PetroQuest Energy Announces 2013 Year-End And Fourth Quarter Results

     PetroQuest Energy Announces 2013 Year-End And Fourth Quarter Results

PR Newswire

LAFAYETTE, La., Feb. 27, 2014

LAFAYETTE, La., Feb. 27, 2014 /PRNewswire/ -- PetroQuest Energy, Inc. (NYSE:
PQ) announced today net income available to common stockholders for the
quarter ended December 31, 2013 of $2,291,000, or $0.04 per share, compared to
fourth quarter 2012 net loss available to common stockholders of $25,451,000,
or $0.41 per share. For the year ended December 31, 2013, the Company
reported net income available to common shareholders of $8,943,000, or $0.14
per share, compared to net loss available to common shareholders of
$137,218,000, or $2.20 per share, for the year ended December 31, 2012. Net
loss for the three and twelve months ended December 31, 2012 included ceiling
test writedowns totaling $28,113,000 and $137,100,000, respectively.

During July 2013, the Company closed the acquisition of certain properties
located in the Gulf of Mexico (the "Gulf of Mexico Acquisition") for an
adjusted purchase price of approximately $189 million. These properties
contributed 4.5 Bcfe to the Company's 2013 production. The acquisition was
financed through the issuance of $200 million of 10% senior notes due 2017.

Discretionary cash flow for the fourth quarter of 2013 was $27,898,000 as
compared to $20,393,000 for the comparable 2012 period. For the year ended
December 31, 2013, discretionary cash flow was $93,056,000 compared to
$77,448,000 for 2012. See the attached schedule for a reconciliation of net
cash flow provided by operating activities to discretionary cash flow.

Oil and gas sales during the fourth quarter of 2013 were $53,174,000 as
compared to $38,147,000 in the fourth quarter of 2012. For the year ended
December 31, 2013, oil and gas sales increased 29% to $182,804,000 as compared
to $141,433,000 for the year ended December 31, 2012. Production for the
fourth quarter and year ended December 31, 2013 was higher by 15% and 12%,
respectively, than production for the comparable periods of 2012. Stated on
an Mcfe basis, unit prices received during the fourth quarter and the year
ended December 31, 2012 were higher by 21% and 15%, respectively, as compared
to the prices received during the comparable 2012 periods.

Lease operating expenses for the fourth quarter of 2013 were $1.23 per Mcfe as
compared to $1.18 per Mcfe in the fourth quarter of 2012. Lease operating
expenses totaled $1.15 per Mcfe for each of the years ended December 31, 2013
and 2012.

Depreciation, depletion and amortization ("DD&A") on oil and gas properties
for the fourth quarter of 2013 was $2.07 per Mcfe as compared to $1.61 per
Mcfe in the fourth quarter of 2012. For the year ended December 31, 2013,
DD&A on oil and gas properties increased to $1.82 per Mcfe from $1.75 per Mcfe
for the comparable period of 2012. DD&A on oil and gas properties was higher
in the 2013 periods as a result of the Gulf of Mexico Acquisition.

Interest expense for the fourth quarter of 2013 increased to $7,835,000, as
compared to $2,787,000 in the fourth quarter of 2012. For the year ended
December 31, 2013, interest expense was $21,886,000 compared to $9,808,000 for
2012. The increase in interest expense was primarily a result of the debt
incurred to finance the Gulf of Mexico Acquisition. 

Fourth quarter of 2013 general and administrative expense was $897,000 higher
than the comparable 2012 period. The fourth quarter 2013 costs included higher
employee related compensation expenses and approximately $200,000 of costs
related to the Gulf of Mexico Acquisition. For the year ended December 31,
2013, general and administrative expenses were $3,555,000 higher than 2012.
The increase in general and administrative expenses for the year ended
December 31, 2013 was due to approximately $4 million of transaction-related
costs associated with the Gulf of Mexico Acquisition.

Production taxes for the fourth quarter of 2013 totaled $193,000, as compared
to $773,000 in the fourth quarter of 2012. The decrease in production taxes
for the fourth quarter of 2013 is primarily due to production tax refunds
received from Texas. For the year ended December 31, 2013, production taxes
were $3,950,000, as compared to $885,000 for the comparable period of 2012.
Production taxes for the 2012 period included refunds of severance taxes paid
on Oklahoma horizontal wells.

