HOUSTON, Nov. 2010 /PRNewswire via COMTEX/ -- Endeavour International Corporation (NYSE Amex: END) (LSE: ENDV) reported discretionary cash flow for the third quarter of 2010 was $6.1 million compared to $7.6 million in the third quarter of 2009 and $11.2 million for the second quarter of 2010. Net loss, as adjusted, was $(14.6) million for the third quarter of 2010 compared to $(6.4) million in the same period last year. On a GAAP basis, the net loss was $(11.7) million for the third quarter of 2010 as compared to $(4.5) million in the same quarter in 2009.
"During the quarter, we achieved several important goals by executing steps to enhance Endeavour's overall value from both an operational, as well as a financial perspective," said William L. Transier, chairman, chief executive officer and president. "The combination of the West Rochelle discovery, our recent financing and the sale of our Cygnus asset positions the company to execute our growth strategy."
Highlights for the third quarter are as follows:
West Rochelle Discovery Confirms Gas and Oil Reservoir - Located in the Central North Sea, the West Rochelle well was spud on September 3rd and reached a total depth of 10,787ft on October 7th encountering natural gas with an oil rim in an excellent quality reservoir similar to that discovered at Rochelle. The well has been sidetracked to the north and has encountered hydrocarbons that extend the West Rochelle area. The well straddles Blocks 15/26c and 15/26b and lies west of the Rochelle gas field in Block 15/27. The West Rochelle accumulation is expected to be developed as a tie-back to the Rochelle field.
Completed the Sale of the UK Cygnus Asset - In October, Endeavour successfully completed the sale of its UK Cygnus asset to Bayerngas UK Ltd. for $110 million in cash. The cash proceeds were not burdened by any current taxes payable and are being used primarily to accelerate the company's development projects.
Continued US Drilling Success and Momentum in the Haynesville - In the third quarter, net sales from US production more than doubled from the previous quarter. Production growth was driven by activity in the Louisiana Haynesville shale play where the company had four successful completions during the quarter. The Woodard 10-H well, where Endeavour holds a 40.8% working interest, flowed gas at an initial production rate of 22.6 million cubic feet of gas equivalent per day. The company currently has an interest in four additional Haynesville wells waiting on completion, including two wells operated by its joint venture partner Cohort Energy. Endeavour plans to continue a conservative 1-2 rig drilling program for the remainder of the year in Louisiana and East Texas maintaining flexibility to adjust drilling activity in accordance with current and future gas prices. In the Pennsylvania Marcellus shale play, the company will participate in two horizontal wells to be drilled in the fourth quarter to further evaluate the Daniel Field in Cameron County where an integrated development plan is being formalized. In Alabama, the Hillwood-operated joint venture successfully drilled two vertical pilot tests which will be evaluated for future horizontal re-entries and/or completion tests.
Completed a Financing Transaction for $160 million - In August, Endeavour closed on a $150 million senior secured credit facility. Of the total proceeds, $66 million was used to repay the company senior bank and second lien facilities. This facility offered the company the flexibility to sell assets and reinvest the proceeds in the business, make acquisitions and incur additional debt. It bears cash interest of 12 percent plus three percent payment in-kind payable in cash at the company's option. The facility contains a covenant package customary for transactions of this type and is callable after the first year. During October 2010, the company borrowed an additional $10 million as provided under this facility.
Awarded Blocks in the 26th Offshore Gas and Licensing Round - Endeavour has been awarded licenses in four blocks or part blocks in the United Kingdom North Sea. The blocks are located in the company's core focus areas.
Share Consolidation Effected in the Form of a Reverse Stock Split - Earlier this week, the company announced a 1-for-7 share consolidation of its common stock in the form of a reverse stock split that is expected to be effective at the opening of trading on November 18, 2010. With this share consolidation, the company expects to make the stock available to a broader range of investors and position the company's trading metrics more in-line with its peers. As a result of the share consolidation, every seven shares of common stock outstanding will automatically be combined into one share of common stock and holders who would otherwise receive fractional shares will have their shares rounded up to the next whole share. The company has not restated any share or per share amounts as a result of this share consolidation within this release.