Search the web
Welcome, Guest
[Sign Out, My Account]
EDGAR_Online

Quotes & Info
Enter Symbol(s):
e.g. YHOO, ^DJI
Symbol Lookup | Financial Search
FPP > SEC Filings for FPP > Form 10-Q on 14-Nov-2013All Recent SEC Filings

Show all filings for FIELDPOINT PETROLEUM CORP

Form 10-Q for FIELDPOINT PETROLEUM CORP


14-Nov-2013

Quarterly Report


Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Company's Condensed Consolidated Financial Statements, and respective notes thereto, included elsewhere herein. The information below should not be construed to imply that the results discussed herein will necessarily continue into the future or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of the management of FieldPoint Petroleum Corporation.

General

FieldPoint Petroleum Corporation derives its revenues from its operating activities including sales of oil and natural gas and operating oil and natural gas properties. The Company's capital for investment in producing oil and natural gas properties has been provided by cash flow from operating activities and from bank financing. The Company categorizes its operating expenses into the categories of production expenses and other expenses.

On June 6, 2013, the Founder and President of FieldPoint Petroleum Corporation, Mr. Ray D. Reaves, died in an automobile accident near Giddings, Texas. On June 9, 2013, the board of directors elected Mr. Roger D. Bryant to serve as its executive Chairman and granted him executive powers to oversee the management of the Company. Mr. Bryant continues to serve as the Company's highest ranking executive officer. On June 14, 2013, Mr. Phillip H. Roberson was engaged to take operational control of the business, and on July 1, 2013, he was named COO/CFO.
During this transitional period, every member of the board of directors has been actively involved with the ongoing efforts to ensure no loss in continuity of the business. The Company has received overwhelming support from shareholders, bankers, attorneys, accountants, contractors, suppliers, field operators and partners, all of which have expressed great respect for Mr. Reaves and their personal loss from this tragic event.

The Company completed drilling the East Lusk 15 Federal #3 on July 31, 2013 and began flowing it back. The well produced 6,411 barrels of oil net during the month of August and we expect a significant decline profile that is similar to the East Lusk 15 Federal #2 in the coming months.


Results of Operations

Comparison of three months ended September 30, 2013 to the three months ended
September 30, 2012

                                                                 Quarter Ended September 30,
                                                                    2013               2012
Revenue:
Oil sales                                                      $     2,365,946      $ 2,131,526
Natural gas sales                                                      205,060          135,394
Total oil and natural gas sales                                $     2,571,006      $ 2,266,920

Sales volumes:
Oil (Bbls)                                                              24,632           24,214
Natural gas (Mcf)                                                       47,047           40,565
Total (BOE)                                                             32,473           30,975

Average sales prices:
Oil ($/Bbl)                                                    $         96.05      $     88.03
Natural gas ($/Mcf)                                                       4.36             3.34
Total ($/BOE)                                                  $         79.17      $     73.19

Costs and expenses ($/BOE)
Lease operating expense                                        $         33.55      $     21.28
Depletion and depreciation                                               15.44            16.38
Exploration expense                                                      (0.36 )              -
Accretion of discount on asset retirement obligations                     0.74             0.71
General and administrative                                                9.02             9.65
Total                                                          $         58.39      $     48.02

Oil and natural gas sales revenues increased 13% or $304,086 to $2,571,006 for the three-month period ended September 30, 2013 from the comparable 2012 period.
Average oil sales prices increased 9% to $96.05 for the three-month period ended September 30, 2013 compared to $88.03 for the period ended September 30, 2012. Average natural gas sales prices increased to $4.36 for the three-month period ended September 30, 2013 compared to $3.34 for the period ended September 30, 2012. Increased oil and natural gas production accounted for an increase in revenue of approximately $58,000. Higher commodity prices for oil and natural gas account for an increase in revenue of approximately $246,000. We anticipate volumes to increase in the coming quarters primarily due to additional drilling in New Mexico expected in the fourth quarter of 2013 and first quarter of 2014.

