Exhibit 99.1
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600 Travis Street
Suite 5200
Houston, Texas 77002
Contact: Roland O. Burns
Chief Financial Officer
(972) 668-8811
Web Site: www.boisdarcenergy.com
NEWS RELEASE
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For Immediate Release
BOIS d’ARC ENERGY, INC. REPORTS
SECOND QUARTER 2006 FINANCIAL AND OPERATING RESULTS
HOUSTON, TEXAS, August 3, 2006 – Bois d’Arc Energy, Inc. (“Bois d’Arc” or the “Company”) (NYSE: BDE) today reported financial and operating results for the quarter and six months ended June 30, 2006. Bois d’Arc’s net income for the three months ended June 30, 2006 was $14.8 million or $0.23 per share which compares to 2005’s second quarter proforma net income of $12.5 million or $0.21 per share. The proforma earnings for the second quarter of 2005 give effect to income taxes as if the Company has been taxed as a corporation prior to May 11, 2005 and to exclude the one-time charge of $108.2 million to establish a deferred income tax liability on the date Bois d’Arc became taxable. For the second quarter of 2006, Bois d’Arc reported oil and gas sales of $59.6 million as compared to $48.7 million for the three months ended June 30, 2005. Production in the second quarter of 2006 totaled 7.3 billion cubic feet equivalent of natural gas (“Bcfe”), an increase of 12% over production of 6.5 Bcfe for the same period in 2005. The Company achieved this increase even though approximately 1.6 Bcfe of its production was deferred in the second quarter of 2006 awaiting the return to service of certain third party pipelines that were damaged by last year’s hurricanes. At the start of the third quarter, all but 8 Mmcfe per day of Bois d’Arc production has been restored. Prices realized by the Company during the second quarter of 2006 averaged $6.84 per Mcf of natural gas and $69.31 per barrel of oil as compared to $7.05 per Mcf of natural gas and $49.63 per barrel of oil in 2005’s second quarter. Bois d’Arc generated $43.8 million of operating cash flow (before changes in working capital accounts) as compared to $32.8 million in the second quarter of 2005. EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses totaled $47.1 million in the second quarter of 2006 as compared to $39.5 million in the second quarter of 2005.
For the six months ended June 30, 2006, Bois d’Arc reported net income of $31.6 million or $0.49 per share as compared to pro forma net income of $23.4 million ($0.42 per diluted share) for the six months ended June 30, 2005. Oil and gas sales for the first half of 2006 were $121.4 million as compared to $92.2 million for the six months ended June 30, 2005. Production in the first half of 2006 totaled 14.3 Bcfe, an increase of 12% over production of 12.7 Bcfe for the same period in 2005. Approximately 3.3 Bcfe of production was deferred during the first six months of 2006 awaiting the return to service of third party pipelines. Prices realized by the Company during the six months ended June 30, 2006 averaged $7.60 per Mcf of natural gas and $65.31 per barrel of oil as compared to $6.84 per Mcf of natural gas and $48.65 per barrel of oil in the same period in 2005. Bois d’Arc’s operating cash flow (before changes in working capital accounts) for the six months ended June 30, 2006, was $88.1 million as compared to $63.0 million in the same period in 2005. EBITDAX totaled $94.8 million in the first half of 2006 as compared to $74.6 million in the first half of 2005.
Bois d’Arc has had successful results from its exploration focused drilling program. Since the beginning of 2006, Bois d’Arc has drilled seven (5.9 net) successful wells out of a total of nine (7.4 net) drilled for a 78% success rate. The successful wells include the fifth well drilled to delineate and extend the “Laker” prospect discovery made last year at Ship Shoal block 111, a successful extension well in Ship Shoal block 99, a discovery at Eugene Island block 166, and the “Steelhead” discovery at Ship Shoal block 111, which were reported on with the first quarter results.
The most significant discovery made so far in 2006 is the OCS-G 18054 #54 ST which was drilled to test the “Sockeye” prospect at South Pelto 22. This project involved the purchase, re-entry and sidetrack of an existing well bore. The sidetrack well was drilled to a depth of 17,686 feet and encountered 109 feet of net pay in a high quality sand. The well also encountered 75 feet of additional net pay in six other reservoirs. This well is being completed and will be connected to an existing operated platform at South Pelto block 22. First production is expected to occur in late August.
