EXHIBIT 99.1 [GRAPHIC OMITTED] NEWS RELEASE FOR IMMEDIATE RELEASE BRIGHAM EXPLORATION REPORTS RECORD SECOND QUARTER 2001 FINANCIAL RESULTS AND 68% GROWTH IN PRODUCTION VOLUMES ================================================================================ Austin, TX -- (Business Wire) - August 8, 2001 -- Brigham Exploration Company (NASDAQ:BEXP) today announced its financial results for the second quarter 2001. Brigham continues to post record results, including significant growth in production volumes and cash flow from levels achieved in the second quarter 2000. Highlights of Brigham's financial performance during the second quarter include: - - Production volumes averaged 29.5 MMcfe per day, a 68% increase over 17.6 MMcfe per day for the same three month period a year ago and 28% over 22.9 MMcfe per day for the first quarter 2001; - - EBITDA increased 178% to $7.2 million from $2.6 million for the second quarter 2000 and 41% from $5.1 million for the first quarter 2001, due to the combined effects of higher production volumes and improvement in realized natural gas sales prices; and - - Operating cash flow more than tripled to $6.0 million from $1.6 million for the same period a year ago and increased 60% from first quarter 2001 levels. SECOND QUARTER 2001 RESULTS Average net daily production volumes for the second quarter 2001 were 29.5 MMcfe, an increase of 68% from the second quarter 2000. For the second quarter, Brigham produced an average 20.7 MMcf of natural gas and 1453 barrels of oil per day. Natural gas and oil sales for the second quarter 2001 increased 126% to $10.5 million from $4.6 million for the same period last year. Of this net increase, $3.0 million was attributable to a 35% increase in the average realized equivalent oil and natural gas sales price and $2.8 million was attributable to a 68% increase in net equivalent production volumes. Cash settlements on natural gas and crude oil hedging transactions of $1.5 million ($0.56 per Mcfe) negatively impacted Brigham's net realized natural gas equivalent sales price and revenues for the second quarter 2001, while natural gas and crude oil hedging settlements of $1.7 million ($1.10 per Mcfe) reduced its average realized natural gas equivalent sales price and revenues for the three month period ended June 30, 2000. Beginning in May 2001, Brigham's natural gas derivative contracts decreased from 15 MMBtu per day to 10 MMBtu per day and its ceiling price increased from an effective NYMEX price of $2.20 per MMBtu to $2.60 per MMBtu. Brigham's outstanding commodity price hedging contracts as of June 30, 2001 are summarized in a table at the end of this release. Lease operating expenses for the second quarter 2001 were $784,000, representing a 56% increase from the second quarter 2000. These increases are primarily due to an increase in the number of producing wells in which the Company owns an interest, higher production volumes and increased well repair and maintenance costs. On a per unit basis, lease operating expenses declined for the second quarter 2001 to $0.30 per Mcfe as compared to $0.32 per Mcfe for the second quarter 2000. Production taxes increased 57% to $622,000 in the second quarter 2001 yet declined $0.02 on a per unit basis to average $0.23 per Mcfe. These increases were primarily attributable 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 $957,000. This represents a 35% increase from the second quarter 2000 and was principally due to higher employee payroll and benefits expenses and several one-time charges. However, on a per unit basis, net general administrative expenses were down 20% to $0.36 per Mcfe for the second quarter 2001 from $0.45 per Mcfe for the second quarter 2000. Depletion expenses were $3.2 million ($1.20 per Mcfe), or 75% higher than the PAGE 6 prior year quarter primarily due to increased production volumes. Net interest expense decreased 41% to $1.8 million for the second quarter 2001 from $3.0 million for 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 178% to $7.2 million for the second quarter 2001 from $2.6 million for the second quarter 2000, while operating cash flow for the second quarter 2001 was $6.0 million, representing a 267% increase from $1.6 million for the same period in 2000. Brigham reported net income of $8.3 million ($0.46 per diluted share) for the second quarter 2001 compared to a net loss of $4.3 million ($0.26 per diluted share) for the prior year period. Excluding the non-cash income (expense) associated with the change in fair market value of certain hedging contracts, Brigham would have reported net income of $1.5 million ($0.10 per diluted share) for the second quarter 2001 as compared to a loss of $2.4 million ($0.14 per diluted share) for the second quarter of 2000. Capital expenditures during the second quarter 