MINNETONKA, Minn., Nov. 14, 2011 (GLOBE NEWSWIRE) -- Ante5, Inc. (OTCBB:ANFC) today announced record oil and gas production for the third quarter ended September 30, 2011. During the quarter ended September 30, 2011, Ante5 reported revenues of $900,511. This represents an increase of 259% from $250,590 in the second quarter ending June 30, 2011 and an 829% from $96,940 in the first quarter ending March 31, 2011. The increase in revenue is due to increased production from Ante5's 21 gross (0.66 net) producing Bakken and Three Forks wells as of September 30, 2011, compared to 11 gross (0.45 net) and 7 gross (.06 net) producing wells as of June 30, 2011, and March 31, 2011, respectively.
THIRD QUARTER 2011 HIGHLIGHTS
- Record quarterly revenue of $900,511, up 259% from $250,590 for the quarter ended June 30, 2011 and up 829% from $96,940 for the quarter ended March 31, 2011.
- Record quarterly production of 10,868 barrels of oil equivalent (BOE), up 317% from 2,606 BOE in the quarter ended June 30, 2011 and up 767% from 1,254 BOE in the quarter ended March 31, 2011.
- Positive Adjusted EBITDA of $205,324 in the quarter ended September 30, 2011 primarily due to strong production operations.
- As of September 30, 2011, Ante5 participated in 28 gross (0.71 net) wells in the Williston Basin's Bakken and Three Forks formations.
Ken DeCubellis, Ante5's Chief Executive Officer, commented, "We are pleased to announce another record revenue and production quarter for Ante5. We ended the quarter with 28 gross (0.71 net) wells. But with strong permitting activity and a focused acquisition strategy, we currently participate in 37 gross (1.02 net) wells."
Production Growth
| Metric | 3rd Quarter 2011 | 2nd Quarter 2011 | 1st Quarter 2011 |
| Net Production (BOE) | 10,868 | 2,606 | 1,254 |
| Realized Price / Barrel | $85.61 | $96.47 | $81.84 |
| Average Daily BOE | 118 | 29 | 14 |
| Total Net Acres | 9,880 | 9,640 | 5,686 |
| Net Acres Producing (% of Total) | 801(8.1%) | 535 (5.6%) | 48 (0.8%) |
| "Drilling" = Preparing to Drill, Drilling, Awaiting Completion, Completing | |||
Operational Update
As of November 11, 2011, Ante5 participated in a total of 37 gross (1.02 net) Bakken & Three Forks wells that are producing or in the process of drilling or completion. Permitting activity on Ante5's acreage continues at a high rate.
Producing Wells: The following table sets forth all 22 of the producing Bakken and Three Forks wells in which Ante5 holds a participating interest as of November 11, 2011.
| Well Name | Operator | County | WI | IP (BOPD)* | BOP Average** | Days*** | |||||
| Christensen 159-102-8-5-1H | Newfield | Williams, ND | 29.99% | 562 | 368 | 36 | |||||
| Weyrauch 15-11H | Hess | Williams, ND | 8.28% | TBD | TBD | TBD | |||||
| A.Tufto 18-19 #1-H | Brigham | Williams, ND | 7.15% | 2,541 | 809 | 32 | |||||
| Love 11-2 #1H | Samson | Williams, ND | 6.25% | 543 | TBD | TBD | |||||
| Burke 24-08H | EOG | Mountrail, ND | 1.56% | 673 | 290 | 27 | |||||
| Revolver 1-35H | Slawson | Mountrail, ND | 1.56% | 1,770 | 856 | 27 | |||||
| White 157-100-17B-20-1H | Petro-Hunt | Williams, ND | 1.56% | TBD | TBD | TBD | |||||
| Marshall 1-13H | Continental | Dunn, ND | 1.17% | 844 | 586 | 35 | |||||
| Clearwater 1-24-25H 1 | Hunt | Mountrail, ND | 1.04% | TBD | TBD | TBD | |||||
| Kannegeiter 160-90-17-P-1H | Occidental | Burke, ND | 1.04% | TBD | TBD | TBD | |||||
| Olson 15-36H | Hess | Williams, ND | 1.04% | 1,135 | 516 | 28 | |||||
| Opedahl 21x-11 | XTO | Williams, ND | 0.98% | TBD | TBD | TBD | |||||
| Talkington 21-30TFH | Whiting | Stark, ND | 0.80% | TBD | TBD | TBD | |||||
| En-Charles Wood-157-94-1720H-1 | Hess | Mountrail, ND | 0.64% | 1,002 | TBD | TBD | |||||
| EN-Will Trust B-157-94-2635H-1 | Hess | Mountrail, ND | 0.48% | 402 | 504 | 20 | |||||
| EN-Will Trust B-157-94-2635H-2 | Hess | Mountrail, ND | 0.48% | 512 | 510 | 33 | |||||
| EN-Will Trust B-157-94-2635H-3 | Hess | Mountrail, ND | 0.48% | 372 | 377 | 30 | |||||
| Hodenfield 15-23H | Hess | Williams, ND | 0.47% | 2,042 | 594 | 33 | |||||
| Go-Soine A-156-97-3229H-1 | Hess | Williams, ND | 0.39% | TBD | TBD | TBD | |||||
| Tempe #1-29H | Continental | Divide, ND | 0.39% | TBD | TBD | TBD | |||||
| Marcy 1-24H | Continental | Williams, ND | 0.31% | TBD | TBD | TBD | |||||
| Scanlan 3-5H | North Plains | Williams, ND | 0.16% | 819 | 828 | 23 | |||||
| 66.22% | |||||||||||
