Constellation Energy Partners LLC (NYSE Arca: CEP) today reported second quarter 2011 results.
The company produced 3,545 MMcfe during the second quarter, for average daily net production of 39.0 MMcfe during the quarter and 38.5 MMcfe for the year-to-date ended June 30, 2011, which includes average net oil production for the year-to-date of approximately 276 barrels per day. Operating costs, which include lease operating expenses, production taxes and general and administrative expenses, net of certain non-cash items, averaged $3.08 per Mcfe during the second quarter and $3.30 for the year-to-date.
Adjusted EBITDA for the second quarter was $56.7 million, which includes $41.3 million in hedge settlements related to the hedge restructuring that the company announced in June 2011. Excluding the hedge settlements, Adjusted EBITDA for the second quarter was $15.3 million, which represents a 14% improvement over the first quarter 2011.
On a GAAP basis, the company recorded net income of $3.3 million for the second quarter 2011.The company completed 19 net wells and recompletions with total capital spending of $3.1 million during the second quarter 2011, and finished the quarter with an additional 16 net wells and recompletions in progress. The company also announced that its board of managers approved a $2 million increase in the company’s capital budget for 2011. With the increase, the company now forecasts that it will spend between $12 million and $14 million this year, with drilling efforts focused primarily on oil potential in the company’s asset base as well as its most capital efficient recompletion opportunities. “We had a good second quarter and have posted solid results for the first half of this year,” said Stephen R. Brunner, President and Chief Executive Officer of Constellation Energy Partners. “We like the progress we’ve seen in drilling our oil opportunities this year, and believe the $2 million increase in our capital budget will allow us to further exploit that potential in 2011.”