Attached files
| file | filename |
|---|---|
| EX-3.1 - EXHIBIT 3.1 - CROSS BORDER RESOURCES, INC. | v240974_ex3-1.htm |
| 8-K - FORM 8-K - CROSS BORDER RESOURCES, INC. | v240974_8k.htm |
Exhibit 99.1
Cross Border Resources, Inc. Announces 2011 Third Quarter Results
SAN ANTONIO, Texas, November 14, 2011 — Cross Border Resources, Inc. (OTCQX: XBOR), ("Cross Border" or "the Company") today announced its financial results for the third quarter ended September 30, 2011, which is the third full quarter of operations for the Company. Cross Border is an oil and gas exploration and production company resulting from the business combination of Doral Energy Corp. and Pure Energy Group, which was effective January 3, 2011. The merger impacts all comparisons to the prior year. Summary financial data is provided below:
Third Quarter 2011 Financial and Operating Highlights
|
·
|
Revenues increased by 38% year-over-year to $1.9 million, up from $1.4 million in the third quarter of 2010.
|
|
|
·
|
Production volume totaled 29,409 barrels of oil equivalent (“boe”), an increase of 38% compared to the third quarter of 2010.
|
|
|
·
|
Average daily production sold during the third quarter of 2011 was 320 barrels of oil equivalent per day (“boed”) compared to 232 boed for the third quarter of 2010.
|
Nine-Month Financial and Operating Highlights
|
·
|
Revenues increased by 68% year-over-year to $5.6 million, up from $3.3 million in the nine months ended September 30, 2010.
|
|
|
·
|
Production volume totaled 74,112 boe, an increase of 25% compared to the first nine months of 2010.
|
|
|
·
|
Average daily production for the nine months ended September 30, 2011 was 272 boed compared to 217 boed for the first nine months of 2010.
|
“We are pleased with our third-quarter performance,” stated Everett “Will” Gray II, CEO and Chairman of Cross Border. “Revenues grew nearly 40% year-over-year, and average daily production exceeded our expectations. We expect improved bottom-line results in the near-term as our startup and merger-related costs decrease and our business growth accelerates.”
Mr. Gray continued, “For the remainder of the year, we will concentrate on executing our fourth-quarter drilling schedule with a primary focus on the emerging Bone Spring and Wolfberry plays. We expect to participate in nine gross wells in the current quarter and remain on track to achieve a year-end exit rate of approximately 500 boed. Our non-operated business model and expansive acreage portfolio provide low-risk, high-impact exposure to the prolific Permian Basin, strongly positioning us to drive long-term value for our shareholders."
Results of Operations for the Three Months Ended September 30, 2011
Revenues
Revenues for the three months ended September 30, 2011 were $1.9 million, as compared to $1.4 million for the three months ended September 30, 2010. The increase of $0.5 million, or 38%, was primarily due to increased production from wells added year-over-year, increased production due to the merger, and a year-over-year increase in the average sales prices for oil and natural gas.
Production volumes for the three months ended September 30, 2011 were 29,409 boe, up 25% year-over-year and 30% sequentially. The increase was primarily due to a combination of increased production from wells added period-over-period and increased production brought on through the merger. Average daily production sold during the third quarter of 2011 was 320 boed compared to 232 boed for the third quarter of 2010. Cross Border’s definition of daily production represents only what volumes were sold in each respective quarter and does not account for stored inventory.
Cross Border’s average realized crude oil sales price for the third quarter of 2011 was $85.42 per barrel, compared to $72.36 in the third quarter of 2010. The Company’s average realized natural gas sales price during the third quarter of 2011 was $6.34 per mcf, compared to $5.33 per mcf in the third quarter of 2010.
Income from Operations
Operating loss for the three months ended September 30, 2011 amounted to $610,973 as compared to operating income of $616,924 for the three months ended September 30, 2010. Operating expenses for the three-month period totaled $2.5 million, an increase of 232% as compared to $755,642 in the same period a year ago. The increase was primarily due to costs related to assets acquired in the merger and higher professional fees consistent with operating as a public company.
