<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
---------------
Date of Report (Date of earliest event reported): FEBRUARY 24, 2000
BRIGHAM EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 000-22433 75-2692967
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
</TABLE>
6300 BRIDGEPOINT PARKWAY
BUILDING TWO, SUITE 500
AUSTIN, TEXAS 78730
(Address, including zip code, of principal executive offices)
Registrant's telephone number, including area code: (512) 427-3300
================================================================================
<PAGE> 2
Item 5. OTHER EVENTS.
On February 24, 2000, Brigham Exploration Company (the "Company")
announced initial production results from two wells completed in its Gulf Coast
exploration projects. On March 7, 2000, the Company announced its proved reserve
estimates as of December 31, 1999, its finding costs and drilling results for
1999, capital budget for 2000, and operational and financial results for the
fourth quarter and fiscal year ended December 31, 1999.
Copies of the Company's press releases that provide these announcements
are attached hereto as Exhibit 99.1, 99.2 and 99.3.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
<TABLE>
<CAPTION>
Item Number Exhibit
----------- -------
<S> <C>
99.1* Press Release dated February 24, 2000.
99.2* Press Release dated March 7, 2000.
99.3* Press Release dated March 7, 2000.
</TABLE>
- -------
* filed herewith.
<PAGE> 3
SIGNATURE
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.
BRIGHAM EXPLORATION COMPANY
Date: March 9, 2000 By: /s/ Curtis F. Harrell
---------------------
Curtis F. Harrell
Chief Financial Officer
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
-------- -----------
<S> <C>
99.1 Press Release dated February 24, 2000.
99.2 Press Release dated March 7, 2000.
99.3 Press Release dated March 7, 2000.
</TABLE>
<PAGE> 1
EXHIBIT 99.1
[BRIGHAM LOGO] NEWS RELEASE
FOR IMMEDIATE RELEASE
BRIGHAM PROVIDES UPDATE ON RECENT WELL COMPLETIONS
================================================================================
Austin, TX -- (Business Wire) - February 24, 2000 -- Brigham
Exploration Company (NASDAQ:BEXP) today announced initial production results for
two wells recently completed in its Gulf Coast exploration projects.
HOME RUN FIELD DISCOVERY
As previously disclosed, Brigham discovered a potentially significant
new Vicksburg field, the Home Run Field, in its Diablo Project in Brooks County,
Texas during the fourth quarter of 1999. The Palmer State #2 well was drilled to
a depth of 12,550 feet and encountered 210 net feet of sand with greater than
15% density log porosity in four Lower Vicksburg sand intervals. During a
six-week period beginning in late December, Brigham perforated, fracture
stimulated and tested each of these four zones with average daily flow rates
ranging from 2.2 to 7.4 MMcf of natural gas and 130 to 430 barrels of condensate
per zone. Receipt of regulatory approvals from the Texas Railroad Commission was
delayed until mid-February, and the Company subsequently performed commingling
operations to produce the Palmer State #2 well from all four Lower Vicksburg
zones.
On February 20th, the Palmer State #2 began flowing to sales as a
commingled producer. Currently, the well is producing at a rate of 10.1 MMcf of
natural gas and 650 barrels of condensate per day, or 14 MMcfe total (4.1 MMcfe
net to Brigham's revenue interest), with a flowing tubing pressure of 6,400 psi.
While the Palmer State #2 is capable of producing at significantly higher rates,
Brigham intends to monitor and evaluate actual production results to determine
the optimal rate at which to produce the well. Brigham operates the Palmer State
#2 well and has retained a 34% working and 29% net revenue interest in the
Diablo Project.
Brigham plans to drill at least five additional locations in this
project in 2000, at least three of which will be developmental locations to the
Palmer State #2 on the same fault block, the first of which should spud in
March. Two of the five locations are exploratory wells planned to test fault
blocks that are immediately adjacent to Brigham's Home Run Field discovery.
