ENP Newswire -
Release date- 21082014 -
The company reported a net loss of
Adjusted Earnings, which adjusts for unrealized derivative gains and losses and certain other items, were
Highlights include the following:
Production of 720 thousand barrels of oil equivalent (MBOE) for the quarter, or 7,907 BOE per day (BOE/d).
Total oil volumes in the second quarter of 2014 were up 4% over the first quarter of 2014.
Adjusted EBITDA in the second quarter of 2014 was up
Agreement to sell West Montalvo Field for
'West Montalvo has long been a solid asset for
Ultimately, this sale gives us increased flexibility to concentrate on unlocking the significant upside we see at our other oily
Second Quarter Production
Production in the second quarter of 2014 was 7,907 BOE/d compared to 7,776 BOE/d in the first quarter of 2014. Daily oil production in the second quarter of 2014 of 7,484 Bbls/d was up 3% compared to 7,278 Bbls/d in the first quarter of 2014, primarily as a result of a return to normal operations at our South Ellwood field, which was significantly impacted by a 20-day shutdown during the first quarter of 2014 due to extended repair work conducted on the third-party common carrier pipeline that transports oil from the field.
'Following the prolonged shutdown at South Ellwood during the first quarter, which impacted our production and delayed our development plan for the year, we were able to move ahead in executing on our 2014 capital program during the second quarter,' stated
Although we are disappointed by the initial results, we remain optimistic going forward,'
'Looking ahead for the remainder of the year, we will adjust our focus towards our Sockeye field, where we plan to drill a well into the M-2 zone from Platform Gail. The wellbore will penetrate multiple sections of the zone and has been designed by our engineering and drilling team as a dual-lateral, which could yield significant cost benefits while maximizing productive capabilities.
While the Sockeye well will be technically challenging, our team has put together a great drilling program, and have proven their capabilities by successfully completing drilling of the very challenging 3242-20 well at South Ellwood. I am looking forward to our activities in the coming months at Sockeye,'
Second Quarter Costs
Capital Investment Second Quarter 2014
In the second quarter of 2014, the Company spent
Additionally during the quarter, the Company spud its second well for the year at the West Montalvo field, the 3314-32 well, which is expected to be completed in the second half of August. The Company also completed the 3314-7, a well drilled during the first quarter of the year, which began producing in May and was placed on artificial lift in July. There were relatively minimal capital expenditures at the Sockeye field during the second quarter, although the Company plans to increase capital spending at the field in the third quarter.
In the second quarter of 2014, the Company had relatively minimal onshore
Information Regarding Earnings Conference Call
In light of recent significant events, including the pending sale of the West Montalvo Field, discussions with the Company's banks regarding projected covenant compliance and continued Board of Director activity relating to the search for a successor Chief Executive Officer,
However, if warranted by developments relating to these issues, we will schedule a call at some point in the third quarter to provide updated information. If such a call is scheduled, a press release detailing the date, time, and instructions for those wanting to listen or participate in the Q & A portion of this call will be issued in advance.
Our discussions with our bank lenders relate to the fact that our most recent financial projections indicate a potential default under the debt-to-EBITDA covenant in our revolving credit facility as of
As a result of that projection, we have reclassified all of our long term debt as current as of
About the Company
Statements made in this news release relating to
These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and the Company's future performance are both subject to a wide range of business risks and uncertainties and there is no assurance that these goals and projections can or will be met.
Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, the timing and extent of changes in oil and gas prices, the timing and results of drilling and other development activities, the availability and cost of obtaining drilling equipment and technical personnel, risks associated with the availability of acceptable transportation arrangements and the possibility of unanticipated operational problems, delays in completing production, treatment and transportation facilities, higher than expected production costs and other expenses, pipeline curtailments by third parties, and a potential inability to complete transactions as anticipated and/or to obtain waivers to or amendments of
The Company's projects are subject to numerous operating, geological and other risks and may not be successful. All forward-looking statements are made only as of the date hereof and the Company undertakes no obligation to update any such statement. Further information on risks and uncertainties that may affect the Company's operations and financial performance, and the forward-looking statements made herein, is available in the Company's filings with the
Adjusted Earnings and Adjusted EBITDA
In addition to net income (loss) determined in accordance with GAAP, we have provided in this release our Adjusted Earnings and Adjusted EBITDA for recent periods. Both Adjusted Earnings and Adjusted EBITDA are non-GAAP financial measures that we use as supplemental measures of our performance.
We calculate the tax effect of reconciling items by re-performing our period-end tax calculation excluding the reconciling items from earnings. The difference between this calculation and the tax expense/benefit recorded for the period results in the tax effect disclosed below.
We believe that Adjusted Earnings facilitates comparisons to earnings forecasts prepared by stock analysts and other third parties. Such forecasts generally exclude the effects of items that are difficult to predict or to measure in advance and are not directly related to our ongoing operations. Adjusted Earnings should not be considered a substitute for net income (loss) as reported in accordance with GAAP.
Because the use of Adjusted EBITDA facilitates comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning and analysis purposes, in assessing acquisition opportunities and in determining how potential external financing sources are likely to evaluate our business.
We present Adjusted Earnings and Adjusted EBITDA because we consider them to be important supplemental measures of our performance. Neither Adjusted Earnings nor Adjusted EBITDA is a measurement of our financial performance under GAAP and neither should be considered as an alternative to net income (loss), operating income or any other performance measure derived in accordance with GAAP, as an alternative to cash flow from operating activities or as a measure of our liquidity.
You should not assume that the Adjusted Earnings or Adjusted EBITDA amounts shown are comparable to similarly named measures disclosed by other companies.
Tel: (303) 583-1637
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