Exhibit 99.1
Brigham Exploration Reports Record Quarterly Production, Record Financial
Results and Provides Third Quarter Forecast
AUSTIN, Texas, Aug. 10 /PRNewswire-FirstCall/ -- Brigham Exploration
Company (Nasdaq: BEXP) today announced its financial results for the quarter
ended June 30, 2004.
Highlights from Brigham's performance for the second quarter include:
-- Second quarter 2004 production of 34.4 MMcfe/d, representing a 19%
increase over second quarter 2003 production;
-- 48% increase in revenues to $18 million, compared to revenues in last
year's second quarter of $12.2 million;
-- 77% increase in operating income to $8.7 million, compared to
operating income in last year's second quarter of $4.9 million; and
-- 126% increase in net capital expenditures to $22.6 million, relative
to net capital expenditures in last year's second quarter of
$10 million.
SECOND QUARTER 2004 RESULTS
Average daily production volumes for the second quarter 2004 were
34.4 MMcfe/d and were 19% higher when compared to production volumes in last
year's second quarter. Higher production combined with an improvement in our
realized sales price, net of hedges, resulted in a $5.8 million, or 48%,
increase in our revenues for the second quarter 2004. Increased production
volumes represented approximately $2.9 million of the $5.8 million increase in
revenues, while improved price realizations represented the remainder of the
increase.
An increase in the number of producing wells during the second quarter
2004 led to a 3% increase in lease operating expenses. On a per unit basis,
lease operating expenses for the second quarter 2004 decreased $0.06 per Mcfe
to $0.42. The decrease in our per unit lease operating expenses was due to a
$0.05 per Mcfe decrease in workover costs and a $0.01 decrease in ad valorem
taxes. An increase in production volumes combined with an increase in the
average pre-hedge sales price that we received for oil and natural gas in the
second quarter 2004 were the primary reasons for the 11% increase in our total
production tax expenses. Despite the increase in our total production tax
expenses, on a per unit basis, production taxes were $0.02 per Mcfe lower due
to reduced tax rates and tax credits on certain wells.
General and administrative expenses for the second quarter 2004 were up
slightly when compared to general and administrative expenses for the second
quarter last year. General and administrative expenses on a per unit basis
decreased 15% in the second quarter 2004 to $0.39 per Mcfe.
Depletion expense for the second quarter 2004 was $5.6 million ($1.82 per
Mcfe) compared to $3.8 million ($1.46 per Mcfe) in the second quarter last
year. An increase in our depletion rate accounted for 61% of this increase,
while an increase in production accounted for 39% of the increase. The
increase in our depletion rate was primarily the result of increased costs of
reserve additions during the first half of 2004. Operating income for the
second quarter 2004 was $8.7 million and grew 77% when compared to operating
income in the second quarter last year.
A decline in our weighted average debt balances outstanding under both our
senior credit facility and our senior subordinated notes, combined with a
decrease in the interest rate that we paid on those borrowings, were the
primary reasons for the $370,000 or 30% decrease in interest expenses for the
second quarter 2004. Interest expenses for the second quarter 2004 were
$854,000 and $0.28 per Mcfe on a per unit basis, compared to $1.2 million and
$0.47 in 2003.
We reported net income available to common stockholders of $5.1 million
($0.13 per diluted share) in the second quarter 2004 versus a net income of
$2.4 million ($0.10 per diluted share) for the prior year period. Net income
in the current quarter was reduced by a $2.7 million provision for deferred
income taxes. There was no income tax provision incurred in last year's
second quarter.
Our net capital expenditures for the second quarter 2004 increased 126%.
Net capital expenditures for the second quarter of 2004 and 2003 were:
($'s in millions)
Three Months Ended June 30,
2004 2003
Drilling $18.6 $7.5
Net land and G&G 2.4 1.0
Capitalized costs 1.6 1.4
Net capital expenditures for
oil and natural gas activities $22.6 $9.9
Other property & equipment --- 0.1
Net capital expenditures $22.6 $10.0
THIRD QUARTER 2004 FORECAST
The following forecasts and estimates of our third 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.
We currently expect third quarter 2004 production volumes to average
between 34 and 38 MMcfe/d (72% natural gas). For the third quarter 2004,
lease operating expenses are projected to be $0.43 per Mcfe, production taxes
are projected to be approximately 5.5% of pre-hedge oil and natural gas
revenues, and general and administrative expenses are projected to be
$1.2 million ($0.35 to $0.39 per Mcfe).
Based on these production and cost estimates, assumed average NYMEX prices
of $6.00 per MMBtu for natural gas and $42.20 per barrel for oil, and taking
into account current derivative contracts outstanding, we forecast that our
revenue will be between $18 and $20.3 million and operating income will be
between $8.9 and $10.4 million for the third quarter 2004.
