EXHIBIT 99.1
| | |
 | | Press Release |
For immediate release
Company contact: Jennifer Martin, Director of Investor Relations, 303-312-8155
Bill Barrett Corporation Reports First Quarter 2010 Results
DENVER – May 4, 2010 – Bill Barrett Corporation (NYSE: BBG) today reported first quarter 2010 operating results highlighted by:
| | • | | Natural gas and oil production of 21.7 Bcfe |
| | • | | Discretionary cash flow of $104.6 million, or $2.30 per diluted common share and $4.81 per Mcfe |
| | • | | Net income of $24.0 million, or $0.53 per diluted share |
| | • | | Expanded revolving credit facility to $800 million borrowing base with $700 million in bank commitments |
| | • | | Continued progress toward issuance of the Record of Decision at West Tavaputs |
Chairman and Chief Executive Officer Fred Barrett commented: “We enjoyed a solid first quarter and are on track to meet our previously announced 2010 guidance. We continue to expect between 8% and 12% production growth and to realize particularly strong pricing through a combination of increased liquids exposure and sizable hedge positions. During the first quarter, approximately 28% of pre-hedge revenue was related to crude oil and natural gas liquids (“NGLs”), mainly from our Blacktail Ridge and Gibson Gulch programs. To take advantage of liquids pricing, the Company is directing additional capital to oil and NGL rich gas. We are modifying our 2010 capital budget to between $450 and $470 million in order to increase activity in Blacktail Ridge and Gibson Gulch. Also during the quarter, we extended and increased our revolving credit facility, further strengthening our liquidity position and offering financial flexibility if opportunities arise via acquisitions, receipt of regulatory approvals or exploration success.
“In April 2010, further progress was made toward issuance of the Record of Decision (“ROD”) for full field development at West Tavaputs as the Bureau of Land Management (“BLM”) sent the Preliminary Final Environmental Impact Statement to agencies that cooperated in the analysis, a step precedent to issuance of the ROD. On this track, we anticipate being able to begin development operations later this year.”
First quarter 2010 natural gas and oil production totaled 21.7 billion cubic feet equivalent (“Bcfe”), down slightly from 22.1 Bcfe in the first quarter of 2009 and down sequentially from 22.8 Bcfe in the fourth quarter of 2009. Total production was affected by operational disruptions at third party gathering and processing facilities causing temporary shut-ins of Gibson Gulch production during the quarter. Including the effects of the Company’s hedging activities, the average realized sales price in the first quarter of 2010 was $7.31 per Mcfe compared with $7.70 per Mcfe in the first quarter of 2009. The Company’s commodity hedging program increased its first quarter 2010 natural gas and oil revenues by net $16.2 million, or $0.75 per Mcfe of production.
Discretionary cash flow (a non-GAAP measure, see “Discretionary Cash Flow Reconciliation” below) in the first quarter of 2010 was $104.6 million, or $2.30 per diluted common share. Discretionary cash flow was down 24% compared with $3.01 per diluted common share in the first quarter of 2009 and down 9% sequentially compared with $2.53 per diluted common share in the fourth quarter of 2009. The year-over-year decrease was primarily due to: the $0.39 per Mcfe decline in the average realized price; the 1.6% decrease in production; higher per unit cash operating costs, which included higher gathering, transportation and processing expenses with full firm transportation charges on the REX pipeline system and for NGL processing; and higher cash interest expense.
Net income in the first quarter of 2010 was $24.0 million, or $0.53 per diluted common share, compared with $26.4 million, or $0.59 per diluted common share, in the first quarter of 2009. The 9% decline in net income is driven by the cash differences discussed above, mostly offset by higher non-cash charges for derivative losses in the 2009 period. Net income for the first quarter of 2010 includes certain adjustments net of tax of ($0.2) million, resulting in adjusted net income (a non-GAAP measure, see “Adjusted Net Income Reconciliation” below) of $23.8 million, or $0.52 per diluted common share. Total dry hole expense for the first quarter of 2010 was $1.9 million, or $1.2 million after tax.
