Triangle Petroleum Provides Financial Results and Operational Update For All Business Segments For Fourth Quarter and Full Fiscal Year 2015

FY 2015

Revenue

y/y % Change

Adj.-EBITDA

y/y % Change

E&P

$284.5

77%

$208.2

86%

RockPile

$418.1

116%

$95.1

127%

Total

$702.6

98%

$303.3

97%

*Dollars in U.S. millions

*Exploration and production operating segment ("E&P") Adjusted-EBITDA includes all exploration and production related business lines, and does not include TPC (parent company) other revenues and expenses

Q4 2015

Revenue

y/y % Change

Adj.-EBITDA

y/y % Change

E&P

$63.0

28%

$54.2

69%

RockPile

$111.1

97%

$17.9

71%

Total

$174.2

65%

$72.1

70%

*Dollars in U.S. millions. Total amounts vary due to rounding

*Exploration and production operating segment ("E&P") Adjusted-EBITDA includes all exploration and production related business lines, and does not include TPC (parent company) other revenues and expenses

Q4 Fiscal Year 2015 and Fiscal Year 2015 Summary Consolidated Statement of Operations (in thousands)

Three Months Ended January 31,

Year Ended January 31,

2015

2014

2015

2014

Revenues

Oil, natural gas and natural gas liquids sales

$    63,023

$    49,372

$    284,502

$    160,548

Oilfield services^(a)

93,965

$    36,138

288,453

98,199

Total Revenues

156,988

85,510

572,955

258,747

Expenses

Lease operating expenses

6,962

4,965

25,703

14,454

Gathering, transportation and processing

6,605

2,753

18,520

4,302

Production taxes

6,112

5,482

29,774

18,006

Depreciation and amortization

43,590

21,011

124,055

58,011

Accretion of asset retirement obligations

(157)

(944)

167

56

Oilfield services^(a)

74,475

29,285

216,596

82,327

Corporate and other stock-based compensation

1,808

1,978

6,255

6,113

E&P stock-based compensation

323

230

1,155

1,127

RockPile stock-based compensation

146

132

509

590

Corporate and other cash G&A expenses

4,878

2,837

14,550

8,203

E&P cash G&A expenses

3,484

1,739

13,736

7,480

RockPile cash G&A expenses

7,560

3,541

25,218

11,116

System conversion costs

-

-

1,334

-

Total operating expenses

155,786

73,009

477,572

211,785

Operating Income

1,202

12,501

95,383

46,962

Interest expense, net

(9,164)

(1,698)

(25,100)

(7,132)

Amortization of deferrred loan costs

(1,372)

(554)

(3,149)

(554)

Gain on extinguishment of debt

6,610

-

6,610

-

Commodity derivatives gains (losses)

50,605

2,146

64,050

1,082

Equity investment income (loss)

(376)

-

81

-

Gain (loss) on equity investment derivatives

(3,109)

3,953

553

39,785

Other income

360

(126)

469

1,278

Total other income

43,553

3,720

43,514

34,459

Net Income Before Income Taxes

44,755

16,221

138,897

81,421

Income tax provision^(b)

5,850

1,972

45,500

7,941

Net Income

$    38,905

$    14,249

$      93,397

$      73,480

Net Income per Common Share

Basic

$        0.50

$        0.17

$          1.12

$          1.07

Diluted^(c)

$        0.42

$        0.15

$          0.97

$          0.91

Adjusted Net Income per Common Share^(d)

Basic

$        0.06

$        0.12

$          0.65

$          0.55

Diluted^(c)

$        0.06

$        0.11

$          0.58

$          0.48

Weighted Average Common Shares

Basic

77,207

85,677

83,611

68,579

Diluted

94,857

102,757

101,032

84,558

(a) Includes intercompany eliminations; reference Note 3 – Segment Reporting in our fiscal year 2015 Form 10-K for additional details

(b) The effective tax rate for the three months and year ended January 31, 2015 is approximately 13% and 33%, respectively, which differs from the statutory income tax rate due to permanent book to tax differences. Income tax provision is a non-cash expense

(c) Includes interest expense add-back of $1.0 million and $4.1 million net of income taxes and amounts capitalized for the 3 months and year ended January 31, 2015, respectively,  related to outstanding convertible note

(d) Reference accompanying Reconciliation Tables and Use of Segment Information and Non-GAAP Measures at end of press release for additional detail

Use of Segment Information and Non-GAAP Measures

(1)

The Company often provides financial metrics for Triangle's segments of operation. Revenues for each segment are disclosed in notes to the financial statements contained in the Company's Form 10-K and Form 10-Q filings, but the sum of those stand-alone revenues differ from Triangle's consolidated revenues for the corresponding reporting period. Triangle's consolidated revenues would reflect segment revenues reduced for intercompany sales (i.e. for RockPile services to Triangle's E&P segment).