Gene Shepherd, Brigham's Chief Financial Officer, commented, "We are
pleased with the record financial performance that the company achieved during
the second quarter and first half of 2004. Our record production volumes and
relatively flat costs have contributed to an expansion in our operating
margins during 2004. With the expanded capital expenditure budget that has
resulted from our recent equity offering, we look forward to building upon
these results in the second half of 2004."
CONFERENCE CALL INFORMATION
Our management will host a conference call to discuss its operational and
financial results for the second quarter 2004 with investors, analysts and
other interested parties on Wednesday, August 11th, at 9:00 a.m. Central time.
To participate in the call, participants within the U.S. please dial
800-396-2386 and participants outside the U.S. please dial 617-847-8712. The
participant passcode for the call is 88907599. 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 25th. 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 53408390. In addition, a live and archived
web cast of the conference call will be available over the Internet at either
http://www.bexp3d.com or http://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 11, 2004, will be available on our website. To access the press
release go to http://www.bexp3d.com and click on News Releases. The file with
a copy of the press release is named Brigham Exploration Report Record
Quarterly Production, Record Financial Results And Provides Third Quarter
Forecast and is dated August 10, 2004. To access the other financial and
statistical information that will be covered by the conference call that will
take place on August 11, 2004, go to http://www.bexp3d.com and click on Event
Calendar. The file with the other financial and statistical information is
named Financial and Statistical Information for the Second Quarter Conference
Call and is dated August 11, 2004.
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 http://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) (unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2004 2003 2004 2003
Revenues:
Oil and natural gas
sales $17,916 $12,127 $34,735 $26,766
Other 41 43 42 81
$17,957 $12,170 $34,777 $26,847
Costs and expenses:
Lease operating 1,305 1,270 2,714 2,244
Production taxes 896 806 1,759 1,744
General and
administrative 1,199 1,187 2,419 2,326
Depletion of oil
and natural gas 5,623 3,799 10,503 7,901
Depreciation and
amortization 184 160 365 257
Accretion of discount
on ARO 40 37 77 71
$9,247 $7,259 $17,837 $14,543
Operating income $8,710 $4,911 $16,940 $12,304
Interest expense (854) (1,224) (1,636) (2,506)
Interest income 15 7 29 28
Other income
(expense) (A) (118) (281) 9 (170)
Income before income
taxes & cumulative
effect of adoption
of accounting
principle $7,753 $3,413 $15,342 $9,656
Deferred income tax
expense (2,683) --- (5,183) ---
Cumulative effect of
adoption of
accounting principle --- --- --- 268
Net income $5,070 $3,413 $10,159 $9,924
Preferred stock
dividends & accretion --- 1,028 --- 2,023
Net income (loss) to
common $5,070 $2,385 $10,159 $7,901
Net income (loss) to
common per share:
Basic $0.13 $0.12 $0.26 $0.40
Diluted $0.13 $0.10 $0.25 $0.30
Wt. Avg. common shares
outstanding:
Basic 39,287 20,087 39,261 19,898
Diluted 40,391 30,037 40,354 32,090
(A) Includes non-cash
gain (loss) related
to changes in the
fair market value
of our derivative
contracts: $(187) $(281) $(60) $(170)
BRIGHAM EXPLORATION COMPANY
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2004 2003 2004 2003
Average net daily
production:
Natural gas (MMcf) 25.0 17.0 24.1 16.7
Oil (Bbls) 1,566 1,990 1,699 2,232
Equivalent natural
gas (MMcfe) (6:1) 34.4 28.9 34.1 30.1
Total net production:
Natural gas (MMcf) 2,246 1,528 4,339 3,000
Oil (MBbls) 141 179 300 402
Equivalent natural
gas (MMcfe) (6:1) 3,092 2,602 6,142 5,412
% Natural gas 73% 59% 71% 55%
Sales prices (Before
hedging):
Natural gas ($/Mcf) $6.19 $5.60 $6.00 $6.40
Oil ($/Bbl) 37.81 29.52 35.79 31.39
Equivalent natural
gas ($/MMcfe) (6:1) 6.22 5.32 5.99 5.88