| * "IP BOPD" means the initial production ("IP") rate expressed in barrels of oil per day. The IP rate is the 24-hour "Peak Production Rate." Peak Production Rates may be established following the initial day of production, depending on operator design or well flow-back profiles. The IP rate may be estimated based on other third party estimates or limited data available at this time. The IP BOPD is computed using crude oil production only, without taking into consideration any associated natural gas production. | |||||||||||
| ** "BOPD Average" means the average barrels of oil per day during the applicable initial days of production. | |||||||||||
| *** "DAYS" means number of initial days of production used to calculate the "BOPD AVG" from the commencement of established production. The "DAYS" used to calculate the "BOPD AVG" does not include days during which a well is shut-in for weather or maintenance purposes. | |||||||||||
"Drilling" Wells: The following table sets forth all 15 of Ante5's Bakken and Three Forks wells that are either preparing to drill, drilling, awaiting completion or completing as of November 11, 2011.
| Well Name | Operator | County | WI |
| Stromme Family Trust 157-101-11C-2-1H | Petro-Hunt | Williams, ND | 7.91% |
| Pasternak Trust 157-100-18A-19-1H | Petro-Hunt | Williams, ND | 7.82% |
| Sidonia 15-1102H | Petro-Hunt | Mountrail, ND | 6.28% |
| Erickson 41-25 SWH | Denbury | McKenzie, ND | 5.00% |
| En-Jorstad-157-94-0904H-1 | Hess | Mountrail, ND | 1.19% |
| Miller 157-101-12C-1-1H | Petro-Hunt | Williams, ND | 1.13% |
| Vanville 22-2623H | EOG | Burke, ND | 1.04% |
| Vanville 21-2635H | EOG | Burke, ND | 1.04% |
| Berger 156-100-7-6-1H | Liberty | Williams, ND | 1.01% |
| Probe 1-19-30HMB | Slawson | Mountrail, ND | 0.77% |
| Lindy 156-100-10-3-1H | Newfield | Williams, ND | 0.67% |
| Pankowski 4-6H | North Plains | Williams, ND | 0.64% |
| Clearwater 1-26-23H 1 | Hunt | Mountrail, ND | 0.69% |
| Setterlund 159-94-28B-33-1H | Petro-Hunt | Burke, ND | 0.20% |
| Helstad 158-99-34D-27-1H | Petro-Hunt | Williams, ND | 0.14% |
| 35.53% |
Non-GAAP Financial Measures
In addition to reporting net income (loss) as defined under GAAP, we also present Adjusted EBITDA. We define Adjusted EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depreciation, depletion and amortization, (iv) accretion of abandonment liability, and (v) non-cash expenses relating to share based payments recognized under ASC Topic 718. We believe the use of non-GAAP financial measures provides useful information to investors regarding our current financial performance, however, Adjusted EBITDA does not represent, and should not be considered an alternative to GAAP measurements. We believe this measure is useful in evaluating our fundamental core operating performance. Specifically, we believe the non-GAAP Adjusted EBITDA results provide useful information to both management and investors by excluding certain expenses that our management believes are not indicative of our core operating results. Although we use adjusted EBITDA to manage our business, including the preparation of our annual operating budget and financial projections, we believe that non-GAAP financial measures have limitations and do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures. A reconciliation of Adjusted EBITDA to Net Income, GAAP, is included below:
| Ante5, Inc. | |||||
| Reconciliation of Adjusted EBITDA | |||||
| Three Months Ended | Nine Months Ended | ||||
| September 30, | September 30, | ||||
| 2011 | 2010 | 2011 | 2010 | ||
| Net Loss | $ (338,212) | $ (8,826) | $ (804,449) | $ (355,459) | |
| Add Back: | |||||
| Interest Expense | 38,233 | 2,889 | 63,723 | 11,429 | |
| Income Tax Provision | (48,300) | -- | (380,500) | -- | |
| Depreciation, Depletion, Amortization & Accretion | 330,232 | 743 | 440,844 | 1,362 | |
| Accretion of Abandonment Liability | 154 | -- | 420 | -- | |
| Share Based Compensation | 223,217 | -- | 535,479 | 58,425 | |
| Adjusted EBITDA | $ 205,324 | $ (5,194) | $ (144,483) | $ (284,243) | |
Ante5 Oil & Gas
Ante5, Inc. is an oil and gas exploration and production company based in Minnetonka, Minnesota. Ante5's focus is the Williston Basin Bakken and Three Forks trends in North Dakota and Montana. Ante5 controls, or has under contract, approximately 10,515 net mineral acres in North Dakota. More information about Ante5 Oil & Gas can be found at www.ante5oil.com.
