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Goodrich Petroleum Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 5, 2010 03:33PM

Goodrich Petroleum Corp. (GDP) filed Quarterly Report for the period ended 2010-06-30. Goodrich Petroleum Corp. has a market cap of $498.5 million; its shares were traded at around $13.27 with and P/S ratio of 4.5.

GDP is in the portfolios of Arnold Schneider of Schneider Capital Management, Chuck Royce of Royce& Associates, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

In April 2010, we acquired an average 70% leasehold interest in approximately 50,000 gross (35,000 net) acres within the oil window of the Eagle Ford Shale play in La Salle and Frio Counties, Texas. The purchase price equates to an average of $1,675 per net acre, with approximately $15.0 million in upfront cash and the option to drill to earn the full interest through $44.0 million in carried drilling costs. In light of this acquisition, we are maintaining our 2010 capital expenditure budget of $255.0 million, while reallocating approximately $50.0 million, or about 20% of our total capital expenditure budget, to leasehold, drilling and completion costs associated with the Eagle Ford Shale oil play.

For the three months ended June 30, 2010, we reported a net loss applicable to common stock of $23.1 million, or $0.64 per basic and diluted share, on total revenue of $34.2 million as compared to a net loss applicable to common stock of $36.5 million, or $1.02 per basic and diluted share, on total revenue of $26.3 million for the three months ended June 30, 2009. The rise in average oil and gas prices period to period contributed $4.1 million and the increase in production contributed $3.7 million to the $7.8 million increase in oil and gas revenues as compared to the three months ended June 30, 2009. We recorded a $0.3 million gain on derivatives not designated as hedges in the three months ended June 30, 2010 compared to a $2.6 million gain on derivatives not designated as hedges for the three months ended June 30, 2009. The decrease in the derivative gain between periods is due to the increase in oil and gas prices. We increased our valuation allowance in the three months ended June 30, 2010, resulting in our recording no income tax benefit for the period compared to a tax benefit of $21.5 million in the three months ended June 30, 2009.

For the six months ended June 30, 2010, we reported a net loss applicable to common stock of $20.3 million, or $0.57 per basic and diluted share, on total revenue of $74.6 million as compared to a net loss applicable to common stock of $34.9 million, or $0.97 per basic and diluted share, on total revenue of $54.7 million for the six months ended June 30, 2009. The rise in average oil and gas prices period to period increased oil and gas revenues by approximately $10.4 million and the production increase contributed approximately $9.4 million to the increase of $19.8 million in oil and gas revenues. Due to favorable terms on our hedges verses market prices, we recorded a $35.0 million gain on derivatives not designated as hedges in the six months ended June 30, 2010 compared to a $39.6 million gain on derivatives not designated as hedges for the six months ended June 30, 2009. We did not record any income tax benefit in the six months ended June 30, 2010 compared to an income tax benefit of $20.2 million for the six months ended June 30, 2009, as we increased our valuation allowance in the fourth quarter of 2009.

For the three months ended June 30, 2010, our average realized price was $4.82 per Mcf including the effect of the realized gains and losses on our natural gas derivatives. Our average realized price was $3.88 per Mcf, excluding the effect of the realized gains and losses on our natural gas derivatives. For the three months ended June 30, 2009, our average realized price was $7.09 per Mcf including the effect of the realized gains and losses on our natural gas derivatives. Our average realized price was $3.33 per Mcf, excluding the effect of the realized gains and losses on our natural gas derivatives.

For the six months ended June 30, 2010, our average realized price was $4.95 per Mcf including the effect of the realized gains and losses on our natural gas derivatives. Our average realized price was $4.36 per Mcf, excluding the effect of the realized gains and losses on our natural gas derivatives. For the six months ended June 30, 2009, our average realized price was $7.21 per Mcf including the effect of the realized gains and losses on our natural gas derivatives. Our average realized price was $3.70 per Mcf, excluding the effect of the realized gains and losses on our natural gas derivatives.

The difference between our realized prices inclusive of the hedge realizations in the 2010 and 2009 periods relates to the floor price on our collars. In 2010, we had 50,000 MMBtu per day hedged at a floor price of $6.00 per MMBtu and in 2009, we had 60,000 MMBtu per day hedged at an average of $8.48 per MMbtu. Additionally we did not have any basis swap contract positions in 2009 where in 2010 we had realized losses on these contracts of $1.1 million and $2.3 million for the three and six months ended June 30, 2010, respectively.

Read the The complete Report



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