EXHIBIT 99.2
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BRIGHAM NEWS RELEASE
EXPLORATION COMPANY FOR IMMEDIATE RELEASE
BRIGHAM EXPLORATION REPORTS SEQUENTIAL QUARTERLY GROWTH IN PRODUCTION, REVENUE
AND EBITDA & PROVIDES THIRD QUARTER GUIDANCE
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Austin, TX -- August 6, 2002 -- Brigham Exploration Company (NASDAQ:BEXP)
today announced its financial results for the second quarter ended June 30,
2002. Highlights of Brigham's financial performance for the quarter include:
- - Production volumes increased 8% over first quarter 2002 volumes to average
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27.3 MMcfe per day;
- - 36% sequential quarterly growth in revenue due to increased production and
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higher realized natural gas and oil prices ($3.57 vs. $2.83 per Mcfe); and
- - 38% sequential quarterly increase in EBITDA to $5.9 million in the second
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quarter 2002 versus $4.3 million in the first quarter 2002.
SECOND QUARTER 2002 RESULTS
Average net daily production for the second quarter 2002 was 27.3 MMcfe,
compared to 25.3 MMcfe in the first quarter 2002 and 29.5 MMcfe in the second
quarter last year. Production for the second quarter 2002 was 7% lower than the
mid-point of the Company's second quarter guidance due to a delay in the start
of production for the Burkhart #1R. Brigham estimates that the Burkhart #1R is
currently producing approximately 6.6 MMcfe per day net to Brigham's revenue
interest.
Revenue from the sale of natural gas and oil was $8.8 million for the
second quarter 2002 compared to $10.5 million in the second quarter of 2001.
Approximately $1.1 million of the decline in the second quarter 2002 natural gas
and oil sales was due to a 10% decrease in Brigham's average equivalent realized
sales price for natural gas and oil and $600,000 was related to lower production
volumes.
Lease operating expenses for second quarter 2002 were $796,000 compared to
$784,000 in the second quarter last year. Lower severance tax rates on certain
wells, a 16% decrease in Brigham's average pre-hedge sales price and lower
production resulted in a 20% decline in production taxes to $499,000 for the
second quarter of 2002 compared to $622,000 in the second quarter of 2001.
General and administrative expenses, excluding a non-cash charge for stock
compensation expense, were $1.1 million for the second quarter 2002 compared to
$960,000 in the second quarter 2001. Depletion expenses were $3.4 million and
Brigham's depletion rate per unit increased 15% over the prior year second
quarter to $1.38 per Mcfe.
Lower interest rates on outstanding debt borrowings during the second
quarter of 2002 resulted in lower interest expense of $1.6 million compared to
$1.8 million in second quarter of 2001. Brigham's average effective interest
rate on its total outstanding debt for the second quarter 2002 was 7.5% compared
to 9.7% in the second quarter last year.
Earnings before interest, taxes, depreciation, depletion, amortization and
other non-cash charges (EBITDA) for the second quarter 2002 was $5.9 million
compared to $7.2 million in the second quarter 2001. Operating cash flow,
before changes in working capital, for the second quarter was $4.8 million
versus $6.0 million for the second quarter 2001. Net income to common
stockholders' for the second quarter of 2002 was $61,000 ($0.00 diluted earnings
per share), compared to $8.3 million ($0.46 diluted earnings per share) in the
second quarter last year. On a sequential quarterly basis, EBITDA increased
38%, operating cash flow improved 43% and net income to common stockholders' was
$61,000 compared to a net loss of $1.3 million in the first quarter of 2002.
Net capital expenditures for the second quarter 2002 totaled $6.4 million,
and included $4.6 million in drilling, $500,000 in land and G&G activities and
$1.3 million in capitalized interest, overhead expenses and other. Net capital
expenditures have not been reduced by expected insurance reimbursements of
approximately $2.0 million related to the loss of surface control and subsequent
redrill of the Burkhart #1.
Page 9 EXHIBIT 99.2
MANAGEMENT COMMENTS
Gene Shepherd, Chief Financial Officer stated, "We are pleased with our
growth in production volumes thus far in 2002. As stated in our last conference
call, we expect to achieve sequential quarterly production volume growth during
the course of 2002. The visibility of this growth has been enhanced by our
recent drilling success at the Providence Field. In addition, compared to the
first quarter 2002, lower lease operating expenses, improved commodity prices
and an improved hedge position should contribute to expansion in our revenues
and cash flows, giving us additional flexibility to fund drilling expenditures
in the second half of 2002."
