ROSETTA RESOURCES ANNOUNCES SECOND QUARTER 2006 FINANCIAL AND OPERATING RESULTS
HOUSTON, TX August 14, 2006 (MARKET WIRE via COMTEX News Network) - Rosetta Resources Inc. (NASDAQ:ROSE) today reported its financial and operating results for the second quarter ended June 30, 2006. As previously announced, a conference call to discuss the results is planned for 10:00 a.m. (CDT), Tuesday, August 15, 2006. To participate in the call, dial (800) 406-5356. An audio archive broadcast will also be available over the internet at www.rosettaresources.com.
Net Income for the three-month period ending June 30, 2006 was $10.0 million or $0.20 per diluted share (all per share amounts herein are on a diluted basis). Revenues for the same period were $63.4 million, including hedging gains of $9.1 million, and operating income was $19.4 million. The company’s production increased to 8.0 Bcfe for the three month period, a 4% increase from the previous quarter. Production volume, operating income and net income were all at their highest levels for the four quarters reported since Rosetta became a separate entity.
Net Income for the six-month period ended June 30, 2006 was $19.5 million or $0.39 per diluted share. Revenues were $127.9 million, including hedging gains of $10.7 million, and operating income was $37.9 million. The company’s production increased to 15.7 Bcfe for the period.
Bill Berilgen, Rosetta’s Chief Executive Officer and President, said, “We are pleased with our second quarter results and the fact that we are beginning to see the effects of our drilling and recompletion program in our operating statistics. Our second quarter operating results do not include production from the non-consent properties, and reflect previous delays in obtaining drilling rigs in the Sacramento Basin and South Texas Lobo. We have now drilled 93 gross wells since July of last year and anticipate significant increases in production in the second half of this year. In our core areas, we had 100% drilling success in the Sacramento Basin where we drilled 16 wells, and in South Texas Lobo, we had 88% drilling success where we drilled 9 wells. Of these 25 core area wells, 24 were successful wells, with 12 currently on production and the remaining wells awaiting completion rigs and pipeline hookup before being placed on production in the third quarter.”
2006 SECOND QUARTER RESULTS
Rosetta’s production for the quarter was 8.0 Bcfe or an average of 87.9 Mmcfe per day. Average realized gas prices for the quarter were $7.56 per Mcf, including the effect of our hedges, and realized oil prices averaged $67.54 per Bbl.
Revenues in the second quarter for Rosetta totaled $63.4 million, including positive effects from our hedges of $9.1 million, representing a decrease of approximately two percent, over the first quarter of 2006.
Total lease operating expense (“LOE”), which includes direct LOE, work over, ad-valorem taxes, and insurance, was $8.3 million or $1.04 per Mcfe.
Work over costs were $1.0 million or $0.13 per Mcfe. Production taxes were $0.20 per Mcfe and treating, transportation, & marketing charges were $0.16 per Mcfe. Direct LOE was $5.6 million or $0.70 per Mcfe for the period.
General and administrative costs were $7.1 million for the second quarter, including non-cash stock compensation expenses of $1.5 million and other costs associated with the process of becoming a public company.
Net Income for the period was $10.0 million or $0.20 per share.
YEAR TO DATE RESULTS
Rosetta’s production for the first six months of 2006 was 15.7 Bcfe or an average of 86.7 Mmcfe per day. Average realized gas prices for the same period were $7.89 per Mcf, including the effect of hedges, and realized oil prices averaged $64.65 per Bbl.
Revenues for the six month period were at a record level for Rosetta with a total of $127.9 million, including positive effects from our hedges of $10.7 million.
Total LOE, which includes direct LOE, work overs, ad-valorem taxes, and insurance, was $17.9 million or $1.14 per Mcfe. Work over costs of $3.2 million or $0.20 per Mcfe were higher than anticipated due primarily to carryover of our 2005 rehab program in one of our main producing areas, South Texas, and our work over program in the Gulf of Mexico. Production taxes were $0.21 per Mcfe and treating, transportation, & marketing charges were $0.18 per Mcfe. Direct LOE was $11.1 million or $0.71 per Mcfe for the period.
General and administrative costs were $16.3 million at year end, including non-cash stock compensation expenses of $3.3 million and other costs associated with the process of becoming a public company.
Net Income for the period was $19.5 million or $0.39 per share.
Net cash from operating activities was $93.4 million and capital expenditures were $101.8 million for the six-month period ended June 30, 2006.
Rosetta Resources Inc. is an independent oil and gas company engaged in acquisition, exploration, development and production of oil and gas properties in North America. Our operations are concentrated in the Sacramento Basin of California, South Texas, the Gulf of Mexico and the Rocky Mountains. Rosetta is a Delaware corporation based in Houston, Texas.
For more information, visit www.rosettaresources.com.