The following table sets forth certain information with respect to the oil and
gas operations of the Company for the three and twelve months ended December
31, 2013 and 2012:

                       Three Months Ended        Year Ended
                       December 31,
                                                 December 31,
                       2013           2012       2013          2012
Production:
 Oil (Bbls)          220,158        140,632    680,980       520,590
 Gas (Mcf)           7,706,293      6,902,878  29,225,843    27,466,228
 Ngl (Mcfe)          1,194,044      1,116,205  4,754,223     3,366,774
 Total Production
                       10,221,285     8,862,875  38,065,946    33,956,542
 (Mcfe)
 Total Daily         111.1          96.3       104.3         92.8
Production (MMcfe)
Sales:
 Total oil sales      $  21,644,128 $         $ 70,476,065 $    
                                      15,008,184               56,635,786
 Total gas sales      25,469,355     17,213,657 87,449,370    63,535,262
 Total ngl sales      6,060,077      5,925,721  24,878,243    21,262,236
 Total oil and gas    $  53,173,560 $         $182,803,678  $   
sales                                 38,147,562               141,433,284
Average sales prices:
 Oil (per Bbl)        $         $      $         $       
                       98.31         106.72    103.49         108.79
 Gas (per Mcf)        3.31           2.49       2.99          2.31
 Ngl (per Mcfe)       5.08           5.31       5.23          6.32
 Per Mcfe             5.20           4.30       4.80          4.17

The above sales and average sales prices include increases (reductions) to
revenue related to the settlement of gas hedges of $676,000 and $(21,000), oil
hedges of $452,000 and $676,000 and ngl hedges of $56,000 and $178,000 for
the quarters ended December 31, 2013, and 2012, respectively. The above sales
and average sales prices include increases (reductions) to revenue related to
the settlement of gas hedges of $1,098,0000 and $6,846,000, oil hedges of
$(232,000) and $1,529,000 and ngl hedges of $61,000 and $722,000 for the years
ended December 31, 2013 and 2012, respectively.

The following initiates guidance for the first quarter of 2014:

                                                    Guidance for
Description                                         1st Quarter 2014
Production volumes (MMcfe/d)                        112 - 117
Percent Gas                                         73%
Percent Oil                                         14%
Percent NGL                                         13%
Expenses:
Lease operating expenses (per Mcfe)                 $1.15 - $1.25
Production taxes (per Mcfe)                         $0.15 - $0.20
Depreciation, depletion and amortization (per Mcfe) $2.05 - $2.15
General and administrative (in millions)*           $6.0 - $6.5
Interest expense (in millions)                      $7.5 - $8.0
* Includes non-cash stock compensation estimate of $1.4 million

The following initiates guidance for 2014:

                                                    Guidance for
Description                                         2014
Production volumes (MMcfe/d)                        125 - 140
Percent Gas                                         70%
Percent Oil                                         13%
Percent NGL                                         17%
Expenses:
Lease operating expenses (per Mcfe)                 $1.10 - $1.20
Production taxes (per Mcfe)                         $0.15 - $0.20
Depreciation, depletion and amortization (per Mcfe) $1.95 - $2.05
General and administrative (in millions)*           $24 - $26
Interest expense (in millions)                      $30 - $32
2014 Capital Expenditures (in millions)             $140 - $150
* Includes non-cash stock compensation estimate of $5.1 million

About the Company
PetroQuest Energy, Inc. is an independent energy company engaged in the
exploration, development, acquisition and production of oil and natural gas
reserves in the Arkoma Basin, Texas, South Louisiana and the shallow waters of
the Gulf of Mexico. PetroQuest's common stock trades on the New York Stock
Exchange under the ticker PQ.

Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
are subject to certain risks, trends and uncertainties that could cause actual
results to differ materially from those projected. Among those risks, trends
and uncertainties are our ability to integrate our acquisitions with our
operations and realize the anticipated benefits from the acquisitions, any
unexpected costs or delays in connection with the integration of the
acquisitions, our ability to find oil and natural gas reserves that are
economically recoverable, the volatility of oil and natural gas prices, the
uncertain economic conditions in the United States and globally, the declines
in the values of our properties that have resulted in and may in the future
result in additional ceiling test write-downs, our ability to replace reserves
and sustain production, our estimate of the sufficiency of our existing
capital sources, our ability to raise additional capital to fund cash
requirements for future operations, the uncertainties involved in prospect
development and property acquisitions or dispositions and in projecting future
rates of production or future reserves, the timing of development expenditures
and drilling of wells, hurricanes and other natural disasters, changes in laws
and regulations as they relate to our operations, including our fracing
operations or our operations in the Gulf of Mexico, and the operating hazards
attendant to the oil and gas business. In particular, careful consideration
should be given to cautionary statements made in the various reports
PetroQuest has filed with the Securities and Exchange Commission. PetroQuest
undertakes no duty to update or revise these forward-looking statements.