THIRD QUARTER 2002 GUIDANCE
The following forecasts and estimates of Brigham's third 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 third quarter 2002 production volumes to average
between 28 and 31 MMcfe per day, 56% of which consists of natural gas. For the
third quarter 2002, lease operating expenses are projected to be $0.33 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 $1.0 million, or
$0.36 to $0.40 per Mcfe.
Based on these production and cost estimates, assumed average NYMEX prices
of $3.00 per MMBtu for natural gas and $26.00 per barrel for oil, and taking
into account current hedging contracts outstanding, Brigham forecasts revenue of
between $8.7 and $9.7 million and EBITDA of between $6.5 and $7.3 million for
the third quarter 2002.
CONFERENCE CALL INFORMATION
Brigham management will host a conference call to discuss the Company's
second quarter 2002 operational and financial results with investors, analysts
and other interested parties on Wednesday, August 7th, at 9:00 a.m. Central
time. To participate in the call, please dial 800-360-9865 and ask for the
Brigham Exploration conference call. A telephone recording of the conference
call will be available to interested parties approximately two hours after the
call is completed through 11:59 p.m. Central time on Wednesday, August 21st. To
access the recording, domestic callers dial 800-428-6051 and international
callers dial 973-709-2089. The passcode I.D. for the conference playback is
253088. 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
Page 10 EXHIBIT 99.2
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three Months Ended June 30, Six Months Ended June 30,
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2001 2002 2001 2002
---------------- ---------------- ---------------- ----------------
Revenues:
Natural gas and oil sales $ 10,467 $ 8,769 $ 17,372 $ 15,203
Other revenue 37 17 175 27
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$ 10,504 $ 8,786 $ 17,547 $ 15,230
Costs and expenses:
Lease operating 784 796 1,490 1,667
Production taxes 622 499 1,088 852
General and administrative, includes
non-cash charge (a) 957 1,718 1,774 2,682
Depletion of natural gas and oil
properties 3,182 3,394 5,659 6,531
Depreciation and amortization 83 101 235 204
5,628 6,508 10,246 11,936
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Operating income $ 4,876 $ 2,278 $ 7,301 $ 3,294
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Interest expense, net (1,779) (1,649) (3,585) (3,070)
Interest income 105 74 167 93
Other income (expense) (b) 5,764 79 5,985 (169)
Income (loss) before income taxes $ 8,966 $ 782 $ 9,868 $ 148
---------------- ---------------- ---------------- ----------------
Income tax expense - - - -
Net income (loss) $ 8,966 $ 782 $ 9,868 $ 148
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Preferred stock dividend & accretion 639 721 1,117 1,419
Net income (loss) to common $ 8,327 $ 61 $ 8,751 ($1,271)
================ ================ ================ ================
Net income (loss) to common per share:
Basic $ 0.52 $ 0.00 $ 0.55 ($0.08)
Diluted 0.46 0.00 0.51 (0.08)
Wt. avg. common shares outstanding:
Basic 15,983 16,038 15,983 16,027
Diluted 18,835 17,655 19,734 16,027
(a) Includes non-cash charge related to
stock compensation expense of: - ($596) - ($596)
(b) Includes non-cash income
(expenses) related to changes in the
fair market value of certain hedging
contracts of: $ 6,807 $ 635 $ 7,028 $ 384
Page 11 EXHIBIT 99.2
BRIGHAM EXPLORATION COMPANY
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended June 30, Six Months Ended June 30,
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2001 2002 2001 2002
-------------- -------------- -------------- --------------
Avg. net daily production:
Natural gas (MMcf) 20.7 16.7 19.3 15.8
Oil (Bbls) 1,453 1,778 1,147 1,749
Equivalent natural gas (MMcfe) (6:1) 29.5 27.3 26.2 26.3
Total net production:
Natural gas (MMcf) 1,867 1,499 3,477 2,844
Oil (MBbls) 131 160 206 315
Equivalent natural gas (MMcfe) (6:1) 2,652 2,460 4,716 4,733
% Natural gas 70% 61% 74% 60%
Sales prices:
Natural gas ($/Mcf) (a) $ 3.78 $ 3.30 $ 3.43 $ 2.92
Oil ($/Bbl) (a) 26.09 23.90 26.33 21.95
Equivalent natural gas ($/Mcfe) (6:1) 3.95 3.57 3.68 3.21
Other financial data:
EBITDA ($000) (b) $ 7,203 $ 5,887 $ 12,319 $ 10,165
Operating cash flow before changes in working capital
($000) 5,970 4,807 9,698 8,177
(a) Includes the effects of hedging gains (losses) of:
Natural gas ($/Mcf) ($0.77) ($0.21) ($2.30) $ 0.01
Oil ($/Bbl) (0.38) (1.69) (0.61) (1.02)
(b) Net income (loss) plus interest expense, DD&A expenses, deferred income taxes and other non-cash items.
