News Releases

Triangle Petroleum Provides Financial and Operational Results For Second Quarter Fiscal Year 2015

Sep 8, 2014

DENVER, Sept. 8, 2014 /PRNewswire/ -- Triangle Petroleum Corporation ("Triangle" or the "Company") (NYSE MKT: TPLM) today provides an operational update and reports its second quarter fiscal year 2015 results for the three-month period ended July 31, 2014 ("Q2 fiscal 2015" or "Q2 FY2015").

Second Quarter Highlights for Fiscal Year 2015 (ended July 31, 2014)

  • Increased quarterly production volumes to 971 Mboe (10,551 Boepd) as compared to 394 Mboe (4,287 Boepd) in Q2 fiscal 2014 (+146% y/y)
  • Increased total estimated net proved reserves to 51,660 Mboe at end of Q2 fiscal 2015 compared to 22,080 Mboe at end of Q2 fiscal 2014 (+134% y/y)
  • Increased consolidated revenues to $142.0 million as compared to $50.4 million for the same period in Q2 fiscal 2014 (+182% y/y)
  • Increased consolidated net income in Q2 fiscal 2015 to $14.6 million, or $0.17 basic EPS ($0.15 fully diluted EPS), as compared to $6.8 million, or $0.12 basic EPS ($0.12 fully diluted EPS) in Q2 fiscal 2014 (+114% y/y)
    • Increased consolidated pre-tax income in Q2 fiscal 2015 to $24.9 million, as compared to $6.8 million in Q2 fiscal 2014 (+266% y/y)
    • Income tax provision of approximately $10.3 million in Q2 fiscal 2015
    • Increased adjusted net income in Q2 fiscal 2015 to $19.5 million, or $0.23 basic adjusted EPS ($0.20 fully diluted adjusted EPS), as compared to $10.6 million, or $0.19 basic adjusted EPS ($0.19 fully diluted adjusted EPS) (reference accompanying "Reconciliation Tables" at end of press release) 
    • Triangle USA Petroleum Corporation ("TUSA"), the Company's wholly-owned E&P subsidiary, placed $450 million aggregate principal notes
  • RockPile Energy Services, LLC ("RockPile") contributed revenue of $61.5 million and income before taxes of $8.8 million in Q2 fiscal 2015 to Triangle's consolidated operations, as compared to $15.8 million and ($0.4) million in Q2 fiscal 2014
  • After July 31, 2014, RockPile distributed an additional $24 million of dividends to Triangle, bringing cumulative RockPile distributions to $34 million

Segment Financial Results

Q2 fiscal 2015 stand-alone revenue and Adjusted-EBITDA (reference accompanying "Reconciliation Tables" as well as "Use of Segment Information and Non-GAAP Measures" disclosures at end of press release)

 

Q2 FY2015

Revenue

q/q % Change

Adj.-EBITDA

q/q % Change

 

E&P

$80.5

32%

$54.4

28%

 

RockPile

$102.1

66%

$28.8

108%

 

Caliber

$2.9

142%

$2.3

229%

 

Total

$185.5

50%

$85.4

50%

 

*Dollars in U.S. millions

*Exploration and production operating segment ("E&P") Adjusted-EBITDA includes all exploration and  production related business lines, and does not include TPC (parent company) other revenues and expenses

*Caliber revenue and Adjusted-EBITDA represents Triangle's ownership share of the partnership which increased to 31.8% from 30% on June 30, 2014, resulting in an average ownership of 30.6% for Q2 fiscal 2015

 

Segment Operational Update

  • TUSA reduced average spud to total depth drill times from 20 days in Q1 fiscal 2015 to approximately 18 days in Q2 fiscal 2015
  • Operational efficiencies associated with pad drilling have reduced AFE's on certain recent wells to approximately $9.5 million (before RockPile and other eliminations)
  • Completed 15 gross (9.9 net) operated wells and 21 gross (1.0 net) non-operated wells in Q2 fiscal 2015
  • RockPile generated approximately $102.1 million of stand-alone revenue in Q2 fiscal 2015 as compared to $44.3 million in Q2 fiscal 2014 (+130% y/y)
    • Completed 15 Triangle operated wells and 19 third-party wells in Q2 fiscal 2015 as compared to 8 Triangle operated wells and 10 third-party well in Q2 fiscal 2014 (+89% y/y)
    • Backlog of approximately 25 wells at the end of Q2 fiscal 2015, including 15 for third-party operators
    • RockPile's fourth pressure pumping spread is expected to be deployed during Q3 fiscal 2015

