Welcome!

News Feed Item

Miller Energy Resources Reports Third Quarter Results

Reports 174% Increase in Production and 108% Increase in Total Revenues to $16.6 Million

KNOXVILLE, TN -- (Marketwired) -- 03/12/14 -- Miller Energy Resources, Inc. ("Miller") (NYSE: MILL) reported its results today for the third quarter of fiscal 2014, which ended January 31, 2014. Total revenues for the quarter were $16.6 million compared to $8.0 million in the third quarter of the prior fiscal year, primarily driven by a 174% increase in net production, from 82,327 BOE to 225,377 BOE, over that same period. Loss before income taxes was $5.3 million for the third quarter of fiscal 2014, compared to a loss before income taxes of $9.3 million for the third quarter of fiscal 2013. Adjusted EBITDA for the third quarter of fiscal 2014 was $4.3 million, compared to an adjusted EBITDA loss of $0.8 million in the third quarter of fiscal 2013.

"Our production reached another all-time high this quarter as we nearly tripled our oil production in Alaska as compared to the third quarter of fiscal 2013. With the addition of the Sword #1 well, the recent closing of the new financing with Apollo and Highbridge and the closing of the North Fork acquisition, we have continued to execute our operational and financial plans to increase production, revenue and cash flows," said Scott M. Boruff, Miller's Chief Executive Officer. "In addition, we saw substantial increases in our proved developed reserve volumes and corresponding PV-10 values in a new reserve report by Ryder Scott Company, primarily as a result of our reworks on the Osprey platform and the drilling of our Sword #1 well."

"We continue to focus on our aggressive drilling program in Alaska, where we have drilling rigs at work on our WMRU-2B and RU-9 oil wells, and our WMRU-8 oil well is currently being brought online. We have also closed the acquisition of the North Fork Unit, and are seeking the needed regulatory approval to close the acquisition of its associated pipeline. As a result of this transaction, we have increased our net production, drilling locations, and wellbore diversification. We are excited about our recent successes and our plans to continue to grow our company's production and shareholder value," Mr. Boruff concluded.

Third Quarter Highlights

  • Total revenues were $16.6 million for the third quarter of fiscal 2014 compared to $8.0 million in the third quarter of fiscal 2013 primarily due to increased production.

  • Our gross margin percentage on oil and natural gas sales increased to 65% for the third quarter of fiscal 2014 compared with 40% for the third quarter of fiscal 2013, due to our low variable operating costs.

  • Average realized oil prices declined 4% to $94.58 per barrel in the third quarter of fiscal 2014 compared with $98.77 in the third quarter of fiscal 2013.

  • Net production, excluding fuel gas, increased by 174% to 225,377 BOE for the third quarter of fiscal 2014 compared with 82,327 BOE in the third quarter of fiscal 2013. The increase in production was primarily due to increased production from RU-1A and RU-7 and new production coming online in fiscal 2014 from our RU-2A and RU-5B oil sidetracks and our Sword #1 oil well.

  • Invested $28.3 million in capital expenditures during the third quarter of fiscal 2014, primarily to accelerate oil and gas development opportunities in Alaska.

Subsequent to the end of the third quarter of fiscal 2014, we refinanced our prior credit facility and entered into a new credit agreement with Apollo Investment Corporation and Highbridge Principal Strategies. The new facility provides for a $175 million term credit facility at an interest rate of LIBOR plus 9.75%, subject to a 2% LIBOR floor. It also allows us to insert a senior facility of up to $100 million, and allows us to implement a discretionary share repurchase plan. In addition, we closed on the previously announced North Fork acquisition, adding the North Fork Unit, including six producing gas wells, which have averaged 1,280 BOEPD since the date of acquisition.

Third Quarter Results

As noted above, total revenues were $16.6 million in the third quarter of fiscal 2014 compared to $8.0 million in the third quarter of the prior fiscal year, an increase of approximately 108% quarter-over-quarter, primarily due to increased oil revenues. Oil revenues totaled $16.3 million in the third quarter of fiscal 2014 compared to $6.7 million in the third quarter of the prior fiscal year, an increase of approximately 143% due to an increase in net barrels sold. Net barrels sold for the third quarter of fiscal 2014 were 172,856, which represents a 103,777 bbl, or 150%, increase as compared to the same period last year.

