HOUSTON, May 6 /PRNewswire-FirstCall/ -- Dune Energy, Inc. (NYSE Amex: DNE) today announced results for the first quarter of 2009.
Revenue and Production
Revenue for the first quarter totaled $14.3 million as compared with $36.7 million for the first quarter of 2008. Production volumes in the first quarter were 198 Mbbls of oil and 1.18 Bcf of natural gas, or 2.4 Bcfe. This compares with 229 Mbbls of oil and 1.6 Bcf of natural gas, or 3.0 Bcfe for the first quarter of 2008. In the first quarter of 2009, the average sales price per barrel of oil was $39.86, and $5.43 per Mcf for natural gas, as compared with $100.82 per barrel and $8.58 per Mcf, respectively, for the first quarter of 2008. The primary reasons behind the decrease in revenue were lower production and lower average sales prices in the first quarter of 2009 versus the first quarter of 2008. Average price received per Mcfe produced was $6.04 in the first quarter of 2009 versus $12.40 in the first quarter of 2008, a 51% decline.
Costs and Expenses
Total lease operating expense for the first quarter totaled $7.0 million versus $12.0 million for the first quarter of 2008, a 42% decrease. On an Mcfe produced basis, this was $2.96 for 2009 versus $4.06 for 2008, a 27% improvement. DD&A expense was $8.1 million for the first quarter and $13.2 million for the first quarter of 2008. Cash G&A expense totaled $3.4 million for the first quarter of 2009 versus $3.8 million for the first quarter of 2008. The $0.4 million decrease reflects a continued focus on cost controls. Interest and financing expense was $8.7 million for both the first quarter of 2009 and the first quarter of 2008, primarily associated with payment of 10.5% interest on the $300 million of Senior Secured notes. We incurred a gain of $2.8 million on hedging during the first quarter of 2009 versus an $11.9 million loss in the first quarter of 2008.
Earnings
Net loss totaled $12.1 million for the first quarter of 2009 and $8.7 million for the first quarter of 2008. Preferred stock dividends were $8.9 million in the first quarter of 2009 versus $5.7 million in the first quarter of 2008, primarily reflecting the difference in coupon rate of the preferred stock. Net loss per share, both basic and fully diluted, for the quarter was $0.21, based on 101.2 million weighted average shares outstanding as compared with $0.18 in the first quarter of 2008 with 79.6 million weighted average shares outstanding. The increased outstanding common shares are predominately associated with conversion of preferred shares into common shares.
James A. Watt, President and Chief Executive Officer stated, "In a press release of April 6, 2009, we outlined the operational plans for the remainder of the year. We are currently executing on that plan while reducing historical G&A and operating costs both on an absolute basis and on a unit basis. We fully understand the challenges facing us and are committed to executing our plan to build long term value for all stakeholders."
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FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning estimates of expected drilling and development wells and associated costs, statements relating to estimates of, and increases in, production, cash flows and values, statements relating to the continued advancement of Dune Energy, Inc.'s projects and other statements which are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although Dune Energy, Inc. believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that the Company's projects will experience technological and mechanical problems, geological conditions in the reservoir may not result in commercial levels of oil and gas production, changes in product prices and other risks disclosed in Dune's Annual report on Form 10-K filed with the U.S. Securities and Exchange Commission.
Dune Energy, Inc. Consolidated Balance Sheets (Unaudited) March 31, 2009 December 31, 2008 -------------- ----------------- ASSETS Current assets: Cash $9,617,942 $15,491,532 Accounts receivable, net of reserve for doubtful accounts of $396,629 and $396,629 11,693,503 14,477,918 Prepayments and other current assets 2,980,806 6,910,422 Derivative assets 5,486,519 4,015,219 --------- --------- Total current assets 29,778,770 40,895,091 ---------- ---------- Oil and gas properties, using successful efforts accounting - proved 581,090,944 578,074,569 Less accumulated depreciation, depletion, amortization and impairment (230,707,639) (222,876,172) ------------ ------------ Net oil and gas properties 350,383,305 355,198,397 ----------- ----------- Property and equipment, net of accumulated depreciation of $1,631,187 and $1,406,927 1,869,910 2,086,313 Deferred financing costs, net of accumulated amortization of $1,118,871 and $970,068 1,472,854 1,621,657 Other assets 6,154,522 2,250,868 --------- --------- TOTAL ASSETS $389,659,361 $402,052,326 ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $9,591,971 $21,662,965 Accrued liabilities 29,162,187 20,038,900 Current debt 1,150,692 2,013,699 Preferred stock dividend payable 2,451,000 2,446,985 --------- --------- Total current liabilities 42,355,850 46,162,549 Long-term debt, net of discount of $9,758,108 and $10,393,213 290,241,892 289,606,787 Other long-term liabilities 16,032,786 15,732,483 ---------- ---------- Total liabilities 348,630,528 351,501,819 ----------- ----------- Commitments and contingencies - - Redeemable