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Black Ridge Oil & Gas Reports Third Quarter 2013 Results and Achieves Best Operational Results in Company History

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Record Quarterly Revenue of $2.5 Million, Record Production of 308 BOEPD, Record Adjusted EBITDA from Oil & Gas Operations of $1.7 million

MINNETONKA, Minn., Nov. 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 nine months ended September 30, 2013.

Third Quarter 2013 Financial Highlights

  • Record adjusted EBITDA from oil and gas operations (excludes non-operating net settlement income) totaled $1.7 million, an increase of 61% and 38% from third quarter of 2012 and second quarter of 2013, respectively
  • Record production averaged 308 barrel of oil equivalent ("Boe") per day, representing 2% production growth compared to the third quarter of 2012, our previous production record, and 10% production growth compared to the second quarter of 2013
  • Record revenue totaled $2.5 million, an increase of 11% from the third quarter of 2012 and an increase of 18% compared to second quarter 2013
  • Reduced general and administrative expenses 24% on a per Boe basis compared to the third quarter of 2012, excluding settlement related legal expenses in 2012
  • Realized $0.8 million of cash flow from operating activities

Third Quarter 2013 Operational Achievements

  • Participated in the completion of 11 gross (0.40 net) wells with a 100% success rate in the Bakken and Three Forks plays
  • Increased total producing wells to 92 gross (3.22 net) wells, a 61% increase in gross producing wells from third quarter of 2012

Third Quarter 2013 Financial Results

Black Ridge Oil & Gas reported a third quarter 2013 net loss of $224 thousand, or $0.00 per basic and diluted common share, compared to net income of $3.356 million, or $0.07 per basic and diluted common share, for the third quarter of 2012.  The 2012 results included settlement income of $3.385 million, net of settlement expenses and related income tax.

Revenue for the third quarter of 2013 was $2.5 million compared to $2.3 million for the third quarter of 2012, an increase of 11%.  Total revenues increased 18% over the second quarter of 2013, driven by higher production and an increase in average realized prices.  The Company produced 28.3 MBoe during the third quarter of 2013, 93% of which was crude oil.

For the third quarter of 2013, the Company's realized oil price, including the effect of settled derivatives, was $95.27 per barrel compared to $82.79 per barrel in the third quarter 2012.  The Company's realized price, including the effect of settled derivatives, was $91.41 per Boe in the third quarter of 2013 compared to $81.85 per Boe in the third quarter of 2012.

Adjusted EBITDA from oil and gas operations for the third quarter of 2013 was $1.7 million compared to $1.1 million (excluding non-operating net settlement income) for the third quarter of 2012, an increase of 61%.  The adjusted third quarter 2013 EBITDA is a record for the Company (excluding non-operating net settlement income in the third and fourth quarters of 2012).

General and administrative expenses decreased to $525 thousand in the third quarter of 2013 from $1.004 million in the third quarter of 2012, or $18.51 and $35.94 per Boe, respectively.  The 2012 general and administrative expenses were $676 thousand or $24.22 per Boe when excluding settlement related legal expenses.

Production expenses were $275 thousand in the third quarter of 2013 compared to $162 thousand in the third quarter of 2012, or $9.69 and $5.79 per Boe, respectively.  Production expenses increased as a percentage of revenues from 7.1% in 2012 to 10.8% in 2013 as increased workover and related expenses and higher water hauling and disposal costs in 2013 drove production costs higher.

Production taxes were $271 thousand in the third quarter of 2013 as compared to $293 thousand in the third quarter of 2012, or 10.7% and 12.8% of sales, respectively.

Depletion, depreciation, amortization and accretion together amounted to $1.073 million in the third quarter of 2013 as compared to $926 thousand in the third quarter of 2012, or $37.83 and $33.17 per Boe, respectively.

Third Quarter 2013 Operational Results

Operationally, Black Ridge's third quarter of 2013 performance reflects continued success in executing its strategy of developing its acreage position and building production.  Production increased 10% to 28,349 Boe in the third quarter of 2013 as compared to second quarter of 2013 production of 25,741 Boe.

Additionally, the Company participated in the completion of 11 gross (0.40 net) wells during the third quarter of 2013 with a 100% success rate, increasing the Company's total producing well count to 92 gross (3.22 net) wells.  As of September 30, 2013, the Company owned working interests in 16 gross (0.70 net) wells that are preparing to drill, drilling, awaiting completion or completing.  The 0.70 net wells that are preparing to drill, drilling, awaiting completion or completing would result in a 22% increase in net wells in production once the wells are completed.

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 nearly doubled from our previous facility to $32 million.

