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PQ > SEC Filings for PQ > Form 8-K on 27-Feb-2014All Recent SEC Filings

Show all filings for PETROQUEST ENERGY INC

Form 8-K for PETROQUEST ENERGY INC


27-Feb-2014

Results of Operations and Financial Condition


Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February 27, 2014, PetroQuest Energy, Inc. (the "Company") announced net income available to common stockholders for the quarter ended December 31, 2013 of $2,291,000, or $0.04 per share, compared to fourth quarter 2012 net loss available to common stockholders of $25,451,000, or $0.41 per share. For the year ended December 31, 2013, the Company reported net income available to common shareholders of $8,943,000, or $0.14 per share, compared to net loss available to common shareholders of $137,218,000, or $2.20 per share, for the year ended December 31, 2012. Net loss for the three and twelve months ended December 31, 2012 included ceiling test writedowns totaling $28,113,000 and $137,100,000, respectively.

During July 2013, the Company closed the acquisition of certain properties located in the Gulf of Mexico (the "Gulf of Mexico Acquisition") for an adjusted purchase price of approximately $189 million. These properties contributed 4.5 Bcfe to the Company's 2013 production. The acquisition was financed through the issuance of $200 million of 10% senior notes due 2017.

Discretionary cash flow for the fourth quarter of 2013 was $27,898,000 as compared to $20,393,000 for the comparable 2012 period. Net cash flow provided by operating activities totaled $26,810,000 and $20,915,000 during the fourth quarters of 2013 and 2012, respectively. For the year ended December 31, 2013, discretionary cash flow was $93,056,000 compared to $77,448,000 for 2012. Net cash flow provided by operating activities totaled $59,719,000 and $88,591,000 during the years ended December 31, 2013 and 2012, respectively. See the attached schedule for a reconciliation of net cash flow provided by operating activities to discretionary cash flow.

Oil and gas sales during the fourth quarter of 2013 were $53,174,000 as compared to $38,147,000 in the fourth quarter of 2012. For the year ended December 31, 2013, oil and gas sales increased 29% to $182,804,000 as compared to $141,433,000 for the year ended December 31, 2012. Production for the fourth quarter and year ended December 31, 2013 was higher by 15% and 12%, respectively, than production for the comparable periods of 2012. Stated on an Mcfe basis, unit prices received during the fourth quarter and the year ended December 31, 2012 were higher by 21% and 15%, respectively, as compared to the prices received during the comparable 2012 periods.

Lease operating expenses for the fourth quarter of 2013 were $1.23 per Mcfe as compared to $1.18 per Mcfe in the fourth quarter of 2012. Lease operating expenses totaled $1.15 per Mcfe for each of the years ended December 31, 2013 and 2012.

Depreciation, depletion and amortization ("DD&A") on oil and gas properties for the fourth quarter of 2013 was $2.07 per Mcfe as compared to $1.61 per Mcfe in the fourth quarter of 2012. For the year ended December 31, 2013, DD&A on oil and gas properties increased to $1.82 per Mcfe from $1.75 per Mcfe for the comparable period of 2012. DD&A on oil and gas properties was higher in the 2013 periods as a result of the Gulf of Mexico Acquisition.

Interest expense for the fourth quarter of 2013 increased to $7,835,000, as compared to $2,787,000 in the fourth quarter of 2012. For the year ended December 31, 2013, interest expense was $21,886,000 compared to $9,808,000 for 2012. The increase in interest expense was primarily a result of the debt incurred to finance the Gulf of Mexico Acquisition.

Fourth quarter of 2013 general and administrative expense was $897,000 higher than the comparable 2012 period. The fourth quarter 2013 costs included higher employee related compensation expenses and approximately $200,000 of costs related to the Gulf of Mexico Acquisition. For the year ended December 31, 2013, general and administrative expenses were $3,555,000 higher than 2012. The increase in general and administrative expenses for the year ended December 31, 2013 was due to approximately $4 million of transaction-related costs associated with the Gulf of Mexico Acquisition.

