1
EXHIBIT 99.3
[BRIGHAM LOGO] NEWS RELEASE
FOR IMMEDIATE RELEASE
BRIGHAM EXPLORATION REPORTS IMPROVED 1999 FINANCIAL RESULTS
================================================================================
Austin, TX -- (Business Wire) - March 7, 2000 -- Brigham Exploration
Company (NASDAQ:BEXP) today announced its financial results for the quarter and
fiscal year ended December 31, 1999. Significant highlights of Brigham's 1999
financial performance include:
o Net production volumes increased 4% on an equivalent basis in the fourth
quarter 1999 relative to the fourth quarter 1998, despite the sale of
producing reserves in mid-1999 and a significantly reduced drilling budget
during 1999;
o Higher realized oil and gas sales prices contributed to production revenue
growth of 63% in the fourth quarter and 9% for the full year 1999 vs.
comparable periods in 1998;
o Significant year-over-year growth in EBITDA - 543% in the fourth quarter
and 43% for the year - due to improved realized sales prices and reduced
unit operating costs; and
o Continuing improvement in per unit G&A expenses - $0.52 per Mcfe in the
fourth quarter 1999 vs. $0.92 per Mcfe in the fourth quarter 1998.
FOURTH QUARTER 1999 RESULTS
Average net daily production volumes for the fourth quarter 1999 were
16.5 MMcfe, an increase of 4% from the fourth quarter 1998. Excluding net
volumes attributable to properties sold by Brigham effective as of June 30,
1999, the Company's average net daily production would have been 12.6 MMcfe for
the fourth quarter 1998, resulting in comparable year-over-year production
growth of 31% over those adjusted volumes. This production growth primarily
resulted from the completion of wells drilled in the early portion of Brigham's
1999 drilling program combined with recompletion and workover projects performed
by the Company on certain producing wells. Significant drilling discoveries made
by the Company late in 1999 did not materially contribute to fourth quarter
volumes and will not contribute a full quarter of production until the second
quarter of 2000.
Net natural gas production in the fourth quarter 1999 was 1.0 Bcf, an
11% decrease over the same period in 1998, while net oil production in the
current year quarter was 80 MBbls, a 61% increase from the prior year quarter.
The decrease in net natural gas production was primarily the result of the
Company's producing property divestitures effective June 30, 1999. The
significant increases in oil production were attributable to workovers and other
production stimulation operations and the resumption of production for certain
non-operated oil wells that were shut-in during the fourth quarter 1998. Natural
gas comprised 68% of Brigham's equivalent fourth quarter 1999 production
volumes.
Natural gas and oil sales for the fourth quarter 1999 were $4.1
million, or a 63% increase from the same period last year. The Company's average
realized natural gas and oil equivalent sales price increased 58% in the fourth
quarter 1999 as compared to the average realized sales price in the prior year
quarter resulting from improved market prices for both natural gas and crude
oil. Brigham's average natural gas sales price for the fourth quarter 1999 was
$2.22 per Mcf compared to $1.65 per Mcf in the fourth quarter 1998 (a 36%
increase), while the Company's average oil sales price for the fourth quarter
1999 was $23.38 per Bbl compared to $13.06 per Bbl in the prior year period (a
79% increase). Losses on natural gas hedging transactions of $485,000, or $0.48
per Mcf, negatively impacted Brigham's net realized natural gas sales price and
revenues during the fourth quarter 1999, while natural gas hedging gains of
$281,000, or $0.25 per Mcf, contributed positively to the Company's average
realized natural gas sales price and revenues during the prior year period. In
late September 1999, Brigham sold call options on a portion of its future oil
and natural gas production to enable the Company to increase its effective fixed
swap price by an average of $0.57 per MMBtu on its existing natural gas hedging
contracts during the months of October 1999 through January 2000. For accounting
purposes, the improvement in the Company's average realized natural gas sales
price attributable to these transactions is not reflected in reported revenues.
Rather, it is reflected in (i) other income (expense) on the income statement,
and (ii) amortization of deferred loss on derivatives instruments and market
value adjustment for derivatives instruments on the cash flow statement.
