Listed:
Last:
Change:
Volume:
High: Low:
 
Last Trade Time

Company News

Black Ridge Oil & Gas Reports Second Quarter 2013 Results

Download PDF

Company Generated Record Adjusted EBITDA from Oil and Gas Operations

Double-Digit Quarterly Production and Revenue Growth

MINNETONKA, Minn., Aug. 13, 2013 /PRNewswire/ -- Black Ridge Oil & Gas, Inc. (the "Company") (OTCQB: ANFC), a well-positioned exploration and production (E&P) company focused on non-operated Bakken and Three Forks properties, today announced financial and operating results for the three and six months ended June 30, 2013.

Second Quarter 2013 Financial Highlights

  • Record adjusted EBITDA increased to $1.2 million, up 129% and 25% from second quarter of 2012 and first quarter of 2013, respectively
  • Production averaged 283 barrel of oil equivalent ("Boe") per day, up 47% compared to the second quarter of 2012 and 17% compared to the first quarter of 2013
  • Total revenue increased 56% from the second quarter of 2012 to $2.2 million and 13% compared to first quarter 2013
  • General and administrative expenses decreased 53% compared to second  quarter 2012, representing a 68% decrease on a per Boe basis

Second Quarter 2013 Operational Achievements

  • Participated in the completion of 8 gross (0.23 net) wells, with a 100% success rate in the Bakken and Three Forks plays
  • Increased total producing wells to 81 gross (2.82 net) wells, a 54% increase from second quarter of 2012
  • Closed on a core acreage swap in Williams County, North Dakota

Second Quarter 2013 Financial Results

The Company reported second quarter 2013 net loss of $297 thousand, or $0.01 per basic and diluted common share, compared to a net loss of $617 thousand, or $0.01 per basic and diluted common share, for the second quarter of 2012.

Revenue for the second quarter of 2013 was $2.2 million compared to $1.4 million for the second quarter of 2012, an increase of 56%.  The increase in revenue for the second quarter of 2013 is primarily attributable to a 47% increase in production from the second quarter of 2012.  The Company produced 25.7 MBoe during the second quarter of 2013, 92% of which was crude oil.

For the second quarter of 2013, the Company's realized oil price was $88.02 per barrel of oil.  The Company's realized price was 6% below WTI as compared to a differential of 18% per barrel in the second quarter of 2012.

Production expenses were $269 thousand in the second quarter of 2013 compared to $122 thousand in the second quarter of 2012, or $10.47 and $6.95 per Boe, respectively.  The 51% increase on a per Boe basis was primarily due to workover and other related expenses and the costs of water hauling and disposal.  Production expenses are down 15% on a per Boe basis from the first quarter of 2013.

Production taxes were $233 thousand in the second quarter of 2013 as compared to $158 thousand in the second quarter of 2012, or 10.8% and 11.5% of sales, respectively.  

General and administrative expenses decreased from $1.24 million in the second quarter of 2012 to $587 thousand in the second quarter of 2013.  In 2012 we expensed $439 thousand related to the fair value of common stock issued as a non-refundable deposit on acreage acquisitions we decided not to complete.

Depletion, depreciation, amortization and accretion together amounted to $876 thousand in the second quarter of 2013 as compared to $535 thousand in the second quarter of 2012, or $34.04 and $30.52 per Boe, respectively.

Adjusted EBITDA for the second quarter of 2013 was $1.2 million compared to $0.5 million for the second quarter of 2012, an increase of 129%.  The adjusted second quarter 2013 EBITDA is a record for the Company (excluding non-operating settlement income in the third and fourth quarters of 2012).

Second Quarter 2013 Operational Results

During the second quarter of 2013, the Company continued high-grading the Company's acreage portfolio.  Our focus on positioning the company for near-term development was exemplified by closing the previously announced core acreage swap in Williams County, North Dakota.  As of June 30, 2013, the Company controlled approximately 12,000 net mineral acres prospective for the Bakken and Three Forks formations.

