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EXHIBIT 99.1
BRIGHAM EXPLORATION
COMPANY NEWS RELEASE
FOR IMMEDIATE RELEASE
BRIGHAM EXPLORATION ANNOUNCES RECORD 2001 FINANCIAL RESULTS; 45% PRODUCTION
GROWTH, 90% INCREASE IN EBITDA AND 111% GROWTH IN OPERATING CASH FLOW
================================================================================
Austin, TX -- (PRNewswire) - February 26, 2002 -- Brigham Exploration
Company (NASDAQ:BEXP) today announced its financial results for the fiscal year
and quarter ended December 31, 2001.
Highlights from Brigham's performance for 2001 include:
- - Production volume for 2001 grew by 45% over 2000 volumes - Production
volumes for 2001 were 9.6 Bcfe compared to 6.6 Bcfe in 2000.
- - EBITDA almost doubles - Higher production volumes combined with improved
price realizations and a lower cost structure result in EBITDA growth of
90% from $12.0 million in 2000 to $22.7 million in 2001.
- - Operating cash flow more than doubles from $8.6 million in 2000 to $18.1
million in 2001.
YEAR-END 2001 RESULTS
Average net daily production volumes for 2001 were 26.6 MMcfe per day
compared to 18.3 MMcfe per day in 2000. Revenues from the sale of natural gas
and oil increased 69% to $32.3 million for 2001 compared to $19.1 million last
year. Approximately 58% of the increase resulted from increased production and
the remainder from a 16% increase in the average realized sales price for
natural gas and oil. Average realized prices for 2001 were $3.11 per Mcf for
natural gas and $24.05 per barrel for oil compared to $1.94 per Mcf and $29.17
per barrel in 2000. Cash settlements on hedging transactions in 2001 resulted
in an $8.2 million ($0.85 per Mcfe) decrease in revenues from the sale of
natural gas and oil.
Lease operating expenses for 2001 were $3.5 million compared to $2.1 for
2000. The increase in lease operating expense was related to higher than
expected charges for well repair and maintenance, increased production volumes
from a greater total well count, and higher overall service costs. Production
tax refunds on wells that qualify for reduced severance tax rates combined with
a 17% decrease in Brigham's average pre-hedge oil price, thus resulting in a
decline in production taxes from $1.8 million in 2000 to $1.5 million for 2001.
General and administrative expenses for 2001 increased 17% to $3.6 million,
however, on a per unit-of-production basis declined by 19% from $0.47 per Mcfe
in 2000 to $0.38 per Mcfe in 2001. Higher production volumes and an increase in
the estimated future development costs required to fully develop Home Run Field
resulted in an increase in depletion expense for 2001, from $7.9 million ($1.20
per Mcfe) in 2000 to $13.2 million ($1.38 per Mcfe) for 2001.
A reduction in Brigham's average outstanding debt balance, $90.6 million
vs. $97.4 million, and a lower annual effective interest rate, 9.3% vs. 12.7%,
led to a decrease in Brigham's net interest expense for 2001. Net interest
expense for 2001 decreased 35% from $9.8 million ($1.48 per Mcfe) for 2000 to
$6.4 million ($0.67 per Mcfe) for 2001.
Earnings before interest, taxes, depreciation, depletion and amortization,
and other non-cash items (EBITDA) increased 90% from $12.0 million last year to
$22.7 million this year and operating cash flow increased 111% from $8.6 million
for 2000 to $18.1 million for 2001. Brigham reported net income of $9.2 million
($0.54 per diluted share) for 2001 versus a net loss excluding extraordinary
items of $15.9 million ($0.98 per diluted share) for 2000.
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EXHIBIT 99.1
For the year, Brigham incurred capital costs of $36.0 million, which
consisted of $27.2 million for drilling, $2.8 million on land and G&G
activities, and $6.0 million for capitalized interest and other.
FOURTH QUARTER 2001 RESULTS
Average net daily production volumes for the fourth quarter 2001 rose 36%
to 25.1 MMcfe per day (66% gas) compared to 18.4 MMcfe per day (71% gas) for the
same period in 2000. Revenue from the sale of natural gas and oil increased 31%
to $6.1 million, from $4.6 million for the same quarter in 2000. Increased
production volumes accounted for $2.0 million of the increase and were offset by
a $573,000 decrease in Brigham's average realized sales price for natural gas
and oil.
