RELEASE: May 7, 2009
HKN Announces Positive Cash Flow from Operations in First Quarter 2009
even with Dramatically Reduced Oil and Gas Commodity Pricing
Texas – May 7, 2009 – HKN,
Inc. (NYSE Amex: HKN) (”HKN”)
today reported its interim financial results for the three months ended March
31, 2009. HKN reported a net loss
of $1.1 million during the first three months of 2009 as compared to net income
of $1.1 million in the first three months of 2008.
first quarter 2009, oil and natural gas prices declined sharply as compared to
the prior year period. However, we have reduced our controllable costs in order
to maintain positive cash flow from operations even during the low commodity
pricing environment. During the first quarter 2009, oil prices decreased 62% from an average of $97.80 per barrel in
the first quarter 2008 to $37.40 per barrel in the first quarter 2009. Prices
realized for natural gas sales decreased 52%, averaging $4.32 per mcf in first
quarter 2009 compared to $9.00 per mcf during first quarter 2008.
operating expenses per barrel of oil equivalent (“boe”) decreased from $37.64
per boe in first quarter 2008 to $29.66 per boe in first quarter 2009.
Our general and administrative expenses decreased
54% from $1.2 million for the first quarter 2008 to $551 thousand for the first
quarter 2009 primarily due to overall lower salary and personnel costs along
with decreased rent and consultant expenses.
have no debt outstanding, and we have a cash and marketable securities balance
of approximately $14.7 million at March 31, 2009. We also anticipate our
operating cash flow and other capital resources, if needed, will adequately
fund our planned capital expenditures and other capital uses over the near-term.
Due to our cost-cutting measures, we have budgeted our 2009 operations to
remain cash-flow positive, even at current market pricing.
In January 2009, our Board of
Directors authorized an amendment to the existing repurchase plan allowing us
to buyback an additional 1.0 million shares of our common stock. During the
three months ended March 31, 2009, we repurchased 500 thousand shares of our
common stock for $1.3 million from a shareholder in a privately negotiated
transaction pursuant to our repurchase program. During the three months ended
March 31, 2009, we retired approximately 507 thousand treasury shares. As of March 31,
2009, approximately 737 thousand shares remained available for repurchase under
our repurchase program.
results for the three months ended March 31, 2009 and 2008 are as follows (in thousands except for share
and per share amounts)
Sheet Summary (in thousands)
(1) Current ratio is calculated as current assets
divided by current liabilities.
(2) Working capital is the difference between
current assets and current liabilities.
of Operating Margin to Net Income (in thousands)
believes the presentation of this non-GAAP financial measure, in connection
with the results for the three months ended March 31, 2009 and 2008, provides
useful information to investors regarding our results of operations. Management
also believes that this non-GAAP financial measure provides a picture of our
results that is comparable among reporting periods and provides factors that
influenced performance during the period under the report. This non-GAAP financial measure should be
considered in addition to, and not as a substitute for, financial measures
prepared in accordance with GAAP.
HKN, Inc. is an
independent energy company engaged in the development and production of crude
oil, natural gas and coalbed methane assets and in the active management of investments
in the energy industry. Additional information may be found at the HKN Web
site, www.hkninc.com. Please e-mail all
investor inquiries to HKNinquiries@ctaintegrated.com.
Certain statements in
this announcement and inferences derived therefrom may be regarded as
“forward-looking statements” within the meaning of the Securities Exchange Act
of 1934, as amended. These forward-looking statements are based on the opinions
and estimates of management at the time the statements are made. Management’s current view and plans,
however, are subject to numerous known and unknown risks, uncertainties and
other factors that may cause the actual results, performance, timing or
achievements of HKN to be materially different from any results, performance,
timing or achievements expressed or implied by such forward-looking
statements. The various uncertainties,
variables, and other risks include those discussed in detail in the Company’s
SEC filings, including the Annual Report on Form 10-K filed on February 18,
2009. HKN undertakes no duty to update or revise any forward-looking
statements. Actual results may vary