UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
March 25, 2003
Abraxas Petroleum Corporation
(Exact name of registrant as specified in its charter)
Nevada
(State of other jurisdiction of incorporation)
0-19118 74-2584033
(Commission File Number) (I.R.S. Employer Identification Number)
500 N. Loop 1604 East, Suite 100
San Antonio, Texas 78232
(Address of principal executive offices)
Registrant's telephone number, including area code:
210-490-4788
Item 9. REGULATION FD DISCLOSURE
See attached Press Release
The following exhibits are filed as part of this report:
NUMBER DOCUMENT
99.1 Press release dated March 25, 2003
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ABRAXAS PETROLEUM CORPORATION
By: __/s/Chris Williford__________
Chris Williford
Executive Vice President, Chief Financial
Officer and Treasurer
Dated: March 25, 2003
Exhibit 99.1
NEWS RELEASE
ABRAXAS ANNOUNCES 2002 FINANCIAL RESULTS AND YEAR END RESERVES
Results from recently sold Canadian operations classified as "Discontinued
Operations"
SAN ANTONIO, TX (March 25, 2003) - Abraxas Petroleum Corporation (AMEX:ABP)
today reported financial and operating results for the fourth quarter and the
full year ended December 31, 2002. Due to required accounting treatment under
GAAP, results for all reported periods related to the Canadian operations sold
in January 2003 have been classified as "Discontinued Operations" on the
Company's Statements of Operations and as "Assets Held for Sale" on the
Company's Balance Sheet. Consequently any comparisons or discussions contained
herein, unless specifically identified to Discontinued Operations, are related
to continuing operations only.
Continuing Operations:
Revenues in the fourth quarter of 2002 were $6.9 million compared to $5.0
million in 2001. Net earnings for the fourth quarter of 2002 were a loss of $6.7
million compared to a loss of $9.2 million in 2001. Higher commodity price
realizations in Q4 2002, $3.85 per Mcfe, compared to Q4 2001, $2.26 per Mcfe,
was the driver behind the increase in revenues and the narrower loss. For the
full year of 2002, a net loss of $60.8 million was incurred compared to a loss
of $16.0 million in 2001. Included in the full year 2002 loss was a non-cash
proved property impairment (ceiling test) charge of $32.9 million.
As Reported Including Discontinued Operations:
The net loss for the fourth quarter of 2002 was $5.7 million including a gain of
$976,000 from discontinued operations. This compares to a loss of $12.9 million
in the fourth quarter of 2001 including a loss from discontinued operations of
$3.7 million. The reported loss for the full year of 2002 was $118.5 million
including a loss from discontinued operations of $57.7 million and impairment
charges totaling $86.3 million. During 2001 the Company reported a loss of $19.7
million including a loss of $3.7 million from discontinued operations. The 2001
numbers do not include any impairment charges.
The Company reported 112.5 Bcfe of proven reserves at year-end 2002 with a PV-10
of $137 million. Additional operational detail, including production data, price
realizations, reserve breakdown and other pertinent information for the
comparable fourth quarters of 2001 and 2002, as well as full year comparisons,
can be found in the attached tables. The Company has also attempted to provide
the reader with a better understanding of the impact on the Company's balance
sheet of the transactions completed in January of 2003, specifically the
Canadian sale, the new senior credit agreement and the exchange offer all
previously announced on January 24, 2003. An unaudited pro forma balance sheet
at December 31, 2002, giving effect to the results of the transactions discussed
above can be found in the attached tables.
Abraxas CEO Bob Watson commenting on 2002 results and subsequent transactions,
"The work that we did during 2002, not only associated with the drill bit but
also with the transactions completed in January of 2003, has allowed Abraxas to
re-engineer our balance sheet and establish a much firmer foundation upon which
to develop our retained assets. The Canadian sale, the new credit facility and
the successful completion of the exchange offer have dramatically changed our
capital structure, reducing our overall debt by 48% and reducing our cash
interest costs from about $34 million a year to $4 million. We anticipate that
this decrease in cash interest payments and the increase in commodity prices
will lead to an improvement in liquidity which will allow us to accelerate the
development of our extensive inventory of retained assets and replicate the
value creation demonstrated in our Canadian sale."