Net Income
Net loss for the three months ended September 30, 2011 was $249,555 as compared to net income of $533,801 for the three months ended September 30, 2010. Net loss per diluted share was $0.02 for the third quarter of 2011.
Adjusted EBITDA
Adjusted EBITDA totaled $709,671, or $0.04 per fully diluted share, a decrease of 24% compared to adjusted EBITDA of $937,045 in the year-ago period.
EBITDA is defined as net earnings before interest, income taxes, depreciation, depletion, amortization, abandonment and mark-to-market gains on derivatives (adjusted EBITDA), which is a non-GAAP performance measure. Adjusted EBITDA does not represent, and should not be considered an alternative to GAAP measurements, and Cross Border’s calculations thereof may not be comparable to similarly titled measures reported by other companies. Cross Border’s management does not view adjusted EBITDA in isolation and also uses other measurements, such as net earnings (loss) and revenues to measure operating performance. A complete reconciliation of EBITDA to GAAP accounting standards can be found in this press release under the financial table “Reconciliation to GAAP.”
Results of Operations for the Nine Months Ended September 30, 2011
Revenues
Revenues for the nine months ended September 30, 2011 were $5.6 million as compared to $3.3 million for the nine months ended September 30, 2010. The increase of $2.3 million, or 68%, was primarily due to increased production from wells added year-over-year, increased production due to the merger, and a year-over-year increase in the average sales prices for oil and natural gas. Oil and gas sales increased 49% year-over-year to $4.9 million as compared to $3.3 million for the same period in 2010. The Company also recorded a $599,100 gain on the sale of oil and gas properties during the first nine months of 2011.
Production volume totaled 74,112 boe, an increase of 25% compared to 59,349 boe for the first nine months of 2010. The increase was due primarily to a combination of increased production from wells added period-over-period and increased production brought on through the merger. Average daily production for the nine months ended September 30, 2011 was 272 boed compared to 217 boed for the first nine months of 2010. Cross Border’s definition of daily production represents only what volumes were sold in each respective quarter and does not account for stored inventory.
Cross Border’s average realized crude oil sales price for the first nine months of 2011 was $86.44 per barrel, compared to $74.01 in the first nine months of 2010. The Company’s average realized natural gas sales price during the first nine months of 2011 was $6.19 per mcf, compared to $5.77 per mcf for the first nine months of 2010.
Income from Operations
Operating loss for the nine months ended September 30, 2011 amounted to $799,856 as compared to operating income of $1.1 million for the nine months ended September 30, 2010. Operating expenses for the nine months ended September 30, 2011 totaled $6.4 million, up 185% from $2.2 million in the same period a year ago. The increase was primarily due to expanded production and included approximately $279,000 of non-recurring expenses associated with the merger.
Net Income
Net loss for the nine months ended September 30, 2011 was $471,068 as compared to net income of $755,244 for the nine months ended September 30, 2010. Net loss per diluted share was $0.03 for the first nine months of 2011.
Adjusted EBITDA
Adjusted EBITDA totaled $2.2 million, an increase of 6% compared to adjusted EBITDA of $2.0 million in the year-ago period.
Liquidity and Capital Resources
As of September 30, 2011, the Company’s current assets were $2.7 million and current liabilities were $1.6 million. Cash and cash equivalents totaled $621,318 as of September 30, 2011. The Company’s shareholders’ equity at September 30, 2011 was $18.0 million. The Company used $1.3 million for operating activities for the nine months ended September 30, 2011, compared to a provision of $1.5 million for the same period in 2010. The Company used $1.6 million for investing activities for the nine months ended September 30, 2011, compared to $1.2 million for the same period in 2010. The Company generated $2.4 million from financing activities for the nine months ended September 30, 2011, compared to $612,895 used in financing activities for the same period in 2010.
2011 Business Outlook
Cross Border anticipates accelerated drilling activity in the second half of 2011 with a primary focus on its 2nd Bone Spring acreage located in both Eddy and Lea counties, New Mexico. Approximately 55% of Cross Border's 2011 CAPEX is allocated to the 2nd Bone Spring development. Cross Border is witnessing increased permitting activity within its current footprint due to the success of emerging drilling and completion technologies that have provided significant rates of return for Permian Basin operators, further demonstrated by the number of active rigs currently drilling in the Permian Basin.
