TRAVERSE CITY, Mich., Nov. 14, 2006 (PRIMEZONE) -- Aurora Oil & Gas Corporation (AMEX:AOG) today announced operating and financial results for the third quarter of 2006. William W. Deneau, President and CEO of Aurora Oil & Gas Corporation commented, "We will continue to execute our strategic plan and pursue development of our large, well-established acreage base to add significant reserves through the drill bit in the coming quarters."
For the third quarter of 2006, Aurora generated revenues of approximately $5.5 million, up 173% from the third quarter of 2005. Oil and natural gas production revenues topped $5.1 million on production of over 686 mmcfe of natural gas for the quarter, averaging 7,456 mcfe per day. This includes over $1 million in realized gains on financial hedges in place, creating a weighted-average realized natural gas price of $7.36 per mcf. Third quarter oil and natural gas revenue was down slightly from the second quarter of 2006, due entirely to lower price realizations experienced on unhedged natural gas sales.
Expenses totaled $7.6 million, a 9% increase from the second quarter. This was driven by a non-cash stock-based compensation charge in the third quarter of $957,028 compared to $234,757 in the second quarter, as required by Statement of Financial Accounting Standard No. 123, "Share-based Payments."
The net loss for the third quarter was $2.1 million compared to a $1.2 million loss in the second quarter of 2006. This was largely driven by the lower price realizations on unhedged production and the non-cash, stock-based compensation charge.
The earnings before interest, income taxes, depletion, depreciation and amortization, and non-cash compensation for the third quarter of 2006 totaled approximately $2.6 million.
Effective November 13, 2006, the company successfully completed a secondary equity offering, raising approximately $54.7 million in net proceeds to help fund the Company's drilling program through 2007.
The Company is pleased with the Antrim Shale drilling results to date, encountering above-average natural fracturing in two new areas on the North side of the Antrim play. Higher water rates are expected to occur in areas of excellent natural fracturing which ultimately result in above-average gas reserves. Once these new wells complete the potentially longer dewatering phase (as long as 18 months), the increasing natural gas production will contribute to revenue growth.
The Company also is ramping up operations on its New Albany Shale properties. During the third quarter, Aurora operated 8 wells in Greene County and will be performing resource assessments in several other locations. The Company will not release individual well results at this time. Experience to date, however, has validated the third-party engineering model which indicates 0.9 to 1.3 bcf of proven reserves per well.
Additional detail on the financial and operational results can be found in the Company's 10-QSB filed November 14, 2006. This form can be retrieved via the Company website at http://www.auroraogc.com/SEC_Filings.htm. Summary financial statements are provided for reference below.
Conference Call Details
Call-In Information
Aurora Oil & Gas invites interested persons to participate in the third quarter call by dialing 877-407-8035 (domestic) or 201-689-8035 (international) prior to 12:55 p.m. EST. A digital replay of the conference call will be available within 3 hours following the call and will remain available until 11:59 p.m. EST on November 21, 2006. The replay can be dialed at 877-660-6853 (domestic) or 201-612-7415 (international) and reference should be made to account number 286 and conference ID number 220364.
Webcast Information
The call will also be broadcast live via Internet webcast on the Company's website, www.auroraogc.com, through the "Investor Relations" page and the "Presentations & Webcasts" link. An archived webcast and podcast will be available for listening or download within 3 hours after the call and can be found under the link suggested above for up to 12 months following the event.
Summary Financial Statements
These condensed financial statements should be read in conjunction with the notes and supplemental information as provided in the Company's 10-QSB filed November 14, 2006. This form can be retrieved via the Company website at http://www.auroraogc.com/SEC_Filings.htm.
