ENDV.L Regulatory News (ENDV)

Endeavour Announces 2013 Second Quarter Financial and Operational Results HOUSTON, Aug. 6, 2013 -- Endeavour International Corporation(NYSE: END) (LSE: ENDV) today reported second quarter 2013 net loss, asadjusted of $12.6 million compared to a net loss, as adjusted of $17.4 millionfor the same period in 2012. On a GAAP basis, net loss for the second quarterof 2013 was $14.3 million as compared to net loss of $51.3 million for the samequarter in 2012. Sales volumes for the second quarter of 2013 were 14,497 barrels of oilequivalent per day ("boepd"), compared to 4,677 boepd for the same quarter inthe prior year. Second quarter 2013 sales numbers were impacted by two liftingsat the Alba field during the period. Physical production for the second quarterof 2013 averaged 9,498 boepd compared to 6,437 boepd for the same quarter of2012. Recent Business Highlights: * North Sea: + Drilling of the West Rochelle (W-1) well has been completed. First production is expected in September 2013 + At East Rochelle, the E-2 well commenced drilling on July 25th + At Bacchus, the third production well was completed and flowed at a rate of 9,600 barrels of oil per day ("bopd") * North America: + First vertical pilot well in the Piceance Basin was successfully drilled, cored and logged * Finance: + In March, the Company received a payment of $22.5 million under a Forward Sale agreement. The Forward Sale commitment has now been fulfilled + In May, the Company completed the sale of an additional $17.5 million expansion to the Monetary Production Payment, bringing the total to $125 million outstanding * Guidance Update: + Direct capital expenditures for the year are expected to be $170 million - $180 million in the U.K. and $10 million - $30 million in the U.S. + Physical production for the third quarter is expected to be in the range of 8,000 - 9,000 boepd due to planned shutdown work on certain U.K. assets during the period "We remain focused and are making progress on operational matters related tothe commencement of first production at Rochelle and improved performance atAlba," said William L. Transier, chairman, chief executive officer andpresident. "The start-up of production from the Bacchus B-1 development isanother achievement for the Company. The performance of this field continues tobe very positive." Operational Update North Sea At the Rochelle development, the West Rochelle well was completed and flowtested at the end of June. During a 56-hour flow test, the well flowed up to 60million standard cubic feet per day, which was the limit of the well testequipment on the drilling rig. Final installation of the subsea pipelineinfrastructure has been completed and the well is connected back to the ScottPlatform. First production from the West Rochelle well (W-1) is expected inSeptember 2013 following the completion of the annual maintenance period at theScott Platform. In addition, the Transocean Prospect rig returned to theRochelle field and commenced drilling the E-2 well at East Rochelle on July25th. The second well of the development, E-2, is expected to be on-line duringthe fourth quarter. Endeavour has a 44% working interest in the Rochelledevelopment. At the Bacchus field, the third planned production well (B-1) has beencompleted and flowed at 9,600 bopd. The well logged 2,057 feet net oil payalong a horizontal completion segment in high quality Jurassic-aged Fulmarsandstone in the field's western fault block. Production performance from thethree wells was over 17,600 bopd gross. The third well was completed ahead ofschedule and below estimated costs. Endeavour has a 30% working interest in thefield. At Alba, the first of three planned development wells at the field wascompleted in June and a second subsea well was drilled and completed over thepast few days. During the planned 28-day summer maintenance program, both theproduced water and well-related issues will be addressed and production for thefield is expected to improve by year-end. Endeavour has a 25.68% workinginterest in the Alba field. North America In the Piceance Basin in Northwest Colorado, Endeavour successfully drilled,cored and logged its first Wiley federal unit vertical pilot well, targetingthe liquids-rich Niobrara and Frontier formations. The Company is evaluatingthe results and will likely drill a horizontal re-entry later in the year. Inthis play, Endeavour has