| 1004 N. Big Spring, Suite 400 | Contact: | Cindy Thomason |
| Midland, TX 79701 | (432) 684-3727 | Manager of Investor Relations |
| http://www.plll.com | cindyt@plll.com |
PARALLEL PETROLEUM ANNOUNCES
THIRD QUARTER 2006 FINANCIAL RESULTS
MIDLAND, Texas, (BUSINESS WIRE), November 8, 2006 – Parallel Petroleum Corporation (NASDAQ: PLLL) today announced its financial results for the third quarter ended September 30, 2006, compared to the results for the same period in 2005. In a separate press release issued today, Parallel announced its operations update and third quarter 2006 production and proved reserves.
Third Quarter Financial Results
For the three months ended September 30, 2006, Parallel reported net income of $11.0 million, or $0.30 per diluted share. Included in net income was a $10.6 million pre-tax, non-cash gain related to the change in fair market value of derivative instruments and ineffective portion of hedges. For the three months ended September 30, 2005, Parallel recorded net income of $2.0 million, or $0.06 per diluted share. Included in net income for the three months ended September 30, 2005 was a $9.0 million pre-tax, non-cash loss related to the change in fair market value of derivative instruments and ineffective portion of hedges.
For the third quarter of 2006, Parallel’s oil and natural gas sales were 282 MBbls of oil and 2,001 MMcf of natural gas, or 616 MBOE, a 43% increase when compared to the third quarter of 2005. During this period, the average prices the Company received for its oil and natural gas on an unhedged basis were $64.53 per barrel and $5.64 per Mcf, or $47.91 per BOE ($42.58 per BOE, hedged). For the same period of 2005, oil sales were 247 MBbls at an average unhedged price of $58.95 per barrel and natural gas sales were 1,109 MMcf at an average unhedged price of $9.88 per Mcf, or 432 MBOE at an average unhedged price of $59.09 per BOE ($50.60 per BOE, hedged).
Nine Months Results
For the nine months ended September 30, 2006, Parallel reported net income of $15.1 million, or $0.42 per diluted share. Included in net income was a $0.6 million pre-tax, non-cash gain related to the change in fair market value of derivative instruments and ineffective portion of hedges. For the nine months ended September 30, 2005, Parallel recorded a net loss of $10.0 million, or a loss of $0.32 per diluted share. Included in the net loss for the nine months ended September 30, 2005 was a $33.5 million pre-tax, non-cash loss related to the change in fair market value of derivative instruments and ineffective portion of hedges.
For the nine months ended September 30, 2006, Parallel’s oil and natural gas sales were 848 MBbls of oil and 4,894 MMcf of natural gas, or 1,664 MBOE, a 55% increase when compared to the nine months ended September 30, 2005. The average prices the Company received for its oil and natural gas on an unhedged basis were $61.88 per barrel and $6.11 per Mcf, or $49.50 per BOE ($43.93 per BOE, hedged). For the same period of 2005, oil sales were 672 MBbls at an average unhedged price of $50.86 per barrel and natural gas sales were 2,411 MMcf at an average price of $8.01 per Mcf, or 1,074 MBOE at $49.81 per BOE ($41.46 per BOE, hedged).
Net cash provided by operating activities for the nine-month period ended September 30, 2006, was $44.6 million, compared to $23.1 million for the same period of 2005. The 93% increase was primarily related to increased oil and gas production volumes, increased oil prices, and an increase in current liabilities offset by an increase in current assets, primarily related to vendor payables and joint interest receivables associated with the Company’s increased drilling activities.
Balance Sheet Review
At September 30, 2006, current assets were $34.3 million, which included $0.3 million of cash. Current liabilities were $41.6 million, including current derivative obligations of $15.5 million. Long-term liabilities were $185.8 million, including $147.0 million of debt and $16.7 million of derivative obligations. The Company’s revolving credit facility had a borrowing base of $156.0 million as of October 1, 2006, and outstanding borrowings under the revolving credit facility as of that same date were $97.0 million. The Company’s borrowing base is expected to increase to
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Parallel Petroleum Announces 3Q 2006 Financial Results
November 8, 2006
Page 2
approximately $167.0 million during the fourth quarter of 2006. In addition, the Company had $50.0 million outstanding under its second lien term loan facility. As of September 30, 2006, the Company’s net capitalized costs associated with its oil and gas properties and other equipment were $347.2 million. Stockholders’ equity was $171.1 million, which included $1.5 million of accumulated other comprehensive loss related to the Company’s hedging activities.
