Cross Border Resources $XBOR
COMPANY SUMMARY
Cross Border Resources, Inc. is an oil and gas exploration company. As of December 31, 2011, the Company owned over 868,000 gross (approximately 295,000 net) mineral and lease acres in New Mexico and Texas. Approximately 26,000 of these net acres exist within the Permian Basin. Its acreage is focused on its prospective Bone Spring acreage located in the heart of the 1st and 2nd Bone Spring play. This play encompasses approximately 4,390 square miles across both New Mexico and Texas. The Company owns varying, non-operated working interests in both Eddy and Lea Counties, New Mexico, along with its working interest partners that include Cimarex, Apache, and Mewbourne. During the year ended December 31, 2011, the Company acquired non-operated working interests, ranging from 10% to 20%, in approximately 2,597 gross (308 net) acres in the Wolfberry trend, located in Dawson, Borden and Howard counties, Texas. On January 3, 2011, it completed the acquisition of Pure Energy Group, Inc.
MANAGEMENT
CEO – Alan W. Barksdale
Alan Barksdale was named Chairman of the Board for Cross Border Resources effective May 7, 2012. Mr. Barksdale been Red Mountain Resources’ President, Chief Executive Officer and a director since June 2011 and served as their Interim Acting Chief Financial Officer from June 2011 to August 2011. Mr. Barksdale has also served as President of Black Rock since its inception. Mr. Barksdale has also been the owner and president of the StoneStreet Group (“StoneStreet”) since 2008. Mr. Barksdale formed StoneStreet to provide advisory and management services and pursue merchant banking activities. At StoneStreet, Mr. Barksdale oversees the firm’s capital investments, manages its subsidiaries and serves as the senior advisor to StoneStreet’s clients.
Director – Richard F. LaRoche Jr.
Mr. LaRoche served 27 years with National HealthCare Corporation (“NHC”) as Secretary and General Counsel and 14 years as Senior Vice President, retiring from these positions in May 2002. He has served as a Board member since 2002. Mr. LaRoche serves as a director of Lodge Manufacturing Company and Pure (both privately held). He also served on the boards of National Health Investors, Inc. from 1991 through 2008, National Health Realty, Inc. from 1998 through 2007 and Trinsic, Inc. from 2004 through 2006. He serves on NHC’s Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee.
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Cross Border Announces First Quarter 2012 Financial Results
May 16, 2012 6:00:00 AM
SAN ANTONIO, May 16, 2012 /PRNewswire/ — Cross Border Resources, Inc. (OTCQX: XBOR), (“Cross Border” or “the Company”), a San Antonio-based oil and gas exploration and production company, today announced its financial results for the first quarter ended March 31, 2012.
(Logo: http://photos.prnewswire.com/prnh/20110523/AQ07208LOGO )
First Quarter 2012 Financial and Operating Highlights
Oil and gas revenues increased by 128% year-over-year to $3.6 million, up from $1.6 million in the first quarter of 2011.
Production volume totaled 41,477 barrels of oil equivalent (“boe”), an increase of 91% compared to 21,772 boe in the first quarter of 2011.
Average daily production sold during the first quarter of 2012 was 456 barrels of oil equivalent per day (“boepd”) compared to 242 boepd for the first quarter of 2011. The daily average sales rate for March 2012 was 750 boepd.
Adjusted EBITDA increased 277.4% year-over-year to $2.0 million, up from $0.5 million in the first quarter of 2011.
Results of Operations for the Quarter Ended March 31, 2012
Revenues
Oil and gas revenues for the quarter ended March 31, 2012 were $3.6 million as compared to $1.6 million for the quarter ended March 31, 2011. The increase of $2.0 million, or 128%, was primarily due to increased production from wells added year-over-year, and a year-over-year increase in the average prices for crude oil.
Sales volume totaled 41,477 boe for the quarter, an increase of 91% compared to 21,772 boe for the same period of 2011. The increase was primarily driven by increased production from wells added period-over-period. Average daily sales for the quarter were 456 boepd, compared to 242 boepd for the same period of 2011. Cross Border’s definition of daily sales represents only what volumes were sold in each respective year and does not account for stored inventory.
