HOUSTON, May 13, 2013 /PRNewswire/ --Dune Energy, Inc. (OTCBB:DUNR) today announced results for the first quarter of calendar year 2013.
Revenue and Production
Oil and gas revenue for the first quarter of 2013 totaled $12.1 million as compared with $13.4 million for the first quarter of 2012. Production volumes in the first quarter were 162 Mboe with 60% of this production being oil. This compares with 229 Mboe for the first quarter of 2012 with a 43% oil cut. In the first quarter of 2013, the average sales price per barrel of oil was $110.04 and $3.71 per Mcf for natural gas, as compared with $110.73 per BO and $3.12 per Mcf, respectively for the first quarter of 2012. Oil prices decreased 1% and gas prices increased 19% from 2012 levels. During the first quarter of 2013 oil revenue accounted for 88% of the total production revenue. Additionally, the Company had other revenue of $1.0 million consisting of the sale of emission credits in the first quarter of 2013.
Although the first quarter production volumes were low compared to a year ago, our investment in Garden Island Bay projects resulted in production increases throughout the quarter. January production averaged 1,393 BOe/day and March production averaged 2,400 BOe/day. We will see the full impact of our investment in the Leeville field in the second quarter. However, the increase will be partially offset by shut in production at Garden Island Bay for field maintenance.
Costs and Expenses
Total lease operating expense was $6.8 million for the first quarter of 2013 as compared to $6.2 million for the first quarter of 2012, or $42.30 and $26.88 per BOe produced, respectively. This increase on a BOe basis was reflective of lower production volumes in 2013 in our older fields with high fixed expenses. DD&A expense was $3.2 million for the first quarter of 2013, or $19.56 per BOe. Total January and February volumes were also negatively impacted by some third party pipeline repairs over and above normal declines. G&A expense totaled $2.6 million for the first quarter of 2013 compared to $3.1 million in the first quarter of 2012. This includes $0.6 million and $0.7 million non-cash stock based compensation in the first quarter of 2013 and first quarter of 2012. Interest and financing did not fluctuate between quarters, remaining at $2.4 million.
Earnings
Net loss totaled $3.2 million for the first quarter of 2013. This compares with a $3.6 million loss in 2012.
Liquidity and Credit Agreements
At the end of the quarter we had $12.2 million in cash and $20 million available under our Sr. Credit Facility based on $50 million of availability. Subsequent to the end of the quarter we signed a second amendment to our credit facility amending the total Debt/EBITDAX covenant ratio to 5.0 times from 4.0 times for the first quarter of 2013 and to 4.5 times from 4.0 times for the second quarter of 2013. It returns to 4.0 times in the third quarter of 2013 and beyond. Additionally, on May 8, 2013 our major shareholders funded a second draw of $10 million on our $50 million equity financing of December 21, 2012. We have now drawn $40 million of the $50 million facility.
2013 Operations Summary and Capital Program
Since our last operations update of March 8, 2013, we have completed the six well shallow drilling program at our Leeville field. Five of the six wells were successful and will result in seven completions, as two wells are dual completions. The final well, the LL&E #340 ST #1, was drilled to 8,867 feet and is to be completed in the 95E sand. The zone has approximately 130 feet of hydrocarbon pay by log and core analysis. Initial production is anticipated soon with expected rates of 120 to 140 BOe/day net to the Company's 40% working interest. The initial six completions have all come on production over the last month and gross production from over the past week has averaged approximately 6.5 MMCF/day and 1,100 BO/day or over 2,200 BOe/day. The Company's net interest in this production is over 650 BOe/day. One additional workover is scheduled to come online in the next several days with an anticipated gross rates of 1.5 MMCF/day and 30 BO/day or 280 BOe/day, which will be approximately 80 BOe/day net to the company. We anticipate that when all wells are producing, Dune will net between 750-850 BOe/day from the new completions. The SL 20783 #1 is drilling below 16,600 feet with a target depth of 20,625 feet.
With the infusion of new equity capital, we anticipate spudding the Wieting #31 well at Chocolate Bayou in June and will also look to commencing new drilling activity in Garden Island Bay and Live Oak Fields in the summer. We provide a monthly update to operations on our website www.duneenergy.com.
James A. Watt, President and CEO of the company stated, "Once again we have shown that as we invest capital in our assets, they respond with increased production volumes. We will continue judiciously investing in our property base as capital availability permits."
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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.
