EXHIBIT 99.1
[GRAPHIC OMITTED]
NEWS RELEASE
FOR IMMEDIATE RELEASE
BRIGHAM EXPLORATION ANNOUNCES RECORD QUARTERLY PRODUCTION, RECORD FINANCIAL
RESULTS AND PROVIDES Q2 2003 GUIDANCE
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Austin, TX -- May 6, 2003 -- Brigham Exploration Company (NASDAQ:BEXP)
today announced record financial results for the quarter ended March 31, 2003.
Highlights of Brigham's financial performance for the first quarter include:
- - Production volumes increased for the sixth consecutive quarter to average
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31.2 MMcfed, up 23% relative to 25.3 MMcfed in the first quarter 2002 and
up 5% relative to 29.6 MMcfed in the fourth quarter of 2002;
- - 172% increase in EBITDA (see reconciliation of non-GAAP financial measures
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in tables) to $11.6 million in the first quarter 2003 due to the combined
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effects of increased production volumes and improved realized prices; and
- - 356% increase in discretionary cash flow (see reconciliation of non-GAAP
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financial measures in tables) to $9.6 million in the first quarter 2003
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from $2.1 million in the first quarter last year.
MANAGEMENT COMMENTS
Gene Shepherd, Brigham's Chief Financial Officer, commented, "We are very
pleased with the record financial performance achieved by the Company in the
first quarter of 2003. We are benefiting not only from the strong industry
conditions, with record commodity prices and low service costs, but also from an
acceleration of our drilling activity beginning in the fourth quarter of 2002
that contributed to our record first quarter production volumes. Importantly,
due to declining unit costs and improving realizations, our per unit margins
grew in each of the last four years and averaged $1.57 per Mcfe in 2002. This
growth in profitability has accelerated thus far in 2003. Our first quarter
margins expanded dramatically to $3.50 per Mcfe, demonstrating the powerful
financial impact provided by the combination of high commodity prices and our
organic drilling-driven growth in production volumes. Given our large and
growing inventory of exploration and development prospects and our enhanced
financial flexibility, by virtue of our fourth quarter equity financings and our
substantial growth in cash flow, we are very excited about the opportunity we
have to compound value for our shareholders in 2003."
FIRST QUARTER 2003 RESULTS
Average daily production volumes for the first quarter 2003 were 31.2
MMcfed, an increase of 23% when compared to the first quarter 2002 and 5% when
compared to the fourth quarter 2002. This represents the sixth consecutive
quarterly increase in Brigham's average daily production volumes.
Revenues from the sale of oil and natural gas were $14.6 million and
increased 128% when compared to revenue in last year's first quarter.
Approximately 80% of the increase was due to an increase in Brigham's post hedge
average realized sales price for oil and gas and 20% was due to an increase in
production volumes.
Lease operating expenses for the first quarter of 2003 were $974,000 and
decreased 8% to $0.35 per Mcfe on a per unit of equivalent production basis
relative to the first quarter last year. The decrease in Brigham's total lease
operating expense per unit of production is primarily due to a decrease in
Brigham's lease operating expense excluding ad valorem taxes. A 137% increase in
Brigham's pre-hedge oil and gas sales price resulted in a 166% increase in
production taxes. Production taxes for the first quarter 2003 represented 5.2%
of total revenue before hedging compared to 5.7 % in the first quarter last
year.
General and administrative expenses for the first quarter 2003 were $1.1
million and decreased 2% to $0.41 per Mcfe on a per unit of equivalent
production basis relative to the first quarter 2002. Depletion expenses were
$4.1 million, up 31% compared to depletion expenses last year. Approximately 77%
of the increase in depletion expenses was due to a 23% increase in Brigham's
production volumes, while 23% of the increase was due to a 6% increase in
Brigham's depletion rate.
