Exhibit 99.1
| | | PRESS RELEASE |
Parallel Petroleum Corporation | | | | |
| | Contact: | | Cindy Thomason |
| | | | Manager of Investor Relations |
http://www.plll.com | | | | cindyt@plll.com |
PARALLEL PETROLEUM ANNOUNCES
FOURTH QUARTER AND YEAR END 2005 FINANCIAL RESULTS
AND MARCH 20, 2006 CONFERENCE CALL AND WEBCAST
MIDLAND, Texas, (BUSINESS WIRE), March 16, 2006 - Parallel Petroleum Corporation (NASDAQ: PLLL) today announced its financial results for the fourth quarter and year ended December 31, 2005, compared to the restated results for the same periods in 2004. In a separate press release dated March 14, 2006, Parallel announced an operations update and information pertaining to the restatement of certain financial statements for the third and fourth quarters of 2004, the year ended December 31, 2004 and the first three quarters of 2005.
Fourth Quarter Results
For the three months ended December 31, 2005, Parallel reported net income of $8.4 million, or $.24 per diluted share. Included in net income was $1.7 million of 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 December 31, 2004, Parallel recorded restated net income of $1.6 million, or $.05 per diluted share. Included in restated net income for the three months ended December 31, 2004 was a $1.6 million pre-tax, non-cash loss related to the change in fair market value of derivative instruments and ineffective portion of hedges.
For the fourth quarter of 2005, Parallel’s oil and natural gas sales were 251 MBbls of oil and 1,181 MMcf of natural gas, or 448 MBOE, a 28% increase when compared to the fourth quarter of 2004. During this period, the average prices the Company received for its oil and natural gas on an unhedged basis were $54.23 per barrel and $9.64 per Mcf, or $55.81 per BOE ($48.27 per BOE, hedged). For the same period of 2004, oil sales were 233 MBbls at an average unhedged price of $44.07 per barrel and natural gas sales were 695 MMcf at an average unhedged price of $6.99 per Mcf, or 349 MBOE at an average unhedged price of $43.36 per BOE ($34.90 per BOE, hedged).
Net cash provided by operating activities for the three-month period ended December 31, 2005, was $14.0 million, compared to $6.1 million for the three month period ended December 31, 2004. The increase was primarily related to increased oil and gas prices and increased production volumes.
Year End Results
For the twelve months ended December 31, 2005, Parallel reported a net loss of $1.6 million, or a loss of $.06 per diluted share. Included in the net loss was $31.8 million of pre-tax, non-cash loss related to the change in fair market value of derivative instruments and ineffective portion of hedges. For the twelve months ended December 31, 2004, Parallel recorded restated net income of $2.3 million, or $.07 per diluted share. Included in restated net income for the twelve months ended December 31, 2004 was a $6.0 million pre-tax, non-cash loss related to the change in fair market value of derivative instruments and ineffective portion of hedges.
For the twelve months ended December 31, 2005, Parallel’s oil and natural gas sales were 923 MBbls of oil and 3,592 MMcf of natural gas, or 1,522 MBOE, a 29% increase when compared to the twelve months ended December 31, 2004. During this period, the average prices the Company received for its oil and natural gas on an unhedged basis were $51.78 per barrel and $8.54 per Mcf, or $51.57 per BOE ($43.46 per BOE, hedged). For the same period of 2004, oil sales were 729 MBbls at an average unhedged price of $39.05 per barrel and natural gas sales were 2,690 MMcf at an average unhedged price of $5.85 per Mcf, or 1,177 MBOE at an average unhedged price of $37.55 per BOE ($30.45 per BOE, hedged).
Net cash provided by operating activities for the twelve-month period ended December 31, 2005, was $37.1 million, compared to $18.2 million for the twelve-month period ended December 31, 2004. The increase was primarily related to increased oil and gas prices and increased production volumes.
