Constellation Energy Partners LLC (NYSE Arca: CEP) today reported third quarter 2010 results.
The company produced 3,758 MMcfe during the quarter, for average daily net production of 40.8 MMcfe, and 11,363 MMcfe for the year-to-date ending September 30, 2010. Operating costs, which include lease operating expenses, production taxes and general and administrative expenses, net of certain non-cash items, averaged $3.52 per Mcfe during the quarter and $3.44 for the year-to-date.
During the quarter, the company completed 10 net wells and recompletions in the Cherokee Basin with total capital spending of $3.6 million. Through September 30, 2010, the company completed 18 net wells and recompletions and had an additional 17 net wells and recompletions in progress, all in the Cherokee Basin.
The company recorded net income before charges of $3.3 million for the quarter, which excludes a $270.4 million non-cash impairment charge related to Cherokee Basin and Woodford Shale assets. Adjusted EBITDA for the quarter was $12.9 million. For the year-to-date, Adjusted EBITDA was $42.5 million.
“Our operating performance continues to be in line with our 2010 forecast, which has allowed us to reduce our debt by $23.5 million so far this year” said Stephen R. Brunner, President and Chief Executive Officer of Constellation Energy Partners. “Although today’s natural gas price environment has caused us to recognize a non-cash impairment charge on some of our acquired assets, we’re still confident about the opportunities in our existing asset base, our competitive position in the two basins in which we operate, our hedge position through 2014, and our prospects for the long-term.”
The company had a cash balance of $13.2 million as of September 30, 2010. Outstanding debt under the company’s credit facility currently totals $171.5 million, leaving the company with $33.5 million in available borrowing capacity at the company’s current borrowing base of $205 million.