SAN DIEGO--(BUSINESS WIRE)--
Exploration and Development, Inc. (OTCBB:OEDV),
an independent exploration and production company focused on the
Horizontal Mississippian and Woodford plays in Oklahoma, reported its
operational and financial results for the quarter ended June 30, 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.
An increase in average daily production from 411 barrels of oil
equivalent per day (BOEPD) in the first quarter of 2014 to 425 BOEPD
in the second quarter of 2014;
Production of 38,756 BOE, 123% higher than the second quarter of 2013;
Revenue from continuing operations of $2.5 million, an 88% increase
over the prior year and in line with first quarter 2014 revenues;
Adjusted EBITDA* of $1.25 million, up 185% over the second quarter of
2013 and also in line with Adjusted EBITDA of $1.38 million from the
first quarter of 2014: and,
Decreased operating expenses per BOE from $12.77 in the first quarter
to $10.08 in the second quarter of 2014.
Since the end of the second quarter, Osage has brought two operated
wells into production, the Whitten 1-3MH and 1-2WH. For the purposes of
long-term reservoir management, flow rates have been restricted and
significant backpressure has been maintained on both wells in order to
flatten their overall declines. Cumulative production on the Whitten
1-3MH is 12,957 BOE, with a product mix composed of 75% oil. The Whitten
1-3MH was produced on an average casing choke of 8/64 during its early
weeks of production. Cumulative production on the Whitten 1-2WH is
10,380 BOE, with a product mix composed of 71% oil. Similarly, the
Whitten 1-2WH was produced on an average casing choke of 5/64 during its
early weeks of production.
Since drilling the two Whitten wells, Osage has reached total depth on
its third well, the McNally 1-20WH, and is currently drilling the
lateral on its fourth operated well, the McNally 1-29MH. Fracture
stimulation of the McNally 1-20WH and McNally 1-29MH is scheduled for
the first half of September.
2014 Drilling and Exit Rate
Osage’s operational plan envisions drilling six total operated wells by
year-end 2014, with four of those wells being in production by December
31. Osage should exit the year with a daily production rate of
approximately 850 BOE, or double its average rate during the second
quarter given just baseline drilling success.
“With Osage's transition from non-operator to operator being complete,
the second quarter of 2014 was the final chapter in a book that has now
been shelved. At the end of the second quarter, Osage had interests in
43 non-operated wells, average daily production of 425 barrels of oil
equivalent, and largely stable revenues quarter-over-quarter. These
numbers do not yet reflect any contribution from the Osage-operated
wells that came online in early July,” stated Mr. Kim Bradford, Chairman
and CEO of Osage Exploration.
Mr. Bradford continued, “We are now well into prosecuting our operated
drilling program, and have a much greater working interest per well than
we did as a non-operator. As a result, growth in quarterly production
and revenue should be much sharper than in the past. We are targeting a
2014 production exit rate that is double our average rate during the
second quarter, and the employment of a second rig in Logan County
sometime next year. We have stated in the past that the period beginning
in the second half of this year would be one of rapid growth and
positive change for Osage, and reiterate that statement and sentiment
In addition to revenue and net income determined in accordance with
GAAP, we have provided a reconciliation of our Adjusted EBITDA in this
release. Adjusted EBITDA is a non-GAAP financial measure that we use as
a supplemental measure of our performance. Adjusted 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 Adjusted EBITDA is comparable to similarly named
figures disclosed by other companies. We define Adjusted EBITDA as net
income before the effects of the items listed in the table below.
Management believes Adjusted EBITDA is a useful measure of performance,
along with operating income (loss) and net income (loss) from continuing
Net loss from continuing operations
Interest expense, net
Depreciation, depletion and accretion
Unrealized losses on derivatives
Gain on sale of land interests
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.
Osage Exploration and Development, Inc.
Jack Zedlitz, VP of
Bradford, President and CEO
Source: Osage Exploration and Development, Inc.