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Black Ridge Reports Record Production Growth and Positive EBITDA for the Quarter Ending June 30, 2012

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MINNETONKA, Minn., Aug. 14, 2012 (GLOBE NEWSWIRE) -- Black Ridge Oil & Gas, Inc. (formerly known as Ante5, Inc.) (OTCBB:ANFC) today announced revenues of $1,380,524 from sales of crude oil and natural gas for the three months ended June 30, 2012 compared to revenues of $250,590 for the three months ended June 30, 2011, an increase of $1,129,934, or 451%. These revenues are due to the drilling and development of producing wells.

For the six months ended June 30, 2012, the Company reported revenues of $2,046,730, an increase of $1,699,200 or 489% over revenues of $347,530 reported during the six months ended June 30, 2011. As of June 30, 2012, the Company had 48 gross (1.83 net) producing wells, and an additional 11 gross (0.39 net) wells that were either preparing to drill, drilling, awaiting completion, or completing, compared to 11 gross (0.45 net) producing wells, and an additional 13 gross wells that were either preparing to drill, drilling, awaiting completion, or completing as of June 30, 2011.

Second Quarter 2012 Highlights

  • Quarterly revenue of $1,380,524.
  • For the six months ended June 30, 2012, production was 25,561 barrels of oil equivalent (BOE), an increase of 21,701 BOE from the six months ended June 30, 2011, representing a growth rate of 562%.
  • 97% of total production was from oil.
  • Positive Adjusted EBITDA of $537,771 in the quarter ended June 30, 2012, an increase of $735,099 from Adjusted EBITDA of negative $197,328 in the quarter ended June 30, 2011. For the six months ended June 30, 2012, Adjusted EBITDA was $507,964, an increase of $859,183 from Adjusted EBITDA of negative $351,219 in the six months ended June 30, 2011.
  • On April 4, 2012, the Company entered into a new Secured Revolving Credit Agreement with Dougherty Funding LLC with availability of up to $10,000,000.
  • As of June 30, 2012, the Company controlled approximately 11,213 net mineral acres in the Bakken and Three Forks formations. In addition, the Company owned working interests in 59 gross wells representing 2.23 net wells that are preparing to drill, drilling, awaiting completion, complete or producing.

Ken DeCubellis, Black Ridge's Chief Executive Officer, commented, "We are proud to report triple digit revenue and production growth during the second quarter as well as for the first six months of 2012. Given our cash position, our credit facility, and the strength of our balance sheet, we believe that we are well positioned to continue the planned development of our Bakken acreage over the second half of 2012 and into 2013 without raising any additional equity capital."

Operational Update

Producing Wells: The following table sets forth Bakken and Three Forks wells in which Black Ridge holds a participating interest that were producing as of June 30, 2012.