The Company is participating in a workover attempt of the Three Rivers Bandit 15 Fed Com #2 well in Lea County, New Mexico with a 9.7% working interest. Three Rivers is plugging back the vertical well to test the Wolfcamp and Bone Spring intervals. Cost net to Cross Border’s interest is approximately $124,000.
Cross Border expects to spud approximately 16 gross wells, or 1.9 approximate net wells, in 2011, with drilling capital expenditures of approximately $7.3 million for the year. Nine wells are scheduled to spud during the current quarter. Four wells initially scheduled for the fourth quarter of 2011 have been rescheduled to spud in early 2012: SE Lusk 33 #2H, Santa Elena 19 Fed #1H, Leo Fed Com #2H, and Brown Bear 14 St Com #1. Cross Border has decided to go non-consent on the Devon KSI 22 Fed #1H due to a significant cost estimate increase that also significantly reduced the well economics. The Alamo Delhi “B” St #3, a vertical well targeting the Grayburg and San Andres formations in Eddy County, New Mexico has been added to the schedule. Cross Border will participate with a 6.25% working interest and a drilling and completion cost of $40,000 proportionate to Cross Border’s interest. All wells listed in the revised drilling schedule are classified as developmental wells.
Historically, Cross Border has been invoiced by its various operators over a three-month time frame with a net 30-day payment for each stage of the drilling and completion costs. If this remains the case, for the remainder of 2011, Cross Border would expect to fund approximately $2.6 million for its proportionate ownership costs with the remaining balance spilling over into Q1 of 2012. Cross Border expects to fund all remaining 2011 drilling commitments using cash-on-hand, cash flow and its existing credit facility. Current availability under the existing credit facility is approximately $3.2 million. The current well status and drilling schedule is provided in the chart below:
|
WELL NAME
|
COUNTY
|
OPERATOR
|
FORMATION
|
WORKING
INTEREST
|
CURRENT STATUS
|
|||||
|
SE Lusk 33 #3H
|
Lea, NM
|
Cimarex
|
2nd Bone Spring
|
37.50%
|
Currently drilling
|
|||||
|
Ocelot 34 Fed Com #1H
|
Lea, NM
|
Mewbourne
|
2nd Bone Spring
|
14.90%
|
To be drilled in Q4
|
|||||
|
Zircon 2 #1H
|
Eddy, NM
|
Mewbourne
|
2nd Bone Spring
|
12.50%
|
To be drilled in Q4
|
|||||
|
Fecta 33 Fed Com #1H
|
Lea, NM
|
Occidental
|
2nd Bone Spring
|
12.50%
|
To be drilled in Q4
|
|||||
|
Mewbourne Bradley 30 St. Com #1H
|
Eddy, NM
|
Mewbourne
|
2nd Bone Spring
|
5.17%
|
Flowing back frac load
|
|||||
|
Tres Amigos PH
|
Borden, TX
|
Big Star
|
Wolfberry
|
10.00%
|
To be drilled in Q4
|
|||||
|
Coleman 1002
|
Dawson, TX
|
Big Star
|
Wolfberry
|
10.00%
|
Awaiting completion
|
|||||
|
Grave Digger #3H
|
Eddy, NM
|
Concho Resources
|
Yeso
|
5.64%
|
To be drilled in Q4
|
|||||
|
Alamo Delhi “B” St #3
|
Eddy, NM
|
Alamo
|
Grayburg and San Andres
|
6.25%
|
To be drilled in Q4
|
|||||
|
Bandit 15 Fed #2
|
Lea, NM
|
Three Rivers
|
Wolfcamp Shale/2nd Bone Spring 1st Bone Spring Workover
|
9.734%
|
Currently Completing
|
|||||
|
Buck Baker 15#1
|
Martin, TX
|
Big Star
|
Wolfberry
|
20%
|
Awaiting Completion
|
|||||
|
Hefley 24 #1
|
Howard, TX
|
Big Star
|
Wolfberry
|
20%
|
Awaiting Completion
|
|||||
|
High Lonesome 26 Fed #2H
|
Eddy, NM
|
Concho Resources
|
Horizontal Abo
|
3.125%
|
Flowing back frac load
|
|||||
|
Bradley 30 Fed #1H
|
Eddy, NM
|
Mewbourne
|
2nd Bone Spring
|
4.67%
|
Flowing back frac load
|
Conference Call and Webcast
Management will host a conference call to discuss these financial results Tuesday, November 15, at 11:00 a.m. Eastern time (8:00 a.m. Pacific).
