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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): NOVEMBER 12, 2001
BRIGHAM EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 000-22433 75-2692967
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6300 BRIDGEPOINT PARKWAY
BUILDING TWO, SUITE 500
AUSTIN, TEXAS 78730
(Address, including zip code, of principal executive offices)
Registrant's telephone number, including area code: (512) 427-3300
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Item 5. OTHER EVENTS.
On November 6, 2001, Brigham Exploration Company ("Brigham") announced
its financial results for the third quarter ended September 30, 2001, and
provided guidance for fourth quarter financial results. A copy of Brigham's
press release that provided these announcements is attached hereto as Exhibit
99.1.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Item Exhibit
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99.1* Press Release dated
November 6, 2001.
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* filed herewith.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BRIGHAM EXPLORATION COMPANY
Date: November 12, 2001 By: /s/ Curtis F. Harrell
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Curtis F. Harrell
Executive Vice President &
Chief Financial Officer
INDEX TO EXHIBITS
Item Number Exhibit
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99.1* Press Release dated
November 6, 2001.
EXHIBIT 99.1
[GRAPHIC OMITED]
BRIGHAM NEWS RELEASE
Exploration Company FOR IMMEDIATE RELEASE
BRIGHAM EXPLORATION REPORTS THIRD QUARTER 2001 FINANCIAL RESULTS, INCLUDING 42%
INCREASE IN PRODUCTION AND 119% GROWTH IN CASH FLOW
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Austin, TX -- (Business Wire) - November 6, 2001 -- Brigham Exploration
Company (NASDAQ:BEXP) today announced its financial results for the third
quarter 2001. Brigham continues to post outstanding financial results, including
significant growth in production volumes and cash flow from levels achieved in
the third quarter 2000.
Highlights of Brigham's financial performance for the third quarter include:
- -- Production volumes averaged 28.8 MMcfe per day for the third quarter 2001.
This represents a 42% increase over 20.3 MMcfe per day in production for
the same three month period a year ago;
- -- EBITDA increased 77% to $6.4 million from $3.6 million for the third
quarter 2000 due to the combined effects of higher production volumes and
improvement in realized natural gas prices; and
- -- Operating cash flow for the quarter more than doubled to $5.4 million from
$2.5 million for the same period a year ago.
THIRD QUARTER 2001 RESULTS
Average net daily production volumes for the three-month period ended
September 30, 2001 were 28.8 Mmcfe. Average net daily production consisted of
19.9 MMcf of natural gas and 1,493 barrels of oil per day and was 42% higher
than average net daily equivalent production volumes recorded for the same
period last year. Natural gas and oil sales for the third quarter 2001
increased by $3.4 million to $8.8 million, representing an increase of 65% over
sales for the same period last year. Of this net increase, 33% ($1.1 million)
was attributable to a 16% increase in the average realized equivalent oil and
natural gas sales price and 67% ($2.3 million) was attributable to a 42%
increase in net equivalent production volumes.
In the third quarter 2001, lease operating expenses increased by 7% on a
per unit of production basis to average $0.32 per Mcfe ($842,000) as compared to
$0.30 per Mcfe ($541,000) in the third quarter 2000. The increase in lease
operating expense is primarily due to an increase in the number of producing
wells in which the Company owns an interest and an increase in well repair and
maintenance costs. Production taxes decreased 25% to $415,000 for the third
quarter 2001 and decreased by 47% on a per unit of production basis to average
$0.16 per Mcfe when compared to third quarter 2000 figures. The decrease in
production taxes is primarily attributable to lower pre-hedge natural gas and
crude oil prices for the third quarter 2001 as well as production tax
reimbursements related to wells that qualify for severance tax refunds. On a per
unit of production basis, net general and administrative expenses for the third
quarter 2001 decreased 8% to average $0.36 per Mcfe ($934,000). The decrease in
general and administrative expense per unit was principally due to growth rates
in production volumes that exceed the rate of increase in net general and
administrative expense. Depletion expenses were $3.2 million ($1.25 per Mcfe),
or 3% higher than the $1.21 per Mcfe in the prior year quarter. Net interest
expense decreased 52% to $1.6 million for the third quarter 2001 from $3.3
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 by 77% to $6.4 million for the third quarter 2001 from $3.6
million for the third quarter 2000. Operating cash flow for the third quarter
2001 was $5.4 million, a 119% increase over the $2.5 million achieved for the
same period in 2000. Brigham reported net income of $2.9 million ($0.17 per
diluted share) for the third quarter 2001 compared to a net loss of $5.3 million
($0.32 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 $758,000 ($0.04 per
diluted share) for the third quarter 2001 as compared to a loss of $2.1 million
($0.13 per diluted share) for the third quarter of 2000.
