DNE Dunedin Enterprise Investment Trust Plc

HOUSTON, Nov. 4 /PRNewswire-FirstCall/ -- Dune Energy, Inc. (NYSE Amex: DNE) today announced results for the third quarter of 2009. Revenue and Production Revenue for the third quarter totaled $15.2 million as compared with $36.3 million for the third quarter of 2008. Production volumes in the third quarter were 170 Mbbls of oil and 1.1 Bcf of natural gas, or 2.1 Bcfe. This compares with 177 Mbbls of oil and 1.4 Bcf of natural gas, or 2.5 Bcfe for the third quarter of 2008. In the third quarter of 2009, the average sales price per barrel of oil was $66.59 and $3.49 per Mcf for natural gas, as compared with $123.81 per barrel and $10.29 per Mcf, for the third quarter of 2008. The primary reasons behind the decrease in revenue were lower production and lower average sales prices in the third quarter of 2009 versus the third quarter of 2008. Average price received per Mcfe produced was $7.13 in the third quarter of 2009 versus $14.75 in the third quarter of 2008, or a 52% decline. Costs and Expenses Total lease operating expense for the third quarter was $7.6 million versus $10.5 million for the third quarter of 2008. DD&A expense was $5.5 million for the third quarter versus $12.2 million for the third quarter of 2008. Net cash G&A expense totaled $2.3 million for the third quarter of 2009 versus $3.4 million for the third quarter of 2008. The $1.1 million decrease reflects a continued emphasis on cost controls. Interest and financing expense, primarily associated with payment of 10.5% interest on the $300 million of Senior Secured Notes, was $8.8 million for the third quarter of 2009 versus $8.9 million for the third quarter of 2008. Earnings Net loss totaled $11.3 million for the third quarter of 2009 versus net income of $14.3 million for the third quarter of 2008. Preferred stock dividends were $9.7 million in the third quarter of 2009 versus $6.8 million in the third quarter of 2008. Net loss per share both basic and diluted for the quarter was $0.14, based on 148.2 million weighted average shares outstanding as compared with $0.08 basic earnings per share and $0.06 diluted earnings per share in the third quarter of 2008 with 93.7 million weighted average basic shares outstanding and 226.9 million weighted average diluted shares outstanding. The increased outstanding common shares are predominately associated with conversion of preferred shares into common shares. Liquidity At the end of the quarter, cash was $19.9 million versus $15.5 million at year end 2008. Accounts payable were $9.3 million in the current quarter versus $21.7 million at year end 2008. Availability under the Wells Fargo Foothill revolver was reset to $40 million in August 2009. Currently there is $17 million drawn against the revolver and $8.8 million issued in standby letters of credit. The $17 million is now considered a current liability as the maturity of the revolver is May 15, 2010. Under our Wells Fargo Foothill revolver, we are required to maintain $10 million of cash or availability at the end of each quarter. Capital Program and Operations In the third quarter of 2009, we invested $3.0 million primarily in workovers of existing wells and completion operations at the Alvin Townsite GU #1. New production from these operations plus the completion of the Wieting #32 at Chocolate Bayou Field should result in fourth quarter volumes averaging between 27 and 33 Mcfe/day depending on final rates on the wells and timing of production facilities. With increased commodity prices and resultant increased cash flow we anticipate initiating a 2-4 well drilling program in our Garden Island Bay field late in 2009 or early 2010. Common Equity and Preferred Shares At the end of the quarter there were 169.1 million common shares outstanding up from 139.4 million at the end of the second quarter reflecting the conversion of 23,610 preferred shares into 29.3 million new common shares. This total includes 15.8 million common shares issued to pay make-whole premiums. The make-whole premium can be paid at Dune's election in cash or shares of common stock. When paid in shares of common stock, this creates significant dilution for the common stock holders. This provision is only applicable through June of 2010. At the end of the quarter there were 204,703 preferred shares outstanding. James A. Watt, President and Chief Executive Officer commented, "We continue to focus capital on high return projects within our fields while maintaining sufficient liquidity to be in compliance with all debt covenants. Increased production volumes and increased commodity prices should allow for the drilling of new wells