To participate in the call please dial (888) 846-5003, or (480) 629-9856 for international calls, approximately 10 minutes prior to the scheduled start time. Interested parties can also listen via a live Internet webcast, which can be found via the Company’s website at http://www.xbres.com, or alternately at http://ViaVid.net.
A replay of the call will be available for two weeks from 2:00 p.m. EST on November 15, 2011, until 11:59 p.m. EST on November 30, 2011. The number for the replay is (877) 870-5176, or (858) 384-5517 for international calls; the passcode for the replay is 4487385. In addition, a recording of the call will be available via the Company’s website at http://www.xbres.com for one year.
About Cross Border Resources
Cross Border Resources is an oil and gas exploration company, headquartered in San Antonio, Texas, focusing on non-operated opportunities with proven operators within the Permian Basin. Cross Border consists of over 800,000 gross (approximately 300,000 net) mineral and lease acres within the state of New Mexico targeting various emerging plays including the 1st & 2nd Bone Spring, and more conventional plays such as the Abo, Yeso, San Andres as well as our Wolfberry acreage located in West Texas. Cross Border Resources currently owns approximately 31,000 net acres within the Permian Basin.
Forward-Looking Statements
This news release contains forward-looking statements that are not historical facts and are subject to risks and uncertainties. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined, and assumptions of management. Forward-looking statements are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "aims", "potential", "goal", "objective", "prospective", and similar expressions or that events or conditions "will", "would", "may", "can", "could" or "should" occur. Information concerning oil or natural gas reserve estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed.
Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially include misinterpretation of data, inaccurate estimates of oil and natural gas reserves, the uncertainty of the requirements demanded by environmental agencies, the Company's ability to raise financing for operations, breach by parties with whom the Company has contracted, inability to maintain qualified employees or consultants because of compensation or other issues, competition for equipment, inability to obtain drilling permits, potential delays or obstacles in drilling operations and interpreting data, the likelihood that no commercial quantities of oil or gas are found or recoverable, and our ability to participate in the exploration of, and successful completion of development programs on all aforementioned prospects and leases. Additional information risks for the Company can be found in the Company's filings with the U.S. Securities and Exchange Commission.
Contacts:
Investor Relations Contact:
Jon Cunningham
RedChip Companies, Inc.
Tel: +1-800-733-2447, Ext. 107
jon@redchip.com
http://www.redchip.com
Company Contact:
Cross Border Resources, Inc.
Everett Willard "Will" Gray II
willg@xbres.com
Cross Border Resources, Inc.
