SALT LAKE CITY, UT -- (Marketwire) -- 08/07/08 -- FX Energy, Inc. (NASDAQ: FXEN) today
announced financial results for its second quarter ended June 30, 2008.
Earnings for the most recent quarter were $(1.5) million, or $(0.04) per
share, versus $(2.7) million, or $(0.08) per share, for last year's second
quarter. Record revenues and lower exploration spending were the two
biggest contributors to the improved results. Total revenues for the second
quarter of 2008 outpaced those of last year's second quarter, primarily due
to higher oil and gas prices, both in Poland and domestically. The Company
also recorded higher oilfield services revenues. Total revenues rose 15
percent to $5.2 million during the second quarter of 2008, compared to
total revenues of $4.5 million during the same period 2007. Exploration
expenses were approximately $900,000, or 29 percent, lower during the
second quarter of 2008 compared to the same quarter of 2007.
Clay Newton, FX's Vice President Finance, remarked, "We were pleased during
the second quarter to see a 14% price increase for all of our natural gas
production in Poland which became effective May 1st. We continue to see a
strong gas market in Poland going forward. These higher prices and
resulting higher cash flows, together with our cash on hand and unused
credit capacity, will provide the means for us to continue to execute our
2008 capital budget."
Earnings before interest, taxes, depreciation, amortization, and
exploration expense (EBITDAX)(1), a non-GAAP financial measure, during the
second quarter of 2008 jumped 33 percent to $2.0 million, compared to $1.5
million for the second quarter of 2007.
The Company's total net production decreased from 593 Mmcfe during the
second quarter of 2007 to 427 Mmcfe during the 2008 quarter. The production
decline is due almost entirely to the expected, and previously disclosed,
decline at the Company's Wilga well in eastern Poland. The well is expected
to stabilize at its current, lower rate for the remainder of the year.
However, other wells are expected to be added to the production base in
2009. In particular, the Company's largest discovery to date, the Roszkow
well, is expected to begin production in early 2009. Consequently, 2009
production should be well ahead of both 2007 and 2008.
Six Month Results
The Company reported earnings of $(5.8) million, or $(0.15) per share, for
the first half of 2008, compared to $(5.3) million, or $(0.15) per share,
for the same period of 2007. The higher loss was partially attributable to
increased exploration spending, most of which occurred during the first
quarter of this year.
Earnings before interest, taxes, depreciation, amortization, and
exploration expense (EBITDAX)(1) rose from just under $3.2 million to just
over $3.2 million.
Oil and gas revenues for the 2008 first half were slightly higher than
those recorded during the same period of 2007. The Company recognized oil
and gas revenues of $7.5 million, compared to $7.3 million for the first
half of 2007. Total revenues for the first half of 2008 were $9.4 million,
compared to $8.7 million in the first half of 2007.
Natural gas production in Poland was 639 Mmcf during the first half of
2008, compared to 900 Mmcf during the same period of 2007. Total oil and
gas production in Poland was 655 Mmcfe during the 2008 six-months, compared
to 980 Mmcfe during the first six months of 2007.
At June 30, 2008, the Company's cash and investments were approximately
$13.6 million, including cash and cash equivalents of approximately $7.9
million and other investments of $5.7 million. In addition, the Company had
full availability remaining under its $25 million reserve-based credit
facility.
Earnings Conference Call Today, Thursday, August 7, 2008 at 4:30 PM.
Eastern (2:30 PM. Mountain)
The Company will host a conference call and webcast today to discuss 2008
second quarter results and update operational items at 4:30 p.m. Eastern
Time. The call will also include a discussion of the Company's current
operations. Conference call information is as follows: US dial-in-number:
800-289-0572; International dial-in-number: 913-312-1513. Request: FX
Energy, Inc. Conference Call.
The call will also be webcast live and interested parties may access the
webcast through FX Energy's homepage at www.fxenergy.com. A rebroadcast
will also be available through the Company's website. For those that are
unable to participate in the live call, a rebroadcast will be available for
two weeks beginning one hour after the completion of the call. The US
replay number: 888-203-1112; International replay: 719-457-0820. The pass
code is 6707724.