convertible preferred stock, net of discount of $8,707,104 and $9,179,927, liquidation preference of $1,000 per share, 750,000 shares designated, 235,815 and 236,805 shares issued and outstanding 227,107,896 227,625,073 STOCKHOLDERS' DEFICIT Preferred stock, $.001 par value, 1,000,000 shares authorized, 250,000 shares undesignated, no shares issued and outstanding - - Common stock, $.001 par value, 300,000,000 shares authorized, 108,027,052 and 96,129,047 shares issued and outstanding 108,027 96,129 Treasury stock, at cost (203,925 and 34,009 shares) 35,270 8,332 Additional paid-in capital 52,252,473 50,139,148 Accumulated other comprehensive loss (2,784,959) (3,709,177) Accumulated deficit (235,689,874) (223,608,998) ------------ ------------ Total stockholders' deficit (186,079,063) (177,074,566) ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $389,659,361 $402,052,326 ============ ============ Dune Energy, Inc. Consolidated Statements of Operations and Comprehensive Loss (Unaudited) Three months ended March 31, ------------------------ 2009 2008 ---- ---- Revenues $14,298,648 $36,691,227 ----------- ----------- Operating expenses: Lease operating expense and production taxes 7,019,723 12,027,243 Accretion of asset retirement obligation 410,874 156,820 Depletion, depreciation and amortization 8,055,727 13,199,501 General and administrative expense 5,047,580 4,964,345 --------- --------- Total operating expense 20,533,904 30,347,909 ---------- ---------- Operating income (loss) (6,235,256) 6,343,318 ---------- --------- Other income(expense): Interest income 30,327 105,285 Interest expense (8,678,947) (8,651,619) Gain (loss) on derivative liabilities 2,803,000 (11,901,979) --------- ----------- Total other income(expense) (5,845,620) (20,448,313) ---------- ----------- Loss from continuing operations before income taxes (12,080,876) (14,104,995) Income tax benefit - 5,374,003 ----------- --------- Loss from continuing operations (12,080,876) (8,730,992) ----------- ---------- Discontinued operations: Income from operations of Barnett Shale Properties - 87,861 Income tax expense - (33,475) ---------- ------- Income on discontinued operations - 54,386 ---------- ------ Net loss (12,080,876) (8,676,606) Preferred stock dividend (8,855,060) (5,724,030) ---------- ---------- Net loss available to common shareholders $(20,935,936) $(14,400,636) ============ ============ Net loss per share: Basic and diluted from continuing operations $(0.21) $(0.18) Basic and diluted from discontinued operations - - ------ ------ Total basic and diluted $(0.21) $(0.18) ====== ====== Weighted average shares outstanding: Basic and diluted 101,233,960 79,610,349 Comprehensive loss: Net loss $(12,080,876) $(8,676,606) Other comprehensive income 924,218 835,776 ------- ------- Comprehensive loss $(11,156,658) $(7,840,830) ============ =========== Dune Energy, Inc. Consolidated Statements of Cash Flows (Unaudited) Three months ended March 31, ------------------------ 2009 2008 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(12,080,876) $(8,676,606) Adjustments to reconcile net loss to net cash used in operating activities: Income from discontinued operations - (54,386) Depletion, depreciation and amortization 8,055,727 13,199,501 Amortization of deferred financing costs and debt discount 783,908 717,351 Stock-based compensation 1,639,001 1,123,993 Accretion of asset retirement obligation 410,874 156,820 Loss (gain) on derivative liabilities (361,442) 10,129,752 Deferred tax benefit - (5,374,003) Changes in: Accounts receivable 2,598,773 (2,870,490) Prepayments and other assets 675,239 1,853,391 Payments made to settle asset retirement obligations (129,062) (799,742) Accounts payable and accrued liabilities (2,929,215) (6,709,128) ---------- ---------- NET CASH PROVIDED BY (USED IN) CONTINUING OPERATIONS (1,337,073) 2,696,453 NET CASH PROVIDED BY DISCONTINUED OPERATIONS - 2,105,315 ---------- --------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (1,337,073) 4,801,768 ---------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Investment in proved and unproved properties (3,016,375) (15,157,758) Purchase of furniture and fixtures (7,858) (329,206) Increase in other assets (649,277) (12,168) -------- ------- NET CASH USED IN INVESTING ACTIVITIES - CONTINUING OPERATIONS (3,673,510) (15,499,132) NET CASH USED IN INVESTING ACTIVITIES - DISCONTINUED OPERATIONS - (6,777,948) ---------- ---------- NET CASH USED IN INVESTING ACTIVITIES (3,673,510) (22,277,080) ---------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term debt - 16,000,000 Payments on short-term debt (863,007) (705,524) -------- -------- NET CASH PROVIDED BY FINANCING ACTIVITIES (863,007) 15,294,476 -------- ---------- NET CHANGE IN CASH BALANCE (5,873,590) (2,180,836) Cash balance at beginning of period 15,491,532 16,771,726 ---------- ---------- Cash balance at end of period $9,617,942 $14,590,890 ========== =========== SUPPLEMENTAL DISCLOSURES Interest paid $20,039 $19,781 Income taxes paid - - NON-CASH DISCLOSURES Redeemable convertible preferred stock dividends $7,041,017 $5,724,030 Accretion of discount on preferred stock 472,823 422,317 Common stock issued for conversion of preferred stock 8,027,000 1,000,000
Dune Energy, Inc.
CONTACT: Investors, Steven J. Craig, Sr. Vice President Investor
Relations and Administration of Dune Energy, Inc., +1-713-229-6300
Web Site: http://www.duneenergy.com/
