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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended March 31, 1998
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: 000-23185
PETROGLYPH ENERGY, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 74-2826234
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
1302 NORTH GRAND STREET
HUTCHINSON, KANSAS 67501
(Address of principal executive offices) (Zip Code)
(316) 665-8500
(Registrant's telephone number, including area code)
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 12 months (or for 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 April 30, 1998, 5,458,333 shares of common stock, par value $.01
per share, of Petroglyph Energy, Inc. were outstanding.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Forward Looking Information and Risk Factors ................................................ 1
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997 ........... 2
Consolidated Statements of Operations for the Three Months Ended
March 31, 1998 and 1997 ............................................... 3
Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 1998 and 1997 ............................................... 4
Notes to Consolidated Financial Statements ....................................... 5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7
PART II -- OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds ........................................... 10
Item 6. Exhibits and Reports on Form 8-K .................................................... 10
Signatures ................................................................... 11
</TABLE>
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PETROGLYPH ENERGY, INC.
FORWARD LOOKING INFORMATION AND RISK FACTORS
Petroglyph Energy, Inc. (the "Company") or its representatives may make
forward looking statements, oral or written, including statements in this
report's Management's Discussion and Analysis of Financial Condition and Results
of Operations, press releases and filings with the Securities and Exchange
Commission, regarding estimated future net revenues from oil and natural gas
reserves and the present value thereof, planned capital expenditures (including
the amount and nature thereof), increases in oil and natural gas production, the
number of wells the Company anticipates drilling in quarterly and annual
periods, the Company's projected financial position, results of operations,
business strategy and other plans and objectives for future operations. Although
the Company believes that the expectations reflected in these forward looking
statements are reasonable, there can be no assurance that the actual results or
developments anticipated by the Company will be realized or, even if
substantially realized, that they will have the expected effects on its business
or results of operations. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include but are not limited to
risks inherent in drilling and other development activities, the timing and
extent of changes in commodity prices, unforeseen engineering and mechanical or
technological difficulties in drilling wells and implementing enhanced oil
recovery programs, the availability, proximity and capacity of refineries,
pipelines and processing facilities, shortages or delays in the delivery of
equipment and services, land issues, federal, state and tribal regulatory
developments and other risks more fully described in the Company's filings with
the Securities and Exchange Commission. All subsequent oral and written forward
looking statements attributable to the Company or persons acting on its behalf
are expressly qualified in their entirety by these factors. The Company assumes
no obligation to update any of these statements.
1
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ITEM 1. FINANCIAL STATEMENTS
PETROGLYPH ENERGY, INC.
Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
ASSETS MARCH 31, DECEMBER 31,
1998 1997
-------- --------
(Unaudited)
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 10,799 $ 16,679
Accounts receivable:
Oil and natural gas sales 336 665
Other 1,064 608
Inventory 1,918 1,377
Prepaid expenses 350 246
-------- --------
Total Current Assets 14,467 19,575
-------- --------
Property and equipment, successful efforts method at cost:
Proved properties 26,920 23,318
Unproved properties 2,998 2,958
Pipelines, gas gathering and other 7,326 6,901
-------- --------
37,244 33,177
Less---Accumulated depletion, depreciation and amortization (7,028) (6,607)
-------- --------
Property and equipment, net 30,216 26,570
Other assets, net of accumulated amortization 563 569
-------- --------
$ 45,246 $ 46,714
======== ========
LIABILITIES AND OWNERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities:
Trade $ 2,379 $ 3,608
Oil and natural gas sales 402 735
Current portion of long-term debt 37 37
Other 644 322
-------- --------
Total Current Liabilities 3,462 4,702
Long-term debt -- --
Deferred tax liability 2,425 2,514
Owners' equity 39,359 39,498
-------- --------
$ 45,246 $ 46,714
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
