EXHIBIT 99.1
BRIGHAM NEWS RELEASE
EXPLORATION COMPANY FOR IMMEDIATE RELEASE
BRIGHAM EXPLORATION ANNOUNCES RECORD Q1 2001 FINANCIAL RESULTS - 24% PRODUCTION
GROWTH, 101% CASH FLOW GROWTH AND NET INCOME OF $424,000
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Austin, TX -- (Business Wire) - May 9, 2001 -- Brigham Exploration Company
(NASDAQ:BEXP) today announced its financial results for the first quarter ended
March 31, 2001, which reflects significant growth in production volumes and cash
flow from levels achieved in both the fourth quarter 2000 and the prior year
quarter. Highlights of Brigham's financial performance during the first quarter
include:
- - Record production volumes which increased 24% in the first quarter 2001 as
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compared to volumes produced in the fourth quarter of 2000, and 35%
relative to the first quarter of 2000;
- - 52% revenue growth relative to the fourth quarter 2000 due to increased
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production volumes and 64% higher realized natural gas prices ($3.03 vs.
$1.85 per Mcf), despite $6.6 million of hedging losses during the first
quarter;
- - Doubling of EBITDA to $5.1 million in the first quarter 2001 from $2.5
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million in the fourth quarter 2000 due to the combined effects of higher
production and improved realized sales prices; and
- - Quarterly net income of $424,000 ($0.02 per diluted share) after preferred
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dividend expenses.
FIRST QUARTER 2001 RESULTS
Average net daily production volumes for the first quarter 2001 were 22.9
MMcfe, an increase of 35% from the first quarter 2000 and 24% from the fourth
quarter 2000. Several drilling discoveries made by Brigham late in 2000
contributed significantly to the growth in first quarter volumes, including a
Hunton discovery in the Anadarko Basin and a Frio bright spot discovery in the
Texas Gulf Coast.
Natural gas and oil sales for the first quarter 2001 were $6.9 million, or
a 53% increase from the same period last year and a 49% increase from the fourth
quarter 2000. Brigham's average realized equivalent natural gas and oil sales
price increased 14% in the first quarter 2001 as compared to the prior year
quarter primarily due to 57% higher realized prices for natural gas ($3.03 vs.
$1.93 per Mcf), a 2% decrease in realized prices for oil ($26.74 vs. $27.16 per
barrel), and an increase in the percentage of natural gas relative to total
equivalent production volumes (78% vs. 61%). Cash settlements on natural gas
hedging transactions of $6.6 million ($4.08 per Mcf) negatively impacted
Brigham's net realized natural gas sales price and revenues during the first
quarter 2001, while natural gas hedging settlements of $514,000 ($0.55 per Mcf)
reduced its average realized natural gas sales price and revenues during the
prior year period. Beginning in May 2001, Brigham's natural gas hedges decreased
from 15 MMBtu to 10 MMBtu per day, while its estimated NYMEX-equivalent hedge
price increased from $2.19 per MMBtu in April to $2.60 per MMBtu in May.
Brigham's outstanding commodity price hedging contracts as of March 31, 2001 are
summarized in a table at the end of this release.
Lease operating expenses for the first quarter 2001 were $706,000, a 54%
increase from the first quarter 2000 primarily due to higher production volumes
and increased well repair and maintenance costs. Production taxes increased 53%
to $466,000 in the first quarter 2001 due to increased production volumes and
higher pre-hedge oil and natural gas prices, offset in part by production tax
reimbursements related to wells that qualify for severance tax refunds. Net
general and administrative expenses were $817,000, a 10% increase from the first
quarter 2000 principally due to higher employee payroll and benefits expenses.
However, net general administrative expenses were down 17% on a per unit basis
to $0.40 per Mcfe in the first quarter 2001 from $0.48 per Mcfe in the first
quarter 2000. Depletion expenses were $2.5 million ($1.20 per Mcfe), or 40%
higher than the prior year quarter primarily due to increased production
volumes. Net interest expense decreased 35% to $1.8 million in the first quarter
2001 from $2.8 million in the prior year period as a result of reduced
borrowings and lower interest rates that resulted largely from the refinancing
of Brigham's senior subordinated notes during the fourth quarter 2000.
Earnings before interest, taxes, depreciation, depletion and amortization
(EBITDA) increased 60% to $5.1 million in the first quarter 2001 from $3.2
million in the first quarter 2000, while operating cash flow for the first
quarter 2001 was $3.7 million ($0.21 per diluted share), or a 51% increase from
$2.5 million ($0.16 per diluted share) for the same period in 2000. Brigham
reported net income of $424,000 ($0.02 per diluted share) for the first quarter
2001 compared to a net loss of $2.2 million ($0.14 per diluted share) for the
prior year period.
Capital expenditures during the first quarter 2001 totaled $10.7 million,
which primarily included $7.8 million related to drilling, $1.1 million for land
and G&G activities and $1.5 million for capitalized interest and overhead
expenses.