Well Operator Location WI(1) IP Rate(2)
Fairbanks 1-20H Continental Williams, ND 0.304 TBD
Christensen 159-102-8-5-1H Newfield Williams, ND 0.300 562
Go-State 157-97-2116H-1 Hess Williams, ND 0.130 558
Pasternak #1-32-29HC G3 Operating Williams, ND 0.125 370
Colfax 1X-19H Continental Williams, ND 0.106 747
Dahl Federal 2-15H (3) SM-energy McKenzie, ND 0.087 TBD
Lowe 18-19-158N-99W Crescent Point Williams, ND 0.083 24
Weyrauch 15-11H Hess Williams, ND 0.083 824
Stromme Family Trust 157-101-11C-2-1H Petro-Hunt Williams, ND 0.079 TBD
Pasternak Trust 157-100-18A-19-1H Petro-Hunt Williams, ND 0.078 534
A.Tufto 18-19 #1-H Brigham Williams, ND 0.072 2,541
Sidonia 15-1102H EOG Mountrail, ND 0.063 510
Love 11-2 #1H Samson Williams, ND 0.062 343
Erickson 41-25 SWH Denbury McKenzie, ND 0.050 1,051
Austin 17-20-158N-99W Crescent Point Williams, ND 0.049 108
Burke 24-08H EOG Mountrail, ND 0.016 673
Revolver 1-35H Slawson Mountrail, ND 0.016 1,770
White 157-100-17B-20-1H Petro-Hunt Williams, ND 0.016 411
Revolver 2-35H Slawson Mountrail, ND 0.016 TBD
En-Jorstad-157-94-0904H-1 Hess Mountrail, ND 0.012 647
Marshall 1-13H Continental Dunn, ND 0.012 844
Miller 157-101-12C-1-1H Petro-Hunt Williams, ND 0.011 2,112
Vanville 22-2623H EOG Burke, ND 0.010 75
Vanville 21-2635H EOG Burke, ND 0.010 240
Olson 15-36H Hess Williams, ND 0.010 1,135
Clearwater 1-24-25H 1 Hunt Mountrail, ND 0.010 254
Kannegeiter 160-90-17-P-1H OXY Burke, ND 0.010 9
Berger 156-100-7-6-1H Liberty Williams, ND 0.010 TBD
Opedahl 21x-11 XTO Williams, ND 0.010 394
Talkington 21-30TFH Whiting Stark, ND 0.008 809
Talkington 41-30PH Whiting Stark, ND 0.008 TBD
Probe 1-19-30HMB Slawson Mountrail, ND 0.008 494
Clearwater 1-26-23H 1 Hunt Mountrail, ND 0.007 174
Lindy 156-100-10-3-1H Liberty Williams, ND 0.007 TBD
Pankowski 4-6H Kodiak Williams, ND 0.006 358
En-Charles Wood-157-94-1720H-1 Hess Mountrail, ND 0.006 347
EN-Will Trust B-157-94-2635H-1 Hess Mountrail, ND 0.005 402
EN-Will Trust B-157-94-2635H-2 Hess Mountrail, ND 0.005 412
EN-Will Trust B-157-94-2635H-3 Hess Mountrail, ND 0.005 372
Hodenfield 15-23H Hess Williams, ND 0.005 2,042
Tempe #1-29H Continental Divide, ND 0.004 338
Go-Soine A-156-97-3229H-1 Hess Williams, ND 0.004 870
Mathewson 1-30H Continental Williams, ND 0.004 662
Marcy 1-24H Continental Williams, ND 0.003 472
Setterlund 159-94-28B-33-1H Petro-Hunt Burke, ND 0.002 208
Scanlan 3-5H Kodiak Williams, ND 0.002 819
Helstad 158-99-34D-27-1H Petro-Hunt Williams, ND 0.001 353
Feller 1-22H Continental Williams, ND 0.001 TBD
Vig 157-99-10D-3-1H Petro-Hunt Williams, ND 0.001 336
(1) The working interests are based on Black Ridge's internal records and may be subject to change by operators' third-party legal counsel in preparing final division order title opinions for each well.
   
(2)
 
The initial production rate ("IP Rate") for each well expressed in barrels of oil per day ("BOPD") does not include associated natural gas production. Initial production is generally the 24-hour "Peak Production Rate" that may be measured following the initial day of production, depending on operator procedure or well profiles, although the calculation may vary from operator to operator.
   
(3) This well was not included in quarter end financial reporting because our Working Interest is subject to a class action lawsuit related to the state of North Dakota's control of riparian acreage.

"Drilling" Wells: The following table sets forth Bakken and Three Forks wells in which Black Ridge holds a participating interest that are either preparing to drill, drilling, awaiting completion or completing as of June 30, 2012.

  Well Location Operator WI(1)  
  Peggy Schettler 14-33H Dunn, ND Marathon 0.125  
  Go-Hill 158-98-3427H-1 Williams, ND Hess 0.102  
  King 157-101-3B-10-1H Williams, ND Petro-Hunt 0.068  
  Go-Durning 157-97-2932H-1 Williams, ND Hess 0.063  
  Talkington 11-30PH Stark, ND Whiting 0.008  
  En-Engebretson 157-94-1003H-1 Mountrail, ND Hess 0.005  
  Washburne 1-22H Williams, ND Continental 0.003  
  Marcy 3-24H Williams, ND Continental 0.003  
  Marcy 2-24H Williams, ND Continental 0.003  
  Hokanson 157-99-1A-12-1H Williams, ND Petro-Hunt 0.003  
  Homer 1-14H Williams, ND Continental 0.002  
           
(1)

 
The working interests are based on Black Ridge's internal records and 
may be subject to change by operators' third-party legal counsel in 
preparing final division order title opinions for each well.