Higher than expected charges for well repair and maintenance, increased
production volumes and an increased total well count all contributed to an 81%
increase in lease operating expense, from $637,000 for 2000 to $1.2 million for
2001. Production tax refunds on wells that qualify for reduced severance tax
rates and a lower average pre-hedge sales price for natural gas and oil resulted
in a 98% decrease in production taxes, from $533,000 in the fourth quarter 2000
to $8,000 for the fourth quarter 2001. General and administrative expenses of
$930,000 were relatively flat when compared to $934,000 for the fourth quarter
of 2000, but declined on a per unit-of-production basis to $0.41 per Mcfe in the
fourth quarter of 2001 from $0.56 per Mcfe for the fourth quarter 2000.
Higher production volumes combined with an increase in the future
development costs required to fully develop Home Run Field resulted in depletion
expense for the year 2001 of $1.38 per Mcfe. As a result, depletion expense in
the fourth quarter of 2001 increased to $4.3 million ($1.90 per Mcfe) from $2.1
million ($1.28 per Mcfe) in the fourth quarter 2000.
Net interest expense for the fourth quarter 2001 was $1.5 million compared
to $781,000 in the fourth quarter 2000. During the fourth quarter 2000 interest
expense was reduced as Brigham was released from certain interest obligations
when it refinanced its subordinated notes. Brigham's weighted average cost of
debt for the fourth quarter of 2001 was 7.9%, compared to 11.2% for the same
quarter of 2000.
EBITDA increased 56% to $4.0 million in the fourth quarter 2001 from $2.5
million in the fourth quarter 2000, while operating cash flow before changes in
working capital increased 49% to $3.0 million for the fourth quarter 2001 versus
$2.0 million for 2000. Brigham reported a net loss of $2.5 million ($0.15 per
diluted share) for the fourth quarter of 2001 versus a net loss excluding
extraordinary items of $4.1 million ($0.25 per diluted share) for the prior year
period.
Capital cost during the fourth quarter 2001 totaled $7.0 million, which
included $5.5 million related to drilling, $380,000 for land and G&G activities
and $1.2 million for capitalized interest, capitalized general and
administrative and other property and equipment.
MANAGEMENT COMMENT
Curtis F. Harrell, Brigham's Executive Vice President and Chief Financial
Officer, commented, "Brigham had an outstanding year in 2001. Despite
significant increases in service costs, we delivered all-in finding costs for
the year of only $1.23 per Mcfe and our three-year average all-in finding costs
were $1.00 per Mcfe. The value of our deep inventory of quality, natural gas
drilling locations is becoming more evident in our financial results, with
record 45% growth in production volumes and 111% growth in operating cash flow."
Harrell further added, "In 2001, our Company continued to improve its
ability to internally finance growth. Despite hedging losses of $0.85 per Mcfe,
we generated $2.50 in gross profit and $1.83 in unit cash flow for every Mcfe
produced. Given our attractive finding costs and lower cost structure, Brigham
posted 50% full cycle return on investment. Looking forward to 2002, given the
lower commodity price environment, we'll limit our capital spending to our
beginning liquidity and our projected discretionary cash flow. We'll focus our
activities on the development of prior field discoveries and continued
exploration in our three core provinces. Even at lower commodity prices, we're
confident that Brigham will continue to deliver growth in cash flow and net
asset value per share through our focused approach to the drill bit."
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EXHIBIT 99.1
FIRST QUARTER 2002 RESULTS GUIDANCE
The following forecasts and estimates of Brigham's first quarter 2002
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 first quarter 2002 production volumes to average
between 24 and 26 MMcfe per day (62% natural gas) and expects to exit the first
quarter at 29 to 30 MMcfe per day. For the first quarter 2002, 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 general and administrative expenses
are projected to be $950,000 ($0.41 to $0.44 per Mcfe).