Condensed Balance Sheets
|
Predecessor Entity
|
||||||||
|
|
September 30,
|
December 31,
|
||||||
|
|
2011
|
2010
|
||||||
|
(Unaudited)
|
(As Restated)
|
|||||||
|
ASSETS
|
||||||||
|
Current Assets
|
||||||||
|
Cash and cash equivalents
|
$
|
621,318
|
$
|
975,123
|
||||
|
Accounts Receivable - Production
|
965,194
|
512,624
|
||||||
|
Accounts Receivable - Related Party
|
—
|
250,000
|
||||||
|
Prepaid Expenses
|
686,492
|
—
|
||||||
|
Derivative Asset - Current Portion
|
309,340
|
—
|
||||||
|
Current Tax Asset
|
100,734
|
—
|
||||||
|
Total Current Assets
|
2,683,078
|
1,737,747
|
||||||
|
Oil and Gas Properties
|
32,413,915
|
19,421,621
|
||||||
|
Less: Accumulated Depletion
|
(9,746,862
|
)
|
(7,328,326
|
)
|
||||
|
Net Oil and Gas Properties
|
22,667,053
|
12,093,295
|
||||||
|
Other Assets
|
||||||||
|
Other Property and Equipment, net of Accumulated Depreciation of $118,572 and $94,759 in 2011 and 2010, respectively
|
103,889
|
124,776
|
||||||
|
Deferred Bond Costs, net of Accumulated Amortization of $331,704 and $293,915 in 2011 and 2010, respectively
|
172,150
|
209,939
|
||||||
|
Deferred Bond Discount, net of Accumulated Amortization of $122,819 and $108,827 in 2011 and 2010, respectively
|
63,741
|
77,733
|
||||||
|
Derivative Asset, net of Current Portion
|
110,386
|
—
|
||||||
|
Other Assets
|
126,943
|
112,532
|
||||||
|
Total Other Assets
|
577,109
|
524,980
|
||||||
|
TOTAL ASSETS
|
$
|
25,927,240
|
$
|
14,356,022
|
||||
|
Predecessor
Entity
|
||||||||
|
September 30,
|
December 31,
|
|||||||
|
2011
|
2010
|
|||||||
|
(Unaudited)
|
(As Restated)
|
|||||||
|
LIABILITIES AND PARTNERS' CAPITAL
|
||||||||
|
Current Liabilities
|
||||||||
|
Accounts Payable - Trade
|
$
|
311,486
|
$
|
875,881
|
||||
|
Accounts Payable - Revenue Distribution
|
213,000
|
49,880
|
||||||
|
Interest Payable
|
47,736
|
107,875
|
||||||
|
Accrued Expenses
|
34,940
|
28,460
|
||||||
|
Deferred Revenues
|
64,958
|
162,394
|
||||||
|
Bonds Payable - Current Portion
|
720,000
|
660,000
|
||||||
|
Creditors Payable - Current Portion
|
180,000
|
150,000
|
||||||
|
Total Current Liabilities
|
1,572,120
|
2,034,490
|
||||||
|
Non-Current Liabilities
|
||||||||
|
Asset Retirement Obligations
|
1,223,515
|
508,588
|
||||||
|
Deferred Income Tax Liability
|
26,609
|
—
|
||||||
|
Line of Credit
|
1,000
|
1,582,426
|
||||||
|
Notes Payable
|
764,278
|
—
|
||||||
|
Bonds Payable, net of Current Portion
|
2,935,000
|
3,555,000
|
||||||
|
Creditors Payable, net of Current Portion
|
1,359,545
|
1,656,305
|
||||||
|
Total Non-Current Liabilities
|
6,309,947
|
7,302,319
|
||||||
|
Total Liabilities
|
7,882,067
|
9,336,809
|
||||||
|
Stockholders’ Equity (Deficit)
|
||||||||
|
Retained Earnings (Accumulated Deficit) (1)
|
(14,611,013
|
)
|
5,019,213
|
|||||
|
Common Stock ($0.001 par value; 36,363,637 authorized and 16,151,946 shares issued and outstanding at September 30, 2011)
|
16,152
|
—
|
||||||
|
Additional Paid in Capital
|
32,640,034
|
—
|
||||||
|
Total Stockholders’ Equity
|
18,045,173
|
5,019,213
|
||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
25,927,240
|
$
|
14,356,022
|
||||
|
(1)
|
Retained Earnings as of December 31, 2010 (As Restated) includes all equity accounts, including all Predecessor Entity Partners' Capital accounts.