Realized prices (Post
hedging):
Natural gas
($/Mcf) (A) $5.90 $4.72 $5.80 $5.12
Oil ($/Bbl) (A) 33.05 27.45 31.88 28.39
Equivalent natural
gas ($/MMcfe)
(6:1) (A) 5.79 4.66 5.66 4.95
(A) Includes the
effects of
hedging gains
(losses) of:
Natural gas
($/Mcf) $(0.29) $(0.88) $(0.20) $(1.28)
Oil ($/Bbl) (4.76) (2.07) (3.91) (3.00)
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)
06/30/2004 12/31/2003
Assets: (unaudited)
Current assets $27,663 $20,835
Oil and natural gas properties, net
(full cost method) 226,715 197,311
Other property and equipment, net 1,195 1,219
Other non-current assets 2,690 4,851
Total assets $258,263 $224,216
Liabilities and stockholders' equity:
Current liabilities $36,266 $35,579
Senior credit facility 36,700 19,000
Senior subordinated notes 20,000 20,000
Series A Preferred Stock, mandatorily
redeemable 9,148 8,794
Other non-current liabilities 6,861 2,498
Total liabilities $108,975 $85,871
Stockholders' equity 149,288 138,345
Total liabilities and stockholders' equity $258,263 $224,216
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2004 2003 2004 2003
Cash flows from
operating activities:
Net income $5,070 $3,413 $10,159 $9,924
Depletion, depreciation
and amortization 5,807 3,959 10,868 8,158
Accretion of discount
on ARO 40 37 77 71
Interest paid through
issuance of add'l
senior sub. notes --- 289 --- 585
Interest paid through
issuance of add'l
redeemable preferred
stock 179 --- 354 ---
Amortization of deferred
loan fees 191 280 383 533
Mkt value adjustments for
derivatives instruments 187 281 60 170
Cumulative effect of
adoption of change in
acctg principle --- --- --- (268)
Deferred income tax
expense 2,683 --- 5,183 ---
Changes in operating
assets and liabilities 2,599 197 (1,734) 4,345
Cash flows provided
by operating
activities $16,756 $8,456 $25,350 $23,518
Cash flows used by
investing
activities (21,050) (9,875) (38,107) (19,214)
Cash flows (used)
provided by
financing activities 7,746 (2,835) 18,089 (7,391)
Net increase
(decrease) in cash
and cash
equivalents $3,452 $(4,254) $5,332 $(3,087)
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2004 2003 2004 2003
Revenues:
Oil and natural
gas sales $5.79 $4.66 $5.66 $4.95
Other revenue 0.01 0.02 0.01 0.01
$5.80 $4.68 $5.67 $4.96
Costs and expenses:
Lease operating 0.42 0.48 0.44 0.41
Production taxes 0.29 0.31 0.29 0.32
General and
administrative 0.39 0.46 0.39 0.43
Depletion of natural
gas and oil
properties 1.82 1.46 1.71 1.46
Depreciation and
amortization 0.06 0.06 0.06 0.05
Accretion of discount
on ARO 0.01 0.01 0.01 0.01
$2.99 $2.78 $2.90 $2.68
Operating income $2.81 $1.90 $2.77 $2.28
Interest expense,
net of interest
income (A) (0.27) (0.47) (0.26) (0.46)
Other income
(expense) (B) 0.02 --- 0.01 ---
Adjusted income
before dividends &
accretion $2.56 $1.43 $2.52 $1.82
(A) Calculated as interest expense minus interest income divided by
production for period.
(B) Excludes non-cash gains/(losses) arising from hedge accounting for
certain of our oil and natural gas hedges
BRIGHAM EXPLORATION COMPANY
SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF AUGUST 10, 2004
(unaudited)
2004 2005
Q3 Q4 Q1 Q2 Q3 Q4
Natural
Gas
Swaps: MMBtu/d 1,500 1,000 --- --- --- ---
$/MMBtu $4.180 $4.360 --- --- --- ---
Natural
Gas
Collars: Floor - MMBtu/d 7,850 6,371 5,750 5,000 --- ---
Floor - $/Mmbtu $4.613 $4.746 $4.663 $4.725 --- ---
Cap - MMBtu/d 7,850 6,371 5,750 5,000 --- ---
Cap - $/MMBtu $6.476 $6.690 $7.100 $6.712 --- ---
Crude
Oil
Swaps: Bbls/d 150 100 --- --- --- ---
$/Bbl $23.91 $23.80 --- --- --- ---
Crude
Oil
Collars: Floor - Bbls/d 530 372 305 205 --- ---
Floor - $/Bbl $26.34 $26.68 $25.56 $26.80 --- ---
Cap - Bbls/d 530 372 305 205 --- ---
Cap - $/Bbl $32.20 $31.71 $30.18 $32.51 --- ---
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- 08/10/2004
/CONTACT: John Turner, Manager - Finance & Investor Relations of Brigham
Exploration Company, +1-512-427-3300, or investor@bexp3d.com /
/Web site: http://www.streetevents.com /
/Web site: http://www.bexp3d.com /
(BEXP)
CO: Brigham Exploration Company
ST: Texas, Oklahoma
IN: OIL
SU: ERN ERP CCA MAV