accumulated leasehold and drill-to-earn optionstotaling about 40,000 gross acres. Finance In March, Endeavour entered into a Forward Sale agreement receiving a paymentof $22.5 million and effectively hedged a portion of production by locking inpricing for in excess of 200,000 barrels of oil over a six month deliveryperiod. During the second quarter, the Company fulfilled the deliveryrequirements for the Forward Sale agreement. This had a positive effect on theCompany's realized oil prices year-to-date. In May, the Company completed the sale of an additional $17.5 million expansionto the Monetary Production Payment (MPP), bringing the total to $125 millionoutstanding. The MPP has a two-year term and will be satisfied out of theproduction from the Alba and Bacchus fields. Repayment of the MPP began in July2013 under its terms. Current liabilities were impacted during the quarter due to thereclassification of the $115 million Credit Revolver from long-term intoshort-term liabilities. Endeavour intends to refinance the Credit Revolver, duein June of 2014, with a new revolving credit facility. Discussions are inprocess with a syndicate of financial institutions. Guidance Update Direct capital expenditures for the U.K. North Sea are expected to be in the$170 million - $180 million range. As disclosed, the increase from previouscapital expenditure estimates are related to cost overruns on Rochelle,primarily from an extended drilling duration of the West well(W-1) and thedrilling of the E-2 well at East Rochelle. Direct capital expenditures for theU.S. remain in the range of $10 million - $30 million and are largelydiscretionary. Each year during the third quarter, routine maintenance work is performed onplatforms and infrastructure in the U.K. North Sea. Due to this planneddowntime, physical production levels for the third quarter are expected to bein the range of 8,000 - 9,000 boepd. With the summer maintenance work at theAlba field, there are no scheduled liftings during the third quarter. While thelack of liftings will impact the estimated sales volumes for the third quarter,the Company continues to receive payments monthly for its physical productionvolumes under its existing marketing agreement. Earnings Conference Call, Tuesday, August 6, 2013 at 9:00 a.m., CentralDaylight Time, 3:00 p.m. British Summer Time Endeavour International will host a conference call and web cast to discuss its2013 second quarter financial and operating results on Tuesday, August 6, 2013at 9:00 a.m. Central Daylight Time, 3:00 p.m. British Summer Time. A supportingslide deck for the conference call is available on the home page of Endeavour'swebsite at www.endeavourcorp.com and under the Investor Relations section inconjunction with the details for the conference call. To participate and askquestions during the conference call, dial the local country telephone numberand the confirmation code 8946017. The toll-free numbers are 800-753-0420 inthe United States and 0-808-101-1152 in the United Kingdom. Other internationalcallers should dial 913-312-0968 (tolls apply). To listen only to the liveaudio web cast access Endeavour's home page at www.endeavourcorp.com. A replaywill be available beginning at 12:00 p.m. Central Daylight Time on August 6,2013 through 12:00 p.m. on August 13, 2013 by dialing toll free 888-203-1112(U.S.) or 719-457-0820 (international), confirmation code 8946017. Endeavour International Corporation is an oil and gas exploration andproduction company focused on the acquisition, exploration and development ofenergy reserves in the North Sea and the United States. For more information,visit www.endeavourcorp.com. Additional information for investors: Certain statements in this news release should be regarded as "forward-looking"statements within the meaning of the securities laws. These statements speakonly as of the date made. Such statements are subject to assumptions, risk anduncertainty. Actual results or events may vary materially. The Securities and Exchange Commission (SEC) permits oil and gas companies, intheir filings with the SEC, to disclose not only proved reserves, but alsoprobable reserves and possible reserves that meet the SEC's definitions forsuch terms, and price and cost sensitivities for such reserves, and prohibitsdisclosure of resources that do not constitute such reserves. We use may usecertain terms in our news releases, such as "reserve