Parallel Petroleum Announces 4Q & Year End 2005 Financial Results
March 16, 2006
Page 2
Balance Sheet Review
At December 31, 2005, current assets were $28.1 million, which included $6.4 million of cash. Current liabilities were $27.7 million, including current derivative obligations of $16.6 million. Long-term liabilities were $135.8 million, including $100.0 million of debt and $25.5 million of derivative obligations. The Company’s revolving credit facility had a borrowing base of $125.0 million as of March 15, 2006, and its outstanding borrowings under the revolving credit facility as of that same date were $79.0 million. In addition, the Company had $50.0 million outstanding under its second lien term loan facility. As of December 31, 2005, the Company’s net capitalized costs associated with its oil and gas properties and other equipment were $215.4 million. Its stockholders’ equity was $89.5 million, which included $6.4 million of accumulated other comprehensive loss that is related to the Company’s hedging activities.
Management Comments
Larry C. Oldham, Parallel’s President, commented, “We are pleased with the Company’s $.24 per-share net earnings of $8.4 million and net cash provided by operating activities of $14.0 million for the three months ended December 31, 2005. These results reflect our 28% increase in production volumes and a 38% increase in realized commodity prices, compared to the fourth quarter of 2004.”
Oldham further commented, “As we announced in our March 14, 2006 press release, since the beginning of this year, we have had activity on 45 of the 135 total well operations budgeted for 2006. We are excited about the results to date, and believe that we are off to a good start in 2006.”
Conference Call and Webcast Information
The Company’s management will host a conference call to discuss current operations, financial results for the fourth quarter and year ended December 31, 2005, and information pertaining to the restatement of certain financial statements for the third and fourth quarters of 2004, the year ended December 31, 2004, and the first three quarters of 2005. In addition to this press release, please refer to Company’s press release dated March 14, 2006 and its Annual Report on Form 10-K for the year ended December 31, 2005 that was filed with the Securities and Exchange Commission on March 16, 2006.
The conference call will be held on Monday, March 20, 2006, at 10:30 a.m. Eastern time ( 9:30 a.m. Central time). To participate in the call, dial 866-713-8565 or 617-597-5324, Participant Passcode 61319371, 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 23506667.
FINANCIAL STATEMENTS AND SCHEDULES FOLLOW
Parallel Petroleum Announces 4Q & Year End 2005 Financial Results
March 16, 2006
Page 3
PARALLEL PETROLEUM CORPORATION | |
Consolidated Balance Sheets | |
December 31, 2005 and 2004 | |
(dollars in thousands) | |
| | | |
Assets | | 2005 | | 2004 | |
| Current assets: | | | | (restated) | |
| Cash and cash equivalents | | $ | 6,418 | | $ | 4,781 | |
| Accounts receivable: | | | | | | | |
| Oil and gas | | | 13,183 | | | 6,642 | |
| Other, net of allowance for doubtful account of $9 | | | 877 | | | 389 | |