Based on these production and cost estimates, assumed average NYMEX prices
of $2.36 per MMBtu for natural gas and $20.34 per barrel for oil, and taking
into account current hedging contracts outstanding, Brigham forecasts revenue of
between $5.9 and $6.5 million and EBITDA of between $4.0 million and $4.4
million for the first quarter 2002.
CONFERENCE CALL INFORMATION
Brigham management will host a conference call to discuss the Company's
year-end 2001 financial and operational results with investors, analysts and
other interested parties on Wednesday, February 27th, at 9:00 a.m. Central time.
To participate in the call, please dial 800-388-8975 within U.S. (973-694-2225
outside U.S.) and ask for the Brigham Exploration conference call (conference
identification number 110362). A recording of the conference call will be
available to interested parties approximately one hour after the call is
completed through 10:00 pm Central time on Tuesday, March 5th. To access the
recording, please dial 800-428-6051 within U.S. (973-709-2089 outside U.S.) and
enter 232319 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: 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)
EXHIBIT 99.1
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------------ ------------------------------
2000 2001 2002 2003
-------------- -------------- -------------- --------------
Revenues:
Natural gas and oil sales $ 4,641 $ 6,073 $ 19,143 $ 32,293
Other revenue 1 57 53 255
-------------- -------------- -------------- --------------
$ 4,642 $ 6,130 $ 19,196 $ 32,548
Costs and expenses:
Lease operating 637 1,154 2,139 3,486
Production taxes 533 8 1,786 1,511
General and administrative 934 930 3,100 3,638
Depletion of natural gas and oil properties 2,129 4,308 7,920 13,211
Depreciation and amortization 190 302 620 677
-------------- -------------- -------------- --------------
$ 4,423 $ 6,702 $ 15,565 $ 22,523
-------------- -------------- -------------- --------------
Operating income $ 219 ($572) $ 3,631 $ 10,025
Interest expense (809) (1,501) (9,906) (6,681)
Interest income 28 34 108 264
Other income (expense) (a) (3,222) 347 (9,488) 8,174
Loss on investment - (94) - (94)
-------------- -------------- -------------- --------------
Income (loss) before income taxes ($3,784) ($1,786) ($15,655) $ 11,688
Income tax expense - - - -
-------------- -------------- -------------- --------------
Net loss before extraordinary item ($3,784) ($1,786) ($15,655) $ 11,688
Extraordinary gain on refinancing of debt 32,267 - 32,267 -
-------------- -------------- -------------- --------------
Net income (loss) $ 28,483 ($1,786) $ 16,612 $ 11,688
Preferred stock dividend & accretion 275 674 275 2,450
-------------- -------------- -------------- --------------
Net income (loss) to common $ 28,208 ($2,460) $ 16,337 $ 9,238
============== ============== ============== ==============
Net income (loss) to common per share: (b)
Basic ($0.25) ($0.15) ($0.98) $ 0.58
Diluted (0.25) (0.15) (0.98) 0.54
Wt. avg. common shares outstanding:
Basic 16,252 16,005 16,241 15,988
Diluted 16,252 16,005 16,241 17,243
(a) Includes non-cash income (expenses) related to changes
in the fair market value of certain hedging contracts of: ($3,202) $ 449 ($8,885) $ 9,666
(b) Net income (loss) to common per share for 2000 excludes extraordinary gain on refinancing of debt.
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------------- ---------------------------------
2000 2001 2002 2003
---------------- ---------------- ---------------- ---------------
Avg. net daily production:
Natural gas (MMcf) 13.0 16.7 12.3 18.8
Oil (Bbls) 900 1,411 1,004 1,299
Equivalent natural gas (MMcfe) (6:1) 18.4 25.1 18.3 26.6
Total net production:
Natural gas (MMcf) 1,174 1,500 4,431 6,766
Oil (MBbls) 81 127 362 468
Equivalent natural gas (MMcfe) (6:1) 1,660 2,262 6,600 9,573
% Natural gas 71% 66% 67% 71%
Sales prices:
Natural gas ($/Mcf) (a) $ 1.85 $ 2.43 $ 1.94 $ 3.11
Oil ($/Bbl) (a) 30.48 19.07 29.17 24.05
Equivalent natural gas ($/Mcfe) (6:1) 2.80 2.69 2.90 3.37
Other financial data:
EBITDA ($000) (b) $ 2,546 $ 3,970 $ 11,956 $ 22,685
Operating cash flow before changes in working capital ($000) 2,033 3,035 8,581 18,097
(a) Includes the effects of hedging gains (losses) of:
Natural gas ($/Mcf) ($3.63) $ 0.00 ($2.12) ($1.18)
Oil ($/Bbl) (0.83) - (0.30) (0.33)
(b) Net income (loss) plus interest expense, DD&A expenses, deferred income taxes and other non-cash items.
