Dune Energy Reports Third Quarter 2013 Financial And Operating Results

    Dune Energy Reports Third Quarter 2013 Financial And Operating Results

PR Newswire

HOUSTON, Nov. 5, 2013

HOUSTON, Nov. 5, 2013 /PRNewswire/ --Dune Energy, Inc. (OTCBB:DUNR) today
announced results for the third quarter of calendar year 2013.

Revenue and Production

Revenue for the third quarter of 2013 totaled $13.7 million as compared with
$13.4 million for the third quarter of 2012. Production volumes in the third
quarter were 109 Mbbls of oil and 0.48 Bcf of natural gas, or 189 Mboe. This
compares with 107 Mbbls of oil and 0.71 Bcf of natural gas, or 225 Mboe for
the third quarter of 2012. In the third quarter of 2013, the average sales
price per barrel of oil was $109.28 and $3.77 per Mcf for natural gas, as
compared with $103.33 per barrel and $3.34 per Mcf, respectively for the third
quarter of 2012. Production decreased 16% in the third quarter of 2013 as
compared to the third quarter of 2012. Oil prices increased 6% and gas prices
increased 13% from 2012 levels. During the third quarter of 2013 oil
accounted for 57% of the total production volumes on an equivalent basis;
however, oil revenue accounted for 87% of the total revenue.

Costs and Expenses

Total lease operating expense (LOE) was $5.7 million for the third quarter of
2013 as compared to $6.4 million for the third quarter of 2012, or $30.16 and
$28.44 per Boe produced, respectively. DD&A expense was $5.2 million for the
third quarter of 2013, or $27.51 per Boe. G&A expense totaled $2.9 million for
the third quarter of 2013 compared to $2.1 million in the third quarter of
2012. Interest and financing expense did not fluctuate between quarters
amounting to around $2.5 million.

First quarter of 2013 LOE was $6.9 million and second quarter was $7.8
million. This decrease from the prior quarters reflects reclassifying the
"Mystery Sheen" at Garden Island Bay as a remediation cost rather than LOE.
As a result of this decision we recorded a non-cash remediation cost of $4.6
million in the 3rd quarter of 2013. This removed approximately $700,000 from
the year to date LOE costs and future costs associated with this remediation
will not be charged to LOE.

Earnings

Net loss totaled $30.4 million for the third quarter of 2013. This compares
with income of $1.4 million in 2012. This net loss was primarily associated
with two factors. The first was a $22.3 million non-cash impairment at our
Garden Island Bay field primarily associated with the impact of lower expected
future oil prices on the economic life of the field's proved reserves
reflected in the June 30, 2013 Reserve Report and the second was a $4.6
million non-cash charge associated with remediation costs mentioned above.

Liquidity

At the end of the quarter we had $1.6 million in cash and $39 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 dated June 30, 2013. The report has been submitted to our banks for
review and we are awaiting their determination of the availability under the
revolver.

The availability under the revolver is subject to a 4.0 to 1.0 ratio of total
debt to trailing 12 months EBITDAX. This covenant limits our total
availability under the revolver to an effective liquidity. At the end of the
third quarter we had total debt as defined of $69.4 million and trailing 12
month EBITDAX of $20.1 million resulting in a ratio of 3.45, well within the
covenant restriction. Effective liquidity at the end of the 3rd quarter was
$12.6 million. Fourth quarter EBITDAX which is primarily driven by production
revenues less LOE will determine our effective availability under the revolver
at the end of the year.

2013 Operations Summary and Capital Program

Production

Production volumes for the 3^rd quarter of 2013 were down from the 2^nd
quarter of 2013 by approximately 531 Boe/day primarily related to a third
party pipeline shut-in our outside-operated Leeville field. In addition,
delays in infrastructure and maintenance work occurred at the Leeville field,
as operator and majority-owner changed due to a sale of interests. The new
operator is addressing these issues and we anticipate production from Leeville
returning to second quarter levels in the fourth quarter of 2013.