Capital expenditures during the third quarter 2001 totaled $8.9 million,
including $6.7 million related to drilling, $523,000 for land, geophysical and
geological ("G&G") activities and $1.6 million for capitalized interest,
overhead expenses and other property and equipment. Thus far in 2001, Brigham
has invested $21.7 million in its drilling program, $2.4 million for land and
G&G activities and $4.7 million for capitalized interest, overhead expenses and
other property and equipment. Capital expenditures for the year are now forecast
to total $38 million, including $28 million for drilling and $4 million for land
and G&G.
FOURTH QUARTER 2001 RESULTS GUIDANCE
The following forecasts and estimates of Brigham's fourth 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 fourth quarter 2001 production volumes to average
between 25 and 28 MMcfe per day, 70% of which consists of natural gas. For the
fourth quarter 2001, lease operating expenses are projected to be $0.33 per
Mcfe, production taxes are projected to be 5% of pre-hedge oil and gas revenues,
and net general and administrative expenses are projected to be $1.0 million
($0.40 to $0.44 per Mcfe).
Based on these production and cost estimates, assumed average NYMEX prices
of $2.75 per MMBtu for natural gas and $21.50 per barrel for oil, and taking
into account current hedging contracts outstanding, Brigham forecasts revenue of
between $6.3 and $7.1 million and EBITDA of between $4.2 million and $4.9
million for the fourth quarter 2001.
MANAGEMENT COMMENT
Bud Brigham, the Company's Chairman, CEO and President, stated, "Our
Company is experiencing a dramatic year of growth in production volumes and cash
flow, driven primarily by our drilling successes early in 2001. Beginning in
the third quarter, due to the significant drop in natural gas prices and the
extremely high costs for drilling rigs and services, we slowed our remaining
2001 drilling program. Despite that slowdown we've had significant recent
drilling successes, including our Triple Crown Field discovery, that have yet to
materially impact our production volumes."
Bud Brigham further stated, "These discoveries should have a substantial
impact on our year end reserves, but their impact on our fourth quarter
production volumes is dependent on how quickly we can get these wells producing
to sales. Regardless, these discoveries are expected to fully impact our first
quarter 2002 production, and should provide us with a substantial developmental
drilling program for several years to come."
CONFERENCE CALL INFORMATION
Brigham management will host a conference call to discuss the company's
third quarter 2001 operational and financial results with investors, analysts
and other interested parties on Wednesday, November 7th, at 9:00 a.m. Central
time. To participate in the call, please dial 800-355-7995 and ask for the
Brigham Exploration conference call (conference reservation number 19885151). A
telephone recording of the conference call will be available to interested
parties approximately one hour after the call is completed through 11:00 a.m.
Central time on Tuesday, November 13th. 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 a leading 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 IR 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
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BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
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2000 2001 2000 2001
--------- -------- ---------- --------
Revenues:
Natural gas and oil sales $ 5,362 $ 8,848 $ 14,502 $26,220
Other revenue 3 23 52 198
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$ 5,365 $ 8,871 $ 14,554 $26,418
Costs and expenses:
Lease operating 541 842 1,502 2,332
Production taxes 554 415 1,253 1,503
General and administrative 718 934 2,166 2,708
Depletion of natural gas and oil properties 2,207 3,244 5,791 8,903
Depreciation and amortization 147 140 430 375
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$ 4,167 $ 5,575 $ 11,142 $15,821
--------- -------- ---------- --------
Operating income $ 1,198 $ 3,296 $ 3,412 $10,597
Interest expense, net (3,291) (1,595) (9,097) (5,180)
Interest income 24 63 80 230
Other income (expense) (a) (3,276) 1,842 (6,266) 7,827
--------- -------- ---------- --------
Income (loss) before income taxes ($5,345) $ 3,606 ($11,871) $13,474
Income tax expense - - - -
--------- -------- ---------- --------
Net income (loss) ($5,345) $ 3,606 ($11,871) $13,474
Preferred stock dividend & accretion - 659 - 1,776
--------- -------- ---------- --------
Net income (loss) to common ($5,345) $ 2,947 ($11,871) $11,698
========= ======== ========== ========
