| | 2350 N. Sam Houston Parkway East
Suite 300
Houston, Texas 77032
(281) 618-4700 Fax: (281) 618-4820 |
NEWS RELEASE
SOUTHWESTERN ENERGY ANNOUNCES RECORD
THIRD QUARTER 2003 RESULTS
High Commodity Prices and Growth in Production Volumes Drive Record Earnings and Discretionary Cash Flow
Houston, Texas - October 30, 2003...Southwestern Energy Company (NYSE: SWN) today reported net income of $10.9 million, or $.30 per diluted share, for the third quarter of 2003, up from $1.3 million, or $.05 per share, for the same period in 2002. Included in the company's 2003 third quarter results were pre-tax gains of $3.0 million, or $.05 of diluted earnings per share, from the sale of real estate and certain fixed assets.Discretionary cash flow(1) was $29.8 million during the third quarter of 2003, up from $15.7 million in the third quarter of 2002. The increases in earnings and discretionary cash flow resulted primarily from higher realized gas and oil prices and growth in the company's equivalent production which was up approximately 10% compared to the second quarter of 2003 and up 11% compared to the third quarter of 2002.
Net income for the nine months ended September 30, 2003 was $34.0 million, or $1.01 per share, compared to $9.8 million, or $.37 per share, for the same period in 2002. Discretionary cash flow was $95.0 million for the first nine months of 2003, compared to $58.9 million for the same period of 2002.
"We are pleased with our results through the first nine months of 2003," stated Harold M. Korell, President and Chief Executive Officer of Southwestern Energy. "We continue to see gains in our production volumes from our drilling program at Overton Field and look for this growth to continue through the remainder of the year. Our drilling program in the Arkoma Basin also continues to be active, particularly in the Ranger Anticline area where we will drill some key wells in the fourth quarter. We remain focused on adding value for each dollar we invest and the combination of our focus on adding value and our expected production growth should lead to continued improved results for the rest of 2003 and into 2004."
Higher Commodity Prices and Production Levels Highlight Quarter
Operating income for the company's exploration and production segment was $22.3 million for the three months ended September 30, 2003, up from $9.7 million for the same period in 2002. The increase in operating income primarily resulted from higher realized gas and oil prices and higher production volumes.
Gas and oil production for the three months ended September 30, 2003 was 11.1 billion cubic feet of gas equivalent (Bcfe), up 10% from 10.1 Bcfe in the second quarter of 2003 and 10.0 Bcfe in the third quarter of 2002. The company's production target for the fourth quarter of 2003 is 11.5 - 12.0 Bcfe, in line with its earlier guidance. With the first nine months of 2003 production at 30.0 Bcfe, the company estimates that its full-year production will be approximately 42.0 Bcfe for 2003, compared to 40.1 Bcfe produced during 2002.
Gas prices realized for the company's production averaged $4.23 per Mcf for the quarter and $4.22 per Mcf for the first nine months of 2003, up 43% and 46%, respectively, from the same periods in 2002. The company realized an average price of $27.17 per barrel for its oil production during the nine months ended September 30, 2003, compared to $20.87 per barrel for the same period of 2002.
The company's commodity hedging activities lowered its average gas price by $.61 per Mcf for the third quarter and $1.18 per Mcf for the first nine months of 2003. On a comparative basis, the company's hedging activities had the effect of decreasing its average gas price during the third quarter of 2002 by $.03 per Mcf and increasing its average price by $.02 per Mcf during the first nine months of 2002. Southwestern's hedging activities lowered its average oil price by $2.31 per barrel during the third quarter and $2.64 per barrel for the first nine months of 2003. Southwestern currently has approximately 7.5 Bcf of its remaining gas production hedged in 2003 through a combination of fixed-price swaps and collars, 29.2 Bcf hedged in 2004 and 3.0 Bcf in 2005. Additionally, the company has 90,000 barrels of its remaining oil production in 2003 hedged at an average WTI price of $26.73 per barrel and 120,000 barrels of oil hedged at $27.24 in 2004. The table below provides a detailed description of the company's hedge position at September 30, 2003.