|
Condensed Statements of Operations
(Unaudited)
|
Three months ended September 30,
|
||||||||
|
2011
|
2010
|
|||||||
|
Predecessor
Entity
|
||||||||
|
Revenues and Gains
|
||||||||
|
Oil and gas sales
|
$
|
1,867,914
|
$
|
1,361,503
|
||||
|
Other
|
32,479
|
11,063
|
||||||
|
Total revenues and gains
|
$
|
1,900,393
|
$
|
1,372,566
|
||||
|
Expenses:
|
||||||||
|
Operating costs
|
444,697
|
146,015
|
||||||
|
Production taxes
|
150,150
|
85,051
|
||||||
|
Depreciation, depletion, and amortization
|
972,972
|
273,991
|
||||||
|
Abandonment expense
|
49,234
|
—
|
||||||
|
Accretion expense
|
31,596
|
14,817
|
||||||
|
General and administrative
|
862,717
|
235,768
|
||||||
|
Total expense
|
2,511,366
|
755,642
|
||||||
|
Gain (loss) from operations
|
(610,973
|
)
|
616,924
|
|||||
|
Other income (expense):
|
||||||||
|
Bond issuance amortization
|
(28,461
|
)
|
(12,596
|
)
|
||||
|
Gain (loss) on derivatives
|
346,555
|
—
|
||||||
|
Interest expense
|
(100,365
|
)
|
(101,840
|
)
|
||||
|
Miscellaneous other income (expense)
|
99,815
|
31,313
|
||||||
|
Total other income (expense)
|
317,544
|
(83,123
|
)
|
|||||
|
Gain (loss) before income taxes
|
(293,429
|
)
|
533,801
|
|||||
|
Current tax benefit (expense)
|
50,996
|
(74,525
|
)
|
|||||
|
Deferred tax benefit (expense)
|
(7,122
|
)
|
74,525
|
|||||
|
Income tax benefit (expense)
|
43,874
|
—
|
||||||
|
Net income (loss)
|
$
|
(249,555
|
)
|
$
|
533,801
|
|||
|
Net loss per share:
|
||||||||
|
Basic and diluted
|
$
|
(0.02
|
)
|
$
|
—
|
|||
|
Weighted average shares outstanding:
|
||||||||
|
Basic and diluted
|
16,151,946
|
—
|
||||||
Cross Border Resources, Inc.
Condensed Statements of Operations
(Unaudited)
|
|
Nine months ended September 30,
|
|||||||
|
|
2011
|
2010
|
||||||
|
|
Predecessor
Entity
|
|||||||
|
Revenues and Gains
|
||||||||
|
Oil and gas sales
|
$
|
4,899,777
|
$
|
3,288,467
|
||||
|
Gain on sale of oil and gas properties
|
599,100
|
—
|
||||||
|
Other
|
97,436
|
52,139
|
||||||
|
Total revenues and gains
|
$
|
5,596,313
|
$
|
3,340,606
|
||||
|
Expenses:
|
||||||||
|
Operating costs
|
959,922
|
329,639
|
||||||
|
Production taxes
|
420,714
|
271,337
|
||||||
|
Depreciation, depletion, and amortization
|
2,045,863
|
898,826
|
||||||
|
Abandonment expense
|
49,234
|
—
|
||||||
|
Accretion expense
|
84,428
|
44,452
|
||||||
|
General and administrative
|
2,836,008
|
699,232
|
||||||
|
Total expense
|
6,396,169
|
2,243,486
|
||||||
|
Gain (loss) from operations
|
(799,856
|
)
|
1,097,120
|
|||||
|
Other income (expense):
|
||||||||
|
Bond issuance amortization
|
(37,789
|
)
|
(37,789
|
)
|
||||
|
Gain (loss) on derivatives
|
452,678
|
—
|
||||||
|
Interest expense
|
(347,959
|
)
|
(304,161
|
)
|
||||
|
Miscellaneous other income (expense)
|
152,443
|
74
|
||||||
|
Total other income (expense)
|
219,373
|
(341,876
|
)
|
|||||
|
Loss before income taxes
|
(580,483
|
)
|
755,244
|
|||||
|
Current tax benefit (expense)
|
136,024
|
(53,167
|
)
|
|||||
|
Deferred tax benefit (expense)
|
(26,609
|
)
|
53,167
|
|||||
|
Income tax benefit (expense)
|
109,415
|
—
|
||||||
|
Net income (loss)
|
$
|
(471,068
|
)
|
$
|
755,244
|
|||
|
Net loss per share:
|
||||||||
|
Basic and diluted
|
$
|
(0.03
|
)
|
$
|
—
|
|||
|
Weighted average shares outstanding:
|
||||||||
|
Basic and diluted
|
14,539,309
|
—
|
||||||
Cross Border Resources, Inc.
