Bois d'Arc Energy Sees Increase in 3Q05 Net Income
Bois d'Arc Energy, Inc. (NYSE: BDE) reported financial and operating results for the three months and nine months ended September 30, 2005. The Company was formed on July 16, 2004 as a successor to a joint exploration venture between Comstock Resources, Inc. and Bois d'Arc Resources, Ltd. Financial results prior to July 16, 2004, represent the combined financial results of the exploration joint venture. On May 10, 2005, in connection with an initial public offering, Bois d'Arc converted from a nontaxable limited liability company to a taxable corporation and changed its name to Bois d'Arc Energy, Inc. Amounts reported for the nine months ended September 30, 2004 represent the combined results of Bois d'Arc Energy, LLC and the predecessors to Bois d'Arc.
Bois d'Arc reported net income for the three months ended September 30, 2005 of $13.3 million or $0.21 per share as compared to pro forma net income of $4.8 million for the same period in 2004. In the third quarter of 2005, Bois d'Arc's oil and gas sales were $43.4 million as compared to $37.4 million for the three months ended September 30, 2004. Production in the third quarter of 2005 totaled 4.8 billion cubic feet equivalent of natural gas ("Bcfe"), which was 18% lower than production of 5.8 Bcfe for the third quarter of 2004. Prices realized by the Company during the third quarter averaged $8.70 per Mcf of natural gas and $59.96 per barrel of oil as compared to $5.96 per Mcf of natural gas and $42.54 per barrel of oil in 2004's third quarter. Bois d'Arc generated $31.0 million of operating cash flow (before changes in working capital accounts) in the third quarter of 2005 as compared to $27.0 million in the third quarter of 2004. EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses totaled $34.7 million in the third quarter of 2005 as compared to $28.2 million in the third quarter of 2004.
Bois d'Arc, along with the majority of operators in the Gulf of Mexico, was substantially impacted by Hurricanes Katrina and Rita and the other storm activity in the Gulf of Mexico. The effects of those storms continue but the Company is making progress in returning to pre-storm operations. Certain of Bois d'Arc's production facilities were damaged during the hurricanes. The Company estimates that the cost of repairs that will not be covered by insurance will be approximately $2.0 million. Bois d'Arc had four drilling rigs under contract in the Gulf of Mexico during the third quarter. None were damaged by the storms; however, the rigs were idle for a combined 63 days because of the storm activity. Bois d'Arc had substantially all of its production shut in for 37 days as a result of the storms. Certain third party pipelines and onshore processing facilities that transport and process Bois d'Arc's production were out of service as a result of the hurricanes. As a result, approximately 2.1 Bcfe or 30% of production was deferred in the third quarter. Since Hurricane Rita, Bois d'Arc has restored approximately 57 million cubic feet equivalent of natural gas ("MMcfe") per day of its net production, which represents approximately 72% of its pre-storm production. The Company expects additional production to resume over the next several months, depending on the restoration of third party pipelines and onshore processing facilities.
For the nine months ended September 30, 2005, Bois d'Arc reported a net loss of $62.1 million or $1.10 per share. Excluding the one time effect on deferred income taxes of its conversion from a limited liability company to a corporation of $108.2 million, net income for the nine months of 2005 was $46.1 million or $0.79 per diluted share. Oil and gas sales for the first nine months of 2005 were $135.6 million as compared to $107.7 million for the nine months ended September 30, 2004. Production in the first nine months of 2005 totaled 17.5 Bcfe, which was 3% higher than production of 17.0 Bcfe for the same period in 2004. Prices realized by the Company during the nine months ended September 30, 2005 averaged $7.36 per Mcf of natural gas and $51.54 per barrel of oil as compared to $6.24 per Mcf of natural gas and $38.59 per barrel of oil in the same period in 2004. Bois d'Arc's operating cash flow (before changes in working capital accounts) for the nine months ended September 30, 2005 was $94.0 million as compared to $75.2 million in the same period in 2004. EBITDAX totaled $109.3 million for the first nine months of 2005 as compared to $81.9 million for the same period of 2004.
Despite the setback to production operations caused by the hurricanes in the third quarter, Bois d'Arc's exploration program year to date has been very successful. Bois d'Arc has had 15 (12.4 net) successful wells out of a total of 18 (15.4 net) wells drilled to date with two dry holes and one well still being evaluated.
The discoveries at Ship Shoal block 111, which proved up the "Laker" prospect, the South Timbalier block 75 discovery, which tested the "Doc Holiday" prospect, and the Ship Shoal block 92 "Paddlefish" well were the larger reserve discoveries of the 15 successful wells that had been reported earlier by the Company. The most recent well that the Company has drilled is the SL 18601 #1 drilled at Vermillion block 12. This well was drilled to a depth of 14,079 feet and encountered only one of the six targeted reservoirs with seven net feet of pay sand. The Company plans to test this zone to determine if the well will be commercial.
Bois d'Arc has spent $134.2 million in the first nine months on its
exploration and development activities and expects to spend an additional
$46.0 million during the last quarter of 2005.
- US Upstream O&G Transactions Dive to Five-Year Low (Mar 17)
- Bois d'Arc, Stone Energy's Stockholders Check Yes for Merger (Aug 27)
- Stone Energy to Acquire Bois d'Arc Energy (Apr 30)