Lease operating expenses per Mcf equivalent (Mcfe) for the company's E&P segment were $.43 per Mcfe for the third quarter of 2003 compared to $.48 per Mcfe in the third quarter of 2002. The decrease in the 2003 unit rate reflects a larger portion of the company's production being provided from the Overton Field which has lower operating costs. Lease operating expenses increased during the third quarter of 2003 from $.36 per Mcfe in the second quarter of 2003 due primarily to an increase in workover expenses. Taxes other than income taxes increased during the quarter to $.22 per Mcfe, up from $.15 per Mcfe in the same period in 2002, due primarily to higher realized commodity prices. General and administrative expenses for the quarter were $.37 per Mcfe, slightly below the company's guidance provided earlier in the year, compared to $.25 per Mcfe in the same period in 2002. The increase from the prior year was primarily due to increased pension and insur ance costs and the quarterly accrual of annual incentive compensation costs. The amortization rate per Mcfe for the company's full cost pool was $1.17 per Mcfe during the third quarter of 2003 compared to $1.16 per Mcfe in the same period in 2002.
Utility Segment Posts Seasonal Operating Loss
The company's utility systems realized a seasonal operating loss of $3.4 million in the third quarter of 2003, compared to a loss of $2.2 million for the same period in 2002.The comparative decrease in operating income in 2003 was primarily due to higher operating costs andincreased pension and insurance costs and the quarterly accrual of annual incentive compensation costs.Operatingincome for Southwestern's utility systems was $2.5 million during the first nine months of 2003, down from $4.7 million in 2002. Weather in the utility's service territory during the first nine months of 2003 was 4% colder than normal and 13% colder than the prior year.
In September 2003, the company's utility subsidiary, Arkansas Western Gas Company (AWG), received regulatory approval of a rate increase totaling $4.1 million annually, exclusive of costs to be recovered through its purchase gas adjustment clause. AWG is also entitled to recover additional costs totaling $2.3 million through its purchase gas adjustment clause over a two-year period. The rate increase was effective for all customer bills rendered on or after October 1, 2003.
Marketing and Other Results Contribute to Bottom Line
The company's marketing operations reported operating income of $.8 million for the third quarter of 2003 and $2.0 million for the nine months ended September 30, 2003, compared to $.5 million and $1.7 million, respectively,for the same periods in 2002. Southwestern's marketing and transportation operations relate primarily to the marketing of its own gas production and some third-party gas that is sold primarily to industrial customers connected to its gas distribution systems.
The company's results related to its interest in the NOARK partnership was a gain of $1.0 million during the first nine months of 2003 compared to a loss of $.4 million during the first nine months of 2002. The 2003 results include a pre-tax gain of $1.3 million related to the sale of a non-strategic portion of NOARK's pipeline.
During the third quarter of 2003, the company also recorded a pre-tax gain of $3.0 million reflected in other operating revenues that was recognized from the sale of real estate and certain fixed assets.
(1) Discretionary cash flow is defined as net cash provided by operating activities before changes in operating assets and liabilities. The company has included information concerning discretionary cash flow primarily because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements which the company may not control and may not relate to the period in which the operating activities occurred. Further, management uses this measure to assess the company's ability to generate cash to fund its exploration and development drilling activities and to service or incur debt. Discretionary cash flow should not be considered in isolation or as a substitute for net cash provided by operating activities prepared in accordance with generally accepted accounting principles. The table below reconciles discretionary cash flow with net cash provided by operating activities as derived from the company's financial information.
