Black Ridge Oil & Gas Announces First Quarter 2015 Results

MINNETONKA, Minn., May 14, 2015 /PRNewswire/ -- Black Ridge Oil & Gas, Inc. ("the Company") ANFC, a growth-oriented exploration and production company focused on non-operated Bakken and Three Forks properties, today announced financial and operating results for the three months ended March 31, 2015.

First Quarter 2015 Company Highlights

• Quarterly production increased 89% over the first quarter of 2014 to 89.3 thousand barrels of oil equivalent ("MBoe"), an average of approximately 992 barrels of oil equivalent per day ("Boe/d")
• Oil and gas sales totaled $2.9 million, a decrease of 28% from the first quarter of 2014
• Participated in the completion of 39 gross (0.91 net) wells, increasing our total producing well count to 286 gross (8.79 net), an increase of 60% over the first quarter of 2014
• Recorded $2.1 million of adjusted EBITDA, representing a decrease of 12% from the first quarter of 2014
• Reduced general and administrative expenses to $9.07 per Boe, a decrease of 44% from the first quarter of 2014
• Increased full year 2015 production guidance from an average of 1,100 BOEPD to 1,200 BOEPD

Acreage and Drilling

As of March 31, 2015, the Company controlled approximately 9,400 net acres in the Williston Basin. Approximately 67% of the acreage is held by production with 286 gross (8.79 net) wells producing. Additionally, the Company had 2.2 net wells in development as of March 31, 2015.

Management Comment

Ken DeCubellis, Black Ridge's CEO, commented, "While the commodity price environment was challenging during the first quarter of 2015, we are generally pleased with the underlying performance of our asset base. The Company was able to achieve our second highest average production on record in the first quarter despite lower than expected volume in Stockyard Creek as wells were shut in for offset completion activities. As we look forward to the balance of 2015, we are cautiously optimistic as we have seen oil prices improve by over 20%, as compared to the average in the first quarter, and we have received indications from our operating partners that drilling and completion costs will be lower than the assumptions used in our 2015 capital plan. However, we are not changing our original 2015 development plan, with the cornerstone being our 1.76 net well Teton project, which is currently scheduled to commence production during the second half of 2015. Any incremental cash flow above our original 2015 plan will be used to reduce debt and build additional liquidity."

Teton Project Update and Production Guidance

The 23 gross well, 1.76 net well, Teton project continues development per plan. All of the wells in this project have finished the drilling phase and completions will begin in the coming weeks. Based on the Company's current expectation for total drilling and completion costs, estimated ultimate recoveries, and the current commodity price deck, the Teton project is expected to meet or exceed our 30% IRR investment hurdle. The Company is increasing our full year production guidance from an average of 1,100 BOEPD to 1,200 BOEPD. We anticipate our production levels to be below the full year average until the Teton project is online, at which point our daily production volumes will exceed the full year average.

DeCubellis added, "The Company has taken some risk to participate in the Teton project during this phase of the commodity price cycle. We are excited about the current pace of the project's development, our current view of the overall economics of the project, and most importantly, the significant improvement that the project will bring to the Company's balance sheet once in full production. As such, we have recently taken the opportunity to hedge additional volume from October 2015 through June 2016."

Liquidity Position and Borrowing Base

Black Ridge ended the quarter with $25.95 million drawn on its $34 million senior secured revolving credit facility. The next redetermination date is scheduled for October 1, 2015. The Company expects to fund 2015 development from availability under the borrowing base and cash flow from operations.

Hedging Update

In the first quarter of 2015, the Company realized a $1,133,421 gain on settled derivatives and a $367,329 unrealized gain on mark-to-market adjustments to its outstanding derivatives contracts. As of March 31, 2015, the Company's net derivative asset was $7,947,074. On May 11, 2015, the Company entered into new swap contracts for 36,000 barrels in Q4 2015 at $61.87 and 45,000 barrels in 1H 2016 at $62.88. The following table summarizes the Company's open crude oil swap contracts as of May 12, 2015:

In addition to the open crude oil swap contracts, the Company has entered into costless collar contracts. The costless collars are used to establish floor and ceiling prices on anticipated crude oil production. There were no premiums paid or received by us related to the costless collar contracts. The following table reflects open costless collar crude oil contracts as of May 12, 2015:

2015 Operating and Financial Results

The following table presents selected operating and financial data for the periods indicated.

First Quarter 2015 Financial Results

In the first quarter of 2015, oil and gas sales, excluding the impact of settled derivatives, were $2.89 million, a decrease of 28% as compared to the first quarter of 2014. The Company realized an average price of $37.60 per barrel of oil and $1.47 per mcf of gas, representing decreases of 57% and 85%, respectively, as compared to the first quarter of 2014. The impact of weaker commodity prices was partially offset by an 89% increase in production over the first quarter of 2014.