The increase in net barrels sold resulted from an increase in oil production for the period. Oil production increased 143,660 bbls, or 190%, to 219,422 bbls. The increase was driven by a 140,741 bbl increase in the Cook Inlet region and a 2,919 bbl increase in the Appalachian region. The production increase in the Cook Inlet region resulted from RU-1A, RU-2A, RU-5B, and RU-7 in our Redoubt Shoals field and our new Sword #1 well being on line during the three months ended January 31, 2014. The production increase in the Appalachian region was a result of new production from our CPP H-1 and Brimstone H-1 wells.

The difference between net barrels sold and net barrels produced is approximately equal to the change in quantity of our crude oil inventory balance during the period. Although we attempt to minimize crude oil inventory balances, shipping schedules in the Cook Inlet region are beyond our control and occasionally require us to store crude oil. In addition, we are required to maintain certain inventory levels in third party pipelines and storage facilities. As noted in the following table, we experienced an above average increase in inventory levels during the third quarter of fiscal 2014, which significantly reduced the potential revenue that may have resulted from our increased oil production during the current period. The increase in our inventory balance primarily resulted from shipping schedules and a requirement to maintain increased inventory levels in third party facilities in the Cook Inlet region.


                                For the Three Months Ended January 31, 2014
                                -------------------------------------------
                                  Cook Inlet    Appalachian       Total
                                -------------  -------------  -------------
In barrels:
  Beginning inventory balance          29,433         17,357         46,790
  Gross production                    254,211         14,330        268,541
  Gross sales                        (197,717)       (13,734)      (211,451)
  Pipeline adjustments                    153             --            153
                                -------------  -------------  -------------
  Ending inventory balance             86,080         17,953        104,033
                                =============  =============  =============

Net change in inventory                56,647            596         57,243
                                =============  =============  =============

Total operating expenses rose to $23.2 million in the third quarter of fiscal 2014 from $14.5 million in the third quarter of fiscal 2013. Oil and gas operating costs increased to $5.8 million in the third quarter of fiscal 2014 compared with $4.1 million in the third quarter fiscal 2013, primarily as a result of increased production. General and administrative expenses were $7.6 million in the third quarter of fiscal 2014 compared with $5.5 million in the third quarter of fiscal 2013, primarily due to increases in salaries and professional fees. Depreciation, depletion and amortization expense rose to $7.6 million in the third quarter of fiscal 2014 compared with $3.3 million in the third quarter of fiscal 2013, primarily as a result of increased production.

Operating loss for the third quarter of fiscal 2014 was $6.6 million compared with an operating loss of $6.5 million in the third quarter of fiscal 2013.

Other income was $1.3 million in the third quarter of fiscal 2014 compared with other expense of $2.8 million in the third quarter of fiscal 2013. The results for the third quarter of fiscal 2014 included a $1.7 million gain on derivatives compared with a $1.7 million loss on derivatives in the third quarter of fiscal 2013. We experience volatility in unrealized gains and losses on derivatives as a result of not using hedge accounting.

Loss before income taxes decreased to $5.3 million for the third quarter of fiscal 2014, compared to a loss before income taxes of $9.3 million for the third quarter of fiscal 2013.

Adjusted EBITDA rose to $4.3 million for the third quarter of fiscal 2014 as compared to an adjusted EBITDA loss of $0.8 million in the third quarter of fiscal 2013.

The Company recorded a net loss attributable to common stockholders of $6.8 million, or $0.15 per diluted share, for the third quarter of fiscal 2014, compared to a net loss attributable to common stockholders of $6.2 million, or $0.14 per diluted share, for the same period in fiscal 2013.