Additionally, the Company participated in the completion of 8 gross (0.23 net) wells during the second quarter of 2013 with a 100% success rate, increasing the Company's total producing well count to 81 gross (2.82 net) wells.  Additionally, as of June 30, 2013, the Company owned working interests in 16 gross (0.66 net) wells that are preparing to drill, drilling, awaiting completion or completing.  Subsequent to the end of the second quarter through August 8, 2013, the Company participated in the completion of 8 gross (0.30 net) wells.

Liquidity

On August 8, 2013, Black Ridge closed a $125 million financing including a $50 million senior secured revolving credit facility and a $75 million subordinated senior secured term loan.  The initial available capital was doubled from our previous facility to $32 million.

Black Ridge intends to use these two new facilities to accelerate the growth of the Company's footprint in the Bakken and Three Forks trends through potential working interest and/or leasehold purchases, development of wells on the Company's existing leases, and retiring the existing credit facility with Dougherty Funding LLC ("Dougherty").  As of June 30, 2013, the principal amount outstanding on the Dougherty facility was $7.9 million and the total availability was $16.5 million.  Subsequent to the end of the second quarter through August 8, 2013 we have drawn an additional $3 million on the Dougherty facility.

Management Comments

Ken DeCubellis, Black Ridge's Chief Executive Officer, said: "We are proud of the record adjusted EBITDA, from oil and gas operations, that the Company achieved during the second quarter of 2013.  We are beginning to see the results from the acquisitions and development investments that were made in the previous two quarters.  The recently announced $125 million financing will provide the Company with the liquidity to continue investing in high return Bakken and Three Forks projects and grow production and cash flow.

Well Update

Producing Wells:  The following table sets forth Bakken and Three Forks wells in which Black Ridge holds a participating interest that were completed or acquired during the quarter ending June 30, 2013.

Well

Operator

Location

WI(1)

SCHA 33-34 #3H

Statoil

Mountrail, ND

0.063

SCHA 33-34 #4TFH

Statoil

Mountrail, ND

0.063

Hanson 33-28H

Zenergy

Williams, ND

0.036

Sequoia 6093 42-34H

Oasis

Burke, ND

0.031

Moody 159-94-15A-22-1H

Petro-Hunt

Burke, ND

0.017

Vera 1-1H

Continental

Williams, ND

0.016

Tena 1-13H

Continental

Williams, ND

0.005

Helstad 157-99-2A-11-1H

HRC Operating

Williams, ND

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.   

"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, 2013.

Well

Operator

Location

WI(1)

Sail and Anchor 4-13-14HBK

Samson Oil and Gas

Williams, ND

0.075

Mathewson 2-30H

Continental

Williams, ND

0.055

Mathewson 3-30H

Continental

Williams, ND

0.055

Colfax 3-19H

Continental

Williams, ND

0.055

Colfax 2-19H

Continental

Williams, ND

0.055

Jurgens 34-12PH

Whiting

Billings, ND

0.008

Jurgens 44-12PH

Whiting

Billings, ND

0.008

Dietz 34-7PH

Whiting

Stark, ND

0.006

Dietz 14-7PH

Whiting

Stark, ND

0.006

Thorp Federal 11X-28B

XTO

Dunn, ND

0.034

Thorp Federal 11X-28F

XTO

Dunn, ND

0.034

Billabong 2-13-14HBK

Samson Oil and Gas

Williams, ND

0.075

Duckstein 1-13-14HTF

Samson Oil and Gas

Williams, ND

0.075

Blackdog 3-13-14HTF

Samson Oil and Gas

Williams, ND

0.075

Raymond 1-21AH

Continental

Williams, ND

0.043

Heckman 7-6-1H

Mountain Divide

Divide, ND

0.004

(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 Adjusted EBITDA results provide useful information to both management and investors by excluding certain income and 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 on a GAAP basis, is included below:

Black Ridge Oil & Gas, Inc.