Triangle also believes that stand-alone segment revenue assists investors in measuring RockPile's performance as a stand-alone company without eliminating, on a consolidated basis, certain revenues attributable to services for Triangle's economic interests in wells operated by Triangle's E&P segment. 

(2)

Adjusted-EBITDA represents income before interest expense, income taxes, depreciation and amortization, other non-cash items, and non-recurring items. Adjusted-EBITDA is not a calculation based upon generally accepted accounting principles in the U.S. ("GAAP"). Triangle has presented Adjusted-EBITDA by segment because it regularly reviews Adjusted-EBITDA by segment as a measure of the segment's operating performance. Triangle also believes Adjusted-EBITDA assists investors in comparing segment performance on a consistent basis without regard to interest expense, income taxes, depreciation and amortization, other non-cash items, and non-recurring items which can vary significantly depending upon many factors. 

The total of Adjusted-EBITDA by segment is not indicative of Triangle's consolidated Adjusted-EBITDA, which reflects other matters such as (i) additional parent company administrative costs, (ii) intercompany eliminations, (iii) paid-in-kind interest expense on the convertible notes, and (iv) the use of the equity method, rather than consolidation, for Triangle's investment in Caliber.  The Adjusted-EBITDA measures presented in the "Reconciliation Tables" may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.

Triangle believes that net income before income taxes is the performance measure calculated and presented in accordance with GAAP that is most directly comparable to Adjusted-EBITDA. Net income before income taxes will be significantly affected by consolidated interest expense and full-cost pool amortization. Such amortization varies with changes in proved reserves, well costs during the year, and future plans in developing proved undeveloped reserves.

(3)

Adjusted net income (loss) is defined as net income (loss) applicable to common stockholders adjusted to exclude certain charges or amounts in order to provide users of this financial information with additional meaningful comparisons between current results and the results of prior periods. Triangle presents this measure because (i) it is consistent with the manner in which the Company's performance is measured relative to the performance of its peers, (ii) this measure is more comparable to earnings estimates provided by securities analysts, and (iii) charges or amounts excluded cannot be reasonably estimated and guidance provided by the Company excludes information regarding these types of items. These adjusted amounts are not a measure of financial performance under GAAP. We believe that net income (loss) is the performance measure calculated and presented in accordance with GAAP that is most directly comparable to adjusted net income (loss).

Fiscal Year 2015 Segment Income and Elimination (in thousands)

Exploration and
Production

Oilfield
Services

Corporate
and Other^(a)

Eliminations and Other

Consolidated Total

Revenues

Oil, natural gas and natural gas liquids sales

$

284,502

$

-

$

-

$

-

$

284,502

Oilfield services for third parties

-

294,526

-

(6,073)

288,453

Intersegment revenues

-

123,577

-

(123,577)

-

Total Revenues

284,502

418,103

-

(129,650)

572,955

Expenses

LOE, GTP, Production Taxes and other expenses

74,164

-

-

-

74,164

Depreciation and amortization

116,633

22,008

921

(15,507)

124,055

Cost of oilfield services

-

301,142

308

(84,854)

216,596

General and administrative

16,225

25,727

20,805

-

62,757

Total operating expenses

207,022

348,877

22,034

(100,361)

477,572

Operating Income

77,480

69,226

(22,034)

(29,289)

95,383

Other income (expense), net

51,216

(3,024)

(2,356)

(2,322)

43,514

Net Income (Loss) Before Income Taxes

$

128,696

$

66,202

$

(24,390)

$

(31,611)

^(b)

$

138,897

(a) Corporate and Other includes Triangle's corporate office and several subsidiaries that management does not consider to be part of the exploration and production or oilfield services segments. Also included are results from Triangle's investment in Caliber, including any changes in the fair value of equity investment derivatives. Other than Caliber, these subsidiaries have limited activity

(b) $31.6 million RockPile, Caliber, and other services consolidated elimination results in a $31.6 million reduction in oil and natural gas property expenditures.

