EXHIBIT 99.2
[GRAPHIC OMITTED]
NEWS RELEASE
FOR IMMEDIATE RELEASE
BRIGHAM
EXPLORATION COMPANY
BRIGHAM EXPLORATION REPORTS SEQUENTIAL QUARTERLY GROWTH IN PRODUCTION, REVENUE &
EBITDA AND PROVIDES FOURTH QUARTER GUIDANCE
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Austin, TX -- November 5, 2002 -- Brigham Exploration Company (NASDAQ:BEXP)
today announced its financial results for the third quarter ended September 30,
2002. Highlights of Brigham's financial performance for the quarter include:
- - 21% sequential quarterly increase in EBITDA to $7.1 million in the third
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quarter 2002 versus $5.9 million in the second quarter 2002;
- - 6% sequential quarterly increase in daily production to 28.9 MMcfe in the
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third quarter 2002 versus 27.3 MMcfe in the second quarter 2002. This
represents the third consecutive sequential quarterly increase in daily
production for Brigham; and,
- - 27% sequential quarterly growth in operating cash flow before changes in
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working capital to a record $6.1 million in the third quarter 2002 versus
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$4.8 million in the second quarter 2002.
THIRD QUARTER 2002 RESULTS
Average net daily production for the third quarter 2002 was 28.9 MMcfe,
compared to 27.3 MMcfe in the second quarter 2002 and 28.8 MMcfe in the third
quarter last year.
Revenues from the sale of oil and natural gas were $9.4 million for the
third quarter 2002 compared to $8.8 million in the third quarter of 2001.
Approximately 67% of the increase in third quarter 2002 revenue was due to
increased production and 33% was due to a 6% increase in Brigham's average
equivalent realized sales price for oil and natural gas.
Lease operating expenses for third quarter 2002 were $761,000, a 10%
decline from lease operating expenses for the third quarter last year. On a per
unit basis, lease operating expense declined by 9% from $0.32 per Mcfe in the
third quarter of 2001 to $0.29 per Mcfe in the third quarter of 2002.
Production taxes for the third quarter 2002 increased 14% due to a 12% increase
in Brigham's average third quarter 2002 pre-hedge sales price.
General and administrative expenses were $1.1 million for the third quarter
2002 compared to $934,000 in the third quarter 2001. The increase in general and
administrative expense is primarily related to an increase in employee payroll
and benefit expense. Depletion expenses were $3.6 million and Brigham's
depletion rate per unit increased 10% over the prior year third quarter to $1.38
per Mcfe.
Interest expense on total outstanding debt for the third quarter 2002 was
$1.6 million and was flat compared to the third quarter 2001. Brigham's average
effective interest rate on its total outstanding debt for the third quarter 2002
was 7.4% compared to 9.0% in the third quarter last year.
Net income to common stockholders for the third quarter 2002 was $989,000
($0.06 diluted earnings per share), compared to $2.9 million ($0.17 diluted
earnings per share) in the third quarter last year. Net income to common
stockholders included non-cash gains/(losses) arising from our hedge accounting
of $106,000 non-cash loss in 2002 and a $2.2 million non-cash gain in 2001.
Excluding these non-cash gains/(losses), Brigham generated net income to common
stockholders of $1.1 million ($0.06 diluted earnings per share) for the third
quarter 2002 and $758,000 ($0.04 diluted earnings per share) for the third
quarter 2001.
Earnings before interest, taxes, depreciation, depletion, amortization and
other non-cash charges (EBITDA) for the third quarter 2002 was $7.1 million
compared to $6.4 million in the third quarter 2001. Operating cash flow, before
EXHIBIT 99.2
changes in working capital, for the third quarter was a record $6.1 million
versus $5.4 million for the third quarter 2001. On a sequential quarterly
basis, EBITDA increased 21%, operating cash flow improved 27% and net income to
common stockholders was $989,000 compared to $61,000 in the second quarter of
2002.
Net capital expenditures for the third quarter 2002 totaled $4.3 million
and included $2.3 million for drilling, $588,000 for land and G&G activities and
$1.4 million in capitalized interest, overhead expenses and other. Net capital
expenditures were partially offset by approximately $1.9 million in insurance
reimbursements related to the loss of surface control and subsequent redrill of
the Burkhart #1.