| | 3 Months Ended September 30, | | 9 Months Ended
September 30, |
| | 2003 | | 2002 | | 2003 | | 2002 |
Net cash provided by operating activities | | $ | 24,543 | | $ | 26,149 | | $ | 94,851 | | $ | 68,405 |
Add back (deduct): | | | | | | | | | | | | |
Change in operating assets and liabilities | | | 5,211 | | | (10,457) | | | 117 | | | (9,456) |
Discretionary cash flow | | $ | 29,754 | | $ | 15,692 | | $ | 94,968 | | $ | 58,949 |
Gas Hedges in Place for 2003 | | |
| | Weighted Avg. NYMEX Price | |
Swaps | Volumes (Bcf) | (per MMBtu) | |
4th Quarter | 2.95 | $3.42 | |
| | | |
| | NYMEX Floor Price | NYMEX Ceiling Price |
Collars | Volumes (Bcf) | (per MMBtu) | (per MMBtu) |
4th Quarter | 1.02 | $3.00 | $4.65 |
| 1.00 | $3.00 | $4.75 |
| 1.50 | $3.25 | $5.05 |
| 1.00 | $4.00 | $6.20 |
| | |
Gas Hedges in Place for 2004 | | |
| | Weighted Avg. NYMEX Price | |
Swaps | Volumes (Bcf) | (per MMBtu) | |
1st Quarter | 1.85 | $4.14 | |
2nd Quarter | 1.85 | $3.92 | |
3rd Quarter | 1.75 | $3.94 | |
4th Quarter | 1.75 | $4.03 | |
| | | |
| | NYMEX Floor Price | NYMEX Ceiling Price |
Collars | Volumes (Bcf) | (per MMBtu) | (per MMBtu) |
1st Quarter | 1.00 | $3.25 | $4.75 |
| 1.00 | $3.75 | $4.55 |
| 1.50 | $4.00 | $6.50 |
| 1.00 | $4.00 | $6.90 |
| 1.00 | $4.00 | $8.50 |
| | | |
2nd Quarter | 1.00 | $3.25 | $4.75 |
| 1.00 | $3.75 | $4.55 |
| 1.50 | $4.00 | $6.50 |
| 1.00 | $4.00 | $6.90 |
| 1.00 | $4.00 | $8.50 |
| | | |
3rd Quarter | 1.00 | $3.25 | $4.75 |
| 1.00 | $3.75 | $4.55 |
| 1.50 | $4.00 | $6.50 |
| 1.00 | $4.00 | $6.90 |
| 1.00 | $4.00 | $8.50 |
| | | |
4th Quarter | 1.00 | $3.25 | $4.75 |
| 1.00 | $3.75 | $4.55 |
| 1.50 | $4.00 | $6.50 |
| 1.00 | $4.00 | $6.90 |
| 1.00 | $4.00 | $8.50 |
| | |
Gas Hedges in Place for 2005 | | |
| | Weighted Avg. NYMEX Price | |
Swaps | Volumes (Bcf) | (per MMBtu) | |
2nd Quarter | 1.00 | $4.51 | |
3rd Quarter | 1.00 | $4.49 | |
4th Quarter | 1.00 | $4.74 | |
| | |
Oil Hedges in Place for 2003 | | |
| Weighted Avg. NYMEX Price | |
Swaps | Volumes (Bbls) | (per Bbl) | |
4th Quarter | 90,000 | $26.73 | |
| | |
Oil Hedges in Place for 2004 | | |
| Weighted Avg. NYMEX Price | |
Swaps | Volumes (Bbls) | (per Bbl) | |
1st Quarter | 30,000 | $28.80 | |
2nd Quarter | 30,000 | $27.50 | |
3rd Quarter | 30,000 | $26.65 | |
4th Quarter | 30,000 | $26.00 | |
Southwestern's executive management team will host a teleconference call on Friday, October 31st at 11:30 a.m. Eastern to discuss the company's third quarter 2003 results. The toll-free number to call is 800-289-0573 and the reservation number is 722662. The teleconference can also be heard "live" over the Internet at the company's website:http://www.swn.com
Southwestern Energy Company is an independent energy company primarily focused on the exploration for and production of natural gas. Additional information on the company can be found on the Internet athttp://www.swn.com.
Contacts: | Greg D. Kerley | | Brad D. Sylvester, CFA |
| Executive Vice President | | Manager, Investor Relations |
| and Chief Financial Officer | | (281) 618-4897 |
| (281) 618-4803 | | |
All statements, other than historical financial information, may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although the company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include, but are not limited to, the timing and extent of changes in commodity prices for gas and oil, the timing and extent of the company's success in discovering, developing, producing, and estimating reserves, property acquisition or divestiture activities that may occur, the effects of weather and regul ation on the company's gas distribution segment, increased competition, legal and economic factors, governmental regulation, the financial impact of accounting regulations and critical accounting policies, changing market conditions, the comparative cost of alternative fuels, conditions in capital markets and changes in interest rates, availability of oil field services, drilling rigs, and other equipment, as well as various other factors beyond the company's control, and any other factors listed in the reports the company has filed with the Securities and Exchange Commission. A discussion of these and other factors affecting the company's performance is included in the company's periodic reports filed with the Securities and Exchange Commission including its Annual Report on Form 10-K for the year ended December 31, 2002.