Reconciliation of Adjusted EBITDA

(Unaudited)



Three Months Ended


Six Months Ended


June 30,


June 30,


2013


2012


2013


2012

Net Income (loss)

$(297,300)


$ (617,445)


$       16,513


$(1,378,302)

Add Back:








Interest Expense, net, excluding amortization








of warrant based financing costs

520,284


137,196


743,056


221,138

Income Tax Provision

(92,913)


(227,381)


(526,701)


(381,565)

Depreciation, Depletion, and Amortization

874,474


533,446


1,580,010


827,199

Accretion of Abandonment Liability

1,811


1,208


2,963


2,005

Common stock issued for terminated oil and gas








acquisition

-


438,539


-


438,539

Share Based Compensation

223,145


272,208


395,598


778,950









Adjusted EBITDA

$ 1,229,501


$ 537,771


$  2,211,439


$     507,964

 

Financial and Statistical Data Tables

Following are financial highlights for the comparative three and six month periods ended June 30, 2013 and 2012.  The following information is based on GAAP reported earnings, with additional required disclosures included in the Company's Form 10-Q:

BLACK RIDGE OIL & GAS, INC.

CONDENSED BALANCE SHEETS










June 30,


December 31,


2013


2012

ASSETS

 (Unaudited)







Current assets:




Cash and cash equivalents

$  1,572,479


$    1,417,340

Accounts receivable

1,767,325


856,233

Settlement receivable

2,500,000


2,500,000

Advances to operators

1,573,359


1,350,295

Prepaid expenses

29,357


47,155

   Total current assets

7,442,520


6,171,023





Property and equipment:




Oil and natural gas properties, full cost method of accounting




   Proved properties

42,565,477


35,248,983

   Unproved properties

6,663,926


9,055,513

Other property and equipment

85,917


85,917

   Total property and equipment

49,315,320


44,390,413

Less, accumulated depreciation, amortization, depletion and allowance for impairment

(7,373,193)


(5,793,184)

   Total property and equipment, net

41,942,127


38,597,229





Debt issuance costs, net

283,048


657,702





Total assets

$49,667,695


$ 45,425,954









LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities:




Accounts payable

$  5,136,889


$    2,953,526

Settlement payable

160,000


160,000

Settlement accounts payable, related party

116,234


116,234

Accrued expenses

114,183


61,666

   Total current liabilities

5,527,306


3,291,426





Asset retirement obligations

72,602


67,145

Revolving credit facility

7,863,838


5,748,844

Deferred tax liability

4,205,995


4,732,696

Total liabilities

17,669,741


13,840,111





Commitments and contingencies

-


-





Stockholders' equity:




Preferred stock, $0.001 par value, 20,000,000 shares




authorized, no shares issued and outstanding

-


-

Common stock, $0.001 par value, 500,000,000 shares




authorized, 47,979,990 shares issued and outstanding

47,980


47,980

Additional paid-in capital

30,242,810


29,847,212

Retained earnings

1,707,164


1,690,651

   Total stockholders' equity

31,997,954


31,585,843





Total liabilities and stockholders' equity

$49,667,695


$ 45,425,954





 

BLACK RIDGE OIL & GAS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)


















For the Three Months


For the Six Months


Ended June 30,


Ended June 30,


2013


2012


2013


2012









Oil and gas sales

$2,151,001


$1,380,524


$4,062,300


$ 2,046,730









Operating expenses:








Production expenses

269,461


121,732


538,267


265,883

Production taxes

232,528


158,378


451,870


233,810

General and administrative

586,860


1,237,883


1,190,438


1,951,774

Depletion of oil and gas properties

868,663


527,712


1,568,388


814,615

Accretion of discount on asset retirement obligations

1,811


1,208


2,963


2,005

Depreciation and amortization

5,811


5,734


11,622


12,584

   Total operating expenses

1,965,134


2,052,647


3,763,548


3,280,671









Net operating income (loss)

185,867


(672,123)


298,752


(1,233,941)









Other income (expense):








Interest income

73


200


193


242

Interest (expense)

(576,153)


(172,903)


(809,133)


(526,168)

   Total other income (expense)

(576,080)


(172,703)


(808,940)


(525,926)









