EXHIBIT 99.1
[GRAPHIC OMITTED]
BRIGHAM
EXPLORATION COMPANY
NEWS RELEASE
FOR IMMEDIATE RELEASE
BRIGHAM EXPLORATION REPORTS RECORD 2002 PRODUCTION, EBITDA & OPERATING CASH
FLOW, AND RECORD Q4 PRODUCTION
================================================================================
Austin, TX -- (PRNewswire) - March 3, 2003 -- Brigham Exploration Company
(NASDAQ:BEXP) today announced its financial results for the fiscal year and
quarter ended December 31, 2002.
Highlights from Brigham's performance for 2002 include:
- - Record Production - 2002 Production was a record 10.0 Bcfe and increased
sequentially over each of the 2002 quarters to a record Q4 2.7 Bcfe or 29.6
MMcfe per day.
- - Record EBITDA - EBITDA increased 9% over EBITDA for 2001, to $24.7 million.
- - Record Operating Cash Flow - Operating cash flow before changes in working
capital increased 11% to $20.1 million.
MANAGEMENT COMMENT
Gene Shepherd, Brigham's Chief Financial Officer, commented, "We are very
pleased with the record financial performance that the Company experienced in
2002, particularly our record levels of production, revenue and EBITDA achieved
during the fourth quarter. Furthermore, the Company has benefited from its
large and growing inventory of development prospects, allowing Brigham to
generate sequential quarterly growth in production, revenue, and EBITDA in each
of our four 2002 quarters."
Shepherd further added, "We began the year with a somewhat depressed
commodity price environment, and as a consequence we scaled back our budgeted
spending to live within our forecasted cashflow. As commodity prices
strengthened we revised our spending plans, but ended up with a back- end loaded
drilling budget where 39% of our drilling dollars were spent in the fourth
quarter. With the enhanced financial flexibility that the Company has realized
from its fourth quarter equity financings and our growing 2003 cash flow, we are
excited about our opportunity to significantly increase our drilling
expenditures in 2003 and further build upon the drilling successes we
experienced throughout 2002, particularly 2002 Q4."
YEAR-END 2002 RESULTS
Average net daily production volumes for 2002 were 27.8 MMcfe per day
compared to 26.6 MMcfe per day in 2001. Revenues from the sale of natural gas
and oil, net of hedging, grew 9% to $35.2 million in 2002 compared to $32.3
million last year. Approximately 89% ($2.6 million) of this increase was due to
higher production, with the remainder coming from a 4% increase in our average
realized sales price for natural gas and oil. Average realized prices for 2002
were $3.22 per Mcf for natural gas and $23.55 per barrel for oil compared to
$3.11 per Mcf and $24.05 per barrel in 2001. Cash settlements on hedging
transactions in 2002 reduced revenue from the sale of natural gas and oil by
$1.8 million ($0.18 per Mcfe) compared to a reduction of $8.2 million ($0.85 per
Mcfe) in 2001.
Lease operating expenses for 2002 were $3.8 million compared to $3.5
million in 2001. The increase in lease operating expense was due to higher ad
valorem taxes caused by higher property valuations at year-end. Production
taxes increased 31% to $2.0 million and were 25% higher on a per unit basis at
$0.20 per Mcfe. The increase in production taxes was primarily related to
higher production volumes and an absence of severance tax refunds compared to
prior periods.
General and administrative expenses for 2002 were $5.0 million compared to
$3.6 million in 2001. The increase in general and administrative expenses
included a non-recurring non-cash charge related to compensation expense of
$596,000.
4
EXHIBIT 99.1
Excluding this non-cash charge, general and administrative expenses increased
20% to $4.4 million and 16% on a per unit basis to $0.44 per Mcfe. Other
increases in general and administrative expenses included higher employee
compensation and benefit expense, office rent, other office expense and
corporate insurance expense.
Depletion of natural gas and oil properties for 2002 was $13.5 million
($1.35 per Mcfe) compared to $13.2 million ($1.38 per Mcfe) in 2001. The
increase in depletion was primarily due to increased production in 2002. The
increase in depletion resulting from increased production was partially offset
by a $0.03 decrease in our depletion rate. The decline in our depletion rate
resulted from the strong reserve replacement rate experienced by the Company in
2002.