Forward-Looking Statements:
All statements, other than statements of historical fact, included in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon current expectations and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. Rosetta assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law.
For Information, contact:
Teri Greer
Rosetta Resources
717 Texas, Suite 2800
Houston, TX 77002
Phone: 713-335-4008
Fax: 713-651-3056
Email: info@rosettaresources.com
http://www.rosettaresources.com
CONSOLIDATED BALANCE SHEET
(In thousands)
| | | June 30, 2006 | | December 31, 2005 | |
| | | (unaudited) | | (audited) | |
ASSETS | | | | | |
| Current assets | | $ | 140,160 | | $ | 167,258 | |
Property and equipment, net (full cost method) | | | 988,555 | | | 935,936 | |
| Other non-current assets | | | 5,847 | | | 16,075 | |
TOTAL ASSETS | | $ | 1,134,562 | | $ | 1,119,269 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDER'S EQUITY | | | | | | | |
| Current liabilities | | $ | 67,199 | | $ | 101,835 | |
| Long-term debt | | | 240,000 | | | 240,000 | |
| Derivative instruments | | | 28,907 | | | 52,977 | |
| Other long-term liabilities | | | 21,775 | | | 9,034 | |
Total liabilities | | | 357,881 | | | 403,846 | |
| | | | | | | | |
Total stockholder's equity | | | 776,681 | | | 715,423 | |
| | | | | | | | |
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | | $ | 1,134,562 | | $ | 1,119,269 | |
CONSOLIDATED INCOME STATEMENT
(In thousands)
| | | Three Months Ended | | Six Months Ended | |
| | | June 30, 2006 | | June 30, 2006 | |
| | | (unaudited) | | (unaudited) | |
REVENUE | | | | | |
| Oil & gas sales | | $ | 54,254 | | $ | 117,235 | |
| Hedge gain | | | 9,127 | | | 10,690 | |
TOTAL REVENUE | | | 63,381 | | | 127,925 | |
| | | | | | | | |
COSTS AND EXPENSES | | | | | | | |
| Lease operating expense | | | 8,323 | | | 17,881 | |
| DD&A | | | 25,601 | | | 49,668 | |
| Treating & transportation, marketing fees | | | 1,315 | | | 2,834 | |
| Production taxes | | | 1,626 | | | 3,323 | |
| General and administrative costs | | | 7,078 | | | 16,329 | |
TOTAL OPERATING COSTS & EXPENSES | | | 43,943 | | | 90,035 | |
| | | | | | | | |
OPERATING INCOME | | | 19,438 | | | 37,890 | |
OTHER (INCOME) EXPENSE: | | | | | | | |
| Interest expense (income), net | | | 3,256 | | | 6,251 | |
| Other expense (income), net | | | 152 | | | 177 | |
| | | | | | | | |
TOTAL OTHER EXP. | | | 3,408 | | | 6,428 | |
INCOME BEFORE INCOME TAX | | | 16,030 | | | 31,462 | |
| Provision for income taxes | | | 6,066 | | | 11,972 | |
NET INCOME | | $ | 9,964 | | $ | 19,490 | |
EPS - Basic | | $ | 0.20 | | $ | 0.39 | |
EPS - Diluted | | $ | 0.20 | | $ | 0.39 | |
Weighted Average Shares - Basic | | | 50,229 | | | 50,175 | |
Weighted Average Shares - Diluted | | | 50,370 | | | 50,361 | |
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
| | | Six Months Ended | |
| | | June 30, 2006 | |
| | | (unaudited) | |
Cash flows from operating activities | | | |
| Net income | | $ | 19,490 | |
| Depreciation, depletion and amortization | | | 49,668 | |
| Deferred income taxes | | | 11,723 | |
| Stock compensation expense | | | 3,322 | |
| Non-cash charges | | | 478 | |
| Change in operating assets and liabilities | | | 8,750 | |
Net cash provided by operating activities | | $ | 93,431 | |
| | | | | |
Cash flows from investing activities | | | | |
| Purchases of property and equipment | | | (99,563 | ) |
| Disposal of property and equipment | | | 36 | |
| Deposits | | | 25 | |
| Other | | | (14 | ) |
Net cash used in investing activities | | | (99,516 | ) |
| | | | | |
Cash flows from financing activities | | | | |
| Equity offering transaction fees | | | 268 | |
| Proceeds from issuances of common stock | | | 296 | |
| Stock-based compensation excess tax benefit | | | 249 | |
| Purchases of treasury stock | | | (1,246 | ) |
Net cash used in financing activities | | | (433 | ) |
| | | | | |
Net increase in cash | | | (6,518 | ) |
Cash and cash equivalents, beginning of period | | | 99,724 | |
Cash and cash equivalents, end of period | | $ | 93,206 | |
| | | | | |
Capital expenditures included in accrued liabilities | | $ | 2,281 | |
