News Column

Osage Exploration and Development Announces First Quarter Financial and Operational Results

May 16, 2014

SAN DIEGO--(BUSINESS WIRE)-- Osage Exploration and Development, Inc. (OTCBB:OEDV), an independent exploration and production company focused on the Horizontal Mississippian and Woodford plays in Oklahoma, reported today its operational and financial results for the quarter ended March 31, 2014. The full text of the Company’s Form 10-Q is available on the SEC EDGAR system or on Osage’s website: http://www.osageexploration.com. Highlights include:

  • Production of 37,063 barrels of oil equivalent, 123% higher than the period ended March 31, 2013;
  • Revenue from continuing operations of $2.6 million, a 118% increase over the prior year;
  • Adjusted EBITDA of $1.38 million, up 145% over the first quarter of 2013; and,
  • Commencement of the Company’s operated drilling program in Logan County, Oklahoma.

    Operational Results

    Osage’s oil production during the first quarter of 2014, net of royalties, was 22,330 BBLs, an increase of 10,170 BBLs, or 83.6%, over the three months ended March 31, 2013. The Company’s natural gas production was 77,627 thousand cubic feet (“Mcf”) for the three months ended March 31, 2014, 192.2% over the same period in 2013. Osage’s average selling price per barrel of oil during the first quarter of this year was $97.16.

              2014         2013         Increase/(Decrease)
    Oil Production: Net Barrels       % of Total Net Barrels       % of Total Barrels       %  
    United States 22,330       100.0 % 12,160       100.0 % 10,170       83.6 %
     
    Natural Gas Production: Net Mcf       % of Total Net Mcf       % of Total Mcf       %  
    United States 77,627 100.0 % 26,568 100.0 % 51,059 192.2 %
     
    Natural Gas Liquid Production: Net Barrels       % of Total Net Barrels       % of Total Barrels       %  
    United States 1,796 100.0 % - n/a 1,796 n/a
     


    Financial Results

    Revenues from continuing operations increased 117.6% from $1.2 million during the first quarter of 2013 to $2.6 million during the same period in 2014. The average production cost per barrel of oil equivalent (“Production Cost/BOE”) for the three months ended March 31, 2014 was $12.77.

              2014         2013         Change
    Amount       Percentage Amount       Percentage Amount       Percentage
    Revenues                  
    Oil sales $ 2,132,817 80.9 % $ 1,087,839 89.8 % $ 1,044,978 96.1 %
    Natural gas sales   504,598       19.1 %   124,033       10.2 %   380,565       306.8 %
    Total revenues $ 2,637,415       100.0 % $ 1,211,872       100.0 % $ 1,425,543       117.6 %
     


    Adjusted EBITDA* was up 145% year-over-year from $564,541 during the first quarter of 2013 to $1,381,652 during the same period in 2014.

                        Q1, 2014           Q1, 2013
    Net loss from continuing operations $ (935,127 )           $ (851,083 )
    Interest expense, net 1,210,136 766,389
    Depreciation, depletion and accretion 999,899 270,485
    Stock based compensation 109,000 378,750
    Unrealized losses on derivatives 68,058 -
    Gain on sale of land interests (70,314 ) -
    Taxation   -               -  
    Adjusted EBITDA$1,381,652$564,541
     


    Management Comments

    “We are pleased with our operational and financial results during a quarter in which we added production from small interests in two wells,” stated Mr. Kim Bradford, Chairman and CEO of Osage Exploration. “When we achieved the asset partition in December of 2013 giving Osage operational control of a majority of its acreage in Logan County, we understood then that all eyes would be appropriately focused on the results of our first operated wells. Both wells are scheduled for fracture stimulation toward the end of May, and we anticipate results from those wells thereafter, followed by results from our third and fourth wells.”

    Mr. Bradford continued, “Our confidence in the quality of this asset has only increased with the availability of new data, and we maintain our belief that the period beginning in the second half of this year is going to be one of rapid growth and positive change for Osage.”

    About Osage Exploration and Development, Inc.

    Based in San Diego, California, with production offices in Oklahoma City, Oklahoma, Osage Exploration and Development, Inc. is an independent exploration and production company with interests in oil and gas wells and prospects in the U.S. http://www.osageexploration.com

    Safe Harbor Statement

    The information in this release includes certain forward-looking statements as defined by the Securities and Exchange Commission that are based on assumptions that in the future may prove not to have been accurate. Those statements and Osage Exploration and Development, Inc. are subject to a number of risks, including production variances from expectations, volatility of product prices, inability to raise sufficient capital to fund its operations, environmental risks, competition, government regulation, and the ability of the Company to execute its business strategy, among others.

    *GAAP Reconciliation

    In addition to revenue and net income determined in accordance with GAAP, we have provided a reconciliation of our EBITDA in this release. EBITDA is a non-GAAP financial measure that we use as a supplemental measure of our performance. EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to revenue, net income, operating income or any other performance measure derived in accordance with GAAP. It should not be assumed that EBITDA is comparable to similarly named figures disclosed by other companies. We define EBITDA as net income before the effects of the items listed in the table above. Management believes Adjusted EBITDA is a useful measure of performance, along with net income (loss).




    Osage Exploration and Development, Inc.

    Jack Zedlitz, VP of Corporate Development

    405-270-0989

    jzedlitz@osageexploration.com

    or

    Kim Bradford, President and CEO

    619-677-3956

    kbradford@osageexploration.com

    http://www.osageexploration.com

    Source: Osage Exploration and Development, Inc.


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