Net interest expense for 2002 was $6.2 million compared to $6.7 million in
2001. The decrease in net interest expense was due primarily to lower LIBOR
experienced during 2002. The weighted average interest rate on our outstanding
indebtedness in 2002 was 7.4% compared to 9.3% in 2001. Interest expense net of
interest income for 2002 was $0.61 per Mcfe compared to $0.67 per Mcfe in 2001.
Our total outstanding indebtedness at December 31, 2002 was $81.8 million,
compared to $91.7 million at December 31, 2001. During the fourth quarter 2002,
we issued $10 million in Series B preferred stock and used a portion of the net
proceeds to repay outstanding indebtedness under our senior credit facility. In
addition, CSFB Private Equity purchased $10 million of our senior credit
facility held by Shell Capital Inc. and converted it into common stock. Debt
conversion expense of $630,000 represents the costs and fees we incurred to
execute the CSFB conversion of our senior debt to common stock.
Earnings before interest expense, taxes, depreciation, depletion and
amortization, and other non-cash items (EBITDA) increased 9% to $24.7 million
and operating cash flow before changes in working capital increased 11% to $20.1
million. Brigham reported net income of $598,000 ($0.03 per diluted share) for
2002 compared to net income of $9.2 million ($0.44 per diluted share) in 2001.
Net income in 2002 included $263,000 in non-cash income related to changes in
the fair market of hedging contracts compared to a gain of $9.7 million in 2001.
Diluted earnings per share for 2001 have been restated (downward) from $0.54 to
$0.44. The diluted EPS data for 2001 and 2002 in this press release reflect the
application of the "if converted" method of accounting for treatment of
convertible debt and mandatorily redeemable preferred stock and associated
warrants. There is no impact on previously reported diluted earnings per share
data for 2002.
Brigham's capital expenditures for 2002 and 2001 were:
($'s in millions)
2002 2001
------------- -------------
Drilling $ 19.8 $ 27.2
Land and G&G 3.7 2.7
Capitalized Cost 5.7 6.1
Participant reimbursements of prior land & seismic cost and asset sales (1.5) (0.4)
------------- -------------
Net capital expenditures $ 27.7 $ 35.6
============= =============
FOURTH QUARTER 2002 RESULTS
Net daily production volumes for the fourth quarter 2002 rose 18% to
average 29.6 MMcfe per day compared to 25.1 MMcfe per day for the same period in
2001. Revenue from the sale of natural gas and oil increased 74% to a record
$10.5 million, from $6.1 million for the same quarter in 2001. Increased
production volumes accounted for $1.3 million of the increase and higher price
realizations accounted for $3.1 million of the increase.
Lease operating expenses for the fourth quarter 2002 were $1.3 million. An
increase in the total number of producing wells resulted in a 15% increase in
lease operating expenses over the fourth quarter last year. Despite the increase
in total lease operating expenses, our lease operating expense per unit of
production in the fourth quarter 2002 was $0.50 per Mcfe compared to $0.51 in
the fourth quarter last year. Our per unit operating costs increased in both the
fourth quarters of 2002 and 2001 as a result of higher ad valorem taxes related
to higher year-end property valuations. Production tax expense in the fourth
quarter 2002 was $650,000 compared to $8,000 in the fourth quarter last year.
The increase in production taxes was due to a 62%
5
EXHIBIT 99.1
increase in our average pre-hedge sales price for natural gas and oil, our
higher production volumes and the absence of prior period tax refunds for wells
qualifying for reduced rates.
General and administrative expenses for the fourth quarter 2002 were $1.2
million compared to $930,000 in 2001. The increase in general and administrative
expense is primarily due to an increase in employee compensation and benefit
expense, contract and professional fees and corporate insurance expense.
Depletion expense for the fourth quarter 2002 was $3.4 million ($1.27 per
Mcfe) compared to $4.3 million ($1.90 per Mcfe) in the fourth quarter last year.
A decline in our depletion rate combined with an increase in depletion due to
higher production resulted in a $931,000 decline in depletion expense for the
fourth quarter of 2002.
Net interest expense for the fourth quarter 2002 was $1.6 million compared
to $1.5 million in the fourth quarter 2001. The increase in interest expense was
due to an increase in our weighted average outstanding indebtedness for the
fourth quarter of 2002 and was offset by 8% decrease in our weighted average
interest rate for the quarter. For the fourth quarter 2002, our weighted average
outstanding indebtedness was $95.5 million compared to $91.6 million in 2001.
