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SEC Filings, Earing Reports, Press Releases
Goodrich Petroleum Corp. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: February 24, 2012 09:47AM
Goodrich Petroleum Corp. (GDP) filed Annual Report for the period ended 2011-12-31. Goodrich Petrol has a market cap of $660.8 million; its shares were traded at around $16.34 with and P/S ratio of 4.5.
Highlight of Business Operations:In accordance with the guidelines of the SEC, our independent reserve engineers estimates of future net revenues from our estimated proved reserves, and the PV-10 and standardized measure thereof, were determined to be economically producible under existing economic conditions, which requires the use of the 12-month average price for each product, calculated as the unweighted arithmetic average of the first-day-of-the-month price for the period January 2011 through December 2011, except where such guidelines permit alternate treatment, including the use of fixed and determinable contractual price escalations. For reserves at December 31, 2011, the average twelve month prices used were $4.12 per MMBtu of natural gas and $92.71 per Bbl of crude oil/condensate. These prices do not include the impact of hedging transactions, nor do they include the adjustments that are made for applicable transportation and quality differentials, and price differentials between natural gas liquids and oil, which are deducted from or added to the index prices on a well by well basis in estimating our proved reserves and related future net revenues.
Oil and natural gas revenues increased in 2011 compared to 2010. The increase in average realized sales price compared to 2010 contributed approximately $20.8 million to the increase in oil and natural gas revenue while the net production increase compared to 2010 contributed approximately $31.6 million to the increase in oil and natural gas revenue. Our average realized sales price was $5.01 per Mcfe in 2011 compared to $4.39 per Mcfe in 2010. Sales prices are dictated by the market. We increased production by the continued development of our Haynesville Shale and Eagle Ford Shale Trend assets. The drilling of 27 wells in Northwest Louisiana and East Texas, 19 of which were in the Haynesville Shale, resulted in the continued trend of annual natural gas production growth for the Company. The drilling of 20 South Texas wells, all of which were in the Eagle Ford Shale Trend, increased our oil production.
Oil and natural gas revenues increased in 2010 compared to 2009. The increase in average sales price compared to 2009 contributed approximately $20.0 million to the increase in oil and natural gas revenue while the net production increase compared to 2009 contributed approximately $17.2 million to the increase in oil and natural gas revenue. Our average realized sales price was $4.39 per Mcfe in 2010 compared to $3.72 per Mcfe in 2009. Sales prices are dictated by the market. We increased production by the development of our Haynesville Shale assets. The drilling and completion of 40 wells in our Northwest Louisiana and East Texas properties, 36 of which were in the Haynesville Shale, resulted in annual natural gas production growth for the Company.
Operating activities. Production from our wells, the price of oil and natural gas and operating costs represent the main drivers behind our cash flow from operations. Changes in working capital also impact cash flows. Net cash provided by operating activities increased $35.9 million this year. Cash received related to oil and natural gas revenue increased $47.2 million year over year with (i) a 19% increase in total production, (ii) growth in oil volumes as a percentage of total volumes from 3% in 2010 to 10% in 2011, and (iii) a 14% increase in the average realized sales price from $4.39 to $5.01 per Mcfe. Operating costs savings of $7.9 million in 2011 as compared to 2010 and $7.9 million in additional realized cash settlements on our derivative contracts were also additive to cash flow from operations. Offsetting decreases to cash flow in 2011 include (i) $17.2 million in additional cash interest paid in 2011 as we replaced $175 million of our 3.25% Convertible Senior Notes due 2026 with $275 million of our 8.875% 2019 Notes and (ii) $9.9 million in working capital changes.
Operating activities. Net cash provided by operating activities was $100.4 million, an increase of $15.1 million, or 13%, from $115.6 million in 2009. Our operating revenues increased 34% in 2010 with an 18% decrease in commodity prices and an increase in average daily production of 13% as compared to 2009. The cash flow decrease was primarily the result of receiving $24.6 million in natural gas derivative settlements in 2010 compared to having received $98.0 million for settlements of natural gas derivatives in 2009.
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