Crimson Exploration Inc. today announced financial results for the first quarter 2008.
Highlights
• Record quarterly revenue of $45.0 million
• Record quarterly production of 4.8 Bcfe
• Daily production for the first quarter of 2008 averaged 52,570 Mcfed, up 772% over the 2007 quarter
• Sale of Barnett Shale interests for approximately $34.0 million
• Reduction in net debt by $31.0 million
Summary Financial Results
The Company reported income before income taxes for the first quarter of 2008 of $1.3 million compared to a loss before income taxes of $2.5 million for the first quarter of 2007. Negatively impacting the first quarter results for 2008 was a $28.5 million non-cash charge recorded to reflect the unrealized mark-to-market exposure on our commodity price and interest rate hedge instruments as required by SFAS 133 "Accounting for Derivative Instruments and Hedging Activities." Recorded in the first quarter 2007 was a $1.9 million non-cash charge related to the mark-to-market requirement. Also recognized in the first quarter of 2008 was a $15.2 million gain on the sale of our interests in the Fort Worth Barnett Shale. Exclusive of the effects of the mark-to-market charges in 2007 and 2008, and the gain from the Barnett Shale in 2008, income before taxes for the first quarter of 2008 would have been $14.6 million, compared to a loss before taxes of $0.7 million in 2007. Net income for the first quarter of 2008 was $0.7 million compared to a net loss of $1.6 million for the first quarter of 2007.
Net cash flow from operations for the first quarter of 2008, which consists of net cash provided by operating activities, plus the period change in certain working capital and other cash flow items, was $27.6 million, a $26.3 million increase over the $1.3 million reported for the 2007 quarter. The increase in cash flow was attributable to the South Texas and Gulf Coast producing assets acquired in May 2007 ("STGC Acquisition"), offset in part by increased interest expense and general and administrative costs related to the increase in debt and infrastructure growth after the acquisition.
Revenues for the first quarter of 2008 were $45.0 million compared to revenue of $4.5 million in the prior year quarter, an approximate ten-fold increase that was attributable primarily to the STGC Acquisition, and to a lesser extent, higher oil and gas price realizations.
Production for the first quarter of 2008 was 4.8 Bcfe of natural gas equivalents, or 52,570 Mcfe per day, compared with production of 542,818 Mcfe, or 6,031 Mcfe per day, in the 2007 quarter. The dramatic increase in production for the quarter was attributable to the STGC Acquisition and to production increases from our 2007 and 2008 drilling programs.