Condensed Statements of Cash Flows
For the Nine Months Ended September 30, 2011 and 2010
|
Nine Months Ended September 30,
|
||||||||
|
|
2011
|
2010
|
||||||
|
Predecessor
Entity
|
||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
|
Net income (loss)
|
$
|
(471,068
|
)
|
$
|
755,244
|
|||
|
Adjustments to reconcile net income (loss) to cash used by operating activities:
|
||||||||
|
Depreciation, depletion, amortization
|
2,045,863
|
884,834
|
||||||
|
Accretion
|
84,428
|
44,452
|
||||||
|
Gain on Disposition of Assets
|
(583,766
|
)
|
—
|
|||||
|
Share-based Compensation
|
569,638
|
—
|
||||||
|
Amortization of debt discount and deferred financing costs
|
51,781
|
51,782
|
||||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Accounts receivable
|
(452,570
|
)
|
(430,713
|
)
|
||||
|
Prepaid expenses and other current assets
|
(826,384
|
)
|
(2,404
|
)
|
||||
|
Accounts payable
|
(843,969
|
)
|
159,997
|
|||||
|
Derivative asset - current portion
|
(419,726
|
)
|
—
|
|||||
|
Accrued expenses
|
(175,630
|
)
|
(27,331
|
)
|
||||
|
Deferred income tax
|
(74,124
|
)
|
—
|
|||||
|
Deferred revenue
|
(97,436
|
)
|
194,873
|
|||||
|
Other current liabilities
|
(60,138
|
)
|
(118,613
|
)
|
||||
|
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
(1,253,101
|
)
|
1,512,121
|
|||||
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
|
Capital expenditures - oil and gas properties
|
(2,312,880
|
)
|
(1,191,698
|
)
|
||||
|
Disposal of oil and gas properties
|
799,100
|
—
|
||||||
|
Capital expenditures - other assets
|
(36,744
|
)
|
—
|
|||||
|
NET CASH USED IN INVESTING ACTIVITIES
|
(1,550,524
|
)
|
(1,191,698
|
)
|
||||
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
|
Proceeds from issuance of common stock, net of expenses
|
5,090,728
|
—
|
||||||
|
Net borrowings (payments) on line of credit
|
(1,581,426
|
)
|
—
|
|||||
|
Proceeds from renewing notes
|
139,359
|
—
|
||||||
|
Repayments of notes payable
|
(382,081
|
)
|
—
|
|||||
|
Repayments of bonds
|
(550,000
|
)
|
(490,000
|
)
|
||||
|
Repayments to creditors
|
(266,760
|
)
|
(122,895
|
)
|
||||
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
2,449,820
|
(612,895
|
)
|
|||||
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(353,805
|
)
|
(292,472
|
)
|
||||
|
Cash and cash equivalents, beginning of period
|
975,123
|
757,119
|
||||||
|
Cash and cash equivalents, end of period
|
$
|
621,318
|
$
|
464,647
|
||||
|
Supplemental disclosures of cash flow information:
|
||||||||
|
Interest paid
|
$
|
165,009
|
$
|
340,385
|
||||
|
Income taxes paid
|
$
|
—
|
$
|
—
|
||||
The above changes in current assets and current liabilities differ from changes between amounts reflected in the September 30, 2011 balance sheet due to current assets and current liabilities acquired in connection with the Company’s reverse acquisition with Pure Energy Group, Inc. and Pure Gas Partners II, LP.
Cross Border Resources, Inc.