Loss before provision for income taxes

(390,213)


(844,826)


(510,188)


(1,759,867)









Provision for income taxes

92,913


227,381


526,701


381,565









Net income (loss)

$(297,300)


$(617,445)


$    16,513


$(1,378,302)

















Weighted average common shares outstanding - basic

47,979,990


47,789,762


47,979,990


47,596,363

Weighted average common shares outstanding - fully diluted

47,979,990


47,789,762


48,540,032


47,596,363









Net income (loss) per common share - basic

$     (0.01)


$     (0.01)


$        0.00


$        (0.03)

Net income (loss) per common share - fully diluted

$     (0.01)


$     (0.01)


$        0.00


$        (0.03)









 

BLACK RIDGE OIL & GAS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)










For the Six Months


Ended June 30,


2013


2012

CASH FLOWS FROM OPERATING ACTIVITIES




Net income (loss)

$         16,513


$ (1,378,302)

Adjustments to reconcile net income (loss)




to net cash provided by operating activities:




   Depletion of oil and gas properties

1,568,388


814,615

   Depreciation and amortization

11,622


12,584

   Amortization of debt issuance costs

399,654


80,463

   Accretion of discount on asset retirement obligations

2,963


2,005

   Common stock issued for terminated oil and gas acquisition

-


438,539

   Common stock warrants

65,884


259,069

   Common stock warrants, related parties

-


45,719

   Common stock options, related parties

329,714


474,162

   Deferred income taxes

(526,701)


(381,565)

   Decrease (increase) in current assets:




      Accounts receivable

(911,092)


(563,619)

      Prepaid expenses

17,798


(52,452)

      Contingent consideration receivable

-


335,999

   Increase (decrease) in current liabilities:




      Accounts payable

(14,833)


44,749

      Accounts payable, related parties

-


(9,206)

      Accrued expenses

52,517


-

      Royalties payable, related party

-


(16,800)

   Net cash provided by operating activities

1,012,427


105,960





CASH FLOWS FROM INVESTING ACTIVITIES




Proceeds from sale of oil and gas properties

343,486


736,625

Purchases of oil and gas properties and development capital expenditures

(2,675,398)


(6,893,144)

Advances to operators

(615,370)


-

Purchases of other property and equipment

-


(7,428)

   Net cash used in investing activities

(2,947,282)


(6,163,947)





CASH FLOWS FROM FINANCING ACTIVITIES




Advances from revolving credit facilities

4,300,000


7,825,000

Repayments on revolving credit facilities

(2,185,006)


(2,000,000)

Debt issuance costs paid

(25,000)


(295,822)

Net cash provided by financing activities

2,089,994


5,529,178





NET CHANGE IN CASH

155,139


(528,809)

CASH AT BEGINNING OF PERIOD

1,417,340


1,401,141

CASH AT END OF PERIOD

$    1,572,479


$       872,332









SUPPLEMENTAL INFORMATION:




Interest paid

$       275,920


$       140,917

Income taxes paid

$                  -


$                  -





NON-CASH INVESTING AND FINANCING ACTIVITIES:




Net change in accounts payable for development of oil and gas properties

$    2,198,196


$  7,865,941

Advances from operators received in swap for oil and gas properties

$  (1,200,000)


$                  -

Advances to operators applied to development of oil and gas properties

$    1,592,306


$                  -

Capitalized asset retirement costs, net of revision in estimate

$           2,494


$         48,688





Cautionary 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 the Company's 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, increases in operator costs, 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 business 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.

About the Company

Black Ridge Oil & Gas, Inc. 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.  For additional information, visit the Company's website at www.blackridgeoil.com.

Make sure you are first to receive timely information on the Company when it hits the newswire.  Sign up for Black Ridge's email news alert system today at https://ir.stockpr.com/blackridgeoil/email-alerts

Contact
Black Ridge Oil & Gas, Inc., Inc.
Ken DeCubellis, Chief Executive Officer
952-426-1241
www.blackridgeoil.com

SOURCE Black Ridge Oil & Gas, Inc.