AURORA OIL & GAS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2006 2005
ASSETS (Unaudited) (Audited)
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 2,999,305 $ 11,980,638
Accounts receivable
Oil and gas sales 2,568,561 2,409,675
Joint interest owners 4,264,430 4,380,606
Notes receivable
Related party 94,956 35,720
Other 299,744 208,626
Drilling advances 1,261,540 --
Prepaid expenses 318,159 240,242
Short-term derivative instruments 3,105,365 --
------------ ------------
Total current assets 14,912,060 19,255,507
------------ ------------
PROPERTY AND EQUIPMENT:
Oil and gas properties, using full
cost accounting:
Proved properties 91,084,766 39,643,003
Unproved properties 44,989,813 37,279,889
Properties held for sale 7,653,612 --
Less: accumulated depletion and
amortization -10,854,451 -7,962,138
------------ ------------
Total oil and gas properties, net 132,873,740 68,960,754
Pipelines 4,831,358 --
Other property and equipment 3,967,201 3,723,918
Less: accumulated depreciation -581,434 -113,780
------------ ------------
Total property and equipment, net 141,090,865 72,570,892
------------ ------------
OTHER ASSETS:
Long-term derivative instruments 2,091,473 --
Deposits on purchase of oil and
gas properties -- 3,206,102
Goodwill 15,973,346 15,973,346
Intangibles (net of accumulated
amortization of $2,558,333 and
$1,407,083, respectively) 2,046,667 3,197,917
Other investments 814,958 1,855,977
Debt issuance costs (net of
accumulated amortization of
$677,389 and $79,096, respectively) 2,512,916 723,993
Other 329,641 38,411
------------ ------------
Total other assets 23,769,001 24,995,746
------------ ------------
TOTAL ASSETS $179,771,926 $116,822,145
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued
liabilities $ 8,701,423 $ 7,470,579
Short-term bank borrowings 3,610,000 6,210,000
Current portion of obligations under
capital leases 4,818 8,823
Current portion of note payable -
related party -- 69,833
Current portion of mortgage payable 83,240 72,877
Drilling advances 361,914 --
Deposit on sale of oil and gas
properties -- 3,509,319
------------ ------------
Total current liabilities 12,761,395 17,341,431
------------ ------------
LONG-TERM LIABILITIES:
Obligations under capital leases,
net of current portion -- 2,262
Asset retirement obligations 990,704 --
Mortgage payable 2,731,206 2,792,600
Senior secured credit facility 45,000,000 --
Mezzanine financing 40,000,000 40,000,000
------------ ------------
Total long-term liabilities 88,721,910 42,794,862
------------ ------------
Total liabilities 101,483,305 60,136,293
------------ ------------
COMMITMENTS, CONTINGENCIES AND
SUBSEQUENT EVENTS
REDEEMABLE CONVERTIBLE PREFERRED STOCK:
Authorized 20,000,000 shares;
outstanding none in 2006 and 34,984
shares in 2005 -- 59,925
------------ ------------
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value;
authorized 250,000,000 shares;
issued and outstanding 82,084,667
shares in 2006 and 61,536,261
shares in 2005 820,847 615,363
Additional paid-in capital 78,971,659 58,670,698
Accumulated other comprehensive
income 5,196,838 --
Accumulated deficit -6,700,723 -2,660,134
------------ ------------
Total shareholders' equity 78,288,621 56,625,927
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $179,771,926 $116,822,145
============ ============
AURORA OIL & GAS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
REVENUES:
Oil and natural
gas sales $ 5,175,635 $ 1,878,344 $16,116,855 $ 2,976,250
Pipeline revenue 364,586 -- 865,454 --
Interest income 39,784 52,723 283,998 218,633
Equity in (loss)
income of
unconsolidated
subsidiary -67,997 -10,166 -226,711 2,231
Other income 41,016 126,696 137,147 476,307
----------- ----------- ----------- -----------
Total revenues 5,553,024 2,047,597 17,176,743 3,673,421
----------- ----------- ----------- -----------
EXPENSES:
General and
administrative 2,046,497 766,778 5,289,210 1,875,674
Pipeline
operating
expenses 188,537 -- 472,738 --
Production and
lease operating 1,692,080 609,210 5,103,131 1,262,167
Depletion,
depreciation and
amortization 1,406,011 250,561 4,430,177 338,061
Interest expense 2,279,760 264,902 5,843,914 516,983
Taxes 9,928 4,003 39,289 259,200
----------- ----------- ----------- -----------
Total expenses 7,622,813 1,895,454 21,178,459 4,252,085
----------- ----------- ----------- -----------
INCOME (LOSS)
BEFORE MINORITY
INTEREST -2,069,789 152,143 -4,001,716 -578,664
MINORITY INTEREST
IN (INCOME) LOSS
OF SUBSIDIARIES -16,445 25,534 -34,364 19,344
----------- ----------- ----------- -----------
NET INCOME (LOSS) ($2,086,234) $ 177,677 ($4,036,080) ($ 559,320)
=========== =========== =========== ===========
NET INCOME (LOSS)
PER COMMON SHARE
- BASIC AND
DILUTED ($ 0.03) $ 0.01 ($ 0.05) ($ 0.02)
=========== =========== =========== ===========
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING -
BASIC AND
