Replies to post #31 on Petroquest Energy Inc. (PQ)

[ChitForBrains]

That's a strange amount of acres, but since it said parts of Kansas it isn't the Pawnee Nation of Oklahoma (which is 28,000 acres). So about $850/acre to lease (or buy from another oil company).

Eagle Ford are going from 1K to 8K per acre.

[Timothy Smith]

PetroQuest Energy Announces Second Quarter Results And Updates Guidance And Hedging

Aug 2, 2012 5:30:00 AM
LAFAYETTE, La., Aug. 2, 2012 /PRNewswire/ -- PetroQuest Energy, Inc. (NYSE: PQ) announced today that the Company recorded a net loss available to common stockholders for the quarter ended June 30, 2012 of $54,520,000, or $0.87 per share, compared to second quarter 2011 net loss available to common stockholders of $3,045,000, or $0.05 per share. For the first six months of 2012, the Company reported a net loss available to common stockholders of $73,128,000, or $1.17 per share, compared to a net loss available to common stockholders of $1,148,000, or $0.02 per share, for the 2011 period. The Company recorded non-cash ceiling test write-downs of $53,485,000 and $73,596,000 during the second quarter and six month periods of 2012, respectively, as a result of the impact of low natural gas prices on the future discounted net cash flows from its estimated proved reserves.

Discretionary cash flow for the second quarter of 2012 was $20,068,000, as compared to $27,009,000 for the comparable 2011 period. For the first six months of 2012, discretionary cash flow was $39,716,000, compared to discretionary cash flow of $52,120,000 for the first six months of 2011. See the attached schedule for a reconciliation of net cash flow provided by operating activities to discretionary cash flow.

Production for the second quarter of 2012 was 8.4 Bcfe, compared to 7.4 Bcfe for the comparable period of 2011. For the first six months of 2012, production was 16.6 Bcfe, compared to 14.7 Bcfe for the comparable period of 2011. Stated on an Mcfe basis, unit prices including the effects of hedges for the second quarter of 2012 were $3.97 per Mcfe, as compared to $5.69 per Mcfe in the second quarter of 2011. For the first six months of 2012, unit prices including the effects of hedges, were $4.19 per Mcfe, as compared to $5.66 per Mcfe for the first six months of 2012. Oil and gas sales during the second quarter of 2012 were $33,376,000, as compared to $41,920,000, in the second quarter of 2011. For the first six months of 2012, oil and gas sales were $69,373,000 compared to oil and gas sales of $83,466,000 for the first six months of 2011.

Lease operating expenses ("LOE") for the second quarter of 2012 decreased to $9,085,000, as compared to $10,206,000 in the second quarter of 2011. LOE per Mcfe was $1.08 for the second quarter of 2012, as compared to $1.38 in the second quarter of 2011. For the first six months of 2012, lease operating expenses decreased to $1.13 per Mcfe from $1.34 per Mcfe in the comparable period of 2011. The decreases in lease operating expenses for the 2012 periods are primarily due to cost savings associated with the Company's Woodford saltwater disposal systems.

Depreciation, depletion and amortization ("DD&A") on oil and gas properties for the second quarter of 2012 was $1.84 per Mcfe, as compared to $1.95 per Mcfe in the second quarter of 2011. For the first six months of 2012, DD&A on oil and gas properties was $1.84 per Mcfe compared to $1.91 per Mcfe for the comparable period of 2011. The decrease in DD&A during the second quarter of 2012, as compared to the second quarter of 2011, was primarily the result of the ceiling test write-down recorded during the first quarter of 2012, as well as the impact of the Company's discovery at its Broussard Estates No. 2 well in south Louisiana in June 2012.

Interest expense for the second quarter of 2012 increased to $2,413,000, as compared to $2,255,000 in the second quarter of 2011. For the first six months of 2012, interest expense was $4,683,000, compared to $4,949,000 for the comparable period of 2011.

Production taxes for the second quarter of 2012 were ($1,917,000), as compared to ($538,000) in the second quarter of 2011. For the first six months of 2012, production taxes were ($768,000) compared to $624,000 for the comparable period of 2011. During the second quarter of 2012, the Company recorded a receivable of $2.7 million for refunds expected to be received relative to severance tax previously paid on horizontal wells drilled in Oklahoma.

