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Dune Energy Reports Second Quarter 2013 Financial And Operating Results



   Dune Energy Reports Second Quarter 2013 Financial And Operating Results

PR Newswire

HOUSTON, Aug. 7, 2013

HOUSTON, Aug. 7, 2013 /PRNewswire/ -- Dune Energy, Inc. (OTCBB:DUNR) today
announced results for the second quarter of calendar year 2013.

Revenue and Production

Revenue for the second quarter of 2013 totaled $16.8 million as compared with
$13.1 million for the second quarter of 2012.  Production volumes in the
second quarter were 135 Mbbls of oil and 0.62 Bcf of natural gas, or 238
Mboe.  This compares with 105 Mbbls of oil and 0.75 Bcf of natural gas, or 230
Mboe for the second quarter of 2012.  In the second quarter of 2013, the
average sales price per barrel of oil was $104.26 and $4.40 per Mcf for
natural gas, as compared with $105.62 per barrel and $2.69 per Mcf,
respectively for the second quarter of 2012.  Production increased 3% in the
second quarter of 2013 as compared to the second quarter of 2012.  Oil prices
decreased 1% and gas prices increased 64% from 2012 levels.  During the second
quarter of 2013 oil accounted for 57% of the total production volumes on an
equivalent basis; however, oil revenue accounted for 84% of the total revenue.

Costs and Expenses

Total lease operating expense was $7.8 million for the second quarter of 2013
as compared to $6.7 million for the second quarter of 2012, or $33.12 and
$29.10 per Boe produced, respectively.  Major increases over the prior year
were increases in production taxes due to additional oil production in
Louisiana, gas purchases for the gas lift system at Garden Island Bay, and
environmental and facilities work at Garden Island Bay.  DD&A expense was $4.8
million for the second quarter of 2013, or $20.22 per Boe. G&A expense totaled
$3.1 million for the second quarter of 2013 compared to $2.3 million in the
second quarter of 2012.  Primary increases in G&A are stock based compensation
and increased personnel costs and consulting fees.  Interest and financing
expense did not fluctuate between quarters amounting to under $5.0 million.

Earnings

Net loss totaled $1.3 million for the second quarter of 2013.  This compares
with income of $0.9 million in 2012.

Liquidity

At the end of the quarter we had $16.2 million in cash and $28 million
available under our Credit Facility based on $50 million of availability.  The
revolver is subject to a mid-year redetermination based on a new reserve
report currently being completed that will incorporate activity in the first
half of the year.  The availability under the revolver is subject to the 4.5
to 1.0 ratio of total debt to trailing 12 months EBITDAX for the second
quarter and 4.0 to 1.0 for subsequent quarters.  Third and fourth quarter
EBITDAX will determine our actual availability under the revolver.

2013 Operations Summary and Capital Program

Production

Second quarter production was up dramatically from first quarter levels
reflecting Garden Island Bay and Leeville production post recent increased
drilling activity.  First quarter production volumes were 162 Mboe while
second quarter was 238 Mboe or a 47% increase.  On a daily basis, first
quarter production was approximately 1,800 Boe/day whereas the second quarter
averaged 2,615 Boe/day.  July and August should average between 2,250 and
2,450 Boe/day reflecting normal declines; deferred production at the Leeville
field due to third party pipeline repairs shutting in the field for
approximately 7-10 days; and, reduced third quarter drilling activity
resulting from limited rig availability.  Additionally, the Heirs of Abraham
well at Leeville sanded up and is currently being worked over.  This well was
making 200-300 Bo/day prior to the recompletion.  Dune has a 40% working
interest in this well.  Assuming a successful completion at the Chocolate
Bayou Wieting #31 and no major hurricanes or other disruptions, production
should increase again in September.  Fourth quarter production should be
enhanced assuming success in drilling by the Chocolate Bayou Wieting #31 well,
the Live Oak LOPT #13 well and the Garden Island Bay #913 (Epsilon) well. 
Forecast volumes for the entire third quarter were anticipated at
approximately 2,500 Boe/day and fourth quarter at 2,700 Boe/day based on the
year-end 2012 reserve report and budget estimates.  These forecasts will be
updated with the new mid-year D&M reserve report which is currently being
completed.