Page 12 EXHIBIT 99.2
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands) (unaudited)
December 31, June 30,
2001 2002
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Assets:
Current assets $ 16,968 $ 21,282
Natural gas and oil properties, at cost, net 151,891 158,314
Other property and equipment, at cost, net 1,331 1,344
Other non-current assets 3,218 3,321
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Total assets $ 173,408 $184,261
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Liabilities and stockholders' equity:
Current liabilities $ 15,266 $ 22,935
Notes payable 75,000 75,000
Senior subordinated notes 16,721 21,218
Other non-current liabilities 206 367
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Total liabilities $ 107,193 $119,520
Redeemable preferred stock 16,614 18,033
Stockholders' equity 49,601 46,708
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Total liabilities and stockholders' equity $ 173,408 $184,261
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BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended June 30, Six Months Ended June 30,
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2001 2002 2001 2002
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Cash flows from operating activities:
Net income (loss) $ 8,966 $ 782 $ 9,868 $ 148
Depletion, depreciation and amortization 3,265 3,495 5,894 6,735
Interest paid through issuance of add'l senior sub. notes 203 270 278 497
Amortization of deferred loan fees 343 299 686 585
Stock option compensation expense - 596 - 596
Market value adjustment for derivatives instruments (6,807) (635) (7,028) (384)
-------------- -------------- -------------- --------------
Operating cash flow $ 5,970 $ 4,807 $ 9,698 $ 8,177
Changes in working capital and other items (703) 1,218 (3,179) 1,879
-------------- -------------- -------------- --------------
Cash flows provided (used) by operating activities $ 5,267 $ 6,025 $ 6,519 $ 10,056
Cash flows (used) provided by investing activities (9,045) (8,193) (17,963) (13,193)
Cash flows (used) provided by financing activities (19) 48 18,839 3,725
-------------- -------------- -------------- --------------
Net increase (decrease) in cash and cash
equivalents ($3,797) ($2,120) $ 7,395 $ 588
Page 13 EXHIBIT 99.2
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended June 30, Six Months Ended June 30,
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2001 2002 2001 2002
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Revenues:
Natural gas and oil sales $ 3.95 $ 3.57 $ 3.68 $ 3.21
Other revenue 0.01 0.01 0.04 0.01
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$ 3.96 $ 3.58 $ 3.72 $ 3.22
Costs and expenses:
Lease operating 0.30 0.32 0.32 0.35
Production taxes 0.23 0.20 0.23 0.18
General and administrative (a) 0.36 0.46 0.38 0.44
Depletion of natural gas and oil properties 1.20 1.38 1.20 1.38
Depreciation and amortization 0.03 0.04 0.05 0.04
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$ 2.12 $ 2.40 $ 2.18 $ 2.39
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Operating income $ 1.84 $ 1.18 $ 1.54 $ 0.83
(a) Excludes non-cash charge for stock compensation expense of $0.24 per Mcfe
for the three months ended June 30, 2002, and $0.12 per Mcfe for the six
months ended June 30, 2002.
BRIGHAM EXPLORATION COMPANY
SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF AUGUST 6, 2002
(unaudited)
Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003
-------- -------- -------- -------- -------- --------
Natural Gas Swaps: MMBtu/d 10,000 8,500 7,500 6,000 5,000 3,500
$/MMBtu $ 3.165 $ 3.246 $ 3.532 $ 3.281 $ 3.503 $ 3.731
Crude Oil Swaps: Bbls/d 500 575 550 450 500 450
$/Bbl $ 25.06 $ 25.00 $ 24.39 $ 23.86 $ 23.52 $ 23.21
Crude Oil Collars: Cap - Bbls/d 500 500 250 250 - - - -
Cap - $/Bbl $ 22.46 $ 22.46 $ 22.56 $ 22.56 - - - -
Floor - Bbls/d 500 500 250 250 - - - -
Floor - $/Bbl $ 18.00 $ 18.00 $ 18.00 $ 18.00 - - - -
Note: Hedged volumes and prices reflected in this table represent average
contract amounts for the quarterly periods presented; natural gas hedge prices
and crude oil hedge contract prices are based on NYMEX pricing.
13