During the first three months of 2012, we participated in seven gross (one net) new wells. As of April 30, 2012, three of the seven new wells had been placed on production, while four were awaiting completion. Additionally, three of the four wells that began during 2011 and were awaiting completion at year-end 2011 were successfully completed during the first quarter of 2012.
Cross Border’s average realized crude oil sales price for the quarter ended March 31, 2012 was $98.46 per barrel, compared to $89.19 in the same period of 2011. The Company’s average realized natural gas sales price for the first quarter of 2012 was $5.86 per 1,000 cubic feet (“mcf”), compared to $6.22 per mcf for the same period of 2011.
Income from Operations
Operating income for the quarter ended March 31, 2012 amounted to $1.4 million as compared to an operating loss of $143,079 for the prior-year quarter. Operating expenses for the quarter ended March 31, 2012 totaled $2.2 million, up 25.5% from $1.7 million in the quarter ended March 31, 2011. The increase, primarily a result of costs related to additional wells brought online year-over-year, was partially offset by a 23.0% decrease in general and administrative expenses.
Net Income
Net income for the quarter ended March 31, 2012 was $658,145 as compared to a net loss of $154,916 for the same period in 2011. Net income per diluted share was $0.04 for the first quarter of 2012.
Adjusted EBITDA
Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) totaled $2.0 million, or $0.13 per fully diluted share, an increase of 277.4% compared to adjusted EBITDA of $0.5 million in the first quarter of 2011.
Adjusted EBITDA, a non-GAAP performance measure, is defined as net earnings before interest, income taxes, depreciation, depletion, amortization, abandonment and mark-to-market gains/losses on derivatives. Adjusted EBITDA does not represent, and should not be considered an alternative to GAAP measurements, and Cross Border’s calculations thereof may not be comparable to similarly titled measures reported by other companies. Cross Border’s management does not view adjusted EBITDA in isolation and also uses other measurements, such as net earnings (loss) and revenues to measure operating performance. A complete reconciliation of EBITDA to GAAP accounting standards can be found in this press release under the financial table “Reconciliation to GAAP.”
Liquidity and Capital Resources
As of March 31, 2012, the Company’s current assets were $4.1 million and current liabilities were $3.3 million. Cash and cash equivalents totaled $70,412 as of March 31, 2012. The Company’s shareholders’ equity at March 31, 2012 was $18.2 million. The Company generated $2.1 million from operating activities for the three months ended March 31, 2012, compared to $3.3 million for the same period of 2011. The Company used $5.9 million for investing activities for the quarter ended March 31, 2012, compared to $4.4 million for the same period of 2011. The Company generated $3.3 million from financing activities for the quarter ended March 31, 2012, compared to $0.9 million for the same period of 2011.
About Cross Border Resources
Information about the Company is available on its website, http://www.xbres.com.
Forward-Looking Statements
This news release contains forward-looking statements that are not historical facts and are subject to risks and uncertainties. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined, and assumptions of management. Forward-looking statements are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “aims”, “potential”, “goal”, “objective”, “prospective”, and similar expressions or that events or conditions “will”, “would”, “may”, “can”, “could” or “should” occur. Information concerning oil or natural gas reserve estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed.
Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company. It is important to note that actual outcomes and the Company’s actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially include misinterpretation of data, inaccurate estimates of oil and natural gas reserves, the uncertainty of the requirements demanded by environmental agencies, the Company’s ability to raise financing for operations, breach by parties with whom the Company has contracted, inability to maintain qualified employees or consultants because of compensation or other issues, competition for equipment, inability to obtain drilling permits, potential delays or obstacles in drilling operations and interpreting data, the likelihood that no commercial quantities of oil or gas are found or recoverable, and our ability to participate in the exploration of, and successful completion of development programs on all aforementioned prospects and leases. Additional information risks for the Company can be found in the Company’s filings with the U.S. Securities and Exchange Commission.
Contacts:
Investor Relations Contact:
Jon Cunningham
RedChip Companies, Inc.
Tel: +1-800-733-2447, Ext. 107
jon@redchip.com
http://www.redchip.com
Company Contact:
Cross Border Resources, Inc.
Nancy Stephenson
nancy@xbres.com
Cross Border Resources, Inc.