About FX Energy
FX Energy is an independent oil and gas exploration and production company
with production in the US and Poland. The Company's main exploration
activity is focused on Poland's Permian Basin where the gas-bearing
Rotliegend sandstone is a direct analog to the Southern Gas Basin offshore
England. The Company trades on the NASDAQ Global Market under the symbol
FXEN. Website www.fxenergy.com
(1) Explanation and Reconciliation of Non-GAAP Financial Measures
Earnings before interest, taxes, depreciation, amortization, and
exploration expense (EBITDAX) is a non-GAAP measure presented because of
its acceptance as an indicator of an oil and gas exploration and production
Company's ability to internally fund exploration and development activities
and to service debt. EBITDAX should not be considered in isolation or as a
substitute for operating income prepared in accordance with generally
accepted accounting principles. The table below reconciles EBITDAX with
income from continuing operations as derived from the Company's financial
information.
EBITDAX: Six Months Ended
30-Jun-08 30-Jun-07
------------ ------------
Net loss $ (5,780) $ (5,307)
Income tax provision (benefit) - -
Interest income and expense, net (99) (37)
Depletion, depreciation and amortization 1,447 1,098
Property impairment - -
Exploration expense 6,277 5,728
Stock compensation expense 1,245 1,476
Other non-cash items 164 240
------------ ------------
EBITDAX $ 3,254 $ 3,197
------------ ------------
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements. Forward-looking statements
are not guarantees. For example, exploration, drilling, development,
construction or other projects or operations may be subject to the
successful completion of technical work; environmental, governmental or
partner approvals; equipment availability, or other things that are or may
be beyond the control of the Company. Operations that are anticipated,
planned or scheduled may be changed, delayed, take longer than expected,
fail to accomplish intended results, or not take place at all.
In carrying out exploration it is necessary to identify and evaluate risks
and potential rewards. This identification and evaluation is informed by
science but remains inherently uncertain. Subsurface features that appear
to be possible traps may not exist at all, may be smaller than interpreted,
may not contain hydrocarbons, may not contain the quantity or quality
estimated, or may have reservoir conditions that do not allow adequate
recovery to render a discovery commercial or profitable. Forward-looking
statements about the size, potential or likelihood of discovery with
respect to exploration targets are certainly not guarantees of discovery or
of the actual presence or recoverability of hydrocarbons, or of the ability
to produce in commercial or profitable quantities. Estimates of potential
typically do not take into account all the risks of drilling and completion
nor do they take into account the fact that hydrocarbon volumes are never
100% recoverable. Such estimates are part of the complex process of trying
to measure and evaluate risk and reward in an uncertain industry.
Forward-looking statements are subject to risks and uncertainties outside
FX Energy's control. Actual events or results may differ materially from
the forward-looking statements. For a discussion of additional
contingencies and uncertainties to which information respecting future
events is subject, see FX Energy's SEC reports or visit FX Energy's website
at www.fxenergy.com.