If you would like to receive timely information on Ante5 Oil & Gas when it hits the newswire, you may sign up for Ante5 email news alerts at: www.anfc-ir.com.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act"). All statements other than statements of historical facts included in this report regarding our financial position, business strategy, plans and objectives of management for future operations, industry conditions and anticipated well production and acreage acquisition are forward-looking statements. When used in this report, forward-looking statements are generally accompanied by terms or phrases such as "estimate," "project," "predict," "believe," "expect," "anticipate," "target," "plan," "intend," "seek," "goal," "will," "should," "may" or other words and similar expressions that convey the uncertainty of future events or outcomes. Items contemplating or making assumptions about actual or potential future sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements include the following: general economic or industry conditions nationally and/or in the communities in which our Company conducts business, volatility in commodity prices for crude oil and natural gas, environmental risks, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our Company's operations, products, services and prices. Additional information on these and other factors that could affect the Company's operations or financial results are included in the company's reports on file with the Securities and Exchange Commission.
We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and contingencies. These forward-looking statements speak only as of the date of this press release. The Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in the Company's expectations.
| ANTE5, INC. | ||
| CONDENSED BALANCE SHEETS (Unaudited) | ||
| September 30, | December 31, | |
| 2011 | 2010 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $3,212,444 | $8,577,610 |
| Accounts receivable | 978,051 | 15,840 |
| Prepaid expenses | 121,655 | 8,431 |
| Current portion of contingent consideration receivable | 250,000 | 287,000 |
| Total current assets | 4,562,150 | 8,888,881 |
| Contingent consideration receivable, net of | ||
| current portion and allowance of $878,650 | 6,062,103 | 6,185,000 |
| Property and equipment: | ||
| Oil and natural gas properties, full cost method of accounting | ||
| Proved properties | 7,780,914 | -- |
| Unproved properties | 13,321,935 | 4,343,389 |
| Other property and equipment | 62,360 | 15,706 |
| Total property and equipment | 21,165,209 | 4,359,095 |
| Less, accumulated depreciation, amortization and depletion | (439,924) | (13,725) |
| Total property and equipment, net | 20,725,285 | 4,345,370 |
| Total assets | $31,349,538 | $19,419,251 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $2,398,693 | $325,584 |
| Accounts payable, related parties | 6,985 | 76,777 |
| Accrued expenses | -- | 47,267 |
| Royalties payable | 315,606 | 323,600 |
| Current portion of deferred tax liability | 80,400 | 119,400 |
| Total current liabilities | 2,801,684 | 892,628 |
| Asset retirement obligations | 3,667 | -- |
| Deferred tax liability, net of current portion | 2,232,100 | 2,573,600 |
| Total liabilities | 5,037,451 | 3,466,228 |
| Stockholders' equity: | ||
| Preferred stock, $0.001 par value, 20,000,000 shares | ||
| authorized, no shares issued and outstanding | -- | -- |
| Common stock, $0.001 par value, 100,000,000 shares authorized, | ||
| 47,402,965 and 37,303,614 shares issued and outstanding at | ||
| September 30, 2011 and December 31, 2010, respectively | 47,403 | 37,304 |
| Additional paid-in capital | 27,807,637 | 16,654,223 |
| Accumulated (deficit) | (1,542,953) | (738,504) |
| Total stockholders' equity | 26,312,087 | 15,953,023 |
| Total liabilities and stockholders' equity | $31,349,538 | $19,419,251 |
| ANTE5, INC. | ||||
| CONDENSED STATEMENTS OF OPERATIONS (Unaudited) | ||||
| For the Three Months | For the Nine Months | |||
| Ended September 30, | Ended September 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Oil and gas sales | $900,511 | -- | $1,248,041 | -- |