| Affiliates | | | 12 | | | 7 | |
| | | | 14,072 | | | 7,038 | |
| Other current assets | | | 2,364 | | | 179 | |
| Deferred tax asset | | | 5,241 | | | 2,531 | |
| Total current assets | | | 28,095 | | | 14,529 | |
| Property and equipment, at cost: | | | | | | | |
| Oil and gas properties, full cost method (including $19,869 and $9,526 not | | | | | | | |
| subject to depletion) | | | 303,819 | | | 229,245 | |
| Other | | | 2,404 | | | 2,062 | |
| | | | 306,223 | | | 231,307 | |
| Less accumulated depreciation, depletion and amortization | | | (90,826 | ) | | (78,782 | ) |
| Net property and equipment | | | 215,397 | | | 152,525 | |
| Restricted cash | | | 2,640 | | | 2,287 | |
| Investment in Westfork Pipeline Companies | | | 3,326 | | | 595 | |
| Other assets, net of accumulated amortization of $901 and $581 | | | 3,550 | | | 735 | |
| | | $ | 253,008 | | $ | 170,671 | |
Liabilities and Stockholders' Equity | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 10,841 | | $ | 5,568 | |
| Asset retirement obligations | | | 214 | | | 150 | |
| Derivative obligations | | | 16,607 | | | 7,965 | |
| Total current liabilities | | | 27,662 | | | 13,683 | |
| Revolving credit facility | | | 50,000 | | | 79,000 | |
| Term loan | | | 50,000 | | | - | |
| Asset retirement obligations | | | 2,281 | | | 1,982 | |
| Derivative obligations | | | 25,527 | | | 9,525 | |
| Deferred tax liability | | | 8,036 | | | 6,487 | |
| Total long-term liabilities | | | 135,844 | | | 96,994 | |
| Commitments and contingencies | | | | | | | |
| | | | | | | | |
| Stockholders' equity: | | | | | | | |
| Series A preferred stock -- par value $0.10 per share, authorized 50,000 shares | | | - | | | - | |
| Preferred stock -- $0.60 cumulative convertible preferred stock -- par value | | | | | | | |
| of $0.10 per share, (liquidation preference of $10 per share) authorized | | | | | | | |
| 10,000,000 shares, issued and outstanding 0 and 950,000 | | | - | | | 95 | |
| Common stock -- par value $0.01 per share, authorized 60,000,000 | | | | | | | |
| shares, issued and outstanding 34,748,916 and 25,439,292 | | | 347 | | | 254 | |
| Additional paid-in capital | | | 78,699 | | | 48,328 | |
| Retained earnings | | | 16,899 | | | 18,759 | |
| Accumulated other comprehensive loss | | | (6,443 | ) | | (7,442 | ) |
| Total stockholders' equity | | | 89,502 | | | 59,994 | |
| | | $ | 253,008 | | $ | 170,671 | |
Parallel Petroleum Announces 4Q & Year End 2005 Financial Results
March 16, 2006
Page 4
PARALLEL PETROLEUM CORPORATION | |
Consolidated Statements of Operations | |
Years ended December 31, 2005, 2004, 2003 | |
(dollars in thousands, except per share data) | |
| | |
| | | 2005 | | 2004 | | 2003 | |
| Oil and natural gas revenues: | | | | (restated) | | | |
| Oil and natural gas sales | | $ | 66,150 | | $ | 35,837 | | $ | 33,855 | |
| Cost and expenses: | | | | | | | | | | |
| Lease operating expense | | | 9,947 | | | 7,373 | | | 6,458 | |
| Production taxes | | | 4,102 | | | 2,108 | | | 1,946 | |
| General and administrative | | | 6,712 | | | 5,378 | | | 4,344 | |