FRIO BRIGHT SPOT PLAY DISCOVERY
In its Southwest Danbury Project in Brazoria County, Texas, Brigham has
successfully completed another well in its Frio bright spot play. Brigham's
prospects in this play are supported by 3-D seismic direct detection techniques
including various amplitude attributes, such as amplitude versus offset (AVO)
analysis. In this project, Brigham recently completed and tested its third
consecutive well in the Upper Frio interval at a depth of approximately 10,700
feet. The Brigham-operated well, in which it retains a 56% working and 43% net
revenue interest, began flowing to sales in mid-February. The well is currently
producing at a rate of 2.9 MMcf of natural gas and 280 barrels of oil per day
with a flowing tubing pressure of 2,800 psi. Brigham intends to spud an offset
location to this Upper Frio discovery in April. In addition, the Company has
twelve other amplitude-related prospects in this project area, at least three of
which should be drilled in 2000.
Brigham intends to release its year-end proved reserve estimates and
financial results for the fourth quarter and full year 1999 during the week of
March 6th.
ABOUT BRIGHAM EXPLORATION
Brigham Exploration Company (www.bexp3d.com) is an independent
exploration and production company that applies 3-D seismic imaging and other
advanced technologies to systematically explore and develop onshore domestic
natural gas and oil provinces.
<PAGE> 2
Page 2
FORWARD LOOKING STATEMENTS DISCLOSURE
Except for the historical information contained herein, the matters
discussed in this news release are forward looking statements that are based
upon current expectations. Important factors that could cause actual results to
differ materially from those in the forward looking statements include risks
inherent in exploratory drilling activities, the timing and extent of changes in
commodity prices, unforeseen engineering and mechanical or technological
difficulties in drilling wells, availability of drilling rigs, land issues,
federal and state regulatory developments and other risks more fully described
in the company's filings with the Securities and Exchange Commission.
Contact: Christopher A. Phelps, Vice President - Finance & Strategic Planning
(512) 427-3300 / [email protected]
<PAGE> 1
EXHIBIT 99.2
[BRIGHAM LOGO] NEWS RELEASE
FOR IMMEDIATE RELEASE
BRIGHAM EXPLORATION ACHIEVES RECORD LOW FINDING COSTS IN 1999; PROVIDES OVERVIEW
OF CAPITAL BUDGET FOR 2000
================================================================================
Austin, TX -- (Business Wire) - March 7, 2000 -- Brigham Exploration
Company (NASDAQ:BEXP) today announced that it achieved an all-in average finding
cost in its 1999 exploration program of $0.53 per Mcfe, which is the lowest
level in the Company's history. Brigham also provided a review of its 1999
drilling activity and an overview of its planned $25 million capital budget for
2000.
YEAR-END 1999 PROVED RESERVES AND FINDING COSTS
Brigham's estimated net proved reserve volumes at December 31, 1999
totaled 84 Bcfe, approximately 78% of which are natural gas and 48% are proved
developed. During 1999, Brigham added 37 Bcfe of net proved reserves primarily
through drilling activities in its Anadarko Basin and Gulf Coast 3-D seismic
projects. The Company's year-end 1999 proved reserve volumes represent an 18%
increase over its 71 Bcfe estimated at mid-year 1999, which were reduced by the
sales of properties with estimated net proved reserves of 36 Bcfe in June 1999.
Brigham's drilling program generated net proved reserve additions that replaced
590% of its 6.3 Bcfe of net volumes produced during the year.
Despite the Company's property sales in June 1999, which generated
proceeds of $17.1 million, the present value of Brigham's estimated proved
reserves, calculated in accordance with SEC guidelines ("PV10% Value"),
increased 40% to $114.5 million at year-end 1999 from $81.7 million at year-end
1998. The PV10% Value at year-end 1999 was calculated based on a Henry Hub
natural gas price of $2.35 per MMBtu and a Koch West Texas Intermediate posted
oil price of $22.75 per barrel.
Net capital expenditures incurred in exploration and development
operations during 1999 totaled $14.3 million, approximately 75% of which related
to drilling activities. As a result, Brigham's average finding costs for 1999
(including revisions to prior reserve estimates) were $0.38 per Mcfe based only
on drilling expenditures and $0.53 per Mcfe based on total net capital
expenditures, each of which represent the lowest annual finding costs achieved
by Brigham.
