PetroQuest Energy Announces Third Quarter 2016 Results; Updates East Texas Joint Venture, Operations, Liquidity And Hedging

LAFAYETTE, La., Oct. 31, 2016

Discretionary cash flow for the third quarter of 2016 was $207,000, as compared to $4,990,000 for the comparable 2015 period.  For the first nine months of 2016, discretionary cash flow was $(2,994,000), as compared to $22,853,000 for the first  nine months of 2015. See the attached schedule for a reconciliation of net cash flow provided by operating activities to discretionary cash flow. 

Production for the third quarter of 2016 was 5.2 Bcfe, compared to 7.4 Bcfe for the comparable period of 2015. For the first nine months of 2016, production was 18.9 Bcfe, compared to 27.5 Bcfe for the comparable period of 2015. The reduction in production volumes during the 2016 periods is primarily attributable to the sale of the Company's Arkoma assets in 2015, as well as the continued lack of capital expenditures.

Stated on an Mcfe basis, unit prices including the effects of hedges for the third quarter of 2016 were $3.27  per Mcfe, as compared to $3.62 per Mcfe in the third quarter of 2015. For the first nine months of 2016, unit prices including the effects of hedges, were $2.66 per Mcfe, as compared to $3.38 per Mcfe for the first nine months of 2015.

Oil and gas sales during the third quarter of 2016 were $17,094,000, as compared to $26,872,000 in the third quarter of 2015. For the first nine months of 2016, oil and gas sales were $50,238,000 as compared to oil and gas sales of $92,873,000 for the first nine months of 2015.

Lease operating expenses ("LOE") for the third quarter of 2016 decreased to $6,857,000, as compared to $10,070,000 in the third quarter of 2015.  Lease operating expenses decreased during the three months ended September 30, 2016 primarily as a result of the Company's 2015 Arkoma divestiture. LOE per Mcfe was $1.31 for the third quarter of 2016, as compared to $1.35 in the third quarter of 2015. For the first nine months of 2016, lease operating expenses were $1.16 per Mcfe compared to $1.17 per Mcfe in the first nine months of 2015.

Depreciation, depletion and amortization ("DD&A") on oil and gas properties for the third quarter of 2016 was $1.12 per Mcfe, as compared to $1.79 per Mcfe in the third quarter of 2015. For the first nine months of 2016, DD&A on oil and gas properties was $1.21 per Mcfe compared to $1.88 per Mcfe for the comparable period of 2015. The decrease in the per unit DD&A rate during the 2016 periods is primarily the result of recent ceiling test write-downs.