| Depreciation, depletion and amortization | | | 12,044 | | | 8,712 | | | 8,390 | |
| Total costs and expenses | | | 32,805 | | | 23,571 | | | 21,138 | |
| Operating income | | | 33,345 | | | 12,266 | | | 12,717 | |
| Other income (expense), net: | | | | | | | | | | |
| Change in fair market value of derivative instruments | | | (31,669 | ) | | (5,726 | ) | | (22 | ) |
| Gain (loss) on ineffective portion of hedges | | | (137 | ) | | (240 | ) | | 191 | |
| Interest and other income | | | 167 | | | 189 | | | 116 | |
| Interest expense | | | (4,780 | ) | | (2,732 | ) | | (2,048 | ) |
| Other expense | | | (102 | ) | | (324 | ) | | (259 | ) |
| Equity in loss of Westfork Pipeline Companies | | | (89 | ) | | - | | | - | |
| Total other income (expense), net | | | (36,610 | ) | | (8,833 | ) | | (2,022 | ) |
| Income (loss) before income taxes | | | (3,265 | ) | | 3,433 | | | 10,695 | |
| Income tax benefit (expense), deferred | | | 1,676 | | | (1,162 | ) | | (3,031 | ) |
| Income (loss) before cumulative effect of change in accounting principle | | | (1,589 | ) | | 2,271 | | | 7,664 | |
| Cumulative effect on prior years of a change in accounting principle, | | | | | | | | | | |
| net of tax of $32 | | | - | | | - | | | (62 | ) |
| Net income (loss) | | | (1,589 | ) | | 2,271 | | | 7,602 | |
| Cumulative preferred stock dividend | | | (271 | ) | | (572 | ) | | (580 | ) |
| Net income (loss) available to common stockholders | | $ | (1,860 | ) | $ | 1,699 | | $ | 7,022 | |
| Net income (loss) per common share: | | | | | | | | | | |
| Basic | | $ | (0.06 | ) | $ | 0.07 | | $ | 0.33 | |
| Diluted | | $ | (0.06 | ) | $ | 0.07 | | $ | 0.31 | |
Parallel Petroleum Announces 4Q & Year End 2005 Financial Results
PARALLEL PETROLEUM CORPORATION | |
Consolidated Statements of Cash Flows | |
Years ended December 31, 2005, 2004 and 2003 | |
(in thousands) | |
| | |
| | | | 2005 | | | 2004 | | | 2003 | |
| Cash flows from operating activities: | | | | | | (restated) | | | | |
| Net income (loss) | | $ | (1,589 | ) | $ | 2,271 | | $ | 7,602 | |
| Adjustments to reconcile net income (loss) to net cash | | | | | | | | | | |
| provided by operating activities: | | | | | | | | | | |
| Depreciation, depletion and amortization | | | 12,044 | | | 8,712 | | | 8,390 | |
| Accretion of asset retirement obligation | | | 112 | | | 92 | | | 139 | |
| Deferred income taxes | | | (1,676 | ) | | 1,162 | | | 3,031 | |
| Change in fair market value of derivative instruments | | | 31,669 | | | 5,726 | | | 22 | |
| (Gain) loss on ineffective portion of hedges | | | 137 | | | 240 | | | (191 | ) |
| Common stock issued in lieu of cash for directors fees | | | 99 | | | 99 | | | - | |
| Stock option expense | | | 278 | | | 169 | | | 98 | |
| Stock-based financial advisory services | | | - | | | - | | | 157 | |
| Cumulative effect on prior years of a change in accounting principle, net of tax | | | - | | | - | | | 62 | |
| Equity in loss of Westfork Pipeline Companies | | | 89 | | | - | | | - | |
| | | | | | | | | | | |
| Changes in assets and liabilities: | | | | | | | | | | |
| Other assets, net | | | (823 | ) | | 163 | | | 167 | |
| Restricted cash | | | (274 | ) | | - | | | - | |
