Attached files
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| 8-K - FORM 8-K DATED MARCH 13, 2014 - FX ENERGY INC | form8k031314.htm |
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FOR IMMEDIATE RELEASE
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SCOTT J. DUNCAN
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FX Energy, Inc.
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March 13, 2014
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3006 Highland Drive, Suite 206
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Salt Lake City, Utah 84106
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(801) 486-5555 Fax (801) 486-5575
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www.fxenergy.com
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FX Energy Reports Full-Year 2013 Results
Salt Lake City, March 13, 2014 – FX Energy, Inc. (Nasdaq: FXEN), today announced financial results for its fourth quarter and full year of 2013. The Company reported a net loss for the full year 2013 of $11.8 million, or $0.22 per share, compared to net income in 2012 of $4.1 million, or $0.08 per share. Included in the Company’s yearly results were noncash, intracompany foreign exchange gains of $5.0 million and $16.3 million for 2013 and 2012, respectively. Without the foreign exchange gains, the Company would have recorded net losses of $16.8 million and $12.2 million for 2013 and 2012, respectively.
For the fourth quarter of 2013, the Company reported net income of $3.8 million, or $0.07 per share, compared to a net loss of $0.4 million, or $0.01 per share, during the same quarter of 2012. Fourth quarter results were positively impacted by $6.0 million and $4.3 million in noncash foreign exchange gains for 2013 and 2012, respectively.
Production Declines for Full-Year 2013, But Will Increase for the First Quarter of 2014
For the full year 2013, the Company reported oil and gas production of 4,441 million cubic feet of gas equivalent (Mmcfe), or 12.2 million cubic feet of gas equivalent per day (Mmcfed). This compares to 4,781 Mmcfe (13.1 Mmcfed) during 2012, a decrease of 7%.
Clay Newton, FX Energy’s Vice President Finance, remarked, “Our production suffered with the unexpected water influx at our Zaniemysl well last summer, along with normal production declines at our Roszkow well. However, with our Lisewo-1 well coming online in December 2013, and our Kormoze-3K well coming online last month, we are now producing about 14.0 Mmcfed. This is some 15% higher than the production rate for last year. The production outlook for 2014 is positive.”
The Company’s 2013 average price for natural gas in Poland increased 4% from 2012 levels, averaging $7.11 per thousand cubic feet (Mcf). Polish gas tariffs were actually 3% lower during 2013; however, currency fluctuations offset the impact of lower prices. Oil prices for our U.S. production increased, with prices averaging $79.48 per barrel for 2013, up 3% from the $76.87 average per barrel price for 2012.
2013 Capital Expenditures Reach Record Levels
The Company’s total capital expenditures, which include all exploration and development costs, reached $49.9 million in 2013, compared to $36.5 million in 2012, an increase of 36%.
Mr. Newton, continued, “Over the past three years we have spent more than $40 million on 2-D and 3-D seismic projects, as we work to build an inventory of drilling prospects going forward. We currently have more than a dozen and a half 3-D seismically-defined structural prospects in our Fences concession. We expect these prospects will provide the basis for significant future drilling in the concession.” (The 853,000-acre Fences Concession in Poland has been the most active area for the Company’s exploration and production operations of the last several years. It continues to be the most important of the Company’s Polish concessions.)
Fourth Quarter Production Decrease Impacts Revenues
Total fourth quarter 2013 production of 997 Mmcfe (10.8 Mmcfe/d) was 21% lower than the 1,270 (13.8 Mmcfe/d) Mmcfe in the fourth quarter of 2012. Oil and gas revenues were $7.6 million, also 21% lower than the $9.6 million recorded in the fourth quarter of 2012. The production and revenue decrease for the quarter were due primarily to reduced production from the Company’s Zaniemysl and Roszkow wells.
The average gas price in Poland during the fourth quarter of 2013 was $7.29 per Mcf compared to $7.31 per Mcf during the fourth quarter of 2012. The decrease in U.S. dollar-denominated prices was due primarily to lower natural gas tariffs in Poland, which were mostly offset by exchange rate changes.