1999 DRILLING ACTIVITY
Brigham spud 6 gross and 2.3 net wells in its Anadarko Basin and Gulf
Coast exploration provinces during the fourth quarter of 1999, representing an
average working interest of 38%. Of these wells, the Company has completed 5
gross (2.3 net) wells and plugged 1 gross (0.0 net) wells, resulting in
completion rates of 83% and 100% on a gross and net basis, respectively. For the
full year 1999, Brigham participated in the drilling of 27 gross (8.8 net)
wells, approximately 70% of which were completed. Highlights from Brigham's 1999
drilling program include:
o Home Run Field Vicksburg Discovery: The most significant drilling discovery
by Brigham in 1999 was the Brigham-operated Palmer State #2 well, which
confirmed the 1,100 acre Home Run Field in Brooks County, Texas. As
previously announced, Brigham fracture stimulated the four Lower Vicksburg
pay intervals identified in the Palmer State #2 during the first six weeks
of 2000. The Company subsequently began full production from all four
commingled zones in late February 2000, and the well is currently producing
at a combined total daily rate of 16 MMcfe, or 4.7 MMcfe net to Brigham's
revenue interest. Proved reserves attributed to the well are 14.1 Bcfe (74%
natural gas), or 4.1 Bcfe net to Brigham's interest. The Company's net cost
to drill and complete the well was approximately $1 million, resulting in a
drilling cost of $0.24 per proved developed producing Mcfe. Further, the
PV10% Value of net proved developed reserves attributed to the well is $9.7
million, or more than nine times the drilling and completion investment.
Brigham's 3-D interpretative mapping indicates that the Home Run Field
reservoirs have over 500 feet of structural relief and cover approximately
1,100 acres, with estimated gross potential reserves ranging from 80 Bcfe
to over 200 Bcfe. The Company expects to spud a development well in
mid-March, with five total wells currently planned for the project area in
2000.
<PAGE> 2
Page 2
o Gulf Coast Frio Discoveries: Brigham achieved drilling success in its
expanding Frio play in Brazoria County, Texas with the completion of two
wells spud during 1999 that added proved reserves of 12.4 gross Bcfe, or
6.6 Bcfe net to the Company's revenue interests. As previously announced,
the most recent Frio discovery began production in mid-February and is
currently producing at a daily rate of 4.7 MMcfe (66% natural gas), or 2.0
MMcfe net to Brigham's revenue interest. During 2000, Brigham plans to
perform a workover of the earlier discovery to restore production from a
dually completed Upper Frio interval currently behind pipe, and to spud two
additional Frio bright spot tests in this project.
o Anadarko Basin Morrow Play: Brigham has completed all five of its wells
drilled in 1999 in its Arnett Project in Ellis, County Oklahoma, resulting
in the discovery of 11.3 gross Bcfe of proved developed reserves, or 5.4
Bcfe net to the Company's revenue interests. Capitalizing on these Lower
Morrow sandstone discoveries, Brigham plans to drill three additional
locations in this project during the first half of 2000.
PLANNED 2000 CAPITAL BUDGET
The Company's planned 2000 capital budget is estimated to be $25
million, which consists of approximately $20 million (or 80% of total budgeted
expenditures) for drilling. Brigham's 2000 drilling program is designed to
capitalize on its low 1999 finding costs and recent drilling discoveries, and is
therefore focused in its Anadarko Basin and Gulf Coast 3-D seismic projects.
The Company estimates that it will drill 30 to 40 wells during 2000,
with an approximate 60%/40% allocation between its Gulf Coast and Anadarko Basin
provinces. Drilling expenditures are estimated to be allocated approximately
75%/25% to its Gulf Coast and Anadarko Basin provinces. Brigham's planned
drilling activity for 2000 consists of a blend of exploratory and developmental
drilling locations with approximately 55% of its $20 million drilling budget
allocated for exploration and the remaining 45% for development. The planned
activity includes:
o Targeting approximately 20% of the Company's 2000 drilling budget towards
its Home Run Field area, including three development wells to the Palmer
State #2 and two exploratory wells to test similar Lower Vicksburg
objectives in fault blocks directly adjacent to Brigham's Home Run Field
discovery. The next Home Run Field development well should spud in the next
ten days.
o Ten to fifteen 3-D seismic amplitude-supported exploratory Frio tests in
several of its Gulf Coast projects, at least two of which are planned to
spud in March.
