TEXOIL, INC. News Release
COMPANY CONTACT
Frank A. Lodzinski, President
110 Cypress Station Drive, Suite
No. 220
Houston, Texas 77090
(281) 537-9920
(281) 537-8324 - Fax
TEXOIL
REPORTS RESULTS OF OPERATIONS FOR THREE
AND NINE MONTHS ENDED SEPTEMBER 30, 1999
SIGNIFICANT INCREASES IN REVENUES, CASH FLOWS AND EARNINGS
HOUSTON, TX, NOVEMBER 9, 1999 - Texoil, Inc., (NASDAQ, Small Cap: "TXLI", Boston, "TXL") today announced financial and operating results for the three and nine month period ended September 30, 1999. Oil and gas and related revenues increased 111% for the nine months ended September 30, 1999, over the comparable period for 1998, to $14.7 million. Cash flow (defined herein as EBITDDA) increased 276% for the nine months ended September 30, 1999, over the prior year to $7.6 million. The Company reported net income for the nine month period of $1.4 million.
Third Quarter 1999
In the third quarter of 1999, Texoil, Inc., realized net income of
$541,000 on revenues of $5.6 million, compared to a net loss of $257,000 for
the third quarter of 1998. During the third quarter of 1999, the Company
produced 338,000 barrels of oil equivalent (BOE), up 104% from the third
quarter of 1998. Gas production increased to 1,068 MMcf, up 334% from the third
quarter of 1998. Oil production totaled 160,000 Bbls, up 28% from the third
quarter of 1998. The Company's average oil price was 38% higher, averaging
$16.11, compared to $11.66 in the same period of 1998. The average gas price increased
30% in the third quarter of 1999 to $2.51 per Mcf from $1.93 in 1998. Cash flow
from operating activities in the third quarter of 1999 increased to $3.0
million from $540,000 in the comparable period of 1998.
Nine Months Ended September 30, 1999
Texoil's net income for the nine months ended September 30, 1999,
was $1.4 million on revenues of $14.7 million. For the comparable period of
1998, net loss was $981,000 on revenues of $6,974,000. The Company's production
increased to 3,029 million Mcf of gas and 503,000 barrels of oil, up 294% and
41%, respectively, from the nine month period in 1998. On a BOE basis,
production totaled 1,008,000 BOE, up 108% from the prior year period. The
Company's average oil price in 1999 increased 11% to $14.28 per Bbl, compared
to $12.84 per Bbl in 1998. Average gas prices increased 9% in 1999 to $2.23 per
Mcf, compared to $2.05 per Mcf in 1998. Cash flow from
operating activities for the nine months period increased to $7.6 million in
1999 from $2.0 million in 1998, an increase of 276%.
Third Quarter Vs. Second Quarter 1999
Revenues in the third quarter of 1999 increased to $5.6 million,
$473,000 or 9.3% over the second quarter. Cash flow per share increased to a
record high of $.46 per share in the third quarter. Cash flow increased to more
than $3.0 million, $294,000 or 10.8% over the second quarter. Net income
decreased by $156,000 resulting from increased interest and depletion,
depreciation and amortization (DD&A) charges. As a percentage of oil and
gas revenues, DD&A increased to 26.4% of revenues from 22.1% in the third
quarter as compared to the second quarter. The increase in this non-cash charge
resulted from several factors, including the divestiture of certain long-life
non-core properties. As part of an ongoing effort, the Company intends to sell
certain non-core properties in order to focus clearly on fields and prospects
with greater cash flow and profit potential. Management expects the DD&A
rate to be reduced as field studies are completed and such fields are
developed.
Fourth Quarter and Year-End 1999
Texoil anticipates increased revenues, cash flow and earnings in the
fourth quarter resulting from production increases associated with recent
acquisitions and field development activities. The Company is presently
estimating that it will end 1999 with approximately $21.0 million of revenue,
$10.5 million of cash flow and $2.0 million of net income. These estimates are
subject to change resulting from changes in prices, costs and reserve
estimates, among other factors.