| Increase in accounts receivable | | | (7,034 | ) | | (2,112 | ) | | (783 | ) |
| (Increase) decrease in other current assets | | | (1,187 | ) | | 31 | | | (132 | ) |
| Increase in accounts payable and accrued liabilities | | | 5,273 | | | 1,603 | | | 931 | |
| Net cash provided by operating activities | | | 37,118 | | | 18,156 | | | 19,493 | |
| | | | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | | | |
| Additions to oil and gas properties | | | (77,351 | ) | | (67,911 | ) | | (14,930 | ) |
| Restricted cash | | | (79 | ) | | (2,287 | ) | | - | |
| Proceeds from disposition of oil and gas properties | | | 3,028 | | | 1,625 | | | 64 | |
| Additions to other property and equipment | | | (342 | ) | | (647 | ) | | (331 | ) |
| Settlements of derivative instruments | | | (5,022 | ) | | - | | | - | |
| Purchase of derivative instruments | | | (2,363 | ) | | - | | | - | |
| Investment in Westfork Pipeline Companies | | | (2,820 | ) | | (298 | ) | | (297 | ) |
| Net cash used in investing activities | | | (84,949 | ) | | (69,518 | ) | | (15,494 | ) |
| | | | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | | | |
| Net borrowing (payments) on revolving line of credit | | | (29,000 | ) | | 39,250 | | | (10,000 | ) |
| Deferred financing costs | | | (1,253 | ) | | (429 | ) | | (28 | ) |
| Borrowings from term loan | | | 50,000 | | | - | | | - | |
| Proceeds from exercise of stock options | | | 2,248 | | | 523 | | | 55 | |
| Proceeds (net) from common stock issued | | | 27,744 | | | - | | | 12,120 | |
| Payment of preferred stock dividend | | | (271 | ) | | (572 | ) | | (580 | ) |
| Deferred stock offering costs | | | - | | | (7 | ) | | - | |
| Net cash provided by financing activities | | | 49,468 | | | 38,765 | | | 1,567 | |
| Net increase (decrease) in cash and cash equivalents | | | 1,637 | | | (12,597 | ) | | 5,566 | |
| | | | | | | | | | | |
| Cash and cash equivalents at beginning of year | | | 4,781 | | | 17,378 | | | 11,812 | |
| Cash and cash equivalents at end of year | | $ | 6,418 | | $ | 4,781 | | $ | 17,378 | |
| Non-cash financing and investing activities: | | | | | | | | | | |
| Oil and gas properties asset retirement obligation | | $ | 251 | | $ | 338 | | $ | 1,075 | |
| Other Transactions: | | | | | | | | | | |
| Interest paid | | $ | 5,422 | | $ | 1,708 | | $ | 2,048 | |
Parallel Petroleum Announces 4Q & Year End 2005 Financial Results
PARALLEL PETROLEUM CORPORATION SELECTED OPERATING AND FINANCIAL DATA |
| | | Three Months Ended | | Twelve Months Ended | |
(in thousands, except per unit data) | | 12/31/2005 | | 12/31/2004 | | 12/31/2005 | | 12/31/2004 | |
| | | | | (restated) | | | | (restated) | |
Production Volumes: | | | | | | | | | |
| Oil (Bbls) | | | 251 | | | 233 | | | 923 | | | 729 | |
| Natural gas (Mcf) | | | 1,181 | | | 695 | | | 3,592 | | | 2,690 | |
BOE (1) | | | 448 | | | 349 | | | 1,522 | | | 1,177 | |
| BOE per day | | | 4.9 | | | 3.8 | | | 4.2 | | | 3.2 | |
Sales Prices: | | | | | | | | | | | | | |
Oil (per Bbl) (2) | | $ | 54.23 | | $ | 44.07 | | $ | 51.78 | | $ | 39.05 | |
Natural gas (per Mcf) (2) | | $ | 9.64 | | $ | 6.99 | | $ | 8.54 | | $ | 5.85 | |