o An exploratory test of a Springer-aged stratigraphic prospect in its
Anadarko Basin province that would extend a channel that has produced in
excess of 128 gross Bcfe to date. This prospect targets estimated gross
unrisked potential reserves of 18 Bcfe, and Brigham retains a 71% working
interest in the exploratory well which is currently drilling and expected
to reach total depth in mid-April.
o An exploratory well that targets a large 3-D delineated Springer structure
with over 140 Bcfe of potential reserves in the Anadarko Basin. Brigham has
an 18% working interest in this 13,000 foot test spud in early January,
which could establish as many as ten potential offset locations. This well
was recently completed in the targeted Springer objective and production
test results are expected within the next week.
o Offset drilling locations in its Morrow and Douglas natural gas plays in
the Anadarko Basin. One Douglas well is currently drilling and three Morrow
wells should spud within the next sixty days.
o A deep proved undeveloped test offsetting a 16 Bcfe well that targets a
potentially significant Hunton structure in the Mountain Front play in the
western portion of the Anadarko Basin.
Brigham expects to fund its planned capital expenditures during 2000
through a combination of cash flow from operations and its recently completed
debt and equity financing transactions that provide a total of $18.5 million to
$23.5 million in committed capital availability.
<PAGE> 3
Page 3
MANAGEMENT COMMENT
Bud Brigham, the Company's Chairman, CEO and President, stated, "Two of
our most significant goals for 1999 were to secure additional liquidity for our
drilling program and to achieve optimal drilling results by concentrating our
activity in areas where we achieved previous 3-D seismic drilling success. We
believe our results demonstrate that we have effectively accomplished each of
these objectives. Our liquidity objectives were completed through a combination
of asset sales, the majority of which were non-producing assets, and financing
transactions which culminated in our recently secured funding of our planned
2000 activity."
Brigham continued, "Our 1999 drilling program, which generated a major
field discovery, validates the value that exists in our deep prospect inventory.
While our historical drilling costs in the Gulf Coast and the Anadarko Basin are
low relative to industry at $0.62 and $0.56 per Mcfe, respectively, we achieved
our lowest drilling cost to date in 1999 at only $0.38 per Mcfe. Further, we are
benefiting from our substantial prior investments in 3-D seismic data and
undeveloped acreage, since the majority of our current capital investments go
directly to drilling, resulting in our extremely low all-in average finding cost
of $0.53 per Mcfe during 1999."
Brigham further stated, "We believe that our 2000 drilling program
provides our Company with outstanding value added economics, and therefore the
opportunity to significantly expand our proved developed reserves, production
volumes and cash flow. This balanced program provides an attractive mix of lower
risk development drilling projects, highlighted by our planned Home Run Field
activity, and several high potential exploratory opportunities. We look forward
to implementing this exciting exploration and development program that builds
upon our drilling accomplishments in 1999, and we therefore expect to deliver
tangible growth in shareholder value in 2000."
ABOUT BRIGHAM EXPLORATION
Brigham Exploration Company (www.bexp3d.com) is an independent
exploration and production company that applies 3-D seismic imaging and other
advanced technologies to systematically explore and develop onshore domestic
natural gas and oil provinces.
FORWARD LOOKING STATEMENTS DISCLOSURE
Except for the historical information contained herein, the matters
discussed in this news release are forward looking statements that are based
upon current expectations. The Company's actual capital expenditures in 2000 may
differ from the estimates discussed herein. Important factors that could cause
actual results to differ materially from those in the forward looking statements
include risks inherent in exploratory drilling activities, the timing and extent
of changes in commodity prices, unforeseen engineering and mechanical or
technological difficulties in drilling wells, availability of drilling rigs,
land issues, availability of sufficient capital resources by the Company and its
project participants, federal and state regulatory developments and other risks
more fully described in the Company's filings with the Securities and Exchange
Commission.