Production taxes for the fourth quarter of 2013 totaled $193,000, as compared to $773,000 in the fourth quarter of 2012. The decrease in production taxes for the fourth quarter of 2013 is primarily due to production tax refunds received from Texas. For the year ended December 31, 2013, production taxes were $3,950,000, as compared to $885,000 for the comparable period of 2012. Production taxes for the 2012 period included refunds of severance taxes paid on Oklahoma horizontal wells.


The following table sets forth certain information with respect to the oil and gas operations of the Company for the three and twelve months ended December 31, 2013 and 2012:

                                   Three Months Ended December 31,          Twelve Months Ended December 31,
                                       2013                 2012                2013                  2012
Production:
Oil (Bbls)                                220,158             140,632               680,980             520,590
Gas (Mcf)                               7,706,293           6,902,878            29,225,843          27,466,228
Ngl (Mcfe)                              1,194,044           1,116,205             4,754,223           3,366,774
Total Production (Mcfe)                10,221,285           8,862,875            38,065,946          33,956,542
Total Daily Production (MMcfe)              111.1                96.3                 104.3                92.8
Sales:
Total oil sales                  $     21,644,128       $  15,008,184     $      70,476,065       $  56,635,786
Total gas sales                        25,469,355          17,213,657            87,449,370          63,535,262
Total ngl sales                         6,060,077           5,925,721            24,878,243          21,262,236

Total oil and gas sales          $     53,173,560       $  38,147,562     $     182,803,678       $ 141,433,284

Average sales prices:
Oil (per Bbl)                    $          98.31       $      106.72     $          103.49       $      108.79
Gas (per Mcf)                                3.31                2.49                  2.99                2.31
Ngl (per Mcfe)                               5.08                5.31                  5.23                6.32
Per Mcfe                                     5.20                4.30                  4.80                4.17

The above sales and average sales prices include increases (reductions) to revenue related to the settlement of gas hedges of $676,000 and $(21,000), oil hedges of $452,000 and $676,000 and ngl hedges of $56,000 and $178,000 for the quarters ended December 31, 2013, and 2012, respectively. The above sales and average sales prices include increases (reductions) to revenue related to the settlement of gas hedges of $1,098,0000 and $6,846,000, oil hedges of $(232,000) and $1,529,000 and ngl hedges of $61,000 and $722,000 for the years ended December 31, 2013 and 2012, respectively.


The following initiates guidance for the first quarter of 2014:

                                                             Guidance for
                                                              1st Quarter
       Description                                               2014
       Production volumes (MMcfe/d)                            112 - 117
       Percent Gas                                                73%
       Percent Oil                                                14%
       Percent NGL                                                13%
       Expenses:
       Lease operating expenses (per Mcfe)                   $1.15 - $1.25
       Production taxes (per Mcfe)                           $0.15 - $0.20
       Depreciation, depletion and amortization (per Mcfe)   $2.05 - $2.15
       General and administrative (in millions)*              $6.0 - $6.5
       Interest expense (in millions)                         $7.5 - $8.0

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

The following initiates guidance for 2014:

                                                             Guidance for
       Description                                               2014
       Production volumes (MMcfe/d)                            125 - 140
       Percent Gas                                                70%
       Percent Oil                                                13%
       Percent NGL                                                17%
       Expenses:
       Lease operating expenses (per Mcfe)                   $1.10 - $1.20
       Production taxes (per Mcfe)                           $0.15 - $0.20
       Depreciation, depletion and amortization (per Mcfe)   $1.95 - $2.05
       General and administrative (in millions)*               $24 - $26
       Interest expense (in millions)                          $30 - $32
       2014 Capital Expenditures (in millions)                $140 - $150

* Includes non-cash stock compensation estimate of $5.1 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, 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 integrate our acquisitions with our operations and realize the anticipated benefits from the acquisitions, any unexpected costs or delays in connection with the integration of the acquisitions, our ability to find oil and natural gas reserves that are economically recoverable, the volatility of oil and natural gas prices, 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 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.

Click here for more information:
"http://www.petroquest.com/news.html?=BizID=1690&1=1"


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