General and administrative expenses during the quarter and six months ended June 30, 2012 totaled $5,999,000 and $11,578,000, respectively, as compared to expenses of $4,280,000 and $8,678,000 during the comparable 2011 periods. The increase in general and administrative expenses for the 2012 periods is primarily due to higher employee related expenses, including non-cash stock compensation costs totaling $3,838,000 during the first six months of 2012 as compared to $1,917,000 during the 2011 period.

The following table sets forth certain information with respect to the oil and gas operations of the Company for the three and six month periods ended June 30, 2012 and 2011:





Three Months Ended


Six Months Ended


June 30,


June 30,


2012
2011


2012
2011
Production:










Oil (Bbls)
116,037
140,049


257,312
315,313
Gas (Mcf)
6,945,466
5,995,945


13,674,781
11,773,285
Ngl (Mcfe)
763,302
533,067


1,356,437
1,073,537
Total Production (Mcfe)
8,404,990
7,369,306


16,575,090
14,738,700
Total Daily Production (Mmcfe)
92.4
81.0


91.1
81.4












Sales:










Total oil sales
$ 12,831,097
$ 15,722,784


$ 28,340,054
$ 32,895,484
Total gas sales
15,457,658
21,490,412


30,737,611
40,616,107
Total ngl sales
5,087,135
4,706,280


10,295,240
9,953,890
Total oil and gas sales
$ 33,375,890
$ 41,919,476


$ 69,372,905
$ 83,465,481












Average sales prices:










Oil (per Bbl)
$ 110.58
$ 112.27


$ 110.14
$ 104.33
Gas (per Mcf)
2.23
3.58


2.25
3.45
Ngl (per Mcfe)
6.66
8.83


7.59
9.27
Per Mcfe
3.97
5.69


4.19
5.66












The above sales and average sales prices include increases (reductions) to revenue related to the settlement of gas hedges of $3,230,000 and $186,000, oil hedges of $415,000 and ($289,000) and NGL hedges of $232,000 and zero for the three months ended June 30, 2012 and 2011, respectively. The above sales and average sales prices include increases (reductions) to revenue related to the settlement of gas hedges of $5,385,000 and $386,000, oil hedges of $362,000 and ($389,000) and NGL hedges of $232,000 and zero for the six months ended June 30, 2012 and 2011, respectively.

The following initiates guidance for the third quarter of 2012:





Guidance for
Description
3rd Quarter 2012




Production volumes (MMcfe/d)
92 - 97




Percent Gas
80%
Percent Oil
8%
Percent NGL
12%




Expenses:


Lease operating expenses (per Mcfe)
$1.10 - $1.15
Production taxes (per Mcfe)
$0.10 - $0.15
Depreciation, depletion and amortization (per Mcfe)
$1.70 - $1.80
General and administrative (in millions)*
$5.5 - $6.0
Interest expense (in millions)
$2.4 - $2.7




*Includes non-cash stock compensation estimate of $1.8 million






The following updates guidance for the full year of 2012:





Guidance for
Description
Full Year 2012




Production volumes (MMcfe/d)
92 - 97




Percent Gas
79%
Percent Oil
9%
Percent NGL
12%












Expenses:


Lease operating expenses (per Mcfe)
$1.10 - $1.15
Production taxes (per Mcfe)
$0.04 - $0.06
Depreciation, depletion and amortization (per Mcfe)
$1.75 - $1.85
General and administrative (in millions)*
$22 - $23
Interest expense (in millions)
$9.5 - $10.5
2012 Capital Expenditures (in millions)
$110 - $115




*Includes non-cash stock compensation estimate of $6.8 million








Hedging Update

The Company recently initiated the following commodity hedging transactions:







Instrument








Production Period


Type


Daily Volumes


Price
Gas:












Jul 12 - Dec 12


Swap


20,000 Mmbtu


$2.73
2013


Three Way Collar


10,000 Mmbtu


$2.00 - $3.00 - $4.09














After executing the above transactions, the Company has approximately 8.0 Bcf of gas volumes hedged for the remainder of 2012 with an average floor price of $3.13 per Mcf and 3.7 Bcf of gas volumes hedged for 2013.

