Milagro Oil & Gas, Inc. (the “Company”) today announced financial results for the third quarter ended September 30, 2012.
The Company reported a net loss of approximately $21.5 million for the third quarter of 2012 compared to net income of approximately $25.0 million for the third quarter of 2011. This $46.5 million decrease in net income relates primarily to unrealized derivative losses. The Company had approximately $16.4 million of unrealized derivative losses for the third quarter of 2012 as compared to approximately $24.1 million of unrealized gains for the same period in 2011. In addition, the Company’s 2012 net income decreased due to lower oil and natural gas revenues of approximately $2.9 million, primarily related to lower natural gas sales. The Company’s 2012 net income was adversely impacted by $4.5 million of higher operating costs, primarily due to an approximate $3.1 million impairment of its oil and gas properties. This cumulative decrease in net income was partially offset by higher realized derivative revenues of approximately $5.1 million, primarily related to natural gas and natural gas liquids. Net income was also impacted by a lack of interest rate derivative revenue in 2012 compared to a gain in 2011 of approximately $2.8 million.
Revenues for the third quarter of 2012 were approximately $19.8 million, which is a 66% decrease from revenues of approximately $58.0 million reported for the same period of 2011. This decrease is the result of lower commodity derivative revenue of approximately $35.3 million which consisted of approximately $40.5 million of unrealized commodity derivative revenues, which was offset by approximately $5.2 million of realized hedge revenues. Additionally, oil and gas revenues decreased by approximately $2.9 million due primarily to lower production and prices for natural gas.
Source: Business Wire
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