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PETROGLYPH ENERGY, INC.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------------
1998 1997
----------- -----------
Operating Revenues:
<S> <C> <C>
Oil sales $ 793 $ 893
Natural gas sales 313 282
Other 35 29
----------- -----------
Total operating revenues 1,141 1,204
Operating Expenses:
Lease operating 595 467
Production taxes 60 63
Exploration costs -- --
Depletion, depreciation and amortization 450 559
General and administrative 495 214
----------- -----------
Total operating expenses 1,600 1,303
----------- -----------
Operating loss (459) (99)
----------- -----------
Other income:
Interest income, net 204 25
Gain on sales of property and equipment, net 28 93
----------- -----------
Net income (loss) before income taxes (227) 19
Income tax expense (benefit):
Deferred (88) --
Pro forma -- 7
Total income tax expense (benefit) (88) 7
----------- -----------
Net income (loss) $ (139) $ 12
=========== ===========
Net income (loss) per share, basic and
diluted $ (.03) $ .00
=========== ===========
Weighted average common shares outstanding
Actual 5,458,333 --
Pro forma -- 2,833,333
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
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PETROGLYPH ENERGY, INC.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1998 1997
-------- --------
Operating Activities:
<S> <C> <C>
Net income (loss) before income taxes $ (139) $ 12
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depletion, depreciation and amortization 457 559
Gain on sales of property and equipment, net (28) (93)
Amortization of deferred revenue -- (46)
Exploration costs -- --
Deferred taxes (88) 7
Changes in assets and liabilities:
Increase in accounts receivable (127) (1,989)
Increase in inventory (541) (468)
(Increase) decrease in prepaid expenses (104) 18
Increase (decrease) in accounts payable and accrued liabilities (1,240) 2,980
-------- --------
Net cash used in operating activities (1,810) 980
-------- --------
Investing Activities:
Proceeds from sales of property and equipment 33 560
Additions to oil and natural gas properties (3,668) (723)
Additions to pipelines, natural gas gathering and other (425) (1,151)
-------- --------
Net cash used in investing activities (4,060) (1,314)
-------- --------
Financing Activities:
Proceeds from issuance of, and draws on, notes payable -- 2,000
Payments on notes payable -- (10)
Payments for organization and financing costs (10) (298)
-------- --------
Net cash provided by (used in) financing activities (10) 1,692
-------- --------
Net increase (decrease) in cash and cash equivalents (5,880) 1,358
Cash and cash equivalents, beginning of period 16,679 1,578
-------- --------
Cash and cash equivalents, end of period $ 10,799 $ 2,936
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
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PETROGLYPH ENERGY, INC.
Notes to Consolidated Financial Statements
(1) ORGANIZATION AND BASIS OF PRESENTATION
Petroglyph Energy, Inc. ("Petroglyph" or the "Company") was incorporated
in Delaware in April 1997 for the purpose of consolidating and continuing the
activities previously conducted by Petroglyph Gas Partners, L.P. ("PGP" or the
"Partnership"). PGP is a Delaware limited partnership, which was organized on
April 15, 1993 to acquire, explore for, produce and sell oil, natural gas and
related hydrocarbons. The general partner is Petroglyph Energy, Inc., a Kansas
corporation ("PEI"). Petroglyph Gas Partners II, L.P. ("PGP II") is a Delaware
limited partnership, which was organized on April 15, 1995 to acquire, explore
for, produce and sell oil, natural gas and related hydrocarbons. The general
partner of PGP II is PEI (1% interest) and the limited partner is PGP (99%
interest). Pursuant to the terms of an Exchange Agreement dated August 22, 1997
(the "Exchange Agreement"), the Company acquired all of the outstanding
partnership interests of the Partnership and all of the stock of PEI in exchange
for shares of Common Stock of the Company (the "Conversion"). The Conversion and
other transactions contemplated by the Exchange Agreement were consummated on
October 24, 1997, immediately prior to the closing of the initial public
offering of the Company's Common Stock (the "Offering"). See Note 4. The
Conversion was accounted for as a transfer of assets and liabilities between
affiliates under common control and resulted in no change in carrying values of
these assets and liabilities.
The accompanying consolidated financial statements of Petroglyph include
the assets, liabilities and results of operations of PGP, its wholly owned
subsidiary, Petroglyph Operating Company, Inc. ("POCI"), and PGP's proportionate
share of assets, liabilities and revenues and expenses of PGP II. PGP owned a
99% interest in PGP II as of December 31, 1997, 1996 and 1995. POCI is a
subchapter C corporation. POCI is the designated operator of all wells for which
PGP has acquired operating rights. Accordingly, all producing overhead and
supervision fees were charged to the joint accounts by POCI. All material
intercompany transactions and balances have been eliminated in the preparation
of the accompanying consolidated financial statements.
