ZaZa Energy Reports Record 2012 Third Quarter Results

Additional Updates

On October 2, 2012, ZaZa’s Board of Directors provided management the authorization to negotiate the sale of the Company’s French subsidiaries (“ZaZa France” or “ZEF”). Numerous unsolicited offers were received prior to this authorization, and ZaZa signed an exclusivity agreement with one company to begin due diligence. As such, pursuant to ASC 360, the Company assessed the carrying value of its French assets compared to the preliminary negotiations on the purchase price, less costs to sell. Based on that analysis, the Company recorded an impairment to oil and gas properties of $20.6 million for the three and nine-month periods ended September 30, 2012.

Mr. Brooks commented, “The effort to sell our France assets is consistent with our stated strategy to divest non-core assets, improve our capital structure and focus resources on the Eaglebine and Eagle Ford territories in Texas, as we believe these operations will result in greater value for our shareholders. That has been, and continues to be, our primary focus.”

About ZaZa Energy Corporation

Headquartered in Houston, Texas, with offices in Corpus Christi, Texas and Paris, France, ZaZa Energy Corporation is a publicly-traded exploration and production company with primary assets in the Eagle Ford and Eaglebine resource plays in Texas. More information about the Company may be found at www.zazaenergy.com.

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "forecasts" and similar references to future periods. These statements include, but are not limited to, statements about ZaZa’s ability to execute on exploration, production and development plans, estimates of reserves, estimates of production, future commodity prices, exchange rates, interest rates, geological and political risks, drilling risks, product demand, transportation restrictions, actual recoveries of insurance proceeds, the ability of ZaZa to obtain additional capital, and other risks and uncertainties described in the Company’s filings with the Securities and Exchange Commission. While forward-looking statements are based on our assumptions and analyses that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties that could cause our actual results, performance and financial condition to differ materially from our expectations. See "Risk Factors" in our 2011 Form 10-K filed with the Securities and Exchange Commission for a discussion of risk factors that affect our business. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future development, or otherwise, except as may be required by law.

ZAZA ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
		September 30,			December 31,
		2012			2011
		(Unaudited)
		(In thousands except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents		$	24,623		$	10,619
Restricted cash			-			111
Accounts receivable — joint interest			2,632			37,303
Accounts receivable — revenue receivable			838			533
Accounts receivable — related party			-			164
Prepayments and other current assets			3,587			2,150
Total current assets			31,680			50,880
Property and equipment
Oil and gas properties, successful efforts method			271,888			17,410
Furniture and fixtures			3,913			2,806
Total property and equipment			275,801			20,216
Accumulated depletion, depreciation and amortization			(10,687)			(1,260)
Property and equipment, net			265,114			18,956
Goodwill			-			-
Other assets			3,232			170
Total assets		$	300,026		$	70,006

Continued on next page

ZAZA ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
		September 30,				December 31,
		2012				2011
		(Unaudited)
		(In thousands except share and per share data)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable — trade		$	9,377			$	38,209
Accounts payable — related parties			115				419
Advances from joint interest owner							112
Accrued liabilities			9,210				19,895
Revolving line of credit			-				5,000
Notes payable to members			-				3,000
Income taxes payable			4,982				123
Total current liabilities			23,684				66,758
Long-term accrued liabilities			348				-
Asset retirement obligations			4,984				309
Deferred income taxes			69,547				-
Subordinated notes			47,330				-
Senior Secured Notes, net of discount			46,752				-
Warrants associated with Senior Secured Notes			38,947				-
Total liabilities			231,592				67,067
Stockholders’ equity (deficit) (See Note 1):
Preferred stock, $0.01 par value, 25,000,000 shares authorized; zero issued or outstanding			-				-
Common stock, $0.01 par value, 250,000,000 shares authorized; 101,769,953 and 75,976,500 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively			1,018				760
Additional paid-in capital			100,909				-
Accumulated (deficit) retained earnings			(31,275	)			2,179
Accumulated other comprehensive income			(2,218	)			-
Total stockholders’ equity (deficit)			68,434				2,939
Total liabilities and stockholders’ equity (deficit)		$	300,026			$	70,006

ZAZA ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATION
		Three Months Ended September 30,								Nine Months Ended September 30,
		2012				2011				2012				2011
		(Unaudited)								(Unaudited)
		(In thousands, except per share data)								(In thousands, except per share data)
Revenues and other income:
Oil and gas revenues		$	10,211			$	801			$	26,991			$	1,277
Bonus income			-				3,560				-				15,049
Other income			196,985				-				197,027				-
Total revenues and other income			207,196				4,361				224,018				16,326
Operating costs and expenses:
Lease operating expense			3,457				596				8,894				627
Exploration expense			3,181				-				3,284				-
Depreciation, depletion and amortization			4,130				200				10,395				485
Accretion expense			54				1				411				1
Impairment of oil and gas properties			22,746				-				22,746				-
Impairment of goodwill			-				-				39,749				-
General and administrative			18,155				6,104				76,057				10,054
Total operating costs and expenses			51,723				6,901				161,536				11,167
Operating income (loss)			155,473				(2,540	)			62,482				5,159
Other expense
Foreign currency exchange (gain) loss			(85	)			-				138				-
Loss on extinguishment of debt			15,224				-				15,224				-
Interest expense, net			3,736				51				9,999				153
(Gain) loss on fair value of warrants			(27,106	)			-				5,315				-
Total other expense			(8,231	)			51				30,676				153
Income (loss) before taxes			163,704				(2,591	)			31,806				5,006
Income tax provision			29,872				(29	)			65,260				56
Net income (loss) available to common shareholders		$	133,832			$	(2,562	)		$	(33,454	)		$	4,950
Basic income (loss) available to common shareholders per share:		$	1.32			$	(0.03	)		$	(0.35	)		$	0.07
Diluted income (loss) available to common shareholders per share:		$	1.02			$	(0.03	)		$	(0.35	)		$	0.07
Weighted average shares outstanding:
Basic			101,731				75,977		(a)		96,879				75,977	(a)
Diluted			105,020				75,977		(a)		96,879				75,977	(a)
Consolidated Statement of Comprehensive Income
Net income (loss)		$	133,832			$	(2,562	)		$	(33,454	)		$	4,950
Foreign currency translation adjustments, net of taxes			(4,398	)			-				(2,218	)			-
Comprehensive income (loss)		$	129,434			$	(2,562	)		$	(35,672	)		$	4,950

(a) Adjusted to reflect the February 21, 2012 Merger with Toreador Resources Corporation, giving retroactive effect for the issuance of shares to former ZaZa LLC members. See Note 1 to the consolidated financial statements.

« First ‹ Previous 1 2 3 4 5 6 7 Next › Last »