OPERATIONAL UPDATE
Since the late 2000 Hunton and Frio bright spot discoveries that were
completed early in 2001, Brigham has completed eight additional wells that are
currently impacting second quarter production volumes. In the Texas Gulf Coast
region, Brigham recently completed its third consecutive Frio bright spot
discovery, the Pitchfork Ranch #1 well, which is currently producing 12.1 MMcfe
per day (2.8 MMcfe net to Brigham's revenue interest). Brigham has also
completed two Home Run Field development wells that are currently producing a
combined 18 MMcfe (4.7 MMcfe net to Brigham's revenue interest).
In its Anadarko Basin region, Brigham completed a recently announced
Springer Channel discovery, which is currently producing 6.5 MMcfe per day (1.3
MMcfe net). In the same area, Brigham is currently completing its fourth
consecutive Springer Channel discovery, in which it retains a 41% revenue
interest. This well should be producing to sales in the next five days.
In its West Texas region, Brigham is now completing its fourth consecutive
oil discovery. The first three of these discoveries have recently been brought
on line at a combined rate of 616 barrels of oil per day, or 407 barrels (2.4
MMcfe) net to Brigham's revenue interest. Brigham anticipates that its most
recent discovery in the Canyon Reef should be producing to sales in the next
several weeks at a rate of approximately 250 barrels of oil per day, or
approximately 195 barrels of oil (1.2 MMcfe) net to Brigham's revenue interest.
Several wells spud by Brigham in 2000 were completed during the first
quarter of 2001. Thus far in its 2001 drilling program, Brigham has completed
six wells (3.4 net) and plugged three wells (0.8 net), yielding an 81% net
completion rate. Brigham currently has five wells (2.5 net) drilling, including
a Brigham-operated Vicksburg test (50% working interest) of an adjacent fault
block to Brigham's Home Run Field. Six additional wells are expected to spud in
the next thirty days.
SECOND QUARTER 2001 RESULTS GUIDANCE
The following forecasts and estimates of Brigham's second quarter 2001
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 second quarter 2001 production volumes to average
between 26 and 28 MMcfe per day, 75% of which consists of natural gas. For the
second quarter 2001, lease operating expenses are projected to be $0.35 per
Mcfe, production taxes are projected to be 5.5% of pre-hedge oil and gas
revenues, and net general and administrative expenses are projected to be
$875,000 ($0.35 to $0.37 per Mcfe).
Based on these production and cost estimates, assumed average NYMEX prices
of $4.75 per MMBtu for natural gas and $27.75 per barrel for oil, and taking
into account current hedging contracts outstanding, Brigham forecasts revenue of
between $8.5 and $9.3 million and EBITDA of between $6.2 million and $6.9
million for the second quarter 2001.
MANAGEMENT COMMENT
Bud Brigham, Chairman, CEO and President, stated, "Our first quarter
financial performance provides the first quantitative look at the value creation
established from our 2000 drilling program. As a result of this successful
program, our production volumes grew 24% over fourth quarter volumes. Our
drilling success has continued in 2001 and, given the eight wells we've
completed thus far, we expect production to grow another 18% in the second
quarter. The combination of growing production volumes, the roll off of a
significant portion of our natural gas hedges and our reduced debt leverage will
continue to drive expansion in both EBITDA margins and operating cash flow
during the course of 2001."
CONFERENCE CALL INFORMATION
Brigham management will host a conference call to discuss the company's
first quarter 2001 operational and financial results with investors, analysts
and other interested parties on Thursday, May 10th, at 9:00 a.m. Central time.
To participate in the call, please dial 800-670-3545 and ask for the Brigham
Exploration conference call (conference identification number 18585193). A
telephone 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 Monday, May 14th. To access the recording, please dial
800-633-8284 and enter 18585193 as the conference playback identification
number. 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.