MANAGEMENT COMMENTS
Gene Shepherd, Chief Financial Officer stated, "As we had projected early
in the year, we've achieved sequential quarterly growth in our production
volumes during the first three quarters of 2002. Although the timing of bringing
our new wells on line has been slower than we anticipated, we've had the
drilling success we hoped for, and it is beginning to positively impact our
financial results, as evidenced by our record operating cash flow in the third
quarter. Given current commodity prices, we expect these results to generate
record fourth quarter revenues, EBITDA, and operating cash flow. For the full
year, we also expect to achieve record production volumes, revenues, EBITDA and
operating cash flow. Even more importantly, our accelerated and thus back end
loaded 2002 drilling program, provides our shareholders with a very exciting
outlook for the year end, and particularly for the first quarter of 2003."
FOURTH QUARTER 2002 GUIDANCE
The following forecasts and estimates of Brigham's fourth 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 fourth quarter 2002 daily production volumes to
average between 29 and 31 MMcfe, 57 % of which consists of natural gas. For the
fourth 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 $0.38 per Mcfe.
Based on these production and cost estimates, assumed average NYMEX prices
of $3.60 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 $9.5 and $10.2 million and EBITDA of between $7.1 and $7.7 million for
the fourth quarter 2002.
CONFERENCE CALL INFORMATION
Brigham management will host a conference call to discuss its third quarter
2002 operational and financial results with investors, analysts and other
interested parties on Wednesday, November 6th, at 9:00 a.m. Central time. To
participate in the call, please dial 800-388-8975 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, November 27th. To access
the recording, domestic callers can dial 800-428-6051 and international callers
can dial 973-709-2089. The passcode I.D. for the conference playback is 263887.
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
EXHIBIT 99.2
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
EXHIBIT 99.2
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
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2001 2002 2001 2002
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Revenues:
Oil and natural gas sales $ 8,848 $ 9,434 $ 26,220 $ 24,637
Other 23 15 198 42
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$ 8,871 $ 9,449 $ 26,418 $ 24,679
Costs and expenses:
Lease operating 842 761 2,332 2,428
Production taxes 415 475 1,503 1,327
General and administrative, includes 1,099
non-cash charge (a) 934 2,708 3,781
Depletion of natural gas and oil properties 3,244 3,587 8,903 10,118
Depreciation and amortization 140 103 375 307
---------------- ---------------- ---------------- ----------------
$ 5,575 $ 6,025 $ 15,821 $ 17,961
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Operating income $ 3,296 $ 3,424 $ 10,597 $ 6,718
Interest expense, net (1,595) (1,614) (5,180) (4,684)
Interest income 63 12 230 105
Other income (expense) (b) 1,842 (87) 7,827 (256)
---------------- ---------------- ---------------- ----------------
Income (loss) before income taxes $ 3,606 $ 1,735 $ 13,474 $ 1,883
Income tax expense - - - -
---------------- ---------------- ---------------- ----------------
Net income (loss) $ 3,606 $ 1,735 $ 13,474 $ 1,883
Preferred stock dividend & accretion 659 746 1,776 2,165
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Net income (loss) to common $ 2,947 $ 989 $ 11,698 ($282)
Net income (loss) to common per share:
Basic $ 0.18 $ 0.06 $ 0.73 ($0.02)
Diluted 0.17 0.06 0.67 (0.02)
Wt. avg. common shares outstanding:
Basic 15,984 16,057 15,983 16,037
Diluted 17,036 17,337 17,469 16,037
(a) Includes non-cash charge related to - - - ($596)
stock compensation expense of:
(b) Includes non-cash gains/(losses) $ 2,189 ($106) $ 9,217 $ 278
arising from hedge accounting for
certain of Brigham's oil and natural
gas hedges of:
EXHIBIT 99.2
BRIGHAM EXPLORATION COMPANY
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
------------------------------ -------------------------------
2001 2002 2001 2002
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Avg. net daily production:
Natural gas (MMcf) 19.9 16.3 19.5 16.0
Oil (Bbls) 1,493 2,104 1,262 1,867
Equivalent natural gas (MMcfe) (6:1) 28.8 28.9 27.1 27.2
Total net production:
Natural gas (MMcf) 1,790 1,463 5,266 4,307
Oil (MBbls) 134 189 341 504
Equivalent natural gas (MMcfe) (6:1) 2,596 2,599 7,311 7,332
% Natural gas 69% 56% 72% 59%