The Company's operations are primarily focused in the Uinta Basin of
Utah and the Raton Basin of Colorado.
The accompanying consolidated financial statements of Petroglyph, with
the exception of the consolidated balance sheet at December 31, 1997, have not
been audited by independent public accountants. In the opinion of the Company's
management, the accompanying financial statements reflect all adjustments
necessary to present fairly the financial position at March 31, 1998 and the
results of operations for the three month periods ended March 31, 1998 and 1997,
and cash flows of the Company for the three month periods ended March 31, 1998
and 1997. All such adjustments are of a normal recurring nature. These interim
results are not necessarily indicative of results for a full year.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted in this Form 10-Q pursuant to the
rules and regulations of the Securities and Exchange Commission.
(2) LONG-TERM DEBT
In September 1997, the Company entered into a credit agreement with The
Chase Manhattan Bank ("Chase") (the "Credit Agreement"). The Credit Agreement
includes a $20.0 million combination credit facility with a two-year revolving
credit facility with an original borrowing base of $7.5 million to be
redetermined semi-annually ("Tranche A"), which expires on September 15, 1999,
at which time all balances outstanding under Tranche A will convert to a term
loan expiring on September 15, 2002. The borrowing base has been redetermined as
of May 1998 to be $10.0 million. Additionally, the Credit Agreement contained a
separate revolving facility of $2.5 million ("Tranche B"), which was set to
expire on March 15, 1999. The Company utilized a portion of the proceeds from
the Offering to eliminate all outstanding amounts under the Credit Agreement in
October 1997. With the repayment of the Tranche B indebtedness, the $2.5 million
under that portion of the Credit Agreement is no longer available to the
Company. Interest on borrowings outstanding under Tranche A is calculated, at
the Company's option, at either Chase's prime rate or the London interbank offer
rate plus a margin determined by the amount outstanding under the tranche.
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(3) COMMITMENTS
The Company had one open hedging contract at March 31, 1998, which is a
crude oil collar on 271,500 Bbls of oil with a floor price of $17.00 per Bbl and
a ceiling price of $20.75 per Bbl indexed to the NYMEX light crude future
settlement price. This contract covers 271,500 Bbls of oil over the next 21
months as follows:
<TABLE>
<CAPTION>
YEAR BBLS
<S> <C>
1998.................................. 112,500
1999.................................. 159,000
-------
Total.............................. 271,500
=======
</TABLE>
Natural gas prices have remained relatively strong because of increased
domestic consumption. Second quarter prices, which have been strong to date,
will be affected by natural gas storage levels and weather-related demand. The
Company uses price hedging arrangements and fixed price natural gas sales
contracts to reduce price risk on a portion of its natural gas production. The
Company has entered into a natural gas sales contract for substantially all of
its current Utah production, effectively fixing its price through September 1998
at an average price of $1.865 per MMBtu. The Company's current Mcf conversion
factor would result in an equivalent price of approximately $2.09 per Mcf.
(4) INITIAL PUBLIC OFFERING
In November 1997, Petroglyph completed its initial public offering (the
"Offering"), of 2,625,000 shares of common stock at $12.50 per share, resulting
in net proceeds to the Company of approximately $30.5 million. Approximately
$10.0 million of the net proceeds were used to eliminate all outstanding amounts
under the Credit Agreement, with the balance of the proceeds expected to be
utilized to develop production and reserves in the Company's Uinta Basin, Raton
Basin and South Texas development properties and for other working capital
needs.
(5) COMMON SHARES OUTSTANDING AND EARNINGS PER COMMON SHARE
Outstanding share volumes of 2,833,333 for 1997 assume the conversion of
partnership interests into common stock, which occurred in October 1997, was
effective at the beginning of the year and is presented for proforma comparison.
This compares to the 5,458,333 common shares outstanding after the Offering,
reflected in the 1998 calculation.
In March 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 128, Earnings Per Share, which
changes the method of computing and disclosing earnings per share for periods
ending after December 15, 1997. The Company has determined that basic and
diluted earnings per share (as defined by SFAS No. 128) are the same for the
three months ended March 31, 1998 and 1997.