Lease operating expenses increased 65% or $430,242 to $1,089,469 for the three month period ended September 30, 2013 from the comparable 2012 period. This was primarily due to increases in costs associated with new field production in 2013, remediation and workover expenses mainly in the Taylor Serbin field, and workover expenses in the Apache Bromide field initiated by the operator, Quantum Resources. Lifting costs per BOE increased $12.27 to $33.55 for the 2013 period compared to $21.28 for the three months ended September 30, 2012. We anticipate lease operating expenses to increase over the following quarters due to additional remedial repairs and workover expenses in the Taylor Serbin and Apache Bromide fields.

Depletion and depreciation decreased 1% or $6,000 to $501,500 for the three month period ended September 30, 2013 versus $507,500 in the 2012 comparable period. This was primarily due to the increase in reserves related to the addition of the new East Lusk #3 well since the prior period.


Exploration expense was reduced by $11,554 during the three month period ended September 30, 2013 due to an adjustment in the cost incurred to drill on the Riverdale lease in Texas. The well was non-economic and the decision was made to plug and abandon the well. There was no comparable expense in the same period in 2012.

General and administrative overhead cost decreased 2% or $5,815 to $293,015 for the three-month period ended September 30, 2013 from the three-month period ended September 30, 2012. This was primarily attributable to a decrease in bonus expense during the 2013 period. At this time, the Company anticipates general and administrative expenses to remain stable or increase slightly in the coming quarters.

Other expenses, net for the quarter ended September 30, 2013, were $116,346 compared to other expense, net of $330,024 for quarter ended September 30, 2012.
The net decrease was primarily due to a $50,000 unrealized loss on commodity derivatives during the three months ended September 30, 2013 compared to a $314,000 unrealized loss and a $51,681 realized gain on commodity derivatives during the 2012 period.

Results of Operations

Comparison of Nine Months Ended September 30, 2013 to the Nine Months Ended
September 30, 2012

                                                                   Nine Months Ended September 30,
                                                                     2013                   2012
Revenues:
Oil sales                                                      $      6,574,024       $      7,062,474
Natural gas sales                                                       564,395                546,023
Total                                                          $      7,138,419       $      7,608,497

Sales volumes:
Oil (Bbls)                                                               71,885                 77,312
Natural gas (Mcf)                                                       124,842                126,759
Total (BOE)                                                              92,692                 98,439

Average sales prices
Oil ($/Bbl)                                                    $          91.45       $          91.35
Natural gas ($/Mcf)                                                        4.52                   4.31
Total ($/BOE)                                                  $          77.01       $          77.29

Costs and expenses ($/BOE)
Lease operating expense                                        $          27.62       $          24.84
Depletion and depreciation                                                16.35                  15.01
Exploration expense                                                        1.65                      -
Accretion of discount on asset retirement obligations                      0.78                   0.69
General and administrative                                                 8.79                   9.21
Total                                                          $          55.19       $          49.75


Oil and natural gas sales revenues decreased 6% or $470,078 to $7,138,419 for the nine month period ended September 30, 2013 from $7,608,497 for the comparable 2012 period. An overall decrease in oil and natural gas production accounted for a $504,000 decrease in revenue while an increase in oil and natural gas commodity prices increased revenue by $34,000. Sales volumes decreased 6% on a BOE basis primarily due to natural declines in production but were offset slightly by production from the East Lusk #3. Average oil sales prices increased $0.10 to $91.45 for the nine month period ended September 30, 2013 compared to $91.35 for the nine month period ended September 30, 2012.
Average natural gas sales prices increased 5% to $4.52 for the nine month period ended September 30, 2013 compared to $4.31 for the nine month period ended September 30, 2012. We anticipate volumes to increase in the fourth quarter primarily due to production from the new well completed in New Mexico in August, 2013.

