Constellation Energy Partners LLC (NYSE MKT: CEP) today reported third quarter 2012 results.
The company produced 3,126 MMcfe during the third quarter, which is down less than 1% versus the second quarter 2012, for average daily net production of 34.0 MMcfe during the third quarter. Year-to-date, the company produced 9,494 MMcfe for average daily net production of 34.6 MMcfe, which is down approximately 9% versus the first nine months of 2011.
The company’s revenue of $6.5 million for the third quarter 2012 includes revenue from sales of $9.7 million, revenue from hedge settlements of $6.3 million, a non-cash loss on mark-to-market activities of $10.2 million, and revenue from services provided to third parties of $0.7 million. Taken together, the company’s revenue from sales and hedge settlements totaled $16.0 million in the third quarter, which is unchanged from the second quarter of 2012. For the year-to-date, approximately 30% of the company’s revenue from sales has resulted from oil sales.
Operating costs, which include lease operating expenses, production taxes and general and administrative expenses, net of certain non-cash items, averaged $3.44 per Mcfe for the third quarter 2012 compared to $3.24 for second quarter 2012. For the year-to-date, operating costs averaged $3.36 per Mcfe, which compares to $3.41 for the first nine months of 2011.Adjusted EBITDA for the third quarter 2012 was $5.6 million, which is down about 10% versus the second quarter 2012 as a result of higher operating expenses recorded by the company in the third quarter 2012. Adjusted EBITDA for the year-to-date was $17.8 million. On a GAAP basis, the company recorded a net loss of $11.2 million for the third quarter 2012 and a net loss of $10.3 million for the year-to-date. The company completed 14 net wells and recompletions on capital spending of $3.7 million in the third quarter 2012. These well additions resulted in 62 net wells and recompletions for the year-to-date, and the company had an additional 55 net wells and recompletions in progress as of Sep. 30, 2012. Drilling activities remain focused on oil potential in the company’s existing asset base as well as capital efficient recompletions. The company continues to fund its capital program using cash flow from operations.