Bpi (AMEX:BPG)
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BPI Energy Holdings, Inc. (AMEX: BPG), an independent energy company
engaged in the exploration, production and commercial sale of coalbed
methane (CBM) in the Illinois Basin, today announced financial and
operating results for the third-quarter and nine-month periods ended
April 30, 2008.
During the fiscal 2008 third quarter, net gas sales volume increased 32
percent to 63.9 million cubic feet (MMcf) from 48.6 MMcf in the fiscal
2007 third quarter. For the first nine months of fiscal 2008, net gas
sales were 185.2 MMcf—an increase of 35
percent from 137.4 MMcf in the first nine months of fiscal 2007.
The average gas price per thousand cubic feet (Mcf) for the quarter
increased to $8.38 versus $6.81 a year ago. Year to date, BPI received
an average of $6.97 per Mcf, versus $6.34 per Mcf for the nine-month
period in 2007.
Compared with the year-ago third-quarter and nine-month periods, 2008
revenues from gas sales rose 60 percent and 47 percent, respectively,
due primarily to the higher sales volume and average realized prices.
Third-quarter revenue was $535,000, up from $335,000, and nine-month
revenue was $1.3 million, up from $876,000, versus fiscal 2007.
General and administrative expenses for the 2008 third quarter and
nine-months were $1.3 million and $4.7 million, respectively—down
34 percent and 24 percent, respectively, from the comparable periods in
2007. The decline for both periods reflected sharply decreased salaries
and benefits. For the quarter, salaries and benefits were 71 percent
lower, and for the nine-months, were down by nearly half.
The company’s net loss was $2.5 million, or
$0.04 per share, for the quarter, compared with the 2007 third-quarter
net loss of $2.1 million, or $0.03 per share. The net loss for the
nine-months narrowed modestly to $6.1 million, or $0.09 per share, from
2007’s net loss of $6.6 million, or $0.09 per
share. The net loss for the quarter and nine-months of fiscal 2008
included a non-cash charge of $.3 million to reflect the decline in
value of the company’s commodity derivatives
contract.
Project Update
Commenting on the company’s operations, BPI
Energy’s President and Chief Executive
Officer James G. Azlein said: “We did not
drill any new wells during the quarter and have focused on addressing
financing requirements and aggressively reducing costs. Earlier this
month, we locked in higher gas prices by exchanging our price collar,
which was to expire in July 2009, for a fixed-price swap of $10.26 per
MMBtu for the notional amount of 20,000 MMBtu per month starting in July
2008 and extending through July 2010. All gas that we produce and sell
in excess of this notional amount will be at the then prevailing prices.”
Operating data for the fiscal 2008 third-quarter and nine-month periods
ended April 30, 2008, are summarized below:
Selected Financial and Operating Data
Three Months Ended
4/30/2008
4/30/2007
Net Gas Sales (Mcf)
63,897
48,558
Average Selling Price
($/Mcf), net
$8.38
$6.81
Nine Months Ended
4/30/2008
4/30/2007
Net Gas Sales (Mcf)
185,210
137,400
Average Selling Price
($/Mcf), net
$6.97
$6.34
At 4/30/2008
At 7/31/2007
Cumulative Wells Drilled
206
170
Wells Producing and Selling Gas1
126
91
Acreage in Production
< 2%
< 2%
Total Acreage
531,000
512,000
1All producing wells are located at BPI
Energy’s Southern Illinois Basin Project.
Although the company continues to evaluate what options may be available
to finance current and future operations, as well as explore additional
potential funding sources, to date, it has not yet obtained additional
funding. BPI has explored, and continues to explore, sources including
the issuance of new debt and/or equity securities, joint ventures,
mergers/combinations, asset sales and selling rights relating to the
company’s litigation against affiliates of
Drummond Coal Co. The company currently has a request pending with its
current lender, GasRock Capital LLC (“GasRock”),
to fund its cash shortfall through the end of fiscal year 2008 along
with a request for capital development funds for new development
activities. GasRock has sole discretion over all future advances under
the GasRock Credit Agreement. Additionally, BPI continues to engage in
discussions with a company that may provide additional development funds
to expand the company’s Southern Illinois
Basin Project. However, BPI does not believe such funds, if obtained,
would provide any significant reimbursement for general and
administrative expenses. BPI can provide no assurance that it will be
successful in completing a financing transaction.
BPI is filing its Form 10-Q for the interim period with the Securities
and Exchange Commission today, Monday, June 16, 2008. Please refer to
the Form 10-Q, which can be found on the company’s
website, for additional information on BPI Energy and its interim
results.
To be added to BPI Energy’s e-mail
distribution list, please click on the link below:
http://www.clearperspectivegroup.com/clearsite/bpi/emailoptin.html
About BPI Energy
BPI Energy (BPI) is an independent energy company engaged in the
exploration, production and commercial sale of coalbed methane (CBM) in
the Illinois Basin, which covers approximately 60,000 square miles in
Illinois, southwestern Indiana and northwestern Kentucky. The company
controls a large CBM acreage position in the Illinois Basin at
approximately 531,000 acres.