DEBT AND LIQUIDITY
In March 2010, the Company amended and extended its revolving credit facility, which now includes a borrowing base of $800.0 million (up from $630.0 million) and bank commitments totaling $700 million (up from $592.8 million). The credit facility matures in April 2014. As of March 31, 2010, the credit facility had $15.0 million in outstanding borrowings. Also at March 31, 2010, the Company had outstanding 5% Convertible Senior Notes in the principal amount of $172.5 million and 9.875% Senior Notes due 2016 in the principal amount of $250.0 million. The Company has significant liquidity available from cash flows from operations and the credit facility to fund its planned capital programs.
OPERATIONS
Production, Wells Spud and Capital Expenditures
The following table lists production, wells spud and total capital expenditures by basin for the three months ended March 31, 2010:
| | | | | | | |
| | | Three Months ended March 31, 2010 |
Basin | | Average Net
Production
(Mmcfe/d) | | Wells
Spud
(gross) | | Capital
Expenditures
(millions) |
Piceance | | 109 | | 36 | | $ | 67.0 |
Uinta | | 74 | | 12 | | | 31.6 |
Powder River (CBM) | | 37 | | 2 | | | 1.1 |
Wind River | | 20 | | 0 | | | 1.9 |
Other | | 1 | | 0 | | | 2.0 |
| | | | | | | |
Total | | 241 | | 50 | | $ | 103.6 |
| | | | | | | |
First quarter 2010 capital expenditures totaled $103.6 million. During 2010, the Company plans to spend between $450 and $470 million for capital expenditures before acquisitions. The Company plans to allocate approximately 90% to 95% of expenditures to key development projects in the Piceance, Uinta and Powder River Basins and approximately 5% to 10% to delineation of prior discoveries and new exploration.
Operating and Drilling Update
The Company anticipates drilling 250 to 275 wells in 2010, including approximately 70 to 75 coal bed methane (CBM) wells, up from 186 wells in 2009. The Company currently has five rigs drilling, with three in the Piceance Basin, one at Blacktail Ridge and one for exploration. The 2010 drilling program will concentrate on growth at our key development areas.
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Piceance Basin, Colorado
Gibson Gulch – Current net production is approximately 122 million cubic feet equivalent per day (MMcfe/d), up from the first quarter average of 109 MMcfe/d. During the first quarter of 2010, production was negatively affected by mechanical issues at third party gathering and processing facilities that required shutting in a portion of production. These facilities are now operating at full capacity. First quarter results benefitted from the Company’s processing election for the majority of its Gibson Gulch natural gas production, which exposes the Company to NGL pricing. This added approximately $0.59 per Mcf to the Company-wide realized price. The future profitability of this election will depend on future NGL pricing. Given the benefits of continued drilling efficiencies and NGL price realizations, the Company now plans to drill between 130 to 140 wells in the area during 2010, with most of the permits already in place. The Company plans to retain three rigs through August 2010 and to add 20 MMcf/d of compression capacity during the second quarter. Gibson Gulch operations exemplify our Rocky Mountain expertise and offer strong margins due to low operating costs and the currently higher revenues related to liquids. The program continues to be a key, lower risk development area for the Company and offers flexibility to adjust the number of active rigs dependent upon the Company’s capital strategy.
At March 31, 2010, the Company had an approximate 97% working interest in production from 574 gross wells in its Gibson Gulch program.
Cottonwood Gulch – In June 2009, the Company acquired a 90% working interest in 40,300 undeveloped acres in Cottonwood Gulch. The Company continues to participate in the mediation process concerning a lawsuit by environmental groups challenging the leases. The property has a signed Record of Decision for an Environmental Impact Statement and Resource Management Plan in effect with the Bureau of Land Management.