2
Page 2
Lease operating expenses for the fourth quarter 1999 were $580,000, an
8% reduction from the fourth quarter 1998. Also lower in the current year
quarter, net general and administrative expenses were $771,000 in the fourth
quarter 1999, or a significant 41% reduction from the fourth quarter 1998.
Depletion expenses were $2.0 million ($1.34 per Mcfe), or a 50% decrease from
the prior year quarter due to Brigham's improved drilling results during 1999.
Interest expense increased to $2.7 million in the fourth quarter 1999 from $2.4
million in the prior year period as a result of increased borrowings and higher
effective interest rates.
Earnings before interest, taxes, depreciation, depletion and
amortization (EBITDA) increased 543% to $3.3 million in the fourth quarter 1999
from $512,000 in the fourth quarter 1998, while operating cash flow for the
fourth quarter 1999 was $2.8 million ($0.19 per diluted share), an increase from
a loss of $891,000 ($0.07 per diluted share) for the same period in 1998. The
Company reported a net loss of $2.2 million ($0.15 per diluted share) for the
fourth quarter 1999 compared to a net loss of $31.6 million ($2.38 per diluted
share) for the prior year period. The net loss during the fourth quarter 1998
included a $25.9 million ($1.95 per diluted share) non-cash capitalized ceiling
impairment charge.
YEAR-END 1999 RESULTS
Net equivalent production volumes totaled 6.3 Bcfe (67% natural gas)
for the full year 1999 compared with 6.6 net Bcfe produced in 1998. Adjusted for
the Company's proved reserve sales effective June 30, 1999, Brigham achieved
comparable year-over-year production volume growth of 3%. Natural gas and oil
sales for 1999 totaled $15 million compared to $13.8 million last year, an
increase of 9% despite the Company's mid-year producing property divestitures,
which generated proceeds of $17.1 million. Brigham's average realized natural
gas and oil equivalent sales price increased 15% to $2.39 per Mcfe in 1999 from
$2.08 per Mcfe in the prior year. Average realized sales prices during 1999 were
$2.11 per Mcf for natural gas and $17.79 per Bbl for oil compared with average
realized sales prices during 1998 of $2.04 per Mcf and $12.85 per Bbl,
respectively.
Despite the Company's sales of producing properties at mid-year and its
reduced drilling budget relative to 1998, Brigham achieved growth in EBITDA,
operating cash flow and net income during 1999. EBITDA for 1999 increased 43% to
$9.5 million from $6.6 million last year, while operating cash flow increased to
$7.5 million ($0.53 per diluted share) in 1999, a 245% increase from $2.2
million ($0.17 per diluted share) for 1998. The Company reported a net loss of
$21.6 million ($1.53 per diluted share) for 1999, partially attributable to a
non-cash $12.2 million loss associated with its property divestitures in
mid-1999. Under full-cost accounting rules, the Company was required to
recognize this loss in the second quarter 1999 despite the economic gain
actually realized on the sales. Excluding this one-time charge, Brigham's net
loss for 1999 would have been $9.4 million ($0.67 per diluted share). This
compares to a loss of $33.3 million ($2.64 per diluted share) for 1998, which
included a $25.9 million ($2.05 per diluted share) non-cash capitalized ceiling
impairment charge recognized during the fourth quarter 1998.
CURRENT DAILY PRODUCTION INCREASED FROM FOURTH QUARTER 1999
Brigham currently estimates its average net daily production volumes to
be approximately 20 MMcfe, or 21% higher than its average daily production
during the fourth quarter 1999. This growth in daily production volumes is
primarily attributable to the late February additions of the recently completed
Palmer State #2 well in Brigham's Home Run Field discovery in Brooks County,
Texas and a well in Brigham's Frio play in Brazoria County, Texas. Following the
completion of its recently announced financing transactions, Brigham has spud 3
wells and has plans to spud an additional 10 wells in the next 60 days in its
Anadarko Basin and Gulf Coast 3-D projects, which would contribute to production
volumes beginning in the second and third quarters of 2000.