Click here for more information:
"http://www.petroquest.com/news.html?=BizID=1690&1=1"





PETROQUEST ENERGY, INC.

Consolidated Balance Sheets

(Amounts in Thousands)
                                  December 31, 2013      December 31, 2012
ASSETS
Current assets:
                                  $            $          
Cash and cash equivalents                            14,904
                                  9,153
Revenue receivable                26,568                 17,742
Joint interest billing receivable 26,556                 42,238
Other receivable                  —                      9,208
Derivative asset                  521                    830
Prepaid drilling costs            477                    1,698
Other current assets              8,132                  2,964
Total current assets              71,407                 89,584
Property and equipment:
Oil and gas properties:
Oil and gas properties, full cost 2,035,899              1,734,477
method
Unevaluated oil and gas           98,387                 71,713
properties
Accumulated depreciation,         (1,553,044)            (1,472,244)
depletion and amortization
Oil and gas properties, net       581,242                333,946
Other property and equipment      13,993                 12,370
Accumulated depreciation of other (8,901)                (7,607)
property and equipment
Total property and equipment      586,334                338,709
Other assets, net of accumulated
amortization of $5,689 and        9,449                  5,110
$4,240, respectively
                                  $            $          
Total assets                                          433,403
                                  667,190
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
                                  $            $          
Accounts payable to vendors                           58,960
                                  47,341
Advances from co-owners           969                    20,459
Oil and gas revenue payable       22,664                 26,175
Accrued interest and preferred    12,909                 6,190
stock dividend
Asset retirement obligation       3,113                  2,351
Derivative liability              1,617                  233
Other accrued liabilities         8,924                  6,535
Total current liabilities         97,537                 120,903
Bank debt                         75,000                 50,000
10% Senior Notes                  350,000                150,000
Asset retirement obligation       45,423                 24,909
Other long-term liability         135                    —
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value;
authorized 5,000 shares; issued   1                      1
and outstanding 1,495 shares
Common stock, $.001 par value;
authorized 150,000 shares; issued 64                     63
and outstanding 63,664 and 62,768
shares, respectively
Paid-in capital                   280,711                276,534
Accumulated other comprehensive   (1,096)                521
income (loss)
Accumulated deficit               (180,585)              (189,528)
Total stockholders' equity        99,095                 87,591
Total liabilities and             $            $          
stockholders' equity                                  433,403
                                  667,190



PETROQUEST ENERGY, INC.

Consolidated Statements of Operations

(Amounts in Thousands, Except Per Share Data)
                      Three Months   Three Months  Twelve        Twelve Months
                      Ended,         Ended,        Months Ended  Ended
                      December 31,   December 31,  December 31,  December 31,
                      2013           2012          2013          2012
Revenues:
                      $        $        $        $      
Oil and gas sales                         182,804  141,433
                       53,174       38,147
Gas gathering revenue (2)            39            66            158
                      53,172         38,186        182,870       141,591
Expenses:
Lease operating       12,535         10,482        43,743        38,890
expenses
Production taxes      193            773           3,950         885
Depreciation,
depletion and         21,563         14,665        71,445        60,689
amortization
Ceiling test          —              28,113        —             137,100
write-down
General and           6,313          5,416         26,512        22,957
administrative
Accretion of asset    550            536           1,753         2,078
retirement obligation
Interest expense      7,835          2,787         21,886        9,808
                      48,989         62,772        169,289       272,407
Other income
(expense):
Other income         156            77            588           606
Derivative income     31             482           233           (233)
(expense)
                      187            559           821           373
Income (loss) from    4,370          (24,027)      14,402        (130,443)
operations
Income tax expense   794            140           320           1,636
Net income (loss)     3,576          (24,167)      14,082        (132,079)
Preferred stock       1,285          1,284         5,139         5,139
dividend
Net income (loss)     $        $        $        $      
available to common                                (137,218)
stockholders            2,291      (25,451)      8,943
Earnings per common
share:
Basic
Net income (loss) per $        $        $        $      
share                                             (2.20)
                         0.04    (0.41)       0.14
Diluted
Net income (loss) per $        $        $        $      
share                                             (2.20)
                         0.04    (0.41)       0.14
Weighted average
number of common
shares:
Basic                 63,475         62,764        63,054        62,459
Diluted               63,588         62,764        63,208        62,459





PETROQUEST ENERGY, INC.