Exploration Costs Impact Operating Cash
Cash flow provided by operating activities was $2.3 million during 2013, compared to cash used in operating activities of $1.2 million in 2012, an increase of $3.5 million. The increase was due primarily to changes in working capital items. During 2013, the Company capitalized $27.9 million in exploration wells and production facilities costs.
At December 31, 2013, the Company’s cash balance was approximately $11.2 million. Working capital was $11.3 million at December 31, 2013 versus $30.4 million at December 31, 2012. Debt drawn under the Company’s revolving credit facility was $45.0 million at the end of 2013, with $20.0 million of availability remaining.
Noncash Charges Continue to Vary
The noncash foreign exchange gains of $5.0 million and $16.3 million for 2013 and 2012, respectively, are included in other income and expense. The gains come primarily from recognition of gains on U.S. dollar-denominated intercompany loans from FX Energy, Inc., to FX Poland, its wholly owned subsidiary. These are noncash adjustments only and could be either losses or gains in the future depending upon future exchange rates.
Earnings Conference Call Today, Thursday, March 13, 2014 at 4:30 PM. Eastern (2:30 PM. Mountain)
The Company will host a conference call and webcast today to discuss 2013 full year and fourth quarter results at 4:30 p.m. Eastern Time. The call will also include a discussion of the Company’s current operations. Conference call information is as follows: Dial-In-Number: 888-523-1245; International: 719-457-1529; Passcode: 7359967. Request: FX Energy, Inc. Conference Call.
The call will also be webcast live and interested parties may access the webcast through FX Energy’s homepage at www.fxenergy.com. For those that are unable to participate in the live call, a rebroadcast will be available through the Company’s website for two weeks beginning one hour after the completion of the call.
About FX Energy
FX Energy is an independent oil and gas exploration and production company with production in the U.S. and Poland. The Company’s main exploration activity is focused on Poland’s Permian Basin where the gas-bearing Rotliegend sandstone is a direct analog to the Southern Gas Basin offshore England. The Company trades on the Nasdaq Global Select Market under the symbol FXEN. Website www.fxenergy.com.
______________________________
FORWARD-LOOKING STATEMENTS
This press release and the related earnings conference call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance. For example, exploration, drilling, development, construction, or other projects or operations may be subject to the successful completion of technical work; environmental, governmental, or partner approvals; equipment availability, or other things that are or may be beyond the control of the Company. Operations that are anticipated, planned, or scheduled may be changed, delayed, take longer than expected, fail to accomplish intended results, or not take place at all.
In carrying out exploration it is necessary to identify and evaluate risks and potential rewards. This identification and evaluation is informed by science but remains inherently uncertain. Subsurface features that appear to be possible traps may not exist at all, may be smaller than interpreted, may not contain hydrocarbons, may not contain the quantity or quality estimated, or may have reservoir conditions that do not allow adequate recovery to render a discovery commercial or profitable. Forward-looking statements about the size, potential, or likelihood of discovery with respect to exploration targets are certainly not guarantees of discovery, of the actual presence or recoverability of hydrocarbons, or of the ability to produce in commercial or profitable quantities. Estimates of potential typically do not take into account all the risks of drilling and completion nor do they take into account the fact that hydrocarbon volumes are never 100% recoverable. Such estimates are part of the complex process of trying to measure and evaluate risk and reward in an uncertain industry.
Forward-looking statements are subject to risks and uncertainties outside FX Energy’s control, including risks and uncertainties as described in the Company’s public filings with the SEC. Actual events or results may differ materially from the forward-looking statements. For a discussion of additional contingencies and uncertainties to which information respecting future events is subject, see FX Energy’s SEC reports or visit FX Energy’s website at www.fxenergy.com. In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law.
