Goodrich Petroleum Corp. (GDP) filed Quarterly Report for the period ended 2010-03-31.
Goodrich Petroleum Corp. has a market cap of $602.1 million; its shares were traded at around $16.05 with and P/S ratio of 5.5. GDP is in the portfolios of John Keeley of Keeley Fund Management, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:In April 2010, we entered into agreements to acquire 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 million in upfront cash and the option to drill to earn the full interest through $44 million in carried drilling costs. The transactions are subject to customary due diligence. In light of this acquisition, we are maintaining our 2010 capital expenditure budget of $255 million, while reallocating approximately $50 million, or about 20% of its capital expenditure budget, to leasehold, drilling and completion costs associated with the Eagle Ford Shale oil play. We currently plan to spud our first Eagle Ford Shale well in the second quarter and to run one or two rigs during the second half of 2010.
For the first quarter of 2010, we reported net income applicable to common stock of $2.8 million, or $0.08 per basic and diluted share, on total revenue of $40.4 million as compared to net income applicable to common stock of $1.6 million, or $0.05 per basic and diluted share, on total revenue of $28.5 million for the first quarter of 2009. In conjunction with the fall of natural gas prices during the first quarter of 2010, we recorded a $34.7 million gain on commodity derivatives not designated as hedges. This includes a realized gain of $1.6 million and an unrealized gain of $33.1 million. See discussions below under the caption Gain (Loss) on Derivatives Not Designated as Hedges.
Production and Other Taxes. Production and other taxes of $1.0 million for the first quarter of 2010 includes production tax of $0.5 million and ad valorem tax of $0.5 million. Production tax included $0.5 million of accrued Tight Gas Sands (TGS) credits and horizontal credits for our wells in the states of Texas and Louisiana. During the comparable period in 2009, production and other taxes were $1.5 million, which included production tax of $0.8 million and ad valorem tax of $0.7 million. Production tax in the first quarter of 2009 included $0.4 million in TGS credits.
Exploration. Exploration expenses for the first quarter of 2010 increased $0.8 million to $3.0 million compared to $2.2 million for the same period in 2009. Included in the first quarter of 2010 is $0.5 million in exploratory seismic cost, mostly related to our ongoing 3-D seismic program in the Angelina River area. On a per unit basis, exploration cost increased to $0.37 per Mcfe in the first quarter of 2010 from $0.33 per Mcfe in the same period in 2009.
General and Administrative. General and Administrative (G&A) expense increased $2.3 million to $9.4 million ($1.18 per Mcfe) for the first quarter of 2010, from $7.1 million ($1.04 per Mcfe) for the first quarter of 2009. The first quarter of 2010 included $0.9 million of compensation costs related to the resignation of an officer of the company. See Note 2 Resignation of Executive Officer to our consolidated financial statements in this report for more information. This amount includes non-cash charges of $0.3 million and $0.4 million for the accelerated vesting or modification of restricted stock and stock options, respectively. This charge also includes $0.2 million for a consulting agreement. G&A expense for the first quarter of 2010 also includes $0.9 million for additional 2009 compensation paid out in March 2010. The remaining increase is related to generally higher compensation cost and stock based compensation. Stock based compensation expense, a non-cash item, amounted to $2.5 million for the first quarter of 2010 compared to $1.6 million for the same period in 2009.
Gain (Loss) on Derivatives Not Designated as Hedges. Gain on derivatives not designated as hedges was $34.7 million for the first quarter of 2010, including a realized gain of $1.6 million and an unrealized gain of $33.1 million for the change in fair value of our natural gas commodity contracts. The decrease in natural gas prices experienced during the first quarter of 2010 led to substantial unrealized gains on our commodity contracts. The first quarter 2010 gain also included a realized loss of $0.6 million and an unrealized gain of $0.5 million on our interest rate swap. As a comparison, the first quarter 2009 loss on derivatives not designated as hedges was $37.0 million including a realized gain of $21.1 million and an unrealized gain of $16.0 million for the changes in fair value of our commodity contracts. The first quarter of 2009 also includes a loss of $0.1 million on our interest rate swap. We will continue to be exposed to volatility in earnings resulting from changes in the fair value of our commodity contracts as we do not designate these contracts as hedges.
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