(Dallas, TX. – November 2, 2011) StockGuru Shines its Spotlight on Dune Energy, Inc. (OTCBB: DUNR). Yesterday the Company announced results for the third quarter of 2011 and provided an operational update. The Company closed on November 1, 2011, at $0.83 near its fifty-two week low which has ranged from $1.35 – 0.051.
Revenue and Production
Revenue from continuing operations for the third quarter totaled $15.1 million as compared with $15.6 million for the third quarter of 2010. Production volumes in the third quarter were 120 Mbbls of oil and .68 Bcf of natural gas, or 1.4 Bcfe. This compares with 148 Mbbls of oil and .93 Bcf of natural gas, or 1.8 Bcfe for the third quarter of 2010. In the third quarter of 2011, the average sales price per barrel of oil was $98.93 and $4.77 per Mcf for natural gas, as compared with $74.92 per barrel and $4.87 per Mcf, respectively for the third quarter of 2010. The primary reasons behind the decrease in revenue were lower production volumes in the third quarter of 2011 versus the third quarter of 2010. Oil volumes decreased 19% and gas volumes decreased 27% from 2010 levels. However, the average price per Mcfe produced was $10.81 in the third quarter of 2011 compared to $8.59 in the third quarter of 2010 or a 26% increase.
Costs and Expenses
Total lease operating expense from continuing operations for the third quarter totaled $6.1 million versus $5.3 million for the third quarter of 2010. Cash G&A expense totaled $2.3 million for the third quarter of 2011 versus $2.1 million for the third quarter of 2010. Interest financing expense was $9.1 million for the third quarter of 2011 versus the $8.8 million of 2010, primarily associated with payment of 10.5% interest on the $300 million of Senior Secured Notes and higher interest rates applicable to the Credit Agreement. We incurred a gain of $.06 million on hedging during the third quarter of 2010 versus no activity in 2011 due to settling all hedge balances in December 2010.
Operating loss for the third quarter of 2011 was $.1 million versus a $.03 million operating loss in the third quarter of 2010. Net loss totaled $10.2 million for the third quarter of 2011 and $9.1 million for the third quarter of 2010. Preferred stock dividends were $5.3 million in the third quarter of 2011 versus $6.5 million in the third quarter of 2010. These dividends were paid in kind (PIK) and as such do not represent a cash payment. Net loss per share, both basic and fully diluted, for the quarter was $0.32, based on 48.9 million weighted average shares outstanding as compared with a loss of $.39 per share in the third quarter of 2010 with 40.4 million weighted average shares outstanding. The increased outstanding common shares are associated with the conversion of preferred shares into common shares.
The CNO #1 at Leeville Field, operated by Manti Exploration Operating LLC, was drilled to a total depth of 14,670 feet measured depth and 14,033 true vertical depth. The well encountered 68 feet of pay in three sands. The well has been perforated in the lowermost sand and tested at rates over 4 Mmcfg per day. Production is anticipated to commence in November of 2011 after installation of a flow line. Dune has a 40% interest in the well. See Investor Overview for November, 2011 on our website for more details on operations and plans for the remainder of 2011.
FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements that are intended to be covered by “forward-looking statements” safe harbor provided by the Private Securities Litigation Reform Act of 1995. All statements included in this press release that address activities, events or developments that Dune Energy expects, believes or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning estimates of expected drilling and development wells and associated costs, statements relating to estimates of, and increases in, production, cash flows and values, statements relating to the continued advancement of Dune Energy, Inc.’s projects and other statements that are not historical facts. When used in this document, the words such as “could,” “plan,” “estimate,” “expect,” “intend,” “may,” “potential,” “should,” and similar expressions are forward-looking statements. Although Dune Energy, Inc. believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include the potential that the Company’s projects will experience technological and mechanical problems, geological conditions in the reservoir may not result in commercial levels of oil and gas production, changes in product prices and other risks disclosed in Dune’s Annual report on Form 10-K filed with the U.S. Securities and Exchange Commission.
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