Abraxas Petroleum Corporation (NASDAQ:AXAS) Files An 8-K Announces Third Quarter 2016 Results

ME Staff
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Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported financial and operating results for the three and nine months ended September 30, 2016.

Financial and Operating Results for the Three Months Ended September 30, 2016

The three months ended September 30, 2016 resulted in:

  • Production of 548 MBoe (5,955 Boepd)
  • Revenue of $14.0 million
  • Adjusted EBITDA(a) of $4.9 million
  • Adjusted EBITDA per bank loan agreement of $5.0 million
  • Adjusted discretionary cash flow(a) of $4.1 million
  • Net loss of $3.3 million, or $0.02 per share
  • Adjusted net loss(a), excluding certain non-cash items of $3.3 million, or $0.02 per share.

(a) See reconciliation of non-GAAP financial measures below.

Net loss for the three months ended September 30, 2016 was $3.3 million, or $0.02 per share, compared to a net loss of $52.4 million, or $0.50 per share, for the three months ended September 30, 2015.

Adjusted net loss, excluding certain non-cash items, for the three months ended September 30, 2016 was $3.3 million, or $0.02 per share, compared to an adjusted net loss, excluding certain non-cash items, of $2.7 million or$0.03 per share for the three months ended September 30, 2015. For the three months ended September 30, 2016 and 2015, adjusted net loss excludes the unrealized gain on derivative contracts of $3.5 million and $10.5 million, respectively. For the quarter ended September 30, 2015, adjusted net loss includes the net income from our subsidiary, Raven Drilling, LLC of $0.2 million. For the three months ended September 30, 2016 and 2015, adjusted net loss excludes the loss attributable to the ceiling test impairment of $3.8 million and $59.9 million, respectively.

Pursuant to SEC Regulation S-X, no income is recognized for Raven Drilling, LLC. Contractual drilling services performed in connection with properties in which Abraxas holds an ownership interest cannot be recognized as income, rather it is credited to the full cost pool and recognized through lower amortization as reserves are produced.

Unrealized gains or losses on derivative contracts are based on mark-to-market valuations which are non-cash in nature and may fluctuate drastically from period to period. As commodity prices fluctuate, these derivative contracts are valued against current market prices at the end of each reporting period in accordance with Accounting Standards Codification 815: Derivatives and Hedging as amended and interpreted, which requires Abraxas to either record an unrealized gain or loss based on the calculated value difference from the previous period-end valuation. For example, NYMEX oil prices on September 30, 2015 were $45.09 per barrel compared to $48.24 on September 30, 2016; therefore, the mark-to-market valuation changed considerably from period to period.

Conference Call

Abraxas Petroleum Corporation (NASDAQ:AXAS) will host its third quarter 2016 earnings conference call at 11 AM ET on November 14, 2016. To participate in the conference call, please dial 844.778.4143 and enter the passcode 94561017. Additionally, a live listen only webcast of the conference call can be accessed under the investor relations section of the Abraxas website at www.abraxaspetroleum.com. A replay of the conference call will be available through December 12, 2016 by dialing 855.859.2056 and entering the passcode 94561017 or can be accessed under the investor relations section of the Abraxas website.

Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploration and production company with operations across the Rocky Mountain, Permian Basin and onshore Gulf Coast regions of the United States.

Safe Harbor for forward-looking statements: Statements in this release looking forward in time involve known and unknown risks and uncertainties, which may cause Abraxas’ actual results in future periods to be materially different from any future performance suggested in this release. Such factors may include, but may not be necessarily limited to, changes in the prices received by Abraxas for crude oil and natural gas. In addition, Abraxas’ future crude oil and natural gas production is highly dependent upon Abraxas’ level of success in acquiring or finding additional reserves. Further, Abraxas operates in an industry sector where the value of securities is highly volatile and may be influenced by economic and other factors beyond Abraxas’ control. In the context of forward-looking information provided for in this release, reference is made to the discussion of risk factors detailed in Abraxas’ filings with the Securities and Exchange Commission during the past 12 months.