Delta's Revenues Increase by 81% in Second Quarter

Delta Petroleum Corporation announced its financial and operating results for the second quarter and first half of 2008.

SECOND QUARTER HIGHLIGHTS

  • Revenue increased 81% to $69.5 million and discretionary cash flow (a non-GAAP measure) increased 127% to $40.7 million, when compared with the prior-year quarter.
  • Production from continuing operations increased 75% for the second quarter of 2008 as compared to the prior-year quarter.
  • Proved reserves (unaudited) increased 8% in the current quarter to 649 billion cubic feet of natural gas equivalents (Bcfe) as of June 30, 2008, compared with 603 Bcfe on March 31, 2008, and 376 Bcfe as of December 31, 2007.
  • The Company's borrowing base increased from $140.0 million to $250.0 million due to growth in production and proved reserves.
  • The Greentown pipeline became operational and began accepting gas from the Greentown Federal 28-11 well.

RESULTS FOR THE SECOND QUARTER

For the quarter ended June 30, 2008, the Company reported total production of 6.2 Bcfe, which was consistent with the upper half of previously stated guidance. Production from continuing operations increased 75% when compared with the prior-year quarter and rose 16% from the levels recorded during the first quarter of 2008. Total revenue increased 81% to $69.5 million in the most recent quarter, compared with $38.4 million in
the quarter ended June 30, 2007. Revenue from oil and gas sales increased 197% to $61.7 million, compared with $20.7 million in the prior-year quarter. The increase in oil and gas revenue when compared with the
corresponding period of the previous year was due to higher production from continuing operations and higher commodity prices. Revenue from contract drilling and trucking fees decreased 45% to $7.9 million, versus $14.3 million in the second quarter of 2007, as a result of inter-company eliminations due to additional DHS rigs working for Delta.

EBITDAX increased 101% to $39.5 million during the three months ended June 30, 2008, compared with $19.6 million in the three months ended June 30, 2007. Discretionary cash flow increased 127% to $40.7 million, versus $18.0 million in the comparable 2007 quarter. (Note: EBITDAX and Discretionary Cash Flow are non-GAAP measures and are described in greater detail below.)

After adjusting for selected items, primarily the non-cash impact of unrealized derivative losses, net income for the second quarter 2008 approximated $4.7 million, or $0.04 per diluted share, versus an adjusted net loss of ($26.8 million), or ($0.43) per share, in the 2007 quarter (see reconciliation of net income (loss) (GAAP) to adjusted net income (loss) (non- GAAP) table for additional information). Before adjusting for the selected items, the Company reported a second quarter net loss of ($22.4 million), or ($0.22) per share, compared with a net loss of ($95.3 million), or ($1.53) per share, in the year-earlier quarter.

RESULTS FOR THE SIX-MONTH PERIOD

During the six months ended June 30, 2008, oil and gas sales from continuing operations increased 167% to $107.1 million, compared with $40.2 million in the comparable period a year earlier. The increase was the
result of a 71% growth in production from continuing operations, an 81% increase in oil prices, and a 65% increase in gas prices. Drilling and trucking revenue decreased 40% to $18.6 million, from $30.9 million in the
prior-year period, as a result of inter-company eliminations due to additional DHS rigs working for Delta.

EBITDAX increased 96% and totaled $69.3 million in the first half of 2008, compared with $35.3 million in the six months ended June 30, 2007. Discretionary cash flow increased 121% to $69.3 million in the six months
ended June 30, 2008, versus $31.4 million in the corresponding period of the previous year.

After adjusting for selected items, primarily the non-cash impact of unrealized derivative losses, net loss for the six months ended June 30, 2008 was ($966,000), or ($0.01) per diluted share, versus an adjusted net loss of ($38.8 million), or ($0.66) per share in the 2007 period. Before adjusting for the selected items, the Company reported a net loss for the six months ended June 30, 2008 of ($42.2 million), or ($0.47) per share, compared with a net loss of ($113.7 million), or ($1.95) per diluted share, in the six months ended June 30, 2007.
 

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