Our weighted average interest rate for the fourth quarter 2002 was 7.3% versus
7.9% last year. Our total outstanding indebtedness at December 31, 2002 was
$81.8 million.
For the fourth quarter 2002, EBITDA increased 86% to a record $7.4 million
and operating cash flow before changes in working capital increased 91% to a
record $5.8 million. Brigham reported net income of $880,000 ($0.05 per diluted
share) for the fourth quarter of 2002 versus a net loss of $2.5 million ($0.15
per diluted share) for the prior year period.
Brigham's capital expenditures during the fourth quarter of 2002 and 2001
were:
($'S IN MILLIONS)
THREE MONTHS ENDED DECEMBER 31,
2002 2001
------------------ -----------------
Drilling $ 7.6 $ 5.5
Land and G&G 1.4 0.3
Capitalized Cost 1.7 1.6
Participant reimbursements of prior land & seismic cost and asset sales (0.2) (0.4)
-------------------------------------
Net capital expenditures $ 10.5 $ 7.0
================== =================
FIRST QUARTER 2003 GUIDANCE
The following forecasts and estimates of Brigham's first quarter 2003
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 2003 production volumes to average
between 31 and 33 MMcfe per day (55% natural gas). For the first quarter 2003,
lease operating expenses are projected to be $0.38 per Mcfe, production taxes
are projected to be 5.5% of pre-hedge oil and gas revenues, and general and
administrative expenses are projected to be $1.2 million ($0.44 to $0.41 per
Mcfe).
Based on these production and cost estimates, assumed average NYMEX prices
of $6.60 per MMBtu for natural gas and $34.80 per barrel for oil, and taking
into account current hedging contracts outstanding, Brigham forecasts revenue of
between $14.4 and $15.5 million and EBITDA of between $11.2 million and $12.1
million for the first quarter 2003.
6
CONFERENCE CALL INFORMATION
Brigham management will host a conference call to discuss the Company's year-end
2002 financial and operational results with investors, analysts and other
interested parties on Tuesday, March 4th, at 9:00 a.m. Central time. To
participate in the call, please dial 800-915-4836 and ask for the Brigham
Exploration conference call (no password required). A recording of the
conference call will be available to interested parties approximately one hour
after the call is completed through 11:59 pm Central time on Tuesday, March
25th. To access the recording, please dial 800-428-6051 within U.S.
(973-709-2089 outside
U.S.) and enter 286889 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.
BRIGHAM TO PRESENT AT RAYMOND JAMES CONFERENCE
Brigham's management will make a corporate presentation at the Raymond
James & Associates 24th Annual Institutional Investors Conference, in Orlando,
Florida, on Wednesday, March 5, 2003. Brigham's presentation will begin at 1:30
pm (ET).
An audio-only webcast version of the presentation will be available, see
below for web address. A replay of the presentation will also be available for
30 days at the same address. A copy of the slide presentation used will be made
available on the Brigham corporate website at www. Bexp3d.com. Details for live
webcast and replay are as follows:
Date & Time: Wednesday, March 5th at 1:30 pm ET
Presenter: Bud Brigham - Chairman, CEO and President
Gene Shepherd - Chief Financial Officer
Live Webcast and Replay Address: http://customer.nvglb.com
/RaymondJames/Institutional/
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
-------------------
7
EXHIBIT 99.1
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three Months Year Ended
Ended December 31, December 31,
------------------- ------------------
2002 2001 2002 2001
-------- --------- -------- --------
Revenues:
Oil and natural gas sales $10,537 $ 6,073 $35,174 $32,293
Other 34 57 76 255
-------- --------- -------- --------
$10,571 $ 6,130 $35,250 $32,548
Costs and expenses:
Lease operating 1,331 1,154 3,759 3,486
Production taxes 650 8 1,977 1,511
General and administrative, includes non-
cash charge (a) 1,190 930 4,971 3,638
Depletion of natural gas and oil properties 3,377 4,308 13,495 13,211