Financial Summary Follows
# # #
OPERATING STATISTICS (Unaudited) | | | | | | | | | Page 1 of 5 |
| Southwestern Energy Company and Subsidiaries | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | Three Months | | | Nine Months | |
Periods Ended September 30 | | 2003 | | | 2002 | | | 2003 | | | 2002 | |
| | | | | | |
Exploration & Production | | | | | | | | | | | | |
Production | | | | | | | | | | | | |
Affiliated gas sales (MMcf) | | 972 | | | 696 | | | 4,428 | | | 3,875 | |
Unaffiliated gas sales (MMcf) | | 9,269 | | | 8,275 | | | 23,173 | | | 23,455 | |
Total gas production (MMcf) | | 10,241 | | | 8,971 | | | 27,601 | | | 27,330 | |
| | | | | | | | | | | | |
Oil production (MBbls) | | 136 | | | 165 | | | 400 | | | 543 | |
| | | | | | | | | | | | |
Total equivalent production (MMcfe) | | 11,053 | | | 9,961 | | | 29,999 | | | 30,588 | |
Commodity Prices | | | | | | | | | | | | |
Average realized gas price per Mcf | | $4.23 | | | $2.96 | | | $4.22 | | | $2.89 | |
Average realized oil price per Bbl | | $26.46 | | | $22.65 | | | $27.17 | | | $20.87 | |
Operating Expenses per Mcfe | | | | | | | | | | | | |
Lease operating expenses | | $0.43 | | | $0.48 | | | $0.40 | | | $0.43 | |
Taxes, other that income taxes | | $0.22 | | | $0.15 | | | $0.24 | | | $0.17 | |
General & administrative expenses | | $0.37 | | | $0.25 | | | $0.40 | | | $0.27 | |
Full cost pool amortization | | $1.17 | | | $1.16 | | | $1.17 | | | $1.16 | |
Marketing | | | | | | | | | | | | |
Gas volumes marketed (MMcf) | | 12,220 | | | 11,582 | | | 30,943 | | | 36,221 | |
Gas Distribution | | | | | | | | | | | | |
Deliveries (Bcf) | | | | | | | | | | | | |
Sales and end-use transportation | | 3.1 | | | 3.2 | | | 17.6 | | | 17.2 | |
Off-system transportation | | - | | | 1.3 | | | 0.1 | | | 2.0 | |
Average number of customers | | 137,123 | | | 134,807 | | | 138,782 | | | 136,456 | |
Average sales rate per Mcf | | $11.00 | | | $8.39 | | | $7.77 | | | $6.57 | |
Heating weather - degree days | | 43 | | | 14 | | | 2,597 | | | 2,291 | |
- percent of normal | | 102% | | | - | | | 104% | | | 91% | |
STATEMENT OF OPERATIONS (Unaudited) | | | | | | | | | Page 2 of 5 |
Southwestern Energy Company and Subsidiaries | | | | | | | | | | | |
| Three Months | | Nine Months |
Periods Ended September 30 | | 2003 | | | 2002 | | | 2003 | | | 2002 |
| (in thousands, except share/per share amounts) |
Operating Revenues | | | | | | | | | | | |
Gas sales | $ | 52,994 | | $ | 35,656 | | $ | 179,987 | | $ | 140,248 |
Gas marketing | | 10,113 | | | 10,018 | | | 34,386 | | | 31,948 |
Oil Sales | | 3,582 | | | 3,728 | | | 10,862 | | | 11,327 |
Gas transportation and other | | 4,379 | | | 1,689 | | | 10,975 | | | 5,230 |
| | 71,068 | | | 51,091 | | | 236,210 | | | 188,753 |
Operating Costs and Expenses | | | | | | | | | | | |
Gas purchases - utility | | 3,496 | | | 3,198 | | | 32,743 | | | 31,770 |
Gas purchases - marketing | | 9,025 | | | 9,287 | | | 31,433 | | | 29,414 |
Operating expenses | | 9,949 | | | 9,698 | | | 28,243 | | | 28,292 |
General and administrative expenses | | 7,937 | | | 5,527 | | | 23,483 | | | 17,351 |
Depreciation, depletion and amortization | | 14,896 | | | 13,323 | | | 40,965 | | | 41,061 |
Taxes, other than income taxes | | 3,058 | | | 2,064 | | | 9,016 | | | 7,132 |
| | 48,361 | | | 43,097 | | | 165,883 | | | 155,020 |
Operating Income | | 22,707 | | | 7,994 | | | 70,327 | | | 33,733 |
Interest Expense | | | | | | | | | | | |
Interest on long-term debt | | 4,324 | | | 5,510 | | | 13,326 | | | 16,209 |