Common Stock Offering
Parallel announced on August 16, 2006 that it completed the sale of 2,500,000 shares of its common stock at a public offering price of $25.25 per share, resulting in net proceeds of approximately $60.25 million. Jefferies & Company, Inc. acted as sole underwriter for the offering. The common shares were issued under Parallel’s universal shelf registration statement.
Parallel used the net proceeds from the offering for general corporate purposes, including debt repayment and the acceleration of its drilling and completion operations in certain core areas such as its Barnett Shale gas, New Mexico Wolfcamp gas and Permian Basin west Texas oil properties.
Sale of West Fork Pipeline
Parallel announced on October 12, 2006 that West Fork Pipeline Company I, LP had agreed to sell certain assets to Texas Midstream Gas Services, L.L.C., an affiliate of Chesapeake Energy Corporation. Parallel, as a limited partner in West Fork Pipeline Company I, LP, agreed to the sale and received approximately $16.0 million allocable to its limited partnership interest. Parallel's share of the gain on the sale is expected to be $10.0 million, pre-tax, which will be realized in the fourth quarter of 2006.
Management Comments
Larry C. Oldham, Parallel’s President, commented, “In spite of a volatile oil and gas pricing environment, we had a very successful third quarter and nine months ended September 30, 2006 in terms of increased earnings, increased production and increased net cash provided by operating activities. Our average daily production volumes increased 43% when compared to the third quarter of 2005, 37% when compared to the fourth quarter of 2005, and 4% when compared to the second quarter of this year. In early July, we recognized an opportunity to hedge additional oil volumes. We collared 1.2 million barrels of oil at what we believed to be very attractive prices, with floors of $65.00 per barrel and caps ranging from $92.00 to $79.60 per barrel through October 31, 2010. Please see our press release dated July 12, 2006 for information pertaining to these oil derivatives.”
Oldham further stated, “Having reduced our bank debt with a portion of the proceeds from our $60 million stock offering and $16 million pipeline sale, our improved liquidity and capital position will allow us to continue our accelerated drilling in the Barnett Shale and in New Mexico with even more confidence. If the borrowing base under our revolving credit facility is increased, our aggressive drilling plans may be further enhanced.”
Conference Call and Webcast Information
The Company’s management will host a conference call to discuss current operations, production, reserves and financial results for the third quarter ended September 30, 2006. In addition to this press release, please refer to the Company’s operations update press release also dated November 8, 2006 and its Form 10-Q Report for the quarterly period ended September 30, 2006 that was filed with the Securities and Exchange Commission on November 8, 2006.
The conference call will be held on Thursday, November 9, 2006, at 10:00 a.m. Eastern time (9:00 a.m. Central time). To participate in the call, dial 800-299-0148 or 617-801-9711, Participant Passcode 28055312, at least five minutes before the scheduled start time. The conference call will also be webcast with slides, and can be accessed live at Parallel’s web site, http://www.plll.com. A replay of the conference call will be available at the Company’s web site or by calling 888-286-8010 or 617-801-6888, Passcode 10845686.