Adjusted EBITDA

In addition to reporting net income (loss) as defined under GAAP, we also present Adjusted EBITDA. We define Adjusted EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depreciation, depletion and amortization, (iv) accretion of abandonment liability, and (v) non-cash expenses relating to share based payments recognized under ASC Topic 718. We believe the use of non-GAAP financial measures provides useful information to investors regarding our current financial performance; however, Adjusted EBITDA does not represent, and should not be considered an alternative to GAAP measurements. We believe this measure is useful in evaluating our fundamental core operating performance. Specifically, we believe the non-GAAP Adjusted EBITDA results provide useful information to both management and investors by excluding certain expenses that our management believes are not indicative of our core operating results. Although we use adjusted EBITDA to manage our business, including the preparation of our annual operating budget and financial projections, we believe that non-GAAP financial measures have limitations and do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures. A reconciliation of Adjusted EBITDA to Net Income, GAAP, is included below:

 
Black Ridge Oil & Gas, Inc.
Reconciliation of Adjusted EBITDA
 
  Three Months Ended Six Months Ended
  June 30, June 30,
  2012 2011 2012 2011
Net Loss $ (617,445) $ (415,313) $ (1,378,302) $ (466,237)
Add Back:        
Interest Expense, net, excluding amortization of warrant based financing costs 137,196 3,462 221,138 2,306
Income Tax Provision (227,381) (57,900) (381,565) (332,200)
Depreciation, Depletion, and Amortization 533,446 71,342 827,199 110,612
Accretion of Abandonment Liability 1,208 146 2,005 266
Common stock issued for terminated oil and gas acquisition 438,539 -- 438,539 --
Share Based Compensation 272,208 200,935 778,950 334,034
         
Adjusted EBITDA $ 537,771 $ (197,328) $ 507,964 $ (351,219)

About the Company

Black Ridge Oil & Gas is an oil and gas exploration and production company based in Minnetonka, Minnesota. Black Ridge's focus is exclusive to the Williston Basin Bakken and Three Forks trend in North Dakota and Montana. Black Ridge Oil & Gas controls approximately 11,213 net Bakken and/or Three Forks acres. For additional information, visit the Company's website at www.blackridgeoil.com.

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BLACK RIDGE OIL & GAS, INC. (Formerly Ante5, Inc.)
CONDENSED BALANCE SHEETS
     
     
  June 30, December 31,
  2012 2011
ASSETS  (Unaudited)  
     
Current assets:    
Cash and cash equivalents  $  872,332  $ 1,401,141
Accounts receivable 1,236,622 673,003
Prepaid expenses 93,051 40,599
Current portion of contingent consideration receivable 2,136,000 2,309,752
Total current assets 4,338,005 4,424,495
     
Property and equipment:    
Oil and natural gas properties, full cost method of accounting    
Proved properties 25,335,616 10,867,443
Unproved properties 12,839,032 13,236,057
Other property and equipment 85,917 78,489
Total property and equipment 38,260,565 24,181,989
Less, accumulated depreciation, amortization and depletion (4,152,696) (3,325,497)
Total property and equipment, net 34,107,869 20,856,492
     
Contingent consideration receivable, net of current portion and allowance of $878,650 3,536,603 3,698,850
Debt issuance costs 267,408 52,049
Total other assets 3,804,011 3,750,899
     
Total assets  $ 42,249,885  $ 29,031,886
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable  $ 10,731,626  $ 2,820,936
Accounts payable, related party -- 9,206
Royalties payable, related party 283,631 300,431
Total current liabilities 11,015,257 3,130,573
     
Asset retirement obligations 54,593 3,900
Revolving credit facilities 5,825,000 --
Deferred tax liability 630,530 1,012,095
     
Total liabilities 17,525,380 4,146,568
     
Stockholders' equity:    
Preferred stock, $0.001 par value, 20,000,000 shares    
authorized, no shares issued and outstanding -- --
Common stock, $0.001 par value, 100,000,000 shares    
authorized, 47,979,990 shares issued and outstanding 47,980 47,403
Additional paid-in capital 29,275,586 28,058,674
Accumulated (deficit) (4,599,061) (3,220,759)
Total stockholders' equity 24,724,505 24,885,318
     
Total liabilities and stockholders' equity  $ 42,249,885  $ 29,031,886
 
 
BLACK RIDGE OIL & GAS, INC. (Formerly Ante5, Inc.)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
     
  For the Three Months For the Six Months
  Ended June 30, Ended June 30,
  2012 2011 2012 2011
         
Oil and gas sales  $ 1,380,524  $ 250,590  $ 2,046,730  $ 347,530
         
Operating expenses:        
Production expenses 121,732 11,352 265,883 16,975
Production taxes 158,378 27,573 233,810 37,003
General and administrative 1,237,883 489,109 1,951,774 857,986
Depletion of oil and gas properties 527,712 68,382 814,615 104,530
Accretion of discount on asset retirement obligations 1,208 146 2,005 266
Depreciation and amortization 5,734 2,960 12,584 6,082
Total operating expenses 2,052,647 599,522 3,280,671 1,022,842
         
