Exhibit 99.1
2013 ANNUAL REPORT
COMMODITY BALANCED PORTFOLIO
B Bill Barrett Corporation
FELLOW SHAREHOLDERS
R. Scot Woodall
Chief Executive Officer and President
2013 was an excellent year. We set forth a simplified, focused program intended to drive improved margins, reduce debt and realize enhanced value from our core oil programs. We delivered on our key objectives and realized a 51% increase in our price per share. Our achievements in 2013 are highlighted by:
30% growth in oil production
30% improvement in pre-hedge cash flow per barrel of oil equivalent (Boe) produced, reflecting improved profitability
88% growth in proved reserves at our three active oil programs
393% production replacement rate
$8.30 per Boe finding and development cost, demonstrating low cost proved reserve additions
$348 million increase in pre-tax PV10 of proved reserves
$189 million reduction in total debt
Safety record better than industry averages
Ending 2013 with a commodity balanced portfolio based on proved reserves and production, providing optionality in our long-term development programs.
Our 2013 operations program focused on our Denver Julesburg (DJ) Basin and Uinta Oil Program assets. In the DJ Basin, we delineated 70% of the recently acquired Northeast Wattenberg position, added 51 MMBoe in proved reserves and increased production by more than 100%. At year-end 2013, we had 1,697gross/844 net drilling locations and 76,000 net acres. The DJ Basin offers a sizable long-term asset base. Further, the program offers significant upside potential. Going forward we will expand our drilling program from the Northeast Wattenberg position to the Wattenberg core and into the Chalk Bluffs area. We plan to delineate the extent of multiple horizons, including the Niobrara B bench, Niobrara C bench and Codell, and test down-spacing to 40 acres. We also plan to test extended reach laterals, which have delivered superior returns for neighboring peer companies. Our progress in the DJ Basin was tremendous in 2013 and positioned us well for 2014 and beyond.
In the Uinta Basin, we had particular success in the East Bluebell acreage position where we drilled 20 wells, added 37 MMBoe proved reserves and increased production by more than 100%. Our 23,000 net acre position in East Bluebell offers economic returns competitive with the DJ Basin and sizable upside through further cost efficiencies associated with scale, down-spacing and a long-term inventory.
DJ BASIN
The Denver-Julesberg (DJ) Basin, located in Colorado and southern Wyoming: In 2013, production increased 112% and reserves increased more than 350% to 66 MMBoe. We delineated 70% of our net Northeast Wattenberg position, establishing a new scalable oil program. The DJ Program offers substantial upside across our 76,000 net acre position.
UINTA OIL PROGRAM
The Uinta Oil Program, located in the Uinta Basin, Utah: In 2013, production increased 38% and reseves increased 10% to 53 MMBoe. We completed two successful downspacing tests establishing 80-acre spacing in a portion of the Blacktail Ridge area and completed a 20 well program in the East Bluebell area where strong economics set the foundation for the 2014 program in the area.
2013 was an excellent year. We set forth a simplified, focused program intended to drive improved margins, reduce debt and realize enhanced value from our core oil programs.
In our effort to achieve commodity balance, focus the portfolio on key assets, and reduce debt, we sold the West Tavaputs dry natural gas assets in December 2013. Following the asset sale, we ended 2013 with a portfolio that is approximately 40% oil, 40% natural gas and 20% natural gas liquids.
Our 2014 operations program will be almost entirely focused on development of the DJ Basin and Uinta Oil Program along with participation in a number oil wells in the Powder River Basin to be operated by partners in this early stage program. We also continue to operate our Gibson Gulch program in the Piceance Basin where we do not plan to drill in 2014 but continue to generate cash flow from this established natural gas program. In 2014, we plan to spend $500 million – $550 million to drill approximately 120 wells in the DJ and Uinta programs as well as participate in approximately 80 wells in the DJ and Powder River Basins. Based on current commodity prices, we expect this year’s program to generate approximately 40% rates of return on drilling capital, and we expect to increase oil production by 30% again in 2014. We are well positioned to drive increased cash flow and increased profitability per barrel produced. In 2014 and forward, we will seek to generate profitable growth in production and cash flow as we continue to realize value from our core programs.
I am proud of our team for our success in 2013 and look forward to continuing that success in 2014. As always, it is our priority to operate with environmental stewardship as we value our Rocky Mountain home and to maintain the highest level of health and safety standards for our employees.
Sincerely,
R. Scot Woodall
Chief Executive Officer and President
March 14, 2014
PICEANCE BASIN
The Gibson Gulch Program, located in the Piceance Basin, Colorado: The Gibson Gulch Program offers exposure to low-cost natural gas and NGLs.