FINANCIAL STATEMENTS AND SCHEDULES FOLLOW
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Parallel Petroleum Announces 3Q 2006 Financial Results
November 8, 2006
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PARALLEL PETROLEUM CORPORATION Consolidated Balance Sheets (dollars in thousands, except per share amounts) |
| | | September 30, 2006 | | | December 31, 2005 | |
Assets | | | (unaudited) | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 312 | | $ | 6,418 | |
Accounts receivable: | | | | | | | |
Oil and natural gas | | | 16,625 | | | 13,183 | |
Other, net of allowance for doubtful account of $80 and $9 | | | 9,524 | | | 877 | |
Affiliates | | | 7 | | | 12 | |
| | | 26,156 | | | 14,072 | |
Other current assets | | | 3,026 | | | 2,364 | |
Deferred tax asset | | | 4,762 | | | 5,241 | |
Total current assets | | | 34,256 | | | 28,095 | |
Property and equipment, at cost: | | | | | | | |
Oil and natural gas properties, full cost method (including $42,036 and $19,869 not | | | | | | | |
subject to depletion) | | | 452,704 | | | 303,819 | |
Other | | | 3,204 | | | 2,404 | |
| | | 455,908 | | | 306,223 | |
Less accumulated depreciation, depletion and amortization | | | (108,674 | ) | | (90,826 | ) |
Net property and equipment | | | 347,234 | | | 215,397 | |
Restricted cash | | | 324 | | | 2,640 | |
Investment in pipelines and gathering system ventures | | | 12,946 | | | 3,326 | |
Other assets, net of accumulated amortization of $1,236 and $901 | | | 3,785 | | | 3,550 | |
| | $ | 398,545 | | $ | 253,008 | |
Liabilities and Stockholders' Equity | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable and accrued liabilities | | $ | 25,721 | | $ | 10,841 | |
Asset retirement obligations | | | 384 | | | 214 | |
Derivative obligations | | | 15,514 | | | 16,607 | |
Total current liabilities | | | 41,619 | | | 27,662 | |
Revolving credit facility | | | 97,000 | | | 50,000 | |
Term loan | | | 50,000 | | | 50,000 | |
Asset retirement obligations | | | 4,241 | | | 2,281 | |
Derivative obligations | | | 16,702 | | | 25,527 | |
Deferred tax liability | | | 17,883 | | | 8,036 | |
Total long-term liabilities | | | 185,826 | | | 135,844 | |
Commitments and contingencies | | | | | | | |
Stockholders' equity: | | | | | | | |
Series A preferred stock -- par value $0.10 per share, authorized 50,000 shares | | | — | | | — | |
Preferred stock -- 6% convertible preferred stock -- par value of $0.10 per share | | | | | | | |
(liquidation preference of $10 per share), authorized 10,000,000 shares | | | — | | | — | |
Common stock -- par value $0.01 per share, authorized 60,000,000 shares, | | | | | | | |
issued and outstanding 37,464,991 and 34,748,916 | | | 374 | | | 347 | |
Additional paid-in capital | | | 140,288 | | | 78,699 | |
Retained earnings | | | 31,970 | | | 16,899 | |
Accumulated other comprehensive loss | | | (1,532 | ) | | (6,443 | ) |
Total stockholders' equity | | | 171,100 | | | 89,502 | |
| | $ | 398,545 | | $ | 253,008 | |
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Parallel Petroleum Announces 3Q 2006 Financial Results
November 8, 2006
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PARALLEL PETROLEUM CORPORATION Consolidated Statements of Operations (unaudited) (in thousands, except per share data) | |
|
|
|
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | 2006 | | | 2005 | | 2006 | | 2005 | |
Oil and natural gas revenues: | | | | | | | | | | | | | |
Oil and natural gas sales | | $ | 29,490 | | $ | 25,501 | | $ | 82,360 | | $ | 53,474 | |
Loss on hedging | | | (3,279 | ) | | (3,664 | ) | | (9,264 | ) | | (8,960 | ) |
