<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 000-22433
BRIGHAM EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1311 75-2692967
(State of other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
6300 Bridgepoint Parkway
Bldg. 2, Suite 500
Austin, Texas 78730
(512) 427-3300
(Name, address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X . No .
----- -----
As of October 31, 1997, 12,253,574 shares of Common Stock, $.01 per share, were
outstanding.
================================================================================
<PAGE> 2
BRIGHAM EXPLORATION COMPANY
INDEX
<TABLE>
<CAPTION>
PAGE
PART I. FINANCIAL INFORMATION: NUMBER
------
<S> <C> <C>
Item 1. Unaudited Condensed Consolidated Financial Statements
a) Balance Sheets - December 31, 1996 and
September 30, 1997 1
b) Statements of Operations - Three and nine months ended
September 30, 1996 and 1997 2
c) Statements of Cash Flows - Nine months ended
September 30, 1996 and 1997 3
d) Statement of Changes in Stockholders' Equity -
September 30, 1997 4
e) Notes to Consolidated Financial Statements 5 - 7
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 8 - 10
PART II. OTHER INFORMATION:
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11 - 12
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
BRIGHAM EXPLORATION COMPANY
UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
December 31, September 30,
1996 1997
----------------- ------------------
(Predecessor) (Company)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,447 $ 5,410
Accounts receivable 2,696 3,738
Prepaid expenses 152 402
----------------- ------------------
Total current assets 4,295 9,550
----------------- ------------------
Natural gas and oil properties, at cost, net 28,005 51,774
Other property and equipment, at cost, net 532 1,171
Drilling advances paid 419 384
Other noncurrent assets 363 183
================= ==================
$ 33,614 $ 63,062
================= ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,937 $ 2,777
Accrued drilling costs 915 4,237
Participant advances received 1,137 3,416
Other current liabilities 628 554
----------------- ------------------
Total current liabilities 5,617 10,984
----------------- ------------------
Notes payable 8,000 8,000
Subordinated notes payable - related party 16,000 -
Other noncurrent liabilities 753 268
Deferred income tax liability - 4,803
Stockholders' equity:
Predecessor capital 3,244 -
Preferred stock, $.01 par value, 10 million shares
authorized, none issued and outstanding - -
Common stock, $.01 par value, 30 million shares
authorized, 12,253,574 issued and outstanding - 123
Additional paid-in capital - 40,559
Unearned stock compensation - (1,501)
Accumulated deficit - (174)
----------------- ------------------
Total stockholders' equity 3,244 39,007
----------------- ------------------
$ 33,614 $ 63,062
================= ==================
</TABLE>
See accompanying notes to the unaudited condensed
consolidated financial statements.
1
<PAGE> 4
BRIGHAM EXPLORATION COMPANY
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
-------------------------------- --------------------------------
1996 1997 1996 1997
-------------- -------------- -------------- --------------
(Predecessor) (Company) (Predecessor) (Company)
<S> <C> <C> <C> <C>
Revenues:
Natural gas and oil sales $ 1,509 $ 2,097 $ 4,244 $ 5,951
Workstation revenue 166 133 458 457
-------------- -------------- -------------- --------------
1,675 2,230 4,702 6,408
-------------- -------------- -------------- --------------
Costs and expenses:
Lease operating 169 317 525 787
Production taxes 92 120 247 339
General and administrative 482 995 1,535 2,450
Amortization of stock compensation - 86 - 201
Depletion of natural gas and oil properties 622 713 1,919 2,108
Depreciation and amortization 123 59 368 231
-------------- -------------- -------------- --------------
1,488 2,290 4,594 6,116
-------------- -------------- -------------- --------------
Operating income (loss) 187 (60) 108 292
-------------- -------------- -------------- --------------
Other income (expense):
Interest income 14 41 39 122
Interest expense (122) (87) (223) (459)
Interest expense - related party (200) - (600) (173)
-------------- -------------- -------------- --------------
(308) (46) (784) (510)
-------------- -------------- -------------- --------------
Net loss before income taxes (121) (106) (676) (218)
Income tax benefit (expense):
Income tax provision - 10 - 197
Deferred income tax charge - - - (5,000)
============== ============== ============== ==============
Net loss $ (121) $ (96) $ (676) $ (5,021)
============== ============== ============== ==============
Net loss per common share $ (0.01)
==============
Weighted average number of common
shares outstanding 12,495
==============
Unaudited pro forma information:
Pro forma net loss $ (54) $ (380) $ (5,021)
============== ============== ==============
Pro forma, as adjusted, net loss $ (54) $ (380) $ (21)
============== ============== ==============
Pro forma net loss
per common share $ (0.01) $ (0.04) $ (0.46)
============== ============== ==============
Pro forma, as adjusted, net loss
per common share $ (0.01) $ (0.04) $ (0.00)
============== ============== ==============
Pro forma weighted average number of
common shares outstanding 9,170 9,170 10,928
============== ============== ==============
</TABLE>
See accompanying notes to the unaudited condensed
consolidated financial statements.