2001 totaled $9.2 million, including $7.0 million related to drilling, $759,000 for land and G&G activities and $1.4 million for capitalized interest, overhead expenses and other property and equipment. Thus far in 2001, Brigham has invested $15 million in its drilling program, $1.8 million for land and G&G activities and $3.0 million for capitalized interest, overhead expenses and other property and equipment. Capital expenditures for the year are now forecast to total $37 million, including $28 million for drilling and $3 million for land and G&G. THIRD QUARTER 2001 RESULTS GUIDANCE The following forecasts and estimates of Brigham's third 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 third quarter 2001 production volumes to average between 30 and 32 MMcfe per day, 75% of which consists of natural gas. For the third quarter 2001, lease operating expenses are projected to be $0.30 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 $900,000 ($0.31 to $0.33 per Mcfe). Based on these production and cost estimates, assumed average NYMEX prices of $3.00 per MMBtu for natural gas and $25.00 per barrel for oil, and taking into account current hedging contracts outstanding, Brigham forecasts revenue of between $8.5 and $9.0 million and EBITDA of between $6.2 million and $6.7 million for the third quarter 2001. MANAGEMENT COMMENT Curtis Harrell, Brigham's Executive Vice President and Chief Financial Officer, stated, "We're extremely pleased with the growth in production volumes demonstrated thus far in 2001. EBITDA exceeded $7.0 million this quarter and reached $12.3 million for the six months ended June 2001, which is greater than our Company's EBITDA for the full year 2000. Growth in production volumes, an improved hedge position and a stronger balance sheet have all combined to powerfully impact our operating margins. In the second quarter, we generated $2.25 in operating cash flow for every Mcfe we produced. Looking forward, we expect continued growth in production volumes as we complete and begin producing our six new discoveries and continue our 2001 drilling program." CONFERENCE CALL INFORMATION Brigham management will host a conference call to discuss the company's second quarter 2001 operational and financial results with investors, analysts and other interested parties on Thursday, August 9th, at 9:00 a.m. Central time. To participate in the call, please dial 888-343-7167 and ask for the Brigham Exploration conference call (conference reservation number 19447498). 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 Tuesday, August 14th. To access the recording, please dial 800-633-8284. 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 PAGE 7 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 PAGE 8 BRIGHAM EXPLORATION COMPANY SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Six Months Ended June 30, Ended June 30, ------------------- ------------------- 2000 2001 2000 2001 --------- -------- --------- -------- Revenues: Natural gas and oil sales $4,635 $10,467 $9,140 $17,372 Other revenue 16 37 49 175 --------- -------- --------- -------- $4,651 $10,504 $9,189 $17,547 Costs and expenses: Lease operating 502 784 961 1,490 Production taxes 395 622 699 1,088 General and administrative 708 957 1,448 1,774 Depletion of natural gas and oil properties 1,820 3,182 3,584 5,659 Depreciation and amortization 148 83 283 235 --------- -------- --------- -------- $3,573 $5,628 $6,975 $10,246 --------- -------- --------- -------- Operating income $1,078 $4,876 $2,214 $7,301 Interest expense, net (3,031) (1,779) (5,806) (3,585) Interest income 19 105 56 167 Other income (expense) (a) (2,394) 5,764 (2,990) 5,985 --------- -------- --------- -------- Income (loss) before income taxes ($4,328) $8,966 ($6,526) $9,868 Income tax expense - - - - --------- -------- --------- -------- Net income (loss) ($4,328) $8,966 ($6,526) $9,868 Preferred stock dividend & accretion - 639 - 1,117 --------- -------- --------- -------- Net income (loss) to common ($4,328) $8,327 ($6,526) $8,751 Net income (loss) to common per share: Basic ($0.26) $0.52 ($0.41) $0.55 Diluted (0.26) 0.46 (0.41) 0.51 Wt. avg. common shares outstanding: Basic 16,713 15,983 15,996 15,983 Diluted 16,713 18,835 15,996 19,734 (a) Includes non-cash income (expenses) related to changes in the fair market value of certain hedging contracts of: ($1,924) $6,807 ($2,367) $7,028 PAGE 9 BRIGHAM EXPLORATION COMPANY PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA Three Months Ended June 30, Six Months Ended June 30, -------------------------------- ------------------------------ 2000 2001 2000 2001 -------------- ---------------- ------------ ---------------- Avg. net daily production: Natural gas (MMcf) 11.6 20.7 11.0 19.3 Oil (Bbls) 992 1,453 1,046 1,147 Equivalent natural gas (MMcfe) (6:1) 