News releases and other information on the company are available on the
Internet at:
http://www.bpi-energy.com
Some of the statements contained in this report that are not
historical facts, including statements containing the words “believes,”
“anticipates,” “expects,”
“intends,” “plans,”
“should,” “may,”
“might,” “continue”
and “estimate” and
similar words, constitute forward-looking statements under the federal
securities laws. These forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or the conditions in our industry,
on our properties or in the Basin, to be materially different from any
future results, performance, achievements or conditions expressed or
implied by such forward-looking statements. Some of the factors that
could cause actual results or conditions to differ materially from our
expectations, include, but are not limited to: (a) our inability to
raise the funds necessary to satisfy our existing accounts payable and
accrued liabilities; (b) a refusal by GasRock Capital LLC (“GasRock”)
to make any additional advances under the GasRock Credit Agreement,
which are at GasRock’s discretion; (c) our
inability to repay or refinance the amounts advanced to us by GasRock
when such amounts become due on January 30, 2009; (d) a breach by us of
a covenant under the GasRock Credit Agreement or other event of default
that allows GasRock to accelerate our outstanding obligations; (e) our
inability to obtain sufficient financing, close an offering of debt or
equity securities, or complete a merger/combination, joint venture,
asset sale, selling of rights relating to our litigation against
Drummond or other transaction that would enable us to fund our future
operations; (f) our failure to accurately forecast CBM production; (g) a
decline in the prices that we receive for our CBM production; (h) our
failure to accurately forecast operating and capital expenditures and
capital needs due to rising costs or different drilling or production
conditions in the field; (i) our inability to attract or retain
qualified personnel with the requisite CBM or other experience; (j)
unexpected economic and market conditions, in the general economy or the
market for natural gas; (k) limitations imposed on us by the GasRock
Credit Agreement; and (l) potential exposure to losses caused by our
derivative contract. We caution readers not to place undue reliance on
these forward-looking statements.
—Financial Tables Follow—
BPI Energy Holdings, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except per-share data)
(Unaudited)
Three Months Ended
April 30,
Nine Months Ended
April 30,
2008
2007
2008
2007
Revenues:
Gas sales
$ 535
$ 335
$ 1,292
$ 876
Operating expenses:
Lease operating expense
403
412
1,038
1,276
General and administrative expenses
1,250
1,885
4,654
6,089
Lease rentals and other operating expense
168
-
247
-
Depreciation, depletion and amortization
204
215
552
591
Total operating expenses
2,025
2,512
6,491
7,956
Operating loss
(1,490
)
(2,177
)
(5,199
)
(7,080
)
Other income (expense):
Interest income
10
109
141
494
Interest expense
(735
)
(1
)
(767
)
(8
)
Other expense, net
(323
)
-
(304
)
-
(1,048
)
108
(930
)
486
Net loss
$ (2,538
)
$ (2,069
)
$ (6,129
)
$ (6,594
)
Basic and diluted net loss per share
($0.04
)
($0.03
)
($0.09
)
($0.09
)
Weighted average common shares outstanding
71,721,318
70,036,326
70,774,984
69,642,804
BPI Energy Holdings, Inc.
Consolidated Balance Sheets
(Dollars in thousands)
April 30,
2008
July 31,
2007
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$ 1,081
$ 11,292
Accounts receivable
145
94
Other current assets
979
1,348
Total current assets
2,205
12,734
Property and equipment, at cost:
Gas properties, full cost method of accounting:
Proved, net of accumulated depreciation, depletion, amortization
and impairment of $12,955 and $12,621
32,535
16,631
Unproved, excluded from amortization
-
8,533
Support equipment, net of accumulated depreciation and
amortization of $809 and $741
352
552
Net gas properties
32,887
25,716
Other property and equipment, net of accumulated depreciation and
amortization of $244 and $152
428
473
Net property and equipment
33,315
26,189
Restricted cash
100
100
Other non-current assets
-
220
Total assets
$ 35,620
$ 39,243
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable
$ 880
$ 1,371
Current maturities of long-term debt and notes payable
11,434
8,488
Accrued liabilities and other
667
1,503
Total current liabilities
12,981
11,362
Long-term debt and notes payable, less current maturities
35
48
Asset retirement obligation
161
114
Other long-term liabilities
40
-
Total liabilities
13,217
11,524
Shareholders’ Equity:
Common shares, no par value, authorized 200,000,000 shares,
73,484,395 and 72,524,493 issued and outstanding
67,946
67,946
Additional paid-in capital
8,421
7,608
Accumulated deficit
(53,964
)
(47,835
)
Total shareholders’ equity
22,403
27,719
Total liabilities and shareholders’
equity
$ 35,620
$ 39,243