Uinta Basin, Utah
West Tavaputs – Current net production is approximately 67 MMcfe/d, consistent with the first quarter average. The Company has drilled its 11-well 2010 program for the area. In order to best manage its contractual obligations for CO2, completion of certain wells was deferred, and the Company expects to complete ten wells during the second and third quarters of 2010.
The Company continues to work closely with the environmental community and the BLM with regards to development of West Tavaputs. In addition to the programmatic agreement signed in January, the BLM recently sent the Preliminary Final Environmental Impact Statement to agencies that cooperated in preparation of the analysis. This step is precedent to issuance of a Record of Decision. The Company is anticipating a positive decision that will enable commencement of development operations in 2010. The West Tavaputs program offers growth in the shallow Mesaverde and Wasatch zones as well as upside opportunity through the Mancos shale and deep formations.
At March 31, 2010, the Company had an approximate 96% working interest in production from 176 gross wells in its West Tavaputs shallow and deep programs.
Blacktail Ridge/Lake Canyon – Current net production is approximately 1,200 barrels of oil equivalent per day (“Boe/d”) from 14 wells, up significantly from the first quarter average of 827 Boe/d. While production for the first quarter of 2010 was up 66% compared with the prior year period, it was negatively affected by two wells that encountered mechanical issues during completion. The Company has recently expanded its 2010 drilling program for the area to include six additional wells, increasing the program to participation in up to 22 wells. The working interests in this area range from 19% to 100%.
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Powder River Basin, Wyoming
Coal Bed Methane (CBM) – Current CBM net production is approximately 37 MMcf/d, consistent with the first quarter average, which was an increase of 36% compared with the prior year period. The Company expects to participate in drilling 70 to 75 wells in the area in 2010, which will commence in the second half of the year when seasonal wildlife stipulations end. Development of this area requires dewatering of wells, which can take up to two years.
At March 31, 2010, the Company had an approximate 73% working interest in production from 674 gross CBM wells.
Wind River Basin, Wyoming
Cave Gulch/Bullfrog/Other – Current net production from the area is approximately 20 MMcfe/d, consistent with the first quarter average. The Company plans to drill two exploratory wells during 2010. The wells will be vertical core holes to evaluate the Niobrara and Mowry formations.
Paradox Basin, Colorado
Yellow Jacket – At the Yellow Jacket shale gas prospect (55% working interest), the larger fracture stimulation used on the Koskie 13H-27 well produced superior results compared with earlier well completions, with commerciality of the well yet to be determined. Well performance and decline analysis observed over approximately five months of production indicate that an even larger fracture stimulation may be required. The Company intends to drill its next well during the second quarter of 2010 and employ larger water volumes, pumping rates and sand concentrations in its hydraulic fracture stimulation. This prospect includes approximately 310,000 gross, and 139,800 net, undeveloped acres plus approximately 176,500 gross, and 127,100 net, undeveloped acres in a similar shale gas prospect in the adjacent Green Jacket area.
ADDITIONAL FINANCIAL INFORMATION
Guidance
The Company’s 2010 guidance (please reference “Forward-looking Statements” below) includes:
| | • | | Capital expenditures of $450 to $470 million before acquisitions, up from $400 to $425 million as previously announced |
| | • | | Oil and natural gas production of 97 to 100 Bcfe, unchanged |
| | • | | Lease operating costs per Mcfe of $0.57 to $0.61, unchanged |
| | • | | Gathering and transportation costs per Mcfe of $0.75 to $0.80, unchanged |
| | • | | General and administrative expenses before non-cash stock-based compensation between $40 and $43 million, unchanged |
Commodity Hedges Update
It is the Company’s strategy to typically hedge 50% to 70% of production through basis to regional sales points for the next 12 months on a rolling basis. Hedging is intended to reduce the risks associated with unpredictable future commodity prices and to provide predictability for a portion of cash flows to support the Company’s capital expenditure program.