17.6 29.5 17.3 26.2 Total net production: Natural gas (MMcf) 1,047 1,867 1,987 3,477 Oil (MBbls) 89 131 188 206 Equivalent natural gas (MMcfe) (6:1) 1,582 2,652 3,116 4,716 % Natural gas 66% 70% 64% 74% Sales prices: Natural gas ($/Mcf) (a) $ 1.98 $ 3.78 $ 1.96 $ 3.43 Oil ($/Bbl) (a) 28.71 26.09 27.89 26.33 Equivalent natural gas ($/Mcfe) (6:1) 2.93 3.95 2.93 3.68 Other financial data: EBITDA ($000) (b) $ 2,595 $ 7,203 $ 5,794 $ 12,319 Operating cash flow before changes in working capital 1,625 5,970 4,097 9,698 ($000) (a) Includes the effects of hedging gains (losses) of: Natural gas ($/Mcf) ($1.66) ($0.77) ($1.13) ($2.30) Oil ($/Bbl) - (0.38) (0.01) (0.61) (b) Net income (loss) plus interest expense, DD&A expenses, deferred income taxes and other non-cash items. SUMMARY CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) December June 30, 31, 2000 2001 -------- -------- Assets: Current assets $10,673 $22,986 Natural gas and oil properties, at cost, net 129,490 143,623 Other property and equipment, at cost, net 1,341 1,254 Other non-current assets 5,407 3,989 -------- -------- Total assets $146,911 $171,852 ======== ======== Liabilities and stockholders' equity: Current liabilities $17,899 $17,605 Notes payable 75,000 75,000 Senior subordinated notes, net 7,000 16,278 Other non-current liabilities 3,697 264 -------- -------- Total liabilities $103,596 $109,147 Redeemable preferred stock, net 8,558 14,667 Stockholders' equity 34,757 48,038 -------- -------- Total liabilities and stockholders' equity $146,911 $171,852 ======== ======== PAGE 10 BRIGHAM EXPLORATION COMPANY SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Three Months Ended June 30, Six Months Ended June 30, -------------------------------- -------------------------- 2000 2001 2000 2001 -------------- ---------------- ------------ ------------ Cash flows from operating activities: Net income (loss) ($4,328) $ 8,966 ($6,526) $ 9,868 Depletion, depreciation and amortization 1,968 3,265 3,867 5,894 Interest paid through issuance of add'l senior sub. 1,526 203 3,003 278 notes Amortization of deferred loan fees 298 343 689 686 Amortization of discount on senior subordinated 237 - 417 - notes Amortization of deferred loss on derivatives - - 280 - instruments Market value adjustment for derivatives instruments 1,924 (6,807) 2,367 (7,028) -------------- ---------------- ------------ ------------ Operating cash flow $ 1,625 $ 5,970 $ 4,097 $ 9,698 Changes in working capital and other items (2,420) (703) (7,864) (3,179) -------------- ---------------- ------------ ------------ Cash flows provided (used) by operating activities ($795) $ 5,267 ($3,767) $ 6,519 Cash flows (used) provided by investing activities (7,519) (9,045) (11,676) (17,963) Cash flows (used) provided by financing activities 6,728 (19) 12,774 18,839 -------------- ---------------- ------------ ------------ Net increase (decrease) in cash and cash ($1,586) ($3,797) ($2,669) $ 7,395 equivalents ============== ================ ============ ============ SUMMARY PER MCFE DATA (unaudited) Three Months Ended June Six Months Ended June ---------------------------- -------------------------- 2000 2001 2000 2001 -------------- ------------ ------------ ------------ Revenues: Natural gas and oil sales $ 2.93 $ 3.95 $ 2.93 $ 3.68 Other revenue 0.01 0.01 0.02 0.04 -------------- ------------ ------------ ------------ $ 2.94 $ 3.96 $ 2.95 $ 3.72 Costs and expenses: Lease operating 0.32 0.30 0.31 0.32 Production taxes 0.25 0.23 0.22 0.23 General and administrative 0.45 0.36 0.46 0.38 Depletion of natural gas and oil properties 1.15 1.20 1.15 1.20 Depreciation and amortization 0.09 0.03 0.09 0.05 -------------- ------------ ------------ ------------ $ 2.26 $ 2.12 $ 2.24 $ 2.17 -------------- ------------ ------------ ------------ Operating income $ 0.68 $ 1.84 $ 0.71 $ 1.55 Interest expense, net (1.90) (0.63) (1.85) (0.72) Other income (expense) (a) (0.30) (0.39) (0.20) (0.22) -------------- ------------ ------------ ------------ Adjusted net income before preferred stock dividend & accretion ($1.52) $ 0.81 ($1.33) $ 0.60 ============== ============ ============ ============ (a) Adjusted to exclude non-cash income (expense) related to changes in the fair market value of certain hedge contracts. Page 11 BRIGHAM EXPLORATION COMPANY SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF JUNE 30, 2001 (unaudited) Q3 2001 Q4 2001 Q1 2002 Q2 2002 -------- -------- -------- -------- Natural Gas Collar: Cap - MMBtu/d 10,000 10,000 10,000 10,000 Cap - $/MMBtu $ 2.60 $ 2.73 $ 2.80 $ 2.67 Floor - MMBtu/d 2,500 2,500 - - - - Floor - $/MMBtu $ 1.90 $ 1.90 - - - - Crude Oil Collar: Cap - Bbls/d 200 200 - - - - Cap - $/Bbl $ 25.25 $ 25.25 - - - - Floor - Bbls/d 200 200 - - - - Floor - $/Bbl $ 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.