Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported financial and operating results for the three and nine months ended September 30, 2011 and provided an operational update.
Financial and Operating Results
Including Abraxas’ equity interest in Blue Eagle’s production, the three months ended September 30, 2011 resulted in:
- Production of 373.1 MBoe (4,055 Boepd), a 5% increase over Q2 2011, of which 47% was oil or natural gas liquids.
The three months ended September 30, 2011 resulted in:
- Production of 343.1 MBoe (3,729 Boepd), excluding Abraxas’ equity interest in Blue Eagle’s production, a 10% increase over Q2 2011;
- Revenue of $18.0 million;
- EBITDA (a) of $9.6 million;
- Discretionary cash flow (a) of $8.1 million;
- Net income of $20.1 million, or $0.22 per share; and
- Adjusted net income (a) of $3.6 million, or $0.04 per share.
See reconciliation of non-GAAP financial measures below.
Net income for the quarter ended September 30, 2011 was $20.1 million, or $0.22 per share, compared to net loss of $856,000, or $0.01 per share, for the same period in 2010. Adjusted net income, excluding unrealized gains on derivative contracts, for the quarter ended September 30, 2011 was $3.6 million, or $0.04 per share, compared to adjusted net loss, excluding unrealized gains on derivative contracts, of $1.2 million, or $0.02 per share, for the same period in 2010.
Unrealized gains or losses on derivative contracts are based on mark-to-market valuations which are non-cash in nature and may fluctuate drastically period to period. As commodity prices fluctuate, these derivative contracts are valued against current market prices at the end of each reporting period in accordance with Accounting Standards Codification 815, “Derivatives and Hedging,” as amended and interpreted, and require Abraxas to either record an unrealized gain or loss based on the calculated value difference from the previous period-end valuation. For example, oil prices on September 30, 2011 were $79.20 per barrel compared to oil prices on June 30, 2011 of $95.42 per barrel; therefore, the mark-to-market valuation changed considerably period to period which resulted in an unrealized gain. Since September 30, 2011, oil prices have increased significantly and are currently trading above $90 per barrel.