As of September 30, 2013 the Company had drawn $15 million on these facilities, recording $12.3 million in long term debt, net of debt discounts of $2.7 million, and had $5.1 million in cash on hand.

Black Ridge continues 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 and development of wells on the Company's existing leases.

Management Comments

Ken DeCubellis, Black Ridge's Chief Executive Officer, said: "This quarter marks the best operational results in Company history.  While we are pleased with this accomplishment, our third quarter operating results reflect none of the benefits our recent financing can help us attain.  We now have the liquidity to renew our focus on obtaining high return acquisitions and development opportunities in the heart of the Bakken/Three Forks play that will drive near term benefits to our operating results.  We are just beginning to see the accretive effect our investments bring to the bottom line."

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 September 30, 2013:




Well

Operator

Location

WI(1)

Sail and Anchor 4-13-14HBK

Slawson

Williams, ND

0.075

Mathewson 2-30H

Continental

Williams, ND

0.055

Mathewson 3-30H

Continental

Williams, ND

0.055

Colfax 2-19H

Continental

Williams, ND

0.055

Colfax 3-19H

Continental

Williams, ND

0.055

Thorp Federal 11X-28B

XTO

Dunn, ND

0.034

Thorp Federal 11X-28F

XTO

Dunn, ND

0.034

Jurgens 34-12PH

Whiting

Billings, ND

0.008

Jurgens 44-12PH

Whiting

Billings, ND

0.008

Dietz 14-7PH

Whiting

Stark, ND

0.006

Dietz 34-7PH

Whiting

Stark, ND

0.006



(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 September 30, 2013:


Well

Operator

Location

WI(1)

Peter 4-2H

SM-energy

Divide, ND

0.125

Coopers 1-23-13HBK

Slawson

Williams, ND

0.084

Tooheys 4-15-14HBK

Slawson

Williams, ND

0.084

Charlotte #1-12-1H

Mountain Divide

Divide, ND

0.083

Billabong 2-13-14HBK

Slawson

Williams, ND

0.075

Duckstein 1-13-14HTF

Slawson

Williams, ND

0.075

Blackdog 3-13-14HTF

Slawson

Williams, ND

0.075

Raymond 1-21AH

Continental

Williams, ND

0.043

Moline 157-100-20D-17-2H

HRC Operating

Williams, ND

0.016

Moline 157-100-20D-17-3H

HRC Operating

Williams, ND

0.016

Amy 2-5H1

Continental

Stark, ND

0.015

Kelter 7-1HTF3

Zenergy

Williams, ND

0.004

Kelter 7-12H3

Zenergy

Williams, ND

0.004

Kelter 7-1H2

Zenergy

Williams, ND

0.004

P Scanlan 153-98-16-9-5-12H

Kodiak

Williams, ND

0.001

P Scanlan 153-98-16-9-5-5H

Kodiak

Williams, ND

0.001



(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 Net Income (Loss) and Adjusted EBITDA

In addition to reporting net income (loss) as defined under GAAP, we also present Adjusted Net Income (Loss) and Adjusted EBITDA.  We define Adjusted Net Income (Loss) as net income (loss) excluding settlement income, net of settlement expenses and related income tax.  We define Adjusted EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depreciation, depletion and amortization, (iv) accretion of abandonment liability, (v) unrealized gains and losses on derivatives, and (vi) 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 Net Income (Loss) and Adjusted EBITDA do not represent, and should not be considered an alternative to GAAP measurements.  We believe these measures are useful in evaluating our fundamental core operating performance.  Specifically, we believe the non-GAAP Adjusted Net Income (Loss) and 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 Net Income (Loss) and 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.  Reconciliations of Adjusted Net Income (Loss) and Adjusted EBITDA to Net Income (Loss) on a GAAP basis are included below:



Black Ridge Oil & Gas, Inc.

Reconciliation of Adjusted Net Income (Loss)

(Unaudited)



Three Months Ended


Nine Months Ended


September 30,


September 30,


2013


2012


2013


2012

Net Income (Loss)

$

(223,664)


$

3,355,510


$

(207,151)


$

1,977,208

Subtract:












Settlement Income, Net of Tax (a)


-



(3,384,643)



-



(3,384,643)

Adjusted Net Income (Loss)

$

(223,664)


$

(29,133)


$

(207,151)


$

(1,407,435)













Weighted average common shares outstanding - basic


47,979,990



47,979,990



47,979,990



47,725,172

Weighted average common shares outstanding - fully diluted


47,979,990



48,583,451



47,979,990



48,049,669













Net income (loss) per common share - basic

$

(0.00)


$

0.07


$

(0.00)


$

0.04

Subtract:












Change due to Settlement Income, Net of Tax


0.00



(0.07)



0.00



(0.07)

Adjusted Net Income (loss) per common share - basic

$

(0.00)


$

(0.00)


$

(0.00)


$

(0.03)













Net income (loss) per common share - fully diluted


(0.00)


$

0.07


$

(0.00)


$

0.04

Subtract:












Change due to Settlement Income, Net of Tax


0.00



(0.07)



0.00



(0.07)

Adjusted Net Income (Loss) per common share - fully diluted

$

(0.00)


$

(0.00)


$

(0.00)


$

(0.03)



(a)

Adjusted to reflect tax expense, computed based on our effective tax rate of approximately 41%, of $2,360,000 for the three and nine months ended September 30, 2012.



 



Black Ridge Oil & Gas, Inc.

Reconciliation of Adjusted EBITDA

(Unaudited)



Three Months Ended


Nine Months Ended


September 30,


September 30,


2013


2012


2013


2012

Net income (loss)

$

(223,664)


$

3,355,510


$

(207,151)


$

1,977,208

Add back:












Interest expense, net, excluding amortization of warrant based financing costs


622,842



275,144



1,365,898



496,282

Income tax provision


(88,708)



2,012,195



(615,409)



1,630,630

Depreciation, depletion, and amortization


1,070,753



924,949



2,650,763



1,752,148

Accretion of abandonment liability


1,811



1,339



4,774



3,344

Common stock issued for terminated oil and gas acquisition


-



-



-



438,539

Share based compensation


263,379



227,588



658,977



1,006,538

Unrealized loss on derivatives


46,225



-



46,225



-













Adjusted EBITDA

$

1,692,638


$

6,796,725


$

3,904,077


$

7,304,689













        Our Adjusted EBITDA for the three and nine month periods ended September 30, 2012 includes settlement income, net of settlement expenses, of $5,744,643.














Financial and Statistical Data Tables


Following are financial highlights for the comparative three and nine month periods ended September 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










September 30,


December 31,


2013


2012

ASSETS

 (Unaudited)







Current assets:




Cash and cash equivalents

$     5,086,978


$   1,417,340

Accounts receivable

2,144,259


856,233

Settlement receivable

2,500,000


2,500,000

Advances to operators

1,220,576


1,350,295

Prepaid expenses

30,791


47,155

Total current assets

10,982,604


6,171,023





Property and equipment:




Oil and natural gas properties, full cost method of accounting




Proved properties

47,556,747


35,248,983

Unproved properties

5,539,955


9,055,513

Other property and equipment

87,218


85,917

Total property and equipment

53,183,920


44,390,413

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

(8,443,947)


(5,793,184)

Total property and equipment, net

44,739,973


38,597,229





Derivative instruments

6,885


-

Debt issuance costs, net

691,661


657,702





Total assets

$   56,421,123


$ 45,425,954









LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities:




Accounts payable

$    5,014,464


$   2,953,526

Settlement payable

160,000


160,000

Settlement accounts payable, related party

116,234


116,234

Accrued expenses

96,916


61,666

Derivative instruments

53,110


-

Total current liabilities

5,440,724


3,291,426





Asset retirement obligations

82,319


67,145

Revolving credit facilities and long term debt, net of discounts of $2,717,949 and $-0-, respectively

12,318,718


5,748,844

Deferred tax liability

4,117,287


4,732,696





Total liabilities

21,959,048


13,840,111





Commitments and contingencies (See note 15)

-


-





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

32,930,595


29,847,212

Retained earnings

1,483,500


1,690,651

Total stockholders' equity

34,462,075


31,585,843





Total liabilities and stockholders' equity

$   56,421,123


$ 45,425,954





 

 


BLACK RIDGE OIL & GAS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)


















For the Three Months


For the Nine Months


Ended September 30,


Ended September 30,


2013


2012


2013


2012









Oil and gas sales

$2,612,640


$2,285,731


$6,674,940


$ 4,332,461

Loss on settled derivatives

(21,184)


-


(21,184)


-

Unrealized loss on derivative instruments

(46,225)


-


(46,225)


-

Total revenues

$2,545,231


$2,285,731


$6,607,531


$ 4,332,461









Operating expenses:








Production expenses

274,756


161,793


813,023


427,676

Production taxes

271,116


292,925


722,986


526,735

General and administrative

524,849


1,003,743


1,715,287


2,955,517

Depletion of oil and gas properties

1,064,921


919,138


2,633,309


1,733,753

Accretion of discount on asset retirement obligations

1,811


1,339


4,774


3,344

Depreciation and amortization

5,832


5,811


17,454


18,395

Total operating expenses

2,143,285


2,384,749


5,906,833


5,665,420









Net operating income (loss)