The Company's production in the first quarter of 2015 was comprised of 82% oil and 18% natural gas and natural gas liquids, on a Boe basis. The Company's increased gas sales percentage reflects the continued improvement in gas infrastructure in North Dakota and higher gas production in the Company's current areas of focus.

Lease operating expenses for the first quarter of 2015 were $1.0 million, or $11.08 per Boe, compared to $0.5 million, or $10.75 per Boe, for the first quarter of 2014. The increase in lease operating expense in the first quarter was primarily attributable to cleanout costs on producing wells subsequent to completion activities on offset locations in the Company's Stockyard Creek project.

General and administrative expenses ("G&A") for the first quarter of 2015 were $0.8 million, or $9.07 per Boe, compared to $0.8 million, or $16.33 per Boe for the first quarter of 2014. Cash G&A (non-GAAP, excludes stock-based compensation expense) was $0.6 million, or $7.27 per Boe, for the first quarter of 2015 compared to $0.6 million, or $13.27 per Boe for the first quarter of 2014.

The Company recorded $2.1 million of adjusted EBITDA in the first quarter of 2015, representing a decrease of 12% from $2.4 million of adjusted EBITDA in the first quarter of 2014. Adjusted EBITDA is a non-GAAP financial measure. Please refer to the reconciliation in this release for additional information about this measure.

Producing Wells

The following table sets forth wells in which Black Ridge holds a participating interest that were completed or acquired during the quarter ending March 31, 2015:

"Drilling" Wells

The following table sets forth wells in which Black Ridge holds a participating interest that were either preparing to drill, drilling, awaiting completion or completing as of March 31, 2015:

Adjusted Net Loss and Adjusted EBITDA

In addition to reporting net loss as defined under GAAP, we also present Adjusted Net Loss and Adjusted EBITDA. We define Adjusted Net Loss as net loss, excluding net  income (loss) on the mark-to-market of derivatives, net of tax. We define Adjusted EBITDA as earnings (loss) before (i) interest expense, (ii) income taxes, (iii) depreciation, depletion and amortization, (iv) accretion of abandonment liability, (v) income (losses) on the mark-to-market of derivatives, and (vi) non-cash expenses relating to share based payments recognized under ASC Topic 718. We believe the use of non-GAAP financial measures provides useful information to investors regarding our current financial performance; however, Adjusted Net Loss and Adjusted EBITDA do not represent, and should not be considered alternatives to GAAP measurements. We believe these measures are useful in evaluating our fundamental core operating performance. Specifically, we believe the non-GAAP Adjusted Net Loss and Adjusted EBITDA results provide useful information to both management and investors by excluding certain income and expenses that our management believes are not indicative of our core operating results. Although we use Adjusted Net Loss and Adjusted EBITDA to manage our business, including the preparation of our annual operating budget and financial projections, we believe that non-GAAP financial measures have limitations and do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures. A reconciliation of Adjusted Net Loss and Adjusted EBITDA to net loss, GAAP, is included below:

 

 

 

 

 

Cautionary Statement as to Forward-Looking Statements
Certain statements contained herein, which are not historical, are forward-looking statements that are subject to risks and uncertainties not known or disclosed herein that could cause actual results to differ materially from those expressed herein. These statements may include projections and other "forward-looking statements" within the meaning of the federal securities laws. Any such projections or statements reflect management's current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from those projected. Important factors that could cause the actual results to differ materially from those projected include, without limitation, general economic or industry conditions nationally and/or in the communities in which our Company conducts business, volatility in commodity prices for crude oil and natural gas, environmental risks, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital or have access to debt financing, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, increases in operator costs, other economic, competitive, governmental, regulatory and technical factors affecting our Company's operations, products, services and prices and other risks inherent in the Company's businesses that are detailed in the Company's Securities and Exchange Commission ("SEC") filings. Readers are encouraged to review these risks in the Company's SEC filings.

About the Company
Black Ridge Oil & Gas is an oil and gas exploration and production company based in Minnetonka, Minnesota. Black Ridge's focus is exclusive to the Williston Basin Bakken and Three Forks trend in North Dakota and Montana. For additional information, visit the Company's website at www.blackridgeoil.com.

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Contact
Black Ridge Oil & Gas, Inc.

Ken DeCubellis, Chief Executive Officer
952-426-1241

www.blackridgeoil.com

 

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SOURCE Black Ridge Oil & Gas, Inc.