As a result of final 2002 financial results and current market conditions,
Abraxas has updated its operating and financial guidance for year 2003 as
follows:
Production:
BCFE (approximately 80% gas) 7 - 8
Price Differentials (Pre Hedge):
$ Per BO 0.64
$ Per MCF 0.51
Lifting Costs, $ Per MCFE 1.21
G&A, $ Per MCFE 0.69
Capital Expenditures ($ Millions) 15.00
Abraxas invites your participation in a conference call on Wednesday, March
26th, at 1:30 pm CST to discuss the contents of this release and respond to
questions. Please call 1-800-967-7140 between 1:20 and 1:30 pm CST, confirmation
code 729258, if you would like to participate in the call. There will be a
replay of the conference call available by calling 1-888-203-1112, confirmation
code 729258, beginning approximately 4:30 pm CST Wednesday, March 26th, through
5:00 pm CST Wednesday, April 2nd.
Abraxas Petroleum Corporation is a San Antonio-based crude oil and natural gas
exploitation and production company. The Company operates in Texas, Wyoming and
western Canada.
Safe Harbor for forward-looking statement: Statements in this release looking
forward in time involve known and unknown risks and uncertainties, which may
cause the Company's actual results in future periods to be materially different
from any future performance suggested in this release. Such factors may include,
but may not be necessarily limited to, changes in the prices received by the
Company for crude oil and natural gas. In addition, the Company's future crude
oil and natural gas production is highly dependent upon the Company's level of
success in acquiring or finding additional reserves. Further, the Company
operates in an industry sector where the value of securities is highly volatile
and may be influenced by economic and other factors beyond the Company's
control. In the context of forward-looking information provided for in this
release, reference is made to the discussion of risk factors detailed in the
Company's filing with the Securities and Exchange Commission during the past 12
months.
FOR MORE INFORMATION CONTACT:
Janice Herndon/Manager Corp. Communications
Telephone 210.490.4788
jherndon@abraxaspetroleum.com
www.abraxaspetroleum.com
Abraxas Petroleum Corporation and Subsidiaries
Consolidated Statements of Operations
Three Months Ended Twelve Months Ended
(In thousands except per share data) December 31, December 31,
------------- ------------ -------------------------
2002 2001 2002 2001
------------- ------------ -------------------------
Revenue:
Oil and gas production revenues $6,796 $4,812 $21,601 $34,934
Rig revenues 123 149 635 756
Other 1 2 71 85
------------- ------------ -------------------------
6,920 4,963 22,307 35,775
Operating costs and expenses:
Lease operating and production taxes 2,109 2,465 7,910 9,302
Depreciation, depletion, and amortization 2,300 2,752 9,654 12,336
Proved Property impairment - - 32,850 -
Rig operations 128 154 567 702
Stock - based compensation - - - (2,767)
General and administrative 1,556 885 5,082 4,937
------------- ------------ ------------ -----------
6,093 6,256 56,063 24,510
------------- ------------ ------------ ----------
Operating income (loss) 827 (1,293) (33,756) 11,265
Other (income) expense:
Interest income (36) (312) (92) (78)
Amortization of deferred financing fees 331 865 1,325 1,907
Interest expense 6,040 6,272 24,689 23,922
Financing costs 967 - 967 -
Loss (gain) on sale of equity investment - 845 - 845
Other 201 191 201 207
------------- ------------ ------------- ----------
7,503 7,861 27,090 26,803
Income (loss) from continuing operations before
taxes and extraordinary gain (6,676) (9,154) (60,846) (15,538)
Income tax expense (benefit) - - - 505
------------- ------------ ------------- ----------
Income (loss) from continuing operations before
extraordinary item (6,676) (9,154) (60,846) (16,043)
Income (loss) from discontinued operations 976 (3,696) (57,681) (3,675)
------------- ------------ ------------- ----------
Income (loss) before extraordinary item (5,700) (12,850) (118,527) (19,718)
Debt extinguishment - - - -
------------- ------------ ------------- ----------
Net income (loss) ($5,700) ($12,850) ($118,527) ($19,718)
============= ============ ============= ==========
Earnings (loss) per common share:
Net income (loss) from continuing operations
