Sabine Oil & Gas Corp (OTCMKTS:SOGC) reported 4Q2014 financial and operating results. The production volumes in 4Q2014 came at 20.2 Bcfe, an increase of 0.8 Bcfe from 19.4 Bcfe recorded on 4Q2013. The increase in production is attributable to the Forest Oil business inclusion and the other development program.
The financials
Sabine Oil & Gas revenue from production of natural gas, oil and natural gas liquids declined to $107.0 million in 4Q2014 from $109.3 million in the same quarter, a year ago. The drop in revenue was a result of a decline in average prices per Mcfe of 6% partially offset by higher production of 4%. The realized average price for natural gas inclusive of hedges was $4.28 per Mcf in 4Q2014 whereas the unhedged price came at $4.11 per Mcf.
The realized average price of oil inclusive of hedges was $69.10 per Bbl in 4Q2014 while unhedged realized average price was $62.54 per Bbl. The hedged volumes comprised almost 96% of oil volumes and 83% of natural gas volumes, which resulted in a realized benefit on such derivative instruments. The hedged volumes in 4Q2013 were 79% and 69% of oil and natural gas respectively.
The highlights
Sabine Oil & Gas closed the business merger of Forest Oil Corporation and Sabine Oil & Gas LLC on December 16, 2014. The 4Q2014 results include 15 days of operating results for the combined company and financial report for Sabine Oil & Gas LLC on a stand-alone basis before merger.
David Sambrooks, the Chief Executive Officer of Sabine Oil & Gas Corp (OTCMKTS:SOGC), said that the company recognizes that market dynamics have altered significantly in the past year, which has impacted the financial position in FY2014. The board of directors and management team are taking proactive initiatives to strengthen the balance sheet and improve liquidity. In last trading session, Sabine Oil & Gas stock price declined 19.05% to close at $0.085.
