Black Ridge Oil & Gas, Inc. ("the Company"), a well-positioned exploration and production (E&P) company focused on non-operated Bakken and Three Forks properties, announced financial and operating results for the three months and year ended December 31, 2012.
Company Records Set during 2012
- Proved reserves, prepared by Netherland, Sewell & Associates, Inc. increased 397% from 2011 to 2.4 million barrel of oil equivalents (MMBOE)
- Production of 73.9 thousand barrel of oil equivalents (MBOE) represents 227% increase from 2011
- Total revenues increased 214% to $6.0 million
- Net income (including settlement income) reached $4.9 million compared to a net loss of $(2.5) million in 2011
- Total cash flow increased to $15.0 million from a use of cash of $(0.3) million for 2011
Operational Achievements during 2012
- Participated in the completion of 42 gross (1.62 net) wells with a 100% success rate
- The Company ended the year with production from 66 gross (2.30 net) wells
- Lease Operating Expenses (LOE) decreased by 62% from 2011 to $8.79/BOE
- Monetized our legacy assets realizing net settlement income of $11.1 million and collecting $14.1 million of settlement proceeds
- Replaced our credit facility with a new Secured Revolving Credit Agreement with Dougherty Funding LLC, which reduced our interest rate on borrowings by 9.75 percentage points. Increased the maximum available from $10.0 million to $20.0 million, of which $16.5 million is currently available
Fourth Quarter and Year-End 2012 Results
The Company reported 2012 fourth quarter net income attributable to common stockholders of $2.9 million, or $0.06 per basic and diluted common share, compared to a net loss of $(1.7) million, or $(0.04) per basic and diluted common share, for the fourth quarter of 2011.
For the year ended December 31, 2012, the Company reported net income attributable to common stockholders of $4.9 million (including settlement income), or $0.10 per basic and diluted common share, compared to a net loss of $(2.5) million, or $(0.06) per basic and diluted common share, for the year ended December 31, 2011.
Ken DeCubellis, Black Ridge's Chief Executive Officer, said: "Black Ridge had a record year in 2012, and we are off to a great start in 2013. Our strategy of deploying capital for purchasing and developing near term high IRR projects have resulted in record earnings for the Company. Our growing operating cash flow and strong balance sheet position allows us the flexibility to identify and participate in wells where we believe Black Ridge and its shareholders will realize the best and highest returns."
Revenues for the fourth quarter of 2012 were $1.7 million compared to $0.7 million for the fourth quarter of 2011, an increase of 152%. Production in the fourth quarter of 2012 totaled 20.4 MBOE, representing a 159% increase over the fourth quarter of 2011.
Revenues for the full-year 2012 totaled $6.0 million compared to $1.9 million for the full-year 2011, an increase of 214%. This year-over-year increase was primarily due to a 227% increase in oil and gas production in 2012. Production in 2012 totaled a record 73.9 MBOE, of which 96% was crude oil. In 2012, the Company's realized commodity prices were $83.27 per barrel of oil and $5.39 per MCF for natural gas, including natural gas liquids. Bakken oil price differentials improved over the course of 2012. For the fourth quarter of 2012, the Company's realized oil price was 5% per barrel below WTI as compared to a differential of 16% per barrel in the first quarter of 2012.
2012 Proved Reserves
As of December 31, 2012, Black Ridge had estimated proved reserves of 2.4 MMBOE, of which 21% were classified as proved developed, and 89% was crude oil. These estimated proved reserves had a pre-tax PV-10 value of $27.9 million. The 2012 reserves estimate represented a 397% increase over the 0.5 MMBOE of proved reserves at year-end 2011. The increase in proved reserves equates to 26 times the Company's 2012 production. The Company's estimated reserves were prepared by its independent reservoir engineering firm, Netherland, Sewell & Associates, Inc.
As of December 31, 2012, the Company controlled approximately 12,256 net mineral acres prospective for the Bakken and Three Forks formations. During the year the Company participated in the completion of 42 gross (1.62 net) wells with a 100% success rate. In addition, the Company owned working interests in 9 gross wells representing 0.36 net wells that are preparing to drill, drilling, awaiting completion, complete or producing.
During 2012, Black Ridge entered into a new Secured Revolving Credit Agreement with Dougherty Funding, LLC., and subsequently increased the facility from $10.0 million to $20.0 million, of which $16.5 million is currently available. Black Ridge monetized legacy assets during 2012 realizing net settlement income of $11.1 million and collecting $14.1 million of settlement proceeds. Black Ridge ended the year with $2.9 million of working capital and $10.8 million of remaining availability on the Dougherty credit facility.
DeCubellis said: "Black Ridge is in a position to continue on our growth trajectory. By remaining focused on our strategy of actively aggregating high quality, non-operated leases and converting the opportunities into high return near term development and production we are excited to expand on our successes in 2013."
The Company expects to see continued reductions in Lease Operating Expenses (LOE) and anticipates LOE to be approximately $7.50 per BOE in 2013. Based on the Company's development and acquisition plans for 2013, which are currently fully funded, and a forecasted realized crude oil price of $85 per barrel, we anticipate achieving sequential quarter over quarter production growth, as well as annual production, revenue and adjusted EBITDA records from oil and gas operations.
DeCubellis said: "We continue to see basin-wide improvements in well economics due to the cost abatements and drilling efficiencies that began in the second half of 2012. In 2013, through March 15th, we received 16 Authorizations for Expenditures (AFEs) from our drilling partners with per-well average drilling and completion costs of approximately $8.6 million. This is approximately an 11% reduction from the previous year's average AFE. We believe we are well positioned to continue converting our leases into production and cash flow as we further develop our asset base in North America's premier unconventional oil play."
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