Condensed Balance Sheets
March 31,
December 31,
2012
2011
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$
70,412
$
472,967
Accounts receivable – production
2,905,931
1,184,544
Prepaid expenses and other current assets
1,061,393
1,808,944
Current tax asset
21,737
21,737
Total Current Assets
4,059,473
3,488,192
Property and Equipment
Oil and gas properties (successful efforts method)
36,288,899
30,540,978
Less accumulated depletion and depreciation
(10,415,884)
(9,870,830)
Net Property and Equipment
25,873,015
20,670,148
Other Assets:
Other property and equipment, net of accumulated depreciation of
$134,408 and $ 126,473 in 2012 and 2011, respectively
88,053
95,988
Deferred bond costs, net of accumulated amortization of $503,854 and
$344,300 in 2012 and 2011, respectively
-
159,554
Deferred bond discount, net of accumulated amortization of $186,560 and
$127,483 in 2012 and 2011, respectively
-
59,077
Deferred financing costs, net of accumulated amortization of $39,739 and
$26,355 in 2012 and 2011, respectively
174,887
64,746
Intangible assets, net of accumulated amortization of $247,020 and
$197,616 in 2012 and 2011, respectively
1,729,137
1,778,541
Goodwill
1,395,807
1,395,807
Other
54,324
54,324
Total Other Assets
3,442,208
3,608,037
TOTAL ASSETS
$
33,374,696
$
27,766,377
Cross Border Resources, Inc.
Condensed Balance Sheets
March 31,
December 31,
2012
2011
(Unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable – trade
$
1,081,770
$
103,759
Accounts payable – revenue distribution
236,915
143,215
Interest payable
63,173
112,659
Accrued expenses
614,094
418,290
Deferred revenues
-
32,479
Notes payable – current
764,278
764,278
Bonds payable – current portion
-
570,000
Creditors payable – current portion
300,000
186,761
Derivative liability – current portion
248,816
56,908
Total Current Liabilities
3,309,046
2,388,349
Non-Current Liabilities:
Asset retirement obligations
1,191,149
1,186,260
Deferred income tax liability
21,737
21,737
Line of credit
9,300,000
2,381,000
Derivative liability, net of current portion
258,675
28,086
Bonds payable, net of current portion
-
2,825,000
Creditors payable, net of current portion
1,052,783
1,352,783
Total Non-Current Liabilities
11,824,344
7,794,866
TOTAL LIABILITIES
15,133,390
10,183,215
STOCKHOLDERS’ EQUITY
Common stock , $0.001 par value, 36,363,637 shares authorized,
16,151,946 shares issued and outstanding at March 31, 2012 and
December 31, 2011
16,152
16,152
Additional paid-in capital
32,617,689
32,617,690
Retained earnings (accumulated deficit)
(14,392,535)
(15,050,680)
TOTAL STOCKHOLDERS’ EQUITY
18,241,306
17,583,162
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
33,374,696
$
27,766,377
Cross Border Resources, Inc.
Condensed Statements of Operations
For the years ended March 31, 2012 and 2011
(unaudited)
2012
2011
REVENUES AND GAINS:
Oil and gas sales
$
3,573,746
$
1,566,813
Other
32,479
32,479
Total Revenues And Gains
$
3,606,225
$
1,599,292
OPERATING EXPENSES:
Operating costs
688,535
153,063
Production taxes
160,371
105,456
Depreciation, depletion, and amortization
661,469
584,290
Accretion expense
4,889
26,416
General and administrative
671,070
873,146
Total Operating Expenses
2,186,334
1,742,371
GAIN (LOSS) FROM OPERATIONS
1,419,891
(143,079)
OTHER INCOME (EXPENSE):
Bond issuance amortization
(159,553)
(4,664)
Gain (loss) on derivatives
(473,913)
30,266
Interest expense
(131,758)
(105,156)
Miscellaneous other income (expense)
3,478
42,019
Total Other Income (Expense)
(761,746)
(37,535)
GAIN (LOSS) BEFORE INCOME TAXES
658,145
(180,614)
Current tax benefit (expense)
(222,869)
30,868
Deferred tax benefit (expense)
222,869
(5,170)
Income tax benefit (expense)
-
25,698
NET INCOME (LOSS)
$
658,145
$
(154,916)
NET GAIN (LOSS) PER SHARE:
Basic and diluted
$
0.04
$
(0.01)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic and diluted
16,151,946
12,476,945
Cross Border Resources, Inc.