Depreciation and amortization 132 302 439 677
-------- --------- -------- --------
$ 6,680 $ 6,702 $24,641 $22,523
-------- --------- -------- --------
Operating income $ 3,891 ($572) $10,609 $10,025
Interest expense, net (1,554) (1,501) (6,238) (6,681)
Interest income 14 34 119 264
Loss on investment - (94) - (94)
Debt conversion expense (630) - (630) -
Other income (expense) (b) (54) 347 (310) 8,174
-------- --------- -------- --------
Income (loss) before income taxes $ 1,667 ($1,786) $ 3,550 $11,688
Income tax expense - - - -
-------- --------- -------- --------
Net income (loss) $ 1,667 ($1,786) $ 3,550 $11,688
Preferred stock dividend & accretion 787 674 2,952 2,450
-------- --------- -------- --------
Net income (loss) to common $ 880 ($2,460) $ 598 $ 9,238
======== ========= ======== ========
Net income (loss) to common per share:
Basic $ 0.05 ($0.15) $ 0.04 $ 0.58
Diluted $ 0.05 ($0.15) $ 0.03 $ 0.44
Wt. avg. common shares outstanding:
Basic 16,436 16,005 16,138 15,988
Diluted 17,787 16,005 17,415 28,205
(a) Includes non-cash charge related to stock
compensation expense of: - - ($596) -
(b) Includes non-cash gains/(losses) arising
from hedge accounting for certain of
Brigham's oil and natural gas hedges of: ($15) $ 449 $ 263 $ 9,666
8
EXHIBIT 99.1
BRIGHAM EXPLORATION COMPANY
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended December 31, Year Ended December 31,
-------------------------------------- -----------------------------
2002 2001 2002 2001
------------------ ------------------ -------------- -------------
Avg. net daily production:
Natural gas (MMcf) 16.5 16.7 16.1 18.8
Oil (Bbls) 2,186 1,411 1,947 1,299
Equivalent natural gas (MMcfe) (6:1) 29.6 25.1 27.8 26.6
Total net production:
Natural gas (MMcf) 1,484 1,500 5,791 6,766
Oil (MBbls) 197 127 701 468
Equivalent natural gas (MMcfe) (6:1) 2,664 2,262 9,996 9,573
% Natural gas 56% 66% 58% 71%
Sales prices:
Natural gas ($/Mcf) (a) $ 3.80 $ 2.43 $ 3.22 $ 3.11
Oil ($/Bbl) (a) 24.87 19.07 23.55 24.05
Equivalent natural gas ($/Mcfe) (6:1) 3.95 2.69 3.52 3.37
Other financial data:
EBITDA ($000) (b) $ 7,376 $ 3,970 $ 24,685 $ 22,685
Operating cash flow before changes in
working capital ($000) 5,785 3,035 20,084 18,097
(a) Includes the effects of hedging gains
(losses) of:
Natural gas ($/Mcf) ($0.43) $ - ($0.12) ($1.18)
Oil ($/Bbl) (2.03) - (1.62) (0.33)
<FN>
(b) Net income (loss) plus interest expense, DD&A expenses, deferred income taxes and other non-cash items.
See reconciliation of Non - GAAP measures below.
9
EXHIBIT 99.1
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands) (unaudited)
December 31, December 31,
2002 2001
------------- -------------
Assets:
Current assets $ 33,396 $ 16,968
Natural gas and oil properties, net (full cost method) 166,080 151,891
Other property and equipment, net 1,234 1,331
Other non-current assets 2,523 3,218
------------- -------------
Total assets $ 203,233 $ 173,408
============= =============
Liabilities and stockholders' equity:
Current liabilities $ 34,010 $ 15,266
Notes payable 60,000 75,000
Senior subordinated notes 21,797 16,721
Other non-current liabilities 186 206
------------- -------------
Total liabilities $ 115,993 $ 107,193
Redeemable preferred stock, Series A 19,540 16,614
Redeemable preferred stock, Series B 4,777 -
Stockholders' equity 62,923 49,601
------------- -------------
Total liabilities and stockholders' equity $ 203,233 $ 173,408
============= =============
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Three Months Ended December 31, Year Ended December 31,
------------------------------------- ----------------------------
2002 2001 2002 2001
------------------ ----------------- ------------ --------------
Cash flows from operating activities:
Net income (loss) $ 1,667 ($1,786) $ 3,550 $ 11,688
Depletion, depreciation and amortization 3,509 4,610 13,934 13,888
Interest paid through issuance of add'l
senior sub. notes 291 223 1,076 721
Amortization of deferred loan fees 303 343 1,191 1,372
Stock option compensation expense - - 596 -
Loss on investment - 94 - 94
Market value and other adjustments for
