Free cash flow from operations was positive for the first time in the company's history. Current production was 94,000 barrels of oil and 103,000 barrels of oil equivalent. Triangle added 2,000 net acres in Q2 in McKenzie County at a cost of $,2000 per acre.
Triangle Petroleum obtained financing with Natural Gas Partners last month for $120 million in convertible notes. The notes convert to $8 a share in the Triangle common stock and carry a cashless coupon with a 5 percent annual interest rate. The interest is simply added to the principal. There are maintenance covenants associated with the note. Triangle Petroleum also added Roy Aneed from NGP to its board of directors.
At the beginning of Q2, Triangle Petroleum began hedging 1000 barrels of oil a day with a floor of approximately $81 and a ceiling of $102 or $103. It began hedging 500 barrels of oil a day for 2013 and 2014 in the same band.
Q2 was RockPile Energy Services' first quarter of operations. Triangle completed 2 wells in the quarter, which are fully operational. RockPile is zipper-fracking 2 wells for Triangle Petroleum in Williams County. Triangle owns 83.3 percent of RockPile.
Triangle Petroleum is now starting its growth mode. It has two rigs operating full time currently and plans to complete 10 more wells for the year. One of the 10 wells is in Three Forks. Triangle has two well shut-ins. Five wells are being fracked in September and October.
Triangle is working on finding a financial partner for Caliber, its midstream business. It expects a positive EPS in Q3.
Triangle is moving more toward ceramic for fracking, rather than sand.
Financials.
Total revenue in Q2 was $10.2 million. Of that amount, $7.5 million came from oil and gas sales, while $2.6 million came from Triangle's share of RockPile Energy Services revenue.
The company's average sales price per barrel was $77 and it sold 93,730 barrels. It produced 60 million cubic feet of gas with an average sales price of $4.20 and 37,460 gallons of LNG at a sales price of $0.97.
Triangle Petroleum had a loss of $.02 in Q2. It hopes Q2 will be the last quarter in which it has a loss.
Due to the NGP financing, Triangle Petroleum had $116 million of cash at the end of Q2. It also had an undrawn credit facility of $27 million, which it expects to increase in the next couple of months. It hopes to double the credit facility, and the hedges will help its credit base.
The transcript of the earnings conference call can be found on Seeking Alpha at the following link:
http://seekingalpha.com/article/851471-triangle-petroleum-s-ceo-discusses-f2q-2013-results-earnings-call-transcript?page=3&p=qanda&l=last
Copyright 2012 Jaygo's Earnings Conference Call Summaries
This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.
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