Ian Fay, Chief Financial Officer of ZaZa added, “With the cash received from the Hess division of assets, we paid down approximately one third of our debt on our Senior Secured Notes, while improving our balance sheet and liquidity position. We have focused exploration and development efforts in our Eagle Ford and Eaglebine acreage and believe we have sufficient resources at our disposal to execute our drilling plans. We are also exploring strategic and operational alternatives to quickly and efficiently tap the resources we know are prevalent in these plays and which will provide additional capital to further develop our assets.”
Nine-Month Financial Comparisons
Total revenues and other income for the nine-month period ended September 30, 2012, were $224.0 million as compared to $16.3 million for the comparable 2011 nine-month period. This includes oil and gas revenues of $27.0 million and $1.3 million for the nine month periods ended September 30, 2012, and September 30, 2011, respectively. Other income for the 2012 nine-month period was $197.0 million and there was no other income realized in the comparable year-ago period.
Operating expenses for the 2012 nine-month period were $154.7 million (including legal and advisory fees incurred in connection with the Combination of $9.7 million, payment of $4.8 million to four executives of ZaZa LLC pursuant to net profit agreements between ZaZa LLC and each such executive, bonuses to ZaZa LLC Members of $17.5 million triggered by the Combination, as well as stock compensation expense of $13 million and impairment charges of $62.5 million) as compared to $11.2 million for the nine-month period ended September 30, 2011. The Company reported operating income of $62.5 million compared to $5.2 million for the comparable nine-month periods in 2012 and 2011, respectively. For the 2012 nine-month period, ZaZa reported a net loss of $33.4 million, or a loss per diluted share of $0.35, as compared to net income available to common shareholders of $5.0 million, or earnings per diluted share of $0.07.