In June 1997, the Financial Accounting Standards Board issued SFAS No.
130, Reporting Comprehensive Income, which establishes the method of reporting
and display of comprehensive income and its components. The Company has
determined that there are no other items of comprehensive income in the periods
presented.
(6) INCOME TAXES
Prior to the Conversion, the results of operations of the Company were
included in the tax returns of its owners. As a result, tax strategies were
implemented that are not necessarily reflective of strategies the Company would
have implemented. In addition, the tax net operating losses generated by the
Company during the period from its inception to the date of the Conversion are
not available to the Company to offset future taxable income as such benefit
accrued to the owners.
Upon the Conversion, the Company became taxable as a corporation. Pro
forma income tax information for the three month period ended March 31, 1997,
presented in the accompanying consolidated statements of operations, reflect the
income tax expense, net income and net income per common share as if all
Partnership income for 1997 had been subject
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to corporate federal and state income tax. The pro forma tax expense was
computed at the federal statutory rate of 35% and an average of the state
statutory rates for those states in which the Company has operations of 4% for
each period presented.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Petroglyph is an independent energy company engaged in the exploration,
development and acquisition of crude oil and natural gas properties. The
Company's strategy is to increase oil and natural gas reserves, oil and natural
gas production and cash flow per share through (i) the development of the
Company's drillsite inventory, (ii) the exploitation of the Company's existing
reserve base, (iii) the control of operations and (iv) the acquisition of
additional interests in oil and natural gas properties that meet its selection
criteria.
OPERATING DATA
The following table sets forth certain operating data of the Company for
the periods presented.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------------
1998 1997
----------- ---------
Production Data:
<S> <C> <C>
Oil (Bbls) ............................... 67,463 60,668
Natural gas (Mcf) ........................ 153,492 103,818
Total (BOE) .............................. 93,045 77,971
Average Daily Production:
Oil (Bbls) ............................... 733 659
Natural gas (Mcf) ........................ 1,668 1,128
Total (BOE) .............................. 1,011 848
Average Sales Price Per Unit (1):
Oil (per Bbl) (2) ........................ $ 11.75 $ 14.72
Natural gas (per Mcf) .................... 2.04 2.72
Costs Per BOE:
Lease operating expenses ................. $ 6.40 $ 5.99
Production and property taxes ............ .65 .82
Depletion, depreciation and Amortization 4.84 7.17
General and administrative ............... 5.32 2.74
</TABLE>
- ----------------------------
(1) Before deduction of production taxes.
(2) Excluding the effects of crude oil hedging transactions and amortization
of deferred revenue, the weighted average sales price per Bbl of oil was
$11.17 and $15.33 for the three months ended March 31, 1998 and 1997,
respectively.
Bbl - Barrel
Mcf - Thousand cubic feet
BOE - Barrels of oil equivalent (six Mcf equal one Bbl)
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The Company uses the successful efforts method of accounting for its oil
and natural gas activities. Costs to acquire mineral interests in oil and
natural gas properties, to drill and equip exploratory wells that result in
proved reserves and to drill and equip development wells are capitalized. Costs
to drill exploratory wells that do not result in proved reserves, geological,
geophysical and seismic costs, and costs of carrying and retaining properties
that do not contain proved reserves are expensed. Costs of significant
nonproducing properties, wells in the process of being drilled and development
projects are excluded from depletion until such time as the related project is
developed and proved reserves are established or impairment is determined.
The Company's predecessor was classified as a partnership for federal
income tax purposes. Therefore, no income taxes were paid or provided for by the
Company prior to the Conversion. Future tax amounts, if any, will be dependent
upon several factors, including but not limited to the Company's results of
operations.
During the three months ended March 31, 1998, the Company drilled 13
gross (8.5 net) wells and completed 10 gross (5 net) wells with 100% success.