401,946


(99,018)


700,698


(1,332,959)









Other income (expense):








Interest income

148


209


341


451

Interest (expense)

(714,466)


(278,129)


(1,523,599)


(804,297)

Settlement income

-


8,020,759


-


8,020,759

Settlement expense

-


(2,276,116)


-


(2,276,116)

Total other income (expense)

(714,318)


5,466,723


(1,523,258)


4,940,797









Loss before provision for income taxes

(312,372)


5,367,705


(822,560)


3,607,838









Provision for income taxes

88,708


(2,012,195)


615,409


(1,630,630)









Net income (loss)

$(223,664)


$3,355,510


$ (207,151)


$ 1,977,208

















Weighted average common shares outstanding - basic

47,979,990


47,979,990


47,979,990


47,725,172

Weighted average common shares outstanding - fully diluted

47,979,990


48,583,451


47,979,990


48,049,669









Net income (loss) per common share - basic

$      (0.00)


$         0.07


$       (0.00)


$          0.04

Net income (loss) per common share - fully diluted

$      (0.00)


$         0.07


$       (0.00)


$          0.04













BLACK RIDGE OIL & GAS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)










For the Nine Months


Ended September 30,


2013


2012

CASH FLOWS FROM OPERATING ACTIVITIES




Net income (loss)

$   (207,151)


$   1,977,208

Adjustments to reconcile net income (loss)




to net cash provided by operating activities:




Depletion of oil and gas properties

2,633,309


1,733,753

Depreciation and amortization

17,454


18,395

Amortization of debt issuance costs

691,928


148,299

Accretion of discount on asset retirement obligations

4,774


3,344

Unrealized loss on derivative instruments

46,225


-

Accrued payment in kind interest applied to long term debt

36,667


-

Amortization of original issue discount on debt

6,457


-

Amortization of debt discounts, warrants

49,170


-

Common stock issued for terminated oil and gas acquisition

-


438,539

Common stock warrants

108,190


261,845

Common stock warrants, related parties

-


45,719

Common stock options, related parties

501,617


698,974

Deferred income taxes

(615,409)


1,630,630

Decrease (increase) in current assets:




Accounts receivable

(1,288,026)


(69,113)

Settlement receivable

-


(15,000,000)

Prepaid expenses

16,364


15,100

Contingent consideration receivable

-


6,008,602

Increase (decrease) in current liabilities:




Accounts payable

(216,975)


96,034

Accounts payable, related parties

-


(4,876)

Settlement payable

-


2,000,000

Settlement payable, related parties

-


550,079

Accrued expenses

35,250


82,352

Royalties payable, related party

-


(300,431)

Net cash provided by operating activities

1,819,844


334,453





CASH FLOWS FROM INVESTING ACTIVITIES




Proceeds from sale of oil and gas properties

500,031


993,449

Purchases of oil and gas properties and development capital expenditures

(5,991,601)


(12,025,284)

Advances to operators

(882,604)


-

Purchases of other property and equipment

(1,301)


(7,428)

Net cash used in investing activities

(6,375,475)


(11,039,263)





CASH FLOWS FROM FINANCING ACTIVITIES




Advances from revolving credit facilities and long term debt

22,000,000


13,850,000

Repayments on revolving credit facilities

(13,048,844)


(2,000,000)

Debt issuance costs paid

(725,887)


(771,233)

Net cash provided by financing activities

8,225,269


11,078,767





NET CHANGE IN CASH

3,669,638


373,957

CASH AT BEGINNING OF PERIOD

1,417,340


1,401,141

CASH AT END OF PERIOD

$   5,086,978


$   1,775,098









SUPPLEMENTAL INFORMATION:




Interest paid

$     551,399


$      266,082

Income taxes paid

$               -


$                -





NON-CASH INVESTING AND FINANCING ACTIVITIES:




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

$   2,277,913


$   5,458,084

Advances to operators received in swap for oil and gas properties

$  (1,200,000)


$                -

Advances to operators applied to purchase of oil and gas properties

$   2,212,323


$                -

Capitalized asset retirement costs, net of revision in estimate

$       10,400


$        50,294

Liabilities relieved to additional paid-in capital

$                -


$      180,000

Fair value of detachable warrants granted in consideration of debt financing

$   2,473,576


$                -





 

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, acquisition and investment opportunities available to the Company, 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.
Ken DeCubellis, Chief Executive Officer
952-426-1241
www.blackridgeoil.com

SOURCE Black Ridge Oil & Gas, Inc.