Net income (loss) to common per share:
Basic ($0.32) $ 0.18 ($0.73) $ 0.73
Diluted (0.32) 0.17 (0.73) 0.67
Wt. avg. common shares outstanding:
Basic 16,713 15,984 16,237 15,983
Diluted 16,713 17,036 16,237 17,469
(a) Includes non-cash income (expenses) related to changes
in the fair market value of certain hedging contracts of: ($3,316) $ 2,189 ($5,683) $ 9,217
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- ------------------
2000 2001 2000 2001
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Avg. net daily production:
Natural gas (MMcf) 14.1 19.9 12.1 19.5
Oil (Bbls) 1,027 1,493 1,039 1,262
Equivalent natural gas (MMcfe) (6:1) 20.3 28.8 18.3 27.1
Total net production:
Natural gas (MMcf) 1,270 1,790 3,257 5,266
Oil (MBbls) 92 134 281 341
Equivalent natural gas (MMcfe) (6:1) 1,824 2,596 4,941 7,311
% Natural gas 70% 69% 66% 72%
Sales prices:
Natural gas ($/Mcf) (a) $ 1.99 $ 3.05 $ 1.97 $ 3.30
Oil ($/Bbl) (a) 30.62 25.26 28.79 25.91
Equivalent natural gas ($/Mcfe) (6:1) 2.94 3.41 2.94 3.59
Other financial data:
EBITDA ($000) (b) $ 3,616 $6,396 $ 9,410 $18,715
Operating cash flow before changes in working capital ($000) 2,451 5,364 6,548 15,062
(a) Includes the effects of hedging gains (losses) of:
Natural gas ($/Mcf) ($2.27) $ 0.00 ($1.58) ($1.52)
Oil ($/Bbl) (0.41) (0.21) (0.14) (0.45)
(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 31, September 30,
2000 2001
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Assets:
Current assets $ 10,673 $ 22,455
Natural gas and oil properties, at cost, net 129,490 149,174
Other property and equipment, at cost, net 1,341 1,295
Other non-current assets 5,407 3,406
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Total assets $ 146,911 $ 176,330
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Liabilities and stockholders' equity:
Current liabilities $ 17,899 18,009
Notes payable 75,000 75,000
Senior subordinated notes, net 7,000 16,498
Other non-current liabilities 3,697 253
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Total liabilities $ 103,596 $ 109,760
Redeemable preferred stock, net 8,558 15,308
Stockholders' equity 34,757 51,262
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Total liabilities and stockholders' equity $ 146,911 $ 176,330
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SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
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2000 2001 2000 2001
--------- -------- ---------- ---------
Cash flows from operating activities:
Net income (loss) ($5,345) $ 3,606 ($11,871) $ 13,474
Depletion, depreciation and amortization 2,354 3,384 6,221 9,278
Interest paid through issuance of add'l senior sub. notes 1,572 220 4,575 498
Amortization of deferred loan fees 298 343 987 1,029
Amortization of discount on senior subordinated notes 256 - 673 -
Amortization of deferred loss on derivatives instruments - - 280 -
Market value adjustment for derivatives instruments 3,316 (2,189) 5,683 (9,217)
--------- -------- ---------- ---------
Operating cash flow $ 2,451 $ 5,364 $ 6,548 $ 15,062
Changes in working capital and other items (818) 1,982 (8,682) (1,197)
--------- -------- ---------- ---------
Cash flows provided (used) by operating activities $ 1,633 $ 7,346 ($2,134) 13,865
Cash flows (used) provided by investing activities (7,412) (8,355) (19,088) (26,318)
Cash flows (used) provided by financing activities 5,766 93 18,540 18,932
--------- -------- ---------- ---------
Net increase (decrease) in cash and cash equivalents ($13) ($916) ($2,682) $ 6,479
========= ======== ========== =========
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
2000 2001 2000 2001
-------- ------- -------- -------
Revenues:
Natural gas and oil sales $ 2.94 $ 3.41 $ 2.94 $ 3.59
Other revenue 0.00 0.01 0.01 0.03
-------- ------- -------- -------
$ 2.94 $ 3.42 $ 2.95 $ 3.61
Costs and expenses:
Lease operating 0.30 0.32 0.30 0.32
Production taxes 0.30 0.16 0.25 0.21
General and administrative 0.39 0.36 0.44 0.37
Depletion of natural gas and oil properties 1.21 1.25 1.17 1.22
Depreciation and amortization 0.08 0.05 0.09 0.05
-------- ------- -------- -------
$ 2.28 $ 2.15 $ 2.26 $ 2.16
-------- ------- -------- -------
Operating income $ 0.66 $ 1.27 $ 0.69 $ 1.45
Interest expense, net (a) (1.79) (0.59) (1.83) (0.68)
Other income (expense) (b) 0.02 (0.13) (0.12) (0.19)
-------- ------- -------- -------
Adjusted net income before preferred stock dividend & accretion ($1.11) $ 0.55 ($1.25) $ 0.58
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(b) Net of capitalized interest and interest income.
(b) Adjusted to exclude non-cash income (expense) related to changes in the
fair market value of certain hedge contracts.