EXHIBIT 99.1
Interest expense for the first quarter 2003 was $1.3 million and decreased
10% relative to the first quarter 2002, due to a decrease in Brigham's weighted
average debt outstanding for the first quarter 2003. The average interest rate
on Brigham's outstanding indebtedness for the first quarter 2003 was 6.1% and
was unchanged from the first quarter last year.
Brigham's earnings before interest expense, taxes, depreciation, depletion,
amortization and other non-cash charges (EBITDA - see reconciliation of non-GAAP
financial measures in tables) for the first quarter 2003 was a record $11.6
million. EBITDA for the first quarter 2003 increased 172% over EBITDA in the
first quarter 2002. Discretionary cash flow (see reconciliation of non-GAAP
financial measures in tables) for the first quarter 2003 increased 356% to $9.6
million relative to $2.1 million in the first quarter 2002. Net income to
common for the first quarter 2003 was $5.5 million compared to a net loss to
common of $1.3 million in the first quarter last year. Net income to common for
the first quarter 2003 included a cumulative $268,000 ($0.01 per diluted share)
non-cash gain related to the adoption of Statement of Financial Accounting
Standards No. 143 relating to asset retirement obligations of oil and gas
properties. Net income to common per diluted share was $0.20 for the first
quarter 2003, compared to a loss of $(0.08) per diluted share last year.
Brigham's net capital expenditures for oil and gas activities in the first
quarter 2003 totaled $8.0 million and included $5.2 million related to drilling,
$1.1 million for land and G&G activities and $1.7 million for capitalized
general and administrative costs and capitalized interest.
SECOND QUARTER 2003 RESULTS GUIDANCE
The following forecasts and estimates of Brigham's second 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 second quarter 2003 production volumes to average
between 28 and 32 MMcfed, 61% of which consists of natural gas. Forecasted
production volumes for second quarter exclude any impact that the Palmer #7
development well would have provided were it not for the well head failure.
Lease operating expenses are projected to be $0.39 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 $1.2 million ($0.42 to $0.48 per
Mcfe).
Based on these production and cost estimates, assumed average NYMEX prices
of $5.15 per MMBtu for natural gas and $26.75 per barrel for oil, and taking
into account current hedging contracts outstanding, Brigham forecasts revenue of
between $10.8 and $12.8 million and EBITDA of between $8.0 and $9.7 million for
the second quarter 2003.
CONFERENCE CALL INFORMATION
Brigham management will host a conference call to discuss the Company's
first quarter 2003 operational and financial results with investors, analysts
and other interested parties on Wednesday, May 7th, at 9:00 a.m. CDT. To
participate in the call, please dial 800-915-4836 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. CDT on Wednesday, May 21st. To access the
recording, domestic callers should dial 800-428-6051 and international callers
should dial 973-709-2089. The passcode I.D. for the conference playback is
292538. 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.
EXHIBIT 99.1
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
EXHIBIT 99.1
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
THREE MONTHS
ENDED MARCH 31,
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2002 2003
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Revenues:
Oil and natural gas sales $ 6,434 $14,639
Other 10 38
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$ 6,444 $14,677
Costs and expenses:
Lease operating 871 974
Production taxes 353 938
General and administrative 964 1,139
Depletion of natural gas and oil properties 3,137 4,102
Depreciation and amortization 103 97
Accretion of asset retirement obligation - 34
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$ 5,428 $ 7,284
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Operating income $ 1,016 $ 7,393
Interest expense (1,421) (1,282)
Interest income 19 21
Other income (expense) (a) (248) 111
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Income (loss) before income taxes and accounting change $ (634) $ 6,243
Income tax expense - -
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Net income (loss) before accounting change $ (634) $ 6,243
Cumulative effect of adoption of accounting principle - 268
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Net income (loss) $ (634) $ 6,511
Preferred stock dividend & accretion 698 995
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Net income (loss) to common $(1,332) $ 5,516