Fourth quarter production volumes are anticipated to be between 2,100 Boe/day
and 2,400 Boe/day largely dependent on facilities and maintenance work being
completed in our Leeville field, volumes remaining at current levels in our
recently completed Wieting #31 well at Chocolate Bayou and new production
coming on line at the Kappa well (GIB SL 214 #913ST1). This well should
commence production within the month. Additionally we are preparing to drill
the LOPT 10 well in our Live Oak field which should commence production in
December.

Capital Program

In the first three quarters of the year we have spent a total of $40 million
primarily in our Leeville, Garden Island Bay and Chocolate Bayou fields. We
anticipate $10 to $12 million being spent in the fourth quarter to finish
drilling and completing the Kappa well at Garden Island Bay, drilling the LOPT
10 at Live Oak Field, and depending on partner timing, potentially commencing
a well at Leeville. We will carefully monitor our capital expenditure against
our effective liquidity to stay within the constraints of our credit
agreements.

James A. Watt, President and CEO of the company stated, "Based on current
forecasts, we anticipate a capital program of approximately $50 million for
calendar 2013. This is the largest investment we have put into our asset
since 2008. To date the results of the program had added new reserves at
excellent finding and development costs and have added new production. We
anticipate 2014 will have a similar drilling program as 2013 with a large
portion of the program front end loaded in our Leeville field."

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)
                                           September30,     December31,

                                           2013              2012
ASSETS
Current assets:
Cash                            $    1,596,807 $   22,793,916
Accounts receivable                        8,846,173         6,723,233
Current derivative asset         —                 765,992
Prepayments and other current assets      391,688           5,160,533
Total current assets           10,834,668        35,443,674
Oil and gas properties, using successful   284,490,074       239,233,653
efforts accounting—proved
Less accumulated depreciation, depletion,  (49,172,275 )     (13,806,672 )
amortization and impairment
Net oil and gas properties                235,317,799       225,426,981
Property and equipment, net of accumulated
depreciation of $206,558 and               169,867           71,080
$256,380
Deferred financing costs, net of
accumulated amortization of $1,375,079 and 1,941,052         2,428,453
$771,061
Noncurrent derivative asset  82,292            397,886
Other assets                      3,676,444         2,692,797
                                           5,869,655         5,590,216
TOTAL ASSETS                              $  252,022,122   $  266,460,871
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                       $   15,917,507  $    6,987,857
Accrued liabilities                    9,678,767         12,529,899
Current derivative liability         6,841             —
Current maturities on long-term debt (see  —                 1,623,541
note 2)
Total current liabilities           25,603,115        21,141,297
Long-term debt (see note 2)  69,424,434        83,429,862
Other long-term liabilities              22,472,330        13,860,597
Total liabilities                     117,499,879       118,431,756
Commitments and contingencies         —                 —
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               177,341,601       155,824,868
Accumulated deficit             (42,770,120 )     (7,852,861 )
Total stockholders' equity                 134,522,243       148,029,115
TOTAL LIABILITIES AND STOCKHOLDERS'        $  252,022,122   $  266,460,871
EQUITY

Dune Energy, Inc.

Consolidated Statements of Operations

(Unaudited)
                         Three months       Three months       Nine months        Nine months

