Pinnacle Announces Third Quarter Earnings
SHERIDAN, Wyo., Nov. 23 /PRNewswire-FirstCall/ -- Pinnacle Gas Resources, Inc. (Nasdaq: PINN) today reported the Company's financial results for the third quarter and nine months ended September 30, 2009 which included the following information:
Results for the Third Quarter 2009-
- Revenue of $3.7 million, including the impact of cash-settled hedges
- Cash operating expenses of $2.7 million, a 44% decrease compared to the third quarter of 2008
- Net Loss of $39.0 million, or Adjusted Net Loss of $1.3 million before non-cash net charges noted below
- EBITDA, as defined below, of $1.3 million
Sales production volumes during the third quarter of 2009 were 0.67 billion cubic feet (Bcf), 35 percent lower compared to 1.04 Bcf during the third quarter of 2008. The decrease was primarily due to the shutting-in of wells due to the low price environment for gas sold in the Rocky Mountain region. Revenues from the sale of natural gas production, which includes gas sales of $1.7 million and realized hedge settlements of $2.0 million, for the third quarter of 2009, were $3.7 million, as compared to $6.4 million during the third quarter of 2008. The decrease in revenues was primarily driven by significantly lower realized natural gas prices along with decreased production. Pinnacle's average natural gas sales price for the third quarter decreased 54% percent to $2.50 per thousand cubic feet (Mcf) compared to $5.49 per Mcf for the third quarter of 2008. Including the effect of hedges, the Company's average natural gas sales price was $5.52 per Mcf compared to $6.19 per Mcf for the third quarter 2008.
For the third quarter 2009 the Company reported operating expenses comprised of transportation and compression expenses, lease operating expenses, production taxes and general and administrative costs of $2.7 million or $4.07 per Mcf compared to $4.9 million or $4.77 per Mcf for the third quarter 2008.For the third quarter of 2009, the Company reported adjusted net loss of $1.3 million, or $0.04 per basic and diluted share, respectively, excluding a net $37.7 million non-cash, after-tax expense, comprised of a marked-to-market unrealized loss of $3.1 million on derivatives (which is due in large part to the roll off of the third quarter hedges and to rising futures prices), and a non-cash ceiling test write-down of $34.6 million primarily due to low natural gas prices coupled with the impairment of unevaluated properties cost basis into the full cost pool. For the third quarter of 2008, the Company reported adjusted net loss of $1.0 million, or $0.03 per basic and diluted share, respectively, excluding a non-cash, after-tax expense of a marked-to-market unrealized gain of $10.0 million on derivatives. The Company reported a net loss of $39.0 million, or $1.31 per basic and diluted share, for the third quarter of 2009, as compared to a net income of $8.9 million, or $0.31 and $0.30 per basic and diluted share, respectively for the same quarter during 2008.
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