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Net income (loss) to common per share:
Basic $ (0.08) $ 0.28
Diluted (0.08) 0.20
Wt. avg. common shares outstanding:
Basic 16,016 19,707
Diluted 16,016 32,111
(a) Includes non-cash income (expenses) related to
changes in the fair market value of certain
hedging contracts of: $ (251) $ 111
EXHIBIT 99.1
BRIGHAM EXPLORATION COMPANY
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
THREE MONTHS
ENDED MARCH 31,
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2002 2003
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AVERAGE NET DAILY PRODUCTION:
Natural gas (MMcf) 14.9 16.4
Oil (Bbls) 1,720 2,475
Equivalent natural gas (MMcfe) (6:1) 25.3 31.2
TOTAL NET PRODUCTION:
Natural gas (MMcf) 1,344 1,472
Oil (MBbls) 155 223
Equivalent natural gas (MMcfe) (6:1) 2,273 2,808
% Natural gas 59% 52%
SALES PRICES:
Natural gas ($/Mcf) (a) $ 2.49 $ 5.53
Oil ($/Bbl) (a) 19.93 29.16
Equivalent natural gas (MMcfe) (6:1) 2.83 5.21
OTHER FINANCIAL DATA:
EBITDA ($000) (b) $4,278 $11,647
Discretionary cash flow ($000) (b) 2,099 9,570
(a) Includes the effects of hedging gains (losses) of:
Natural gas ($/Mcf) $ 0.25 $ (1.71)
Oil ($/Bbl) (0.32) (3.72)
(b) See reconciliation of non-GAAP financial measures in tables.
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands) (unaudited)
12/31/2002 03/31/2003
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ASSETS:
Current assets $ 33,322 $ 37,246
Oil and gas properties, at cost, net 164,980 171,119
Other property and equipment, at cost, net 1,234 1,245
Other non-current assets 2,523 3,733
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Total assets $ 202,059 $ 213,343
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LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities $ 34,010 $ 39,981
Notes payable 60,000 56,000
Senior subordinated notes, net 21,797 22,093
Other non-current liabilities 186 2,223
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Total liabilities $ 115,993 $ 120,297
Series A Preferred Stock, mandatorily redeemable 19,540 20,329
Series B Preferred Stock, mandatorily redeemable 4,777 4,983
Stockholders' equity 61,749 67,734
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Total liabilities and stockholders' equity $ 202,059 $ 213,343
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EXHIBIT 99.1
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
THREE MONTHS
ENDED MARCH 31,
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2002 2003
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Cash flows from operating activities:
Net income (loss) $ (634) $ 6,511
Depletion, depreciation and amortization 3,240 4,199
Accretion of asset retirement obligation - 34
Interest paid through issuance of add'l senior sub. Notes 227 296
Cumulative effect of adoption of accounting principle - (268)
Amortization of deferred loan fees and debt issuance cost 286 253
Market value adjustment for derivatives instruments 251 (111)
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Operating cash flow $ 3,370 $10,914
Changes in working capital and other items 661 4,148
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Cash flows provided (used) by operating activities $ 4,031 $15,062
Cash flows (used) provided by investing activities (5,000) (9,339)
Cash flows (used) provided by financing activities 3,677 (4,556)
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Net increase (decrease) in cash and cash equivalents $ 2,708 $ 1,167
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SUMMARY PER MCFE DATA
(unaudited)
THREE MONTHS
ENDED MARCH 31,
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2002 2003
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Revenues:
Oil and natural gas sales $ 2.83 $ 5.21
Other 0.00 0.01
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$ 2.83 $ 5.22
Costs and expenses:
Lease operating 0.38 0.35
Production taxes 0.16 0.33
General and administrative 0.42 0.41
Depletion of natural gas and oil properties 1.38 1.46
Depreciation and amortization 0.05 0.03
Accretion of asset retirement obligation 0.00 0.01
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$ 2.39 $ 2.59
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Operating income $ 0.44 $ 2.63
Interest expense, net of interest income (0.62) (0.45)
Other income (expense) (a) 0.00 0.00
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Net income before preferred stock dividend & accretion $(0.18) $ 2.18
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(a) Adjusted to exclude non-cash income (expense) related to changes in the
fair market value of certain hedge contracts and non-cash expense related
to charges for ineffective hedges.
