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FX Energy Posts $18.9 Million Loss in 1Q

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   |    Monday,May 11,2015

FX Energy, Inc. announced financial results for its first quarter ended March 31, 2015. The Company reported a first quarter net loss of $18.9 million, or $(0.36) per share.

This compares to a net loss of $1.0 million, or $(0.02) per share, for the first quarter of 2014. Included in the Company's quarterly results were noncash, intracompany foreign exchange losses of $14.3 million and $1.2 million in 2015 and 2014, respectively. Without the foreign exchange losses, the Company would have recorded a net loss of $4.6 million for the quarter ended March 31, 2015, and net income of $0.3 million for the quarter ended March 31, 2014.

Lower Polish Gas Prices and a Strong Dollar Lead to Revenue Declines

Total revenues for the first quarter of both 2015 and 2014 were $6.6 million and $9.5 million, respectively. Oil and gas revenues decreased by approximately $2.9 million from quarter to quarter. Lower oil and natural gas prices and lower production caused the decline.

The average price received in Poland for the first quarter of 2015 was $5.96 per thousand cubic feet, or Mcf, compared to $7.42 per Mcf for the first quarter of 2014. Two factors contributed to the decrease in average prices. First, the Polish low-methane tariff, which serves as the reference price for the Company's gas sales agreements, was 6.1% lower during February and March of 2015. Second, period-to-period strength in the U.S. dollar against the Polish zloty decreased the Company's dollar-denominated gas prices. The average exchange rate during the first quarter of 2015 was 3.73 zlotys per dollar. The average exchange rate during the first quarter of 2014 was 3.06 zlotys per dollar, a change of approximately 22%.

Oil revenues of $386,000 in the first quarter of 2015 were 58% lower than $920,000 during the first quarter of 2014. Oil prices averaged $35.06 per barrel in the first quarter of 2015, compared to $76.91 per barrel in the same quarter of 2014. Oil production decreased by 8% over 2014 levels. Currently all of the Company's oil production is in the United States, mostly from a relatively small oil field in Montana. This oil is a relatively heavy grade of crude and sells at a discount to the standard WTI price.

Total net oil and gas production during the first quarter of 2015 was 1,115 million cubic feet equivalent (Mmcfe) a daily average of 12.4 Mmcfe/d. First quarter 2014 production was 1,229 Mmcfe, a daily average of 13.6 Mmcfe. Production declines at the Company's Roszkow and Komorze wells contributed to the lower production figures in 2015.

Operating Cash Declines Due to Lower Revenues

Net cash used in operating activities was $2.3 million during the first quarter of 2015, compared to net cash provided by operating activities of $4.4 million during the 2014 first quarter. Lower revenues and higher exploration expenses during the first quarter of 2015 caused the reduction in cash flows from operating activities.


Related Categories :

First Quarter (1Q) Update