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PetroQuest Energy Inc. recorded net income available to common stockholders for the quarter ended June 30, 2013 of $3,662,000, or $0.06 per share, compared to second quarter 2012 net loss available to common stockholders of $54,520,000, or $0.87 per share.
Charles T. Goodson, Chairman, Chief Executive Officer and President, commented: "With the closing of the Gulf of Mexico acquisition in July, we view the third quarter of 2013 as an inflection point in our oil production and associated cash flow. We have taken advantage of the recent rally in crude prices by layering in multiple hedging contracts at more attractive prices than we used in our valuation of the assets. On a pro forma basis, the acquired assets would have provided a 60% increase to our first quarter 2013 EBITDA on daily production of 967 barrels of oil and 19 MMcfe of gas. Over the next several weeks, we expect to increase oil production from the acquired assets to 2,100 barrels per day, which should translate into a material cash flow contribution."
Operations Update
The company has reported operations updates on all of its unconventional sectors, which can be accessed below:
PetroQuest to Add Woodford Rig; Eyes 213% Growth by 2014
PetroQuest Talks Cotton Valley Results, MissLime Seismic
Financial Results
For the first six months of 2013, the Company reported net income available to common stockholders of $6,269,000, or $0.10 per share, compared to a net loss available to common stockholders of $73,128,000, or $1.17 per share, for the 2012 period. During the second quarter and six month periods of 2012, the Company recognized non-cash ceiling test write-downs of $53,485,000 and $73,596,000, respectively, as a result of the impact of low natural gas prices on the future discounted net cash flows from its estimated proved reserves.
Discretionary cash flow for the second quarter of 2013 was $19,809,000, as compared to $20,068,000 for the comparable 2012 period. For the first six months of 2013, discretionary cash flow was $38,441,000 compared to discretionary cash flow of $39,716,000 for the first six months of 2012. See the attached schedule for a reconciliation of net cash flow provided by operating activities to discretionary cash flow.
Production for the second quarter of 2013 was 8.7 Bcfe, compared to 8.4 Bcfe for the comparable period of 2012. For the first six months of 2013, production was 16.9 Bcfe, compared to 16.6 Bcfe for the comparable period of 2012. Adjusted for the Fayetteville asset divestiture in December 2012, production during the second quarter and the first six months of 2013 was 9% higher than each of the corresponding 2012 periods. The increase in production during the 2013 periods is primarily due to additional La Cantera production as well as higher liquids rich Woodford production.
Stated on an Mcfe basis, unit prices including the effects of hedges for the second quarter of 2013 were $4.39 per Mcfe, as compared to $3.97 per Mcfe in the second quarter of 2012. For the first six months of 2013, unit prices including the effects of hedges, were $4.37 per Mcfe, as compared to $4.19 per Mcfe for the first six months of 2012. Oil and gas sales during the second quarter of 2013 were $38,076,000, as compared to $33,376,000, in the second quarter of 2012. For the first six months of 2013, oil and gas sales were $74,052,000 compared to oil and gas sales of $69,373,000 for the first six months of 2012.
Lease operating expenses ("LOE") for the second quarter of 2013 decreased to $8,837,000, as compared to $9,085,000 in the second quarter of 2012. LOE per Mcfe was $1.02 for the second quarter of 2013, as compared to $1.08 in the second quarter of 2012. For the first six months of 2013, lease operating expenses decreased to $1.10 per Mcfe from $1.13 per Mcfe in the comparable period of 2012. The decline in LOE during the 2013 periods is primarily the result of a reduction in workovers attributable to repairs and maintenance.
Depreciation, depletion and amortization ("DD&A") on oil and gas properties for the second quarter of 2013 was $1.64 per Mcfe, as compared to $1.84 per Mcfe in the second quarter of 2012. For the first six months of 2013, DD&A on oil and gas properties was $1.59 per Mcfe compared to $1.84 per Mcfe for the comparable period of 2012. The decrease in the per unit DD&A rate is primarily the result of ceiling test write-downs recognized during 2012.
Interest expense for the second quarter of 2013 increased to $3,116,000, as compared to $2,413,000 in the second quarter of 2012. For the first six months of 2013, interest expense was $5,980,000, compared to $4,683,000 for the comparable period of 2012. The increase in interest expense was due to increased borrowings outstanding under the bank credit facility.
Production taxes for the second quarter of 2013 were $1,481,000, as compared to ($1,917,000) in the second quarter of 2012. For the first six months of 2013, production taxes were $2,509,000 compared to ($768,000) for the comparable period of 2012. The increases during the 2013 periods as compared to the corresponding 2012 periods were the result of recording a receivable of $2,717,000 during the second quarter of 2012 for refunds relative to severance tax previously paid on our Oklahoma horizontal wells.
General and administrative expenses during the quarter and six months ended June 30, 2013 totaled $6,351,000 and $11,067,000, respectively, as compared to expenses of $5,999,000 and $11,578,000 during the comparable 2012 periods. General and administrative expenses for the quarter ended June 30, 2013 included $996,000 of transaction costs associated with the Gulf of Mexico acquisition closed on July 3, 2013.