Other Matters
On November 8, 1999, the shareholders approved the Series A
Preferred Stock offering with Quantum Energy Partners, L.P., affiliates of
EnCap Investments L.L.C., the V & C Energy Partnership and certain other
individual investors. Pursuant to the stock purchase agreement, the Company
will issue 2,750,000 shares of Series A Convertible Preferred Stock at $8.00
per share for a total consideration of $22 million. Funding is expected to
occur during the week ending November 12, 1999. Management believes that the
Company's performance and the private placement has favorably positioned the
Company for further growth. In addition, on November 1, 1999, the Company
closed the acquisition of the Eloi Bay field located in the state waters of St.
Bernard Parish Louisiana; a subsidiary of the Company will operate the field.
Shareholders and interested parties are referred to separate news releases (previously issued) and the recently filed 10-QSB for the third quarter of 1999, for further details regarding matters discussed in this news release. In particular, shareholders and interested parties are referred to "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's SEC filings, for a discussion of industry conditions, the Company's business strategy and management's goals. As outlined therein, management's intent is to continue the Company's growth through profitable acquisitions, development and exploration activities and through effective financial management.
Management Comments
Mr. Frank A. Lodzinski, Texoil's Chief Executive Officer stated,
"Texoil has achieved significant increases in production, revenues, cash
flows and profitability. Management is pleased with the operating results
realized in the third quarter and year-to-date periods and forecasts continued
increases in revenues, cash flows and profits in the fourth quarter and 2000.
The majority of the increased revenues is a direct result of production
increases from our acquisition and development programs. The recent recovery in
oil prices certainly helped, but production increases and reductions in
per-unit operating and administrative costs were the major contributors. The
average year-to-date oil price was only $14.28, and the average for the third
quarter was $16.11. Further realized price recovery will have a direct impact
on earnings. In addition, the recent acquisition of South Texas and South
Louisiana proved properties and increased development activities are expected
to further improve production, cash flows and earnings."
Mr. Lodzinski also stated, "Texoil has emerged from the commodity price downturn of 1998 and early 1999 as a stronger Company and is favorably positioned to continue its growth. The Company has out-performed many of its peers, both in terms of financial performance and reserve and production growth. Texoil's growth rates compete favorably with companies in its peer group. Projected cash flow increases and the consummation of the private placement will allow the Company to fully implement its capital development and exploration program and pursue additional acquisitions."
Texoil, Inc. (www.texoil.com), an independent energy Company, acquires and develops oil and gas reserves through an active and diversified program that includes purchases of reserves, re-engineering, development and exploration activities, which are currently focused in Texas, South Louisiana and the Texas Gulf Coast. On December 31, 1997, the Company acquired Cliffwood Oil & Gas Corp.; the merger resulted in a change of management and business strategy and substantially increased the Company's overall financial resources.
Forward-Looking Information
This release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
23E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical facts included in this report, are
forward-looking statements regarding the Company's business strategy, plans,
objectives and beliefs of management for future operations. All statements
included in this release regarding the impact of recent acquisitions of
producing properties on the Company are forward-looking statements and are
based on management's best projections. Although the Company believes the
expectations and beliefs reflected in forward-looking statements included in
this release are reasonable, it can give no assurance that such expectations
will prove to have been correct. Forward-looking statements are not guarantees
of future performance and actual results, developments and business decisions
may differ from those envisioned by such forward-looking statements.
SEE FINANCIAL SUMMARY ATTACHED
TEXOIL,
INC.