Nine Months Results

Total revenue for the nine months ended January 31, 2014 rose to $48.4 million compared with $27.1 million for the nine months ended January 31, 2013, an increase of approximately 79% year-over-year, primarily due to increased oil revenues. Oil revenues totaled $47.0 million for the nine months ended January 31, 2014 compared to $22.3 million for the nine months ended January 31, 2013, an increase of approximately 111% due to an increase in net barrels sold. Net barrels sold for the nine months ended January 31, 2014 were 469,387, which represents a 260,866 bbl, or 125%, increase as compared to the same period last year.

The increase in net barrels sold resulted from an increase in oil production for the period. Oil production increased 297,444 bbls, or 136%, to 516,138 bbls. The increase was driven by a 290,059 bbls increase in the Cook Inlet region and a 7,385 bbls increase in the Appalachian region. The production increase in the Cook Inlet region resulted from RU-1A, RU-2A, RU-5B, and RU-7 in our Redoubt Shoals field and our new Sword #1 well being on line during the nine months ended January 31, 2014. The production increase in the Appalachian region was a result of new production from our CPP H-1 and Brimstone H-1 wells.

The difference between net barrels sold and net barrels produced is approximately equal to the change in quantity of our crude oil inventory balance during the period. Although we attempt to minimize crude oil inventory balances, shipping schedules in the Cook Inlet region are beyond our control and occasionally require us to store crude oil. In addition, we are required to maintain certain inventory levels in third party pipelines and storage facilities. As noted in the following table, we experienced an above average increase in inventory levels during the first nine months of fiscal 2014, which significantly reduced the potential revenue that may have resulted from our increased oil production during the current period. The increase in our inventory balance primarily resulted from shipping schedules and a requirement to maintain increased inventory levels in third party facilities in the Cook Inlet region.


                                 For the Nine Months Ended January 31, 2014
                                -------------------------------------------
                                  Cook Inlet    Appalachian       Total
                                -------------  -------------  -------------
In barrels:
  Beginning inventory balance          30,130         24,063         54,193
  Gross production                    595,082         37,953        633,035
  Gross sales                        (537,782)       (44,063)      (581,845)
  Pipeline adjustments                 (1,350)            --         (1,350)
                                -------------  -------------  -------------
  Ending inventory balance             86,080         17,953        104,033
                                =============  =============  =============

Net change in inventory                55,950         (6,110)        49,840
                                =============  =============  =============

Total operating expenses rose to $65.5 million for the nine months ended January 31, 2014 from $44.7 million in the first nine months of fiscal 2013. Oil and gas operating costs increased to $18.2 million for the nine months ended January 31, 2014, compared with $13.0 million for the nine months ended January 31, 2013, primarily due to increased production. General and administrative expenses increased 24% to $21.1 million for the nine months ended January 31, 2014 compared with $17.1 million for the nine months ended January 31, 2013 due to increases in salaries and professional fees. Depreciation, depletion, and amortization expense increased to $22.4 million for the nine months ended January 31, 2014 compared with $9.5 million for the nine months ended January 31, 2013, primarily as a result of increased production.

Operating loss for the nine months ended January 31, 2014 was $17.0 million compared with an operating loss of $17.6 million for the nine months ended January 31, 2013.

Other expense was $9.6 million for the nine months ended January 31, 2014 compared with $2.1 million in other income for the nine months ended January 31, 2013. The results for the nine months ended January 31, 2014 included a $5.6 million loss on derivatives compared with a $5.2 million gain on derivatives for the nine months ended January 31, 2013. We experience volatility in unrealized gains and losses on derivatives as a result of not using hedge accounting.

Loss before income taxes increased to $26.7 million for the nine months ended January 31, 2014, compared to a loss before income taxes of $15.5 million for the nine months ended January 31, 2013.

Adjusted EBITDA rose to $11.4 million for the nine months ended January 31, 2014 as compared to adjusted EBITDA of $2.3 million for the nine months ended January 31, 2013.

The Company recorded a net loss attributable to common stockholders of $24.5 million, or $0.56 per diluted share, for the nine months ended January 31, 2014, compared to a net loss attributable to common stockholders of $12.4 million, or $0.29 per diluted share, for the same period in fiscal 2013.