FX ENERGY, INC., AND SUBSIDIARIES
Consolidated Balance Sheets
As of December 31, 2013 and 2012
(in thousands)
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2013
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2012
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||||
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ASSETS
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|||||
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Current assets:
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|||||
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Cash and cash equivalents
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$
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11,153
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$
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33,990
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Receivables:
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|||||
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Accrued oil and gas sales
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3,464
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3,447
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|||
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Joint interest and other receivables
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5,029
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7,733
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|||
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Value-added tax receivable
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1,847
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1,136
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|||
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Inventory
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100
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199
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|||
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Other current assets
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234
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614
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|||
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Total current assets
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21,827
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47,119
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Property and equipment, at cost:
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|||||
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Oil and gas properties (successful-efforts method):
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|||||
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Proved
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85,244
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63,821
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Unproved
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2,404
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2,337
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Other property and equipment
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11,857
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10,717
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Gross property and equipment
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99,505
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76,875
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|||
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Less accumulated depreciation, depletion, and amortization
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(23,369)
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(19,786)
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Net property and equipment
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76,136
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57,089
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|||
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Other assets:
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|||||
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Certificates of deposit
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406
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382
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Loan fees
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2,323
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1,364
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Total other assets
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2,729
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1,746
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|||
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Total assets
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$
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100,692
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$
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105,954
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FX ENERGY, INC., AND SUBSIDIARIES
Consolidated Balance Sheets
As of December 31, 2013 and 2012
(in thousands, except share data)
-Continued-
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2013
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2012
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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|||||
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Current liabilities:
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|||||
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Accounts payable
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$
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9,694
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$
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8,532
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Accrued liabilities
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833
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1,192
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Current portion of long-term debt
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--
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7,000
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Total current liabilities
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10,527
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16,724
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Long-term liabilities:
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Notes payable
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45,000
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33,000
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Asset retirement obligation
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1,620
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1,431
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Total long-term liabilities
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46,620
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34,431
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Total liabilities
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57,147
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51,155
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Commitments and Contingencies (Note 6)
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|||||
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Stockholders’ equity:
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|||||
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Preferred stock, $0.001 par value, 5,000,000 shares authorized as of
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|||||
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December 31, 2013 and 2012; no shares outstanding
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--
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--
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Common stock, $0.001 par value, 100,000,000 shares authorized as of
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|||||
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December 31, 2013 and 2012; 53,733,398 and 53,246,620 shares issued
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and outstanding as of December 31, 2013 and 2012, respectively
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54
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53
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Additional paid-in capital
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226,060
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222,513
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Cumulative translation adjustment
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15,025
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18,027
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Accumulated deficit
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(197,594)
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(185,794)
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Total stockholders’ equity
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43,545
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54,799
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|||
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Total liabilities and stockholders’ equity
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$
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100,692
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$
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105,954
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FX ENERGY, INC., AND SUBSIDIARIES
Consolidated Statements of Operations
For the years ended December 31, 2013, 2012, and 2011
(in thousands, except per share amounts)
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2013
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2012
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2011
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||||||
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Revenues:
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||||||||
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Oil and gas sales
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$