2
<PAGE> 5
BRIGHAM EXPLORATION COMPANY
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Nine Nine
Months Ended Months Ended
September 30, September 30,
1996 1997
----------------- ------------------
(Predecessor) (Company)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (676) $ (5,021)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depletion of natural gas and oil properties 1,919 2,108
Depreciation and amortization 368 231
Amortization of stock compensation - 201
Changes in working capital and other items 2,444 5,391
----------------- ------------------
Net cash provided by operating activities 4,055 2,910
----------------- ------------------
Cash flows from investing activities:
Additions to natural gas and oil properties (7,957) (22,325)
Proceeds from the sale of natural gas and oil properties 2,149 -
Additions to other property and equipment (34) (456)
(Increase) decrease in drilling advances paid (684) 35
----------------- ------------------
Net cash used by investing activities (6,526) (22,746)
----------------- ------------------
Cash flows from financing activities:
Proceeds from issuance of common stock - 23,927
Increase in notes payable 5,600 13,250
Repayment of notes payable - (13,250)
Principal payments on capital lease obligations (199) (128)
----------------- ------------------
Net cash provided by financing activities 5,401 23,799
----------------- ------------------
Net increase in cash and cash equivalents 2,930 3,963
Cash and cash equivalents, beginning of period 1,802 1,447
================= ==================
Cash and cash equivalents, end of period $ 4,732 $ 5,410
================= ==================
</TABLE>
See accompanying notes to the unaudited condensed
consolidated financial statements.
3
<PAGE> 6
BRIGHAM EXPLORATION COMPANY
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands, except share data)
<TABLE>
<CAPTION>
Common Stock Additional Unearned
----------------------- Paid-in Stock Accumulated Predecessor
Shares Amounts Capital Compensation Deficit Capital Total
------------ -------- ----------- ------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, - $ - $ - $ - $ - $ 3,244 $ 3,244
December 31, 1996
Consummation of
the Exchange 8,928,574 90 19,580 - - (3,244) 16,426
Issuance of stock
options - - 1,932 (1,932) - - -
Issuance of common
stock 3,325,000 33 23,894 - - - 23,927
Net loss for
period ended
February 27, 1997 - - (4,847) - - - (4,847)
Net loss for
period from
February 27, 1997
to September 30, 1997 - - - - (174) - (174)
Amortization of
unearned stock
compensation - - - 431 - - 431
----------- --------- ----------- ------------- ------------- ----------- -----------
Balance,
September 30, 1997 12,253,574 $ 123 $ 40,559 $ (1,501) $ (174) $ - $ 39,007
=========== ========= =========== ============= ============= =========== ===========
</TABLE>
See accompanying notes to the unaudited condensed
consolidated financial statements.
4
<PAGE> 7
BRIGHAM EXPLORATION COMPANY
NOTES TO THE UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Nature of Operations
Brigham Exploration Company (the "Company") is a Delaware corporation
formed on February 25, 1997 for the purpose of exchanging its common
stock for the common stock of Brigham, Inc. and the partnership interests
of Brigham Oil & Gas, L.P. (the "Partnership"). Brigham, Inc. is a Texas
corporation whose only asset is its ownership interest in the
Partnership. The Partnership was formed in May 1992 to explore and
develop onshore domestic natural gas and oil properties using 3-D seismic
imaging and other advanced technologies. Since its inception, the
Partnership has focused its exploration and development of natural gas
and oil properties in the Permian and Hardeman Basins of West Texas, the
Anadarko Basin and the onshore Gulf Coast.
Pursuant to an exchange agreement dated February 26, 1997 (the "Exchange
Agreement") and upon the initial filing on February 27, 1997 of a
registration statement with the Securities and Exchange Commission for
the public offering of common stock (the "Offering"), the shareholders of
Brigham, Inc. transferred all of the outstanding stock of Brigham, Inc.
to the Company in exchange for 3,859,821 shares of common stock of the
Company. Pursuant to the Exchange Agreement, the Partnership's other
general partner and the limited partners also transferred all of their
partnership interests to the Company in exchange for 3,314,286 shares of
common stock of the Company. Furthermore, the holders of the
Partnership's subordinated convertible notes transferred these notes to
the Company in exchange for 1,754,464 shares of common stock. These
transactions are referred to as the "Exchange." In completing the
Exchange, the Company issued 8,928,571 shares of common stock to the
stockholders of Brigham, Inc., the partners of the Partnership and the
holder of the Partnership's subordinated notes payable. As a result of
the Exchange, the Company now owns all the partnership interests in the
Partnership.
In May 1997, the Company sold 3,325,000 shares of its common stock in the
Offering at a price of $8.00 per share. With a portion of the proceeds
from the Offering, the Company repaid the outstanding borrowings, $13.3
million, under the Partnership's revolving credit facility.
2. BASIS OF PRESENTATION
The unaudited condensed consolidated balance sheets at December 31, 1996
and September 30, 1997 reflect the accounts of the Partnership at
December 31, 1996 and the consolidated accounts of the Company at
September 30, 1997, respectively. The unaudited condensed consolidated
statements of operations and of cash flows for the nine months ended
September 30, 1996 and 1997 include the results of operations and cash
flows of the Partnership for the nine months ended September 30, 1996 and
the period from January 1, 1997 to February 27, 1997 and for the Company
the period from February 25, 1997, the date of its inception, to
September 30, 1997. As the Exchange was the conversion of a partnership
into a corporation, the Exchange has been accounted for by the Company as
a reorganization.
The accompanying consolidated financial statements are unaudited, and in
the opinion of management, reflect all adjustments that are necessary for
a fair presentation of the financial position and results of operations
for the periods presented. All such adjustments are of a normal and
recurring nature. The results of operations for the periods presented are
not necessarily indicative of the results to be expected for the entire
year. The unaudited condensed consolidated financial statements should be
read in conjunction with the Predecessors' historical consolidated
financial statements and notes thereto as of and for the period ended
December 31, 1996 as included in the Company's Registration Statement on
Form S-1 (333-22491) filed with the Securities and Exchange Commission.
5
<PAGE> 8
BRIGHAM EXPLORATION COMPANY
NOTES TO THE UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
3. UNAUDITED PRO FORMA INFORMATION
The Partnership's legal form has no relation to the capital structure of
the Company after the Exchange. As a result, historical loss per unit
amounts are not relevant and have not been presented. Pro forma net loss
per common share and pro forma, as adjusted, net loss per common share
are presented giving effect to the number of shares outstanding
subsequent to the Exchange (8,928,574 shares) and giving effect to
employee stock options granted on March 4, 1997, as if these shares and
options had been issued at the beginning of each period presented. The
effect of the stock option grants on pro forma net loss per common share
and pro forma, as adjusted, net loss per common share was calculated
using the treasury stock method.
Pro forma net loss reflects pro forma exchange adjustments primarily
representing the amortization of compensation expense related to employee
stock options granted upon formation of the Company, the reduction of
interest expense related to the transfer of the subordinated notes
payable to the Company as part of the Exchange, and related income tax
effects. In addition to the effect of these pro forma adjustments, pro
forma, as adjusted, net loss has been adjusted to exclude the $5.0
million deferred tax charge recorded by the Company on February 27, 1997
(see Note 4), as this was a nonrecurring charge related to the Exchange.
4. INCOME TAXES
Prior to the consummation of the Exchange, the Partnership was not
subject to federal income taxes. Income and losses were passed through to
its partners on the basis of the allocation provisions established by the
partnership agreement. Upon consummation of the Exchange, the Partnership
became subject to federal income taxes through its ownership by the
Company. Also, in conjunction with the Exchange, the Company recorded a
deferred income tax liability of $5.0 million to recognize the temporary
differences between the financial statement and tax bases of the assets
and liabilities of the Partnership at the Exchange date, February 27,
1997, given the provisions of enacted tax laws.
5. FUTURE REPORTING REQUIREMENTS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 ("SFAS 128"),
Earnings Per Share ("EPS"). SFAS 128 replaces the presentation of primary
EPS with a presentation of basic EPS and requires a dual presentation of
basic and diluted EPS on the face of the income statement for all
entities with complex capital structures. Basic EPS excludes dilutive
securities and is computed by dividing income available to common
shareholders by the weighted-average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution that could
occur if dilutive securities were converted into common stock and is
computed similarly to fully diluted EPS pursuant to previous accounting
pronouncements. SFAS 128 is effective for periods ending after December
15, 1997, including interim periods, and earlier application is not
permitted. SFAS 128 requires restatement of all prior period EPS data
presented.
For the nine months ended September 30, 1996 and 1997, the Company
reported pro forma net loss per common share of $0.04 per share and $0.46
per share, respectively. Under SFAS 128, basic pro forma net loss per
common share for the respective periods would have been $0.04 and $0.47,
respectively, and diluted pro forma net loss per common share would have
been $0.04 and $0.46, respectively.
6
<PAGE> 9
BRIGHAM EXPLORATION COMPANY
NOTES TO THE UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
6. SUBSEQUENT EVENT
On November 12, 1997, the Company closed an acquisition of certain
producing properties; these properties were formerly owned by Mobil and
were recently acquired by Ward Petroleum. The Company paid $13.4 million
for a 50% interest in the properties.
7
<PAGE> 10
BRIGHAM EXPLORATION COMPANY
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
Results of Operations
Comparison of three month periods ended September 30, 1996 and September 30,
1997
Natural gas and oil sales. Natural gas and oil sales increased 39% from
$1.5 million in the third quarter of 1996 to $2.1 million in the third quarter
of 1997. Of this net increase, $755,000 was attributable to an increase in
production, partially offset by $167,000 attributable to a decrease in the
average sales price for natural gas and oil. Production volumes for natural gas
increased 60% from 207,000 Mcf in the third quarter of 1996 to 330,000 Mcf in
the third quarter of 1997. The average price received for natural gas decreased
5% from $2.20 per Mcf in the third quarter of 1996 to $2.10 per Mcf in the third
quarter of 1997. Production volumes for oil increased 44% from 53,000 Bbls in
the third quarter of 1996 to 76,000 Bbls in the third quarter of 1997. The
average price received for oil decreased 8% from $20.03 per Bbl in the third
quarter of 1996 to $18.53 per Bbl in the third quarter of 1997. Natural gas and
oil sales were increased by production from wells completed since the third
quarter of 1996 partially offset by the natural decline of existing production.
Lease operating expenses. Lease operating expense increased 88% from
$169,000 ($.32 per Mcfe) in the third quarter of 1996 to $317,000 ($.40 per
Mcfe) in the third quarter of 1997. This increase is primarily due to an
increase in the number of producing wells and certain extraordinary well
operations costs.
General and administrative expenses. General and administrative
expenses increased 106% from $482,000 ($.92 per Mcfe) in the third quarter of
1996 to $995,000 ($1.27 per Mcfe) in the third quarter of 1997. The increase is
a result of payroll costs related to additional employees and charges related to
the relocation of the principal executive offices to Austin, Texas. Certain of
the additional employees have been hired to extend the Company's control of its
drilling and post drilling operations.
Depletion of natural gas and oil properties. Depletion of natural gas
and oil properties increased 15% from $622,000 ($1.19 per Mcfe) in the third
quarter of 1996 to $713,000 ($.91 per Mcfe) in the third quarter of 1997 as a
result of higher production volumes.
Interest expense. Interest expense decreased 73% from $322,000 in the
third quarter of 1996 to $87,000 in the third quarter of 1997. This decrease was
due to a lower average outstanding balance in the third quarter of 1997 offset
partially by a higher effective interest rate. The weighted average outstanding
debt balance decreased 89% from $21.0 million in the third quarter of 1996 to
$2.37 million in the third quarter of 1997. The effective interest rate
increased 86% from 5.9% in the third quarter of 1996 to 10.9% in the third
quarter of 1997. The decrease in the average outstanding balance was a result of
the exchange of the RIMCO 5% subordinated notes in February 1997 and the
repayment of the entire outstanding revolving credit facility with the proceeds
from the IPO in May 1997. The revolving credit facility had an effective
interest rate of 8.5% at September 30, 1997.
Comparison of nine month periods ended September 30, 1996 and September 30, 1997
Natural gas and oil sales. Natural gas and oil sales increased 40% from
$4.2 million in the first nine months of 1996 to $6.0 million in the first nine
months of 1997. Of this increase, $1.5 million or 86% was attributable to an
increase in production, and $236,000 or 14% was attributable to an increase in
the average sales price for natural gas and oil. Production volumes for natural
gas increased 59% from 495,000 Mcf in the first nine months of 1996 to 788,000
Mcf in the first nine months of 1997. The average price received for natural gas
increased 12% from $2.14 per Mcf in the first nine months of 1996 to $2.40 per
Mcf in the first nine months of 1997. Production volumes for oil increased 22%
from 166,000 Bbls in the first nine months of 1996 to 203,000 Bbls in the first
nine months of 1997. The average price received for oil increased 4% from $19.21
per Bbl in the first nine months of 1996 to $19.99
8
<PAGE> 11
per Bbl in the first nine months of 1997. Natural gas and oil sales were
increased by production from wells completed since the first nine months of 1996
partially offset by the natural decline of existing production. Natural gas and
oil sales in the first nine months of 1996 include one month of production
related to certain properties sold at the end of January 1996.
Lease operating expenses. Lease operating expense increased 50% from
$525,000 ($.35 per Mcfe) in the first nine months of 1996 to $787,000 ($.39 per
Mcfe) in the first nine months of 1997. This increase is primarily due to an
increase in the number of producing wells.
General and administrative expenses. General and administrative
expenses increased 60% from $1.5 million ($1.03 per Mcfe) in the first nine
months of 1996 to $2.5 million ($1.22 per Mcfe) in the first nine months of
1997. The increase is a result of payroll costs related to additional employees
and charges related to the relocation of the principal executive offices to
Austin, Texas.
Depletion of natural gas and oil properties. Depletion of natural gas
and oil properties increased 10% from $1.9 million ($1.29 per Mcfe) in the first
nine months of 1996 to $2.1 ($1.05 per Mcfe) in the first nine months of 1997 as
a result of higher production volumes.
Interest expense. Interest expense decreased 23% from $823,000 in the
first nine months of 1996 to $632,000 in the first nine months of 1997. This
decrease was primarily due to to a lower average outstanding balance offset
partially by a higher effective interest rate. The weighted average outstanding
debt balance decreased 58% from $18.7 million in the first nine months of 1996
to $7.9 million in the first nine months of 1997. The effective interest rate
increased 79% from 5.6% in the first nine months of 1996 to 10.0% in the first
nine months of 1997. The increase in the effective interest rate is a result of
the exchange of the RIMCO 5% subordinated notes in February 1997 and the
increase in the balance outstanding under the revolving credit facility in 1997.
Income taxes. Prior to consummation of the Exchange, the Partnership
was not subject to federal income taxes. Income and losses were passed through
to its partners on the basis of the allocation provisions established by the
partnership agreement. Upon consummation of the Exchange, the Partnership became
subject to federal income taxes through its ownership by the Company. Also in
conjunction with the Exchange, the Company recorded a deferred income tax
liability of $5 million to recognize the temporary differences between the
financial statement and tax bases of the assets and liabilities of the
Partnership at the Exchange date, February 27, 1997, given the provisions of
enacted laws.
Liquidity and Capital Resources
The Company's primary sources of capital have been borrowings
(revolving credit facility and private placement debt), working capital and the
sale of interests in projects. During May 1997, as described in Note 1 to the
Unaudited Condensed Consolidated Financial Statements included herein, the
Company completed an initial public offering of Common Stock of the Company that
generated proceeds of approximately $24 million, net of offering costs, that was
used to repay all outstanding debt ($13.25 million) under the revolving credit
facility and to fund capital expenditures.
In the first nine months of 1997, cash flow provided by operations was
$2.9 million primarily as a result of an increase in natural gas and oil
revenues, net of production taxes, lease operating expenses and general and
administrative expenses. Cash flow used in investing activities was $22.8
million in the first nine months of 1997 primarily as a result of capital
expenditures. Cash flow provided by financing activities was $23.8 million in
the first nine months of 1997 primarily as a result of the proceeds from the IPO
in May 1997. On November 12, 1997, the Company financed the acquisition of $13.4
million of producing properties through the Company's existing revolving credit
facility.
9
<PAGE> 12
The Company expects to continue its exploration and production
activities during the remainder of 1997 and expects to finance those activities
with proceeds from the initial public offering, borrowings under the revolving
credit facility and cash flow from operations.