POWDER DEEP OIL PROGRAM
The Powder Deep Oil Program, located in Wyoming: This exciting new area is in the early stages of development. We completed a five well program in 2013 targeting the Shannon formation. This stacked oil play offers targets to multiple horizons.
FINANCIAL STATISTICS
FINANCIAL DATA 2013 2012 2011
Net Income (Loss), millions $(192.7) $ 0.6 $ 30.7
Adjusted Earnings, per share $ (0.43) $ 0.15 $ 1.78
Discretionary Cash Flow, millions $ 281 $ 403 $ 478
Discretionary Cash Flow, per share $ 5.92 $ 8.51 $ 10.12
Production Revenue, per Boe $ 39.35 $ 37.90 $ 42.29
Lease Operating Expenses and Gathering,
Transportation and Processing, per Boe $ 9.50 $ 9.15 $ 8.43
Production Taxes, per Boe $ 1.88 $ 1.30 $ 2.11
G&A, excluding non-cash stock-based compensation, per Boe $ 3.39 $ 2.66 $ 2.68
Depletion, Depreciation, and Amortization, per Boe $ 19.33 $ 17.49 $ 16.20
Discretionary Cash Flow, per Boe $ 19.44 $ 20.55 $ 26.86
AVERAGE REALIZED PRICES
Natural Gas*, including hedge effect, per Mcf $ 4.16 $ 5.07 $ 6.46
Oil, including hedge effect, per Bbl $ 82.38 $ 84.96 $ 80.63
NGLs, including hedge effect, per Bbl $ 28.31 N/A N/A
Combined, per Boe $ 39.35 $ 37.90 $ 42.29
* includes the effect of NGL revenues in 2012 and 2011 OPERATING STATISTICS
PROVED RESERVES AND ACREAGE 2013 2012 2011
Natural Gas, Bcf 466 739 1,181
Oil, MMBbls 83.5 50.8 30.6
NGLs, MMBbls 35.8 N/A N/A
Oil Equivalents, MMBoe 197 174 227
Percent Developed 42% 59% 51%
Pre-Tax PV-10, millions $ 1,750 $ 1,401 $ 2,117
Net Acreage, rounded 814,000 1,198,000 1,389,000
PRODUCTION Natural Gas, Bcf 52.7 101.5 97.9
Oil, MMBbls 3.5 2.7 1.5
NGLs, MMBbls 2.2 N/A N/A
Oil Equivalents, MMBoe 14.5 19.6 17.8
Average Daily Production, MBoe/d 39.7 53.7 48.8
Percent Oil 24% 14% 8%
OPERATING STATISTICS
Capital Expenditures, millions $ 474 $ 963 $ 987
Producing Wells, gross/net 1,698/1,142 1,831/1,361 2,398/1,904
Wells Drilled, gross/net 164/86 327/220 285/195
CORPORATE PROFILE
Growth in Oil
Oil Percent of Production
30.0
22.5
15.0
7.5
24
14
7 8
5
0
09
10
11
12
13
Proved Reserves (%)
42%
40%
18%
Gas
Oil
NGL
Proved Oil Reserves, MMBbls
90.0
67.5
45.0
22.5
83.5
50.8
30.6
13.0
7.8
0
09
10
11
12
13
Bill Barrett Corporation is an exploration and production company with operations focused in the resource-rich Rocky Mountain region. Our multi-year drilling inventory offers a balance of oil, natural gas and natural gas liquids. Our portfolio provides optionality for our development program and the ability to capture high returns in various economic environments. We strive to continue to improve efficiencies, enhance recoveries and maintain financial flexibility to further pursue our growth strategy while operating in a safe and environmentally responsible manner. We are conscientious and diligent in preserving and protecting our beautiful Rocky Mountain home.
U.S. Rocky Mountain Focus
POWDER RIVER BASIN
WY
UINTA BASIN
PICEANCE BASIN
DJ BASIN
DENVER
UT
CO
Board of Directors
Jim W. Mogg, Chairman of the Board, Past Chairman of DCP Midstream Partners
Carin M. Barth, President of LB Capital, Inc.
Kevin O. Meyers, Past Senior Vice President, Exploration and Production,
Americas of ConocoPhillips and President of ConocoPhillips Canada
William F. Owens, Former Governor of Colorado
Edmund P. Segner, Past President and Chief of Staff of EOG Resources, Inc.