Net operating  (loss) (672,123) (348,932) (1,233,941) (675,312)
         
Other income (expense):        
Interest income 200 256 242 1,412
Interest (expense) (172,903) (25,490) (526,168) (25,490)
Loss on disposal of equipment -- (1,061) -- (1,061)
Indemnification expenses -- (97,986) -- (97,986)
Total other income (expense) (172,703) (124,281) (525,926) (123,125)
         
Loss before provision for income taxes (844,826) (473,213) (1,759,867) (798,437)
         
Provision for income taxes 227,381 57,900 381,565 332,200
         
Net (loss)  $ (617,445)  $ (415,313) $(1,378,302)  $ (466,237)
         
         
Weighted average number of common shares outstanding - basic and fully diluted 47,789,762 40,505,760 47,596,363 39,180,194
         
Net (loss) per share - basic and fully diluted  $ (0.01)  $ (0.01)  $ (0.03)  $ (0.01)
         
         
BLACK RIDGE OIL & GAS, INC. (Formerly Ante5, Inc.)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
   
  For the Six Months
  Ended June 30,
  2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES    
Net (loss)  $ (1,378,302)  $ (466,237)
Adjustments to reconcile net (loss) to net cash used in operating activities:    
Depletion of oil and gas properties 814,615 104,530
Depreciation and amortization 12,584 6,082
Amortization of debt issuance costs 80,463 3,718
Accretion of discount on asset retirement obligations 2,005 266
Loss on disposal of equipment -- 1,061
Common stock issued for terminated oil & gas acquisition 438,539 --
Common stock warrants 259,069 18,506
Common stock warrants, related parties 45,719 3,266
Common stock options, related parties 474,162 312,262
Decrease (increase) in assets:    
Accounts receivable (563,619) (242,611)
Prepaid expenses (52,452) (95,816)
Contingent consideration receivable 335,999 85,343
Increase (decrease) in liabilities:    
Accounts payable 44,749 (76,732)
Accounts payable, related party (9,206) 145,939
Accrued expenses -- (47,267)
Royalties payable, related party (16,800) (4,319)
Deferred tax liability (381,565) (332,200)
Net cash provided by (used in) operating activities 105,960 (584,209)
     
CASH FLOWS FROM INVESTING ACTIVITIES    
Proceeds from the sale of oil and gas properties 736,625 --
Purchases of oil and gas properties and development capital expenditures (6,893,144) (5,665,533)
Purchases of other property and equipment (7,428) (40,533)
Net cash used in investing activities (6,163,947) (5,706,066)
     
CASH FLOWS FROM FINANCING ACTIVITIES    
Advances from revolving credit facilities 7,825,000 --
Repayments on revolving credit facilities (2,000,000) --
Debt issuance costs paid (295,822) (66,921)
Proceeds from the exercise of common stock options -- 15,600
Net cash provided by (used in) financing activities 5,529,178 (51,321)
     
NET CHANGE IN CASH  (528,809) (6,341,596)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,401,141 8,577,610
CASH AND CASH EQUIVALENTS AT END OF PERIOD  $ 872,332  $ 2,236,014
     
     
SUPPLEMENTAL INFORMATION:    
Interest paid  $ 140,917  $ --
Income taxes paid  $ --  $  --
     
NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Purchase of oil and gas properties paid subsequent to period-end  $ 10,288,091  $ 3,697,835
Purchase of oil and gas properties through issuance of common stock  $ --  $ 4,940,269
Capitalized asset retirement costs  $ 48,688  $ 3,074

Statement as to Forward Looking Statements

Certain statements contained herein, which are not historical, are forward-looking statements that are subject to risks and uncertainties not known or disclosed herein that could cause actual results to differ materially from those expressed herein. These statements may include projections and other "forward-looking statements" within the meaning of the federal securities laws. Any such projections or statements reflect Black Ridge Oil & Gas current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from those projected. Important factors that could cause the actual results to differ materially from those projected include, without limitation, general economic or industry conditions nationally and/or in the communities in which our Company conducts business, volatility in commodity prices for crude oil and natural gas, environmental risks, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital or have access to debt financing, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our Company's operations, products, services and prices and other risks inherent in the Company's businesses that are detailed in the Company's Securities and Exchange Commission ("SEC") filings. Readers are encouraged to review these risks in the Company's SEC filings.