DILUTED 82,042,049 38,092,366 78,043,518 36,816,852
=========== =========== =========== ===========
AURORA OIL & GAS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
-------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 2006 2005
----------- -----------
Net loss ($4,036,080) ($559,320)
Adjustments to reconcile net
loss to net cash provided by
(used in)operating activities:
Depreciation, depletion and
amortization 4,430,177 338,061
Amortization of debt
issuance costs 598,569 47,989
Accretion of asset retirement
obligations 53,708 --
Stock-based compensation 1,349,177 --
Equity in (income) loss of
unconsolidated subsidiary 226,711 -2,231
Other -32,350 --
Minority interest in loss
(income) of subsidiaries 34,364 -19,344
Changes in operating assets
and liabilities, net
Accounts receivable 189,655 -2,074,555
Accounts receivable -
related party -- -68,393
Drilling advance assets -1,261,540 --
Prepaid expenses -77,917 -22,855
Accounts payable and
accrued liabilities 1,221,524 1,300,338
Drilling advance
liabilities 361,914 -387,175
----------- -----------
Net cash provided by
(used in) operating
activities 3,057,912 -1,447,485
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for oil
and gas development -56,416,435 -25,502,472
Capital expenditures for
property and equipment -256,163 -555,972
Proceeds from sale of oil and
gas properties 15,250,000 7,717,851
Proceeds from sale of other
investments 165,082 --
Payments for merger costs -- -407,496
Advances on notes receivable -93,118 -72,379
Advances on notes receivable -
related parties -77,956 --
Payments received on notes
receivable - related parties 20,720 85,000
Purchase of member interest in
Hudson Pipelines and
Processing Co., L.L.C. -162,108 -501,956
Investment in unconsolidated
subsidiary -577,088 -125,000
----------- -----------
Net cash used in
investing activities -42,147,066 -19,362,424
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on short-term
bank borrowings -2,600,000 -350,000
Advances on senior secured
credit facility, net of
financing costs of $2,386,613 14,997,394 --
Advances on mezzanine financing,
net of financing costs of
$300,000 -- 19,700,000
Payments on mortgage obligation -51,031 --
Payments on notes payable -
related party -69,833 -2,948,698
Payments on capital lease
obligations -6,267 -8,283
Distributions to minority
interest members -- -805,000
Net proceeds from sales of
common stock -- 11,025,000
Net proceeds from exercise of
options and warrants 18,187,449 --
Dividends paid on preferred
stock -20,250 -44,340
Other -329,641 -720
----------- -----------
Net cash provided by
financing activities 30,107,821 26,567,959
----------- -----------
Net (decrease) increase in cash
and cash equivalents -8,981,333 5,758,050
Cash and cash equivalents,
beginning of the period 11,980,638 5,179,582
----------- -----------
Cash and cash equivalents,
end of the period $ 2,999,305 $10,937,632
=========== ===========
NON-CASH FINANCING AND
INVESTING ACTIVITIES:
Oil and natural gas properties
asset retirement obligations $ 936,996 $ --
=========== ===========
Purchase of oil and gas working
interest through senior
secured credit facility $27,615,993 $ --
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the period
for interest $ 5,418,864 $ 1,250,958
=========== ===========
About Aurora Oil & Gas Corporation
Aurora Oil & Gas Corporation is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production with its main operations in the Michigan Antrim Shale and New Albany Shale of Indiana and Kentucky.
Note on Forward-Looking Statements
Statements regarding the plans for the future growth, development plans and growth through drilling, estimated value of proved reserves and anticipated production volumes are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although we believe that the forward-looking statements described are based on reasonable assumptions, we can give no assurance that they will prove accurate. Important factors that could cause our actual results to differ materially from those included in the forward-looking statements include the timing and extent of changes in commodity prices for oil and gas, drilling and operating risks, the availability of drilling rigs, changes in laws or government regulations, unforeseen engineering and mechanical or technological difficulties in drilling the wells, operating hazards, weather-related delays, the loss of existing credit facilities, availability of capital, and other risks more fully described in our filings with the Securities and Exchange Commission. All forward-looking statements contained in this release, including any forecasts and estimates, are based on management's outlook only as of the date of this release and we undertake no obligation to update or revise these forward-looking statements, whether as a result of subsequent developments or otherwise.