Total revenues | | | 26,211 | | | 21,837 | | | 73,096 | | | 44,514 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Cost and expenses: | | | | | | | | | | | | | |
Lease operating expense | | | 5,323 | | | 2,663 | | | 12,639 | | | 7,399 | |
Production taxes | | | 1,538 | | | 1,334 | | | 4,116 | | | 2,615 | |
General and administrative | | | 2,405 | | | 1,735 | | | 7,147 | | | 4,771 | |
Depreciation, depletion and amortization | | | 7,420 | | | 3,104 | | | 17,848 | | | 8,159 | |
Total costs and expenses | | | 16,686 | | | 8,836 | | | 41,750 | | | 22,944 | |
Operating income | | | 9,525 | | | 13,001 | | | 31,346 | | | 21,570 | |
| | | | | | | | | | | | | |
Other income (expense), net: | | | | | | | | | | | | | |
Change in fair market value of derivative instruments | | | 10,323 | | | (9,388 | ) | | 116 | | | (33,086 | ) |
Gain (loss) on ineffective portion of hedges | | | 305 | | | 404 | | | 500 | | | (456 | ) |
Interest and other income | | | 29 | | | 83 | | | 122 | | | 124 | |
Interest expense | | | (3,345 | ) | | (1,060 | ) | | (8,944 | ) | | (3,101 | ) |
Other expense | | | (96 | ) | | (75 | ) | | (164 | ) | | (77 | ) |
Equity in gain (loss) of pipelines and gathering system ventures | | | (39 | ) | | 22 | | | (68 | ) | | (72 | ) |
Total other income (expense), net | | | 7,177 | | | (10,014 | ) | | (8,438 | ) | | (36,668 | ) |
Income (loss) before income taxes | | | 16,702 | | | 2,987 | | | 22,908 | | | (15,098 | ) |
Income tax benefit (expense), deferred | | | (5,706 | ) | | (998 | ) | | (7,837 | ) | | 5,137 | |
Net income (loss) | | | 10,996 | | | 1,989 | | | 15,071 | | | (9,961 | ) |
Cumulative preferred stock dividend | | | — | | | — | | | — | | | (271 | ) |
Net income (loss) available to common stockholders | | $ | 10,996 | | $ | 1,989 | | $ | 15,071 | | $ | (10,232 | ) |
| | | | | | | | | | | | | |
Net income (loss) per common share: | | | | | | | | | | | | | |
Basic | | $ | 0.30 | | $ | 0.06 | | $ | 0.43 | | $ | (0.32 | ) |
Diluted | | $ | 0.30 | | $ | 0.06 | | $ | 0.42 | | $ | (0.32 | ) |
| | | | | | | | | | | | | |
Weighted average common share outstanding: | | | | | | | | | | | | | |
Basic | | | 36,215 | | | 34,033 | | | 35,340 | | | 31,585 | |
Diluted | | | 36,919 | | | 34,951 | | | 36,027 | | | 31,585 | |
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Parallel Petroleum Announces 3Q 2006 Financial Results
November 8, 2006
Page 5
PARALLEL PETROLEUM CORPORATION Consolidated Statements of Cash Flows Nine Months Ended September 30, 2006 and 2005 (unaudited) (dollars in thousands) | |
|
|
|
|
| | | 2006 | | | | | 2005 | |
Cash flows from operating activities: | | | | | | | | | |
Net income (loss) | | $ | 15,071 | | | | $ | (9,961 | ) |
Adjustments to reconcile net income (loss) to net cash | | | | | | | | | |
provided by operating activities: | | | | | | | | | |
Depreciation, depletion and amortization | | | 17,848 | | | | | 8,159 | |
Accretion of asset retirement obligation | | | 172 | | | | | 82 | |
Deferred income tax | | | 7,837 | | | | | (5,137 | ) |
Change in fair value of derivative instruments | | | (116 | ) | | | | 33,086 | |
(Gain) loss on ineffective portion of hedges | | | (500 | ) | | | | 456 | |
Common stock issued in lieu of cash for directors fees | | | 100 | | | | | 99 | |
Stock option expense | | | 435 | | | | | 119 | |
Equity in loss of pipelines and gathering system ventures | | | 68 | | | | | 72 | |
Changes in assets and liabilities: | | | | | | | | | |
Other assets, net | | | 1,140 | | | | | 186 | |
Restricted cash | | | (50 | ) | | | | (149 | ) |
