UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

 

FORM 8–K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

 

Date of Report (Date of Earliest Event Reported): November 16, 2007 (November 14, 2007)

 

CRIMSON EXPLORATION INC.

(Exact Name of Registrant as Specified in Charter)

 

 

 

 

717 Texas Avenue, Suite 2900, Houston Texas 77002

(Address of Principal Executive Offices)

 

(713) 236-7400

(Registrant’s telephone number, including area code)

 

_____________________________________________________________________________

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 14d-2(b))

 

[] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

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Item 2.02  Results of Operations and Financial Condition.

On November 14, 2007, Crimson Exploration Inc. issued a press release announcing financial results for the third quarter ended September 30, 2007. The press release is included in this report as Exhibit 99.1.

The information contained in Exhibit 99.1 is incorporated herein by reference. The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 9.01  Financial Statements and Exhibits.

(c)  Exhibits

 

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

 

CRIMSON EXPLORATION, INC.

 

E. Joseph Grady

Chief Financial Officer and

Senior Vice President

 

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Exhibit Index

 

 

 

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Exhibit 99.1

 

Crimson Exploration Inc. Announces Record Third Quarter 2007 Financial Results

Houston, TX – (BUSINESS WIRE) – November 14, 2007 - Crimson Exploration Inc. (OTCBB: CXPO - News) today announced financial results for the third quarter 2007 and YTD period to supplement its operating results press release from November 5^th.

 

Highlights

 

Summary Financial Results

 

Total operating revenues for the third quarter 2007 were $38.0 million compared to $5.6 million in the prior year quarter. For the first nine months of 2007, total operating revenues were $69.2 million compared to $16.0 million for the first nine months of 2006. Increases for both the quarter and nine month period were due to the higher overall production impact from the acquisition of certain oil and natural gas properties and related assets in the South Texas and Gulf Coast areas of Louisiana and Texas (“the STGC Properties”) in May 2007.

 

Production for the third quarter 2007 was 4,629,441 Mcfe of natural gas equivalents, or 50,320 Mcfe per day, compared with production of 694,793 Mcfe, or 7,552 Mcfe per day, in the third quarter 2006. Production for the first nine months 2007 was 8,462,800 Mcfe of natural gas equivalents, or 30,999 Mcfe per day, compared with production of 1,924,443 Mcfe, or 7,049 Mcfe per day, in the first nine months of 2006.

 

Average realized prices in the third quarter 2007 (including the effects of realized gains/losses on our commodity price hedges) were $66.47 per barrel of oil, $7.60 per Mcf of natural gas, and $45.17 per barrel of natural gas liquids, or $7.11 on a Mcfe basis. For the third quarter 2006, average realized prices were $61.01 per barrel of oil and $6.72 per Mcf of natural gas. Average realized prices for the first nine months of 2007 were $64.61 per barrel of oil, $7.57 per Mcf of natural gas, and $44.71 per barrel of natural gas liquids, or $7.39 on a Mcfe basis. For the first nine months of 2006, average realized prices were $65.43 per barrel of oil, and $6.96 per Mcf of natural gas.

 

Total Operating Expenses for the third quarter 2007 were $22.3 million compared to $5.7 million in the third quarter of 2006. Of the $16.6 million increase in total operating expenses, field operating expenses were up approximately $4.3 million and depreciation, depletion and amortization increased by $10.6 million; both increases primarily due to the addition of the STGC Properties. Also contributing to the increase in total operating expenses for the quarter was a $1.7 million increase in general and administrative costs related to the increase in the size of the company after the STGC acquisition. Exploration expense increased by $0.6 million versus the third quarter of 2006, primarily due to $0.5 million in dry hole expense. For the first nine months 2007, total operating expenses were $44.2 million compared to $14.6 million in the first nine months of 2006, with increases similar in type and proportion to those reported for the quarter.

 

Other Income (Expense) was a net negative $5.7 million for the third quarter 2007 compared to a net positive of $4.3 million in the third quarter 2006. This increase in expense was primarily due to $6.0 million in interest expense associated with our outstanding debt from the acquisition of the STGC Properties, offset slightly by the $0.6 million increase in the mark-to-market valuation on our derivative instruments.

 

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Cash flow from operations for the first nine months of 2007, exclusive of changes in working capital, was $39.5 million, a $32.7 million increase over the $6.8 million reported for the first nine months of 2006.

 

Net income for the third quarter 2007 was $6.2 million compared to $2.6 million for the third quarter of 2006. For both the quarter and year-to-date periods, the increase resulted from the increase in he results of operations from the STGC properties, offset in part by the increase in interest expense and the non-cash change in the mark-to-market value of our commodity hedge contracts.

 

Selected Financial and Operating Data

 

The following table reflects certain comparative financial and operating data for the three and nine month periods ended September 30, 2007 and 2006:

 

 

 

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CRIMSON EXPLORATION INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

CRIMSON EXPLORATION INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

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Non–GAAP Financial Measures

 

Crimson also presents earnings before interest, taxes, depreciation and amortization (“EBITDA”) and net cash flow from operations, exclusive of working capital items, which consists of net cash provided by operating activities plus the period change in accounts receivable, other current assets and accounts payable and accrued expenses. Management uses these measures to assess the company’s ability to generate cash to fund operations, exploration and development activities. Management interprets trends in these measures in a similar manner as trends in operations, cash flow and liquidity. Neither EBITDA, nor net cash flows from operations, exclusive of working capital items, should be considered as alternatives to net income, income from operations or net cash provided by operational activities as defined by GAAP. The following is a reconciliation of net cash provided by operating activities to net cash flow from operations, exclusive of working capital items and EBITDA:

 

 

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission (“SEC”). Such statements include those concerning Crimson’s strategic plans, expectations and objectives for future operations. All statements included in this press release that address activities, events or developments that Crimson expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions Crimson made based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond Crimson’s control. Statements regarding future production, revenue and cash flow are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, commodity price changes, inflation or lack of availability of goods and services, environmental risks, drilling risks and regulatory changes and the potential lack of capital resources. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. Please refer to our filings with the SEC, including our Form 10-K for the year ended December 31, 2006 and our subsequent Form 10-Q’s for a further discussion of these risks.

 

Contact:

 

 

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