Exploration & Production | Quarterly / Earnings Reports | Production | Third Quarter (3Q) Update
PetroQuest Tags Highest Quarterly Production in Company History
Print
|
PetroQuest Energy, Inc. reported net income available to common stockholders for the quarter ended September 30, 2014 was $4,671,000, or $0.07 per share, compared to third quarter 2013 net income available to common stockholders of $383,000, or $0.01 per share.
Charles T. Goodson, Chairman, Chief Executive Officer and President, commented: "Our 2014 Cotton Valley results have greatly exceeded our pre-drill expectations and we are looking forward to a more robust drilling program in this area for the foreseeable future. With only six Cotton Valley wells contributing to this year's program, we grew our total Carthage estimated proved reserves and production by 94% and 195%, respectively, from December 31, 2013, which speaks volumes for the growth potential of this liquids rich asset. Additionally, we are nearing total depth on our Thunder Bayou prospect which could have a significant impact on the Company's 2015 growth profile."
Production for the third quarter of 2014 was 11.6 Bcfe, compared to 10.9 Bcfe for the comparable period of 2013. Third quarter 2014 production was the highest quarterly production in the Company's history. For the first nine months of 2014, production was 32.1 Bcfe, compared to 27.8 Bcfe for the comparable period of 2013. Oil and NGL volumes made up approximately 30% of third quarter 2014 production as compared to 23% in the third quarter of 2013.
Oil volumes for the third quarter of 2014 were negatively impacted by extended downtime from a third party pipeline servicing Ship Shoal 238 and facilities work at West Delta 89 and La Cantera. Ship Shoal 238 and West Delta 89 have been returned to full production.
Operations Update
The company has updated its operating segments, which can be accessed below:
PetroQuest's Cotton Valley Wells 'Exceeding Expectations'; Adds Rig
PetroQuest Cuts Well Costs in the Woodford; Talks Results
Gulf Coast
At the Thunder Bayou prospect, the Company is currently drilling at approximately 18,000 feet. The prospect has a proposed total depth of 21,000 feet, which the Company expects to reach during the fourth quarter of 2014. The Company has an approximate 50% working interest in this high impact prospect.
4th Quarter 2014 Guidance
The Company previously initiated fourth quarter 2014 guidance assuming La Cantera facility work would be completed in September and total gross field production would be restored to approximately 110 MMcfe/d (16.5 MMcfe/d, net). Continued facility work has resulted in a reduction to fourth quarter estimated La Cantera volumes to 60 MMcfe/d (7.5 MMcfe/d, net). While La Cantera production volumes are forecasted to be reduced during the fourth quarter of 2014, the Company does not expect this to impact its original estimate for reserve recovery. In addition, initial production was later than expected on two recent pads in the Company's West Relay field.
As a result, the Company provides the following update to fourth quarter guidance:
Financial Results
For the first nine months of 2014, the Company reported net income available to common stockholders of $24,306,000, or $0.37 per share, compared to net income available to common stockholders of $6,652,000, or $0.10 per share, for the 2013 period.
Discretionary cash flow for the third quarter of 2014 was $30,438,000, as compared to $26,717,000 for the comparable 2013 period. For the first nine months of 2014, discretionary cash flow was $100,079,000, as compared to discretionary cash flow of $65,158,000 for the first nine months of 2013. See the attached schedule for a reconciliation of net cash flow provided by operating activities to discretionary cash flow.
Stated on an Mcfe basis, unit prices including the effects of hedges for the third quarter of 2014 were $4.88 per Mcfe, as compared to $5.10 per Mcfe in the third quarter of 2013. For the first nine months of 2014, unit prices including the effects of hedges, were $5.52 per Mcfe, as compared to $4.66 per Mcfe for the first nine months of 2013. Oil and gas sales during the third quarter of 2014 were $56,486,000, as compared to $55,578,000 in the third quarter of 2013. For the first nine months of 2014, oil and gas sales were $177,033,000 compared to oil and gas sales of $129,630,000 for the first nine months of 2013.
Lease operating expenses for the third quarter of 2014 increased to $13,019,000, as compared to $12,652,000 in the third quarter of 2013. LOE per Mcfe decreased to $1.13 during the third quarter of 2014, as compared to $1.16 in the third quarter of 2013. For the first nine months of 2014, lease operating expenses increased to $1.17 per Mcfe from $1.12 per Mcfe in the comparable period of 2013. The increase in per unit lease operating expenses for the nine month period is primarily due to an increase in expensed workovers during the 2014 period as compared to the 2013 period.
Depreciation, depletion and amortization on oil and gas properties for the third quarter of 2014 was $1.89 per Mcfe, as compared to $2.03 per Mcfe in the third quarter of 2013. For the first nine months of 2014, DD&A on oil and gas properties was $1.98 per Mcfe compared to $1.76 per Mcfe for the comparable period of 2013. The increase in the per unit DD&A rate for the nine month period is primarily the result of the July 2013 Gulf of Mexico acquisition, which had a higher cost per unit as compared to our overall amortization base.
Interest expense for the third quarter of 2014 decreased to $7,050,000, as compared to $8,071,000 in the third quarter of 2013. For the first nine months of 2014, interest expense was $22,066,000, compared to $14,051,000 for the comparable period of 2013. The increase in interest expense during the nine month 2014 period was primarily the result of the issuance of $200 million of 10% senior notes due 2017 in July 2013 to finance the Gulf of Mexico acquisition.
General and administrative expenses during the quarter and nine months ended September 30, 2014 totaled $6,319,000 and $19,028,000, respectively, as compared to expenses of $9,132,000 and $20,199,000 during the comparable 2013 periods. General and administrative expenses during the 2013 periods included approximately $4 million in acquisition related costs associated with the Gulf of Mexico acquisition in July 2013. General and administrative expenses included non-cash sharebased compensation expenses of $1,309,000 and $1,325,000 during the third quarters of 2014 and 2013, respectively, and $4,025,000 and $3,105,000 for the respective nine month periods ended September 30, 2014 and 2013.