                         ended              ended              ended              ended

                         September30,2013 September30,2012 September30,2013 September30,2012
Revenues:
Oil and gas              $               $               $               $   
revenues  13,706,257        13,440,370        42,611,399        39,942,295
Other revenues  —                  —                  963,150            —
Total revenues       13,706,257         13,440,370         43,574,549         39,942,295
Operating expenses:
Lease operating expense  5,677,034          6,419,316          20,084,684         19,004,600
and production taxes
Accretion of asset       402,732            365,439            1,208,196          1,096,317
retirement obligation
Depletion, depreciation  5,183,118          926,277            13,144,822         10,198,260
and amortization
General and
administrative           2,924,299          2,117,447          8,641,758          7,541,041
expense
Loss on settlement of
asset retirement         —                  62,148             —                  951,094
obligation
liability
Impairment of oil and    22,250,000         —                  22,250,000         —
gas properties
Remediation costs    4,284,246          97,715             4,586,000          371,097
Total operating          40,721,429         9,988,342          69,915,460         39,162,409
expense
Operating income         (27,015,172 )      3,452,028          (26,340,911 )      779,886
(loss)
Other income (expense):
Other                    82                 2,715              774                16,417
income
Interest expense  (2,541,193 )       (2,419,864 )       (7,460,381 )       (7,201,331 )
Gain (loss) on
derivative               (809,439 )         (2,430,239 )       (1,116,741 )       2,297,397
instruments
Total other income       (3,350,550 )       (4,847,388 )       (8,576,348 )       (4,887,517 )
(expense)
Net loss                 $               $              $               $    
                         (30,365,722 )      (1,395,360 )       (34,917,259 )      (4,107,631 )
Net loss per share:
Basic and diluted  $          $          $          $        
                         (0.42 )           (0.04 )           (0.54 )           (0.10 )
Weighted average shares
outstanding:
Basic and diluted  71,907,952         39,391,382         64,779,930         39,207,325

Dune Energy, Inc.

Consolidated Statements of Cash Flows

(Unaudited)
                                    Nine months          Nine months

                                    ended                ended

                                    September30,2013   September30,2012
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss                            $   (34,917,259 ) $    (4,107,631 )
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Depletion, depreciation and         13,144,822           10,198,260
amortization
Amortization of deferred financing  604,018              555,322
costs
Stock-based compensation        1,763,135            1,306,197
Loss on settlement of asset         —                    951,094
retirement obligation liability
Accretion of asset retirement       1,208,196            1,096,317
obligation
Impairment of oil and gas           22,250,000           —
properties
Remediation costs               4,586,000            —
Unrealized loss (gain) on           1,088,427            (1,331,092 )
derivative instruments
Changes in:
Accounts receivable            (2,223,214 )         1,256,952
Prepayments and other assets    4,768,845            1,847,376
Payments made to settle asset       (196,314 )           (2,082,624 )
retirement obligations
Accounts payable and accrued        9,266,089            2,192,585
liabilities
NET CASH PROVIDED BY OPERATING      21,342,745           11,882,756
ACTIVITIES
CASH FLOWS FROM INVESTING
ACTIVITIES
Cash investment in proved and       (40,435,570 )        (19,126,544 )
unproved properties
Decrease in restricted              —                    17,184
cash
Purchase of furniture and           (146,963 )           (95,233 )
fixtures
Decrease (increase) in other        (983,647 )           313,858
assets
NET CASH USED IN INVESTING          (41,566,180 )        (18,890,735 )
ACTIVITIES
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from sale of common        20,000,000           —
stock
Common stock issuance               (233,516 )           —
costs
Payments on short-term              (1,623,541 )         (4,557,857 )
debt
Increase in long-term debt issuance (116,617 )           (198,924 )
costs
Payments on long-term               (19,000,000 )        (3,000,000 )
debt
NET CASH PROVIDED BY (USED IN)      (973,674 )           (7,756,781 )
FINANCING ACTIVITIES
NET CHANGE IN CASH                  (21,197,109 )        (14,764,760 )
BALANCE
Cash balance at beginning of        22,793,916           20,393,672
period
Cash balance at end of period       $     1,596,807  $     5,628,912
SUPPLEMENTAL DISCLOSURES
Interest paid              $     1,837,444  $     2,094,165
Income taxes paid    —                    —
NON-CASH INVESTING AND FINANCIAL
DISCLOSURES
Accrued interest converted to       $     4,994,572  $     4,360,073
long-term debt
Non-cash investment in proved and
unproved properties in accounts     —                    1,794,071
payable
Revision to asset retirement        4,820,851            —
obligation

SOURCE Dune Energy, Inc.

Website: http://www.duneenergy.com
 
Press spacebar to pause and continue. Press esc to stop.