Other interest charges | | 350 | | | 287 | | | 1,072 | | | 945 |
Interest capitalized | | (457) | | | (364) | | | (1,323) | | | (1,015) |
| | 4,217 | | | 5,433 | | | 13,075 | | | 16,139 |
Other Income (Expense) | | (476) | | | (124) | | | 883 | | | (598) |
Income Before Income Taxes, Minority Interest & Accounting Change | | 18,014 | | | 2,437 | | | 58,135 | | | 16,996 |
Minority Interest in Partnership | | (469) | | | (366) | | | (1,843) | | | (1,128) |
Income Before Income Taxes & Accounting Change | | 17,545 | | | 2,071 | | | 56,292 | | | 15,868 |
Provision for Income Taxes - Deferred | | 6,667 | | | 797 | | | 21,391 | | | 6,109 |
Income Before Accounting Change | | 10,878 | | | 1,274 | | | 34,901 | | | 9,759 |
Cumulative Effect of Adoption of Accounting Principle | | - | | | - | | | (855) | | | - |
Net Income | $ | 10,878 | | $ | 1,274 | | $ | 34,046 | | $ | 9,759 |
Basic Earnings Per Share: | | | | | | | | | | | |
Income Before Accounting Change | | $0.31 | | | $0.05 | | | $1.07 | | | $0.39 |
Cumulative Effect of Adoption of Accounting Principle | | - | | | - | | | (0.03) | | | - |
Net Income | | $0.31 | | | $0.05 | | | $1.04 | | | $0.39 |
Diluted Earnings Per Share: | | | | | | | | | | | |
Income Before Accounting Change | | $0.30 | | | $0.05 | | | $1.04 | | | $0.37 |
Cumulative Effect of Adoption of Accounting Principle | | - | | | - | | | (0.03) | | | - |
Net Income | | $0.30 | | | $0.05 | | | $1.01 | | | $0.37 |
Weighted Average Common Shares Outstanding | | | | | | | | | | | |
Basic | | 35,090,330 | | | 25,306,920 | | | 32,786,030 | | | 25,195,812 |
Diluted | | 36,028,157 | | | 26,096,616 | | | 33,582,506 | | | 26,029,923 |
BALANCE SHEETS (Unaudited) | | | | Page 3 of 5 |
Southwestern Energy Company and Subsidiaries | | | | | |
| | | | | |
September 30, | | 2003 | | 2002 | |
| | (in thousands) | |
ASSETS | | | | | |
| | | | | |
Current Assets | | $ 79,859 | | $ 58,053 | |
Investments | | 13,814 | | 15,138 | |
Property, Plant and Equipment, at cost | | 1,421,801 | | 1,293,675 | |
Less: Accumulated depreciation, depletion and amortization | | 691,921 | | 646,547 | |
| | 729,880 | | 647,128 | |
Other Assets | | 14,899 | | 17,491 | |
| | $ 838,452 | | $ 737,810 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | |
| | | | | |
Current Liabilities | | $ 115,929 | (1) | $ 62,785 | (1) |
Long-Term Debt | | 225,000 | | 353,200 | |
Deferred Income Taxes | | 140,143 | | 118,577 | |
Other Liabilities | | 22,842 | | 10,246 | |
Commitments and Contingencies | | | | | |
Minority Interest in Partnership | | 12,894 | | 12,818 | |
Shareholders' Equity | | | | | |
| Common stock, $.10 par value; authorized 75,000,000 shares, issued 37,225,584 shares | | 3,723 | | 2,774 | |
Additional paid-in capital | | 121,130 | | 19,059 | |
Retained earnings | | 232,034 | | 193,436 | |
Accumulated other comprehensive income (loss) | | (13,222) | | (9,794) | |
| | 343,665 | | 205,475 | |
| Less: Common stock in treasury, at cost, 1,623,454 shares in 2003 and 2,013,825 shares in 2002 | | 18,196 | | 22,434 | |
| | Unamortized cost of restricted shares issued under stock incentive plan, 495,416 shares in 2003 and 420,083 shares in 2002 | | 3,825 | | 2,857 | |
| | 321,644 | | 180,184 | |
| | $ 838,452 | | $ 737,810 | |
(1) Current liabilities include $37.0 million in 2003 for debt outstanding under the Company's revolving credit facility. Also included are $16.2 million in 2003 and $13.9 million in 2002 related to the Company's hedging activities. These amounts were recorded under the provisions of SFAS No. 133.