derivatives instruments 15 (449) (263) (9,666)
------------------ ----------------- ------------ --------------
Operating cash flow $ 5,785 $ 3,035 $ 20,084 $ 18,097
Changes in working capital and other items 993 2,022 8,889 825
------------------ ----------------- ------------ --------------
Cash flows provided (used) by operating activities $ 6,778 $ 5,057 $ 28,973 $ 18,922
Cash flows (used) provided by investing activities (8,356) (7,253) (27,206) (33,571)
Cash flows (used) provided by financing activities 4,714 (8) 8,439 18,924
------------------ ----------------- ------------ --------------
Net increase (decrease) in cash and cash equivalents $ 3,136 ($2,204) $ 10,206 $ 4,275
================== ================= ============ ==============
10
EXHIBIT 99.1
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended December 31, Year Ended December 31,
------------------------------------- ----------------------------
2002 2001 2002 2001
------------------ ----------------- ------------ --------------
Revenues:
Natural gas and oil sales $ 3.95 $ 2.69 $ 3.52 $ 3.37
Other revenue 0.01 0.03 0.01 0.03
------------------ ----------------- ------------ --------------
$ 3.96 $ 2.72 $ 3.53 $ 3.40
Costs and expenses:
Lease operating 0.50 0.51 0.38 0.36
Production taxes 0.24 0.00 0.20 0.16
General and administrative 0.45 0.41 0.44 (a) 0.38
Depletion of natural gas and oil properties 1.27 1.90 1.35 1.38
Depreciation and amortization 0.05 0.13 0.04 0.07
------------------ ----------------- ------------ --------------
$ 2.51 $ 2.95 $ 2.41 $ 2.35
------------------ ----------------- ------------ --------------
Operating income $ 1.45 ($0.23) $ 1.12 $ 1.05
Interest expense, net (b) (0.58) (0.65) (0.61) (0.67)
Other income (expense) (c) (0.01) (0.05) (0.06) (0.16)
------------------ ----------------- ------------ --------------
Adjusted net income before dividend & accretion $ 0.86 ($0.93) $ 0.45 $ 0.22
================== ================= ============ ==============
<FN>
(a) Excludes non-cash charge for stock compensation expense of $0.06 per Mcfe.
(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, loss on investment in fourth
quarter 2001& FY 2001 and debt conversion expense in the fourth quarter of
2002 & FY 2002.
SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF MARCH 3, 2003
(UNAUDITED)
2003 2004
------------------------------ ------------------------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
------ ------ ------ ------ ------ ------ ------ ------
Natural Gas Swaps: MMBtu/d 9,250 9,000 6,500 4,500 3,250 2,500 1,500 1,000
$/MMBtu $3.632 $3.846 $3.867 $4.039 $4.963 $4.252 $4.180 $4.360
Crude Oil Swaps: Bbls/d 750 675 600 450 325 225 150 100
$/Bbl $25.29 $25.22 $23.77 $23.21 $25.35 $24.52 $23.91 $23.80
Crude Oil Collars: Cap - Bbls/d 250 250 - - - - - - - - - - - -
Cap - $/Bbl $22.56 $22.56 - - - - - - - - - - - -
Floor - Bbls/d 250 250 - - - - - - - - - - - -
Floor - $/Bbl $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.
11
EXHIBIT 99.1
BRIGHAM EXPLORATION COMPANY
RECONCILIATION OF NON-GAAP MEASURES
(in thousands) (unaudited)
EBITDA is defined as net income (loss) plus interest expense, DD&A expenses,
deferred income taxes and other non-cash items
We believe that operating income is the financial measure calculated and
presented in accordance with generally accepted accounting principles that is
most directly comparable to EBITDA as defined. The following table reconciles
EBITDA as defined with our operating income, as derived from our financial
statements.
Three Months Ended December 31, Year Ended December 31,
------------------------------------- ----------------------------
2002 2001 2002 2001
------------------- ---------------- ------------ --------------
Operating Income $ 3,891 ($572) $ 10,609 $ 10,025
Depletion, depreciation and amortization 3,509 4,610 13,934 13,888
Non-cash compensation expense - - 596 -
Interest Income 14 34 119 264
Cash portion of other income / (expense) (38) (102) (573) (1,492)
------------------- ---------------- ------------ --------------
EBITDA $ 7,376 $ 3,970 $ 24,685 $ 22,685
12