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PQ > SEC Filings for PQ > Form 8-K on 7-Nov-2012All Recent SEC Filings

Show all filings for PETROQUEST ENERGY INC

Form 8-K for PETROQUEST ENERGY INC


7-Nov-2012

Results of Operations and Financial Condition


Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On November 7, 2012, PetroQuest Energy, Inc. (the "Company") announced net loss available to common stockholders for the quarter ended September 30, 2012 of $38,639,000, or $0.62 per share, compared to third quarter 2011 net income available to common stockholders of $3,727,000, or $0.06 per share. For the first nine months of 2012, the Company reported net loss available to common stockholders of $111,767,000, or $1.79 per share, compared to net income available to common stockholders of $2,579,000, or $0.04 per share, for the first nine months of 2011. Net loss for the three and nine month 2012 periods included ceiling test writedowns totaling $35,391,000 and $108,987,000, respectively.
Discretionary cash flow for the third quarter of 2012 was $17,339,000, as compared to $21,099,000 for the comparable 2011 period. Net cash flow provided by operating activities totaled $25,408,000 and $31,222,000 during the third quarters of 2012 and 2011, respectively. For the first nine months of 2012, discretionary cash flow was $57,055,000. Discretionary cash flow for the first nine months of 2011 was $73,219,000. Net cash flow provided by operating activities totaled $67,676,000 and $91,113,000 during the first nine months of 2012 and 2011, respectively. See the attached schedule for a reconciliation of net cash flow provided by operating activities to discretionary cash flow. Production for the third quarter of 2012 was 8.5 Bcfe, a 15% increase from the
7.4 Bcfe produced during the comparable period of 2011. Natural gas liquids production for the third quarter of 2012 increased 53% from the comparable period of 2011. For the first nine months of 2012, production was 25.1 Bcfe , compared to 22.2 Bcfe for the comparable period of 2011. Approximately 77% of the Company's third quarter 2012 production was from long-lived basins. Stated on an Mcfe basis, unit prices received during the third quarter and the first nine months of 2012 were 24% and 25% lower, respectively, than the comparable 2011 periods. Oil and gas sales during the third quarter of 2012 decreased 13% to $33,913,000, as compared to $38,980,000 in the third quarter of 2011. For the first nine months of 2012, oil and gas sales decreased 16% to $103,286,000 from $122,446,000 in the first nine months of 2011. Lease operating expenses for the third quarter of 2012 were $1.13 per Mcfe as compared to $1.39 per Mcfe in the third quarter of 2011. For the first nine months of 2012, lease operating expenses per Mcfe decreased 17% to $1.13 from $1.36 in the comparable period of 2011. Per unit lease operating expenses decreased primarily due to the overall increase in produced volumes. Depreciation, depletion and amortization ("DD&A") on oil and gas properties for the third quarter of 2012 was $1.73 per Mcfe as compared to $1.94 per Mcfe in the third quarter of 2011. For the first nine months of 2012, DD&A per Mcfe decreased 6% to $1.80 per Mcfe from $1.92 per Mcfe for the comparable period of 2011. The decrease in DD&A during the third quarter of 2012, as compared to the third quarter of 2011, was primarily the result of the ceiling test write-downs recorded during the 2012 periods. Interest expense for the third quarter of 2012 increased to $2,338,000, as compared to $2,299,000 in the third quarter of 2011. For the first nine months of 2012, interest expense was $7,021,000, compared to $7,248,000 for the comparable period of 2011.

General and administrative expenses increased $973,000 and $3,873,000 for the third quarter and nine months ended September 30, 2012, as compared to the respective 2011 periods. The increases during the 2012 periods are primarily due to higher employee related expenses, including non-cash share-based compensation costs totaling $5,609,000 during the first nine months of 2012 as compared to $2,985,000 during the 2011 period.
Production taxes for the third quarter of 2012 totaled $880,000, as compared to $1,446,000 in the third quarter of 2011. For the first nine months of 2012, production taxes were $112,000 compared to $2,070,000 for the comparable period of 2011. Production taxes for the nine month 2012 period decreased due to a receivable of $2,717,000 recorded in June 2012 related to severance tax refunds expected to be received over the next three years.