potential," that the SEC'sguidelines strictly prohibit us from including in filings with the SEC. Theseestimates are by their nature more speculative than estimates of proved,probable and possible reserves and accordingly are subject to substantiallygreater risk of being actually realized. In addition, we do not represent thatthe probable or possible reserves described herein meet the recoverabilitythresholds established by the SEC in its new definitions. Investors are urgedto also consider closely the disclosure in our filings with the SEC, availablefrom our website at www.endeavourcorp.com. Endeavour is also subject to therequirements of the London Stock Exchange and considers the disclosures in thisrelease to be appropriate and/or required under the guidelines of thatexchange. Endeavour International Corporation Condensed Consolidated Balance Sheets (Unaudited) (Amounts in thousands) June 30, December 31, 2013 2012 AssetsCurrent Assets:Cash and cash equivalents $ 130,790 $ 59,185Restricted cash 178 178Accounts receivable 28,434 46,003Prepaid expenses and other current assets 33,933 20,995 Total Current Assets 193,335 126,361 Property and Equipment, Net 1,054,834 1,003,441Goodwill 259,238 262,764Other Assets 39,065 49,906 Total Assets $ 1,546,472 $ 1,442,472 Liabilities and Stockholders' EquityCurrent Liabilities: Accounts payable $ 72,212 $ 60,153 Current maturities of debt 115,163 15,713 Monetary production payment, current 20,833 - Accrued expenses and other 96,154 90,100 Total Current Liabilities 304,362 165,966 Long-Term Debt 749,894 843,793Deferred Taxes 125,146 141,887Other Liabilities 238,242 147,692Total Liabilities 1,417,644 1,299,338 Commitments and Contingencies Series C Convertible Preferred Stock 43,703 43,703 Stockholders' Equity 85,125 99,431 Total Liabilities and Stockholders' Equity $ 1,546,472 $ 1,442,472 Endeavour International Corporation Condensed Consolidated Statement of Operations (Unaudited) (Amounts in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2013 2012 2013 2012 Revenues $ 126,165 $ 23,003 $ 183,837 $ 38,169 Cost of Operations: Operating expenses 38,103 5,742 55,593 10,640 Depreciation, depletion and 51,923 10,627 74,870 18,533 amortization Impairment of oil and gas - 19,960 3,534 35,700 properties General and administrative 4,882 5,030 10,364 10,353 Total Expenses 94,908 41,359 144,361 75,226 Income (Loss) From Operations 31,257 (18,356) 39,476 (37,057) Other Income (Expense): Unrealized gains (losses) on (1,277) 3,805 303 (973) derivatives Interest expense (24,447) (25,256) (45,885) (44,963) Loss on early extinguishment of - (21,661) - (21,661) debt Letter of credit fees (7,128) (3,064) (18,508) (3,064) Other income (expense) (1,009) (611) 8,871 (3,282) Total Other Expense (33,861) (46,787) (55,219) (73,943) Loss Before Income Taxes (2,604) (65,143) (15,743) (111,000) Income Tax Expense (Benefit) 11,281 (14,335) 12,189 (24,929)Net Loss (13,885) (50,808) (27,932) (86,071)Preferred Stock Dividends 456 456 911 911 Net Loss to Common Stockholders $ (14,341) $ (51,264) $ (28,843) $ (86,982) Net Loss per Common Share:Basic and Diluted $ (0.30) $ (1.31) $ (0.61) $ (2.26) Weighted Average Number of Common SharesOutstanding:Basic and Diluted 47,092 39,020 47,076 38,438 Endeavour International Corporation Condensed Consolidated Statement of Cash Flows (Unaudited) (Amounts in thousands) Six Months Ended June 30, 2013 2012Cash Flows from Operating Activities: Net loss $ (27,932) $ (86,071)Adjustments to reconcile net loss to net cashprovided by (used in) operating activities:Depreciation, depletion and amortization 74,870 18,533Impairment of oil and gas properties 3,534 35,700Deferred tax benefit (2,457) (24,008)Unrealized (gains) losses on derivatives (303) 973Amortization of non-cash compensation 1,632 3,114Amortization of loan costs and discount 8,695 7,311Non-cash interest expense 3,454 5,153Loss on early extinguishment of debt - 21,661Other (2,444) 4,687Changes in operating assets and liabilities 12,562 (15,140) Net Cash Provided by (Used in) Operating Activities 71,611 (28,087) Cash Flows From Investing Activities: Capital expenditures (107,314) (116,458) Acquisitions, net of cash acquired (1,472) (228,105) Increase in restricted cash - (178)Net Cash Used in Investing Activities (108,786) (344,741) Cash Flows From Financing Activities: Repayments of borrowings - (244,565)Borrowings under debt agreements, net of debt discount - 