EBITDAX is a supplemental financial measure used by the company’s management and by securities analysts, investors, lenders, rating agencies and others who follow the industry as an indicator of the company’s ability to internally fund exploration and development activities and to service or incur additional debt. The company also uses this measure because EBITDAX allows the company to compare its operating performance and return on capital with those of other companies without regard to financing methods and capital structure. EBITDAX should not be considered as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with generally accepted accounting principles (“GAAP”). EBITDAX excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Therefore, the company’s EBITDAX may not be comparable to similarly titled measures used by other companies.
The table below reconciles the most directly comparable GAAP financial measure to EBITDAX.
Reconciliation of Net Income (Loss) to EBITDAX
For the Three Months Ended December 31,
|For the Year Ended December 31,|
|Net income (loss) as reported||$||11,482,185||$||(1,720,554||)||$||20,845,941||$||(19,441,528||)|
|Loss on plugging and abandonment||-||-||393,599||-|
|Dry hole costs||124,882||-||3,912,823||-|
|Depreciation, depletion and amortization||3,213,959||4,201,758||15,591,048||16,001,826|
|Gain on revision of asset retirement obligations||(303,633||)||-||(303,633||)||-|
|Interest expense, net||4,315,916||4,659,854||17,698,849||22,469,584|
|Loss on settlement of accounts payable||-||-||-||990,786|
|Income tax provision (benefit)||(6,747,749||)||(24,528||)||(6,839,117||)||285,838|
|Unrealized hedging (gain) loss||-||-||-||(435,049||)|
|Gain on extinguishment of debt||-||-||(7,708,486||)||-|
|Other development expenditures||-||-||-||-|