PetroQuest Energy Announces First Quarter 2018 Results

LAFAYETTE, La., May 07, 2018 (GLOBE NEWSWIRE) -- PetroQuest Energy Inc. (the "Company") today announced a loss to common stockholders for the quarter ended March 31, 2018 of $2,212,000, or $0.09 per share, compared to first quarter 2017 loss to common stockholders of $4,918,000, or $0.23 per share.

Discretionary cash flow for the first quarter of 2018 was $9,394,000, as compared to $9,206,000 for the comparable 2017 period. See the attached schedule for a reconciliation of net cash flow provided by operating activities to discretionary cash flow.

Production for the first quarter of 2018 was 6.1 Bcfe (67.8 MMcfe/d), compared to 5.2 Bcfe (58.1 MMcfe/d) for the comparable period of 2017. The increase in production as compared to the first quarter of 2017 was due primarily to the Company's East Texas drilling program throughout 2017 and its Thunder Bayou recompletion in the first quarter of 2017. On January 31, 2018, however, the Company sold its Gulf of Mexico properties, which contributed approximately 4.7 MMcfe/d to first quarter 2018 production, as compared to 15.5 MMcfe/d in the first quarter of 2017. Stated on an Mcfe basis, unit prices including the effects of hedges for the first quarter of 2018 were $4.08 per Mcfe, as compared to $3.98 per Mcfe in the first quarter of 2017. Oil and gas sales during the first quarter of 2018 were $24,917,000, as compared to $20,772,000 in the first quarter of 2017.

Lease operating expenses (“LOE”) for the first quarter of 2018 decreased to $7,040,000, as compared to $7,076,000 in the first quarter of 2017. On a per unit basis LOE per Mcfe was $1.15 for the first quarter of 2018, as compared to $1.35 in the first quarter of 2017. The decrease in per unit lease operating expenses for the three months ended March 31, 2018 is primarily a result of the divestiture of the Company's Gulf of Mexico assets in January 2018 which had a higher per unit rate as compared to the Company's onshore properties.

Depreciation, depletion and amortization (“DD&A”) on oil and gas properties for the first quarter of 2018 was $1.06 per Mcfe, as compared to $1.15 per Mcfe in the first quarter of 2017. The decrease in the per unit DD&A rate for the three months ended March 31, 2018 is primarily the result of the Company's Gulf of Mexico divestiture in January 2018.

Interest expense for the first quarter of 2018 was $7,481,000, as compared to $7,258,000 in the first quarter of 2017. During the three month period ended March 31, 2018, capitalized interest totaled $421,000, as compared to $305,000 during the 2017 period.

Production taxes for the first quarter of 2018 totaled $1,227,000, as compared to $308,000 in the first quarter of 2017. The increase in production taxes during the 2018 period is primarily the result of increases in production and pricing as well as the expiration of a two-year severance tax exemption on the Company's Thunder Bayou well in June 2017.

General and administrative expenses for the first quarter of 2018 totaled $3,300,000, as compared to $3,153,000 during the comparable 2017 periods. Capitalized general and administrative expenses for the first quarter of 2018 totaled $1,430,000, as compared to $1,334,000 during the comparable 2017 period.

The following table sets forth certain information with respect to the oil and gas operations of the Company for the three month periods ended March 31, 2018 and 2017:

The above sales and average sales prices include increases (decreases) to revenues related to the settlement of gas hedges of $804,000 and $(321,000) for the three months ended March 31, 2018 and 2017, respectively. The above sales and average sales prices include decreases to revenue related to the settlement of oil hedges of $264,000 and $0 for the three months ended March 31, 2018 and 2017, respectively.

The following provides guidance for the second quarter of 2018:

About the Company
PetroQuest Energy Inc. is an independent energy company engaged in the exploration, development, acquisition and production of oil and natural gas reserves in Texas and Louisiana. PetroQuest’s common stock trades on the OTCQX market under the symbol PQUE.

Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this news release are forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, these statements are based upon assumptions and anticipated results that are subject to numerous uncertainties and risks. Actual results may vary significantly from those anticipated due to many factors, including the volatility of oil and natural gas prices; our indebtedness and the significant amount of cash required to service our indebtedness; our estimate of the sufficiency of our existing capital sources to fund our exploration and development activities and service our indebtedness, including availability under our multi-draw term loan facility; our ability to raise additional capital to fund cash requirements for future operations; limits on our growth and our ability to finance our operations and serve our indebtedness; our ability to fund and execute our Cotton Valley and Austin Chalk development programs as planned; our ability to increase recoveries in the Austin Chalk formation and to increase our overall oil production as planned; our estimates with respect to fracked Austin Chalk wells in Louisiana, including production EURs and costs; our estimates with respect to production, reserve replacement ratio and finding and development costs; our receipt of a cash refund with respect to our offshore bonds and the timing and amount of the same; our responsibility for offshore decommissioning liabilities for offshore interests we no longer own; our ability to hedge future production to reduce our exposure to price volatility in the current commodity pricing market; our ability to find, develop and produce oil and natural gas reserves that are economically recoverable and to replace reserves and sustain and/or increase production; ceiling test write-downs resulting, and that could result in the future, from lower oil and natural gas prices; fund our capital needs and respond to changing conditions imposed by our multi-draw term loan facility and restrictive debt covenants; approximately 46% of our production being exposed to the additional risk of severe weather, including hurricanes, tropical storms and flooding, and natural disasters; losses and liabilities from uninsured or underinsured drilling and operating activities; changes in laws and governmental regulations as they relate to our operations; the operating hazards attendant to the oil and gas business; the volatility of our common stock price; and the limited trading market for our common stock. In particular, careful consideration should be given to cautionary statements made in the various reports the Company has filed with the SEC. The Company undertakes no duty to update or revise these forward-looking statements.

Note: Management believes that discretionary cash flow is relevant and useful information, which is commonly used by analysts, investors and other interested parties in the oil and gas industry as a financial indicator of an oil and gas company’s ability to generate cash used to internally fund exploration and development activities and to service debt. Discretionary cash flow is not a measure of financial performance prepared in accordance with generally accepted accounting principles (“GAAP”) and should not be considered in isolation or as an alternative to net cash flow provided by operating activities. In addition, since discretionary cash flow is not a term defined by GAAP, it might not be comparable to similarly titled measures used by other companies.

For further information, contact:
Matt Quantz, Manager – Corporate Communications 
(337) 232-7028, www.petroquest.com