Exhibit 99.1
For immediate release
For more information, contact:
Investors, Philip J. Iracane, 713-307-8770
Media, Janice Aston White, 713-307-8780
Endeavour announces
2005 third quarter earnings
Houston, TX – November 3, 2005 — Endeavour International Corporation (AMEX:END) today reported a 2005 third quarter loss of $14.5 million or $0.19 per diluted share as compared to a loss of $4.0 million or $0.06 per diluted share the same quarter in 2004. Earnings for the quarter include a $9.4 pretax charge for impairment of oil and gas properties, reflective of unsuccessful exploration activities during the quarter. Revenues for the period were $10.9 million, and production was 198,600 barrels of oil equivalent (BOE). Average oil price for the quarter was $56.08 per barrel.
“Our Norwegian production continues to exceed our expectations and generate cash flow to cover our worldwide corporate expenses, allowing investor capital to be used for growth activities of the company,” said William L. Transier, co-chief executive officer. “Although we were disappointed by the results of our first three exploration wells, our cash position is sufficient to fund the exploration program promised to investors.”
“There are still seven more wells to be drilled as part of our exploratory campaign,” said John N. Seitz, co-chief executive officer. “We are confident that Endeavour can leverage its technical abilities and data base to discover oil and gas resources in the North Sea from our prospect inventory.”
Significant events for the quarter include:
• Successful participation in United Kingdom 23rd Seaward Licensing Round –Endeavour Energy UK Limited was awarded 11 licenses covering 17 blocks in the 23rd Seaward Licensing Round. This adds to the nine licenses and 18 blocks awarded last year in the 22nd Seaward Licensing Round. Of the newest awards, Endeavour gained interests in six licenses covering six blocks in the Central North Sea and will serve as operator for three of the blocks. In addition, Endeavour was awarded and will operate two licenses and six blocks in the Inner Moray Firth. The remaining three licenses are comprised of five blocks located in the Southern Gas Basin with Endeavour operating two of the blocks. Of the licenses, eight cover 14 blocks granted under traditional terms that require the company to fulfill a work program within four years from the date of award. The remaining three covering three blocks are under “promote” terms in which the company
pays reduced license fees for a two-year period as evaluations of exploration potential are conducted. In the UK sector of the North Sea, Endeavour now has interests in 22 licenses involving 38 blocks that cover more than one million acres.
• Exploration campaign underway in the United Kingdom sector of the North Sea – Endeavour plugged and abandoned its first well on Block 31/26b when the company-operated Turnberry well encountered non-commercial shows of hydrocarbons. Two farm-in wells, Fiacre and Prometheus, were also drilled during the quarter but encountered non-commercial quantities of hydrocarbons. Drilling operations are set to begin next week on the Turriff and Tulliallan prospects on Block 31/26b in the Central Graben. The Turiff well will test an independent play for a Jurassic Fulmar sandstone objective with a shallower secondary prospect, Tulliallan, aimed at a Cretaceous target. Endeavour holds a 60 percent working interest in the well and serves as operator.
• Continued stable production from Norway – The company’s net production in Norway averaged approximately 2,159 BOE during the third quarter.
Earnings Conference Call Tomorrow, Thursday, November 3, at 9:00 A.M. CST (10:00 A.M. EST)
Endeavour will host an analyst conference call tomorrow, Thursday, November 3, at 9:00 a.m. Central Standard Time (10:00 a.m. Eastern Standard Time) to discuss 2005 third quarter earnings. To participate and ask questions during the conference call, dial toll free 1-800-818-5264 (U.S., toll-free) or 913-981-4910 (international), pass code: 4492075. To listen only to the live audio web cast via the Internet access Endeavour’s Internet home page at www.endeavourcorp.com. The PowerPoint slides that will be used during the presentations will also be available on the Internet.
A replay will be available beginning at 12:00 p.m. Central Standard Time on November 3 through 12:00 p.m. Central Standard Time on November 10, by dialing toll free 1-888-203-1112 (U.S.) or 719-457-0820 (international), pass code: 4492075.
Endeavour International Corporation is an international oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea. For more information, visit www.endeavourcorp.com.
Certain statements in this news release should be regarded as “forward-looking” statements within the meaning of the securities laws. These statements speak only of as of the date made. Such statements are subject to assumptions, risk and uncertainty. Actual results or events may vary materially.