| STATEMENTS of CASH FLOWS (Unaudited) | | | | | Page 4 of 5 |
Southwestern Energy Company and Subsidiaries | | | | | | |
| | | | | | |
| | | Nine Months |
| Periods Ended September 30 | | 2003 | | 2002 |
| | (in thousands) |
Cash Flows From Operating Activities | | | | | | |
Net Income | | $ | 34,046 | | $ | 9,759 |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | |
Depreciation, depletion and amortization | | | 43,130 | | | 42,864 |
Deferred income taxes | | | 21,391 | | | 6,109 |
Ineffectiveness of cash flow hedges | | | (779) | | | - |
Gain on sale of property and equipment | | | (2,991) | | | - |
Equity in (income) loss of NOARK partnership | | | (1,026) | | | 400 |
Minority interest in partnership | | | 342 | | | (183) |
Cumulative effect of adoption of accounting principle | | | 855 | | | - |
Change in operating assets and liabilities | | | (117) | | | 9,456 |
Net cash provided by operating activities | | | 94,851 | | | 68,405 |
| | | | | | |
Cash Flows From Investing Activities | | | | | | |
Capital expenditures | | | (121,723) | | | (67,829) |
Distribution from NOARK partnership | | | 2,500 | | | - |
Proceeds from sale of property and equipment | | | 3649 | | | - |
Increase in gas stored underground | | | (5,423) | | | (1,072) |
Other items | | | 499 | | | (291) |
Net cash used in investing activities | | | (120,498) | | | (69,192) |
| | | | | | |
Cash Flow From Financing Activities | | | | | | |
Issuance of common stock | | | 103,085 | | | - |
Payments on revolving long-term debt | | | (229,700) | | | (144,400) |
Borrowings under revolving long-term debt | | | 149,300 | | | 147,600 |
Change in bank drafts outstanding | | | 1,056 | | | (7,623) |
Proceeds from exercise of common stock options | | | 1,586 | | | 2,077 |
Net cash provided by (used in) financing activities | | | 25,327 | | | (2,346) |
| | | | | | |
Increase (decrease) in cash | | | (320) | | | (3,133) |
Cash at beginning of year | | | 1,690 | | | 3,641 |
Cash at end of period | | $ | 1,370 | | $ | 508 |
SEGMENT INFORMATION (Unaudited) | | | | | Page 5 of 5 |
Southwestern Energy Company and Subsidiaries | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | Exploration | | | | | Marketing, | | | | | | | |
| | and | | Gas | | Transportation | | | | | | | |
| | Production | | Production | | and Other | | Eliminations | | Total |
| | | | | | | (in thousands) | | | | | | | |
Quarter Ending September 30, 2003 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Revenues | $ | 46,877 | | $ | 16,069 | | $ | 58,642 | | $ | (50,520) | | $ | 71,068 | |
| Gas purchases | | - | | | 8,448 | | | 54,451 | | | (50,378) | | | 12,521 | |
| Operating expenses | | 4,720 | | | 5,248 | | | - | | | (19) | | | 9,949 | |
| General and administrative expenses | | 4,094 | | | 3,662 | | | 304 | | | (123) | | | 7,937 | |
| Depreciation, depletion & amortization | | 13,307 | | | 1,554 | | | 35 | | | - | | | 14,896 | |
| Taxes, other than income taxes | | 2,461 | | | 577 | | | 20 | | | - | | | 3,058 | |