For 2010 and 2011, the Company has hedges in place as outlined in the table below. Swap and collar hedge positions are tied to regional sales points and include:
| | • | | For the remaining nine months of 2010, approximately 47.7 Bcfe at a weighted average blended floor price of $8.06 per Mcfe. |
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| | • | | For 2011, approximately 35.7 Bcfe at a weighted average blended floor price of $6.91 per Mcfe. |
As of April 30, 2010:
SWAPS & COLLARS
| | | | | | | | | | | | | | | |
Period | | Natural Gas/ NGLs | | Oil | | Equivalent |
| | | Volume
MMBtu/d | | Price
$/MMBtu | | Volume
Bbl/d | | Price
$/Bbl | | Volume
Mmcfe | | Price
$/Mcfe |
2Q10 | | 196,352 | | $ | 7.04 | | 1,534 | | $ | 81.88 | | 17,081 | | $ | 8.03 |
3Q10 | | 196,217 | | $ | 7.04 | | 1,600 | | $ | 82.22 | | 17,294 | | $ | 8.05 |
4Q10 | | 148,809 | | $ | 7.00 | | 1,600 | | $ | 82.22 | | 13,329 | | $ | 8.10 |
1Q11 | | 122,500 | | $ | 6.31 | | 400 | | $ | 87.63 | | 10,239 | | $ | 7.10 |
2Q11 | | 112,500 | | $ | 5.98 | | 400 | | $ | 87.63 | | 9,525 | | $ | 6.76 |
3Q11 | | 112,500 | | $ | 5.98 | | 400 | | $ | 87.63 | | 9,630 | | $ | 6.76 |
4Q11 | | 72,717 | | $ | 6.18 | | 400 | | $ | 87.63 | | 6,303 | | $ | 7.07 |
In addition, the Company has the following natural gas basis only hedges in place, none of which are currently in the money:
BASIS ONLY HEDGES - CIG/NWPL
| | | | | |
| | | Natural Gas | |
Period | | Volume
MMBtu/d | | Differential
/ Price
$MMBtu | |
2Q10 | | 45,000 | | (2.57 | ) |
3Q10 | | 45,000 | | (2.57 | ) |
4Q10 | | 22,000 | | (2.47 | ) |
1Q11 | | 20,000 | | (1.72 | ) |
2Q11 | | 20,000 | | (1.72 | ) |
3Q11 | | 20,000 | | (1.72 | ) |
4Q11 | | 20,000 | | (1.72 | ) |
FIRST QUARTER 2010 WEBCAST AND CONFERENCE CALL
As previously announced, a webcast and conference call will be held later this morning to discuss first quarter 2010 results. Please join Bill Barrett Corporation executive management at 12:00 p.m. EDT/10:00 a.m. MDT for the live webcast, accessed atwww.billbarrettcorp.com, or join by telephone by calling 800-901-5248 (617-786-4512 international callers) with passcode 65620382. The webcast will remain available on the Company’s website for approximately 30 days, and a replay of the call will be available through May 7, 2010 at call-in number 888-286-8010 (617-801-6888 international) with passcode 56350054. The Company has also tentatively scheduled its remaining 2010 earnings conference calls for August 3 and November 2, each at noon Eastern time/10:00 a.m. Mountain time.
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UPCOMING EVENTS
Annual Meeting of Stockholders
The 2010 Annual Meeting of Stockholders of Bill Barrett Corporation will be held on May 13, 2010 at 9:30 a.m. MDT. The meeting will be webcast and may be accessed live and for replay on the Company’s website at www.billbarrettcorp.com.
DISCLOSURE STATEMENTS
Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding projected results and future events. In particular, the Company is providing “2010 Guidance,” which contain projections for certain 2010 operational and financial results. These forward-looking statements are based on management’s judgment as of this date and include certain risks and uncertainties. Please refer to the Company’s Annual Report on Form 10-K for the year-ended December 31, 2009 filed with the SEC, and other filings including our Current Reports on Form 8-K, for a list of certain risk factors.