Endeavour International Corporation
Comparative Condensed Statements of Operations
(Amounts in Thousands, Except per Share Data)
| | Three Months
Ended September 30, | | Nine Months
Ended September 30, | |
| | 2005 | | 2004 | | 2005 | | 2004 | |
Revenues | | $ | 10,852 | | $ | — | | $ | 27,645 | | $ | 8 | |
| | | | | | | | | |
Cost of Operations: | | | | | | | | | |
Operating expenses | | 2,569 | | — | | 7,943 | | 1 | |
Depreciation, depletion and amortization | | 2,399 | | 382 | | 6,860 | | 890 | |
Impairment of oil and gas properties | | 9,394 | | — | | 9,394 | | — | |
Equity loss from entities with oil and gas properties | | — | | 90 | | 79 | | 224 | |
General and administrative | | 5,730 | | 3,658 | | 14,255 | | 9,141 | |
Total Expenses | | 20,092 | | 4,130 | | 38,531 | | 10,256 | |
| | | | | | | | | |
Loss From Operations | | (9,240 | ) | (4,130 | ) | (10,886 | ) | (10,248 | ) |
| | | | | | | | | |
Other (Income) Expense: | | | | | | | | | |
Consideration given in excess of fair value of identifiable assets acquired | | — | | — | | — | | 10,779 | |
Interest expense | | 1,150 | | 8 | | 3,115 | | 262 | |
(Gain) loss on sale of oil and gas interests | | (22 | ) | — | | (14,966 | ) | (355 | ) |
Other (income) expense | | (796 | ) | (146 | ) | (2,401 | ) | (2,030 | ) |
| | | | | | | | | |
Total Other (Income) Expense | | 332 | | (138 | ) | (14,252 | ) | 8,656 | |
| | | | | | | | | |
Income (Loss) Before Minority Interest | | (9,572 | ) | (3,992 | ) | 3,366 | | (18,904 | ) |
Minority Interest | | — | | (5 | ) | (470 | ) | 12 | |
| | | | | | | | | |
Income (Loss) Before Income Taxes | | (9,572 | ) | (3,987 | ) | 2,896 | | (18,892 | ) |
Income Tax Expense | | 4,850 | | — | | 8,714 | | — | |
| | | | | | | | | |
Net Loss | | (14,422 | ) | (3,987 | ) | (5,818 | ) | (18,892 | ) |
Preferred Stock Dividends | | 39 | | 39 | | 118 | | 385 | |
| | | | | | | | | |
Net Loss to Common Stockholders | | $ | (14,461 | ) | $ | (4,026 | ) | $ | (5,936 | ) | $ | (19,277 | ) |
| | | | | | | | | |
Net Loss Per Common Share – Basic and Diluted | | $ | (0.19 | ) | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.31 | ) |
| | | | | | | | | |
Weighted Average Number of Common Shares Outstanding - Basic and Diluted | | 74,656 | | 69,366 | | 74,084 | | 62,596 | |
Endeavour International Corporation
Comparative Condensed Consolidated Balance Sheets
(Amounts in Thousands)
| | September 30, 2005 | | December 31, 2004 | |
Assets | | | | | |
Current Assets: | | | | | |
Cash and cash equivalents | | $ | 89,121 | | $ | 8,975 | |
Accounts receivable | | 5,866 | | 4,286 | |
Prepaid expenses and other current assets | | 13,942 | | 3,814 | |
Total Current Assets | | 108,929 | | 17,075 | |
| | | | | |
Equity Interests in Entities with Oil and Gas Properties | | — | | 3,688 | |
Property and Equipment, Net | | 54,284 | | 50,228 | |
Goodwill | | 27,758 | | 20,119 | |
Restricted Cash | | 4,366 | | 2,507 | |
Other Assets | | 11,218 | | 8,120 | |
Total Assets | | $ | 206,555 | | $ | 101,737 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
Current Liabilities: | | | | | |
Accounts payable | | $ | 18,698 | | $ | 2,909 | |
Current portion of long-term debt | | — | | 2,138 | |
Accrued expenses and other | | 15,658 | | 7,329 | |
Total Current Liabilities | | 34,356 | | 12,376 | |
| | | | | |
Long-Term Debt | | 81,250 | | 2,150 | |
Deferred Taxes | | 17,799 | | 18,012 | |
Other Liabilities | | 10,256 | | 8,979 | |
Total Liabilities | | 143,661 | | 41,517 | |
| | | | | |
Minority Interest | | — | | 3,248 | |
| | | | | |
Stockholders’ Equity | | 62,894 | | 56,972 | |
Total Liabilities and Stockholders’ Equity | | $ | 206,555 | | $ | 101,737 | |
Endeavour International Corporation
Comparative Condensed Consolidated Statements of Cash Flows
(Amounts in Thousands)
| | Nine Months Ended
September 30, | |
| | 2005 | | 2004 | |
Cash Flows from Operating Activities: | | | | | |
Net loss | | $ | (5,818 | ) | $ | (18,892 | ) |
Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | |
Depreciation, depletion and amortization | | 6,860 | | 890 | |
Impairment of oil and gas properties | | 9,394 | | — | |
Consideration given in excess of fair value of identifiable assets acquired | | — | | 10,779 | |
Deferred tax expense | | 3,275 | | — | |
Gain on collection of promissory notes | | — | | (1,848 | ) |
Amortization of non-cash compensation | | 5,131 | | 4,733 | |
Gain on sale of assets | | (14,966 | ) | (355 | ) |
Other operating activities | | 1,299 | | 1,319 | |
Increase in net assets and liabilities | | 8,803 | | 5,151 | |
Net Cash Provided by Operating Activities | | 13,978 | | 1,777 | |
| | | | | |
Cash Flows From Investing Activities: | | | | | |
Capital expenditures | | (22,648 | ) | (4,278 | ) |
Acquisitions, net of cash acquired | | (1,437 | ) | (66 | ) |
Proceeds from sale of assets | | 19,465 | | 741 | |
Other investing activities | | (2,454 | ) | (1,590 | ) |
Net Cash Used in Investing Activities | | (7,074 | ) | (5,193 | ) |
| | | | | |
Cash Flows From Financing Activities: | | | | | |
Proceeds from (repayments of) borrowings, net | | 77,244 | | (1,751 | ) |
Purchase and retirement of common and preferred stock | | — | | (5,031 | ) |
Financing costs paid | | (3,648 | ) | — | |
Proceeds from common and preferred stock issued and issuable | | — | | 46,399 | |
Other financing | | 1,423 | | — | |
Net Cash Provided by Financing Activities | | 75,019 | | 39,617 | |
| | | | | |
Net Increase in Cash and Cash Equivalents | | 81,923 | | 36,201 | |
Effect of Foreign Currency Changes on Cash | | (1,777 | ) | — | |
Cash and Cash Equivalents, Beginning of Period | | 8,975 | | 57 | |
| | | | | |
Cash and Cash Equivalents, End of Period | | $ | 89,121 | | $ | 36,258 | |