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33,311
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$
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34,461
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$
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29,807
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Oilfield services
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1,218
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2,137
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5,631
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|||||
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Total revenues
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34,529
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36,598
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35,438
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Operating costs and expenses:
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Lease operating expenses
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3,680
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3,631
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3,834
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|||||
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Exploration costs
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20,792
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23,795
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16,618
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|||||
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Impairment of oil and gas properties
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6,129
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2,562
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72
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|||||
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Loss on sale of assets
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--
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49
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--
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|||||
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Asset retirement obligation gain
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--
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--
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(52)
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|||||
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Oilfield services costs
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1,179
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1,610
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4,458
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|||||
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Depreciation, depletion, and amortization (DD&A)
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4,573
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4,239
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3,397
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|||||
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Accretion expense
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90
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63
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68
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|||||
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Stock compensation
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2,853
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2,325
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1,744
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|||||
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General and administrative costs (G&A)
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8,836
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8,369
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8,396
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|||||
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Total operating costs and expenses
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48,132
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46,643
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38,535
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|||||
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Operating loss
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(13,603)
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(10,045)
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(3,097)
|
|||||
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Other income (expense):
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||||||||
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Interest expense
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(3,269)
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(2,485)
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(2,167)
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|||||
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Interest and other income
|
105
|
356
|
188
|
|||||
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Foreign exchange gain (loss)
|
4,967
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16,292
|
(23,448)
|
|||||
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Total other income (expense)
|
1,803
|
14,163
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(25,427)
|
|||||
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Net income (loss)
|
$
|
(11,800)
|
$
|
4,118
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$
|
(28,524)
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||
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Basic and diluted
net income (loss) per common share
|
$
|
(0.22)
|
$
|
0.08
|
$
|
(0.57)
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||
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Basic and diluted weighted average number
|
||||||||
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of shares outstanding
|
52,752
|
52,274
|
50,262
|
|||||
FX ENERGY, INC., AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2013, 2012, and 2011
(in thousands)
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2013
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2012
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2011
|
||||||
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Cash flows from operating activities:
|
||||||||
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Net income (loss)
|
$
|
(11,800)
|
$
|
4,118
|
$
|
(28,524)
|
||
|
Adjustments to reconcile net loss to net cash used in
|
||||||||
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operating activities:
|
||||||||
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Depreciation, depletion, and amortization
|
4,573
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4,239
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3,397
|
|||||
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Impairment of oil and gas properties
|
6,129
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6,979
|
72
|
|||||
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Accretion expense
|
90
|
63
|
68
|
|||||
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Loss on property dispositions
|
--
|
49
|
44
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|||||
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Stock compensation
|
2,853
|
2,325
|
1,744
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|||||
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Foreign exchange (gains) losses
|
(4,986)
|
(16,289)
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23,397
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|||||
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Common stock issued for services (G&A)
|
694
|
666
|
777
|
|||||
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Asset retirement obligation revisions
|
(6)
|
408
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(52)
|
|||||
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Loan fee amortization
|
1,182
|
504
|
554
|
|||||
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Increase (decrease) from changes in working capital items:
|
||||||||
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Receivables
|
2,097
|
(2,905)
|
(5,241)
|
|||||
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Inventory
|
98
|
(2)
|
(3)
|
|||||
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Other current assets
|
370
|
(50)
|
(253)
|
|||||
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Other assets
|
(25)
|
25
|
--
|
|||||
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Accounts payable and accrued liabilities
|
1,089
|
(1,320)
|
3,950
|
|||||
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Asset retirement obligations settled
|
(50)
|
(43)
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(50)
|
|||||
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Net cash provided by (used in) operating activities
|
2,308
|
(1,233)
|
(120)
|
|||||
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Cash flows from investing activities:
|
||||||||
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Additions to oil and gas properties
|
(26,792)
|
(15,836)
|
(17,300)
|
|||||
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Additions to other property and equipment
|
(1,153)
|
(735)
|
(1,221)
|
|||||
|
Proceeds from sale of assets
|
--
|
221
|
35
|
|||||
|
Net cash used in investing activities
|
(27,945)
|
(16,350)
|
(18,486)
|
|||||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from issuance of common stock, net of offering costs
|
--
|
--
|
45,041
|
|||||
|
Proceeds from notes payable, net of deferred loan fees
|
42,964
|
--
|
40,000
|
|||||
|
Payments of notes payable
|
(40,000)
|
--
|
(35,000)
|
|||||
|
Proceeds from exercise of stock options and warrants
|
--
|
--
|
801
|
|||||
|
Net cash provided by financing activities
|
2,964
|
--
|
50,842
|
|||||
|
Effect of exchange rate changes on cash
|
(164)
|
714
|
(1,117)
|
|||||
|
Net increase (decrease) in cash
|
(22,837)
|
(16,869)
|
31,119
|
|||||
|
Cash and cash equivalents at beginning of year
|
33,990
|
50,859
|
19,740
|
|||||
|
Cash and cash equivalents at end of year
|
$
|
11,153
|
$
|
33,990
|
$
|
50,859
|
||