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Constellation Energy Partners LLC (NYSE Arca: CEP) today reported first quarter 2011 results.
The company produced 3,424 MMcfe during the quarter, for average daily net production of 38.0 MMcfe during the quarter. Production during the quarter was impacted by severe winter weather in the company’s areas of operation in February. During March, the company’s average daily net production was 39.3 MMcfe, which includes approximately 37.5 MMcf per day of natural gas production and 300 barrels per day of oil production.
Operating costs, which include lease operating expenses, production taxes and general and administrative expenses, net of certain non-cash items, averaged $3.51 per Mcfe during the quarter, which was a 5% improvement versus the fourth quarter 2010. Lower operating costs, combined with higher prices on the company’s unhedged production during the quarter, allowed the company to realize $13.4 million in Adjusted EBITDA, a 15% improvement over the prior quarter.
During the first quarter 2011, the company completed 20 net wells and recompletions in the Cherokee Basin with total capital spending of $1.3 million. The company finished the quarter with an additional 14 net wells and recompletions in progress in the Cherokee and Black Warrior Basins.
“We’re off to a great start in executing our 2011 business plan,” said Stephen R. Brunner, President and Chief Executive Officer of Constellation Energy Partners. “Our operating results were in line with our forecast, which allowed us to improve our Adjusted EBITDA, reduce debt, and make meaningful progress on our 2011 capital program.”
On a GAAP basis, the company recorded a net loss of $5.2 million for the first quarter 2011. Included in this net loss is $10.1 million in losses on non-cash mark-to-market activities, which relates to changes in the value of the company’s hedge portfolio stemming from higher commodity forward price levels at the end of the first quarter 2011 as compared to the fourth quarter 2010.