Contact: Christopher A. Phelps, Vice President - Finance & Strategic Planning
(512) 427-3300 / [email protected]
<PAGE> 1
EXHIBIT 99.3
[BRIGHAM LOGO] NEWS RELEASE
FOR IMMEDIATE RELEASE
BRIGHAM EXPLORATION REPORTS IMPROVED 1999 FINANCIAL RESULTS
================================================================================
Austin, TX -- (Business Wire) - March 7, 2000 -- Brigham Exploration
Company (NASDAQ:BEXP) today announced its financial results for the quarter and
fiscal year ended December 31, 1999. Significant highlights of Brigham's 1999
financial performance include:
o Net production volumes increased 4% on an equivalent basis in the fourth
quarter 1999 relative to the fourth quarter 1998, despite the sale of
producing reserves in mid-1999 and a significantly reduced drilling budget
during 1999;
o Higher realized oil and gas sales prices contributed to production revenue
growth of 63% in the fourth quarter and 9% for the full year 1999 vs.
comparable periods in 1998;
o Significant year-over-year growth in EBITDA - 543% in the fourth quarter
and 43% for the year - due to improved realized sales prices and reduced
unit operating costs; and
o Continuing improvement in per unit G&A expenses - $0.52 per Mcfe in the
fourth quarter 1999 vs. $0.92 per Mcfe in the fourth quarter 1998.
FOURTH QUARTER 1999 RESULTS
Average net daily production volumes for the fourth quarter 1999 were
16.5 MMcfe, an increase of 4% from the fourth quarter 1998. Excluding net
volumes attributable to properties sold by Brigham effective as of June 30,
1999, the Company's average net daily production would have been 12.6 MMcfe for
the fourth quarter 1998, resulting in comparable year-over-year production
growth of 31% over those adjusted volumes. This production growth primarily
resulted from the completion of wells drilled in the early portion of Brigham's
1999 drilling program combined with recompletion and workover projects performed
by the Company on certain producing wells. Significant drilling discoveries made
by the Company late in 1999 did not materially contribute to fourth quarter
volumes and will not contribute a full quarter of production until the second
quarter of 2000.
Net natural gas production in the fourth quarter 1999 was 1.0 Bcf, an
11% decrease over the same period in 1998, while net oil production in the
current year quarter was 80 MBbls, a 61% increase from the prior year quarter.
The decrease in net natural gas production was primarily the result of the
Company's producing property divestitures effective June 30, 1999. The
significant increases in oil production were attributable to workovers and other
production stimulation operations and the resumption of production for certain
non-operated oil wells that were shut-in during the fourth quarter 1998. Natural
gas comprised 68% of Brigham's equivalent fourth quarter 1999 production
volumes.
Natural gas and oil sales for the fourth quarter 1999 were $4.1
million, or a 63% increase from the same period last year. The Company's average
realized natural gas and oil equivalent sales price increased 58% in the fourth
quarter 1999 as compared to the average realized sales price in the prior year
quarter resulting from improved market prices for both natural gas and crude
oil. Brigham's average natural gas sales price for the fourth quarter 1999 was
$2.22 per Mcf compared to $1.65 per Mcf in the fourth quarter 1998 (a 36%
increase), while the Company's average oil sales price for the fourth quarter
1999 was $23.38 per Bbl compared to $13.06 per Bbl in the prior year period (a
79% increase). Losses on natural gas hedging transactions of $485,000, or $0.48
per Mcf, negatively impacted Brigham's net realized natural gas sales price and
revenues during the fourth quarter 1999, while natural gas hedging gains of
$281,000, or $0.25 per Mcf, contributed positively to the Company's average
realized natural gas sales price and revenues during the prior year period. In
late September 1999, Brigham sold call options on a portion of its future oil
and natural gas production to enable the Company to increase its effective fixed
swap price by an average of $0.57 per MMBtu on its existing natural gas hedging
contracts during the months of October 1999 through January 2000. For accounting
purposes, the improvement in the Company's average realized natural gas sales
price attributable to these transactions is not reflected in reported revenues.
Rather, it is reflected in (i) other income (expense) on the income statement,
and (ii) amortization of deferred loss on derivatives instruments and market
value adjustment for derivatives instruments on the cash flow statement.
<PAGE> 2
Page 2
Lease operating expenses for the fourth quarter 1999 were $580,000, an
8% reduction from the fourth quarter 1998. Also lower in the current year
quarter, net general and administrative expenses were $771,000 in the fourth
quarter 1999, or a significant 41% reduction from the fourth quarter 1998.