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: Christopher A. Phelps, Vice President - Finance & Strategic Planning
(512) 427-3300/investor@bexp3d.com
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three Months Ended March 31,
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2000 2001
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Revenues:
Natural gas and oil sales $ 4,505 $ 6,905
Other revenue 33 138
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4,538 7,043
Costs and expenses:
Lease operating 459 706
Production taxes 304 466
General and administrative 740 817
Depletion of natural gas and oil properties 1,764 2,477
Depreciation and amortization 123 110
Amortization of stock compensation 12 42
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3,402 4,618
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Operating income 1,136 2,425
Interest expense, net (2,775) (1,806)
Interest income 37 62
Other income (expense) (a) (596) 221
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Net income (loss) before income taxes (2,198) 902
Income tax expense - -
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Net income (loss) (2,198) 902
Preferred stock dividend expense - 478
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Net income (loss) to common $(2,198) $ 424
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Net income (loss) to common per share:
Basic $ (0.14) $ 0.03
Diluted $ (0.14) $ 0.02
Wt. avg. common shares outstanding:
Basic 15,279 15,983
Diluted 15,279 17,888
(a) Includes non-cash income (expenses) related to changes
in the fair market value of certain hedging contracts of: $ (443) $ 221
BRIGHAM EXPLORATION COMPANY
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended March 31,
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2000 2001
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Avg. net daily production:
Natural gas (MMcf) 10.4 17.9
Oil (Bbls) 1,100 841
Equivalent natural gas (MMcfe) (6:1) 17.0 22.9
Total net production:
Natural gas (MMcf) 940 1,610
Oil (MBbls) 99 76
Equivalent natural gas (MMcfe) (6:1) 1,534 2,064
% Natural gas 61% 78%
Sales prices:
Natural gas ($/Mcf) (a) $ 1.93 $ 3.03
Oil ($/Bbl) (a) $27.16 $26.74
Equivalent natural gas ($/Mcfe) (6:1) $ 2.94 $ 3.35
Other financial data:
EBITDA ($000) (b) $3,199 $5,116
Operating cash flow ($000) (c) $2,472 $3,728
Operating cash flow per diluted share (c) $ 0.16 $ 0.21
(a) Includes the effects of hedging gains (losses) of:
Natural gas ($/Mcf) $(0.55) $(4.08)
Oil ($/Bbl) $(0.02) $(1.00)
(b) Net income (loss) plus interest expense, DD&A expenses, income taxes and
other non-cash items.
(c) Net income (loss) plus DD&A expenses, deferred income taxes and other
non-cash items.
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands) (unaudited)
December 31, March 31,
2000 2001
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Assets:
Current assets $ 10,673 $ 25,455
Natural gas and oil properties, at cost, net 129,490 137,665
Other property and equipment, at cost, net 1,341 1,311
Other non-current assets 5,407 4,670
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Total assets $ 146,911 $ 169,101
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Liabilities and stockholders' equity:
Current liabilities $ 17,899 $ 23,587
Notes payable 75,000 75,000
Senior subordinated notes, net 7,000 16,075
Other non-current liabilities 3,697 2,025
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Total liabilities 103,596 116,687
Redeemable preferred stock, net 8,558 14,183
Stockholders' equity 34,757 38,231
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Total liabilities and stockholders' equity $ 146,911 $ 169,101
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BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended March 31,
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2000 2001
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Cash flows from operating activities:
Net income (loss) $(2,198) $ 902
Depletion, depreciation and amortization 1,887 2,587
Interest paid through issuance of add'l senior sub. notes 1,477 75
Amortization of deferred stock compensation 12 42
Amortization of deferred loan fees 391 343
Amortization of discount on senior subordinated notes 180 -
Amortization of deferred loss on derivatives instruments 280 -
Market value adjustment for derivatives instruments 443 (221)
Changes in deferred income tax liability - -
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Operating cash flow 2,472 3,728
Changes in working capital and other items (5,444) (2,476)
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Cash flows provided (used) by operating activities (2,972) 1,252
Cash flows used by investing activities (4,157) (8,918)
Cash flows provided by financing activities 6,046 18,858
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Net increase (decrease) in cash and cash equivalents $(1,083) $11,192
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SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended March 31,
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2000 2001
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Revenues:
Natural gas and oil sales $ 2.94 $ 3.35
Workstation revenue 0.02 0.07
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2.96 3.42
Costs and expenses:
Lease operating 0.30 0.34
Production taxes 0.20 0.23
General and administrative 0.48 0.40
Depletion of natural gas and oil properties 1.15 1.20
Depreciation and amortization 0.08 0.05
Amortization of stock compensation 0.01 0.02
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2.22 2.24
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Operating income $ 0.74 $ 1.18
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BRIGHAM EXPLORATION COMPANY
SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF MARCH 31, 2001
(unaudited)
Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002
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Natural Gas Swap: MMBtu/d 10,000 - - - - - - - -
$ /MMBtu $ 2.19 - - - - - - - -
Natural Gas Collar: Cap - MMBtu/d 6,703 10,000 10,000 10,000 10,000
Cap - $/MMBtu $ 2.60 $ 2.60 $ 2.73 $ 2.80 $ 2.67
Floor - MMBtu/d 3,352 2,500 2,500 - - - -
Floor - $/MMBtu $ 1.90 $ 1.90 $ 1.90 - - - -
Crude Oil Collar: Cap - Bbls/d 400 200 200 - - - -
Cap - $/Bbl $ 26.60 $ 25.25 $ 25.25 - - - -
Floor - Bbls/d 400 200 200 - - - -
Floor - $/Bbl $ 18.00 $ 16.10 $ 16.10 - - - -
Note: Hedged volumes and prices reflected in this table represent average
contract amounts for the quarterly periods presented; natural gas hedge
prices reflect estimated NYMEX equivalent prices since the actual contract
prices are based on various regional index prices, while the crude oil
hedge contract prices are based on NYMEX pricing.