Actual results may differ materially from Company projections and can be affected by a variety of factors outside the control of the Company including, among other things, market conditions, oil and gas price volatility, exploration drilling and testing results, the ability to receive drilling and other permits and regulatory approvals, government approval for development projects, governmental regulations, risks related and costs to hedging activities including counterparty viability, availability of third party gathering, transportation and processing, the availability and cost of services and materials, the ability to obtain industry partners to jointly explore certain prospects and the willingness and ability of those partners to meet capital obligations when requested, availability and costs of financing to fund the Company’s operations, surface access and costs, uncertainties inherent in oil and gas production operations and estimating reserves, the speculative actual recovery of estimated potential volumes, unexpected future capital expenditures, competition, risks associated with operating in one major geographic area, the success of the Company’s risk management activities, and other factors discussed in the Company’s reports filed with the SEC. Bill Barrett Corporation encourages readers to consider the risks and uncertainties associated with projections. In addition, the Company assumes no obligation to publicly revise or update any forward-looking statements based on future events or circumstances.
ABOUT BILL BARRETT CORPORATION
Bill Barrett Corporation (NYSE: BBG), headquartered in Denver, Colorado, explores for and develops natural gas and oil in the Rocky Mountain region of the United States. Additional information about the Company may be found on its websitewww.billbarrettcorp.com.
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BILL BARRETT CORPORATION
Selected Operating Highlights
(Unaudited)
| | | | | | | | |
| | | | | Three Months Ended
March 31, |
| | | | | 2010 | | 2009 |
Production Data: | | | | | | | | |
Natural gas (MMcf) | | | | | 20,629 | | | 21,073 |
Oil (MBbls) | | | | | 184 | | | 169 |
Combined volumes (MMcfe) | | | | | 21,733 | | | 22,087 |
Daily combined volumes (Mmcfe/d) | | | | | 241 | | | 245 |
Average Prices (before the effects of realized hedges): | | | | | | | | |
Natural gas (per Mcf) | | | | $ | 6.31 | | $ | 3.74 |
Oil (per Bbl) | | | | | 68.23 | | | 25.00 |
Combined (per Mcfe) | | | | | 6.56 | | | 3.76 |
Average Prices (after the effects of realized hedges): | | | | | | | | |
Natural gas (per Mcf) | | | | $ | 7.08 | | $ | 7.72 |
Oil (per Bbl) | | | | | 70.04 | | | 43.95 |
Combined (per Mcfe) | | | | | 7.31 | | | 7.70 |
Average Costs (per Mcfe): | | | | | | | | |
Lease operating expense | | | | $ | 0.57 | | $ | 0.53 |
Gathering, transportation and processing expense | | | | | 0.73 | | | 0.50 |
Production tax expense | | (1) | | | 0.38 | | | 0.04 |
Depreciation, depletion and amortization | | | | | 2.60 | | | 2.66 |
General and administrative expense, excluding stock-based compensation | | (2) | | | 0.45 | | | 0.43 |
| (1) | Production tax expense for the first quarter of 2010 and the first quarter of 2009 include one-time benefits of $2.2 million and $4.4 million, respectively, to reduce and re-estimate prior years as a result of amended returns filed with the States of Utah and Colorado regarding the calculation of severance taxes. Exclusive of the one-time benefits, the production tax expense per unit would have been $0.48 and $0.24 in 2010 and 2009, respectively. |
