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.