Since the first quarter, Bois d’Arc also has drilled successful wells in Ship Shoal block 106 and at South Pelto block 5. The OCS-G-24923 #1 was drilled to test Bois d’Arc’s “Inwood” prospect at Ship Shoal block 106. This well was drilled to a depth of 12,094 feet and encountered 28 feet of net pay in three commercial reservoirs. Production is expected to start in the fourth quarter of 2006 after this well is completed and connected to an existing operated platform at Ship Shoal block 99. Bois d’Arc also drilled a well to test the “Gordo” prospect at South Pelto 5 which was successful. The OCS-G 12027 #21 was drilled to a depth of 15,237 feet and encountered 21 feet of net pay in two sands. This well will be completed and connected to an existing operated platform with production expected to start at the end of the third quarter of 2006. The two unsuccessful wells were drilled at South Timbalier block 11 and at Ship Shoal block 99.
Bois d’Arc made capital expenditures of $114 million during the first six months of 2006 for its exploration and development activities. During the second half of 2006, the Company expects to make an additional $116 million in capital expenditures.
This press release may contain “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described herein. Although the Company believes the expectations in such statements to be reasonable, there can be no assurance that such expectations will prove to be correct.
Bois d’Arc Energy is a growing independent exploration company engaged in the discovery and production of oil and natural gas in the Gulf of Mexico. The Company’s stock is traded on the New York Stock Exchange under the symbol “BDE”.
BOIS d’ARC ENERGY, INC.
OPERATING RESULTS
(In thousands, except per share amounts)
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | 2006 | | | 2005 | | | 2006 | | | 2005 | |
| | | | | | | | | | | | | | | | |
Oil and gas sales | | $ | 59,607 | | | $ | 48,685 | | | $ | 121,440 | | | $ | 92,161 | |
Operating expenses: | | | | | | | | | | | | | | | | |
Oil and gas operating | | | 11,821 | | | | 8,273 | | | | 24,261 | | | | 15,980 | |
Exploration | | | 3,718 | | | | 4,554 | | | | 8,249 | | | | 7,690 | |
Depreciation, depletion and amortization | | | 16,495 | | | | 12,785 | | | | 30,888 | | | | 24,606 | |
Impairment | | | 846 | | | | — | | | | 846 | | | | — | |
Loss on disposal of assets | | | — | | | | 89 | | | | — | | | | 89 | |
General and administrative, net | | | 2,641 | | | | 2,360 | | | | 5,882 | | | | 4,387 | |
| | | | | | | | | | | | | | |
Total operating expenses | | | 35,521 | | | | 28,061 | | | | 70,126 | | | | 52,752 | |
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Income from operations | | | 24,086 | | | | 20,624 | | | | 51,314 | | | | 39,409 | |
Other income (expenses): | | | | | | | | | | | | | | | | |
Interest income | | | 57 | | | | 50 | | | | 126 | | | | 95 | |
Other income | | | 327 | | | | — | | | | 327 | | | | — | |
Interest expense | | | (1,569 | ) | | | (981 | ) | | | (2,646 | ) | | | (2,749 | ) |
| | | | | | | | | | | | | | | | |
Total other expenses | | | (1,185 | ) | | | (931 | ) | | | (2,193 | ) | | | (2,654 | ) |
| | | | | | | | | | | | | | |
Income before income taxes | | | 22,901 | | | | 19,693 | | | | 49,121 | | | | 36,755 | |
Provision for income taxes | | | (8,118 | ) | | | (112,134 | ) | | | (17,557 | ) | | | (112,134 | ) |
| | | | | | | | | | | | | | |
Net income (loss) | | $ | 14,783 | | | $ | (92,441 | ) | | $ | 31,564 | | | $ | (75,379 | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) per share: | | | | | | | | | | | | �� | | | | |
Basic | | $ | 0.24 | | | $ | (1.62 | ) | | $ | 0.51 | | | $ | (1.41 | ) |
Diluted | | $ | 0.23 | | | $ | (1.62 | )(1) | | $ | 0.49 | | | $ | (1.41 | )(1) |
