GMX Resources Slips To Loss In Q3

11/6/2009 8:23 AM ET

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(RTTNews) - Friday, oil and natural gas company GMX Resources Inc. (GMXR: News ) reported a net loss for the third quarter, compared to a profit last year, as sales declined 37%, largely due to oil and natural gas deflation. The company also updated guidance for 2009 through 2011.

Net loss for the quarter was $2.8 million or $0.19 per share compared with net income of $9.6 million or $0.50 per share in the corresponding period last year.

Net loss applicable to common stock was $3.94 million or $0.19 per share compared with net income of $8.5 million or $0.50 per share in the year-ago period.

Adjusted net income available to common shareholders, which excludes unrealized derivative losses of and income tax valuation allowances was $1.6 million or $0.08 per share. On average, fourteen analysts polled by Thomson Reuters expected the company to report earnings of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.

Oil and gas sales plunged 37% to $23.1 million from $36.4 million in the year-ago period due to a 36% decrease in the average realized price of oil and natural gas, net of hedging activities. Ten Street analysts had a sales consensus estimate of $22.38 million for the quarter.

Production of oil declined 45% to 28 thousand barrels or Mbbls from 51 Mbbls in the year-ago period. Natural gas production increased to 3,322 million cubic feet or Mmcf from 3,204 MMcf a year earlier. Average daily production declined to 37.9 million cubic feet or Mmcfe from 38.2 Mmcfe in the same period last year.

Average Selling price of oil declined to $80.8 per barrel from $99.8 per barrel in the prior year period. Natural gas average selling price declined to $6.26 from $9.76 in the same period last year. Average sales price per thousand cubic feet equivalent Mcfe declined $6.61 from $10.36 a year earlier.

Due to cost reductions initiatives, during the quarter both lease operating expenses and general and administrative expenses on a per Mcfe basis decreased. Lease operating expenses declined 5% to $0.78 per Mcfe from $0.82 per Mcfe in the second quarter of 2009. General and administrative expenses of $1.38 per Mcfe, decreased 14% from $1.61 per Mcfe in the second quarter of 2009.

Year-to-date, net loss was $135.4 million or $7.60 per share compared with net income of $28.2 million or $1.62 per share in the year-ago period. Adjusted net income available to common shareholders, was $3.7 million, or $0.20 per share. Sales declined to $68.7 million from $101.6 million a year earlier.