within our fields as we move into 2010." Click here for more information: http://www.duneenergy.com/news.html?b=1683&1=1 FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning estimates of expected drilling and development wells and associated costs, statements relating to estimates of, and increases in, production, cash flows and values, statements relating to the continued advancement of Dune Energy, Inc.'s projects and other statements which are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although Dune Energy, Inc. believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that the Company's projects will experience technological and mechanical problems, geological conditions in the reservoir may not result in commercial levels of oil and gas production, changes in product prices and other risks disclosed in Dune's Annual report on Form 10-K filed with the U.S. Securities and Exchange Commission. Dune Energy, Inc. Consolidated Balance Sheets (Unaudited) ASSETS September 30, 2009 December 31, 2008 ------------------ ----------------- Current assets: Cash $19,852,970 $15,491,532 Accounts receivable, net of reserve for doubtful accounts of $0 and $396,629 10,352,679 14,477,918 Prepayments and other current assets 875,207 6,910,422 Derivative assets 47,642 4,015,219 ------ --------- Total current assets 31,128,498 40,895,091 ---------- ---------- Oil and gas properties, using successful efforts accounting -proved 587,683,201 578,074,569 Less accumulated depreciation, depletion, amortization and impairment (243,373,393) (222,876,172) ------------ ------------ Net oil and gas properties 344,309,808 355,198,397 ----------- ----------- Property and equipment, net of accumulated depreciation of $2,042,136 and $1,406,927 1,420,207 2,086,313 Deferred financing costs, net of accumulated amortization of $1,416,477 and $970,068 1,175,248 1,621,657 Other assets 4,425,467 2,250,868 --------- --------- 7,020,922 5,958,838 --------- --------- TOTAL ASSETS $382,459,228 $402,052,326 ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $9,318,554 $21,662,965 Accrued liabilities 28,749,814 20,038,900 Short-term debt 17,000,000 2,013,699 Preferred stock dividend payable 2,047,000 2,446,985 --------- --------- Total current liabilities 57,115,368 46,162,549 Long-term debt, net of discount of $8,430,845 and $10,393,213 291,569,155 289,606,787 Other long-term liabilities 16,448,620 15,732,483 ---------- ---------- Total liabilities 365,133,143 351,501,819 ----------- ----------- Commitments and contingencies - - Redeemable convertible preferred stock, net of discount of $7,720,440 and $9,179,927, liquidation preference of $1,000 per share, 750,000 shares designated, 204,703 and 236,805 shares issued and outstanding 196,982,560 227,625,073 STOCKHOLDERS' DEFICIT Preferred stock, $.001 par value, 1,000,000 shares authorized, 250,000 shares undesignated, no shares issued and outstanding - - Common stock, $.001 par value, 300,000,000 shares authorized, 169,055,173 and 96,129,047 shares issued and outstanding 169,055 96,129 Treasury stock, at cost (300,312 and 34,009 shares) (46,355) (8,332) Additional paid-in capital 84,465,456 50,155,812 Accumulated other comprehensive loss (936,523) (3,709,177) Accumulated deficit (263,308,108) (223,608,998) ------------ ------------ Total stockholders' deficit (179,656,475) (177,074,566) ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $382,459,228 $402,052,326 ============ ============ Dune Energy, Inc. Consolidated Statements of Operations (Unaudited) Three months ended Nine months ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenues $15,221,657 $36,304,350 $44,405,815 $124,498,520 ----------- ----------- ----------- ------------ Operating expenses: Lease operating expense and production taxes 7,568,253 10,542,897 22,571,307 33,857,045 Exploration expense - 14,950 - 114,950 Accretion of asset retirement obligation 403,223 165,697 1,225,016 483,463 Depletion, depreciation and amortization 5,510,120 12,187,417 21,158,208 40,514,691 General and administrative expense 3,060,245 4,852,145 11,692,710 15,022,657 --------- --------- ---------- ---------- Total operating expenses 16,541,841 27,763,106 56,647,241 89,992,806 ---------- ---------- ---------- ---------- Operating income (loss) (1,320,184) 8,541,244 (12,241,426) 34,505,714 ---------- --------- ----------- ---------- Other income(expense): Interest income 12,270 227,924 38,079 425,693 Interest expense (8,814,933) (8,856,723) (26,234,441) (26,381,409) Gain (loss) on derivative liabilities (1,137,767) 23,655,374 (1,261,322) (13,065,754) ---------- ---------- ---------- ----------- Total other income (expense) (9,940,430) 