PGEI earnings released. What do some of you oil experts think about this company?
Thursday April 29, 11:23 am Eastern Time
Company Press Release
SOURCE: Petroglyph Energy, Inc.
Petroglyph Energy, Inc. Announces
First Quarter Results
HUTCHINSON, Kan., April 29 /PRNewswire/ -- Petroglyph Energy, Inc. (Nasdaq: PGEI - news)
today announced a net loss before change in accounting principle of $329,000 on revenues of $1.02
million for the quarter ended March 31, 1999 compared to a net loss of $139,000 on revenues of
$1.14 million for the quarter ended March 31, 1998. Operating cash flow (net income plus
depreciation, depletion and amortization and deferred taxes) declined to a negative $66,000, or
$0.01 per share, for the quarter ended March 31, 1999, from a positive $223,000, or $0.04 per
share, for the quarter ended March 31, 1998. The decrease in net income and operating cash flow
was primarily due to a change to net interest expense of $69,000 for the quarter ended March 31,
1999 from net interest income of $204,000 for the quarter ended March 31, 1998.
The Company implemented additional general and administrative (G&A) cost reductions in the first
quarter of 1999 resulting in a pre-tax severance charge of $55,000. The Company expects to incur
G&A costs of approximately $350,000 per quarter for the remainder of the year. Robert Murdock,
Chairman and CEO commented, ''With the elimination of 35% of total Company G&A costs since
the fourth quarter of 1998, the Company has successfully executed its immediate cost reduction plan
and is at the point of being cash flow neutral, based on existing operations. The management team is
now aggressively pursuing the next step in our 1999 growth strategy, which is to execute on selective
producing property acquisition and/or combination opportunities that leave Petroglyph with its
intrinsic resource development upside while driving down the average per unit cost structure. The
Company intends to accomplish these objectives through transactions designed to significantly
increase our proportion of producing oil and gas reserves. Concurrently, and most importantly, we
believe such transactions will provide the increased cash flow necessary to continue developing our
Uinta Basin waterfloods and Raton Basin coalbed methane projects.''
The Company's first quarter 1999 financial results were also impacted by the Company's adoption of
Statement of Position (''SOP'') 98-5, Reporting on the Costs of Start-Up Activities, which requires
future start-up and organization charges to be expensed as they are incurred and previously
capitalized charges to be expensed upon adoption as a change in accounting principle. As a result of
this adoption, the Company recognized an $111,000 after tax non-cash charge in the first quarter of
1999.
During the first quarter of 1999, the Company spent $1.5 million on the development of its oil and
gas properties and ended the quarter with debt of $8.5 million under its revolving credit facility and
$0.8 million in working capital.
Effective April 1, 1999, the Company completed the sale of its Texas compression assets as planned
for net proceeds of $785,000, which will result in a gain in the second quarter of approximately
$526,000, related to the sale.
Operating and Development Activity
Average daily oil and gas production for the quarter ended March 31, 1999 was 880 BOE,
compared to 1,034 BOE during the quarter ended March 31, 1998. This decrease was primarily
due to a decline in the average number of producing wells in the Antelope Creek Field between
periods. During the last half of 1998, approximately 30 wells were taken out of production due to
low oil prices or as a result of being converted to water injection status in support of the ongoing
Antelope Creek Field waterflood development plan.
Antelope Creek Field
During the first quarter of 1999, the Company converted 2 gross (1 net) producing wells to water
injection status and as a result of recent oil price increases, the Company began returning the shut-in
wells to producing status. Based upon the availability of cash flow, the Company will convert up to
20 additional production wells to water injection status during 1999 to increase future waterflood
production on a field-wide basis.
Raton Basin
During the first quarter of 1999, the Company completed its water disposal and gas gathering system
infrastructure while increasing produced water levels to approximately 30,000 Bbls per day from its
17 well pilot area. The pilot project continues to progress in line with engineering expectations, with
water levels in the production wells dropping and small levels of produced gas volumes increasing.
Helen Gohlke Field
During the first quarter of 1999, the Company drilled 3 gross (2 net) wells and completed 2 gross (1
net) wells. One well was a dry hole and expensed as exploration cost in 1998. The Company intends
to continue to market this property for a possible sale.
Petroglyph Energy, Inc. is an independent energy company located in Hutchinson, Kansas engaged in
the exploration, development and acquisition of oil and gas properties. Its properties are
concentrated in Utah, Colorado and Texas.
Forward Looking Statements
Certain statements contained herein constitute ''forward-looking statements'' within the meaning of
the Private Securities Litigation Reform Act of 1995 (the ''Reform Act''). Such forward-looking
statements involve known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include but are not limited to risks inherent in drilling and other development activities,
the timing and extent of changes in commodity prices, unforeseen engineering and mechanical or
technological difficulties in drilling wells and implementing enhanced oil recovery programs, the
availability, proximity and capacity of refineries, pipelines and processing facilities, shortages or
delays in the delivery of equipment and services, land issues, federal and state regulatory
developments and other risks more fully described in Petroglyph's filings with the Securities and
Exchange Commission.
PETROGLYPH ENERGY, INC.
SELECTED FINANCIAL DATA
(In thousands, except per share data)
Three Months
Ended March 31,
1999 1998
(Unaudited) (Unaudited)
STATEMENTS OF OPERATIONS:
REVENUES
Oil sales $616 $793
Gas sales 320 313
Other 79 35
Total revenues 1,015 1,141
OPERATING EXPENSES
Lease operations 501 595
Production taxes 36 60
Depreciation, depletion and amortization 448 450
General and administrative 475 495
Total operating expenses 1,460 1,600
Operating income (loss) (445) (459)
OTHER INCOME (EXPENSE)
Interest income (expense) (69) 204
Gain (loss) on sales of property and equipment, net - 28
INCOME (LOSS) BEFORE INCOME TAXES (514) (227)
INCOME TAX (EXPENSE) BENEFIT 185 88
NET INCOME (LOSS) BEFORE CHANGE IN
ACCOUNTING PRINCIPLE ($329) ($139)
Change in Accounting Principle ($111) -
NET INCOME (LOSS) ($440) ($139)
Net income (loss) per common share
before change in accounting principle ($.06) ($.03)
Net income (loss) per common share
from change in accounting principle ($.02) -
Net income (loss) per common share ($.08) ($.03)
Weighted average common shares
outstanding (in thousands) 5,458 5,458
OTHER OPERATING DATA:
Operating cash flow:
Total ($66) $ 223
Per common share ($.01) $.04
Net production:
Oil (Bbls) 50,612 67,463
Gas (Mcf) 171,498 153,492
BOE 79,195 93,045
Average sales price:
Oil ($/Bbl) $12.18 $11.75
Gas ($/Mcf) $1.86 $2.04
March 31, 1999 December 31, 1998
CONSOLIDATED BALANCE SHEETS: (Unaudited)
Current assets $2,907 $4,722
Property and equipment, net 41,800 40,698
Other assets 447 615
Total assets $45,154 $46,035
Current liabilities $2,078 $2,771
Long-term debt 8,000 7,500
Deferred tax liability 205 452
Stockholders' equity 34,871 35,312
Total liabilities and stockholders' equity $45,154 $46,035
SOURCE: Petroglyph Energy, Inc.
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