| | | | | | | | | | | | | | | | |
Weighted average common and common stock equivalent shares outstanding: | | | | | | | | | | | | | | | | |
Basic | | | 62,429 | | | | 57,118 | | | | 62,429 | | | | 53,315 | |
Diluted | | | 64,515 | | | | 57,118 | (1) | | | 64,472 | | | | 53,315 | (1) |
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Pro forma computation related to conversion to a corporation for income tax purposes: | | | | | | | | | | | | | | | | |
Income before income taxes | | | | | | $ | 19,693 | | | | | | | $ | 36,755 | |
Pro forma income tax provision | | | | | | | (7,152 | ) | | | | | | | (13,386 | ) |
Pro forma net income | | | | | | $ | 12,541 | | | | | | | $ | 23,369 | |
| | | | | | | | | | | | | | | | |
Pro forma net income per share (unit): | | | | | | | | | | | | | | | | |
Basic | | | | | | $ | 0.22 | | | | | | | $ | 0.44 | |
Diluted | | | | | | $ | 0.21 | | | | | | | $ | 0.42 | |
| | | | | | | | | | | | | | | | |
Weighted average common and common stock equivalent shares (units) outstanding: | | | | | | | | | | | | | | | | |
Basic | | | | | | | 57,118 | | | | | | | | 53,315 | |
Diluted | | | | | | | 58,857 | | | | | | | | 54,997 | |
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(1) Basic and diluted are the same due to the net loss. | | | | | | | | | | | | | | |
BOIS d’ARC ENERGY, INC.
OPERATING RESULTS
(In thousands, except per share amounts)
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | 2006 | | | 2005 | | | 2006 | | | 2005 | |
| | | | | | | | | | | | | | | | |
Cash flow from operations: | | | | | | | | | | | | | | | | |
Net cash provided by operating activities | | $ | 51,276 | | | $ | 43,195 | | | $ | 84,027 | | | $ | 64,930 | |
Increase (decrease) in accounts receivable | | | (175 | ) | | | 13,082 | | | | (4,472 | ) | | | 17,194 | |
Increase (decrease) in other current assets | | | 2,538 | | | | 2,101 | | | | 685 | | | | 2,191 | |
Decrease (increase) in accounts payable and accrued expenses | | | (9,846 | ) | | | (25,597 | ) | | | 7,827 | | | | (21,294 | ) |
Cash flow from operations | | $ | 43,793 | | | $ | 32,781 | | | $ | 88,067 | | | $ | 63,021 | |
| | | | | | | | | | | | | | |
EBITDAX: | | | | | | | | | | | | | | | | |
Net income | | $ | 14,783 | | | $ | (92,441 | ) | | $ | 31,564 | | | $ | (75,379 | ) |
Interest expense | | | 1,569 | | | | 981 | | | | 2,646 | | | | 2,749 | |
Loss on disposal of assets, net | | | — | | | | 89 | | | | — | | | | 89 | |
Income tax expense | | | 8,118 | | | | 112,134 | | | | 17,557 | | | | 112,134 | |
Depreciation, depletion and amortization | | | 16,495 | | | | 12,785 | | | | 30,888 | | | | 24,606 | |
Impairment | | | 846 | | | | — | | | | 846 | | | | — | |
Stock-based compensation | | | 1,556 | | | | 1,388 | | | | 3,019 | | | | 2,745 | |
Exploration expense | | | 3,718 | | | | 4,554 | | | | 8,249 | | | | 7,690 | |
EBITDAX | | $ | 47,085 | | | $ | 39,490 | | | $ | 94,769 | | | $ | 74,634 | |
| | | | | | | | | | | | | | |
| | As of June 30, | |
| | 2006 | | | 2005 | |
Balance Sheet Data: | | | | | | | | |
Cash and cash equivalents | | $ | 7,360 | | | $ | 4,905 | |
Other current assets | | | 44,092 | | | | 35,559 | |
Property and equipment, net | | | 741,164 | | | | 560,289 | |
Other | | | 703 | | | | 844 | |
Total assets | | $ | 793,319 | | | $ | 601,597 | |
| | | | | | | | |
Current liabilities | | $ | 73,198 | | | $ | 56,459 | |
Deferred income taxes | | | 138,344 | | | | 110,954 | |
Long-term debt | | | 90,000 | | | | 11,000 | |
Reserve for future abandonment costs | | | 37,988 | | | | 30,575 | |
Stockholders’ equity | | | 453,789 | | | | 392,609 | |
Total liabilities and stockholders’ equity | | $ | 793,319 | | | $ | 601,597 | |
BOIS d’ARC ENERGY, INC.
