Friday, oil and natural gas company GMX Resources Inc. (GMXR) 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.
Looking ahead, the company expects production for the fourth quarter of 2009 to range between 3.50 billion cubic feet equivalent or Bcfe and 3.75 Bcfe. Production guidance for 2010 and 2011 is estimated to be 17 Bcfe and 25 Bcfe, respectively, under a three rig drilling program. Under a four rig drilling program, production is estimated to be 19 Bcfe and 30 Bcfe for 2010 and 2011, respectively.
For 2010, the company expects capital expenditure guidance ranges from $190 million for a three H/B Hz rig drilling program to $220 million if the fourth contracted rig begins H/B Hz drilling in late March 2010 as scheduled. For 2011, capital expenditure guidance ranges from $200 million to $245 million for a three and four rig program, respectively.
GMXR closed Thursday's regular trading session at $12.49.
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