preferred stock 340 -- 340 --
Amortization of deferred loan
fees 248 303 1,057 1,191
Stock option compensation
expense -- -- -- 596
Mkt value adjustments for
derivatives instruments 419 15 669 (263)
Cumulative effect of adoption
of change in acctg prin -- -- (268) --
Deferred income tax benefit (1,636) -- (1,636) --
Changes in working capital and
other items 298 1,067 4,300 8,963
Cash flows provided by
operating activities $9,266 $6,778 $41,691 $28,973
Cash flows used by
investing activities (16,687) (8,356) (46,089) (27,206)
Cash flows (used) provided
by financing activities 2,184 4,714 (5,141) 8,439
Net increase (decrease) in
cash and cash equivalents ($5,237) $3,136 ($9,539) $10,206
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
Revenues:
Natural gas and oil sales $4.37 $3.93 $4.83 $3.51
Other revenue 0.01 0.01 0.01 0.01
$4.38 $3.94 $4.84 $3.52
Costs and expenses:
Lease operating 0.44 0.50 0.49 0.38
Production taxes 0.07 0.24 0.23 0.20
General and
administrative 0.41 0.45 0.42 0.50
Depletion of natural gas
and oil properties 1.93 1.68 1.59 1.46
Depreciation and
amortization 0.07 0.05 0.06 0.04
Accretion of discount on
ARO 0.01 - 0.01 -
$2.93 $2.92 $2.80 $2.58
Operating income $1.45 $1.02 $2.04 $0.94
Interest expense, net (a) (0.45) (0.58) (0.45) (0.61)
Other income (expense) (b) 0.03 (0.01) 0.01 (0.06)
Adjusted income before
dividends & accretion $1.03 $0.43 $1.60 $0.27
(a) Net of interest income.
(b) Excludes non-cash gains/(losses) arising from hedge accounting for
certain of our oil and natural gas hedges and debt conversion
expense in the fourth quarter of 2002 & FY 2002.
BRIGHAM EXPLORATION COMPANY
SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF MARCH 4, 2004
(unaudited)
2004 2005
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Natural Gas MMBtu/d 3,250 2,500 1,500 1,000 -- -- -- --
Swaps: $/MMBtu $4.963 $4.252 $4.180 $4.360 -- -- -- --
Natural Gas Floor - 6,000 5,600 4,350 2,871 2,250 1,500 -- --
Collars: MMBtu/d
Floor - $4.125 $4.112 $4.101 $4.131 $4.139 $4.083 -- --
$/Mmbtu
Cap - 6,000 5,600 4,350 2,871 2,250 1,500 -- --
MMBtu/d
Cap - $8.433 $5.672 $5.724 $5.813 $6.633 $5.107 -- --
$/MMBtu
Crude Oil Bbls/d 325 225 150 100 -- -- -- --
Swaps: $/Bbl $25.35 $24.52 $23.91 $23.80 -- -- -- --
Crude Oil Floor -
Collars: Bbls/d 500 550 400 242 175 75 -- --
Floor - $23.00 $24.09 $24.50 $23.83 $23.00 $23.00 -- --
$/Bbl
Cap - Bbls/d 500 550 400 242 175 75 -- --
Cap - $/Bbl $30.43 $30.60 $30.27 $28.25 $25.85 $26.45 -- --
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.
SOURCE Brigham Exploration Company
-0- 03/04/2004
/CONTACT: John Turner, Manager - Finance & Investor Relations of Brigham
Exploration Company, +1-512-427-3300, investor@bexp3d.com /
/Web site: http://www.bexp3d.com
http://www.streetevents.com /
(BEXP)
CO: Brigham Exploration Company
ST: Texas, Oklahoma
IN: OIL
SU: ERN CCA