Depletion expenses were $2.0 million ($1.34 per Mcfe), or a 50% decrease from
the prior year quarter due to Brigham's improved drilling results during 1999.
Interest expense increased to $2.7 million in the fourth quarter 1999 from $2.4
million in the prior year period as a result of increased borrowings and higher
effective interest rates.
Earnings before interest, taxes, depreciation, depletion and
amortization (EBITDA) increased 543% to $3.3 million in the fourth quarter 1999
from $512,000 in the fourth quarter 1998, while operating cash flow for the
fourth quarter 1999 was $2.8 million ($0.19 per diluted share), an increase from
a loss of $891,000 ($0.07 per diluted share) for the same period in 1998. The
Company reported a net loss of $2.2 million ($0.15 per diluted share) for the
fourth quarter 1999 compared to a net loss of $31.6 million ($2.38 per diluted
share) for the prior year period. The net loss during the fourth quarter 1998
included a $25.9 million ($1.95 per diluted share) non-cash capitalized ceiling
impairment charge.
YEAR-END 1999 RESULTS
Net equivalent production volumes totaled 6.3 Bcfe (67% natural gas)
for the full year 1999 compared with 6.6 net Bcfe produced in 1998. Adjusted for
the Company's proved reserve sales effective June 30, 1999, Brigham achieved
comparable year-over-year production volume growth of 3%. Natural gas and oil
sales for 1999 totaled $15 million compared to $13.8 million last year, an
increase of 9% despite the Company's mid-year producing property divestitures,
which generated proceeds of $17.1 million. Brigham's average realized natural
gas and oil equivalent sales price increased 15% to $2.39 per Mcfe in 1999 from
$2.08 per Mcfe in the prior year. Average realized sales prices during 1999 were
$2.11 per Mcf for natural gas and $17.79 per Bbl for oil compared with average
realized sales prices during 1998 of $2.04 per Mcf and $12.85 per Bbl,
respectively.
Despite the Company's sales of producing properties at mid-year and its
reduced drilling budget relative to 1998, Brigham achieved growth in EBITDA,
operating cash flow and net income during 1999. EBITDA for 1999 increased 43% to
$9.5 million from $6.6 million last year, while operating cash flow increased to
$7.5 million ($0.53 per diluted share) in 1999, a 245% increase from $2.2
million ($0.17 per diluted share) for 1998. The Company reported a net loss of
$21.6 million ($1.53 per diluted share) for 1999, partially attributable to a
non-cash $12.2 million loss associated with its property divestitures in
mid-1999. Under full-cost accounting rules, the Company was required to
recognize this loss in the second quarter 1999 despite the economic gain
actually realized on the sales. Excluding this one-time charge, Brigham's net
loss for 1999 would have been $9.4 million ($0.67 per diluted share). This
compares to a loss of $33.3 million ($2.64 per diluted share) for 1998, which
included a $25.9 million ($2.05 per diluted share) non-cash capitalized ceiling
impairment charge recognized during the fourth quarter 1998.
CURRENT DAILY PRODUCTION INCREASED FROM FOURTH QUARTER 1999
Brigham currently estimates its average net daily production volumes to
be approximately 20 MMcfe, or 21% higher than its average daily production
during the fourth quarter 1999. This growth in daily production volumes is
primarily attributable to the late February additions of the recently completed
Palmer State #2 well in Brigham's Home Run Field discovery in Brooks County,
Texas and a well in Brigham's Frio play in Brazoria County, Texas. Following the
completion of its recently announced financing transactions, Brigham has spud 3
wells and has plans to spud an additional 10 wells in the next 60 days in its
Anadarko Basin and Gulf Coast 3-D projects, which would contribute to production
volumes beginning in the second and third quarters of 2000.
MANAGEMENT COMMENT
Curtis Harrell, Brigham's Chief Financial Officer, stated, "In many
ways 1999 was a year of transition for our company. Activity levels were down
significantly as we focused on the sale of assets and a series of related
financing transactions. We were also successful in the implementation of various
measures to reduce overhead and other fixed components of our cost structure. As
a result, we begin 2000 with an improved cost structure and the necessary
capital to fund a drilling budget twice that of 1999."