Outlook

As we progress into the final quarter of fiscal 2014, we believe our inventory of recompletions, workovers, exploration and development projects and newly acquired assets offer numerous growth opportunities. We are in the process of bringing our WMRU-8 onshore oil well online, and have spudded our RU-9 offshore oil well. We have begun moving the Patterson 191 rig to drill our WMRU-2B well, which will utilize the non-producing existing WMRU-2A wellbore to reduce capital costs. We also plan to perforate additional zones in the Sword #1 well. By adding production from the North Fork Unit, RU-9, WMRU-8 and the Sword #1 well, the Company expects to reach 6,000 BOEPD before the end of fiscal 2014.

From a financial perspective, the company is working to secure lower cost first lien financing prior to the end of our fiscal year. In addition, we look forward to continuing our work with Tesoro on the Trans-Foreland Pipeline, which will give us a direct and continuous connection to the Tesoro refinery.

Investor Conference Call

Mr. Scott Boruff, CEO of Miller Energy, Mr. David Voyticky, President, Mr. John Brawley, CFO, and Mr. David Hall, COO, will host Miller's fiscal 2014 third quarter earnings call. To attend the call, please use the dial in information below. When prompted, ask for the "Miller Energy Resources Q3 2014 conference call."


Date:                     March 13, 2014
Time:                     4:30 pm Eastern Time US
Dial-In (U.S.):           +1-877-941-1427
International Dial-In:    +1-480-629-9664
Conference ID:            4674019
Webcast:                  http://public.viavid.com/index.php?id=108273

Please dial in at least 10-minutes before the call to ensure timely participation.

A playback of the call will be available from 7:30 p.m. ET on March 13, 2014 to 11:59 p.m. ET on March 15, 2014. To listen, call 1-877-870-5176 within the United States or 1-858-384-5517 when calling internationally. Please use the replay pin number 4674019.

About Miller Energy Resources

Miller Energy Resources is an oil and natural gas exploration, production and drilling company operating in multiple exploration and production basins in North America. Miller's focus is in Cook Inlet, Alaska and in the heart of Tennessee's prolific and hydrocarbon-rich Appalachian Basin including the Mississippian Lime and Chattanooga Shale. Miller is headquartered in Knoxville, Tennessee with offices in Anchorage, Alaska and Huntsville, Tennessee. The Company's common stock is listed on the NYSE under the symbol MILL.

Statements Regarding Forward-Looking Information

Certain statements in this press release and elsewhere by Miller Energy Resources, Inc. are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve the implied assessment that the resources described can be profitably produced in the future, based on certain estimates and assumptions. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated by Miller Energy Resources, Inc. and described in the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, the potential for Miller to experience additional operating losses; material weaknesses in Miller's internal control over financial reporting and the need to enhance Miller's management, systems, accounting, controls and reporting performance; high debt costs under Miller's existing senior credit facility; potential limitations imposed by debt covenants under the senior credit facility on Miller's growth and ability to meet our business objectives; Miller's ability to meet the financial and production covenants contained in the Apollo Credit Facility; whether Miller are able to complete or commence drilling projects within the expected time frame; litigation risks; the ability to perform under the terms of oil and gas leases, and exploration licenses with the Alaska DNR, including meeting the funding or work commitments of those agreements; uncertainties related to deficiencies identified by the SEC in our Form 10-K for 2011; Miller's ability to successfully acquire, integrate and exploit new productive assets in the future; whether Miller can establish production on certain leases in a timely manner before expiration; the ability to complete the work commitments required as terms of the Susitna Basin Exploration Licenses; the ability to recover proved undeveloped reserves and convert probable and possible reserves to proved reserves; Miller's experience with horizontal drilling; risks associated with the hedging of commodity prices; the dependence on third party transportation facilities; concentration risk in the market for the oil we produce in Alaska; the impact of natural disasters on our Cook Inlet Basin operations; the effect of global market conditions on the ability to obtain reasonable financing and on the prices of Miller's common, Series C and Series D Preferred Stock; the imprecise nature of our reserve estimates; risks related to drilling dry holes or wells without commercial quantities of hydrocarbons; fluctuating oil and gas prices and the impact on Miller's results from operations; the need to discover or acquire new reserves in the future to avoid declines in production; differences between the present value of cash flows from proved reserves and the market value of those reserves; the existence within the industry of risks that may be uninsurable; strong industry competition; constraints on production and costs of compliance that may arise from current and future environmental, FERC and other statutes, rules and regulations at the state and federal level; new regulation on derivative instruments used to manage risk against fluctuating commodity prices; the impact that future legislation could have on access to tax incentives currently enjoyed by Miller; that no dividends may be paid on our common stock for some time; cashless exercise provisions of outstanding warrants; market overhang related to restricted securities and outstanding options, and warrants; the impact of non-cash gains and losses from derivative accounting on future financial results; risks to non-affiliate shareholders arising from the substantial ownership positions of affiliates; the junior ranking of the Series C and Series D Preferred Stock to the Series B Preferred Stock and all indebtedness; the ability to pay dividends on the Series C or Series D Preferred Stock; whether the Series C or Series D Preferred Stock is rated; the ability of the Series C or Series D Preferred Stockholders to exercise conversion rights upon a Change of Control; fluctuations in the market price of the Series C and Series D Preferred Stock; whether additional shares of Series C or Series D Preferred Stock or additional series of preferred stock that rank on parity with the Series C or Series D Preferred Stock are issued; the very limited voting rights held by Series C and Series D Preferred Stockholders; the newness of the Series C and Series D Preferred Stock and their limited trading markets; risks related to the continued listing of the Series C or Series D Preferred Stock on the NYSE; and the effect of the change of control conversion feature of the Series C or Series D Preferred Stock on a potential change in control. Additional information on these and other factors, which could affect Miller's operations or financial results, are included in Miller Energy Resources, Inc.'s reports on file with United States Securities and Exchange Commission including its Annual Report on Form 10-K, as amended, for the fiscal year ended April 30, 2013. Miller Energy Resources, Inc.'s actual results could differ materially from those anticipated in these forward- looking statements as a result of a variety of factors, including those discussed in its periodic reports that are filed with the Securities and Exchange Commission and available on its Web site (www.sec.gov). All forward-looking statements attributable to Miller Energy Resources or to persons acting on its behalf are expressly qualified in their entirety by these factors. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We assume no obligation to update forward-looking statements should circumstances or management's estimates or opinions change unless otherwise required under securities law.


                        MILLER ENERGY RESOURCES, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (Unaudited)
                (Dollars in thousands, except per share data)

                                                    January 31,   April 30,
                                                        2014         2013
                                                    -----------  -----------
                       ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                         $    13,184  $     2,551
  Restricted cash                                         4,066        7,531
  Accounts receivable                                     1,137        3,204
  Alaska production tax credits receivable               19,763       12,713
  Inventory                                               4,944        3,382
  Prepaid expenses and other                              8,371        1,183
                                                    -----------  -----------
Total current assets                                     51,465       30,564
OIL AND GAS PROPERTIES, NET                             568,808      491,314
EQUIPMENT, NET                                           34,860       37,571
OTHER ASSETS:
  Land                                                      542          542
  Restricted cash, non-current                           12,007       10,207
  Deferred financing costs, net                           1,607        2,085
  Other assets                                            1,809          541
                                                    -----------  -----------
Total assets                                        $   671,098  $   572,824
                                                    ===========  ===========
        LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable                                  $    40,538  $    13,129
  Accrued expenses                                       18,527        6,338
  Short-term portion of derivative instruments            1,758          842
  Current portion of long-term debt                          --        6,000
                                                    -----------  -----------
Total current liabilities                                60,823       26,309
OTHER LIABILITIES:
  Deferred income taxes                                 145,890      157,530
  Asset retirement obligation                            20,967       19,890
  Long-term portion of derivative instruments             3,152           --
  Long-term debt, less current portion                   74,268       48,978
                                                    -----------  -----------
Total liabilities                                       305,100      252,707
MEZZANINE EQUITY:
  Series C Cumulative Preferred Stock, redemption
   amount of $78,124, 3,250,000 shares authorized,
   3,069,968 and 1,454,901 shares issued and
   outstanding as of January 31, 2014 and April 30,
   2013, respectively                                    67,097       31,236

STOCKHOLDERS' EQUITY:
  Series D Cumulative Redeemable Preferred Stock,
   redemption amount of $32,342, 4,000,000 shares
   authorized, 1,069,031 and 0 shares issued and
   outstanding as of January 31, 2014 and April 30,
   2013, respectively                                    29,885           --
  Series D Cumulative Redeemable Preferred Stock,
   held in escrow                                        (5,000)          --
  Common stock, $0.0001 par, 500,000,000 shares
   authorized, 45,231,447 and 43,444,694 shares
   issued and outstanding as of January 31, 2014
   and April 30, 2013, respectively                           4            4
  Additional paid-in capital                             97,845       88,184
  Retained earnings                                     176,167      200,693
                                                    -----------  -----------
Total stockholders' equity                              298,901      288,881
                                                    -----------  -----------
Total liabilities and stockholders' equity          $   671,098  $   572,824
                                                    ===========  ===========


                       MILLER ENERGY RESOURCES, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)
          (Dollars in thousands, except share and per share data)

                            Three Months Ended         Nine Months Ended
                                January 31,               January 31,
                         ------------------------  ------------------------
                             2014         2013         2014         2013
                         -----------  -----------  -----------  -----------
REVENUES:
  Oil sales              $    16,348  $     6,720  $    47,012  $    22,310
  Natural gas sales              118          133          671          328
  Other                          162        1,146          749        4,433
                         -----------  -----------  -----------  -----------
Total revenues                16,628        7,999       48,432       27,071
OPERATING EXPENSES:
  Oil and gas operating        5,821        4,118       18,249       12,963
  Cost of other revenue          256        1,051          844        4,084
  General and
   administrative              7,587        5,518       21,092       17,056
  Exploration expense            352          187          786          244
  Depreciation,
   depletion and
   amortization                7,642        3,341       22,352        9,528
  Accretion of asset
   retirement obligation         305          284          903          853
  Other operating
   expense (income), net       1,250           --        1,250          (65)
                         -----------  -----------  -----------  -----------
Total operating expenses      23,213       14,499       65,476       44,663
                         -----------  -----------  -----------  -----------
OPERATING LOSS                (6,585)      (6,500)     (17,044)     (17,592)
OTHER INCOME (EXPENSE):
  Interest expense, net         (407)      (1,117)      (4,051)      (2,785)
  Gain (loss) on
   derivatives, net            1,677       (1,681)      (5,589)       5,215
  Other income
   (expense), net                 42           25           26         (350)
                         -----------  -----------  -----------  -----------
Total other income
 (expense)                     1,312       (2,773)      (9,614)       2,080
                         -----------  -----------  -----------  -----------
LOSS BEFORE INCOME TAXES      (5,273)      (9,273)     (26,658)     (15,512)
  Income tax benefit           2,171        3,931       11,640        6,551
                         -----------  -----------  -----------  -----------
NET LOSS                      (3,102)      (5,342)     (15,018)      (8,961)
  Accretion of Series A,
   C and D preferred
   stock                        (817)        (145)      (1,935)      (2,605)
  Series C and D
   preferred stock
   cumulative dividends       (2,905)        (677)      (7,573)        (809)
                         -----------  -----------  -----------  -----------
NET LOSS ATTRIBUTABLE TO
 COMMON STOCKHOLDERS     $    (6,824) $    (6,164) $   (24,526) $   (12,375)
                         ===========  ===========  ===========  ===========

LOSS PER COMMON SHARE:
  Basic                  $     (0.15) $     (0.14) $     (0.56) $     (0.29)
  Diluted                $     (0.15) $     (0.14) $     (0.56) $     (0.29)
WEIGHTED AVERAGE NUMBER
 OF COMMON SHARES:
  Basic                   44,886,838   43,367,781   44,141,222   42,445,223
  Diluted                 44,886,838   43,367,781   44,141,222   42,445,223


                       MILLER ENERGY RESOURCES, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (Unaudited)
                           (Dollars in thousands)
                                                        Nine Months Ended
                                                           January 31,
                                                     ----------------------
                                                        2014        2013
                                                     ----------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                             $  (15,018) $   (8,961)
Adjustments to reconcile net loss to net cash
 provided by operating activities:
  Depreciation, depletion and amortization               22,352       9,528
  Amortization of deferred financing fees and debt
   discount                                               1,113         549
  Expense from issuance of equity                         5,120       7,630
  Dry hole costs, leasehold impairments and non-cash
   exploration expenses                                     157          --
  Deferred income taxes                                 (11,640)     (6,551)
  Derivative contracts:
    (Gain) loss on derivatives, net                       5,589      (5,215)
    Cash settlements                                     (2,765)      2,276
  Accretion of asset retirement obligation                  903         853
  Other                                                   1,949          --
Changes in operating assets and liabilities:
  Receivables                                             5,084         996
  Inventory                                                 372        (467)
  Prepaid expenses and other assets                      (1,788)     (1,445)
  Accounts payable, accrued expenses and other            3,849       6,944
                                                     ----------  ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES                15,277       6,137

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures for oil and gas properties       (94,388)    (23,213)
  Proceeds from Alaska production tax credits            18,561          --
  North Fork purchase deposit                            (3,000)         --
  Prepayment of drilling costs                           (2,302)         --
  Purchase of equipment and improvements                   (986)     (9,606)
  Proceeds from sale of equipment                            --       2,000
                                                     ----------  ----------
NET CASH USED IN INVESTING ACTIVITIES                   (82,115)    (30,819)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Cash dividends                                         (5,646)       (285)
  Payments on debt                                           --     (24,130)
  Proceeds from borrowings                               20,000      40,000
  Debt acquisition costs                                 (1,900)     (3,854)
  Redemption of preferred stock                              --     (11,240)
  Issuance of preferred stock                            62,704      20,448
  Equity issuance costs                                  (3,893)     (1,576)
  Exercise of equity rights                               4,538       3,832
  Restricted cash                                         1,665        (992)
  Other                                                       3          --
                                                     ----------  ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES                77,471      22,203
                                                     ----------  ----------
NET CHANGE IN CASH AND CASH EQUIVALENTS                  10,633      (2,479)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD          2,551       3,971
                                                     ----------  ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $   13,184  $    1,492
                                                     ==========  ==========
SUPPLEMENTARY CASH FLOW DATA:
  Cash paid for interest                             $    5,805  $    8,895
SIGNIFICANT NON-CASH INVESTING AND FINANCING
 ACTIVITIES:
  Capital expenditures in accounts payable and
   accrued expenses                                  $   32,572  $    6,702
  Reduction of oil and gas properties and equipment
   from applications for Alaska production tax
   credits                                           $   28,906  $       --
  Issuance of Series D Preferred Stock held in
   escrow                                            $    5,000  $       --
  Accretion of preferred stock                       $    1,935  $    2,605

Regulation G Disclosure - Discussion of Non-GAAP Financial Data and Reconciliation to GAAP
This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K, as promulgated by the SEC. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, including that in our public filings.

To supplement the Company's condensed consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use non-GAAP adjusted EBITDA, or adjusted Earnings Before Income Taxes, Depreciation and Amortization, as a measure to evaluate earnings by excluding certain non-cash expenses as set forth in the table below. The Company uses this non-GAAP financial measure for financial and operational decision making and as a means to evaluate period-to-period comparisons. Management believes that this non-GAAP financial measure provides meaningful supplemental information regarding the Company's performance and liquidity. The Company believes that both management and investors benefit from referring to this non-GAAP financial measure in assessing performance and when planning, forecasting and analyzing future periods. This non-GAAP financial measure also facilitates management's internal comparisons to historical performance and liquidity as well as comparisons to competitors' operating results. The Company believes this non-GAAP financial measure is useful to investors both because (1) it allows for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) it is used by our institutional investors and the analyst community to help them analyze the health of the business.

Adjusted EBITDA Reconciliations


                              For the Three Months     For the Nine Months
                                Ended January 31,       Ended January 31,
                             ----------------------  ----------------------
                                2014        2013        2014        2013
                             ----------  ----------  ----------  ----------
                                         (dollars in thousands)
                             ----------------------------------------------
Loss before income taxes     $   (5,273) $   (9,273) $  (26,658) $  (15,512)
Adjusted by:
  Interest expense, net             407       1,117       4,051       2,785
  Depreciation, depletion
   and amortization               7,642       3,341      22,352       9,528
  Accretion of asset
   retirement obligation            305         284         903         853
  Exploration costs                 352         187         786         244
  Stock-based compensation        1,546       2,652       5,120       7,367
  Non-recurring litigation
   settlements and matters        1,998          --       1,998          --
  Derivative contracts:
    (Gain) loss on
     derivatives, net            (1,677)      1,681       5,589      (5,215)
    Cash settlements               (983)       (822)     (2,765)      2,276
                             ----------  ----------  ----------  ----------
Adjusted EBITDA              $    4,317  $     (833) $   11,376  $    2,326
                             ==========  ==========  ==========  ==========

Add to Digg Bookmark with del.icio.us Add to Newsvine

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
Kubernetes is a new and revolutionary open-sourced system for managing containers across multiple hosts in a cluster. Ansible is a simple IT automation tool for just about any requirement for reproducible environments. In his session at @DevOpsSummit at 18th Cloud Expo, Patrick Galbraith, a principal engineer at HPE, discussed how to build a fully functional Kubernetes cluster on a number of virtual machines or bare-metal hosts. Also included will be a brief demonstration of running a Galera M...
According to Forrester Research, every business will become either a digital predator or digital prey by 2020. To avoid demise, organizations must rapidly create new sources of value in their end-to-end customer experiences. True digital predators also must break down information and process silos and extend digital transformation initiatives to empower employees with the digital resources needed to win, serve, and retain customers.
As ridesharing competitors and enhanced services increase, notable changes are occurring in the transportation model. Despite the cost-effective means and flexibility of ridesharing, both drivers and users will need to be aware of the connected environment and how it will impact the ridesharing experience. In his session at @ThingsExpo, Timothy Evavold, Executive Director Automotive at Covisint, will discuss key challenges and solutions to powering a ride sharing and/or multimodal model in the a...
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lea...
IoT is fundamentally transforming the auto industry, turning the vehicle into a hub for connected services, including safety, infotainment and usage-based insurance. Auto manufacturers – and businesses across all verticals – have built an entire ecosystem around the Connected Car, creating new customer touch points and revenue streams. In his session at @ThingsExpo, Macario Namie, Head of IoT Strategy at Cisco Jasper, will share real-world examples of how IoT transforms the car from a static p...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
From wearable activity trackers to fantasy e-sports, data and technology are transforming the way athletes train for the game and fans engage with their teams. In his session at @ThingsExpo, will present key data findings from leading sports organizations San Francisco 49ers, Orlando Magic NBA team. By utilizing data analytics these sports orgs have recognized new revenue streams, doubled its fan base and streamlined costs at its stadiums. John Paul is the CEO and Founder of VenueNext. Prior ...
One of biggest questions about Big Data is “How do we harness all that information for business use quickly and effectively?” Geographic Information Systems (GIS) or spatial technology is about more than making maps, but adding critical context and meaning to data of all types, coming from all different channels – even sensors. In his session at @ThingsExpo, William (Bill) Meehan, director of utility solutions for Esri, will take a closer look at the current state of spatial technology and ar...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
Businesses are struggling to manage the information flow and interactions between all of these new devices and things jumping on their network, and the apps and IT systems they control. The data businesses gather is only helpful if they can do something with it. In his session at @ThingsExpo, Chris Witeck, Principal Technology Strategist at Citrix, will discuss how different the impact of IoT will be for large businesses, expanding how IoT will allow large organizations to make their legacy ap...
The many IoT deployments around the world are busy integrating smart devices and sensors into their enterprise IT infrastructures. Yet all of this technology – and there are an amazing number of choices – is of no use without the software to gather, communicate, and analyze the new data flows. Without software, there is no IT. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the protocols that communicate data and the emerging data analy...