Petrohawk Energy production for the first quarter averaged 412 million cubic feet equivalent per day (Mmcfe/d), up 14% over fourth quarter 2008 and a 58% raise over the same period one year ago. Total production for the first quarter was 37.1 billion cubic feet of natural gas equivalent (Bcfe), 93% of which was natural gas.
For the quarter, Petrohawk Energy generated revenues of $263 million and cash flow from operations before changes in working capital (cash flow from operations, a non-GAAP measure) of $142 million, or $0.55 per fully diluted common share. After adjusting for selected items, net income for the quarter was $0.02 per fully diluted common share, or $12 million after tax, against $29 million, or $0.15 per fully diluted common share one year ago. Selected items for the first quarter comprise a $101 million non-cash derivative gain on Petrohawk Energy’s long-term derivative position, in assition to $1.7 billion full cost ceiling impairment, both items are due to the accounting effect of lower commodity prices, and stated prior to any income tax adjustment for such items.
Lease operating costs continue to reduce on a per unit basis. The company has reported lease operating expense for the quarter of $0.44 per Mcfe, a 6% decline over 2008 average per unit lease operating expense. A raise in gathering and transportation expense was impacted by a one-time adjustment, and Petrohawk Energy anticipates this item will be within stated guidance of between $0.40 and $0.48 per Mcfe for the full year. Cash costs (including lease operating, gathering and transportation, production taxes, workover, general and administrative, and interest expense) were $3.30 per Mcfe for the quarter, unchanged against fourth quarter 2008.
During the first quarter, the company has gained $2.28 per Mcf from hedging, bringing realized natural gas prices to $6.64 per Mcf. Petrohawk Energy also gained $5.51 per barrel from its hedging program during the quarter, bringing realized oil prices to $43.61 per barrel. Before the effect of hedges, the company has realized 89% of NYMEX for its natural gas production and 88% of NYMEX for oil. Natural gas realizations were negatively affected by stoppages in completion of a third-party pipeline in the Fayetteville shale.
At the end of the first quarter, Petrohawk Energy had about $1.2 billion in liquidity, including $285 million of cash and marketable securities and $950 million in revolver capacity. During the three months ended March 31, 2009, Petrohawk Energy expended $391 million on drilling, completions, seismic, land and infrastructure.
Our operations are going extremely well, gaining efficiencies, displaying healthy margins, and contributing to a reinvestment profile that better positions Petrohawk for an economic upturn. Our production growth, cash flow, expenditures and hedging are in relative balance, allowing our Company to forge ahead with our stake in several important U.S. shale plays, said Floyd C. Wilson, chairman, president and chief executive officer. Homegrown American natural gas is clearly part of the answer for a healthier environment and reduced dependence on foreign energy sources. Petrohawk intends to be in the vanguard of this movement.