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 Oklahoma, Texas, the Gulf Coast Basin, Arkansas and Wyoming. 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 find oil and natural gas reserves that are economically recoverable, the volatility of oil and natural gas prices and significantly depressed natural gas prices since the middle of 2008, 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 in shale plays 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)
(unaudited)








June 30,
December 31,


2012
2011
ASSETS




Current assets:




Cash and cash equivalents
$ 9,599
$ 22,263
Revenue receivable
12,476
15,860
Joint interest billing receivable
37,991
47,445
Hedge asset
4,814
6,418
Prepaid drilling costs
2,163
2,900
Drilling pipe inventory
2,259
4,070
Other current assets
3,399
2,965
Total current assets
72,701
101,921
Property and equipment:




Oil and gas properties:




Oil and gas properties, full cost method
1,666,929
1,600,546
Unevaluated oil and gas properties
76,709
70,408
Accumulated depreciation, depletion and amortization
(1,369,941)
(1,265,603)
Oil and gas properties, net
373,697
405,351
Gas gathering assets
4,177
4,177
Accumulated depreciation and amortization of gas gathering assets
(1,943)
(1,794)
Total property and equipment
375,931
407,734
Other assets, net of accumulated depreciation and amortization




of $8,837 and $8,066, respectively
8,399
6,511
Total assets
$ 457,031
$ 516,166
LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable to vendors
$ 61,711
$ 50,750
Advances from co-owners
22,526
33,867
Oil and gas revenue payable
12,412
13,764
Accrued interest and preferred stock dividend
6,166
6,167
Asset retirement obligation
1,034
3,110
Other accrued liabilities
4,898
8,250
Total current liabilities
108,747
115,908
Bank debt
17,500
-
10% Senior Notes
150,000
150,000
Asset retirement obligation
28,758
27,317
Hedge liability
317
-
Deferred income taxes
-
551
Commitments and contingencies




Stockholders' equity:




Preferred stock, $.001 par value; authorized 5,000




shares; issued and outstanding 1,495 shares
1
1
Common stock, $.001 par value; authorized 150,000




shares; issued and outstanding 62,380 and 62,148




shares, respectively
62
62
Paid-in capital
274,061
270,606
Accumulated other comprehensive income
3,023
4,031
Accumulated deficit
(125,438)
(52,310)
Total stockholders' equity
151,709
222,390
Total liabilities and stockholders' equity
$ 457,031
$ 516,166












PETROQUEST ENERGY, INC.
Consolidated Statements of Operations
(unaudited)
(Amounts in Thousands, Except Per Share Data)










Three Months Ended


Six Months Ended


June 30,


June 30,


2012
2011


2012
2011
Revenues:










Oil and gas sales
$ 33,376
$ 41,920


$ 69,373
$ 83,466
Gas gathering revenue
37
55


81
112


33,413
41,975


69,454
83,578












Expenses:










Lease operating expenses
9,085
10,206


18,750
19,709
Production taxes
(1,917)
(538)


(768)
624
Depreciation, depletion and amortization
15,762
14,657


30,992
28,719
Ceiling test write-down
53,485
12,973


73,596
18,907
General and administrative
5,999
4,280


11,578
8,678
Accretion of asset retirement obligation
517
427


1,017
1,179
Interest expense
2,413
2,255


4,683
4,949


85,344
44,260


139,848
82,765












Other income (expense):










Other income
123
197


272
277
Derivative expense
(375)
-


(375)
-


(252)
197


(103)
277












Income (loss) from operations
(52,183)
(2,088)


(70,497)
1,090












Income tax expense (benefit)
1,049
(330)


61
(329)












Net income (loss)
(53,232)
(1,758)


(70,558)
1,419












Preferred stock dividend
1,288
1,287


2,570
2,567












Net loss available to common stockholders
$ (54,520)
$ (3,045)


$ (73,128)
$ (1,148)












Earnings per common share:










Basic










Net loss per share
$ (0.87)
$ (0.05)


