San Antonio, TX - (NewMediaWire) - August 17, 2015 - EnerJex Resources, Inc. (NYSE MKT: ENRJ) (NYSE MKT: ENRJ.PR) ("EnerJex" or the "Company"), an independent exploration and production company focused on the acquisition and development of oil and natural gas properties located in the Rocky Mountain and Mid-Continent regions of the United States, announced today that it has filed its SEC Form 10-Q for the second quarter ended June 30, 2015.
Highlights for the second quarter include the following:
- Reduction of bank debt to $21.5 million compared to $23.5 million as of March 31, 2015 and $32.0 million as of March 31, 2014.
- Positive net working capital of $4.1 million at the end of the period, including current assets of $7.9 million.
- Reduction of accounts payable to $1.2 million compared to $2.0 million as of March 31, 2015 and $3.0 million as of December 31, 2014.
- On August 12, 2015, EnerJex completed the sale of various oil and gas leases, equipment and wells in Kansas for approximately $2.8 million. The Company repaid $1.5 million of bank debt with the proceeds and plans to invest the balance of $1.3 million in its existing oil and gas assets.
- On July 21, 2015, EnerJex received a liquidating distribution in the amount of $1.45 million with respect to the shares of Oakridge Energy, Inc. ("Oakridge") that are owned by the Company. EnerJex expects to receive one or more additional liquidating distributions from Oakridge although the timing and amount of such distributions are uncertain. The Company repaid $750,000 of bank debt with the proceeds from this distribution.
- As a result of the above transactions, EnerJex's bank debt has been further reduced to $19.1 million, accounts payable have been reduced to approximately $0.4 million, and cash on the balance sheet (inlcuding restricted cash) was approximately $3.2 million as of August 14, 2015.
- The company recently added additional oil hedges in the form of deferred premium put options, which provide downside protection while preserving upside potential. For the second half of 2015, EnerJex has hedged approximately 320 barrels of oil per day through swaps at an average price of $85.86 per barrel. For the first half of 2016, the Company has hedged approximately 300 barrels of oil per day through put options at an average price of $85.00 per barel, excluding a deffered put premium of $5.03 per barrel. For the second half of 2016, EnerJex has hedged approximately 160 barrels of oil per day through put options at an average price of $60.00 per barrel, excluding a deferred put premium of $5.72 per barrel.
- EnerJex recently entered into a joint venture arrangement with multiple industry partners pursuant to which the Company will contribute certain undeveloped oil and gas leases and retain a 50% working interest in the project. In return for the acreage contribution, EnerJex will retain a 50% carried interest in four exploration wells targeting oil from multiple stacked pay zones on large subsurface structures that have been identified through the interpretation of extensive 3D seismic data. It is anticipated that these will be vertical wells drilled to a total depth of approximately 6,000 feet. The Company expects the first of these wells to be spudded in the fourth quarter 2015. Further details on this joint venture will be forthcoming.
EnerJex's CEO, Robert Watson, Jr., commented, "Management has been working diligently to position the Company for an eventual recovery in oil prices. EnerJex's hedging strategy has proven to be invaluable in the current difficult commodity price environment. I am proud of our team's commitment and accomplishments during 2015, and I am pleased to announce that the Company expects to increase its operational activity during the remainder of this year through investment in existing oil and gas assets and through the joint venture. EnerJex's Board of Directors continues to evaluate strategic initiatives including but not limited to potential mergers and asset acquisitions."
About EnerJex Resources, Inc.
EnerJex Resources, Inc. (NYSE MKT: ENRJ) (NYSE MKT: ENRJ.PR) is an independent exploration and production company focused on the acquisition and development of oil and natural gas properties located in the Rocky Mountain and Mid-Continent regions of the United States. The Company owns oil and gas leases covering nearly 100,000 acres in multiple prolific hydrocarbon basins located in Colorado, Kansas, Nebraska, and Texas.
EnerJex's producing assets are characterized by long-lived reserves with low production decline rates, and the Company has identified more than 500 drilling locations within its existing properties. Through its large acreage footprint in the Denver-Julesburg ("DJ") Basin, EnerJex also has exposure to emerging oil resource plays including the horizontal Niobrara and Codell plays in Weld County, Colorado. The Company's management team has more than 100 years of combined experience in the oil and gas exploration and production industry, including geology, engineering, operations, and finance. EnerJex's headquarters are located in San Antonio, Texas, and additional information is available on its website at www.enerjex.com.
This press release and the materials referenced herein include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give EnerJex's current expectations or forecasts of future events. The statements in this press release regarding the completion of drilling for and commencement of operations at new wells, successful production at newly drilled wells, expected increases in overall production, the acquisition of operating assets and related agreements, any implied or perceived benefits from any current or future transaction, and any other effects resulting from any of those matters, are forward-looking statements. Such statements involve material risks and uncertainties, including but not limited to: whether newly drilled or newly acquired properties will produce at levels consistent with management's expectations; market conditions; whether EnerJex will experience equipment failures and, if they materialize, whether we will be able to fund repair work without materially impairing planned production levels or the availability of capital for further production increases; the ability of EnerJex to meet its loan covenants under the debt facility that is expected to fund the costs of the new wells and to obtain financing from other sources for continued drilling; the costs of operations; delays, and any other difficulties related to producing oil; the ability of EnerJex to integrate the newly producing assets; the ability to retain necessary skilled workers to operate the new producing wells; the price of oil; EnerJex's ability to market and sell produced minerals; the risks and effects of legal and administrative proceedings and governmental regulation; future financial and operational results; competition; general economic conditions; the ability to manage and continue growth; and the ability of management to successfully integrate Black Raven. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Important factors that could cause actual results to differ materially from the forward-looking statements are set forth in our Form 10-K filed with the SEC. EnerJex undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. EnerJex's production forecasts are dependent upon many assumptions, including estimates of production decline rates from existing wells and the outcome of future drilling activity. Although EnerJex believes the expectations and forecasts reflected in these and other forward-looking statements are reasonable, it can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.