Patina Oil & Gas (POG) 8-K Financial statements and exhibits

Exhibit 99.1

NEWS RELEASE

PATINA PRODUCTION RISES 46%

DENVER, COLORADO—JULY 30, 2003 -PATINA OIL & GAS CORPORATION (NYSE:POG) today reported second quarter results. Revenues jumped 82% to $92.4 million as cash flow from operations before changes in working capital rose to $61.5 million, an increase of 65% from the prior year period. Net income increased 64% to $20.3 million or $0.59 per share ($0.57 fully diluted). Without the non-cash deferred compensation adjustment, a charge driven by the increase in the Company’s stock price, net income per share would have increased by 73% to $0.71 per share ($0.68 fully diluted). The dramatic increases were due to rapid production growth and higher realized prices.

Average daily production in the quarter rose to 265.3 MMcfe, a 46% increase from a year ago. Production was comprised of 16,165 barrels of oil and 168.3 MMcf of gas per day. The growth was achieved primarily through ongoing Wattenberg development and the contribution of the recently acquired Mid Continent properties. Wellhead prices, after adjustment for hedging, averaged $3.77 per Mcfe, a 22% increase, or $25.60 per barrel and $3.48 per Mcf, increases of 3% and 30%, respectively. Hedging reduced realized prices by $0.54 per Mcf and $2.58 per barrel in the quarter. Lease operating expenses more than doubled to $13.9 million, averaging $0.58 per Mcfe, an increase of 45%. The increase in unit operating costs was due to increasing oil production, which involves higher field costs. The Company’s production mix was 63% natural gas in the second quarter of 2003 versus 72% in 2002 due to the oil reserves acquired in late 2002 and early 2003 in the Mid Continent. Production taxes increased $3.5 million due to higher prices and production. Depletion and depreciation expense increased 44% or $7.1 million due to higher production volumes, offset by a slightly lower per unit rate. General and administrative expenses increased $784,000, largely as a result of staff hired in conjunction with recent acquisitions. Interest expense increased $1.3 million due to borrowings incurred in the acquisitions. The deferred compensation adjustment, a non-cash expense related to valuation of shares of common stock held in the deferred compensation plan, rose to $8.9 million, an increase of $7.1 million from the prior year quarter, due to a 22% rise in the Company’s stock price during the period. The income tax provision increased 86% or $5.8 million due to higher pre-tax earnings and a higher tax rate. In 2003, taxes are being recorded at 38% versus the 35% rate utilized in 2002 due to the expiration of Section 29 tax credits at the end of 2002.

During the second quarter, $46.2 million of capital expenditures were incurred. Development expenditures in Wattenberg totaled $22.5 million for the drilling or deepening of 22 wells to the J-Sand or Codell, performing 120 Codell refracs and five recompletions. An additional $19.8 million was spent to drill or deepen 87 wells and perform 31 recompletions in the Mid Continent and elsewhere and $3.9 million was spent on minor acquisitions. At June 30, 2003, bank debt totaled $239.0 million, a $7.0 million reduction during the quarter, despite the repurchase of 241,000 shares for $7.4 million. Since June 30^th, an additional 238,900 shares have been repurchased for $7.2 million.

To enhance the liquidity of the Company’s stock, a 25% stock dividend was paid in June, resulting in the issuance of approximately 7.1 million common shares. By maintaining the cash dividend rate at $0.06 per share, the dividend was raised 25%. At June 30^th, the Company had 34.1 million shares outstanding (35.9 million fully diluted).

Commenting, Thomas J. Edelman, Patina’s Chairman, said, “We continue to be extremely pleased with the Company’s performance. While gas prices have begun to retreat to more sustainable levels, we remain highly profitable. Approximately 70% of our projected oil and gas production is hedged at attractive prices in the second half of 2003 and 60% in 2004. Wattenberg development continues to yield exceptional results. As importantly, we have begun to integrate our Mid Continent acquisitions. While the performance of these properties is not yet at a level we are satisfied with, we are on our way to achieving targeted production growth. We believe the Mid Continent will provide substantial opportunities for profitable long-term production and reserve growth through a combination of ongoing development and acquisitions. In summary, we anticipate a very successful second half and expect to continue to achieve superior returns for our shareholders.”