The following table sets forth certain information with respect to the oil and gas operations of the Company for the three-and nine-month periods ended September 30, 2012 and 2011:

                                  Three Months Ended September 30,          Nine Months Ended September 30,
                                       2012                2011                  2012                  2011
Production:
Oil (Bbls)                                122,645          130,144               379,958                445,457
Gas (Mcf)                               6,888,569        6,073,776            20,563,350             17,847,061
Ngl (Mcfe)                                894,138          584,786             2,250,569              1,658,323
Total Production (Mcfe)                 8,518,577        7,439,426            25,093,667             22,178,126
Total Daily Production (Mmcfe)               92.6             80.9                  91.6                   81.2
Sales:
Total oil sales                 $      13,287,548     $ 13,508,377     $      41,627,602          $  46,403,861
Total gas sales                        15,583,994       19,865,595            46,321,605             60,481,702
Total ngl sales                         5,041,274        5,606,335            15,336,515             15,560,225
Total oil and gas sales         $      33,912,816     $ 38,980,307     $     103,285,722          $ 122,445,788
Average sales prices:
Oil (per Bbl)                   $          108.34     $     103.80     $          109.56          $      104.17
Gas (per Mcf)                                2.26             3.27                  2.25                   3.39
Ngl (per Mcfe)                               5.64             9.59                  6.81                   9.38
Per Mcfe                                     3.98             5.24                  4.12                   5.52

The above sales and average sales prices include increases to revenue related to the settlement of gas hedges of $1,482,000 and $478,000, oil hedges of $491,000 and $178,000 and Ngl hedges of $312,000 and zero for the three months ended September 30, 2012 and 2011, respectively. The above sales and average sales prices include increases (reductions) to revenue related to the settlement of gas hedges of $6,867,000 and $864,000, oil hedges of $853,000 and ($211,000) and Ngl hedges of $544,000 and zero for the nine months ended September 30, 2012 and 2011, respectively.

The following initiates guidance for the fourth quarter of 2012:
                                                                  Guidance for
Description                                                     4th Quarter 2012

Production volumes (MMcfe/d)                                        94 - 98

Percent Gas                                                           77%
Percent Oil                                                            9%
Percent NGL                                                           14%

Expenses:
 Lease operating expenses (per Mcfe)                             $1.05 - $1.15
 Production taxes (per Mcfe)                                     $0.10 - $0.15
 Depreciation, depletion and amortization (per Mcfe)             $1.60 - $1.70
 General and administrative (in millions)*                        $5.5 - $6.0
 Interest expense (in millions)                                   $2.6 - $2.9

 2012 Capital Expenditures (in millions)                          $130 - $135

* Includes non-cash stock compensation estimate of $1.4 million


About the Company
PetroQuest Energy, Inc. is an independent energy company engaged in the exploration, development, acquisition and production of oil and natural gas reserves in the Arkoma Basin, Wyoming, Texas, South Louisiana and the shallow waters of the Gulf of Mexico. PetroQuest's common stock trades on the New York Stock Exchange under the ticker PQ.

Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are our ability to find oil and natural gas reserves that are economically recoverable, the volatility of oil and natural gas prices and significantly depressed natural gas prices since the middle of 2008, the uncertain economic conditions in the United States and globally, the declines in the values of our properties that have resulted in and may in the future result in additional ceiling test write-downs, our ability to replace reserves and sustain production, our estimate of the sufficiency of our existing capital sources, our ability to raise additional capital to fund cash requirements for future operations, the uncertainties involved in prospect development and property acquisitions or dispositions and in projecting future rates of production or future reserves, the timing of development expenditures and drilling of wells, hurricanes and other natural disasters, changes in laws and regulations as they relate to our operations, including our fracing operations in shale plays or our operations in the Gulf of Mexico, and the operating hazards attendant to the oil and gas business. In particular, careful consideration should be given to cautionary statements made in the various reports PetroQuest has filed with the Securities and Exchange Commission. PetroQuest undertakes no duty to update or revise these forward-looking statements.

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"http://www.petroquest.com/news.html?=BizID=1690&1=1"


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