Summary Financial Data
(Thousands)
|
|
|
Three Months Ended |
Nine Months Ended |
||
|
|
|
1999 |
1998 |
1999 |
1998 |
|
Revenues |
|
|
|
|
|
|
|
Oil and gas |
$ 5,523 |
$ 1,932 |
$ 13,925 |
$ 6,164 |
|
|
Other |
310 |
256 |
801 |
810 |
|
|
Total |
5,563 |
2,188 |
14,726 |
6,974 |
|
Expenses |
|
|
|
|
|
|
|
Lease operating |
1,561 |
1,241 |
4,595 |
3,383 |
|
|
Workover |
41 |
10 |
87 |
119 |
|
|
Production taxes |
435 |
111 |
1,047 |
337 |
|
|
General and administrative |
507 |
286 |
1,403 |
1,113 |
|
|
Total |
2,544 |
1,648 |
7,132 |
4,952 |
|
Operating Income |
3,019 |
540 |
7,594 |
2,022 |
|
|
|
Depreciation, depletion & amortization |
1,391 |
555 |
3,485 |
1,489 |
|
|
Interest and debt expense |
759 |
242 |
1,841 |
521 |
|
|
Write-down of oil and gas properties |
- |
- |
- |
1,208 |
|
Income (loss) before income taxes |
869 |
(257) |
2,268 |
(1,196) |
|
|
Provision for deferred income taxes |
(328) |
- |
(858) |
215 |
|
|
Net Income (loss) |
541 |
(257) |
1,410 |
(981) |
|
|
Per Common Share |
|
|
|
|
|
|
|
Net income (loss) per share-basic |
$ .08 |
(.04) |
$ .22 |
(.15) |
|
|
Net income (loss) per share-diluted |
$ .08 |
(.04) |
$ .21 |
(.15) |
|
|
Weighted average shares outstanding-basic |
6,555 |
6,548 |
6,555 |
6,351 |
|
|
Weighted average shares outstanding-diluted |
6,738 |
6,548 |
6,779 |
6,351 |
|
Cash Flow from EBITDDA |
|
|
|
|
|
|
|
Net income (loss) |
541 |
(257) |
1,410 |
(981) |
|
|
Plus: |
|
|
|
|
|
|
Depreciation, depletion and amortization |
1,391 |
555 |
3,485 |
1,489 |
|
|
Interest |
759 |
242 |
1,841 |
521 |
|
|
Write-down of oil and gas properties |
- |
- |
- |
1,208 |
|
|
Deferred income taxes |
328 |
- |
858 |
(215) |
|
|
Total |
3,019 |
540 |
7,594 |
2,022 |
|
Cash Flow per Common Share |
|
|
|
|
|
|
|
Cash flow per share-basic |
$ .46 |
.01 |
$ 1.29 |
.05 |
|
|
Cash flow per share-diluted |
$ .45 |
.01 |
$ 1.25 |
.05 |
|
Production and Prices |
|
|
|
|
|
|
|
Natural gas, MMcf |
1,068 |
246 |
3,029 |
768 |
|
|
Price per Mcf |
$ 2.51 |
$ 1.93 |
$ 2.23 |
$ 2.05 |
|
|
Crude oil and condensate, Mbbls |
160 |
125 |
503 |
356 |
|
|
Price per barrel |
$ 16.11 |
$ 11.66 |
$ 14.28 |
$ 12.84 |
|
|
Barrel of oil equivalent (MBOE) |
338 |
166 |
1,008 |
484 |
|
|
Production costs (per BOE) |
$ 4.03 |
$ 6.07 |
$ 3.93 |
$ 5.74 |
|
Current Assets |
|
|
6,898 |
3,551 |
|
|
Property, plant and equipment-net |
|
|
49,605 |
26,487 |
|
|
Other assets |
|
|
475 |
590 |
|
|
|
Total assets |
|
|
56,978 |
30,628 |
|
Current liabilities |
|
|
5,297 |
3,378 |
|
|
Long-term debt |
|
|
28,900 |
6,050 |
|
|
Subordinated convertible debt |
|
|
10,000 |
10,000 |
|
|
Deferred income taxes |
|
|
68 |
- |
|
|
Shareholders' equity |
|
|
12,713 |
11,200 |
|
|
Total liabilities and shareholders' equity |
|
|
56,978 |
30,628 |
|