EXHIBIT 99.1
BRIGHAM EXPLORATION COMPANY
SUMMARY OF COMMODITY PRICE HEDGES OUTSTANDING AS OF MAY 6, 2003
(unaudited)
Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004
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Natural Gas Swaps: MMBtud 9,000 6,500 4,500 3,250 2,500 1,500 1,000
$/MMBtu $ 3.846 $ 3.867 $ 4.039 $ 4.963 $ 4.252 $ 4.180 $ 4.360
Natural Gas Collars: MMBtu/d - - - - - - 3,000 2,000 1,500 1,000
Floor - $/MMbtu - - - - - - $ 4.000 $ 4.000 $ 4.000 $ 4.000
Ceiling - $/MMbtu - - - - - - $ 9.900 $ 5.450 $ 5.390 $ 5.620
Natural Gas Floors: MMBtu/d 1,648 5,000 5,000 - - - - - - - -
$/MMBtu $ 4.500 $ 4.500 $ 4.500 - - - - - - - -
Crude Oil Swaps: Bbls/d 675 600 450 325 225 150 100
$/Bbl $ 25.22 $ 23.77 $ 23.21 $ 25.35 $ 24.52 $ 23.91 $ 23.80
Crude Oil Collars: Cap - Bbls/d 250 - - - - - - - - - - - -
Floor - $/Bbl $ 18.00 - - - - - - - - - - - -
Ceiling - $/Bbl $ 22.56 - - - - - - - - - - - -
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.
EXHIBIT 99.1
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
To fully assess Brigham's operating results, management believes that,
although not prescribed under generally accepted accounting principles ("GAAP"),
discretionary cash flow and EBITDA are appropriate measures of Brigham's ability
to satisfy capital expenditure obligations and working capital requirements.
Discretionary cash flow and EBITDA are non-GAAP financial measure as defined
under SEC rules. Brigham's discretionary cash flow and EBITDA should not be
considered in isolation or as a substitute for other financial measurements
prepared in accordance with GAAP or as a measure of the Company's profitability
or liquidity. As discretionary cash flow and EBITDA exclude some, but not all,
items that affect net income and may vary among companies, the discretionary
cash flow and EBITDA presented below may not be comparable to similarly titled
measures of other companies. Management believes that operating income (loss)
calculated in accordance with "GAAP" is the most directly comparable measure
most similar to discretionary cash flow and EBITDA.
Discretionary cash flow is defined as operating income (loss) plus
depletion, depreciation and amortization expense, interest income, non-cash
expenses, cash gains (losses) on the settlement of non-hedge derivatives and
cash portion of other income (expense) less capitalized general and
administrative cost and cash interest. The following table provides a
reconciliation of discretionary cash flow to operating income (loss) for the
periods presented.
THREE MONTHS
ENDED MARCH 31,
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2002 2003
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Operating income (loss) $ 1,016 $ 7,393
Depletion, depreciation and amortization 3,240 4,199
Accretion of asset retirement obligation - 34
Interest income 19 21
Cash portion of other income (expense) 3 -
Capitalized general and administrative cost (999) (1,131)
Cash interest (1,180) (947)
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Discretionary cash flow $ 2,099 $ 9,570
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EBITDA is defined as net income (loss) plus interest expense, depletion,
depreciation and amortization expenses, deferred income taxes and other non-cash
items. The following table provides a reconciliation of EBITDA to operating
income (loss) for the periods presented.
THREE MONTHS
ENDED MARCH 31,
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2002 2003
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Operating income (loss) $1,016 $ 7,393
Depletion, depreciation and amortization 3,240 4,199
Accretion of asset retirement obligation - 34
Interest income 19 21
Cash portion of other income (expense) 3 -
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EBITDA $4,278 $11,647
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