<PAGE> 3
Page 3
Harrell further stated, "Our Company continues to benefit from its
prior investments in 3-D seismic and land assets with 80% of our 2000 capital
budget directed towards drilling. We therefore have an excellent opportunity in
2000 to accelerate our growth in production volumes and reserves at extremely
attractive all-in finding costs. With an improved cost structure and higher
commodity prices, EBITDA margins should continue to improve from the record
levels realized in the fourth quarter of 1999."
CONFERENCE CALL INFORMATION
Brigham management will host a conference call to discuss the Company's
year-end 1999 financial and operational results with investors, analysts and
other interested parties on Wednesday, March 8th, at 9:00 a.m. Central time. To
participate in the call, please dial 800-340-5810 and ask for the Brigham
Exploration conference call (conference identification number 14513509). A
recording of the conference call will be available to interested parties
approximately one hour after the call is completed through 5:00 p.m. Central
time on Thursday, March 9th. To access the recording, please dial 800-633-8284
and enter 14513509 as the conference playback identification number.
ABOUT BRIGHAM EXPLORATION
Brigham Exploration Company (www.bexp3d.com) is an independent
exploration and production company that applies 3-D seismic imaging and other
advanced technologies to systematically explore and develop onshore domestic
natural gas and oil provinces.
FORWARD LOOKING STATEMENTS DISCLOSURE
Except for the historical information contained herein, the matters
discussed in this news release are forward looking statements that are based
upon current expectations. The Company's actual capital expenditures in 2000 may
differ from the estimates discussed herein. Important factors that could cause
actual results to differ materially from those in the forward looking statements
include risks inherent in exploratory drilling activities, the timing and extent
of changes in commodity prices, unforeseen engineering and mechanical or
technological difficulties in drilling wells, availability of drilling rigs,
land issues, availability of sufficient capital resources by the Company and its
project participants, federal and state regulatory developments and other risks
more fully described in the Company's filings with the Securities and Exchange
Commission.
Contact: Christopher A. Phelps, Vice President - Finance and Strategic Planning
(512) 427-3300 / [email protected]
<PAGE> 4
Page 4
BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)(unaudited)
<TABLE>
<CAPTION>
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
1998 1999 1998 1999
------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Natural gas and oil sales $ 2,507 $ 4,096 $ 13,799 $ 14,992
Workstation revenue 68 38 390 285
2,575 4,134 14,189 15,277
Costs and expenses:
Lease operating 630 580 2,172 2,259
Production taxes 145 283 850 968
General and administrative 1,310 771 4,672 3,481
Depletion of natural gas and oil properties 3,970 1,982 8,483 7,792
Capitalized ceiling impairment 25,926 -- 25,926 --
Depreciation and amortization 125 127 413 525
Amortization of stock compensation 74 11 372 1
-------- ------- -------- --------
32,180 3,754 42,888 15,026
-------- ------- -------- --------
Operating income (loss) (29,605) 380 (28,699) 251
Interest expense (2,386) (2,727) (5,968) (9,697)
Interest income 22 42 136 176
Other income (expense) -- 111 -- (163)
Loss on sale of natural gas and oil properties -- -- -- (12,195)
-------- ------- -------- --------
Net loss before income taxes (31,969) (2,194) (34,531) (21,628)
Income tax benefit 322 -- 1,186 --
-------- ------- -------- --------
Net loss $(31,647) $(2,194) $(33,345) $(21,628)
======== ======= ======== ========
Net loss per share:
Basic / Diluted $ (2.38) $ (0.15) $ (2.64) $ (1.53)
Wt. avg. common shares outstanding:
Basic / Diluted 13,306 14,518 12,626 14,152
</TABLE>
PRODUCTION, SALES PRICES AND OTHER FINANCIAL DATA
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
1998 1999 1998 1999
------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Avg. net daily production:
Natural gas (MMcf) 12.5 11.1 11.9 11.7
Oil (Bbls) 551.0 887 1,100 960
Equivalent natural gas (MMcfe) (6:1) 15.8 16.5 18.5 17.4
Total net production:
Natural gas (MMcf) 1,125 1,003 4,269 4,197
Oil (MBbls) 50 80 396 346
Equivalent natural gas (MMcfe) (6:1) 1,422 1,482 6,644 6,270
% Natural gas 79% 68% 64% 67%
Sales prices:
Natural gas ($/Mcf) (a) $ 1.65 $ 2.22 $ 2.04 $ 2.11
Oil ($/Bbl) $ 13.06 $23.38 $12.85 $17.79
Equivalent natural gas ($/Mcfe) (6:1) $ 1.76 $ 2.76 $ 2.08 $ 2.39
Other financial data:
EBITDA ($000) (b) $ 512.0 $3,293 $6,631 $9,456
Operating cash flow ($000) (c) $ (891) $2,757 $2,182 $7,532
Operating cash flow per diluted share(c) $ (0.07) $ 0.19 $ 0.17 $ 0.53
</TABLE>
(a) Includes the effects of natural gas hedging gains and losses.