Forward Looking Information
The Company may make forward looking statements, oral or written,
including statements in this report, press releases and other filings with the
SEC, relating to the Company's drilling plans, its potential drilling locations,
capital expenditures, use of offering proceeds, the ability of expected sources
of liquidity to support working capital and capital expenditure requirements and
the Company's financial position, business strategy and other plans and
objectives for future operations. Such statements involve risks and
uncertainties, including those relating to the Company's dependence on
exploratory drilling activities, the volatility of natural gas and oil prices,
the risks associated with growth (including the risk of reduced availability of
seismic gathering and drilling services in the face of growing demand), the
substantial capital requirements of the Company's exploration and development
projects, operating hazards and uninsured risks and other factors detailed in
the Company's registration statement and other filings with the SEC. All
subsequent oral and written forward looking statements attributable to the
Company are expressly qualified in their entirety by these factors. The Company
assumes no obligation to update these statements.
10
<PAGE> 13
PART II. OTHER INFORMATION:
Item 5. Other Information
On November 12, 1997, the Company closed an acquisition of certain
producing properties in Grady County, Oklahoma; these properties were formerly
owned by Mobil and were recently acquired by Ward Petroleum. The Company paid
$13.4 million for a 50% interest in the properties. The properties, which are
located at the northern end of the prolific Carter Knox anticline in the
Company's Anadarko Basin Core Province, include approximately 21.3 Bcfe of net
proved reserves, a large portion of which is non-producing, 3,600 net acres of
leasehold, and 750 net mineral acres. In addition, the Company will operate a
3-D seismic program over approximately 20 square miles to delineate upside
potential in the Big Four, Springer, Bromide, and Arbuckle formations. Ward
Petroleum will operate the drilling phase, and is currently implementing a
development program. The acquisition will be financed through the Company's
existing revolving credit facility with Bank One, Texas, NA.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Computation of Earnings per Share
27 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto, duly authorized, in the City of Austin, State of Texas,
on the 13th day of November, 1997.
BRIGHAM EXPLORATION COMPANY
By: /s/ BEN M. BRIGHAM
-----------------------------------------------
Ben M. Brigham
President , Chief Executive Officer and
Chairman of the Board
By: /s/ CRAIG M. FLEMING
-----------------------------------------------
Craig M. Fleming
Chief Financial Officer
11
<PAGE> 14
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. INDEX TO EXHIBITS PAGE
- ------- ----------------- ------------
<S> <C> <C>
11.1 Computation of Earnings per Share Tabbed by
Exhibit
27 Financial Data Schedule No.
</TABLE>
12
<PAGE> 1
Exhibit 11.1 Computation of pro forma weighted average number of common
shares outstanding for the three month and nine month periods
ended September 30, 1996 and 1997 (in thousands).
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
---------------------------- ----------------------------
1996 1997 1996 1997
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Number of shares outstanding after the Exchange 8,929 8,929 8,929 8,929
Employee stock options granted under the 1997
Incentive Plan 644 644 644 644
Shares assumed to be repurchased under the treasury
stock method:
$3,220,485 (1)/$8.00 per share (2) (403) (403) (403) (403)
3,000,000 shares issued May 8, 1997 - 3,000 - 1,594
325,000 shares issued May 15, 1997 - 325 - 164
------------
Weighted average number of common
shares outstanding 12,495
============
------------ ------------ -------------
Pro forma weighted average number of common
shares outstanding 9,170 9,170 10,928
============ ============ =============
</TABLE>
Notes:
(1) Calculated by multiplying employee stock options granted under the 1997
Incentive Plan (644,097) by their exercise price ($5.00).
(2) Initial public offering price.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,410
<SECURITIES> 0
<RECEIVABLES> 3,738
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,550
<PP&E> 52,945
<DEPRECIATION> 0
<TOTAL-ASSETS> 63,062
<CURRENT-LIABILITIES> 10,984
<BONDS> 0
0
0
<COMMON> 123
<OTHER-SE> 38,884
<TOTAL-LIABILITY-AND-EQUITY> 63,062
<SALES> 5,951
<TOTAL-REVENUES> 6,408
<CGS> 0
<TOTAL-COSTS> 1,126
<OTHER-EXPENSES> 4,990
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 510
<INCOME-PRETAX> (218)
<INCOME-TAX> 4,803
<INCOME-CONTINUING> (5,021)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,021)
<EPS-PRIMARY> (.46)
<EPS-DILUTED> (.46)
</TABLE>
