This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

ZaZa Energy Reports Record 2012 Third Quarter Results

Operating expenses for the 2012 third quarter were $51.7 million (including $22 million in impairment charges and $8 million in stock compensation expense), as compared to $6.9 million in the 2011 third quarter, resulting in operating income of $155.5 million, as compared to an operating loss of $2.5 million in the comparable period last year. Net income available to common shareholders for the three months ended September 30, 2012, was $133.8 million, or $1.02 per diluted share, as compared to a net loss of $2.6 million, or a loss per diluted share of $0.03, for the three months ended September 30, 2011.

Third Quarter Milestones and Operational Updates
  • Hess Joint Venture: The Company successfully negotiated the exit of its Joint Venture with Hess Corporation, when the two companies entered into agreements where ZaZa Energy France sold its 50% interest in certain Paris Basin exploration permits to Hess Oil France while retaining a 5% overriding royalty interest capped at $130 million, and divided the Texas assets held by ZaZa Energy, LLC and Hess Corporation in the Eagle Ford area. The division of assets in Texas resulted in ZaZa receiving approximately 60,500 additional net acres in the Eagle Ford core located in Southern Frio, Gonzalez, Fayette, DeWitt, Colorado and Lavaca Counties, increasing ZaZa’s net acreage position from 11,500 to 72,000 net acres. Additionally, and subject to a threshold sales amount and a time limitation, a portion of net proceeds will be paid to ZaZa for any sales of Hess’ retained working interests in the Cotulla Prospect Area. The companies also mutually agreed to terminate their Agreements in both France and Texas. At the closing of this transaction, ZaZa received approximately $69 million in cash in addition to the previously received $15 million dollars related to an amendment of the companies’ Texas joint venture agreements in the second quarter of 2012.
  • Private Offering of Convertible Senior Notes: As announced in the third quarter, but consummated in the first week of the fourth quarter, ZaZa successfully completed the sale and issuance of $40.0 million in aggregate principal amount of 9% Convertible Senior Notes. The Notes will be senior, unsecured obligations and will bear interest at a fixed rate of 9.0% per annum, and will mature in August, 2017, unless earlier converted, redeemed or repurchased. The Company intends to use the net proceeds from the offering to fund drilling capital expenditures and leasehold transactions, as well as for general corporate purposes.
  • Filing of Financial Statements: During the third quarter, ZaZa filed its Form 10-K for the period ended December 31, 2011, and both its first and second quarter Form 10-Qs for the periods ending March 31, 2012, and June 30, 2012, respectively. As announced on September 13, 2012, ZaZa was informed by NASDAQ that it regained full compliance with NASDAQ’s continued listing standards.
  • Management Enhancements: The Company announced the appointments of Todd Brooks as Chief Executive Officer, Ian Fay as Chief Financial Officer and John Hearn, Jr. as Chief Operating Officer. All three senior executives have significant experience in the oil & gas sector, in negotiating and executing financial transactions and in asset development. ZaZa also continued to enhance its operating team across its Eaglebine and Eagle Ford properties.
  • Eaglebine/Woodbine Stingray Well: During the third quarter, ZaZa completed the initial pilot hole drilling on its Eaglebine Stingray A-1H well in Walker County, TX. The Company officially commenced hydraulic fracturing operations today, with initial production planned for late November. Additionally, and as previously announced, ZaZa has entered into a multi-well rig contract with Nabors Drilling USA and has entered into a multi-year lease for a field office and yard near its Eaglebine acreage in Walker County, as it further appraises and delineates its Eaglebine acreage position. Additionally, during the fourth quarter, the Company will begin drilling operations at its Eagle Ford Boening Well.

Mr. Brooks added, “The decision to exit our Joint Venture and divide assets with Hess was mutual and in the best interest of our Company and our shareholders. It provided us financial resources, a significantly larger resource base and Working Interest in the Eagle Ford, and the opportunity to develop these resources at a more aggressive pace. Additionally, the large, strategic 90,000 net acre block we have begun to develop in the Eaglebine play is located in the thickest part of one of the most prolific emerging oil and gas resource plays in North America.”

2 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs