Delta Petroleum Corporation Announces Third Quarter 2009 Operating Results
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DENVER, Nov. 5 /PRNewswire-FirstCall/ -- Delta Petroleum Corporation (Nasdaq: DPTR), an independent oil and gas exploration and development company, announced its financial and operating results for the third quarter of 2009.
GRAY 31-23 COMPLETION RESULTS
Delta has finished completion efforts on the Gray well. As previously announced, while all zones encountered significant high pressure, they flowed primarily water with minor amounts of non-commercial associated gas. Additional testing was performed in the basalt section of the well with a similar outcome, and therefore the Gray well has been expensed as a dry hole in the Company's third quarter financial statements.
Delta's Columbia River Basin team has reviewed available data in order to provide possible explanations regarding the lack of commercial gas from the Wenatchee sands of the Gray well. One of the challenges generally experienced in the industry is the fact that fresh water and hydrocarbons are almost indistinguishable on electric logs. Therefore the gas shows and over-pressured reservoir seen in the Gray well during drilling suggested a gas reservoir with some associated water; however, completion results instead revealed that the reservoir is a fresh water reservoir with some associated natural gas.
The lessons learned from the drilling of the Gray well have provided the Company with important and strategic information that will be of benefit in any future drilling operations in the Columbia River Basin. Numerous issues related to drilling through the basalt formation were identified, analyzed and explained, and management believes that this information can be translated into potentially significant savings of both cost and time in the future. While gas was liberated, no source rock was drilled in this well, thus Delta's primary objective, the deeper Roslyn formation, remains a viable target.
John Wallace, the Company's President and COO said, "We are extremely disappointed with the results of the Gray well, but exploration drilling carries with it significant risks. We continue to believe that the Roslyn formation, which has produced elsewhere in the Columbia River Basin, has significant potential and should be tested. In addition, data obtained during the drilling of the Gray well has allowed for better seismic interpretation that can now be applied to the Company's leasehold in the basin. A more accurate representation of the structural configuration below the basalt section, including the Roslyn formation, will help direct us to more precise geologic prospects and potential future well locations."
"While much attention was paid to the drilling and completion of the Gray well, we want to highlight to our stockholders where the intrinsic value lies within Delta. Delta's operational strength is in the Rockies and go forward strategy focused on lower-risk development projects will allow the Company to realize consistent, efficient reserve and production growth in the Piceance Basin, once natural gas prices recover. We believe that we have the track record, experience and assets that will allow us to execute this strategy."
Dan Taylor, the Company's Chairman stated, "Delta will continue to strive to deliver value to our shareholders through the development of our core assets and the execution of our cost control strategy. I concur with John on the underlying value of Delta being our proved and probable reserves in the Piceance Basin, which are not adequately reflected in our current share price."
BORROWING BASE REDETERMINATION
On October 30, 2009, the Company and its senior lenders completed the borrowing base re-determination under the Company's revolving credit facility. As part of the redetermination, the Company and its lenders entered into an amendment to the credit facility pursuant to which the lenders provided waivers from the December 31, 2009 and March 31, 2010 current ratio and consolidated secured debt to EBITDAX ratio covenants, and the borrowing base was reduced from $225.0 million to $185.0 million. The amendment requires that Delta maintain minimum availability of $20.0 million essentially reducing Delta's availability under the credit facility. In addition, capital expenditures will be limited to $10.0 million for the quarter ended December 31, 2009, $10.0 million for the quarter ended March 31, 2010, and $5.0 million for the quarter ended June 30, 2010, provided that any excess of the limitation over the amount of actual expenditures may be carried forward from an earlier quarter to a subsequent quarter. The next scheduled re-determination is March 1, 2010.
RESULTS FOR THE THIRD QUARTER
For the quarter ended September 30, 2009, the Company reported production of 5.14 billion cubic feet equivalents (Bcfe), a decrease of 22% when compared with the third quarter of 2008 and a decrease of 10% when compared with the second quarter of 2009. Total revenue decreased 67% to $23.9 million in the quarter, versus revenue of $72.0 million in the quarter ended September 30, 2008. Revenue from oil and gas sales declined 64% to $21.5 million, compared with $60.3 million in the prior year quarter. The decrease was principally the result of a 44% decrease in oil prices received, a 60% decrease in natural gas prices received, and a 22% decrease in production. The average oil price received during the three months ended September 30, 2009 decreased to $61.43 per Bbl compared to $110.49 per Bbl for the year earlier period. The average natural gas price received during the three months ended September 30, 2009 decreased to $2.59 per Mcf compared to $6.49 per Mcf for the year earlier period. The production decrease was primarily related to production declines in the Rockies that have not been offset by additional drilling. Revenue from contract drilling and trucking fees decreased 78% to $2.5 million in the current quarter, versus $11.8 million in the third quarter of 2008. The decrease is the result of lower third party rig utilization in the three months ended September 30, 2009 compared to the comparable year earlier period, resulting from a significant industry slowdown attributable to lower commodity prices.
The Company reported a third quarter net loss attributable to Delta common stockholders of ($96.8 million), or ($0.35) per diluted share, compared with net income attributable to Delta common stockholders of $48.8 million, or $0.47 per diluted share, in the third quarter of 2008. The increased loss was primarily due to impairments recorded in the third quarter of 2009 and significantly lower natural gas and oil prices compared to the same period prior year.
THIRD QUARTER PRODUCTION VOLUMES, UNIT PRICES AND COSTS
Production volumes, average prices received and cost per thousand cubic feet equivalent (Mcfe) for the three months ended September 30, 2009 and 2008 are as follows:
Three Months Ended
September 30,
--------------------
2009 2008
---- ----
Production - Continuing Operations:
Oil (Mbbl) 180 247
Gas (Mmcf) 4,059 5,089
Total Production (Mmcfe) 5,137 6,569
Average Price - Continuing Operations:
Oil (per barrel) $61.43 $110.49
Gas (per Mcf) $2.59 $6.49
Costs per Mcfe - Continuing Operations:
Lease operating expense $1.47 $1.17
Production taxes $0.23 $0.59
Transportation costs $0.41 $0.55
Depletion expense $4.86 $4.40
Realized derivative gains $0.07 $1.65
Lease operating expense. Lease operating expense for the quarter ended September 30, 2009 decreased to $7.6 million from $7.7 million in the year earlier period. Lease operating expense from continuing operations per Mcfe for the three months ended September 30, 2009 increased to $1.47 per Mcfe from $1.17 per Mcfe for the comparable year earlier period, primarily as a result of lower production volumes.
Depreciation, depletion and amortization expense. Oil and gas depreciation, depletion and amortization expense decreased 13% to $25.7 million for the three months ended September 30, 2009, as compared to $29.6 million for the same period prior year. Depletion expense for the three months ended September 30, 2009 was $25.0 million compared to $28.9 million for the three months ended September 30, 2008. Our depletion rate increased from $4.40 per Mcfe for the three months ended September 30, 2008 to $4.86 per Mcfe for the current year period primarily due to the effect of low spot commodity prices at September 30, 2009 on the reserves used in our depletion calculation, offset by the effect of impairments recorded in the fourth quarter of 2008.
Dry Hole Costs and Impairments. Delta incurred dry hole and impairment costs of approximately $53.4 million for the three months ended September 30, 2009 compared to $8.1 million for the comparable period a year ago. During the three months ended September 30, 2009, dry hole and impairment costs primarily related to the Gray 31-23 in the Columbia River Basin which was completed during the third quarter of 2009, but found to be uneconomic resulting in dry hole costs of $31.0 million and Columbia River Basin unproved leasehold impairments of $20.4 million. In addition, $2.1 million of other impairments were recorded, most of which related to a proved property impairment for the Angleton property in Texas.
The Company incurred dry hole costs of approximately $8.1 million for the three months ended September 30, 2008 primarily related to four wells, one well in Wyoming, one well in California, one well in Utah and a non-operated well in the Columbia River Basin. No impairments were recorded during the three months ended September 30, 2008.
General and Administrative Expense. General and administrative expense decreased 33% to $10.0 million for the three months ended September 30, 2009, as compared to $14.9 million for the comparable prior year period. The decrease in general and administrative expense is attributed to reduced staffing as a result of reductions in force during the first half of 2009 resulting in lower cash compensation expense and a decrease in non-cash stock compensation expense from lower executive performance share costs, and also from forfeitures and modifications of salaries related to the reductions in force which affected approximately fifty percent of personnel.
RESULTS FOR THE NINE MONTHS
For the nine months ended September 30, 2009, the Company reported production of 17.2 Bcfe, a decrease of 5% when compared with the nine months ended September 30, 2008. Total revenue decreased 52% to $105.5 million in the nine months ended September 30, 2009, versus revenue of $217.6 million in the nine months ended September 30, 2008. Revenue from oil and gas sales declined 65% to $65.0 million, compared with $187.3 million in the prior year period. The decrease was principally the result of a 54% decrease in oil prices received, a 66% decrease in natural gas prices received and a 5% decrease in production. The average oil price received during the nine months ended September 30, 2009 decreased to $47.90 per Bbl compared to $105.17 per Bbl for the year earlier period. The average natural gas price received during the nine months ended September 30, 2009 decreased to $2.69 per Mcf compared to $7.93 per Mcf for the year earlier period. Revenue from contract drilling and trucking fees decreased to $9.4 million compared to $30.4 million for the same period in the prior year. The decrease is the result of lower third party rig utilization in the nine months ended September 30, 2009 compared to the comparable year earlier period, resulting from a significant industry slowdown attributable to lower commodity prices.
The Company reported a nine month net loss attributable to common stockholders of ($294.7 million), or ($1.55) per diluted common share, compared with a net income attributable to common stockholders of $4.6 million, or $0.05 per diluted share, for the nine months ended September 30, 2008. The increased loss was due to dry holes costs and impairments recorded in the second and third quarters of 2009 and significantly lower oil and natural gas prices offset by an offshore litigation gain recorded in 2009.
NINE MONTHS PRODUCTION VOLUMES, UNIT PRICES AND COSTS
Production volumes, average prices received and cost per equivalent Mcf for the nine months ended September 30, 2009 and 2008 are as follows:
Nine Months Ended
September 30,
--------------------
2009 2008
---- ----
Production - Continuing Operations:
Oil (Mbbl) 594 760
Gas (Mmcf) 13,591 13,531
Total Production (Mmcfe) 17,155 18,091
Average Price - Continuing Operations:
Oil (per barrel) $47.90 $105.17
Gas (per Mcf) $2.69 $7.93
Costs per Mcfe - Continuing Operations:
Lease operating expense $1.46 $1.37
Production taxes $0.22 $0.64
Transportation costs $0.46 $0.44
Depletion expense $4.68 $4.18
Realized derivative gains $0.02 $0.11
Lease operating expense. Lease operating expenses for the nine months ended September 30, 2009 of $25.0 million was comparable to $24.7 million in the year earlier period as both production and per unit cost rates remained consistent. Lease operating expense from continuing operations per Mcfe for the nine months ended September 30, 2009 increased to $1.46 per Mcfe from $1.37 per Mcfe for the comparable year earlier period.
Depreciation, depletion and amortization expense. Oil and gas depreciation, depletion and amortization expense increased 7% to $82.5 million for the nine months ended September 30, 2009, as compared to $77.4 million for the comparable year earlier period. Depletion expense for the nine months ended September 30, 2009 was $80.3 million compared to $75.6 million for the nine months ended September 30, 2008. The depletion rate increased from $4.18 per Mcfe for the nine months ended September 30, 2008 to $4.68 per Mcfe for the current year period primarily due to the effect of low spot commodity prices at September 30, 2009 on the reserves used in the depletion calculation, offset by the effect of impairments recorded in the fourth quarter of 2008.
Dry Hole Costs and Impairments. Delta incurred dry hole and impairment costs of approximately $161.5 million for the nine months ended September 30, 2009 compared to $10.9 million for the comparable period a year ago. During the nine months ended September 30, 2009, dry hole and impairment costs primarily related to unproved leasehold impairments in Garden Gulch ($38.6 million), Haynesville ($26.7 million), Columbia River Basin ($20.6 million) and Lighthouse ($14.7 million), a $31.0 million dry hole for the Gray well in the Columbia River Basin, $10.5 million impairment of Vega area surface acres, $6.5 million of DHS equipment and rig impairments, $4.3 million of tubular inventory impairments, $1.9 million of proved property impairments in the Gulf Coast, and a $1.9 million impairment of the Paradox pipeline.
General and Administrative Expense. General and administrative expense decreased 25% to $31.5 million for the nine months ended September 30, 2009, as compared to $42.1 million for the comparable prior year period. The decrease in general and administrative expenses is attributed to reduced staffing as a result of reductions in force during the first half of 2009 resulting in lower cash compensation expense and a decrease in non-cash stock compensation expense from lower executive performance share costs, and also from forfeitures and modifications of salaries related to the reductions in force which affected approximately fifty percent of personnel.
ADDITIONAL FINANCIAL INFORMATION
The following table summarizes the Company's open derivative contracts at September 30, 2009, required pursuant to the Company's credit agreement:
Fixed
Commodity Volume Price Term Index Price
--------- ------------------- ------ ----------------- ------------
Crude oil 1,000 Bbls / Day $52.25 Oct '09 - Dec '09 NYMEX - WTI
Crude oil 1,000 Bbls / Day $52.25 Jan '10 - Dec '10 NYMEX - WTI
Crude oil 500 Bbls / Day $57.70 Jan '11 - Dec '11 NYMEX - WTI
Natural gas 4,000 MMBtu / Day $5.720 Oct '09 - Dec '09 NYMEX - HHUB
Natural gas 6,000 MMBtu / Day $5.720 Jan '10 - Dec '10 NYMEX - HHUB
Natural gas 10,000 MMBtu / Day $4.105 Oct '09 - Dec '09 CIG
Natural gas 15,000 MMBtu / Day $4.105 Jan '10 - Dec '10 CIG
Natural gas 4,373 MMBtu / Day $3.973 Oct '09 - Dec '09 CIG
Natural gas 5,367 MMBtu / Day $3.973 Jan '10 - Dec '10 CIG
Natural gas 12,000 MMBtu / Day $5.150 Jan '11 - Dec '11 CIG
Natural gas 3,253 MMBtu / Day $5.040 Jan '11 - Dec '11 CIG
The net fair value of the Company's derivative instruments recorded in the financial statement was a liability of approximately $27.0 million at September 30, 2009.
OPERATIONS UPDATE
Columbia River Basin, WA, 50% WI - As previously announced, Delta's plans for additional drilling activity originally scheduled for later this year and in 2010 in the vicinity of the Gray well in the southern portion of the Columbia River Basin have been suspended. Delta currently has approximately 424,000 net acres, and will reassess its drilling plans based upon future geophysical acquisition and interpretation.
Piceance Basin, CO, 31% - 100% WI - Current production from the Piceance Basin approximates 36.5 million cubic feet equivalent per day (Mmcfe/d) net. The Company has begun completion activity on 24 drilled and uncompleted wells in the Vega Area. Additionally, the operator of Garden Gulch has begun completion operations on the uncompleted inventory of eight wells. The pace of completion activity will be measured to maintain compliance with the capital expenditures covenant under the amendment to the senior credit agreement, and is expected to continue at such pace through the second quarter of 2010.
The Company has tested additional sands in the upper-portion of the Williams Fork formation in three existing wells. Initial results are encouraging and management believes there may be 26 additional producing wells that may exhibit incremental production from this section of the Williams Fork.
The Company is constructing a new water treatment facility that is anticipated to reduce water hauling and disposal costs over the long term development of the field. The new water treatment facility is a patented distillation process that will allow the Company to surface discharge its treated water, thereby reducing the water hauling costs in the field. Additionally, Delta has completed its new compression facility that will allow for significant increased production volumes in the future. The Company continues to assess the current gas price environment to determine when to resume drilling activity.
2009 CAPITAL EXPENDITURES AND PRODUCTION GUIDANCE
The Company is slightly increasing its previously provided production guidance for 2009 to a range of 21-22 Bcfe. Drilling and completion related capital expenditures for the year are currently expected to be approximately $56 million. As described above, in conjunction with the October 30, 2009 borrowing base redetermination the Company agreed to limit its capital expenditures to $10.0 million in the quarter ending December 31, 2009, $10.0 million in the quarter ending March 31, 2010 and $5.0 million in the quarter ending June 30, 2010.
CHANGES IN DELTA'S BOARD OF DIRECTORS
The Company has announced that one of the members of its board of directors, James B. Wallace, has decided to resign from the board of Delta Petroleum. Mr. Wallace offered his resignation without any conflict or disagreement with the Company's direction or management. Dan Taylor commented, "Jim has been a significant contributor to the Company's board for the past eight years. His expertise and knowledge from having over 50 years of experience in the industry has been of tremendous value to our board and management team. His insight and advice will be greatly missed." Mr. Wallace's resignation was effective November 4, 2009.
INVESTOR CONFERENCE CALL
An investor conference call has been scheduled for 12:00 noon Eastern Time on Thursday, November 5, 2009. Stockholders and other interested parties may participate in the conference call by dialing 800-860-2442 (international callers dial 412-858-4600) and reference the ID code "Delta Petroleum call," a few minutes before 12:00 noon Eastern Time on November 5, 2009. The call will also be broadcast live and can be accessed through the Company's website at http://www.deltapetro.com/eventscalendar.html. A replay of the conference call will be available one hour after the completion of the conference call from November 5, 2009 until November 13, 2009 by dialing 877-344-7529 (international callers dial 412-317-0088) and entering the conference ID 435005#.
ABOUT DELTA PETROLEUM
Delta Petroleum Corporation is an oil and gas exploration and development company based in Denver, Colorado. The Company's core areas of operations are the Rocky Mountain and Gulf Coast Regions, which comprise the majority of its proved reserves, production and long-term growth prospects. Its common stock is listed on the NASDAQ Global Market System under the symbol "DPTR."
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this announcement are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, viability of the Roslyn formation, operational strengths and strategies, expected reserve and production growth, drilling plans and activity, pace of completion activity, anticipated drilling and production results and volumes, expected decreases in costs including water hauling and disposal costs and anticipated capital expenditures. Readers are cautioned that all forward-looking statements are based on management's present expectations, estimates and projections, but involve risks and uncertainty, including without limitation, uncertainties in the projection of future rates of production, unanticipated recovery or production problems, unanticipated results from wells being drilled or completed, the effects of delays in completion of gas gathering systems, pipelines and processing facilities, as well as general market conditions, competition and pricing. Please refer to the Company's report on Form 10-K for the year ended December 31, 2008 and subsequent reports on Forms 10-Q and 8-K as filed with the Securities and Exchange Commission for additional information. The Company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
For further information contact the Company at (303) 293-9133 or via email at info@deltapetro.com
DELTA PETROLEUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2009 2008
---- ----
ASSETS (In thousands, except share data)
Current assets:
Cash and cash equivalents $ 10,683 $65,475
Short-term restricted deposits 102,898 100,000
Trade accounts receivable, net of
allowance for doubtful
accounts of $100 and $652, respectively 13,698 30,437
Deposits and prepaid assets 4,682 11,253
Inventories 7,880 9,140
Deferred tax assets - 231
Other current assets 5,955 6,221
----- -----
Total current assets 145,796 222,757
Property and equipment:
Oil and gas properties, successful
efforts method of accounting:
Unproved 292,317 415,573
Proved 1,387,612 1,365,440
Drilling and trucking equipment 181,229 194,223
Pipeline and gathering systems 98,452 86,076
Other 16,095 29,107
------ ------
Total property and equipment 1,975,705 2,090,419
Less accumulated depreciation and depletion (760,682) (658,279)
--------- ---------
Net property and equipment 1,215,023 1,432,140
--------- ---------
Long-term assets:
Long-term restricted deposit 200,000 200,000
Marketable securities 1,977 1,977
Investments in unconsolidated affiliates 14,032 17,989
Deferred financing costs 3,861 7,640
Other long-term assets 14,339 12,460
------ ------
Total long-term assets 234,209 240,066
------- -------
Total assets $1,595,028 $1,894,963
========== ==========
LIABILITIES AND EQUITY
Current liabilities:
Credit facility - Delta $- $294,475
Credit facility - DHS 83,268 -
Installments payable on property acquisition 99,356 97,453
Accounts payable 56,567 159,024
Executive severance payable 2,898 -
Other accrued liabilities 16,724 13,576
Derivative instruments 14,551 -
------ --
Total current liabilities 273,364 564,528
Long-term liabilities:
Installments payable on property
acquisition, net of current portion 192,013 188,334
7% Senior notes 149,591 149,534
3 3/4% Senior convertible notes 102,894 99,616
Credit facility - Delta 123,038 -
Credit facility - DHS - 93,848
Asset retirement obligations 8,197 6,585
Derivative instruments 12,483 -
Deferred tax liabilities - 1,024
-- -----
Total long-term liabilities 588,216 538,941
Commitments and contingencies
Equity:
Preferred stock, $.01 par value:
authorized 3,000,000 shares, none issued - -
Common stock, $.01 par value; authorized
300,000,000 shares, issued 276,728,000
shares at September 30, 2009 and 103,424,000
shares at December 31, 2008 2,767 1,034
Additional paid-in capital 1,622,808 1,372,123
Treasury stock at cost; 1,038,000 shares at
September 30, 2009 and 36,000 shares at
December 31, 2008 (2,057) (540)
Executive severance payable in common stock 1,700 -
Accumulated deficit (904,925) (610,227)
--------- ---------
Total Delta stockholders' equity 720,293 762,390
------- -------
Non-controlling interest 13,155 29,104
------ ------
Total equity 733,448 791,494
------- -------
Total liabilities and equity $1,595,028 $1,894,963
========= =========
DELTA PETROLEUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
(In thousands, except per share amounts)
Revenue:
Oil and gas sales $21,534 $60,288 $65,041 $187,280
Contract drilling and
trucking fees 2,538 11,760 9,425 30,355
Gain (loss) on offshore
litigation award (150) - 31,054 -
----- -- ------ --
Total revenue 23,922 72,048 105,520 217,635
------ ------ ------- -------
Operating expenses:
Lease operating expense 7,566 7,679 25,013 24,722
Transportation expense 2,089 3,630 7,849 7,902
Production taxes 1,156 3,862 3,761 11,666
Exploration expense 891 2,870 2,422 5,805
Dry hole costs and impairments 53,406 8,149 161,471 10,918
Depreciation, depletion,
amortization and accretion -
oil and gas 25,715 29,600 82,469 77,391
Drilling and trucking operating
expenses 2,818 8,245 10,416 20,597
Depreciation and amortization -
drilling and trucking 5,545 2,722 17,512 9,573
General and administrative
expense 9,951 14,892 31,545 42,139
Executive severance expense, net - - 3,739 -
-- -- ----- --
Total operating expenses 109,137 81,649 346,197 210,713
------- ------ ------- -------
Operating income (loss) (85,215) (9,601) (240,677) 6,922
-------- ------- --------- -----
Other income and (expense):
Interest expense and financing
costs (10,729) (11,605) (43,686) (30,218)
Interest income 1,023 3,142 1,779 8,400
Other income (expense) 220 (3,896) 1,630 (3,624)
Realized gain (loss) on
derivative instruments, net 370 10,820 370 2,055
Unrealized gain (loss) on
derivative instruments, net (5,923) 54,779 (27,034) 13,574
Income (loss) from
unconsolidated affiliates (454) 2,122 (3,324) 2,814
---- ----- ------ -----
Total other income
(expense) (15,493) 55,362 (70,265) (6,999)
-------- ------ -------- -------
Income (loss) from continuing
operations before income taxes
and discontinued operations (100,708) 45,761 (310,942) (77)
Income tax expense (benefit) 265 (2,175) (53) (3,632)
--- ------- ---- -------
Income (loss) from continuing
operations (100,973) 47,936 (310,889) 3,555
Discontinued operations:
Gain (loss) on sale of
discontinued operations,
net of tax - 715 - 719
-- --- -- ---
Net income (loss) (100,973) 48,651 (310,889) 4,274
Less net loss attributable
to non-controlling interest 4,146 147 16,191 355
----- --- ------ ---
Net income (loss) attributable
to Delta common stockholders $(96,827) $48,798 $(294,698) $4,629
======== ======= ========= ======
Amounts attributable to Delta
common stockholders:
Gain (loss) from continuing
operations $(96,827) $48,083 $(294,698) $3,910
Income (loss) from
discontinued operations,
net of tax - 715 - 719
-- --- -- ---
Net income (loss) $(96,827) $48,798 $(294,698) $4,629
-------- ------- --------- -----
Basic income (loss)
attributable to Delta
common stockholders
per common share:
Gain (loss) from continuing
operations $(0.35) $0.47 $(1.55) $0.04
Discontinued operations - 0.01 - 0.01
-- ---- -- ----
Net income (loss) $(0.35) $0.48 $(1.55) $0.05
------ ----- ------ -----
Diluted income (loss)
attributable to Delta
common stockholders
per common share:
Gain (loss) from continuing
operations $(0.35) $0.46 $(1.55) $0.04
Discontinued operations - 0.01 - 0.01
-- ---- -- ----
Net income (loss) $(0.35) $0.47 $(1.55) $0.05
------ ----- ------ ----
Weighted average common shares
outstanding:
Basic 275,465 101,277 189,740 95,365
Diluted 275,465 102,790 189,740 96,994
DELTA PETROLEUM CORPORATION
RECONCILIATION OF DISCRETIONARY CASH FLOW AND EBITDAX
(in thousands)
(unaudited)
THREE MONTHS ENDED September 30, September 30,
2009 2008
---- ----
CASH PROVIDED BY OPERATING ACTIVITIES $(12,690) $43,935
Changes in assets and liabilities 10,173 (9,326)
Exploration costs 891 2,870
--- -----
Discretionary cash flow (deficiency)* $(1,626) $37,479
======== =======
NINE MONTHS ENDED: September 30, September 30,
2009 2008
---- ----
CASH PROVIDED BY OPERATING ACTIVITIES $20,159 $93,318
Changes in assets and liabilities (1,113) 7,674
Less net proceeds from offshore litigation
award (48,701) -
Exploration costs 2,422 5,805
----- -----
Discretionary cash flow (deficiency)* $(27,233) $106,797
======== ========
* Discretionary cash flow represents net cash provided by operating
activities before changes in assets and liabilities and offshore
litigation plus exploration costs. Discretionary cash flow is
presented as a supplemental financial measurement in the evaluation
of our business. We believe that it provides additional information
regarding our ability to meet our future debt service, capital
expenditures and working capital requirements. This measure is
widely used by investors and rating agencies in the valuation,
comparison, rating and investment recommendations of companies.
Discretionary cash flow is not a measure of financial performance
under GAAP. Accordingly, it should not be considered as a
substitute for cash flows from operating, investing or financing
activities as an indicator of cash flows, or as a measure of
liquidity.
THREE MONTHS ENDED September 30, September 30,
2009 2008
---- ----
Net income (loss) $(100,973) $48,651
Minority Interest 4,146 147
Income tax expense (benefit) 265 (2,175)
Interest income (1,023) (3,142)
Interest and financing costs 10,729 11,605
Depletion, depreciation and amortization 31,260 32,322
Gain on offshore litigation award, sale of
drilling rig and other 212 (715)
Unrealized loss on derivative instruments 5,923 (54,779)
Exploration, dry hole and impairment costs 54,298 11,019
------ ------
EBITDAX** $4,837 $42,933
====== =======
THREE MONTHS ENDED September 30, September 30,
2009 2008
---- ----
CASH PROVIDED BY OPERATING ACTIVITIES $(12,690) $43,935
Changes in assets and liabilities 10,173 (9,326)
Less Interest net of financing costs 5,522 4,485
Exploration costs 891 2,870
Other non-cash items 941 969
--- ---
EBITDAX** $4,837 $42,933
====== =======
NINE MONTHS ENDED September 30, September 30,
2009 2008
---- ----
Net income (loss) $(310,889) $4,274
Minority Interest 16,191 355
Income tax benefit (53) (3,632)
Interest income (1,779) (8,400)
Interest and financing costs 43,686 30,218
Depletion, depreciation and amortization 99,981 86,964
Gain on offshore litigation award, sale of
drilling rig and other (32,717) (719)
Unrealized loss on derivative instruments 27,034 (13,574)
Exploration, dry hole and impairment costs 163,893 16,723
------- ------
EBITDAX** $5,347 $112,209
====== ========
NINE MONTHS ENDED September 30, September 30,
2009 2008
---- ----
CASH PROVIDED BY OPERATING ACTIVITIES $20,159 $93,318
Changes in assets and liabilities (1,113) 7,674
Less net proceeds from offshore litigation
award (48,701) -
Interest net of financing costs 26,296 11,581
Exploration costs 2,422 5,805
Other non-cash items 6,284 (6,169)
----- -------
EBITDAX** $5,347 $112,209
====== ========
** EBITDAX represents net income (loss) attributable to Delta common
stockholders before income tax expense (benefit), interest and
financing costs, depreciation, depletion and amortization expense,
gain on sale of oil and gas properties, offshore litigation and other
investments, unrealized gains (loss) on derivative contracts and
exploration and impairment and dry hole costs. EBITDAX is presented
as a supplemental financial measurement in the evaluation of our
business. We believe that it provides additional information
regarding our ability to meet our future debt service, capital
expenditures and working capital requirements. This measure is widely
used by investors and rating agencies in the valuation, comparison,
rating and investment recommendations of companies. EBITDAX is also a
financial measurement that, with certain negotiated adjustments, is
reported to our lenders pursuant to our bank credit agreement and is
used in the financial covenants in our bank credit agreement and our
senior note indentures. EBITDAX is not a measure of financial
performance under GAAP. Accordingly, it should not be considered as a
substitute for net income, income from operations, or cash flow
provided by (used in) operating activities prepared in accordance with
GAAP.
SOURCE Delta Petroleum Corporation
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