The Company will host a conference call on Thursday, July 31, 2003 beginning at 2:00 pm (EDT) to discuss these results. To participate in the call, please dial (800) 289-0493. A replay of the call will also be available through August 30, 2003 by dialing (888) 203-1112. The access code for the replay is 694739. The replay of the call will also be available on our website at www.patinaoil.com, click on “Shareholder Conference Calls”, then click on the date of the call you wish to listen to.

This release contains certain forward-looking statements within the meaning of the Federal securities laws. Such statements are based on management’s current expectations, estimates and projections, which are subject to a wide range of uncertainties and business risks. Factors that could cause actual results to differ from those anticipated are discussed in the Company’s periodic filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2002.

Patina is an independent oil company engaged in the acquisition, development, exploitation and production of oil and natural gas primarily in Colorado’s Wattenberg Field and the Mid Continent region of southern Oklahoma and the Texas Panhandle.

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Contact:  David J. Kornder

Executive Vice President

Chief Financial Officer

(303) 389-3600

dkornder@patinaoil.com

PATINA OIL & GAS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Three Months Ended June 30,								Six Months Ended June 30,
	%								%
	Change		2003		2002				Change		2003			2002
Revenues
Oil and gas sales			$	90,952	$	50,948					$	180,482		$	98,956
Deferred compensation asset gain (loss)				902		(594	)					734			(536	)
Other				564		339						1,169			4,159
	82	%		92,418		50,693			78	%		182,385			102,579
Expenses
Lease operating expenses				13,948		6,582						24,646			13,736
Production taxes				6,407		2,877						12,892			4,933
Exploration				1,036		184						2,169			348
Gross margin	73	%		71,027		41,050			71	%		142,678			83,562
General and administrative				4,237		3,453						8,683			6,046
Interest and other				1,937		618						4,102			1,252
Deferred compensation adjustment				8,861		1,752						9,919			6,069
Depletion, depreciation, and amortization				23,270		16,169						44,357			30,964
Pre-tax income	72	%		32,722		19,058			93	%		75,617			39,231
Provision for income taxes
Current				4,663		1,563						10,775			4,307
Deferred				7,771		5,108						17,959			9,460
				12,434		6,671		��				28,734			13,767
Net income before cumulative effect of change in accounting principle	64	%	$	20,288	$	12,387			84	%	$	46,883		$	25,464
Cumulative effect of change in accounting principle				—		—						(2,613	)		—
Net income	64	%	$	20,288	$	12,387			74	%	$	44,270		$	25,464
Net income per share before cumulative effect of change in accounting principle
Basic	55	%	$	0.59	$	0.38			77	%	$	1.38		$	0.78
Diluted	58	%	$	0.57	$	0.36			76	%	$	1.32		$	0.75
Net income per share
Basic	55	%	$	0.59	$	0.38			67	%	$	1.30		$	0.78
Diluted	58	%	$	0.57	$	0.36			65	%	$	1.24		$	0.75
Weighted average shares outstanding
Basic				34,158		32,785						34,052			32,526
Diluted				35,850		34,614						35,616			34,158

PATINA OIL & GAS CORPORATION

SUMMARY BALANCE SHEET, OPERATIONAL AND CASH FLOW DATA

(in thousands, except price data)