$ (1.17)
$ (0.02)
Diluted










Net loss per share
$ (0.87)
$ (0.05)


$ (1.17)
$ (0.02)












Weighted average number of common shares:










Basic
62,363
61,917


62,289
61,793
Diluted
62,363
61,917


62,289
61,793


















PETROQUEST ENERGY, INC.
Consolidated Statements of Cash Flows
(unaudited)
(Amounts in Thousands)






Six Months Ended


June 30,


2012
2011
Cash flows from operating activities:




Net income (loss)
$ (70,558)
$ 1,419
Adjustments to reconcile net income (loss) to net cash provided by




operating activities:




Deferred tax expense (benefit)
61
(329)
Depreciation, depletion and amortization
30,992
28,719
Ceiling test writedown
73,596
18,907
Accretion of asset retirement obligation
1,017
1,179
Share based compensation expense
3,838
1,917
Amortization costs and other
395
308
Non-cash derivative expense
375
-
Payments to settle asset retirement obligations
(2,450)
(513)
Changes in working capital accounts:




Revenue receivable
3,384
3,719
Prepaid drilling and pipe costs
2,548
5,507
Joint interest billing receivable
8,962
(13,976)
Accounts payable and accrued liabilities
4,602
(3,358)
Advances from co-owners
(11,341)
18,235
Other
(3,153)
(1,843)
Net cash provided by operating activities
42,268
59,891
Cash flows used in investing activities:




Investment in oil and gas properties
(75,825)
(69,006)
Sale of oil and gas properties
275
-
Sale of unevaluated oil and gas properties
6,083
-
Net cash used in investing activities
(69,467)
(69,006)
Cash flows used in financing activities:




Net payments for share based compensation
(383)
(896)
Deferred financing costs
(12)
(16)
Payment of preferred stock dividend
(2,570)
(2,569)
Proceeds from bank borrowings
45,000
-
Repayment of bank borrowings
(27,500)
-
Net cash provided by (used in) financing activities
14,535
(3,481)
Net decrease in cash and cash equivalents
(12,664)
(12,596)
Cash and cash equivalents, beginning of period
22,263
63,237
Cash and cash equivalents, end of period
$ 9,599
$ 50,641
Supplemental disclosure of cash flow information:




Cash paid during the period for:




Interest
$ 7,871
$ 8,291
Income taxes
$ 15
$ 1












PETROQUEST ENERGY, INC.
Non-GAAP Disclosure Reconciliation
(Amounts In Thousands)














Three Months Ended


Six Months Ended




June 30,


June 30,




2012
2011


2012
2011
Net loss


$ (53,232)
$ (1,758)


$ (70,558)
$ 1,419














Reconciling items:












Deferred tax expense (benefit)


1,049
(330)


61
(329)
Depreciation, depletion and amortization


15,762
14,657


30,992
28,719
Ceiling test writedown


53,485
12,973


73,596
18,907
Non-cash derivative expense


375
-


375
-
Accretion of asset retirement obligation


517
427


1,017
1,179
Share based compensation expense


1,915
885


3,838
1,917
Amortization costs and other


197
155


395
308
Discretionary cash flow


20,068
27,009


39,716
52,120
Changes in working capital accounts


9,917
14,623


5,002
8,284
Settlement of asset retirement obligations


(1,668)
-


(2,450)
(513)














Net cash flow provided by operating activities


$ 28,317
$ 41,632


$ 42,268
$ 59,891




















Note:
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. 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.


----------------------------------------------
Matt Quantz
Manager - Corporate Communications
[phone]

[legalizeMJ]

LINK:GOOD NEWS:Successful Results Of The Exchange Offer And Consent Solicitation As Of The Early Tender Date And Extension Of Early Tender Date

https://finance.yahoo.com/news/petroquest-energy-announces-successful-results-113000901.html

GOOD NEWS:PQ Provide First Quarter 2016 Production And 2016 Capital Expenditures Guidance; Updates Operations, Liquidity And Hedging
https://finance.yahoo.com/news/petroquest-energy-announces-2015-estimated-210100344.html

PQ= STRONG BUY.
Go PQ $$$$$$$$$$$