TUSA Supplemental Information

  • Current and prospective TUSA bondholders can request access to standalone TUSA financials through the "Investor Relations" section of the Company's website under the heading "TUSA Senior Notes"
  • Subsequent to Q2 fiscal 2015, on September 3, 2014, Triangle contributed $20 million of additional capital to TUSA for normal course budgeted capital expenditures, which would adjust TUSA standalone debt to annualized Q2 fiscal 2015 EBITDA from 2.1x (Q2 fiscal 2015) to 2.0x on a pro forma basis

Q2 Fiscal 2015 Summary Consolidated Statement of Operations (in thousands)

           

Three Months Ended July 31,

           

2014

 

2013

Revenues

               

Oil, natural gas and natural gas liquids sales

   

$    80,506

 

$    34,639

Oilfield services

       

61,483

 

15,755

Total Revenues

       

141,989

 

50,394

Expenses

               

Production taxes

       

8,677

 

3,919

Lease operating expenses

     

6,698

 

2,830

Gathering, transportation and processing

   

3,733

 

69

Oilfield services(a)

       

43,554

 

12,692

Depreciation and amortization

     

26,706

 

10,918

Accretion of asset retirement obligations

   

41

 

9

Corporate and Other stock-based compensation

1,336

 

1,092

E&P stock-based compensation

   

344

 

247

RockPile stock-based compensation

   

127

 

99

Corporate and Other cash G&A expenses

   

2,591

 

1,417

E&P cash G&A expenses

     

4,442

 

1,683

RockPile cash G&A expenses

     

5,251

 

2,446

Total operating expenses

     

103,500

 

37,421

                 

Operating Income

       

38,489

 

12,973

                 

Gain (loss) on equity investment derivatives

 

(7,534)

 

-

Gain (loss) from commodity derivative activities

(921)

 

(4,399)

Interest expense

       

(5,385)

 

(1,969)

Income (loss) from equity investment

   

190

 

(596)

Interest income

       

47

 

43

Other income

       

5

 

747

Total other income

       

(13,598)

 

(6,174)

                 

Net Income Before Income Taxes

     

24,891

 

6,799

Income tax provision(b)

     

(10,339)

 

-

Net Income

       

$    14,552

 

$      6,799

                 

Net Income per Common Share

           

Basic

         

$        0.17

 

$        0.12

Diluted(c)

       

$        0.15

 

$        0.12

                 

Adjusted Net Income per Common Share(d)

         

Basic

         

$        0.23

 

$        0.19

Diluted(c)

       

$        0.20

 

$        0.19

                 

Weighted Average Common Shares

         

Basic

         

86,172

 

56,451

Diluted

         

103,774

 

57,012

                 
                 

(a) Includes intercompany eliminations; reference Note 4 – Segment Reporting in our Q2 fiscal 2015 Form 10-Q for additional details.

(b) The effective tax rate for the three months ended July 31, 2014 is approximately 41.5%, which differs from the statutory income tax rate due to permanent book to tax differences. Income tax provision is primarily a non-cash expense, with a cash tax expense component of approximately $0.4 million.

(c) Includes net interest expense add-back of $1.0 million in Q2 fiscal 2015 related to outstanding convertible notes.

(d) Reference accompanying Reconciliation Tables and Use of Segment Information and Non-GAAP Measures at end of press release for additional detail.

Q2 Fiscal 2015 Summary Consolidated Balance Sheet (in thousands)

           

July 31, 2014

 

January 31, 2014

Assets

               

Cash and equivalents

     

$        107,527

 

$                 81,750

Other current assets

     

157,124

 

113,131

Net property and equipment

   

1,051,853

 

753,880

Other noncurrent assets

     

91,950

 

78,823

Total assets

       

$     1,408,454

 

$            1,027,584

                 

Liabilities and Stockholders' Equity

         

Current liabilities

       

$        191,323

 

$               159,368

5% convertible note

     

132,543

 

129,290

Long-term debt

       

499,470

 

205,067

Other noncurrent liabilities

   

31,631

 

10,697

Total stockholders' equity

     

553,487

 

523,162

Total liabilities and stockholders' equity

$     1,408,454

 

$            1,027,584

                 

 

Use of Segment Information and Non-GAAP Measures

(1)

The Company often provides financial metrics for Triangle's segments of operation. Revenues for each segment are disclosed in notes to the financial statements contained in the Company's Form 10-K and Form 10-Q filings, but the sum of those stand-alone revenues differ from Triangle's consolidated revenues for the corresponding reporting period. Triangle's consolidated revenues would reflect segment revenues reduced for intracompany sales (i.e. for RockPile services to Triangle's E&P segment).

   
 

 Triangle also believes that stand-alone segment revenue assists investors in measuring RockPile's and Caliber's performance as stand-alone companies without eliminating, on a consolidated basis, certain revenues attributable to services for Triangle's economic interests in wells operated by Triangle's E&P segment.