Increase in accounts receivable | | | (12,084 | ) | | | | (7,927 | ) |
(Increase) decrease in other current assets | | | (151 | ) | | | | 61 | |
Increase in accounts payable and accrued liabilities | | | 14,880 | | | | | 3,988 | |
Federal tax deposit | | | (40 | ) | | | | — | |
Net cash provided by operating activities | | | 44,610 | | | | | 23,134 | |
Cash flows from investing activities: | | | | | | | | | |
Additions to oil and natural gas properties | | | (147,058 | ) | | | | (37,888 | ) |
Use of restricted cash for acquisition of oil and natural gas properties | | | 2,366 | | | | | 2,287 | |
Proceeds from disposition of oil and natural gas properties | | | 130 | | | | | 3,028 | |
Additions to other property and equipment | | | (800 | ) | | | | (421 | ) |
Settlements on derivative instruments | | | (3,568 | ) | | | | (3,424 | ) |
Purchase of derivative instruments | | | — | | | | | (598 | ) |
Investment in pipelines and gathering system ventures | | | (9,688 | ) | | | | (1,686 | ) |
Net cash used in investing activities | | | (158,618 | ) | | | | (38,702 | ) |
Cash flows from financing activities: | | | | | | | | | |
Net borrowings (payments) on revolving line of credit | | | 47,000 | | | | | (11,000 | ) |
Deferred financing cost | | | (179 | ) | | | | — | |
Proceeds (net) from common stock issued | | | 60,315 | | | | | 27,743 | |
Proceeds from exercise of stock options | | | 766 | | | | | 450 | |
Payment of preferred stock dividend | | | — | | | | | (271 | ) |
Net cash provided by financing activities | | | 107,902 | | | | | 16,922 | |
Net increase (decrease) in cash and cash equivalents | | | (6,106 | ) | | | | 1,354 | |
Cash and cash equivalents at beginning of period | | | 6,418 | | | | | 4,781 | |
Cash and cash equivalents at end of period | | $ | 312 | | | | $ | 6,135 | |
Non-cash financing and investing activities: | | | | | | | | | |
Oil and natural gas properties asset retirement obligations | | $ | 1,957 | | | | $ | 73 | |
Conversion of preferred stock | | $ | — | | | | $ | 95 | |
Other transactions: | | | | | | | | | |
Interest paid | | $ | 9,065 | | | | $ | 3,319 | |
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Parallel Petroleum Announces 3Q 2006 Financial Results
November 8, 2006
Page 6
PARALLEL PETROLEUM CORPORATION
SELECTED OPERATING AND FINANCIAL DATA | |
| | | | | |
| | | | | | | | | | | | | |
| | (in thousands, except per unit data) | |
Production Volumes: | | | | | | | | | | | | | |
Oil (Bbls) | | | 282 | | | 247 | | | 848 | | | 672 | |
Natural gas (Mcf) | | | 2,001 | | | 1,109 | | | 4,894 | | | 2,411 | |
BOE (1) | | | 616 | | | 432 | | | 1,664 | | | 1,074 | |
BOE per day | | | 6.7 | | | 4.7 | | | 6.1 | | | 3.9 | |
Sales Prices: | | | | | | | | | | | | | |
Oil (per Bbl) (2) | | $ | 64.53 | | $ | 58.95 | | $ | 61.88 | | $ | 50.86 | |
Natural gas (per Mcf) (2) | | $ | 5.64 | | $ | 9.88 | | $ | 6.11 | | $ | 8.01 | |
BOE price (2) | | $ | 47.91 | | $ | 59.09 | | $ | 49.50 | | $ | 49.81 | |
BOE price (3) | | $ | 42.58 | | $ | 50.60 | | $ | 43.93 | | $ | 41.46 | |
Operating Revenues: | | | | | | | | | | | | | |
Oil | | $ | 18,194 | | $ | 14,550 | | $ | 52,478 | | $ | 34,168 | |
Oil hedge | | | (3,279 | ) | | (3,664 | ) | | (9,264 | ) | | (8,759 | ) |
Natural gas | | | 11,296 | | | 10,951 | | | 29,882 | | | 19,306 | |
Natural gas hedge | | | — | | | — | | | — | | | (201 | ) |
| | $ | 26,211 | | $ | 21,837 | | $ | 73,096 | | $ | 44,514 | |
Operating Expenses and Income: | | | | | | | | | | | | | |
Lease operating expense | | $ | 5,323 | | $ | 2,663 | | $ | 12,639 | | $ | 7,399 | |
Production taxes | | | 1,538 | | | 1,334 | | | 4,116 | | | 2,615 | |