Consolidated Statements of Cash Flows

(Amounts in Thousands)
                                    Twelve Months Ended,  Twelve Months
                                                           Ended,
                                    December 31, 2013      December 31, 2012
Cash flows from operating
activities:
Net income (loss)                   $            $        
                                       14,082          (132,079)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Deferred tax expense               320                    1,636
Depreciation, depletion and         71,445                 60,689
amortization
Ceiling test writedown              —                      137,100
Accretion of asset retirement       1,753                  2,078
obligation
Share based compensation expense    4,216                  6,910
Amortization costs and other        1,473                  881
Non-cash derivative expense         (233)                  233
(benefit)
Payments to settle asset retirement (3,335)                (2,627)
obligations
Changes in working capital
accounts:
Revenue receivable                  (8,826)                (1,882)
Prepaid drilling and pipe costs     1,221                  4,479
Joint interest billing receivable   15,685                 3,981
Accounts payable and accrued        (12,865)               20,916
liabilities
Advances from co-owners             (19,490)               (13,408)
Other                               (5,592)                (316)
Net cash provided by operating      59,854                 88,591
activities
Cash flows used in investing
activities:
Investment in oil and gas           (298,824)              (147,771)
properties
Investment in other property and    (1,679)                (1,743)
equipment
Sale of oil and gas properties      19,913                 837
Sale of unevaluated oil and gas     487                    8,889
properties
Net cash used in investing          (280,103)              (139,788)
activities
Cash flows used in financing
activities:
Net payments for share based        (38)                   (981)
compensation
Deferred financing costs            (320)                  (42)
Payment of preferred stock dividend (5,139)                (5,139)
Proceeds from bank borrowings       73,000                 102,500
Repayment of bank borrowings        (48,000)               (52,500)
Proceeds from issuance of 10%       200,000                —
Senior Notes
Costs associated with issuance of   (5,005)                —
10% Senior Notes
Net cash provided by financing      214,498                43,838
activities
Net decrease in cash and cash       (5,751)                (7,359)
equivalents
Cash and cash equivalents,          14,904                 22,263
beginning of period
Cash and cash equivalents, end of   $            $         
period                                  9,153          14,904
Supplemental disclosure of cash
flow information:
Cash paid during the period for:
Interest                            $            $         
                                       20,101           16,026
Income taxes                        $            $         
                                           12          105





PETROQUEST ENERGY, INC.

Non-GAAP Disclosure Reconciliation

(Amounts In Thousands)
                                     Three Months Ended    Years Ended
                                     December 31,          December 31,
                                     2013        2012      2013     2012
Net income (loss)                    $      $     $     $   
                                       3,576   (24,167) 14,082   (132,079)
Reconciling items:
 Deferred tax expense          794         140       320      1,636
 Depreciation, depletion and    21,563      14,665    71,445   60,689
amortization
 Ceiling test writedown         -           28,113    -        137,100
 Accretion of asset retirement  550         536       1,753    2,078
obligation
 Share based compensation       1,111       1,301     4,216    6,910
expense
 Non-cash derivative (income)   (31)        (482)     (233)    233
expense
 Amortization expense and other 335         287       1,473    881
Discretionary cash flow              27,898      20,393    93,056   77,448
 Changes in working capital     (168)       630       (30,002) 13,770
accounts
 Settlement of asset retirement (920)       (108)     (3,335)  (2,627)
obligations
Net cash provided by operating       26,810      $20,915   $59,719  $88,591
activities

      Management believes that discretionary cash flow is relevant and useful
      information, which is commonly used by analysts, investors and other
      interested parties in the oil and gas industry as a financial indicator
      of an oil and gas company's ability to generate cash used to internally
      fund exploration and development activities and to service debt.
Note: Discretionary cash flow is not a measure of financial performance
      prepared in accordance with generally accepted accounting principles
      ("GAAP") and should not be considered in isolation or as an alternative
      to net cash flow provided by operating activities. In addition, since
      discretionary cash flow is not a term defined by GAAP, it might not be
      comparable to similarly titled measures used by other companies.

SOURCE PetroQuest Energy, Inc.

Website: http://www.petroquest.com
Contact: Matt Quantz, Manager - Corporate Communications, (337) 232-7028,
www.petroquest.com
 
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