NASDAQ:AXAS) reported financial and operating results for the three and six months ended June 30, 2012 and provided an operational update.
Financial and Operating Results
Including Abraxas' equity interest in Blue Eagle's production, the three months ended June 30, 2012 resulted in:
* Production of 388.7 MBoe (4,272 Boepd), up 12% over Q1 2012, of which 54% was oil or natural gas liquids.
The three months ended June 30, 2012 resulted in:
* Production of 358.5 MBoe (3,940 Boepd), excluding Abraxas' equity interest in Blue Eagle's production, a 10% increase over Q1 2012;
* Revenue of $15.9 million
* EBITDA(a) of $8.9 million
* Discretionary cash flow(a) of $7.1 million
* Net income of $10.9 million, or $0.12 per share
* Adjusted net income(a) of $1.9 million, or $0.02 per share
* Debt Covenant Metrics:
Working Capital 1.09:1.0 (min 1.0:1.0)
Debt to EBITDA 2.85:1.0 (max 4.0:1.0)
Interest Coverage 7.38:1.0 (min 2.5:1.0)
(a) See reconciliation of non GAAP financial measures below.
Net income for the quarter ended June 30, 2012 was $10.9 million, or $0.12 per share, compared to a net income of $8.9 million, or $0.10 per share, for the same period in 2011.
Adjusted net income, excluding certain non-cash items, for the quarter ended June 30, 2012 was $1.9 million or $0.02 per share, compared to adjusted net income, excluding certain non cash items, of $1.0 million or $0.01 per share for the same period in 2011. For the quarters ended June 30, 2012 and 2011, adjusted net income excludes the unrealized gain on derivative contracts of $10.3 million and $8.0 million respectively. Also excluded is a full cost impairment on Canadian assets of $1.3 million for the quarter ended June 30, 2012.
Unrealized gains or losses on derivative contracts are based on "mark to market" valuations which are non cash in nature and may fluctuate drastically 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, and require Abraxas to record an unrealized gain or loss based on the calculated value difference from the previous period end valuation.
For example, NYMEX oil prices on June 30, 2012 were $84.96 per barrel compared to $103.02 on March 31, 2012......Read the entire earnings report.