before extraordinary item ($0.22) ($0.31) ($2.03) ($0.62)
Discontinued operations (loss) 0.03 (0.12) (1.92) (0.14)
Extraordinary item - - - -
------------- ------------ -------------- -----------
Net income (loss) per common share ($0.19) ($0.43) ($3.95) ($0.76)
============= ============ ============== ===========
ABRAXAS PETROLEUM CORPORATION
YEAR-END RESULTS
Three Months Twelve Months
(In thousands except per share data) Ended December 31, Ended December 31,
2002 2001 2002 2001
---- ---- ---- ----
Continuing Operations Data:
Revenues $6,920 $4,963 $22,307 $35,775
EBITDA 3,127 1,459 8,748 20,834
Cash Flow (Before Working Capital Changes) (4,044) (4,692) (17,017) (3,722)
Continuing Operations Net Loss (6,676) (9,154) (60,846) (16,043)
Continuing Operations Net Loss Per Share (.22) (.31) (2.03) (.62)
Net Income (loss) from Discontinued Operations 976 (3,696) (57,681) (3,675)
Net Income (loss) from Discontinued Per Share .03 (.12) (1.92) (.14)
Reported Net Loss (5,700) (12,850) (118,527) (19,718)
Reported Net Loss Per Share (.19) (.43) (3.95) (.76)
Weighted Ave. Shares Outstanding (Millions) 30.0 30.0 30.0 25.8
Production:
Crude Oil (BPD) 742 825 725 999
NGL (BPD) 30 184 26 141
Natural Gas (MCFPD) 14,551 17,500 15,561 21,433
MMCFEPD 19.2 23.6 20.1 28.3
Prices (net of hedge costs):
Crude Oil ($/BBL) $30.91 $18.68 $24.42 $25.07
NGL's ($/BBL) 18.57 11.93 14.88 15.61
Natural Gas ($/MCF) 3.46 2.04 2.64 3.19
Price per MCFE 3.85 2.26 2.95 3.39
Expenses:
Lease Operating ($/MCFE) $1.19 $1.14 $1.08 $.90
General & Administrative ($/MCFE) .88 .45 .69 .48
Interest ($/MCFE) 3.40 2.75 3.36 2.31
D/D/A ($/MCFE) 1.30 1.27 1.32 1.20
Reserves:
Consolidated PV-10 $136,584 $77,187
U. S. Reserves (Bcfe) 97.6 134.9
Canada Reserves (Bcfe) 14.9 7.2
Balance Sheet Data (In $000s)
Year End Year End
December 31, 2002 December 31, 2001
Cash $557 $3,593
Working Capital (Deficit)* (67,547) (2,982)
Property and Equipment, Net 95,926 127,486
Total Assets** 181,425 303,616
Long-Term Debt*** 190,979 262,240
Shareholders Equity (Deficit) (142,254) (28,585)
Actual Common Shares Outstanding (Millions) 30.0 30.0
*2002 Working capital includes a current liability of $63.5 million for senior
secured notes which were paid off on January 23, 2003. It does not include
assets and liabilities held for sale for either period.
**Total Assets include assets held for sale (total assets from continued
operations equal $107.2 million for 2002 and $139.7 million for 2001)
***2002 Long-term debt includes the second lien and old notes that were
exchanged in the tender offer in January, 2003.
ABRAXAS PETROLEUM CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET AT DECEMBER 31, 2002
-----------------------------------
AS REPORTED
ON 10-K PROFORMA*
(Audited) (Unaudited)
-----------------------------------
(Dollars in Thousands)
ASSETS:
Current Assets $ 7,923 $ 7,923
Assets held for sale 74,247 -
Property and Equipment - Net 95,926 95,926
Other Assets 3,329 5,844
-----------------------------------
Total Assets $ 181,425 $ 109,693
-----------------------------------
LIABILITIES & STOCKHOLDER'S DEFICIT:
Current liabilities $ 75,470 $ 6,970
Liabilities related to assets held for sale 56,697 -
Long-term debt 190,979 175,298 (1)
Other liabilities 533 533
Stockholder's equity (deficit) (142,254) (73,108) (2)
-----------------------------------
Total liabilities and stockholder's equity
(deficit) $ 181,425 $ 109,693
-----------------------------------
* Gives effect as to the sales of Canadian Abraxas Petroleum Ltd. and Grey Wolf
Exploration Inc., the closing of the Company's new senior credit agreement,
the redemption of the Company's previous first lien notes and the completion
of the exchange offer related to the Company's former second lien and old
notes, as if all transactions happened at December 31, 2002.
(1)Consists of new senior credit agreement with outstanding balance of $46.7
million and $128.6 million which represents the carrying value of the $109.7
million face amount of the newly exchanged notes, due in May 2007.
(2)Reflects estimated gain on sale of Canadian subsidiaries to be booked in the
first quarter 2003 (approximately $69 million), minus transaction costs of
exchange offer that will be expensed (approximately $3.6 million), plus
issuance of new shares related to the exchange offer (approximately $3.8
million).