AUSTIN, Texas, March 3 /PRNewswire-FirstCall/ --
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. 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% 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.
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 p.m. 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 http://www.bexp3d.com
or http://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 p.m. (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 http://www.Bexp3d.com .
Details for live webcast and replay are as follows:
Date & Time: Wednesday, March 5th at 1:30 p.m. 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 http://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
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (unaudited)
Three Months Ended Year 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 $9,666
BRIGHAM EXPLORATION COMPANY
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
Avg. net daily production:
Natural gas (MMcf) 16.5 16.7 16.1 18.8
Oil (Bbls) 2,186 1,411 1,947 1,299
Equivalent natural gas
(MMcfe) (6:1) 29.6 25.1 27.8 26.6
Total net production:
Natural gas (MMcf) 1,484 1,500 5,791 6,766
Oil (MBbls) 197 127 701 468
Equivalent natural gas
(MMcfe) (6:1) 2,664 2,262 9,996 9,573
% Natural gas 56% 66% 58% 71%
Sales prices:
Natural gas ($/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)
(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.
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 Year Ended
December 31, 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
SUMMARY PER MCFE DATA
(unaudited)
Three Months Ended Year Ended
December 31, 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
(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.
BRIGHAM EXPLORATION COMPANY
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.
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 Year Ended
December 31, 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
SOURCE Brigham Exploration Company
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Related links:
http://customer.nvglb.com/RaymondJames/Institutional
http://www.rjcapitalmarkets.com/conference_detail_main.asp?content_id=58
http://www.bexp3d.com
CONTACT:
John Turner, Manager - Finance & Investor
Relations of Brigham Exploration Company, +1-512-427-3300, or
investor@bexp3d.com
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