MANAGEMENT COMMENT
Curtis Harrell, Brigham's Chief Financial Officer, stated, "In many
ways 1999 was a year of transition for our company. Activity levels were down
significantly as we focused on the sale of assets and a series of related
financing transactions. We were also successful in the implementation of various
measures to reduce overhead and other fixed components of our cost structure. As
a result, we begin 2000 with an improved cost structure and the necessary
capital to fund a drilling budget twice that of 1999."
3
Page 3
Harrell further stated, "Our Company continues to benefit from its
prior investments in 3-D seismic and land assets with 80% of our 2000 capital
budget directed towards drilling. We therefore have an excellent opportunity in
2000 to accelerate our growth in production volumes and reserves at extremely
attractive all-in finding costs. With an improved cost structure and higher
commodity prices, EBITDA margins should continue to improve from the record
levels realized in the fourth quarter of 1999."
CONFERENCE CALL INFORMATION
Brigham management will host a conference call to discuss the Company's
year-end 1999 financial and operational results with investors, analysts and
other interested parties on Wednesday, March 8th, at 9:00 a.m. Central time. To
participate in the call, please dial 800-340-5810 and ask for the Brigham
Exploration conference call (conference identification number 14513509). A
recording of the conference call will be available to interested parties
approximately one hour after the call is completed through 5:00 p.m. Central
time on Thursday, March 9th. To access the recording, please dial 800-633-8284
and enter 14513509 as the conference playback identification number.
ABOUT BRIGHAM EXPLORATION
Brigham Exploration Company (www.bexp3d.com) 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.
FORWARD LOOKING STATEMENTS DISCLOSURE
Except for the historical information contained herein, the matters
discussed in this news release are forward looking statements that are based
upon current expectations. The Company's actual capital expenditures in 2000 may
differ from the estimates discussed herein. 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, availability of sufficient capital resources by the Company and its
project participants, federal and state regulatory developments and other risks
more fully described in the Company's filings with the Securities and Exchange
Commission.
Contact: Christopher A. Phelps, Vice President - Finance and Strategic Planning
(512) 427-3300 / investor@bexp3d.com
4
Page 4
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)(unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
1998 1999 1998 1999
------------- ---------------- --------------- ---------------
Revenues:
Natural gas and oil sales $ 2,507 $ 4,096 $ 13,799 $ 14,992
Workstation revenue 68 38 390 285
2,575 4,134 14,189 15,277
Costs and expenses:
Lease operating 630 580 2,172 2,259
Production taxes 145 283 850 968
General and administrative 1,310 771 4,672 3,481
Depletion of natural gas and oil properties 3,970 1,982 8,483 7,792
Capitalized ceiling impairment 25,926 -- 25,926 --
Depreciation and amortization 125 127 413 525
Amortization of stock compensation 74 11 372 1
-------- ------- -------- --------
32,180 3,754 42,888 15,026
-------- ------- -------- --------
Operating income (loss) (29,605) 380 (28,699) 251
Interest expense (2,386) (2,727) (5,968) (9,697)
Interest income 22 42 136 176
Other income (expense) -- 111 -- (163)
Loss on sale of natural gas and oil properties -- -- -- (12,195)
-------- ------- -------- --------
Net loss before income taxes (31,969) (2,194) (34,531) (21,628)
Income tax benefit 322 -- 1,186 --
-------- ------- -------- --------
Net loss $(31,647) $(2,194) $(33,345) $(21,628)
======== ======= ======== ========
Net loss per share:
Basic / Diluted $ (2.38) $ (0.15) $ (2.64) $ (1.53)
Wt. avg. common shares outstanding:
Basic / Diluted 13,306 14,518 12,626 14,152
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
1998 1999 1998 1999
------------- ---------------- --------------- ---------------
Avg. net daily production:
Natural gas (MMcf) 12.5 11.1 11.9 11.7
Oil (Bbls) 551.0 887 1,100 960
Equivalent natural gas (MMcfe) (6:1) 15.8 16.5 18.5 17.4
Total net production:
Natural gas (MMcf) 1,125 1,003 4,269 4,197
Oil (MBbls) 50 80 396 346
Equivalent natural gas (MMcfe) (6:1) 1,422 1,482 6,644 6,270
% Natural gas 79% 68% 64% 67%
Sales prices:
Natural gas ($/Mcf) (a) $ 1.65 $ 2.22 $ 2.04 $ 2.11
Oil ($/Bbl) $ 13.06 $23.38 $12.85 $17.79
Equivalent natural gas ($/Mcfe) (6:1) $ 1.76 $ 2.76 $ 2.08 $ 2.39
Other financial data:
EBITDA ($000) (b) $ 512.0 $3,293 $6,631 $9,456
Operating cash flow ($000) (c) $ (891) $2,757 $2,182 $7,532
Operating cash flow per diluted share(c) $ (0.07) $ 0.19 $ 0.17 $ 0.53
(a) Includes the effects of natural gas hedging gains and losses.
