EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollar Amounts in Thousands)
Nine Months Ended September 30, | Year Ended December 31, | |||||||||||||||||||||||||||||||||||
Proforma 2004 (a) | 2004 | 2003 | Proforma 2003 (a) | 2003 | 2002 | 2001 | 2000 | 1999 | ||||||||||||||||||||||||||||
Net Income | $ | (22,515 | ) | $ | (18,687 | ) | $ | 47,371 | $ | 31,700 | $ | 59,411 | $ | 26,237 | $ | 53,171 | $ | 28,749 | $ | 19,105 | ||||||||||||||||
Cumulative effect of accounting change | — | — | (12,324 | ) | — | (12,324 | ) | — | 1,522 | — | — | |||||||||||||||||||||||||
Provision for Income taxes | (12,942 | ) | (10,764 | ) | 26,834 | 22,674 | 33,452 | 16,732 | 34,388 | 16,765 | 5,332 | |||||||||||||||||||||||||
Fixed charges (see below) | 42,065 | 32,224 | 19,544 | 73,038 | 27,618 | 21,994 | 20,707 | 19,806 | 18,588 | |||||||||||||||||||||||||||
Interest capitalized | (9,051 | ) | (4,872 | ) | (2,021 | ) | (13,695 | ) | (3,232 | ) | (2,387 | ) | (3,145 | ) | (3,818 | ) | (3,592 | ) | ||||||||||||||||||
Total adjusted earnings available for payment of fixed charges | $ | (2,443 | ) | $ | (2,099 | ) | $ | 79,404 | $ | 113,717 | $ | 104,925 | $ | 62,576 | $ | 106,643 | $ | 61,502 | $ | 39,433 | ||||||||||||||||
Fixed Charges | ||||||||||||||||||||||||||||||||||||
Interest expense | $ | 31,568 | $ | 26,506 | $ | 17,130 | $ | 57,096 | $ | 23,778 | $ | 19,377 | $ | 17,411 | $ | 15,885 | $ | 14,912 | ||||||||||||||||||
Interest capitalized | 9,051 | 4,872 | 2,021 | 13,695 | 3,232 | 2,387 | 3,145 | 3,818 | 3,592 | |||||||||||||||||||||||||||
Rental expense representative of interest factor | 1,446 | 846 | 393 | 2,247 | 608 | 230 | 151 | 103 | 84 | |||||||||||||||||||||||||||
Total fixed charges | $ | 42,065 | $ | 32,224 | $ | 19,544 | $ | 73,038 | $ | 27,618 | $ | 21,994 | $ | 20,707 | $ | 19,806 | $ | 18,588 | ||||||||||||||||||
Ratio of earnings to fixed charges | (b) | (c) | 4.1 | 1.6 | 3.8 | 2.8 | 5.2 | 3.1 | 2.1 |
(a) | Adjusted to give effect to (1) the acquisition of Nuevo Energy Company effective May 14, 2004; (2) the sale of $250.0 million Series A notes and the application of the net proceeds thereof and borrowings under our credit facility including for the termination of Nuevo’s credit facility and certain other recapitalization transactions; (3) the acquisition of 3TEC Energy Corporation which was completed on June 4, 2003; (4) the issuance of $75.0 million of 8 3/4% notes on May 30, 2003; and (5) the sale of Nuevo’s operations in The Republic of Congo, which was completed on July 30, 2004. |
(b) | Total fixed charges exceed total adjusted earnings available for payment of fixed charges by $44.5 million. Total adjusted earnings available for payment of fixed charges includes a $122.1 million noncash loss on derivatives that do not qualify for hedge accounting. Excluding this noncash loss the ratio of earnings to fixed charges would be 2.8 to 1.0. |
(c) | Total fixed charges exceed total adjusted earnings available for payment of fixed charges by $34.3 million. Total adjusted earnings available for payment of fixed charges includes a $109.5 million noncash loss on derivatives that do not qualify for hedge accounting. Excluding this noncash loss the ratio of earnings to fixed charges would be 3.3 to 1.0. |