(b) Net income (loss) plus interest expense, DD&A expenses, deferred
income taxes and other non-cash items.
(c) Net income (loss) plus DD&A expenses, deferred income taxes and other
non-cash items.
<PAGE> 5
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BRIGHAM EXPLORATION COMPANY
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)(unaudited)
<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
------------ ------------
<S> <C> <C>
Assets:
Current assets $ 10,797 $ 8,264
Natural gas and oil properties, at cost, net 134,317 112,066
Other property and equipment, at cost, net 2,014 1,686
Other non-current assets 3,388 3,667
-------- --------
Total assets $150,516 $125,683
======== ========
Liabilities and stockholders' equity:
Current liabilities $ 23,513 $ 17,744
Notes payable 59,000 56,000
Senior subordinated notes, net 35,786 41,341
Other non-current liabilities 7,536 1,600
-------- --------
Total liabilities 125,835 116,685
Stockholders' equity 24,681 8,998
-------- --------
Total liabilities and stockholders' equity $150,516 $125,683
======== ========
</TABLE>
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
1998 1999 1998 1999
------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $(31,647) $(2,194) $(33,345) $(21,628)
Depletion, depreciation and amortization 4,095 2,109 8,896 8,317
Capitalized ceiling impairment 25,926 -- 25,926 --
Interest paid through issuance of add'l senior sub. notes 507 1,431 507 5,459
Amortization of deferred stock compensation 74 11 372 1
Amortization of deferred loan fees 263 579 726 1,739
Amortization of discount on senior subordinated notes 212 181 286 575
Amortization of deferred loss on derivatives instruments -- 759 -- 759
Market value adjustment for derivatives instruments -- (119) -- 115
Loss on sale of natural gas and oil properties -- -- -- 12,195
Changes in deferred income tax liability (321) -- (1,186) --
-------- ------- -------- --------
Operating cash flow (891) 2,757 2,182 7,532
Changes in working capital and other items 12,144 240 12,592 (4,954)
-------- ------- -------- --------
Cash flows provided by operating activities 11,253 2,997 14,774 2,578
Cash flows (used) provided by investing activities (31,780) (4,468) (86,227) 1,644
Cash flows (used) provided by financing activities 21,845 832 72,321 (4,049)
-------- ------- -------- --------
Net increase (decrease) in cash and cash equivalents $ 1,318 $ (639) $ 868 $ 173
======== ======= ======== ========
</TABLE>
SUMMARY PER MCFE DATA
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- --------------------------------
1998 1999 1998 1999
------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Natural gas and oil sales $ 1.76 $2.76 $ 2.08 $2.39
Workstation revenue 0.05 0.03 0.06 0.05
------- ----- ------ -----
1.81 2.79 2.14 2.44
Costs and expenses:
Lease operating 0.44 0.39 0.33 0.36
Production taxes 0.10 0.19 0.13 0.15
General and administrative 0.92 0.52 0.70 0.56
Depletion of natural gas and oil properties 2.79 1.34 1.28 1.24
Capitalized ceiling impairment 18.23 0.00 3.90 0.00
Depreciation and amortization 0.09 0.09 0.06 0.08
Amortization of stock compensation 0.05 0.01 0.06 0.00
------- ----- ------ -----
22.62 2.54 6.46 2.39
------- ----- ------ -----
Operating income $(20.81) $0.25 $(4.32) $0.05
======= ===== ====== =====
</TABLE>