15,026,575 (27,457,684) (39,021,470) ---------- ---------- ----------- ----------- Income (loss) from continuing operations before income taxes (11,260,614) 23,567,819 (39,699,110) (4,515,756) Income tax benefit (expense) - (8,979,340) - 1,720,503 --- ---------- --- --------- Income (loss) from continuing operations (11,260,614) 14,588,479 (39,699,110) (2,795,253) ----------- ---------- ----------- ---------- Discontinued operations: Loss from operations of Barnett Shale Properties (including impairment in 2008 of $41,893,165) - (478,054) - (39,927,805) Income tax benefit - 182,139 - 15,212,494 --- ------- --- ---------- Loss on discontinued operations - (295,915) - (24,715,311) --- -------- --- ----------- Net income (loss) (11,260,614) 14,292,564 (39,699,110) (27,510,564) Preferred stock dividend (9,657,788) (6,791,034) (28,990,268) (87,218,441) ---------- ---------- ----------- ----------- Net income (loss) available to common shareholders $(20,918,402) $7,501,530 $(68,689,378) $(114,729,005) ============ ========== ============ ============= Net income (loss) per share: Basic from continuing operations $(0.14) $0.08 $(0.55) $(1.04) Basic from discontinued operations - - - (0.28) --- --- --- ----- Total basic $(0.14) $0.08 $(0.55) $(1.32) ====== ===== ====== ====== Net income (loss) per share: Diluted from continuing operations $(0.14) $0.06 $(0.55) $(1.04) Diluted from discontinued operations - - - (0.28) --- --- --- ----- Total diluted $(0.14) $0.06 $(0.55) $(1.32) ====== ===== ====== ====== Weighted average shares outstanding: Basic 148,162,869 93,655,276 125,050,485 86,744,254 Diluted 148,162,869 226,949,884 125,050,485 86,744,254 Comprehensive loss: Net income (loss) $(11,260,614) $14,292,564 $(39,699,110) $(27,510,564) Other comprehensive income 924,218 113,439 2,772,654 1,174,257 ------- ------- --------- --------- Comprehensive income (loss) $(10,336,396) $14,406,003 $(36,926,456) $(26,336,307) ============ =========== ============ ============ Dune Energy, Inc. Consolidated Statements of Cash Flows (Unaudited) Nine months ended September 30, ------------- 2009 2008 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(39,699,110) $(27,510,564) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Loss from discontinued operations - 24,715,311 Depletion, depreciation and amortization 21,158,208 40,514,691 Amortization of deferred financing costs and debt discount 2,408,777 2,195,808 Stock-based compensation 3,313,135 3,916,090 Exploration expense - 114,950 Deferred tax benefit - (1,720,503) Accretion of asset retirement obligation 1,225,016 483,463 Loss on derivative liabilities 7,418,357 3,338,345 Changes in: Accounts receivable 3,928,512 13,482,188 Prepayments and other assets 2,780,838 4,095,335 Payments made to settle asset retirement obligations (553,287) (1,038,825) Accounts payable and accrued liabilities (3,598,292) (45,455,821) ---------- ----------- NET CASH PROVIDED BY (USED IN) CONTINUING OPERATIONS (1,617,846) 17,130,468 NET CASH PROVIDED BY DISCONTINUED OPERATIONS - 7,189,892 --- --------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (1,617,846) 24,320,360 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Investment in proved and unproved properties (9,002,565) (34,269,414) Purchase of furniture and fixtures (4,452) (412,793) Proceeds from sale of assets - 38,122,619 --- ---------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES - CONTINUED OPERATIONS (9,007,017) 3,440,412 NET CASH USED IN INVESTING ACTIVITIES -DISCONTINUED OPERATIONS - (9,053,023) --- ---------- NET CASH USED IN INVESTING ACTIVITIES (9,007,017) (5,612,611) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term debt 17,000,000 - Proceeds from long-term debt - 28,100,000 Payments on long-term debt - (28,100,000) Payments on short-term debt (2,013,699) (2,053,691) ---------- ---------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 14,986,301 (2,053,691) ---------- ---------- NET CHANGE IN CASH BALANCE 4,361,438 16,654,058 Cash balance at beginning of period 15,491,532 16,771,726 ---------- ---------- Cash balance at end of period $19,852,970 $33,425,784 =========== =========== SUPPLEMENTAL DISCLOSURES Interest paid $15,864,575 $16,310,601 Income taxes paid - - NON-CASH DISCLOSURES Common stock issued for conversion of preferred stock $52,753,000 $15,240,000 Redeemable convertible preferred stock dividends 27,530,781 87,218,441 Accretion of discount on preferred stock 1,459,487 1,303,589 DATASOURCE: Dune Energy, Inc. CONTACT: Investors, Steven J. Craig, Sr. Vice President Investor Relations and Administration of Dune Energy, Inc., +1-713-229-6300 Web Site: http://www.duneenergy.com/

Copyright