*Reference Note 3 – Segment Reporting in our fiscal year 2015 Form 10-K for additional details

Q4 Fiscal Year 2015 Segment Income and Elimination (in thousands)

Exploration and Production

Oilfield    Services

Corporate and Other^(a)

 Eliminations and Other

Consolidated Total

Revenues

Oil, natural gas and natural gas liquids sales

$

63,023

$

-

$

-

$

-

$

63,023

Oilfield services for third parties

-

94,066

-

(101)

93,965

Intersegment revenues

-

17,075

-

(17,075)

-

Total Revenues

63,023

111,141

-

(17,176)

156,988

Expenses

LOE, GTP, Production Taxes and other expenses

19,522

-

-

-

19,522

Depreciation and amortization

39,903

7,608

304

(4,225)

43,590

Cost of oilfield services

-

86,015

256

(11,796)

74,475

General and administrative

3,807

7,706

6,686

-

18,199

Total operating expenses

63,232

101,329

7,246

(16,021)

155,786

Operating Income

(209)

9,812

(7,246)

(1,155)

1,202

Other income (expense), net

49,789

(1,489)

(4,619)

(128)

43,553

Net Income (Loss) Before Income Taxes

$

49,580

$

8,323

$

(11,865)

$

(1,283)

^(b)

$

44,755

(a) Corporate and Other includes Triangle's corporate office and several subsidiaries that management does not consider to be part of the exploration and production or oilfield services segments. Also included are results from Triangle's investment in Caliber, including any changes in the fair value of equity investment derivatives. Other than Caliber, these subsidiaries have limited activity

(b) $1.3 million RockPile, Caliber, and other services consolidated elimination results in a $1.3 million reduction in oil and natural gas property expenditures.

*Reference Note 3 – Segment Reporting in our fiscal year 2015 Form 10-K for additional details

Reconciliation Tables (in thousands)

a)    

Consolidated Adjusted net income (loss) per common stockholder (reference disclosure (3) in "Use of Segment Information and Non-GAAP Measures")

Q4 Fiscal 2015

Q4 Fiscal 2014

Fiscal 2015

Fiscal 2014

Net income attributable to common stockholders

$             38,905

$             14,249

$             93,397

$             73,480

(Gain) loss on equity investment derivatives

3,109

(3,953)

(553)

(39,785)

(Gain) loss on commodity derivatives

(50,605)

(2,146)

(64,050)

(1,082)

Realized gain (loss) on commodity derivatives

14,506

-

11,422

-

Other

(6,610)

1,972

(5,276)

932

Tax impact(a)

5,176

502

19,149

3,895

Adjusted Net Income

$               4,481

$             10,624

$             54,090

$             37,439

Adjusted Net Income Per Common Share

Basic

$                 0.06

$                 0.12

$                 0.65

$                 0.55

Diluted(b)

$                 0.06

$                 0.11

$                 0.58

$                 0.48

Weighted Average Common Shares

Basic

77,207

85,677

83,611

68,579

Diluted

94,857

102,757

101,032

84,558

(a) Tax impact is computed as pre tax-effected adjusting items multiplied by the Company's effective tax rate

(b) Includes interest expense add-back of $1.0 million and $4.1 million net of income taxes and amounts capitalized for the 3 months and year ended January 31, 2015, respectively, related to outstanding convertible note

b)

E&P stand-alone Adjusted-EBITDA (reference disclosure (1) and (2) in "Use of Segment Information and Non-GAAP Measures")  

Q4 Fiscal 2015

Fiscal 2015

Net Income (Loss) Before Income Taxes

$              49,580

$            128,696

Depreciation and amortization

39,903

116,633

Net interest expense

7,730

19,574

Stock-based compensation

323

1,155

Accretion of asset retirement obligations

(157)

167

Other

(7,049)

(5,406)

(Gain) loss on commodity derivatives

(50,605)

(64,050)

Realized gain (loss) on commodity derivatives

14,506

11,422

Adjusted-EBITDA

$              54,231

$            208,191

c)   

Oilfield Services stand-alone Adjusted-EBITDA (reference disclosure (1) and (2) in "Use of Segment Information and Non-GAAP Measures")

Q4 Fiscal 2015

Fiscal 2015

Net Income (Loss) Before Income Taxes

$                8,323

$              66,202

Depreciation and amortization

7,608

22,008

Stock-based compensation

146

509

Net interest expense

1,061

2,704

Other

776

3,720

Adjusted-EBITDA

$              17,914

$              95,143

*Oilfield Services Adjusted-EBITDA calculated per RockPile credit facility