Investor Contact:
Steven J. Craig
Sr. Vice President Investor Relations and Administration
713-229-6300
Dune Energy, Inc. | ||||
Consolidated Balance Sheets | ||||
(Unaudited) | ||||
ASSETS | March 31, 2013 | December 31, 2012 | ||
Current assets: | ||||
Cash | $ 12,159,561 | $ 22,793,916 | ||
Accounts receivable | 7,797,925 | 6,723,233 | ||
Current derivative asset | 77,233 | 765,992 | ||
Prepayments and other current assets | 3,062,504 | 5,160,533 | ||
Total current assets | 23,097,223 | 35,443,674 | ||
Oil and gas properties, using successful efforts accounting - proved | 258,448,945 | 239,233,653 | ||
Less accumulated depreciation, depletion and amortization | (16,966,353) | (13,806,672) | ||
Net oil and gas properties | 241,482,592 | 225,426,981 | ||
Property and equipment, net of accumulated depreciation of $264,585 and $256,380 | 192,881 | 71,080 | ||
Deferred financing costs, net of accumulated amortization of $967,513 and $771,061 | 2,268,599 | 2,428,453 | ||
Noncurrent derivative asset | 244,357 | 397,886 | ||
Other assets | 2,732,813 | 2,692,797 | ||
5,438,650 | 5,590,216 | |||
TOTAL ASSETS | $ 270,018,465 | $ 266,460,871 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Accounts payable | $ 15,424,588 | $ 6,987,857 | ||
Accrued liabilities | 9,176,526 | 12,529,899 | ||
Current maturities on long-term debt | 927,738 | 1,623,541 | ||
Total current liabilities | 25,528,852 | 21,141,297 | ||
Long-term debt | 85,023,470 | 83,429,862 | ||
Other long-term liabilities | 14,210,124 | 13,860,597 | ||
Total liabilities | 124,762,446 | 118,431,756 | ||
Commitments and contingencies | - | - | ||
STOCKHOLDERS' EQUITY | ||||
Preferred stock, $.001 par value, 1,000,000 shares authorized, 250,000 shares undesignated, no shares issued and outstanding | - | - | ||
Common stock, $.001 par value, 4,200,000,000 shares authorized, 59,070,458 and 59,022,445 shares issued | 59,070 | 59,022 | ||
Treasury stock, at cost (63,810 and 1,056 shares) | (121,146) | (1,914) | ||
Additional paid-in capital | 156,381,131 | 155,824,868 | ||
Accumulated deficit | (11,063,036) | (7,852,861) | ||
Total stockholders' equity | 145,256,019 | 148,029,115 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 270,018,465 | $ 266,460,871 | ||
Dune Energy, Inc. | ||||
Consolidated Statements of Operations | ||||
(Unaudited) | ||||
Three months ended March 31, | ||||
2013 | 2012 | |||
Revenues: | ||||
Oil and gas revenues | $ 12,121,663 | $ 13,395,116 | ||
Other revenues | 963,150 | - | ||
Total revenues | 13,084,813 | 13,395,116 | ||
Operating expenses: | ||||
Lease operating expense and production taxes | 6,861,401 | 6,158,785 | ||
Accretion of asset retirement obligation | 402,732 | 365,439 | ||
Depletion, depreciation and amortization | 3,167,886 | 4,285,661 | ||
General and administrative expense | 2,588,082 | 3,101,057 | ||
Loss on settlement of asset retirement obligation liability | 22,920 | 423,922 | ||
Total operating expense | 13,043,021 | 14,334,864 | ||
Operating income (loss) | 41,792 | (939,748) | ||
Other income (expense): | ||||
Other income | 602 | 11,297 | ||
Interest expense | (2,434,979) | (2,369,686) | ||
Loss on derivative instruments | (817,590) | (292,422) | ||
Total other income (expense) | (3,251,967) | (2,650,811) | ||
Net loss | $ (3,210,175) | $ (3,590,559) | ||
Net loss per share: | ||||
Basic and diluted | $ (0.05) | $ (0.09) | ||
Weighted average shares outstanding: | ||||
Basic and diluted | 59,041,035 | 38,826,328 | ||
Dune Energy, Inc. | ||||
Consolidated Statements of Cash Flows | ||||
(Unaudited) | ||||
Three months ended March 31, | ||||
2013 | 2012 | |||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net loss | $ (3,210,175) | $ (3,590,559) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
Depletion, depreciation and amortization | 3,167,886 | 4,285,661 | ||
Amortization of deferred financing costs | 196,452 | 178,388 | ||
Stock-based compensation | 632,305 | 653,294 | ||
Loss on settlement of asset retirement obligation liability | 22,920 | 423,922 | ||
Accretion of asset retirement obligation | 402,732 | 365,439 | ||
Unrealized loss on derivative instruments | 842,288 | 528,423 | ||
Changes in: | ||||
Accounts receivable | (1,193,924) | 41,019 | ||
Prepayments and other assets | 2,098,029 | 515,110 | ||
Payments made to settle asset retirement obligations | (76,125) | (945,182) | ||
Accounts payable and accrued liabilities | 5,887,765 | 5,719,226 | ||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 8,770,153 | 8,174,741 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Investment in proved and unproved properties | (18,426,091) | (8,956,747) | ||
Decrease in restricted cash | - | 17,184 | ||
Purchase of furniture and fixtures | (130,006) | (69,308) | ||
Decrease (increase) in other assets | (71,092) | 315,099 | ||
NET CASH USED IN INVESTING ACTIVITIES | (18,627,189) | (8,693,772) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Payments on short-term debt | (695,803) | (672,796) | ||
Decrease (increase) in long-term debt issuance costs | (5,522) | 28,452 | ||
Common stock issuance costs | (75,994) | - | ||
Payments on long-term debt | - | (3,000,000) | ||
NET CASH USED IN FINANCING ACTIVITIES | (777,319) | (3,644,344) | ||
NET CHANGE IN CASH BALANCE | (10,634,355) | (4,163,375) | ||
Cash balance at beginning of period | 22,793,916 | 20,393,672 | ||
Cash balance at end of period | $ 12,159,561 | $ 16,230,297 | ||
SUPPLEMENTAL DISCLOSURES | ||||
Interest paid | $ 562,198 | $ 539,949 | ||
Income taxes paid | - | - | ||
NON-CASH INVESTING AND FINANCIAL DISCLOSURES | ||||
Accrued interest converted to long-term debt | $ 1,593,608 | $ 1,328,357 | ||
Non-cash investment in proved and unproved properties in accounts payable | 789,201 | 2,622,454 | ||
SOURCE Dune Energy, Inc.