(b) Net income (loss) plus interest expense, DD&A expenses, deferred
income taxes and other non-cash items.
(c) Net income (loss) plus DD&A expenses, deferred income taxes and other
non-cash items.
5
Page 5
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)(unaudited)
December 31, December 31,
1998 1999
------------ ------------
Assets:
Current assets $ 10,797 $ 8,264
Natural gas and oil properties, at cost, net 134,317 112,066
Other property and equipment, at cost, net 2,014 1,686
Other non-current assets 3,388 3,667
-------- --------
Total assets $150,516 $125,683
======== ========
Liabilities and stockholders' equity:
Current liabilities $ 23,513 $ 17,744
Notes payable 59,000 56,000
Senior subordinated notes, net 35,786 41,341
Other non-current liabilities 7,536 1,600
-------- --------
Total liabilities 125,835 116,685
Stockholders' equity 24,681 8,998
-------- --------
Total liabilities and stockholders' equity $150,516 $125,683
======== ========
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
1998 1999 1998 1999
------------- ---------------- --------------- ---------------
Cash flows from operating activities:
Net loss $(31,647) $(2,194) $(33,345) $(21,628)
Depletion, depreciation and amortization 4,095 2,109 8,896 8,317
Capitalized ceiling impairment 25,926 -- 25,926 --
Interest paid through issuance of add'l senior sub. notes 507 1,431 507 5,459
Amortization of deferred stock compensation 74 11 372 1
Amortization of deferred loan fees 263 579 726 1,739
Amortization of discount on senior subordinated notes 212 181 286 575
Amortization of deferred loss on derivatives instruments -- 759 -- 759
Market value adjustment for derivatives instruments -- (119) -- 115
Loss on sale of natural gas and oil properties -- -- -- 12,195
Changes in deferred income tax liability (321) -- (1,186) --
-------- ------- -------- --------
Operating cash flow (891) 2,757 2,182 7,532
Changes in working capital and other items 12,144 240 12,592 (4,954)
-------- ------- -------- --------
Cash flows provided by operating activities 11,253 2,997 14,774 2,578
Cash flows (used) provided by investing activities (31,780) (4,468) (86,227) 1,644
Cash flows (used) provided by financing activities 21,845 832 72,321 (4,049)
-------- ------- -------- --------
Net increase (decrease) in cash and cash equivalents $ 1,318 $ (639) $ 868 $ 173
======== ======= ======== ========
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
1998 1999 1998 1999
------------- ---------------- --------------- ---------------
Revenues:
Natural gas and oil sales $ 1.76 $2.76 $ 2.08 $2.39
Workstation revenue 0.05 0.03 0.06 0.05
------- ----- ------ -----
1.81 2.79 2.14 2.44
Costs and expenses:
Lease operating 0.44 0.39 0.33 0.36
Production taxes 0.10 0.19 0.13 0.15
General and administrative 0.92 0.52 0.70 0.56
Depletion of natural gas and oil properties 2.79 1.34 1.28 1.24
Capitalized ceiling impairment 18.23 0.00 3.90 0.00
Depreciation and amortization 0.09 0.09 0.06 0.08
Amortization of stock compensation 0.05 0.01 0.06 0.00
------- ----- ------ -----
22.62 2.54 6.46 2.39
------- ----- ------ -----
Operating income $(20.81) $0.25 $(4.32) $0.05
======= ===== ====== =====