Randy I. Stein, Tax, Accounting and Business Consultant, Former Principal of
PricewaterhouseCoopers LLP
Michael E. Wiley, Past Chairman and Chief Executive Officer of Baker Hughes Incorporated
Officers
R. Scot Woodall, Chief Executive Officer and President
Robert W. Howard, Chief Financial Officer and Treasurer
Terry R. Barrett, Senior Vice President – Geosciences
David R. Macosko, Senior Vice President – Accounting
Larry A. Parnell, Senior Vice President – Engineering, Planning and Business Development
Stephen W. Rawlings, Senior Vice President – Operations
Kenneth A. Wonstolen, Senior Vice President – General Counsel
Duane J. Zavadil, Senior Vice President – EH&S, Regulatory and Government Affairs
William M. Crawford, Vice President – Finance and Marketing
Jennifer C. Martin, Vice President – Investor Relations
Mitchell J. Reneau, Vice President – Land
Troy L. Schindler, Vice President – Drilling
Monty D. Shed, Vice President – Production
Michelle Vion, Vice President – Human Resources
Corporate Information
Corporate Office
1099 Eighteenth Street, Suite 2300
Denver, Colorado 80202
Telephone: 303-293-9100
Fax: 303-291-0420
www.billbarrettcorp.com
Investor Relations
Jennifer C. Martin
Vice President – Investor Relations
investor_relations@billbarrettcorp.com
Annual Shareholders’ Meeting
Our Annual Shareholder’s Meeting will be held
at 8:00 a.m. (MDT) on Tuesday, May 6, 2014
Bill Barrett Corporation, Corporate Headquarters
1099 18th St, Suite 2300
Denver, CO 80202
Transfer Agent
Computershare
211 Quality Circle, Suite 210
College Station, TX 77845
www.computershare.com/investor
Independent Auditors
Deloitte & Touche LLP
Denver, Colorado
Independent Reservoir Engineers
Netherland, Sewell & Associates, Inc.
Dallas, Texas
DISCLOSURE STATEMENTS
Please reference our filings with the Securities and Exchange Commission (“SEC”) for further information related to the following disclosures. Reference the accompanying Annual Report on Form 10-K for the year ended December 31, 2013, as well as Current Reports on Form 8-K and Quarterly Reports on Form 10-Q, specifically including the Form 8-K filed with the SEC on February 21, 2014, regarding our Fourth Quarter and Full-Year 2013 Results. SEC filings are posted to the Company’s website at www.billbarrettcorp.com. You may also obtain SEC filings by calling 1-800-SEC-0330 or at www.sec.gov.
Forward-Looking Statements
This report contains forward-looking statements regarding the Company’s future plans and expected performance based on assumptions the Company believes to be reasonable. A number of potential risks and uncertainties could cause actual results to differ materially from these statements. Please reference “Risks Related to the Oil and Natural Gas Industry and Our Business” in the accompanying Form 10-K for descriptions of such risks and uncertainties. The Company encourages readers to consider these factors and assumes no obligation to publicly revise or update any forward-looking statements.
New York Stock Exchange Certification
New York Stock Exchange Rule 303A. 12(a) requires the chief executive officers of listed companies to certify that they are not aware of any violations by their companies of the Exchange’s corporate governance listing standards. This annual certification by the chief executive officer of Bill Barrett Corporation has been filed with the New York Stock Exchange. In addition, Bill Barrett Corporation has filed Exhibits to the accompanying Form 10-K for the SEC certifications required for the chief executive officer and chief financial officer under Section 302 of the Sarbanes-Oxley Act.
Non-GAAP Measures
Non-GAAP Measures in this report include Discretionary Cash Flow, Adjusted Net Income, Pre-tax PV10 and G&A, excluding non-cash stock-based compensation
This report contains these non-GAAP measures because management believes that they are useful to investors evaluating the Company’s operating performance. These measures are widely used in the oil and natural gas industry, including by research analysts, in the valuation, comparison and recommendation of investments. Of note, the calculation of these measures may vary substantially from company to company depending upon accounting methods, internal decisions, and capital structure, and there are significant limitations in using these measures. The Company encourages readers to consider these non-GAAP measures along with the Company’s reported financial statements under GAAP. The computations and reconciliations of Discretionary Cash Flow and Adjusted Net Income may be found in the Company’s Current Report on Form 8-K filed February 21, 2014. Pre-tax PV10 is the discounted future cash flows of the Company as presented in the accompanying Form 10-K, without considering the effect of income taxes. G&A, excluding non-cash stock-based compensation is discussed in the accompanying Form 10-K.
Reserve Disclosure
Although the SEC permits oil and gas companies to disclose probable and possible reserves in their filings with the SEC, the Company did not include those estimates in its filings with the SEC.
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