| Operating expenses: | ||||
| Production expenses | 362,560 | -- | 379,535 | -- |
| Production taxes | 101,936 | -- | 138,939 | -- |
| General and administrative | 474,570 | 148,064 | 1,332,556 | 487,594 |
| Depletion of oil and gas properties | 327,363 | -- | 431,893 | -- |
| Accretion of discount on asset retirement obligations | 154 | -- | 420 | -- |
| Depreciation and amortization | 2,869 | 743 | 8,951 | 1,362 |
| Total operating expenses | 1,269,452 | 148,807 | 2,292,294 | 488,956 |
| Net operating loss | (368,941) | (148,807) | (1,044,253) | (488,956) |
| Other income (expense): | ||||
| Interest income | 252 | 1,988 | 1,664 | 4,044 |
| Interest (expense) | (38,233) | (2,889) | (63,723) | (11,429) |
| Other income | 20,410 | 140,882 | 20,410 | 140,882 |
| Loss on disposal of equipment | -- | -- | (1,061) | -- |
| Indemnification expenses | -- | -- | (97,986) | -- |
| Total other income (expense) | (17,571) | 139,981 | (140,696) | 133,497 |
| Loss before provision for income taxes | (386,512) | (8,826) | (1,184,949) | (355,459) |
| Provision for income taxes | 48,300 | -- | 380,500 | -- |
| Net (loss) | $ (338,212) | $ (8,826) | $ (804,449) | $ (355,459) |
| Weighted average number of common shares | ||||
| outstanding - basic and fully diluted | 45,661,345 | 21,292,333 | 41,364,318 | 21,292,333 |
| Net (loss) per share - basic and fully diluted | $ (0.01) | -- | $ (0.02) | $ (0.02) |
| ANTE5, INC. | |||
| CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) | |||
|
For the Nine Months Ended September 30, 2011 |
From Inception (April 9, 2010) to September 30, 2010 |
||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net (loss) | $ (804,449) | $ (355,459) | |
| Adjustments to reconcile net (loss) | |||
| to net cash used in operating activities: | |||
| Depletion of oil and gas properties | 431,893 | -- | |
| Depreciation and amortization | 8,951 | 1,362 | |
| Accretion of discount on asset retirement obligations | 420 | -- | |
| Loss on disposal of equipment | 1,061 | -- | |
| Loss on sale of debt securities | -- | 8,363 | |
| Common stock granted for services | 43,120 | -- | |
| Common stock warrants granted | 46,264 | -- | |
| Common stock warrants granted, related parties | 8,164 | -- | |
| Common stock options granted, related parties | 492,359 | 58,425 | |
| Decrease (increase) in assets: | |||
| Accounts receivable | (962,211) | (11,633) | |
| Prepaid expenses | (113,224) | (15,234) | |
| Contingent consideration receivable | 159,897 | 141,365 | |
| Increase (decrease) in liabilities: | |||
| Accounts payable | 187,100 | (23,378) | |
| Accounts payable, related parties | (69,792) | -- | |
| Accrued expenses | (47,267) | 29,546 | |
| Royalties payable | (7,994) | (9,294) | |
| Deferred tax liability | (380,500) | -- | |
| Net cash used in operating activities | (1,006,208) | (175,937) | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Cash acquired in spin-off from Ante4, Inc. | -- | 258,712 | |
| Proceeds from sale of short term investments | -- | 3,700,000 | |
| Purchases and increases in oil and gas properties | (9,929,935) | -- | |
| Purchases of other property and equipment | (62,360) | -- | |
| Net cash used in investing activities | (9,992,295) | 3,958,712 | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Principal payments on line of credit | -- | (2,437,336) | |
| Proceeds from the sale of common stock, net of $526,444 of offering costs | 5,616,057 | -- | |
| Proceeds from the exercise of common stock options | 17,280 | -- | |
| Net cash provided by (used in) financing activities | 5,633,337 | (2,437,336) | |
| NET CHANGE IN CASH | (5,365,166) | 1,345,439 | |
| CASH AT BEGINNING OF PERIOD | 8,577,610 | -- | |
| CASH AT END OF PERIOD | $ 3,212,444 | $ 1,345,439 | |
| SUPPLEMENTAL INFORMATION: | |||
| Interest paid | $ 9,295 | $ 6,854 | |
| Income taxes paid | $ -- | $ -- | |
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
| Purchase of oil and gas properties paid subsequent to period-end | $ 1,886,009 | $ -- | |
| Purchase of oil and gas properties through issuance of common stock | $ 4,940,269 | $ -- | |
| Capitalized asset retirement obligations | $ 3,247 | $ -- | |