This compares with 15 gross (7.5 net) wells drilled and 12 gross (6 net) wells
completed during the three months ended March 31, 1997. Currently injected water
volumes are approximately 11,000 barrels per day.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1998 Compared to Three Months Ended
March 31, 1997
OPERATING REVENUES
Oil revenues decreased 11% to $793,000 for the quarter ended March 31,
1998, as compared to $893,000 for the same period in 1997, primarily as a result
of a decrease in realized oil prices of 20%. The decrease was partially offset
by a production volume increase of 11%, or 76 barrels per day, compared to the
quarter ended March 31, 1997. This increase was primarily due to continued
successful drilling and development of the Company's acreage in the Uinta Basin.
Natural gas revenues increased 11% to $313,000 for the quarter ended
March 31, 1998, as compared to $282,000 for the same period in 1997, primarily
due to a 48% increase in natural gas production to 153,000 Mcf. The impact of
the volume increase was partially offset by a 25% decrease in average sales
price for the quarter to $2.04 compared to $2.72 for the first quarter 1997. The
increase in natural gas production volumes is related to the success of the
Company's drilling program on its Utah properties during 1997.
OPERATING EXPENSES
Lease operating expenses increased to $595,000 for the quarter ended
March 31, 1997, as compared to $467,000 for the same period in 1997. This is a
result of a significant increase in the number of producing wells and injector
wells in which the Company has an interest due to the drilling program on the
Company's Utah properties. The Company's lease operating expenses increased to
$6.40 per BOE during the 1998 period as compared to $5.99 per BOE for the 1997
period. During the first quarter of 1998, 15 oil and gas wells in the Antelope
Creek Field were converted to water injection wells. These 15 wells would have
otherwise contributed significantly to production. The loss of production and
sustained operating expenses for these wells caused an increase in costs per
BOE. The Company expects operating costs per BOE to decline as a result of
additional production due to the increase in water injection rates. In addition,
the Company historically experiences a decline in operating expenses over the
year as a result of increased remedial activities in the first quarter of each
year.
Depreciation, depletion and amortization expense decreased 19% to
$450,000 for the quarter ended March 31, 1998, as compared to $559,000 for the
same period in 1997. This decrease is primarily the result of an increase in
proved reserves in the Company's year-end reserve report for 1997 resulting from
the Company's successful drilling program, partially offset by increased
production.
General and administrative expenses increased 131% to $495,000 for the
quarter ended March 31, 1998, as compared to $214,000 for the quarter ended
March 31, 1997. The increase is primarily a result of an increase in company
personnel as the number of employees grew to 53 from 28 for the comparable 1997
period. Additional engineering, geological and administrative staff was required
as a result of increased development activity. Increased
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<PAGE> 11
accounting personnel costs and additional legal and outside accounting costs
were incurred as a result of increased financial reporting requirements
associated with public company reporting requirements.
OTHER INCOME (EXPENSES)
Interest income, net, for the quarter ended March 31, 1998 increased to
$204,000, as compared to $25,000 in 1997 primarily as a result of interest
earned on proceeds from the Offering in October, 1997.
Gain on sales of property and equipment declined to $28,000 for the
quarter ended March 31, 1998, as compared to $93,000 for the same 1997 period
due to gains recognized from sales of certain non-strategic oil and natural gas
properties in the first quarter of 1997.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW AND WORKING CAPITAL
Cash used in operating activities was $1,810,000 for the quarter ended
March 31, 1998, as the Company accumulated inventory preparing for near-term
drilling operations and reduced payables from fourth quarter 1997 drilling
activity. The Company used cash on hand, proceeds from sales of property and
equipment of $33,000 and a portion of the Offering proceeds to finance
$4,093,000 of capital spending to drill 8.5 and complete 5 net wells,
respectively, and convert 7.5 net injector wells in the Company's Antelope Creek
Field. The Company expects to utilize future cash flow from operations, cash on
hand and its available borrowing base to develop production and reserves in the
Company's Uinta Basin, Raton Basin, and South Texas development properties and
for other working capital needs.
The Company believes that cash flow from operations, availability under
the Credit Agreement and the remaining proceeds from the Offering will be
adequate to support its budgeted working capital and capital expenditure
requirements for at least the next 12 months.
CAPITAL EXPENDITURES
The Company typically requires capital primarily for the exploration,
development and acquisition of oil and natural gas properties and general
working capital purposes. During the remainder of 1998, the Company will
redirect a substantial portion of planned capital investment from oil
development to gas. Antelope Creek oil development, previously planned for 60
gross (30 net) wells during 1998, will now target approximately 26 gross (13
net) wells during the first half of the year. The level of drilling for the
remainder of 1998 will depend on realized oil prices.