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BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands) (unaudited)
EXHIBIT 99.1
December 31, December 31,
2000 2001
------------- -------------
Assets:
Current assets $ 10,673 $ 16,968
Oil and gas properties, at cost, net 129,490 151,891
Other property and equipment, at cost, net 1,341 1,331
Other non-current assets 5,407 3,218
------------- -------------
Total assets $ 146,911 $ 173,408
============= =============
Liabilities and stockholders' equity:
Current liabilities $ 17,899 $ 15,266
Notes payable 75,000 75,000
Senior subordinated notes, net 7,000 16,721
Other non-current liabilities 3,697 206
------------- -------------
Total liabilities $ 103,596 $ 107,193
Mandatorily redeemable preferred stock, net 8,558 16,614
Stockholders' equity 34,757 49,601
------------- -------------
Total liabilities and stockholders' equity $ 146,911 $ 173,408
============= =============
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
--------------- --------------- --------------- ---------------
2000 2001 2000 2001
--------------- --------------- --------------- ---------------
Cash flows from operating activities:
Net income (loss) $ 28,483 $ (1,786) $ 16,612 $ 11,688
Depletion, depreciation and amortization 2,319 4,610 8,540 13,888
Interest paid through issuance of add'l senior sub. notes - 223 4,575 721
Amortization of deferred loan fees 296 343 1,283 1,372
Amortization of discount on senior subordinated notes - - 673 -
Amortization of deferred loss on derivatives instruments - - 280 -
Market value adjustment for derivatives instruments 3,202 (449) 8,885 (9,666)
Loss on investment - 94 - 94
Extraordinary gain on refinancing of debt (32,267) - (32,267) -
--------------- --------------- --------------- ---------------
Operating cash flow 2,033 3,035 8,581 18,097
Changes in working capital and other items (4,534) 2,222 (13,216) 1,025
--------------- --------------- --------------- ---------------
Cash flows provided (used) by operating activities (2,501) 5,257 (4,635) 19,122
Cash flows (used) by investing activities (6,983) (7,253) (26,071) (33,571)
Cash flows (used) provided by financing activities 10,261 (208) 28,801 18,724
--------------- --------------- --------------- ---------------
Net increase (decrease) in cash and cash equivalents $ 777 $ (2,204) $ (1,905) $ 4,275
=============== =============== =============== ===============
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
2000 2001 2000 2001
-------------- -------------- -------------- --------------
Revenues:
Natural gas and oil sales $ 2.80 $ 2.69 $ 2.90 $ 3.37
Other revenue 0.00 0.03 0.01 0.03
-------------- -------------- -------------- --------------
$ 2.80 $ 2.72 $ 2.91 $ 3.40
Costs and expenses:
Lease operating 0.38 0.51 0.32 0.36
Production taxes 0.32 0.00 0.27 0.16
General and administrative 0.56 0.41 0.47 0.38
Depletion of natural gas and oil properties 1.28 1.90 1.20 1.38
Depreciation and amortization 0.11 0.13 0.09 0.07
-------------- -------------- -------------- --------------
$ 2.65 $ 2.95 $ 2.35 $ 2.35
-------------- -------------- -------------- --------------
Operating income (loss) $ 0.15 ($0.23) $ 0.56 $ 1.05
Interest expense, net (a) (0.47) (0.65) (1.48) (0.67)
Other income (expense) (b) (0.01) (0.05) (0.09) (0.16)
-------------- -------------- -------------- --------------
Adjusted net income before preferred stock dividend & accretion ($0.33) ($0.93) ($1.01) $ 0.22
============== ============== ============== ==============
<FN>
(a) 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
& loss on investment.