Operating Income (Loss) | $ | 22,295 | | $ | (3,420) | | $ | 3,832 | | $ | - | | $ | 22,707 | |
| | | | | | | | | | | | | | | | |
Capital Investments | $ | 45,898 | (1) | $ | 1,731 | | $ | 181 | | $ | - | | $ | 47,810 | (1) |
| | | | | | | | | | | | | | | |
Quarter Ending September 30, 2002 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Revenues | $ | 30,325 | | $ | 13,063 | | $ | 33,748 | | $ | (26,045) | | $ | 51,091 | |
| Gas purchases | | - | | | 5,490 | | | 32,906 | | | (25,911) | | | 12,485 | |
| Operating expenses | | 4,801 | | | 4,912 | | | - | | | (15) | | | 9,698 | |
| General and administrative expenses | | 2,444 | | | 2,899 | | | 303 | | | (119) | | | 5,527 | |
| Depreciation, depletion & amortization | | 11,851 | | | 1,431 | | | 41 | | | - | | | 13,323 | |
| Taxes, other than income taxes | | 1,524 | | | 574 | | | (34) | | | - | | | 2,064 | |
Operating Income (Loss) | $ | 9,705 | | $ | (2,243) | | $ | 532 | | $ | - | | $ | 7,994 | |
| | | | | | | | | | | | | | | |
Capital Investments | $ | 25,559 | | $ | 1,450 | | $ | 46 | | $ | - | | $ | 27,055 | |
| | | | | | | | | | | | | | |
Nine Months Ending September 30, 2003 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Revenues | $ | 130,102 | | $ | 94,213 | | $ | 156,683 | | $ | (144,788) | | $ | 236,210 | |
| Gas purchases | | - | | | 58,082 | | | 150,403 | | | (144,309) | | | 64,176 | |
| Operating expenses | | 12,062 | | | 16,295 | | | - | | | (114) | | | 28,243 | |
| General and administrative expenses | | 11,959 | | | 10,924 | | | 965 | | | (365) | | | 23,483 | |
| Depreciation, depletion & amortization | | 36,238 | | | 4,622 | | | 105 | | | - | | | 40,965 | |
| Taxes, other than income taxes | | 7,135 | | | 1,813 | | | 68 | | | - | | | 9,016 | |
Operating Income | $ | 62,708 | | $ | 2,477 | | $ | 5,142 | | $ | - | | $ | 70,327 | |
|
Capital Investments | $ | 121,130 | (1) | $ | 6,671 | | $ | 477 | | $ | - | | $ | 128,278 | (1) |
| | | | | | | | | | | | | | | |
Nine Months Ending September 30, 2002 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Revenues | $ | 90,161 | | $ | 78,403 | | $ | 98,608 | | $ | (78,419) | | $ | 188,753 | |
| Gas purchases | | - | | | 43,408 | | | 95,738 | | | (77,962) | | | 61,184 | |
| Operating expenses | | 13,187 | | | 15,207 | | | - | | | (102) | | | 28,292 | |
| General and administrative expenses | | 8,162 | | | 8,739 | | | 805 | | | (355) | | | 17,351 | |
| Depreciation, depletion & amortization | | 36,379 | | | 4,560 | | | 122 | | | - | | | 41,061 | |
| Taxes, other than income taxes | | 5,335 | | | 1,787 | | | 10 | | | - | | | 7,132 | |
Operating Income | $ | 27,098 | | $ | 4,702 | | $ | 1,933 | | $ | - | | $ | 33,733 | |
| | | | | | | | | | | | | | | |
Capital Investments | $ | 63,394 | | $ | 4,210 | | $ | 225 | | $ | - | | $ | 67,829 | |
(1) Exploration and Production capital expenditures for 2003 include $6.6 million of accrued, non-cash expenditures.