General and administrative: | | | | | | | | | | | | | |
General and administrative | | | 1,579 | | | 1,113 | | | 4,236 | | | 2,941 | |
Public reporting | | | 826 | | | 622 | | | 2,911 | | | 1,830 | |
Depreciation, depletion and amortization | | | 7,420 | | | 3,104 | | | 17,848 | | | 8,159 | |
| | $ | 16,686 | | $ | 8,836 | | $ | 41,750 | | $ | 22,944 | |
Operating income | | $ | 9,525 | | $ | 13,001 | | $ | 31,346 | | $ | 21,570 | |
Total other income (expense), net | | | 7,177 | | | (10,014 | ) | | (8,438 | ) | | (36,668 | ) |
Income (loss) before income taxes | | | 16,702 | | | 2,987 | | | 22,908 | | | (15,098 | ) |
Income tax benefit (expense), deferred | | | (5,706 | ) | | (998 | ) | | (7,837 | ) | | 5,137 | |
Net income (loss) | | | 10,996 | | | 1,989 | | | 15,071 | | | (9,961 | ) |
Cumulative preferred stock dividend | | | — | | | — | | | — | | | (271 | ) |
Net income (loss) available to common stockholders | | $ | 10,996 | | $ | 1,989 | | $ | 15,071 | | $ | (10,232 | ) |
Net income (loss) per common share: | | | | | | | | | | | | | |
Basic | | $ | 0.30 | | $ | 0.06 | | $ | 0.43 | | $ | (0.32 | ) |
Diluted | | $ | 0.30 | | $ | 0.06 | | $ | 0.42 | | $ | (0.32 | ) |
Weighted average common shares outstanding: | | | | | | | | | | | | | |
Basic | | | 36,215 | | | 34,033 | | | 35,340 | | | 31,585 | |
Diluted | | | 36,919 | | | 34,951 | | | 36,027 | | | 31,585 | |
________________________________ | | | | | | | | | | | | | |
(1) A BOE means one barrel of oil equivalent using the ratio of six Mcf of gas to one barrel of oil. | |
(2) Excludes hedge transactions. | | | | | | | | | | | | | |
(3) Includes hedge transactions. | | | | | | | | | | | | | |
___________________________________________________________________________________________
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Parallel Petroleum Announces 3Q 2006 Financial Results
November 8, 2006
Page 7
PARALLEL PETROLEUM CORPORATION
DERIVATIVES INFORMATION AS OF SEPTEMBER 30, 2006(1)
PUTS: | | | | Houston Ship Channel | | | | |
| | | | | Gas Price | | | | |
Period of Time | | MMBTU of Natural Gas | | | Floor | | Fair Market Value | |
| | | | | | | ($ in thousands) | | |
Oct 1, 2006 thru Oct 31, 2006 | | 93,000 | | | $7.17 | | $300 | | |
COSTLESS COLLARS: | | | | NYMEX Oil Prices | | | | | | WAHA Gas Prices | | |
| | | | | | | Houston Ship Channel Gas Prices | | | |
Period of Time | | Barrels of Oil | | Floor | | Cap | | MMBTU of Natural Gas | | Floor | | Cap | | Floor | | | | Cap | | Fair Market Value |
| | | | | | | | | | | | | | | | | | | | | | | | | | ($ in thousands) |
Oct 1, 2006 thru Dec 31, 2006 | | 99,000 | | | $53.12 | | | $80.87 | | — | | | $ — | | | $ — | | | $ — | | | | | $ — | $ | (246) |
Oct 1, 2006 thru Oct 31, 2006 | | — | | | $ — | | | $ — | | 62,000 | | | $7.50 | | | $13.90 | | | $ — | | | | | $ — | | 217 |
Oct 1, 2006 thru Oct 31, 2006 | | — | | | $ — | | | $ — | | 31,000 | | | $ — | | | $ — | | | $9.00 | | | | | $14.55 | | 164 |
Jan 1, 2007 thru Dec 31, 2007 | | 292,000 | | | $55.63 | | | $84.88 | | — | | | $ — | | | $ — | | | $ — | | | | | $ — | | 146 |
Apr 1, 2007 thru Oct 31, 2007 | | — | | | $ — | | | $ — | | 214,000 | | | $6.00 | | | $11.05 | | | $ — | | | | | $ — | | 51 |
Jan 1, 2008 thru Dec 31, 2008 | | 237,900 | | | $60.38 | | | $81.08 | | — | | | $ — | | | $ — | | | $ — | | | | | $ — | | 236 |
Jan 1, 2009 thru Dec 31, 2009 | | 620,500 | | | $63.53 | | | $80.21 | | — | | | $ — | | | $ — | | | $ — | | | | | $ — | | 1,583 |
Jan 1, 2010 thru Oct 31, 2010 | | 486,400 | | | $63.44 | | | $78.26 | | — | | | $ — | | | $ — | | | $ — | | | | | $ — | | 1,492 |