FX ENERGY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share data)
June 30, December 31,
2008 2007
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 4,432 $ 4,262
Marketable securities 9,182 15,202
Accounts receivable:
Accrued oil sales 2,522 1,906
Joint interest and other receivables 1,951 805
Input VAT receivable 2,102 446
Inventory 211 178
Other current assets 176 365
------------ ------------
Total current assets 20,576 23,164
------------ ------------
Property and equipment, at cost:
Oil and gas properties (successful efforts
method):
Proved 23,785 23,491
Unproved 9,850 2,001
Other property and equipment 6,113 5,590
------------ ------------
Gross property and equipment 39,748 31,082
Less accumulated depreciation, depletion
and amortization (10,644) (9,197)
------------ ------------
Net property and equipment 29,104 21,885
------------ ------------
Other assets:
Certificates of deposit 406 406
Loan fees 853 914
------------ ------------
1,259 1,320
------------ ------------
Total assets $ 50,939 $ 46,369
============ ============
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable $ 7,353 $ 4,432
Accrued liabilities 1,890 3,358
------------ ------------
Total current liabilities 9,243 7,790
------------ ------------
Long-term liabilities:
Asset retirement obligation 1,079 1,037
------------ ------------
Total liabilities 10,322 8,827
------------ ------------
Stockholders equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, no shares issued as of
June 30, 2008 and December 31, 2007 -- --
Common stock, $0.001 par value, 100,000,000
shares authorized, 40,303,447 and 38,196,357
issued and outstanding as of June 30, 2008
and December 31, 2007, respectively 40 38
Additional paid-in capital 151,977 142,901
Accumulated other comprehensive loss (224) (1)
Accumulated deficit (111,176) (105,396)
------------ ------------
Total stockholders equity 40,617 37,542
------------ ------------
Total liabilities and stockholders equity $ 50,939 $ 46,369
============ ============
FX ENERGY, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
(in thousands, except per share amounts)
For the three months For the six months
ended June 30, ended June 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Revenues:
Oil and gas sales $ 4,197 $ 3,751 $ 7,469 $ 7,252
Oilfield services 998 760 1,951 1,436
-------- -------- -------- --------
Total revenues 5,195 4,511 9,420 8,688
-------- -------- -------- --------
Operating costs and expenses:
Lease operating expenses 891 902 1,768 1,809
Geological and geophysical costs 2,226 3,135 6,277 5,728
Oilfield services costs 710 634 1,276 1,032
Depreciation, depletion and
amortization (DD&A) 732 557 1,447 1,098
Accretion expense 21 19 42 39
Stock compensation (G&A) 619 735 1,245 1,476
General and administrative (G&A) 1,560 1,240 3,244 2,850
-------- -------- -------- --------
Total operating costs and
expenses 6,759 7,222 15,299 14,032
-------- -------- -------- --------
Operating loss (1,564) (2,711) (5,879) (5,344)
-------- -------- -------- --------
Other income:
Interest income (expense) and
other income 76 29 99 37
-------- -------- -------- --------
Total other income 76 29 99 37
-------- -------- -------- --------
Net loss (1,488) (2,682) (5,780) (5,307)
Other comprehensive income (loss):
Increase (decrease) in market value
of available for sale marketable
securities 82 25 (223) 70
-------- -------- -------- --------
Comprehensive loss $ (1,406) $ (2,657) $ (6,003) $ (5,237)
======== ======== ======== ========
Basic and diluted net loss per
common share $ (0.04) $ (0.08) $ (0.15) $ (0.15)
======== ======== ======== ========
Basic and diluted weighted average
number of shares outstanding 40,303 35,752 39,678 35,698
======== ======== ======== ========
FX ENERGY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
For the Six Months
Ended June 30,
------------------
2008 2007
-------- --------
Cash flows from operating activities:
Net loss $ (5,780) $ (5,307)
Adjustments to reconcile net loss to net cash used in
operating activities:
Accretion expense 42 39
Depreciation, depletion and amortization 1,447 1,098
Stock issued for services 665 744
Stock compensation (G&A) 1,245 1,476
Increase (decrease) from changes in working capital
items:
Accounts receivable (3,418) (26)
Inventory (33) 4
Other current assets 189 52
Other assets 61 (63)
Accounts payable and accrued liabilities (1,930) 2,153
-------- --------
Net cash (used in) provided by operating
activities (7,512) 170
-------- --------
Cash flows from investing activities:
Additions to oil and gas properties (4,760) (5,851)
Additions to other property and equipment (523) (681)
Additions to marketable securities (204) --
Proceeds from maturities of marketable securities 6,000 4,182
-------- --------
Net cash provided by (used in) investing activities 513 (2,350)
-------- --------
Cash flows from financing activities:
Proceeds from exercise of stock options and warrants 7,169 1,180
-------- --------
Net cash provided by financing activities 7,169 1,180
-------- --------
Increase (decrease) in cash and cash equivalents 170 (1,000)
Cash and cash equivalents at beginning of period 4,262 4,644
-------- --------
Cash and cash equivalents at end of period $ 4,432 $ 3,644
======== ========
SCOTT J. DUNCAN
FX Energy, Inc.
3006 Highland Drive, Suite 206
Salt Lake City, Utah 84106
(801) 486-5555
Fax (801) 486-5575 www.fxenergy.com
.gif)
