Emerald Oil Inc. (NYSE MKT: EOX) detailed its second-quarter financial results, the company said Aug. 4. The quarter ended June 30, the company added.
Oil and natural gas sales yielded $31.3 million in revenues during the quarter, higher than second-quarter 2013’s $10.6 million. The increase was partly due to higher production from well completions, the company said. Of the total amount, crude oil comprised about 97% of the revenues, the company added.
During the quarter, production expenses totaled $3.9 million, higher than second-quarter 2013’s $1.6 million. Respectively, the expenses in each quarter equated to $11.45 per barrel of oil equivalent (boe) and $12.59/boe, Emerald added.
General and administrative expenses totaled $7.6 million, higher than second-quarter 2013’s $6 million. The increase was mostly due to the addition of new personnel, Emerald said.
The adjusted EBITDA was $17.4 million, higher than second-quarter 2013’s $2.8 million. This was a 521% increase, Emerald added.
The quarter’s adjusted net income was $7.6 million, the same as the adjusted net loss in second-quarter 2013, the company said.
Emerald Oil acquired about 31,500 net acres in the Williston Basin that are “highly contiguous" to its Low Rider and Lewis & Clark operating areas in McKenzie, Billings and Dunn counties, N.D.
The company received 13,325 net acres in Low Rider and 18,227 net acres in Lewis & Clark, and their current net production is estimated to be about 400 boe/d, the company said.
They have a PV-10 value of $51.5 million, the company added. There are 2 MMboe of proved reserves, and the total 157 drilling locations are divided between the operating areas. Low Rider has 72 and Lewis & Clark has 85, the company noted.
The roughly-$110 million transaction will not require “external capital” or cause “any material change to 2014 financial or operational guidance,” the company added. Emerald will pay about $78.4 million in cash on hand, and transfer about 4,175 net acres in Williams County, the company said.
The company, with its lending syndicate, will amend its credit facility alongside the transaction’s closing, Emerald said, noting that it will increase the facility’s borrowing base to $200 million from $100 million.
Emerald’s facility is currently undrawn, the company added, noting that the current hedges on commodity prices--which are “at maximum capacity,”-- reflect the revised borrowing base. The hedges go through 2015’s first quarter, the company said.
Denver-based Emerald Oil Inc. explores and produces oil in the Williston Basin.
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