Summary Balance Sheet			June 30, 2003			June 30, 2002
Total assets	94	%	$	859,640		$	443,626
Total debt	360	%	$	239,000		$	52,000
Stockholders' equity	11	%	$	294,160		$	264,973
	% Change		Three Months Ended June 30,						% Change		Six Months Ended June 30,
Summary Operational Data			2003			2002					2003			2002
Oil production (MBbl)	92	%		1,471			766		80	%		2,676			1,490
Gas production (MMcf)	29	%		15,313			11,887		27	%		29,759			23,424
Total production (MMcfe)	46	%		24,139			16,482		42	%		45,813			32,363
Average oil price (per Bbl)	3	%	$	25.60		$	24.96		8	%	$	26.11		$	24.13
Average gas price (per Mcf)	30	%	$	3.48		$	2.68		38	%	$	3.72		$	2.69
Average price per Mcfe	22	%	$	3.77		$	3.09		29	%	$	3.94		$	3.06
Summary Cash Flow
Net income	64	%	$	20,288		$	12,387		74	%	$	44,270		$	25,464
Cumulative effect of change in accounting principle				—			—					2,613			—
Depletion, depreciation, and amortization				23,270			16,169					44,357			30,964
Deferred compensation adjustments				7,959			2,346					9,185			6,605
Exploration and other				1,171			211					2,437			417
Stock option tax benefit				1,077			1,058					4,657			3,472
Reversal of hedging impairment, net				—			(57	)				—			(2,340	)
Deferred tax provision				7,771			5,108					17,959			9,460
Cash flow before changes in working capital (1)	65	%		61,536			37,222		69	%	$	125,478		$	74,042
Changes in working capital				(1,032	)		(4,996	)				(11,813	)		(13,101	)
Cash flow provided by operations	88	%	$	60,504		$	32,226		87	%	$	113,665		$	60,941
Adjusted weighted average shares outstanding-diluted (2)				37,214			35,907					36,960			35,481
Reconciliation of Net income per share to Net income per share before deferred compensation adjustments
Net income			$	20,288		$	12,387				$	44,270		$	25,464
Deferred compensation adjustments				7,959			2,346					9,185			6,605
Provision for income taxes at 38% in 2003 and 35% in 2002				(3,024	)		(821	)				(3,490	)		(2,312	)
Non-cash deferred compensation adjustments, net of tax			$	4,935		$	1,525				$	5,695		$	4,293
Net income excluding deferred compensation adjustments	81	%		25,223			13,912		68	%		49,965			29,757
Adjusted weighted average shares outstanding (2)
Basic				35,522			34,078					35,396			33,849
Diluted				37,214			35,907					36,960			35,481
Net income per share before deferred compensation adjustments (3)
Basic	73	%	$	0.71		$	0.41		60	%	$	1.41		$	0.88
Diluted	74	%	$	0.68		$	0.39		61	%	$	1.35		$	0.84
(1)    Management believes that the non-GAAP measure of cash flow before changes in working capital is useful information to investors because it is widely used by professional analysts in valuing oil and gas companies. Many investors use research reports of these analysts in making investment decisions. (2)    Includes shares held in treasury for deferred compensation as follows:
Weighted Average Shares Outstanding—Basic				34,158			32,785					34,052			32,526
Weighted Average Shares Held in Deferred Compensation Plan				1,364			1,293					1,344			1,323
Adjusted Weighted Average Shares Outstanding—Basic				35,522			34,078					35,396			33,849
Weighted Average Shares Outstanding—Diluted				35,850			34,614					35,616			34,158
Weighted Average Shares Held in Deferred Compensation Plan				1,364			1,293					1,344			1,323
Adjusted Weighted Average Shares Outstanding—Diluted				37,214			35,907					36,960			35,481

(3) Management believes that the non-GAAP measure of net income per share before deferred compensation adjustments is useful information to investors due to the nature of the required accounting for shares of the Company's common stock held in the deferred compensation plan. Under EITF 97-14, "Accounting for Deferred Compensation Arrangements Where Amounts Earned are Held in a Rabbi Trust and Invested," shares of the Company's common stock in the trust are treated as treasury stock and reported at historical cost. However, the liability to plan participants related to the shares held in the trust is reported at fair value. As a result, an increase in the value of the Company's common stock results in a charge to earnings, whereas a decrease in the value of the Company's common stock results in an increase to earnings. In addition, as the shares of the Company's common stock in the trust are treated as treasury stock, generally accepted accounting principles require the shares to be excluded from the calculation of basic weighted average shares outstanding and, if dilutive, excluded from diluted weighted average shares outstanding. Based on conversations with investors, management believes that net income per share before deferred compensation adjustments is an important indicator for its investors of the Company’s performance.