Summary Operating Statistics
(Unaudited)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
September 30,
|
September 30,
|
|||||||||||||||
|
2011
|
2010
(Predecessor
Entity)
|
2011
|
2010
(Predecessor
Entity)
|
|||||||||||||
|
Revenues & Sales
|
||||||||||||||||
|
Oil & Gas Sales
|
$ | 1,867,914 | 1,361,503 | $ | 4,899,777 | 3,288,467 | ||||||||||
|
Gain on Sale of Oil & Gas Properties
|
- | - | 599,100 | - | ||||||||||||
|
Total revenue
|
1,900,393 | 1,372,566 | 5,596,313 | 3,340,606 | ||||||||||||
|
Net Income (Loss)
|
(249,555 | ) | 533,801 | (471,068 | ) | 755,244 | ||||||||||
|
Net Income Per Share
|
||||||||||||||||
|
Basic & Diluted
|
(0.02 | ) | n/a | (0.03 | ) | n/a | ||||||||||
|
Average Number of Shares Outstanding
|
||||||||||||||||
|
Basic & Diluted
|
16,151,946 | - | 14,539,309 | - | ||||||||||||
|
Production Volumes
|
||||||||||||||||
|
Oil (Bbls)
|
15,650 | 10,583 | 41,506 | 27,670 | ||||||||||||
|
Gas (mcf)
|
82,557 | 64,699 | 195,637 | 190,074 | ||||||||||||
|
Total Barrels of Oil Equivalent (boe)*
|
29,409 | 21,366 | 74,112 | 59,349 | ||||||||||||
|
Average Barrels of Oil Equivalent per day (boed)
|
320 | 232 | 272 | 217 | ||||||||||||
|
Oil (Bbls)
|
53.2 | % | 49.5 | % | 56.0 | % | 46.6 | % | ||||||||
|
Gas (mcf)
|
46.8 | % | 50.5 | % | 44.0 | % | 53.4 | % | ||||||||
|
Total Barrels of Oil Equivalent (boe)*
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
|
Average sales price:
|
||||||||||||||||
|
Gas ($ per mcf)
|
6.34 | $ | 5.33 | 6.19 | $ | 5.77 | ||||||||||
|
Oil ($ per bbl)
|
85.42 | 72.36 | 86.44 | 74.01 | ||||||||||||
|
Average cost of production:
|
||||||||||||||||
|
Average production cost ($/boe)
|
10.71 | 4.72 | 10.77 | 4.84 | ||||||||||||
|
Average production taxes ($/boe)
|
6.48 | 3.97 | 6.25 | 4.56 | ||||||||||||
|
Depletion Expense
|
950,000 | 267,978 | 2,072,990 | 862,442 | ||||||||||||
|
Depletion Expense ($/boe)
|
32.30 | 12.54 | 27.97 | 14.53 | ||||||||||||
|
Non-GAAP Adjusted EBITDA
|
709,671 | 937,045 | 2,153,642 | 2,040,472 | ||||||||||||
|
Non GAAP Adjusted EBITDA Per Share
|
||||||||||||||||
|
Basic & Diluted
|
0.04 | n/a | 0.15 | n/a | ||||||||||||
Cross Border Resources, Inc.
Reconciliation to GAAP
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
September 30,
|
September 30,
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
Predecessor
Entity
|
Predecessor
Entity
|
|||||||||||||||
|
Net income (loss)
|
$ | (249,555 | ) | $ | 533,801 | $ | (471,068 | ) | $ | 755,244 | ||||||
|
Interest expense and other
|
128,826 | 114,436 | 385,748 | 341,950 | ||||||||||||
|
Income tax expense (benefit)
|
(43,874 | ) | - | (109,415 | ) | - | ||||||||||
|
Accretion of asset retirement obligations
|
31,576 | 14,817 | 84,428 | 44,452 | ||||||||||||
|
Depreciation, depletion, and amortization
|
972,972 | 273,991 | 2,045,863 | 898,826 | ||||||||||||
|
Stock-based compensation
|
114,408 | - | 569,638 | - | ||||||||||||
|
Mark-to-market gain on commodity swaps
|
(239,936 | ) | - | (400,786 | ) | - | ||||||||||
|
Abandonment Expense
|
49,234 | - | 49,234 | - | ||||||||||||
|
Adjusted EBITDA
|
$ | 709,671 | $ | 937,045 | $ | 2,153,642 | $ | 2,040,472 | ||||||||
# # #
Source: Cross Border Resources, Inc.