| (2) | Management believes the separate presentation of the non-cash component of general and administrative expense is useful because the cash portion provides a better understanding of cash required for general and administrative expenses. Management also believes that this disclosure may allow for a more accurate comparison to the Company’s peers that may have higher or lower costs associated with equity grants. |
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BILL BARRETT CORPORATION
Consolidated Statements of Operations
(Unaudited)
| | | | | | | | | | |
| | | | | Three Months Ended
March 31, | |
| | | | | 2010 | | | 2009 | |
| (in thousands, except per share amounts) | | | | | | | | |
Operating and Other Revenues: | | | | | | | | | | |
Oil and gas production | | (1) | | $ | 163,649 | | | $ | 170,176 | |
Commodity derivative loss | | (1) | | | (5,664 | ) | | | (25,956 | ) |
Other | | | | | (175 | ) | | | 520 | |
| | | | | | | | | | |
Total operating and other revenues | | | | | 157,810 | | | | 144,740 | |
| | | | | | | | | | |
Operating Expenses: | | | | | | | | | | |
Lease operating | | | | | 12,441 | | | | 11,680 | |
Gathering, transportation and processing | | | | | 15,970 | | | | 11,024 | |
Production tax | | (2) | | | 8,289 | | | | 926 | |
Exploration | | | | | 301 | | | | 760 | |
Impairment, dry hole costs and abandonment | | | | | 2,879 | | | | 185 | |
Depreciation, depletion and amortization | | | | | 56,534 | | | | 58,757 | |
General and administrative | | (3) | | | 9,802 | | | | 9,586 | |
Non-cash stock-based compensation | | (3) | | | 3,974 | | | | 3,794 | |
| | | | | | | | | | |
Total operating expenses | | | | | 110,190 | | | | 96,712 | |
| | | | | | | | | | |
Operating Income | | | | | 47,620 | | | | 48,028 | |
| | | | | | | | | | |
Other Income and Expense: | | | | | | | | | | |
Interest and other income | | | | | 20 | | | | 198 | |
Interest expense | | | | | (10,123 | ) | | | (5,129 | ) |
| | | | | | | | | | |
Total other income and expense | | | | | (10,103 | ) | | | (4,931 | ) |
| | | | | | | | | | |
Income before Income Taxes | | | | | 37,517 | | | | 43,097 | |
Provision for Income Taxes | | | | | 13,540 | | | | 16,684 | |
| | | | | | | | | | |
Net Income | | | | $ | 23,977 | | | $ | 26,413 | |
| | | | | | | | | | |
Net Income Per Common Share | | | | | | | | | | |
Basic | | | | $ | 0.53 | | | $ | 0.59 | |
Diluted | | | | $ | 0.53 | | | $ | 0.59 | |
Weighted Average Common Shares Outstanding | | | | | | | | | | |
Basic | | | | | 44,910 | | | | 44,618 | |
Diluted | | | | | 45,408 | | | | 44,740 | |
| (1) | The table below summarizes the realized and unrealized gains and losses the Company recognized related to its oil and natural gas derivative instruments for the period indicated: |
| | | | | | | | |
| | | Three Months Ended
March 31, | |
| | | 2010 | | | 2009 | |
Included in oil and gas production revenue: | | | | | | | | |
Realized gains on cash flow hedges | | $ | 21,008 | | | $ | 87,119 | |
| | | | | | | | |
Included in commodity derivative loss: | | | | | | | | |
Realized losses on derivatives not designated as cash flow hedges | | $ | (4,763 | ) | | $ | — | |
Unrealized ineffectiveness gains (losses) recognized on derivatives designated cash flow hedges | | | 393 | | | | (5,863 | ) |
Unrealized losses on derivatives not designated as cash flow hedges | | | (1,294 | ) | | | (20,093 | ) |
| | | | | | | | |
Total commodity derivative loss | | $ | (5,664 | ) | | $ | (25,956 | ) |
| | | | | | | | |
| (2) | Production tax expense for the first quarter of 2010 and the first quarter of 2009 include one-time benefits of $2.2 million and $4.4 million, respectively, to reduce and re-estimate prior years as a result of amended returns filed with the States of Utah and Colorado regarding the calculation of severance taxes. |