Sales prices:
Natural gas ($/Mcf) (a) $ 3.05 $ 3.23 $ 3.30 $ 3.02
Oil ($/Bbl) (a) 25.26 24.85 25.91 23.04
Equivalent natural gas ($/Mcfe) (6:1) 3.41 3.63 3.59 3.36
Other financial data:
EBITDA ($000) (b) $ 6,396 $ 7,126 $ 18,715 $ 17,289
Operating cash flow before changes in working capital ($000) 5,364 6,122 15,062 14,299
(a) Includes the effects of hedging gains (losses) of:
Natural gas ($/Mcf) $ 0.00 ($0.06) ($1.52) ($0.02)
Oil ($/Bbl) (0.21) (2.18) (0.45) (1.46)
<FN>
(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 September
31, 30,
2001 2002
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Assets:
Current assets $ 16,968 $ 28,577
Natural gas and oil properties, net (full cost method) 151,891 158,958
Other property and equipment, net 1,331 1,300
Other non-current assets 3,218 2,950
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Total assets $ 173,408 $ 191,785
Liabilities and stockholders' equity:
Current liabilities $ 15,266 $ 29,677
Notes payable 75,000 75,000
Senior subordinated notes 16,721 21,506
Other non-current liabilities 206 353
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Total liabilities $ 107,193 $ 126,536
Redeemable preferred stock 16,614 18,778
Stockholders' equity 49,601 46,471
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Total liabilities and stockholders' equity $ 173,408 $ 191,785
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EXHIBIT 99.2
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2001 2002 2001 2002
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Cash flows from operating activities:
Net income (loss) $ 3,606 $ 1,735 $ 13,474 $ 1,883
Depletion, depreciation and amortization 3,384 3,690 9,278 10,425
Interest paid through issuance of add'l senior sub. 220 288 498 785
Notes
Amortization of deferred loan fees 343 303 1,029 888
Stock option compensation expense - - - 596
Market value and other adjustments for derivatives
instruments (2,189) 106 (9,217) (278)
-------------- -------------- -------------- --------------
Operating cash flow $ 5,364 $ 6,122 $ 15,062 $ 14,299
Changes in working capital and other items 1,982 6,017 (1,197) 7,896
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Cash flows provided (used) by operating $ 7,346 $ 12,139 $ 13,865 $ 22,195
activities
Cash flows (used) provided by investing activities (8,355) (5,657) (26,318) (18,850)
Cash flows (used) provided by financing activities 93 - 18,932 3,725
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Net increase (decrease) in cash and cash ($916) $ 6,482 $ 6,479 $ 7,070
equivalents
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SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- --------------------------------
2001 2002 2001 2002
--------------- --------------- --------------- ---------------
Revenues:
Natural gas and oil sales $ 3.41 $ 3.63 $ 3.59 $ 3.36
Other revenue 0.01 0.01 0.03 0.01
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$ 3.42 $ 3.64 $ 3.62 $ 3.37
Costs and expenses:
Lease operating 0.32 0.29 0.32 0.33
Production taxes 0.16 0.18 0.21 0.18
General and administrative (a) 0.36 0.42 0.37 0.43
Depletion of natural gas and oil properties 1.25 1.38 1.22 1.38
Depreciation and amortization 0.05 0.04 0.05 0.04
--------------- --------------- --------------- ---------------
$ 2.14 $ 2.31 $ 2.17 $ 2.36
--------------- --------------- --------------- ---------------
Operating income $ 1.28 $ 1.33 $ 1.45 $ 1.01
Interest expense, net (b) (0.59) (0.62) (0.68) (0.62)
Other income (expense) (c) (0.13) 0.01 (0.19) (0.07)
--------------- --------------- --------------- ---------------
Adjusted net income before dividend & accretion $ 0.56 $ 0.72 $ 0.58 $ 0.32
=============== =============== =============== ===============
<FN>
(a) Excludes non-cash charge for stock compensation expense of $0.08 per Mcfe for the nine months ended September 30,
2002.
(b) Net of interest income.
(c) Excludes non-cash gains/(losses) arising from hedge accounting for certain of Brigham's oil and natural gas hedges.
EXHIBIT 99.2
BRIGHAM EXPLORATION COMPANY
SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF NOVEMBER 5, 2002
(unaudited)
Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003
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Natural Gas Swaps: MMBtu/d 11,750 9,250 6,500 5,000 3,500
$/MMBtu $ 3.394 $ 3.632 $ 3.320 $ 3.503 $ 3.731
Crude Oil Swaps: Bbls/d 875 750 550 600 450
$/Bbl $ 26.47 $ 25.29 $ 24.28 $ 23.77 $ 23.21
Crude Oil Collars: Cap - Bbls/d 500 250 250 - - - -
Cap - $/Bbl $ 22.46 $ 22.56 $ 22.56 - - - -
Floor - Bbls/d 500 250 250 - - - -
Floor - $/Bbl $ 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.