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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

 

 

WASHINGTON, D.C.  20549

 

 

FORM 10-Q

 

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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

 

 

For the Quarter Ended September 30, 2004

 

 

 

 

 

or

 

 

 

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

 

 

For the Transition Period From                 to                

 

Commission File Number:  000-25717

 

 

PETROHAWK ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

 

86-0876964

(State of Incorporation)

 

(I.R.S. Employer Identification No.)

 

 

 

1100 Louisiana, Suite 4400, Houston, TX

 

77002

(Address of principal executive offices)

 

(Zip Code)

 

(832) 204-2700

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes ý  No o

 

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

 

Yes o  No ý

 

As of November 1, 2004, the Registrant had 13,892,167 shares of Common Stock, $.001 par value, outstanding.

 

 


 

INDEX

 

PART I - FINANCIAL INFORMATION

 

 

 

ITEM 1.  Financial Statements

 

 

Condensed Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003 (unaudited)

 

 

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2004 and 2003 (unaudited)

 

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2004 and 2003 (unaudited)

 

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

ITEM 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

Disclosure Regarding Forward-Looking Statements

 

 

PHAWK, LLC Transaction

 

 

Related Party Transaction

 

 

Overview

 

 

Liquidity and Capital Resources

 

 

Capital Expenditures

 

 

Significant Accounting Policies

 

 

Comparison of Results of Operations for the three and nine months ended September 30, 2004 and 2003

 

 

 

 

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk

 

 

 

 

ITEM 4.  Controls and Procedures.

 

 

 

 
PART II. - OTHER INFORMATION

 

 

 

 

ITEM 2.  Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

 

 

 

 

ITEM 4.  Submission of Matters to a Vote of Security Holders

 

 

 

 

ITEM 6.  Exhibits

 

 

 

Signatures

 

 

 

2


 

PART I

ITEM 1.  FINANCIAL STATEMENTS

PETROHAWK ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

 

 

 

SEPTEMBER 30,
2004

 

DECEMBER 31,
2003

 

CURRENT ASSETS

 

 

 

 

 

Cash

 

$

35,096,236

 

$

2,109,681

 

Accounts receivable

 

 

 

 

 

Oil and gas sales

 

4,168,686

 

1,898,746

 

Other

 

598,260

 

113,529

 

Prepaid expenses and other

 

1,112,885

 

564,980

 

Total current assets

 

40,976,067

 

4,686,936

 

 

 

 

 

 

 

OIL AND GAS PROPERTY, at cost (full cost method)

 

 

 

 

 

Evaluated properties

 

87,782,235

 

78,717,380

 

Unevaluated properties

 

740,519

 

1,294,212

 

Less – accumulated amortization of full cost pool

 

(43,121,687

)

(39,740,116

)

Net oil and gas properties

 

45,401,067

 

40,271,476

 

 

 

 

 

 

 

OTHER OPERATING PROPERTY AND EQUIPMENT, at cost

 

 

 

 

 

Gas gathering system and equipment

 

1,502,692

 

1,496,404

 

Support equipment

 

220,482

 

197,379

 

Other

 

760,990

 

276,498

 

Less – accumulated depreciation

 

(855,894

)

(813,450

)

Net other operating property and equipment

 

1,628,270

 

1,156,831

 

 

 

 

 

 

 

DEBT ISSUE COSTS, net of amortization of $90,287

 

1,335,299

 

—

 

OTHER ASSETS

 

377,232

 

—

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

89,717,935

 

$

46,115,243

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Accounts payable, trade

 

$

593,308

 

$

1,646,559

 

Dividends payable

 

—

 

112,707

 

Asset retirement obligations – current portion

 

220,386

 

171,860

 

Liabilities from price risk management activities

 

592,500

 

—

 

Other accrued liabilities

 

1,976,408

 

566,990

 

Total current liabilities

 

3,382,602

 

2,498,116

 

 

 

 

 

 

 

LONG-TERM DEBT

 

—

 

13,284,652

 

SUBORDINATED CONVERTIBLE NOTE PAYABLE

 

35,000,000

 

—

 

ASSET RETIREMENT OBLIGATIONS, less current portion

 

1,524,886

 

1,062,860

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

Preferred stock, $.001 par value, 5,000,000 shares authorized:
598,271 and 604,271shares issued and outstanding at September 30, 2004 and December 31, 2003, respectively. Liquidation value at September 30, 2004 of $5,533,890.

 

598

 

604

 

Common stock, $.001 par value: 50,000,000 shares authorized;
13,870,549 and 6,223,036 shares issued at September 30, 2004 and December 31, 2003, respectively; 13,862,167 and 6,214,654 shares outstanding at September 30, 2004 December 31, 2003, respectively.

 

13,871

 

6,223

 

Additional paid-in capital

 

73,778,685

 

51,930,449

 

Treasury stock, at cost; 8,382 shares at September 30, 2004 and December 31, 2003.

 

(36,428

)

(36,428

)

Accumulated deficit