| (3) | Management believes the separate presentation of the non-cash component of general and administrative expense is useful because the cash portion provides a better understanding of cash required for general and administrative expenses. Management also believes that this disclosure may allow for a more accurate comparison to the Company’s peers that may have higher or lower costs associated with equity grants. |
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BILL BARRETT CORPORATION
Consolidated Condensed Balance Sheets
(Unaudited)
| | | | | | | | |
| | | | | As of
March 31, 2010 | | As of
December 31, 2009 |
| (in thousands) | | | | | | |
Assets: | | | | | | | | |
Cash and cash equivalents | | | | $ | 51,254 | | $ | 54,405 |
Other current assets | | (1) | | | 189,079 | | | 125,634 |
Property and equipment, net | | | | | 1,698,936 | | | 1,659,260 |
Other noncurrent assets | | (1) | | | 47,080 | | | 26,824 |
| | | | | | | | |
Total assets | | | | $ | 1,986,349 | | $ | 1,866,123 |
| | | | | | | | |
Liabilities and Stockholders’ Equity: | | | | | | | | |
Current liabilities | | (1) | | $ | 173,858 | | $ | 153,292 |
Notes payable under bank credit facility | | | | | 15,000 | | | 5,000 |
Senior notes | | | | | 238,790 | | | 238,478 |
Convertible senior notes | | | | | 160,139 | | | 158,772 |
Other long-term liabilities | | (1) | | | 294,361 | | | 282,026 |
Stockholders’ equity | | | | | 1,104,201 | | | 1,028,555 |
| | | | | | | | |
Total liabilities and stockholders’ equity | | | | $ | 1,986,349 | | $ | 1,866,123 |
| | | | | | | | |
| (1) | At March 31, 2010, the estimated fair value of all of our commodity derivative instruments was a net asset of $129.0 million, comprised of: $118.1 million current assets; $26.9 million non-current assets; $6.9 million current liabilities; and $9.1 million non-current liabilities. This amount will fluctuate quarterly based on estimated future commodity prices. |
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BILL BARRETT CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
| | | | | | | | |
| | | Three Months Ended
March 31, | |
| | | 2010 | | | 2009 | |
| (in thousands) | | | | | | |
Operating Activities: | | | | | | | | |
Net income | | $ | 23,977 | | | $ | 26,413 | |
Adjustments to reconcile to net cash provided by operations: | | | | | | | | |
Depreciation, depletion and amortization | | | 56,534 | | | | 58,757 | |
Impairment, dry hole costs and abandonment costs | | | 2,879 | | | | 185 | |
Unrealized derivative loss | | | 901 | | | | 25,956 | |
Deferred income taxes | | | 12,191 | | | | 16,628 | |
Stock compensation and other non-cash charges | | | 4,255 | | | | 4,314 | |
Amortization of debt discounts and deferred financing costs | | | 2,608 | | | | 1,751 | |
Loss on sale of properties | | | 935 | | | | 1 | |
| | | | | | | | |
Change in assets and liabilities: | | | | | | | | |
Accounts receivable | | | (1,327 | ) | | | 12,909 | |
Prepayments and other assets | | | (2,446 | ) | | | (2,504 | ) |
Accounts payable, accrued and other liabilities | | | (15,192 | ) | | | 6,668 | |
Amounts payable to oil & gas property owners | | | 738 | | | | (5,337 | ) |
Production taxes payable | | | 2,923 | | | | (3,205 | ) |
| | | | | | | | |
Net cash provided by operating activities | | $ | 88,976 | | | $ | 142,536 | |
| | | | | | | | |
Investing Activities: | | | | | | | | |
Additions to oil and gas properties, including acquisitions | | | (91,145 | ) | | | (134,901 | ) |
Additions of furniture, equipment and other | | | (709 | ) | | | (1,226 | ) |
Proceeds from sale of properties | | | 3,105 | | | | — | |
| | | | | | | | |
Net cash used in investing activities | | $ | (88,749 | ) | | $ | (136,127 | ) |
| | | | | | | | |
Financing Activities: | | | | | | | | |