   

(2)

Adjusted-EBITDA represents income before interest expense, income taxes, depreciation and amortization, other non-cash items, and non-recurring items. Adjusted-EBITDA is not a calculation based upon generally accepted accounting principles in the U.S. ("GAAP"). Triangle has presented Adjusted-EBITDA by segment because it regularly reviews Adjusted-EBITDA by segment as a measure of the segment's operating performance. Triangle also believes Adjusted-EBITDA assists investors in comparing segment performance on a consistent basis without regard to interest expense, income taxes, depreciation and amortization, other non-cash items, and non-recurring items which can vary significantly depending upon many factors. 

   
 

The total of Adjusted-EBITDA by segment is not indicative of Triangle's consolidated Adjusted-EBITDA, which reflects other matters such as (i) additional parent administrative costs, (ii) intracompany eliminations, (iii) paid-in-kind interest expense on the convertible notes and (iv) the use of the equity method, rather than consolidation, for Triangle's investment in Caliber.  The Adjusted-EBITDA measures presented in the "Reconciliation Tables" may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.

   
 

We believe that net income before income taxes is the performance measure calculated and presented in accordance with GAAP that is most directly comparable to Adjusted-EBITDA. Net income before income taxes will be significantly affected by consolidated interest expense and full-cost pool amortization. Such amortization varies with changes in proved reserves, well costs during the year, and future plans in developing proved undeveloped reserves.

   

(3)

Adjusted net income (loss) is defined as net income (loss) applicable to common stockholders adjusted to exclude certain charges or amounts in order to provide users of this financial information with additional meaningful comparisons between current results and the results of prior periods. We present this measure because (i) it is consistent with the manner in which the Company's performance is measured relative to the performance of its peers, (ii) this measure is more comparable to earnings estimates provided by securities analysts, and (iii) charges or amounts excluded cannot be reasonably estimated and guidance provided by the company excludes information regarding these types of items. These adjusted amounts are not a measure of financial performance under GAAP. We believe that net income (loss) is the performance measure calculated and presented in accordance with GAAP that is most directly comparable to adjusted net income (loss).

About Triangle

Triangle (NYSE MKT: TPLM) is a vertically integrated, growth oriented energy company with a strategic focus on developing the Bakken Shale and Three Forks formations in the Williston Basin of North Dakota and Montana. For more information, visit Triangle's website at www.trianglepetroleum.com.

Conference Call Information

As previously announced, Triangle will host a conference call Tuesday, September 9, 2014 at 8:30 AM MT (10:30 AM ET) to provide an operational update and financial results of Triangle's Q2 fiscal 2015, followed immediately by a question and answer session. Interested parties may dial-in using the conference call number (877) 870-4263. International parties may dial-in using (412) 317-0790. The Company recommends dialing into the conference call at least ten minutes before the scheduled start time. A recording of the conference call will be available through September 17, 2014 at (877) 344-7529 (conference # 10051229). For international participants, the replay dial-in number is (412) 317-0088 (conference # 10051229).

Q2 Fiscal 2015 Segment Income and Elimination (in thousands)

 

 

   

Exploration and Production

   

RockPile's Pressure Pumping and Other Services

   

Corporate and Other(a)

   

 Eliminations and Other

   

Consolidated Total

Revenues

                           

Oil, natural gas and natural gas liquids sales

$

80,506

 

$

-

 

$

-

 

$

-

 

$

80,506

Oilfield services for third parties

 

-

   

64,093

   

-

   

(2,610)

   

61,483

Intersegment revenues

 

-

   

37,962

   

-

   

(37,962)

   

-

Other

 

-

   

-

   

272

   

(272)

   

-

Total revenues

 

80,506

   

102,055

   

272

   

(40,844)

   

141,989

                             

Expenses

                           

Prod. taxes, LOE, and other expenses

 

19,149

   

-

   

-

   

-

   

19,149

Depreciation and amortization

 

23,439

   

4,690

   

186

   

(1,609)

   

26,706

Cost of oilfield services

 

-

   

68,867

   

-

   

(25,313)

   

43,554

General and administrative

 

4,786

   

5,378

   

3,927

   

-

   

14,091

Total operating expenses

 

47,374

   

78,935

   

4,113

   

(26,922)

   

103,500

                             

Income (loss) from operations

 

33,132

   

23,120

   

(3,841)

   

(13,922)

   

38,489

Other income (expense), net

 

(4,267)

   

(667)

   

(7,580)

   

(1,084)

   

(13,598)

Net income (loss) before income taxes

$

28,865

 

$

22,453

 

$

(11,421)

 

$

(15,006)

(b)

$

24,891

                             

(a) Corporate and Other includes our corporate office and several subsidiaries that management does not consider to be part of the exploration and production or oilfield services segments.  Also included are our results from our investment in Caliber, including any changes in the fair value of our equity investment derivatives.  Other than our investment in Caliber, these subsidiaries have limited activity.

