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Goodrich Petroleum Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 8, 2012 12:23PM
Goodrich Petroleum Corp. (GDP) filed Quarterly Report for the period ended 2012-03-31. Goodrich Petrol has a market cap of $617.2 million; its shares were traded at around $14.29 with and P/S ratio of 3.1.
Highlight of Business Operations:Increase our oil production. During the past year, we have concentrated on increasing our crude oil production and reserves by investing and drilling in the Eagle Ford Shale Trend. We intend to take advantage of the current favorable sales price of oil compared to the relative sales price of natural gas. We increased our oil production as a percentage of total production from 5% at March 31, 2011 to 15% at March 31, 2012.
For the three months ended March 31, 2012, we reported net loss applicable to common stock of $19.2 million, or $0.53 per basic and diluted share, on total revenue of $45.3 million as compared to a net loss applicable to common stock of $24.7 million, or $0.68 per basic and diluted share, on total revenue of $41.2 million for the three months ended March 31, 2011. The increase in average realized sales price contributed approximately $6.1 million to the increase in oil and natural gas revenue partially offset by a negative impact of approximately $1.6 million related to the decreased production volumes as compared to the three months ended March 31, 2011. We recorded a $9.4 million gain on derivatives not designated as hedges in the three months ended March 31, 2012, compared to a $10.0 million loss on derivatives not designated as hedges for the three months ended March 31, 2011.
Revenues from operations increased for the three months ended March 31, 2012 compared to the same period in 2011 as a result of a 15% net increase in average realized sales price, partially offset by a 4% decrease in daily production. The production decrease in the three month period ended March 31, 2012 compared to the same period in 2011 was caused by a decrease in natural gas production. In response to depressed natural gas prices, we continue to focus our resources on increasing oil production, which we are currently able to sell at a more favorable relative price. For the three months ended March 31, 2012, 51% of our oil and natural gas revenue was attributable to oil revenue versus 18% for the three months ended March 31, 2011.
Transportation expense increased in the first quarter 2012 compared to the same period in 2011, partially as a result of higher transportation costs related to our gas production from the Eagle Ford Shale Trend wells but more predominately related to the renegotiation of certain natural gas gathering and processing contracts where in return for paying higher transportations cost we are receiving pricing with a natural gas liquids uplift thereby increasing our revenues.
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 $24.0 million for the three months ended March 31, 2012 compared to the same period in 2011. Cash received related to oil and natural gas revenue increased $10.5 million in the first quarter 2012 compared to the first quarter 2011 due to (i) growth in oil volumes as a percentage of total volumes from 5% in 2011 to 15% in 2012, and (ii) a 15% increase in the average realized sales price from $4.51 to $5.18 per Mcfe. Also additive to cash flow from operations was $8.7 million in additional realized cash settlements on our derivative contracts and $14.4 million in working capital changes. Offsetting decreases to cash flow in the first quarter of 2012 include (i) operating costs increased of $6.0 million in 2012 as compared to 2011 and (ii) $3.6 million in additional cash interest paid in 2012 as we replaced $175 million of our 2026 Notes with $275 million of our 2019 Notes and increased borrowing from our Senior Credit Facility.
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