Proceeds from credit facility | | | 20,000 | | | | 42,000 | |
Principal payments on credit facility | | | (10,000 | ) | | | (20,000 | ) |
Deferred financing costs and other | | | (14,872 | ) | | | (2 | ) |
Proceeds from sale of common stock | | | 1,494 | | | | — | |
| | | | | | | | |
Net cash provided by (used in) financing activities | | $ | (3,378 | ) | | $ | 21,998 | |
| | | | | | | | |
Increase (Decrease) in Cash and Cash Equivalents | | | (3,151 | ) | | | 28,407 | |
Beginning Cash and Cash Equivalents | | | 54,405 | | | | 43,063 | |
| | | | | | | | |
Ending Cash and Cash Equivalents | | $ | 51,254 | | | $ | 71,470 | |
| | | | | | | | |
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BILL BARRETT CORPORATION
Reconciliation of Discretionary Cash Flow & Adjusted Net Income
(Unaudited)
Discretionary Cash Flow Reconciliation
| | | | | | | | |
| | | Three Months Ended
March 31, | |
| | | 2010 | | | 2009 | |
(in thousands, except per share amounts) | | | | | | | | |
Net Income | | $ | 23,977 | | | $ | 26,413 | |
Adjustments to reconcile to discretionary cash flow: | | | | | | | | |
Depreciation, depletion and amortization | | | 56,534 | | | | 58,757 | |
Impairment, dry hole costs and abandonment costs | | | 2,879 | | | | 185 | |
Exploration expense | | | 301 | | | | 760 | |
Unrealized derivative loss | | | 901 | | | | 25,956 | |
Deferred income taxes | | | 12,191 | | | | 16,628 | |
Stock compensation and other non-cash charges | | | 4,255 | | | | 4,314 | |
Amortization of debt discounts and deferred financing costs | | | 2,608 | | | | 1,751 | |
Loss on sale of properties | | | 935 | | | | 1 | |
| | | | | | | | |
Discretionary Cash Flow | | $ | 104,581 | | | $ | 134,765 | |
| | | | | | | | |
Per share, diluted | | $ | 2.30 | | | $ | 3.01 | |
Per Mcfe | | $ | 4.81 | | | $ | 6.10 | |
| | |
| Adjusted Net Income Reconciliation | | | | | | | | |
| |
| | | Three Months Ended
March 31, | |
| | | 2010 | | | 2009 | |
(in thousands except per share amounts) | | | | | | | | |
Net Income | | $ | 23,977 | | | $ | 26,413 | |
Adjustments to net income: | | | | | | | | |
Unrealized derivative loss | | | 901 | | | | 25,956 | |
Loss on sale of properties | | | 935 | | | | 1 | |
One time items: | | | | | | | | |
Production tax expense | | | (2,184 | ) | | | (4,400 | ) |
| | | | | | | | |
Subtotal Adjustments | | | (348 | ) | | | 21,557 | |
Effective tax rate | | | 36 | % | | | 39 | % |
| | | | | | | | |
Tax effected adjustments | | | (222 | ) | | | 13,212 | |
| | | | | | | | |
Adjusted Net Income | | $ | 23,755 | | | $ | 39,625 | |
| | | | | | | | |
Per share, diluted | | $ | 0.52 | | | $ | 0.89 | |
Per Mcfe | | $ | 1.09 | | | $ | 1.79 | |
The non-GAAP (Generally Accepted Accounting Principles) measures of discretionary cash flow and adjusted net income are presented because management believes that they provide useful additional information to investors for analysis of the Company’s ability to internally generate funds for exploration, development and acquisitions as well as adjusting net income for unusual items to allow for easier comparison from period to period. In addition, these measures are widely used by professional research analysts and others in the valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions.
These measures should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, profitability, cash flow or liquidity measures prepared in accordance with GAAP. Because discretionary cash flow and adjusted net income exclude some, but not all, items that affect net income and net cash provided by operating activities and may vary among companies, the amounts presented may not be comparable to similarly titled measures of other companies.
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