 

(b) $15.0 million RockPile, Caliber, and other services consolidated elimination results in a $15.0 million reduction in oil and natural gas property expenditures.

 

*Reference Note 4 – Segment Reporting in our Q2 fiscal 2015 Form 10-Q for additional details

Reconciliation Tables (in thousands)

 

 

a)  Consolidated Adjusted net income per common stockholder (reference disclosure (3) in "Use of Segment Information and Non-GAAP Measures")

                 
           

Q2 fiscal 2015

 

Q2 fiscal 2014

Net income attributable to common stockholders

 

$            14,552

 

$              6,799

Loss on equity investment derivatives

   

7,534

 

-

Loss on commodity derivatives

   

921

 

4,399

Loss on investment in marketable securities

 

-

 

(581)

Tax impact(a)

       

(3,512)

 

-

Adjusted net income

       

$            19,496

 

$            10,617

                 

Adjusted net income per common

           

Basic

         

$                0.23

 

$                0.19

Diluted(b)

         

$                0.20

 

$                0.19

                 

Weighted average common shares

           

Basic

         

86,172

 

56,451

Diluted

         

103,774

 

57,012

                 

(a) Tax impact is computed as pre tax-effected adjusting items multiplied by the Company's effective tax rate.

(b) Includes interest expense add-back of $1.0 million net of income taxes and amounts capitalized in Q2 fiscal year 2015 related to outstanding convertible notes.

 
   

b) 

E&P stand-alone Adjusted-EBITDA (reference disclosure (1) and (2) in "Use of Segment Information and Non-GAAP Measures")

               
         

Q2 fiscal 2015

 

Q1 fiscal 2015

Net income before income taxes

   

$          28,865

 

$          17,472

Depreciation and amortization

   

23,439

 

18,612

Net interest expense

     

3,351

 

1,113

Stock-based compensation

   

344

 

395

Accretion of asset retirement obligations

 

41

 

134

Loss on commodity derivatives

 

921

 

5,456

Settlements of commodity derivatives

 

(2,555)

 

(818)

Adjusted-EBITDA

     

$           54,407

 

$          42,365

 

c) 

RockPile stand-alone Adjusted-EBITDA (reference disclosure (1) and (2) in "Use of Segment Information and Non-GAAP Measures")

         

Q2 fiscal 2015

 

Q1 fiscal 2015

Net income before income taxes

   

$          22,453

 

$            8,437

Depreciation and amortization

   

4,690

 

3,590

Stock-based compensation

   

127

 

90

Net interest expense

     

564

 

507

Other

   

930

 

1,176

Adjusted-EBITDA

     

$          28,764

 

$          13,800

*RockPile Adjusted-EBITDA calculated as per RockPile credit facility

   
   
               
               

d)  

Caliber stand-alone Adjusted-EBITDA (reference disclosure (1) and (2) in "Use of Segment Information and Non-GAAP Measures")

         

Q2 fiscal 2015

 

Q1 fiscal 2015

Net income before income taxes

   

$                881

 

$                 51

Depreciation and amortization

   

510

 

231

Warrant amortization expense

   

171

 

56

Net interest expense

     

114

 

85

Net well connect fees billed(1)

   

588

 

266

Adjusted-EBITDA

     

$            2,264

 

$               689

               

*Caliber Adjusted-EBITDA represents Triangle's ownership share of the partnership, before intracompany elimination, which increased to 31.8% from 30% on June 30, 2014, resulting in a Q2 fiscal 2015 average ownership of 30.6%

(1) Well connect fees are recorded as deferred revenue when completed and amortized over the expected term of the underlying production for revenue recognition purposes. The adjustment to EBITDA represents well connect fees billed, net of revenue recognized during the period

 

Forward-Looking Statements Disclosure

The information presented in this press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements.  These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Factors that could cause actual results to differ materially from the results contemplated by the forward-looking statements include, but are not limited to, the risks discussed in the Company's annual report on Form 10-K and its other filings with the Securities and Exchange Commission. The forward-looking statements in this press release are made as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement as a result of new information, future developments, or otherwise.

Contact

Triangle Petroleum Corporation
Justin Bliffen, Chief Financial Officer
303-260-7125
info@trianglepetroleum.com

SOURCE Triangle Petroleum Corporation


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