Total Fair Market Value | | | | | | | | | | | | | | | | | | | | | | | | | $ | 3,643 |
SWAPS: | | | | | | | |
Period of Time | | Volume Hedged Bbl Oil | | | NYMEX Oil Swap Price | | Fair Market Value | |
| | | | | | | ($ in thousands) | |
Oct 1, 2006 thru Dec 20, 2006 (2) | | 60,750 | | | $23.04 | | $ (2,476 | ) |
Oct 1, 2006 thru Dec 31, 2006 | | 46,000 | | | $36.35 | | (1,275 | ) |
Jan 1, 2007 thru Dec 31, 2007 | | 474,500 | | | $34.36 | | (15,315 | ) |
Jan 1, 2008 thru Dec 31, 2008 | | 439,200 | | | $33.37 | | (14,195 | ) |
Total Fair Market Value | | | | | | | $ (33,261 | ) |
INTEREST RATE SWAPS: | | | | | | | | |
Period of Time | | Notional Amount | | Fixed Interest Rates | | Fair Market Value | | |
| | ($ in millions) | | | | ($ in thousands) | | |
Oct 1, 2006 thru Dec 31, 2006 (2) | | $ 10 | | 4.05% | | $ 30 | | |
Oct 1, 2006 thru Dec 31, 2006 | | $ 50 | | 4.41% | | 307 | | |
Jan 1, 2007 thru Dec 31, 2007 | | $100 | | 4.62% | | 469 | | |
Jan 1, 2008 thru Dec 31, 2008 | | $100 | | 4.86% | | (119 | ) | |
Jan 1, 2009 thru Dec 31, 2009 | | $ 50 | | 5.06% | | (82 | ) | |
Jan 1, 2010 thru Oct 31, 2010 | | $ 50 | | 5.15% | | (59 | ) | |
Total Fair Market Value | | | | | | $ 546 | | |
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(1) BNP Paribas and Citibank, NA are the counterparties in Parallel's derivative instruments. | |
(2) Designated as cash flow hedge. | | | | | | | | |
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Parallel Petroleum Announces 3Q 2006 Financial Results
November 8, 2006
Page 8
The Company
Parallel Petroleum is an independent energy company headquartered in Midland, Texas, engaged in the acquisition, exploration, development and production of oil and gas using 3-D seismic technology and advanced drilling, completion and recovery techniques. Parallel’s primary areas of operation are the Permian Basin of West Texas and New Mexico, North Texas Barnett Shale, Onshore Gulf Coast of South Texas, East Texas and Utah/Colorado. Additional information on Parallel Petroleum Corporation is available at http://www.plll.com.
This release contains forward-looking statements subject to various risks and uncertainties that could cause the Company’s future plans, objectives and performance to differ materially from those in the forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “plan,” “subject to,” “anticipate,” “estimate,” “continue,” “present value,” “future,” “reserves”, “appears,” “prospective,” or other variations thereof or comparable terminology. Factors that could cause or contribute to such differences could include, but are not limited to, those relating to the results of exploratory drilling activity, the Company’s growth strategy, changes in oil and natural gas prices, operating risks, availability of drilling equipment, outstanding indebtedness, weaknesses in the Company’s internal controls, the inherent variability in early production tests, changes in interest rates, dependence on weather conditions, seasonality, expansion and other activities of competitors, changes in federal or state environmental laws and the administration of such laws, and the general condition of the economy and its effect on the securities market. While we believe our forward-looking statements are based upon reasonable assumptions, these are factors that are difficult to predict and that are influenced by economic and other conditions beyond our control. Investors are directed to consider such risks and other uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission.