Condensed Statements of Cash Flows
For the years ended March 31, 2012 and 2011
(unaudited)
Three Months Ended March 31,
2012
2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)
$
658,145
$
(154,916)
Adjustments to reconcile net income (loss) to cash used by operating activities:
Depreciation, depletion, amortization
661,469
571,694
Accretion
4,889
26,416
Share-based compensation
-
30,492
Amortization of debt discount and deferred financing costs
218,631
17,260
Changes in operating assets and liabilities:
Accounts receivable
(1,721,387)
(104,914)
Prepaid expenses and other current assets
698,382
3,492,054
Accounts payable
1,022,225
(321,381)
Derivative asset/liability
422,497
-
Accrued expenses
195,570
(201,175)
Deferred income tax
-
(25,698)
Deferred revenue
(32,479)
(32,479)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
2,127,942
3,297,353
CASH FLOWS FROM INVESTING ACTIVITIES
Cash impact of merger, net
-
(62,797)
Capital expenditures – oil and gas properties
(5,867,736)
(4,285,954)
Capital expenditures – other assets
-
(45,146)
NET CASH USED IN INVESTING ACTIVITIES
(5,867,736)
(4,393,897)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings (payments) on line of credit
6,919,000
1,212,500
Proceeds from renewing notes
-
128,037
Repayments of bonds
(3,395,000)
(190,000)
Repayments to creditors
(186,761)
(266,760)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
3,337,239
883,777
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(402,555)
(212,767)
Cash and cash equivalents, beginning of period
472,967
975,123
Cash and cash equivalents, end of period
$
70,412
$
762,356
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid
$
101,154
$
174,341
Income taxes paid
$
-
$
-
Cross Border Resources, Inc.
Summary Operating Statistics
(Unaudited)
Three Months
Ended March 31,
2012
2011
Revenues & Sales
Oil & Gas Sales
$
3,573,746
$
1,566,813
Gain on Sale of Oil & Gas Properties
-
-
Total revenue
$
3,606,225
$
1,599,292
Net Income (Loss)
$
658,145
$
(154,916)
Net Income Per Share
Basic & Diluted
$
0.04
$
(0.01)
Average Number of Shares Outstanding
16,151,946
12,476,945
Basic & Diluted
Production Volumes
Oil (Bbls)
32,415
13,287
Gas (mcf)
54,370
50,911
Total Barrels of Oil Equivalent (boe)
41,477
21,772
Average Barrels of Oil Equivalent per day (boepd)
456
242
Oil (Bbls)
78.2%
61.0%
Gas (mcf)
21.8%
39.0%
Total Barrels of Oil Equivalent (boe)
100.0%
100.0%
Average sales price:
Gas ($ per mcf)
$
5.86
$
6.22
Oil ($ per bbl)
$
98.46
$
89.19
Average cost of production:
Average production cost ($/boe)
$
15.62
$
7.25
Average production taxes ($/boe)
$
3.86
$
5.45
Depletion Expense
$
531,000
$
545,741
Depletion Expense ($/boe)
$
12.80
$
25.07
Non-GAAP Adjusted EBITDA
$
2,038,311
$
540,137
Non GAAP Adjusted EBITDA Per Share
Basic & Diluted
$
0.13
$
0.04
Cross Border Resources, Inc.
Reconciliation to GAAP
(unaudited)
Three Months
Ended March 31,
2012
2011
Net income (loss)
$
658,145
$
(154,916)
Interest expense and other
291,311
109,820
Income tax expense (benefit)
-
(25,698)
Accretion of asset retirement obligations
4,889
26,416
Depreciation, depletion, and amortization
661,469
584,290
Stock-based compensation
-
30,492
Mark-to-market loss on commodity swaps
422,497
(30,267)
-
Adjusted EBITDA
$
2,038,311
$
540,137
SOURCE Cross Border Resources, Inc.