CONSOLIDATED OPERATING RESULTS
(In thousands, except per unit amounts)
| | For the Three Months Ended | |
| | June 30, 2006 | | | June 30, 2005 | |
| | | | | | | | |
Oil production (thousand barrels) | | | 345 | | | | 361 | |
Gas production (million cubic feet – Mmcf) | | | 5,218 | | | | 4,362 | |
Total production (Mmcfe) | | | 7,290 | | | | 6,527 | |
| | | | | | | | |
Oil sales | | $ | 23,943 | | | $ | 17,912 | |
Gas sales | | | 35,664 | | | | 30,773 | |
Total oil and gas sales | | $ | 59,607 | | | $ | 48,685 | |
| | | | | | | | |
Average oil price (per barrel) | | $ | 69.31 | | | $ | 49.63 | |
Average gas price (per thousand cubic feet – Mcf) | | $ | 6.84 | | | $ | 7.05 | |
Average price (per Mcf equivalent) | | $ | 8.18 | | | $ | 7.46 | |
Lifting cost(1) | | $ | 11,821 | | | $ | 8,273 | |
Lifting cost (per Mcf equivalent) | | $ | 1.62 | | | $ | 1.27 | |
| | | | | | | | |
Oil and gas capital expenditures: | | | | | | | | |
Leasehold costs | | $ | 2,045 | | | $ | 4,103 | |
Exploration drilling | | | 38,479 | | | | 1,071 | |
Development drilling | | | 10,013 | | | | 17,236 | |
Other development costs | | | 17,304 | | | | 10,397 | |
Total | | $ | 67,841 | | | $ | 32,807 | |
| | | | | | | | |
(1) Includes production taxes of $358 and $1,009 for the three months ended June 30, 2006 and 2005, respectively.
| |
| | For the Six Months Ended | |
| | June 30, 2006 | | | June 30, 2005 | |
| | | | | | | | |
Oil production (thousand barrels) | | | 663 | | | | 711 | |
Gas production (million cubic feet – Mmcf) | | | 10,282 | | | | 8,413 | |
Total production (Mmcfe) | | | 14,259 | | | | 12,682 | |
| | | | | | | | |
Oil sales | | $ | 43,280 | | | $ | 34,610 | |
Gas sales | | | 78,160 | | | | 57,551 | |
Total oil and gas sales | | $ | 121,440 | | | $ | 92,161 | |
| | | | | | | | |
Average oil price (per barrel) | | $ | 65.31 | | | $ | 48.65 | |
Average gas price (per thousand cubic feet – Mcf) | | $ | 7.60 | | | $ | 6.84 | |
Average price (per Mcf equivalent) | | $ | 8.52 | | | $ | 7.27 | |
Lifting cost(2) | | $ | 24,261 | | | $ | 15,980 | |
Lifting cost (per Mcf equivalent) | | $ | 1.70 | | | $ | 1.26 | |
| | | | | | | | |
Oil and gas capital expenditures: | | | | | | | | |
Leasehold costs | | $ | 3,023 | | | $ | 4,203 | |
Exploration drilling | | | 64,791 | | | | 14,919 | |
Development drilling | | | 21,836 | | | | 32,600 | |
Other development costs | | | 24,648 | | | | 18,637 | |
Total | | $ | 114,298 | | | $ | 70,359 | |
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(2) Includes production taxes of $719 and $1,272 for the six months ended June 30, 2006 and 2005, respectively.
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