BOE price (2) | | $ | 55.81 | | $ | 43.36 | | $ | 51.57 | | $ | 37.55 | |
BOE price (3) | | $ | 48.27 | | $ | 34.90 | | $ | 43.46 | | $ | 30.45 | |
Operating Revenues: | | | | | | | | | | | | | |
| Oil | | $ | 13,632 | | $ | 10,271 | | $ | 47,800 | | $ | 28,455 | |
| Effect of oil hedges | | | (3,380 | ) | | (2,654 | ) | | (12,139 | ) | | (7,458 | ) |
| Natural Gas | | | 11,384 | | | 4,853 | | | 30,690 | | | 15,735 | |
| Effect of natural gas hedges | | | - | | | (297 | ) | | (201 | ) | | (895 | ) |
| | | $ | 21,636 | | $ | 12,174 | | $ | 66,150 | | $ | 35,837 | |
Operating Expenses and Income: | | | | | | | | | | | | | |
| Lease operating expense | | $ | 2,548 | | $ | 1,936 | | $ | 9,947 | | $ | 7,373 | |
| Production taxes | | | 1,487 | | | 701 | | | 4,102 | | | 2,108 | |
| General and administrative: | | | | | | | | | | | | | |
| General and administrative | | | 1,348 | | | 744 | | | 4,289 | | | 3,123 | |
| Public reporting | | | 593 | | | 753 | | | 2,423 | | | 2,255 | |
| Depreciation, depletion and amortization | | | 3,885 | | | 2,682 | | | 12,044 | | | 8,712 | |
| | | | 9,861 | | | 6,816 | | | 32,805 | | | 23,571 | |
| Operating income | | | 11,775 | | | 5,358 | | | 33,345 | | | 12,266 | |
| Other income (expense), net: | | | | | | | | | | | | | |
| Change in fair market value of derivative instruments | | | 1,417 | | | (1,310 | ) | | (31,669 | ) | | (5,726 | ) |
| Gain (loss) on ineffective portion of hedges | | | 319 | | | (304 | ) | | (137 | ) | | (240 | ) |
| Interest and other income | | | 43 | | | 21 | | | 167 | | | 189 | |
| Interest expense | | | (1,679 | ) | | (1,268 | ) | | (4,780 | ) | | (2,732 | ) |
| Other expense | | | (25 | ) | | (214 | ) | | (102 | ) | | (324 | ) |
| Equity in loss of Westfork Pipeline Companies | | | (17 | ) | | - | | | (89 | ) | | - | |
| Total other income (expense), net | | | 58 | | | (3,074 | ) | | (36,610 | ) | | (8,833 | ) |
| Income (loss) before income taxes | | | 11,833 | | | 2,284 | | | (3,265 | ) | | 3,433 | |
| Income tax benefit (expense), deferred | | | (3,461 | ) | | (730 | ) | | 1,676 | | | (1,162 | ) |
| Net income (loss) | | | 8,372 | | | 1,554 | | | (1,589 | ) | | 2,271 | |
| Cumulative preferred stock dividend | | | - | | | (143 | ) | | (271 | ) | | (572 | ) |
| Net income (loss) available to common stockholders | | $ | 8,372 | | $ | 1,411 | | $ | (1,860 | ) | $ | 1,699 | |
| Net income (loss) per common share: | | | | | | | | | | | | | |
| Basic | | $ | 0.24 | | $ | 0.06 | | $ | (0.06 | ) | $ | 0.07 | |
| Diluted | | $ | 0.24 | | $ | 0.05 | | $ | (0.06 | ) | $ | 0.07 | |
| Weighted average common shares outstanding: | | | | | | | | | | | | | |
| Basic | | | 34.2 | | | 25.4 | | | 32.3 | | | 25.3 | |
| Diluted | | | 35.0 | | | 28.6 | | | 32.3 | | | 25.7 | |
| | | | | | | | | | | | | | |
(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. | | | | | | | | | | | | | |
Parallel Petroleum Announces 4Q & Year End 2005 Financial Results
PARALLEL PETROLEUM CORPORATION |
DERIVATIVES INFORMATION (1) |
PUTS: | | | | Houston Ship Channel | | | |
| | | MMBTU of | | Gas Price | | Fair Market | |
Period of Time | | Natural Gas | | Floor | | Value | |
| | | | | | | ($ in thousands) | |