Capital Program

In the first half of the year we spent approximately $29 million primarily in
our Leeville and Garden Island Bay fields.  All drilling and production costs
for the six well development programs at Leeville were concluded in the first
half of the year.  The SL 20783 #ST2, a 20,500' exploratory test in which Dune
has a 20% working interest is to be junked and abandoned due to problems
encountered while drilling.  We anticipate that our insurance coverage will
pay all costs to either permanently or temporarily abandon the well, and drill
a new wellbore to 18,929 feet minus a $100,000 deductible amount.  The cost of
the well prior to encountering downhole problems was approximately $30 million
gross or $6 million to Dune's working interest.  Assuming the insurance
settlement will result in a new well bore, we will drill the remaining 1,500'
to test the original prospect.  This will probably not occur until late in
2013 or early 2014.  At Chocolate Bayou, the Wieting #31 is currently at
11,850' and we are preparing to run 7 5/8" casing.  Once casing is run, we
will drill the 800 feet needed to test the objective 12,000 S sand section at
approximately 12,400 feet.  Assuming we encounter a reservoir sand similar to
the offsetting Wieting #32, we anticipate gross production volumes of 500
Bo/day and 5 MMcfg/day or up to 500 Boe/day net to Dune's 50% working
interest.  There are no reserves currently booked to this wellbore.  We
anticipate drilling the LOPT #13 well in our Live Oak field as soon as final
permits are secured.  This well will tap proved undeveloped reserves and
should produce approximately 1 MMcfg/day plus 50 Bo/day or approximately 175
Boe/day net to our interest.  The well will take approximately 30 days to
drill once permits are finalized.  We anticipate spudding the well in August
or September.  At Garden Island Bay we are awaiting a rig to spud the SL 214
#913 (Epsilon prospect).  The rig is anticipated to come to us by late
September to drill this unbooked location.  For the fourth quarter of 2013 our
drilling program will focus on additional wells at Garden Island Bay, Bateman
Lake or our Leeville field.  The exact drilling program will be dependent on
partner negotiations at the Leeville field.

James A. Watt, President and CEO of the company stated, "Our year-to-date
drilling results have resulted in significant new production.  Based on
current forecasts of third and fourth quarter production and EBITDAX, our
liquidity should be sufficient to continue our drilling program at our major
fields.  Success in the third and fourth quarter drilling programs should
result in increased production and EBITDAX which will allow the Company to
access the full availability under our revolver in 2014." 

Click here for more information:
http://www.duneenergy.com/news.html?b=1683&1=1

FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements.
Forward-looking statements include, but are not limited to, statements
concerning estimates of expected drilling and development wells and associated
costs, statements relating to estimates of, and increases in, production, cash
flows and values, statements relating to the continued advancement of Dune
Energy, Inc.'s projects and other statements which are not historical facts.
When used in this document, the words such as "could," "plan," "estimate,"
"expect," "intend," "may," "potential," "should," and similar expressions are
forward-looking statements. Although Dune Energy, Inc. believes that its
expectations reflected in these forward-looking statements are reasonable,
such statements involve risks and uncertainties and no assurance can be given
that actual results will be consistent with these forward-looking statements.
Important factors that could cause actual results to differ from these
forward-looking statements include the potential that the Company's projects
will experience technological and mechanical problems, geological conditions
in the reservoir may not result in commercial levels of oil and gas
production, changes in product prices and other risks disclosed in Dune's
Annual report on Form 10-K filed with the U.S. Securities and Exchange
Commission.

Investor Contact:
Steven J. Craig
Sr. Vice President Investor Relations and Administration
713-229-6300

 

 Dune Energy, Inc. 
 Consolidated Balance Sheets 
 (Unaudited) 
 ASSETS                                     June 30, 2013    December 31, 2012
 Current assets: 
    Cash                                    $    16,236,288  $          
                                                              22,793,916
    Accounts receivable                     8,306,955        6,723,233
    Current derivative asset                451,953          765,992
    Prepayments and other current assets    1,343,365        5,160,533
 Total current assets                       26,338,561       35,443,674
 Oil and gas properties, using successful   268,281,667      239,233,653
efforts accounting - proved 
 Less accumulated depreciation, depletion   (21,749,779)     (13,806,672)
and amortization 
 Net oil and gas properties                 246,531,888      225,426,981
 Property and equipment, net of
accumulated depreciation of $186,066 and    188,871          71,080
$256,380 
 Deferred financing costs, net of
accumulated amortization of $1,167,515 and  2,137,521        2,428,453
$771,061 
 Noncurrent derivative asset                379,925          397,886
 Other assets                               3,209,481        2,692,797
                                            5,915,798        5,590,216
 TOTAL ASSETS                               $ 278,786,247    $        
                                                              266,460,871
 LIABILITIES AND STOCKHOLDERS' EQUITY 
 Current liabilities: 
    Accounts payable                        $    10,389,706  $            
                                                              6,987,857
    Accrued liabilities                     10,568,110       12,529,899
    Current maturities on long-term debt    231,935          1,623,541
(see note 2) 
 Total current liabilities                  21,189,751       21,141,297
 Long-term debt (see note 2)                78,699,326       83,429,862
 Other long-term liabilities                14,469,747       13,860,597
 Total liabilities                          114,358,824      118,431,756
 Commitments and contingecies               -                -
 STOCKHOLDERS' EQUITY 
 Preferred stock, $.001 par value,
1,000,000 shares authorized, 250,000        -                -
shares undesignated, no shares issued and
outstanding 
 Common stock, $.001 par value,
4,200,000,000 shares authorized,            71,908           59,022
71,907,952 and 59,022,445 shares issued 
 Treasury stock, at cost (63,810 and 1,056  (121,146)        (1,914)
shares) 
 Additional paid-in capital                 176,881,059      155,824,868
 Accumulated deficit                        (12,404,398)     (7,852,861)
 Total stockholders' equity                 164,427,423      148,029,115
 TOTAL LIABILITIES AND STOCKHOLDERS'        $ 278,786,247    $        
EQUITY                                                        266,460,871