580,000Proceeds from issuance of common stock - 61,088Proceeds from issuance of monetary production payment 125,000 - Dividends paid (416) (416)Payments for early extinguishment of debt - (7,248)Financing costs paid (15,804) (27,500)Other financing - 3Net Cash Provided by Financing Activities 108,780 361,362 Net Increase (Decrease) in Cash and Cash Equivalents 71,605 (11,466)Cash and Cash Equivalents, Beginning of Period 59,185 106,036 Cash and Cash Equivalents, End of Period $ 130,790 $ 94,570 Endeavour International Corporation Operating Statistics (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2013 2012 2013 2012 Sales volume (1)Oil and condensate sales (Mbbls): United Kingdom 1,205 191 1,713 287 United States 1 1 1 2 Total 1,206 192 1,714 289 Gas sales (MMcf): United Kingdom 15 30 26 51 United States (2) 667 1,375 1,489 3,052 Total 682 1,405 1,515 3,103 Oil equivalent sales (MBOE) United Kingdom 1,207 196 1,717 295 United States (2) 112 230 249 510 Total 1,319 426 1,966 805 Total BOE per day 14,497 4,677 10,862 4,426 Physical production volume (BOE per day)(1) United Kingdom 8,083 3,910 7,973 2,401 United States (2) 1,415 2,527 1,454 2,804 Total 9,498 6,437 9,427 5,205 Realized Price, before and afterderivatives Oil and condensate price ($ per Bbl) 102.67 $ 104.46 $ 104.37 108.67 Gas price ($ per Mcf) 3.50 $ 2.14 $ 3.30 2.20 Equivalent oil price ($ per BOE) 95.64 $ 54.05 $ 93.51 47.39 (1) We record oil revenues when deliveries have occurred and legal ownership of the oil transfers to the customer. Physical production may differ from sales volumes based on the timing of tanker liftings for our international sales. In October 2012, we completed an exchange with domestic co-venturer, J-W Operating Company ("J-W"), whereby we exchanged our Bull Bayou Haynesville and Willow Springs Cotton Valley properties for all of J-W's upstream and(2) midstream interests in the Pennsylvania Marcellus area. The transaction added 15,500 net acres to our position in the Marcellus area, bringing the total to 31,000 net acres, and decreased our position in the Haynesville area by 2,100 net acres and approximately 3.2 MMcf equivalent per day (530 BOE per day) of declining net production. Endeavour International Corporation Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (Amounts in thousands) As required under Regulation G of the Securities Exchange Act of 1934, providedbelow are reconciliations of net income (loss) to the following non-GAAPfinancial measures: net income, as adjusted and Adjusted EBITDA. We use thesenon-GAAP measures as key metrics for our management and to demonstrate ourability to internally fund capital expenditures and service debt. The non-GAAPmeasures are useful in comparisons of oil and gas exploration and productioncompanies as they exclude non-operating fluctuations in assets and liabilities. (Amounts in thousands) Three Months Ended Six Months Ended June 30, June 30, 2013 2012 2013 2012 Net Loss $ (13,885) $ (50,808) $ (27,932) $ (86,071)Impairment of oil and gas - 19,960 3,534 35,700properties (net of tax) (1)Unrealized gains (losses) on 1,277 (4,355) (303) (207)derivatives (net of tax) (2)Loss on early extinguishment of - 17,762 - 17,762debt (net of tax) (3) Net Loss as Adjusted $ (12,608) $ (17,441) $ (24,701) $ (32,816) Net Loss $ (13,885) $ (50,808) $ (27,932) $ (86,071)Unrealized loss on derivatives 1,277 (3,805) (303) 973Net interest expense 24,427 25,134 45,849 44,784Letter of credit fees 7,128 3,064 18,508 3,064Loss on early extinguishment of - 21,661 - 21,661debtDepreciation, depletion and 51,923 10,627 74,870 18,533amortizationImpairment of oil and gas - 19,960 3,534 35,700propertiesIncome Tax Expense (Benefit) 11,281 (14,335) 12,189 (24,929) Adjusted EBITDA $ 82,151 $ 11,498 $ 126,715 $ 13,715 (1) Since the impairments related to U.S. oil and gas properties, we recognized no tax benefits as there was no assurance that we could generate any U.S. taxable earnings. (2) Net of tax benefit of none, $550, none and $1,180 for the three months ended June 30, 2013 and 2012, six months ended June 30, 2013 and 2012, respectively. (3) Net of tax benefit of $3,899 for both the three and six months ended June 30, 2012. SOURCE: Endeavour International Corporation CONTACT: Endeavour - Investor Relations, Darcey Matthews, +1-713-307-8711, orPelham Public Relations - UK Media, Philip Dennis, +44 (0)207 861 3919, orHenry Lerwill, +44(0)207 861 3169