Revenue and Production
Revenue for the fourth quarter totaled
Costs and Expenses
Direct lease operating expenses, for the fourth quarter totaled
DD&A expense was
Earnings
Net loss totaled
2008 Capital, Year End Reserves and 2009 Budget
Total capital expended in 2008 was
Year end 2008 reserves, as prepared by DeGoyler and MacNaughton, were 8.2 million barrels of oil and 83.8 billion cubic feet of gas or 133 Bcfe. This compares to 175.3 Bcfe at year-end 2007. During 2008 we sold 32.1 Bcfe of Barnett Shale reserves, produced 12.8 Bcfe including 1.4 Bcfe from the Barnett, added 13.5 Bcfe through extensions and discoveries and recorded an 11.0 Bcfe negative revision.
For 2009 the board initially approved a
FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning estimates of expected drilling and development wells and associated costs, statements relating to estimates of, and increases in, production, cash flows and values, statements relating to the continued advancement of Dune Energy, Inc.'s projects and other statements which are not historical facts. When used in this document, the words such as 'could,' 'plan,' 'estimate,' 'expect,' 'intend,' 'may,' 'potential,' 'should,' and similar expressions are forward-looking statements. Although Dune Energy, Inc. believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that the Company's projects will experience technological and mechanical problems, geological conditions in the reservoir may not result in commercial levels of oil and gas production, changes in product prices and other risks disclosed in Dune's Annual report on Form 10-K filed with the U.S. Securities and Exchange Commission.
Dune Energy, Inc.
Consolidated Balance Sheets
December 31,
------------
2008 2007
---- ----
ASSETS
Current assets:
Cash $15,491,532 $16,771,726
Accounts receivable, net of reserve
for doubtful accounts of $396,629 and
$396,629 14,477,918 31,474,433
Assets held for sale - 76,492,464
Prepayments and other current assets 6,910,422 6,764,741
Derivative assets 4,015,219 837,664
------------ -----------
Total current assets 40,895,091 132,341,028
------------ -----------
Oil and gas properties, using
successful efforts accounting - proved 578,074,569 518,036,814
Less accumulated depreciation,
depletion, amortization and
impairment (222,876,172) (41,529,191)
------------ -----------
Net oil and gas properties 355,198,397 476,507,623
------------ -----------
Property and equipment, net of
accumulated depreciation
of $1,406,927 and $416,324 2,086,313 2,632,400
Deferred financing costs, net of
accumulated amortization
of $970,068 and $371,353 1,621,657 2,220,372
Deposit - related party - 500,000
Other assets 2,250,868 2,229,723
------------ ------------
TOTAL ASSETS $402,052,326 $616,431,146
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $21,662,965 $56,648,904
Accrued liabilities 20,038,900 30,948,966
Current debt 2,013,699 2,053,691
Preferred stock dividend payable 2,446,985 1,899,330
Derivative liabilities - 4,131,078
------------ ------------
Total current liabilities 46,162,549 95,681,969
Long-term debt, net of discount of
$10,393,213 and $12,755,924 289,606,787 287,244,076
Deferred taxes - 29,929,436
Other long-term liabilities 15,732,483 16,762,462
------------ ------------
Total liabilities 351,501,819 429,617,943
------------ ------------
Commitments and contingencies - -
Redeemable convertible preferred
stock, net of discount of
$9,179,927 and $10,943,172,
liquidation preference of $1,000
per share, 750,000 shares
designated, 236,805 and 227,918
shares issued and outstanding 227,625,073 216,974,828
STOCKHOLDERS' DEFICIT
Preferred stock, $.001 par value,
1,000,000 shares authorized,
250,000 shares undesignated, no shares
issued and outstanding - -
Common stock, $.001 par value,
300,000,000 shares authorized,
96,129,047 and 79,258,174 shares
issued and outstanding 96,129 79,258
Treasury stock, at cost (34,009 and
0 shares) 8,332 -
Additional paid-in capital 50,139,148 56,079,580
Accumulated other comprehensive loss (3,709,177) (3,831,228)
Accumulated deficit (223,608,998) (82,489,235)
------------ -----------
Total stockholders' deficit (177,074,566) (30,161,625)
------------ -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $402,052,326 $616,431,146
============ ============
Dune Energy, Inc.
Consolidated Statements of Operations
For the Year Ended December 31,
-------------------------------
2008 2007 2006
---- ---- ----
(As adjusted)
Revenues $146,599,698 $71,199,940 $3,360,066
------------ ------------ ------------
Operating expenses:
Lease operating
expense and
production taxes 43,501,273 28,603,072 768,054
Exploration expense 114,950 383,391 2,024,431
Accretion of asset
retirement obligation 911,012 887,344 24,848
Depletion,
depreciation and
amortization 56,692,441 29,871,772 3,430,909
General and
administrative expense 18,470,758 22,140,782 4,823,582
Bad debt expense - 396,629 -
Loss on impairment of
investment - 3,192,250 -
Impairment of oil and
gas properties 125,694,000 - 6,911,697
------------ ------------ ------------
Total operating expense 245,384,434 85,475,240 17,983,521
------------ ------------ ------------
Operating loss (98,784,736) (14,275,300) (14,623,455)
------------ ------------ ------------
Other income(expense):
Interest income 501,591 1,672,459 217,405
Interest expense (35,022,056) (31,070,721) (6,730,450)
Other expense - - (494,458)
Gain (loss) on
derivative liabilities 4,071,507 (1,896,644) (33,733)
------------ ------------ ------------
Total other
income(expense) (30,448,958) (31,294,906) (7,041,236)
------------ ------------ ------------
Loss from continuing
operations before income
taxes (129,233,694) (45,570,206) (21,664,691)
Income tax benefit 20,505,873 15,949,572 -
------------ ------------ ------------
Loss from continuing
operations (108,727,821) (29,620,634) (21,664,691)
------------ ------------ ------------
Discontinued operations:
Income (loss) from
operations of Barnett
Shale Properties
(including impairment of
$43,895,525 in 2008 and
$24,499,632 in 2006) (41,815,505) 1,876,966 (23,890,677)
Income tax benefit
(expense) 9,423,563 (656,938) -
------------- ------------ ------------
Income (loss) on
discontinued operations (32,391,942) 1,220,028 (23,890,677)
------------- ------------ ------------
Net loss (141,119,763) (28,400,606) (45,555,368)
Preferred stock dividend (100,597,155) (15,196,346) -
------------- ------------ ------------
Net loss available to
common shareholders $(241,716,918) $(43,596,952) $(45,555,368)
============= ============ ============
Net loss per share:
Basic and diluted from
continuing operations $(2.36) $(0.62) $(0.37)
Basic and diluted
from discontinued
operations (0.36) 0.02 (0.41)
------------- ------------ -------------
Total basic and diluted $(2.72) $(0.60) $(0.78)
============= ============ =============
Weighted average shares
outstanding:
Basic and diluted 88,818,086 72,083,522 58,583,932
Dune Energy, Inc.
Consolidated Statements of Cash Flows
For the Year Ended December 31,
2008 2007 2006
---- ---- ----
(As adjusted)
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $(141,119,763) $(28,400,606) $(45,555,368)
Adjustments to reconcile
net loss to net cash
used in operating
activities:
Loss (income) from
discontinued
operations 32,391,942 (1,220,028) 23,890,677
Depletion,
depreciation and
amortization 56,692,441 29,871,772 3,430,909
Amortization of
deferred financing
costs and debt discount 2,961,426 7,030,353 2,148,282
Stock-based
compensation 5,282,671 8,071,142 1,324,714
Realized gain on
sale of investment (146,210)
Loss on impairment of
investment - 3,192,250 -
Impairment of oil and
gas properties 125,694,000 - 6,911,697
Exploration expense 114,950 383,390 2,024,431
Bad debt expense - 396,629 -
Accretion of asset
retirement obligation 911,012 887,344 24,848
Loss (gain) on
derivative liabilities (13,358,724) 2,948,403 33,733
Deferred tax benefit (20,505,873) (15,949,572) -
Changes in:
Accounts receivable 16,082,845 (10,339,830) (2,253,961)
Prepayments and
other assets (2,448,783) (2,297,871) (27,515)
Payments made to
settle asset
retirement
obligations (1,208,920) - -
Accounts payable
and accrue
liabilities (45,146,857) 51,364,642 3,431,762
----------- ---------- ----------
NET CASH PROVIDED BY
(USED IN) CONTINUING
OPERATIONS 16,196,157 45,938,018 (4,615,791)
NET CASH PROVIDED BY
DISCONTINUED OPERATIONS 7,304,552 8,269,090 2,977,414
----------- ---------- ----------
NET CASH PROVIDED BY
(USED IN) OPERATING
ACTIVITIES 23,500,709 54,207,108 (1,638,377)
----------- ---------- ----------
CASH FLOWS FROM
INVESTING ACTIVITIES
Acquisition of
Goldking, net of
$1,155,720 cash received - (309,344,280) -
Investment in proved
and unproved properties (52,750,005) (105,357,440) (4,526,017)
Deposits 500,000
Proceeds from sale of
investment 424,098
Purchase of furniture
and fixtures (546,886) (1,114,340) (23,640)
Increase in other assets (21,145) (72,034) (500,000)
Increase in deposit -
related party - - (500,000)
----------- ------------ -----------
NET CASH USED IN
INVESTING ACTIVITIES -
CONTINUING OPERATIONS (52,393,938) (415,888,094) (5,549,657)
NET CASH USED IN
INVESTING ACTIVITIES -
DISCONTINUED OPERATIONS 27,653,027 (47,246,404) (32,802,273)
----------- ------------ -----------
NET CASH USED IN
INVESTING ACTIVITIES (24,740,911) (463,134,498) (38,351,930)
----------- ------------ -----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from
convertible preferred stock - 203,677,812 -
Proceeds from long-term debt 28,100,000 356,909,062 37,101,223
Proceeds from short-term debt 2,589,057 3,038,007 -
Proceeds from sale of
common stock, net - - 22,103,232
Proceeds from
exercise of options - - 100,000
Payment on long-term
debt issuance costs - (6,286,413) (993,563)
Payment on preferred
stock issuance costs - (1,053,156)
Payments on long-term debt (28,100,000) (104,771,263) (18,500,000)
Payments on long-term
debt -related parties - (27,423,932) -
Payments on short-term debt (2,629,049) (1,965,706) -
----------- ------------ -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES (39,992) 422,124,411 39,810,892
----------- ------------ -----------
NET CHANGE IN CASH BALANCE (1,280,194) 13,197,021 (179,415)
Cash balance at
beginning of period 16,771,726 3,574,705 3,754,120
----------- ------------ -----------
Cash balance at end
of period $15,491,532 $16,771,726 $3,574,705
=========== ============ ===========
SUPPLEMENTAL DISCLOSURES
Interest paid $32,060,629 $21,340,567 $2,150,597
Income taxes paid - - -
NON-CASH DISCLOSURES
Common stock issued for
conversion of debt $ - $2,692,250 $ -
Common stock issued for
purchase of Goldking - 18,000,000 -
Redeemable convertible
preferred stock
dividends 98,833,909 13,817,330 -
Asset retirement
obligation revision 7,402,701 2,736,914 273,719
Deferred taxes
associated with
acquisition - 45,222,070 -
Accretion of discount on
preferred stock 1,763,246 1,379,016 -
Purchase price
adjustment for asset
retirement obligation - 1,418,557 -
Common stock issued
for conversion of
preferred stock 16,441,000 - -
Common stock issued for
cashless exercise of
options 59 73 -
SOURCE Dune Energy, Inc.