 

 Dune Energy, Inc. 
 Consolidated Statements of Operations 
 (Unaudited) 
                 Three        Three        Six months    Six months    Three months ended 
                months       months 
                 ended        ended        ended         ended         March 31, 
                June 30,     June 30,     June 30,      June 30,      2013          2012
                2013         2012         2013          2012
 Revenues: 
    Oil and     $            $            $ 28,905,142  $ 26,501,925  $ 12,121,663  $ 13,395,116
gas revenues     16,783,479   13,106,809
    Other       -            -            963,150.00    -             963,150.00    -
revenues 
 Total          16,783,479   13,106,809   29,868,292    26,501,925    13,084,813    13,395,116
revenues 
 Operating
expenses: 
    Lease
operating
expense and     7,848,003    6,699,881    14,709,404    12,858,666    6,861,401     6,158,785
production
taxes 
    Accretion
of asset        402,732      365,439      805,464       730,878       402,732       365,439
retirement
obligation 
    Depletion,
depreciation    4,793,818    4,986,322    7,961,704     9,271,983     3,167,886     4,285,661
and
amortization 
    General
and             3,129,377    2,322,537    5,717,459     5,423,594     2,588,082     3,101,057
administrative
expense 
    Gain (loss)
on settlement
of asset        (22,920)     465,024      -             888,946       22,920        423,922
retirement
obligation
liabliity 
 Total
operating       16,151,010   14,839,203   29,194,031    29,174,067    13,043,021    14,334,864
expense 
 Operating      632,469      (1,732,394)  674,261       (2,672,142)   41,792        (939,748)
income (loss) 
 Other income
(expense): 
    Other       90           2,405        692           13,702        602           11,297
income 
    Interest    (2,484,209)  (2,411,781)  (4,919,188)   (4,781,467)   (2,434,979)   (2,369,686)
expense 
    Gain
(loss) on       510,288      5,020,058    (307,302)     4,727,636     (817,590)     (292,422)
derivative
instruments 
 Total other
income          (1,973,831)  2,610,682    (5,225,798)   (40,129)      (3,251,967)   (2,650,811)
(expense) 
 Net income     $            $            $             $             $             $
(loss)          (1,341,362)   878,288      (4,551,537)   (2,712,271)   (3,210,175)   (3,590,559)
 Net income
(loss) per
share: 
    Basic and   $            $            $             $             $             $          
diluted             (0.02)         0.02    (0.07)        (0.07)        (0.05)        (0.09)
 Weighted
average shares
outstanding: 
    Basic and   63,238,696   39,402,243   61,156,848    39,114,285    59,041,035    38,826,328
diluted 

 

Dune Energy, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
                                            Six months ended  Six months ended
                                            June 30, 2013     June 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                    $ (4,551,537)     $ (2,712,271)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
   Depletion, depreciation and              7,961,704         9,271,983
amortization
   Amortization of deferred financing       396,454           364,154
costs
   Stock-based compensation                 1,288,589         1,028,225
   Loss on settlement of asset              -                 888,946
retirement obligation liability
   Accretion of asset retirement            805,464           730,878
obligation
   Unrealized loss (gain) on derivative     332,000           (3,972,122)
instruments
   Changes in:
      Accounts receivable                   (1,693,865)       1,546,048
      Prepayments and other assets          3,817,168         1,274,502
      Payments made to settle asset         (196,314)         (1,910,086)
retirement obligations
      Accounts payable and accrued          2,805,040         6,902,054
liabilities
NET CASH PROVIDED BY OPERATING              10,964,703        13,412,311
ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Cash investment in proved and unproved      (27,143,528)      (17,721,344)
properties
Decrease in restricted cash                 -                 17,184
Purchase of furniture and fixtures          (145,477)         (94,487)
Decrease (increase) in other assets         (516,684)         314,969
NET CASH USED IN INVESTING ACTIVITIES       (27,805,689)      (17,483,678)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock          20,000,000        -
Common stock issuance costs                 (219,513)         -
Payments on short-term debt                 (1,391,607)       (4,333,592)
Increase in long-term debt issuance         (105,522)         (96,548)
costs
Payments on long-term debt                  (8,000,000)       (3,000,000)
NET CASH PROVIDED BY (USED IN) FINANCING    10,283,358        (7,430,140)
ACTIVITIES
NET CHANGE IN CASH BALANCE                  (6,557,628)       (11,501,507)
   Cash balance at beginning of period      22,793,916        20,393,672
   Cash balance at end of period            $ 16,236,288      $ 8,892,165
SUPPLEMENTAL DISCLOSURES
Interest paid                               $ 1,226,811       $ 1,415,771
Income taxes paid                           -                 -
NON-CASH INVESTING AND FINANCIAL
DISCLOSURES
Accrued interest converted to long-term     $ 3,269,464       $ 2,822,263
debt
Non-cash investment in proved and unproved  1,904,486         1,514,623
properties in accounts payable

SOURCE Dune Energy, Inc.

Website: http://www.duneenergy.com
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