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Abraxas Petroleum Corporation reported financial and operating results for the three and six months ended June 30, 2013.
Bob Watson, Abraxas’ President and CEO commented, "During the first half of 2013 Abraxas successfully executed on numerous asset sales in an effort to refocus our portfolio and true up our balance sheet. With those efforts now behind us, and those barrels removed from our production base, we now endeavor to deliver visible and profitable absolute production growth."
The three months ended June 30, 2013 resulted in:
- Production of 374 MBoe (4,109 Boepd)
- Revenue of $21.5 million
- Adjusted EBITDA(a) of $11.7 million inclusive of Raven Drilling
- Adjusted discretionary cash flow of $10.6 million inclusive of Raven Drilling
- Net income of $7.9 million, or $0.08 per share
- Adjusted net income, excluding certain non-cash items and inclusive of Raven Drilling(a) of $3.0 million, or $0.03 per share
Net income for the three months ended June 30, 2013 was $7.9 million, or $0.08 per share, compared to a net income of $10.9 million, or $0.12 per share, for the three months ended June 30, 2012.
Adjusted net income, excluding certain non-cash items, for the three months ended June 30, 2013 was $3.0 million, or $0.03 per share, compared to adjusted net income, excluding certain non-cash items, of $2.4 million or $0.03 per share for the three months ended June 30, 2012. For the three months ended June 30, 2013 and 2012, adjusted net income excludes the unrealized gain on derivative contracts of $7.5 million and $10.3 million, respectively. Also excluded is a full cost impairment on Canadian assets of $2.0 million and $1.3 million for the quarters ended June 30, 2013 and June 30, 2012, respectively. Included in adjusted net income for the quarters ended June 30, 2013 and June 30, 2012 is the net income from our subsidiary, Raven Drilling, LLC of $0.7 million and $0.5 million, respectively.
Pursuant to SEC regulation S-X, no income is recognized for Raven Drilling, LLC. Contractual drilling services performed in connection with properties in which Abraxas holds an ownership interest cannot be recognized as income, rather it is credited to the full cost pool and recognized through lower amortization as reserves are produced.
Unrealized gains or losses on derivative contracts are based on mark-to-market valuations which are non-cash in nature and may fluctuate drastically from period to period. As commodity prices fluctuate, these derivative contracts are valued against current market prices at the end of each reporting period in accordance with Accounting Standards Codification 815, “Derivatives and Hedging,” as amended and interpreted, and require Abraxas to either record an unrealized gain or loss based on the calculated value difference from the previous period-end valuation. For example, NYMEX oil prices on June 30, 2012 were $84.96 per barrel compared to $96.56 on June 30, 2013; therefore, the mark-to-market valuation changed considerably period to period.