FX Energy's Revenues Rose 15% in Second Quarter
FX Energy, Inc. announced financial results for its second quarter ended June 30, 2008. Earnings for the most recent quarter were $(1.5) million, or $(0.04) per share, versus $(2.7) million, or $(0.08) per share, for last year's second quarter.
Record revenues and lower exploration spending were the two biggest contributors to the improved results. Total revenues for the second quarter of 2008 outpaced those of last year's second quarter, primarily due to higher oil and gas prices, both in Poland and domestically. The Company also recorded higher oilfield services revenues. Total revenues rose 15 percent to $5.2 million during the second quarter of 2008, compared to total revenues of $4.5 million during the same period 2007. Exploration expenses were approximately $900,000, or 29 percent, lower during the second quarter of 2008 compared to the same quarter of 2007.
Clay Newton, FX's Vice President Finance, remarked, "We were pleased during the second quarter to see a 14% price increase for all of our natural gas production in Poland which became effective May 1st. We continue to see a strong gas market in Poland going forward. These higher prices and resulting higher cash flows, together with our cash on hand and unused credit capacity, will provide the means for us to continue to execute our 2008 capital budget."
Earnings before interest, taxes, depreciation, amortization, and exploration expense (EBITDAX)(1), a non-GAAP financial measure, during the second quarter of 2008 jumped 33 percent to $2.0 million, compared to $1.5 million for the second quarter of 2007.
The Company's total net production decreased from 593 Mmcfe during the second quarter of 2007 to 427 Mmcfe during the 2008 quarter. The production decline is due almost entirely to the expected, and previously disclosed, decline at the Company's Wilga well in eastern Poland. The well is expected to stabilize at its current, lower rate for the remainder of the year. However, other wells are expected to be added to the production base in 2009. In particular, the Company's largest discovery to date, the Roszkow well, is expected to begin production in early 2009. Consequently, 2009 production should be well ahead of both 2007 and 2008.
Six Month Results
The Company reported earnings of $(5.8) million, or $(0.15) per share, for the first half of 2008, compared to $(5.3) million, or $(0.15) per share, for the same period of 2007. The higher loss was partially attributable to increased exploration spending, most of which occurred during the first quarter of this year.
Earnings before interest, taxes, depreciation, amortization, and exploration expense (EBITDAX)(1) rose from just under $3.2 million to just over $3.2 million.
Oil and gas revenues for the 2008 first half were slightly higher than those recorded during the same period of 2007. The Company recognized oil and gas revenues of $7.5 million, compared to $7.3 million for the first half of 2007. Total revenues for the first half of 2008 were $9.4 million, compared to $8.7 million in the first half of 2007.
Natural gas production in Poland was 639 Mmcf during the first half of 2008, compared to 900 Mmcf during the same period of 2007. Total oil and gas production in Poland was 655 Mmcfe during the 2008 six-months, compared to 980 Mmcfe during the first six months of 2007.
At June 30, 2008, the Company's cash and investments were approximately $13.6 million, including cash and cash equivalents of approximately $7.9 million and other investments of $5.7 million. In addition, the Company had full availability remaining under its $25 million reserve-based credit facility.
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