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