Capital investment dollars not spent on oil development will be deployed
in the Company's gas development prospects in the Natural Buttes Extension Area,
the Raton Basin coalbed methane project and the Helen Gohlke Field in Texas. In
total the Company expects to invest between $13 million and $17 million in oil
and gas development during the remainder of 1998.
Based on preliminary results from the two Natural Buttes wells drilled
in December 1997 and January 1998, the Company plans to continue development
with 8 gross (4 net) wells by year-end.
In the first quarter of 1998, Petroglyph drilled its first 4 exploration
wells in a central portion of its 65,000 net acre Raton Basin development area.
Based on the positive results of these tests, up to 32 additional wells are
planned for the project in 1998. The Company is currently negotiating with
Colorado Interstate Gas Company to transport its coalbed methane gas production.
If the negotiations prove successful, production could begin as early as October
1998.
During the first quarter of 1998, the Company obtained the initial
processed results of its 3-D seismic survey covering its 5,000 acre Helen Gohlke
Field, located in the Wilcox Trend on the border of Victoria and Dewitt
Counties, Texas. The Company is reviewing and targeting drilling objectives
beginning with the most shallow, with 3 initial gas objectives to be drilled to
a depth of approximately 4,200 feet into the Frio (Miocene) formation in the
second quarter of 1998. Additional and deeper targets may be drilled after
evaluation of the initial shallow tests.
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FINANCING
In September 1997, the Company entered into a credit agreement with
The Chase Manhattan Bank ("Chase") (the "Credit Agreement. The Credit Agreement
includes a $20.0 million combination credit facility with a two-year revolving
credit facility with an original borrowing base of $7.5 million to be
redetermined semi-annually ("Tranche A"), which expires on September 15, 1999,
at which time all balances outstanding under Tranche A will convert to a term
loan expiring on September 15, 2002. The borrowing base has been redetermined as
of May 1998 to be $10.0 million. Additionally, the Credit Agreement contained a
separate revolving facility of $2.5 million ("Tranche B"), which expires on
March 15, 1999. The Company utilized a portion of the proceeds from the Offering
to eliminate all outstanding amounts under the Credit Agreement in October 1997.
With the repayment of the Tranche B indebtedness, the $2.5 million under that
portion of the Credit Agreement is no longer available to the Company. Interest
on borrowings outstanding under Tranche A is calculated, at the Company's
option, at either Chase's prime rate or the London interbank offer rate plus a
margin determined by the amount outstanding under the tranche.
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Pursuant to a Registration Statement on Form S-1 (No. 333-34251),
which became effective on October 20, 1997, filed in connection with the initial
public offering of the Company's common stock, the Company sold 2,625,000 shares
at $12.50 per share for gross proceeds of $32,812,500. The offering was managed
by Prudential Securities Incorporated, Oppenheimer & Co., Inc. and Johnson Rice
& Company L.L.C., and the underwriters of the offering received underwriting
discounts and commissions of $2,296,875. Of the net proceeds of $30,515,625
received by the Company, the Company repaid $10.0 million of outstanding
indebtedness under the Credit Agreement, paid approximately $1.3 million of
offering expenses and used $8.4 million, through March 31, 1998, to develop
production, reserves and infrastructure in the Company's Uinta Basin, Raton
Basin and South Texas development properties. The balance of the net proceeds is
being held by the Company in cash and cash equivalents and is anticipated to be
used for further development of the Company's oil and natural gas properties and
general working capital purposes.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
27 Financial Data Schedule
(b) Reports Submitted on Form 8-K:
None.
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<PAGE> 13
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.
PETROGLYPH ENERGY, INC.
By: /s/ Robert C. Murdock
---------------------------------
Robert C. Murdock
Chairman, President & Chief
Executive Officer
By: /s/ Tim A. Lucas
---------------------------------
Tim A. Lucas
Vice President & Chief
Financial Officer
Date: May 12, 1998
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<PAGE> 14
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 10,799,000
<SECURITIES> 0
<RECEIVABLES> 1,400,000
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0
0
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<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