| Apr 1, 2006 thru Oct 31, 2006 | | | 642,000 | | $ | 7.17 | | $ | 174 | |
COLLARS: | | | | NYMEX | | | | Houston Ship Channel | | WAHA | | | |
| | | Barrels of | | Oil Prices | | MMBTU of | | Gas Prices | | Gas Prices | | Fair Market | |
Period of Time | | Oil | | Floor | | Cap | | Natural Gas | | Floor | | Cap | | Floor | | Cap | | Value | |
| | | | | | | | | | | | | | | | | | | ($ in thousands) | |
| Jan 1, 2006 thru Dec 31, 2006 | | | 289,800 | | $ | 48.22 | | $ | 75.83 | | | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | (1,122 | ) |
| Apr 1, 2006 thru Oct 31, 2006 | | | - | | $ | - | | $ | - | | | 428,000 | | $ | 7.50 | | $ | 13.90 | | $ | - | | $ | - | | | 52 | |
| Apr 1, 2006 thru Oct 31, 2006 | | | - | | $ | - | | $ | - | | | 214,000 | | $ | - | | $ | - | | $ | 9.00 | | $ | 14.55 | | | 181 | |
| Jan 1, 2007 thru Dec 31, 2007 | | | 219,000 | | $ | 52.50 | | $ | 83.00 | | | - | | $ | - | | $ | - | | $ | - | | $ | - | | | 230 | |
| Apr 1, 2007 thru Oct 31, 2007 | | | - | | $ | - | | $ | - | | | 214,000 | | $ | 6.00 | | $ | 11.05 | | $ | - | | $ | - | | | (145 | ) |
| Jan 1, 2008 thru Dec 31, 2008 | | | 109,800 | | $ | 55.00 | | $ | 76.50 | | | - | | $ | - | | $ | - | | $ | - | | $ | - | | | 153 | |
| Jan 1, 2009 thru Dec 31, 2009 | | | 91,250 | | $ | 55.00 | | $ | 73.00 | | | - | | $ | - | | $ | - | | $ | - | | $ | - | | | 126 | |
| Jan 1, 2010 thru Dec 31, 2010 | | | 76,000 | | $ | 55.00 | | $ | 71.00 | | | - | | $ | - | | $ | - | | $ | - | | $ | - | | | 113 | |
| Total Fair Market Value | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (412 | ) |
SWAPS: | | | | | | | |
| | | Barrels of | | NYMEX Oil | | Fair Market | |
Period of Time | | Oil | | Swap Price | | Value | |
| | | | | | | ($ in thousands) | |
Jan 1, 2006 thru Dec 20, 2006 (2) | | | 265,500 | | $ | 23.04 | | $ | (10,457 | ) |
| Jan 1, 2006 thru Dec 31, 2006 | | | 182,500 | | $ | 36.35 | | | (4,806 | ) |
| Jan 1, 2007 thru Dec 31, 2007 | | | 474,500 | | $ | 34.36 | | | (13,327 | ) |
| Jan 1, 2008 thru Dec 31, 2008 | | | 439,200 | | $ | 33.37 | | | (11,741 | ) |
| Total Fair Market Value | | | | | | | | $ | (40,331 | ) |
INTEREST RATE SWAPS: | | | | | | Estimated | |
| | | Notional | | Weighted Average | | Fair Market Value | |
Period of Time | | Amounts | | Fixed Interest Rates | | at December 31, 2005 | |
| | | ($ in millions) | | | | ($ in thousands) | |
Jan 1, 2006 thru Dec 31, 2006 (2) | | $ | 10 | | | 4.05 | % | $ | 69 | |
| Jan 1, 2006 thru Dec 31, 2006 | | $ | 90 | | | 4.41 | % | | 299 | |
| Jan 1, 2007 thru Dec 31, 2007 | | $ | 100 | | | 4.62 | % | | 118 | |
| Jan 1, 2008 thru Dec 30, 2008 | | $ | 100 | | | 4.86 | % | | (111 | ) |
| Jan 1, 2009 thru Dec 31, 2009 | | $ | 50 | | | 5.06 | % | | (110 | ) |
| Jan 1, 2010 thru Oct 31, 2010 | | $ | 50 | | | 5.15 | % | | (94 | ) |
| Total Fair Market Value | | | | | | | | $ | 171 | |
| | | | | | | | | | | |
(1) BNP Paribas and Citibank, NA are the counterparties in Parallel's derivative instruments. |
(2) Designated as a cash flow hedge. |
Parallel Petroleum Announces 4Q & Year End 2005 Financial Results
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.
###