Lease operating expenses increased 5% or $115,049 to $2,560,438 for the nine month period ended September 30, 2013 from the comparable 2012 period. This was primarily due to the costs associated with operating expenses on the new well completed in New Mexico during the third quarter of 2013 and workover expenses in the Taylor Serbin and Apache Bromide fields. Lifting cost per BOE increased 11%, from $24.84 to $27.62 for the 2013 period. We anticipate lease operating expense to increase over the following quarters due to additional remedial repairs and workover expenses and operating expenses related to the new well completed in New Mexico.

Depletion and depreciation expense increased 3% to $1,515,500, compared to $1,477,500 for the comparable 2012 period. This was primarily due to the addition of the new East Lusk #3 well during the current period.

Exploration expense was $1.65 on a BOE basis for the nine month period ended September 30, 2013. The adjusted cost incurred to drill on the Riverdale lease in Texas was $152,650. The well was non-economic and the decision was made to plug and abandon the well. There was no comparable expense in the same period in 2012.

General and administrative overhead cost decreased 10% or $91,479 to $815,070 for the nine month period ended September 30, 2013 from the nine month period ended September 30, 2012. This was attributable primarily to a decrease in salary expenses. In the coming quarters we anticipate general and administrative expenses to remain stable or increase slightly.

Other expense, net for the nine months ended September 30, 2013, amounted to $236,903 compared to other income, net of $34,110 for the comparable 2012 period. The net decrease was primarily due to a $50,000 unrealized loss on commodity derivatives during the 2013 period compared to a $99,000 unrealized gain and a $129,012 realized gain on commodity derivatives during the 2012 period.

Liquidity and Capital Resources

Cash flow provided by operating activities was $3,359,900 for the nine month period ended September 30, 2013, as compared to $2,765,428 of cash flow provided by operating activities in the comparable 2012 period. The increase in cash flows from operating activities was primarily due to changes in accounts payable offset by lower net income and deferred income tax expense.

Cash flow used in investing activities was $1,252,226 for the nine month period ended September 30, 2013 and $3,666,153 in the comparable 2012 period due to the additions to oil and natural gas properties and equipment in each period.

Cash flow provided by financing activities for the nine month period ended September 30, 2013 was $89,600 from the exercise of 22,400 of our outstanding publicly traded common stock purchase warrants at an exercise price of $4.00 per share. Cash flow provided by financing activities for the nine month period ended September 30, 2012 was $193,589, net after expenses of approximately $63,769, from the sale of 60,761 shares of our common stock.


We may continue to raise financing through draws from our line of credit which has a borrowing base of $11,000,000. We anticipate our operating cash flow and other capital resources, including our Citibank revolving credit facility, if needed, will adequately fund planned capital expenditures and other capital uses over the near term. Based on industry outlook for the remainder of 2013, prices for oil and gas may be lower than the comparable period in 2012.

Effective May 16, 2012, we executed an At Market Issuance Sales Agreement with MLV & Co., LLC ("MLV") providing for an at-the-market offering of securities of up to 900,000 shares of one common stock (the "ATM Offering"). The ATM Offering is being undertaken pursuant to Rule 415 and a universal shelf Registration Statement on Form S-3 which was declared effective by the SEC on December 9, 2011. Through September 30, 2013, we have sold an aggregate of 60,761 shares of common stock in the ATM Offering, realizing net proceeds of $193,589 during 2012. An additional 839,239 shares of common stock have been registered for sale in the ATM Offering, which may continue until May 16, 2014 unless terminated sooner as provided for in the Sales Agreement with MLV. As there is no commitment for future sales of additional shares, we cannot predict how much, if any, additional proceeds may be realized in the ATM Offering.

PART I

  Add FPP to Portfolio     Set Alert         Email to a Friend  
Get SEC Filings for Another Symbol: Symbol Lookup
Quotes & Info for FPP - All Recent SEC Filings
Copyright © 2014 Yahoo! Inc. All rights reserved. Privacy Policy - Terms of Service
SEC Filing data and information provided by EDGAR Online, Inc. (1-800-416-6651). All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.