Vintage Petroleum 8-K Vice President - Corporate Development

EXHIBIT 99

	For Further Information Contact:
For Immediate Release	Robert E. Phaneuf
Tuesday, November 9, 2004	Vice President - Corporate Development
	(918) 592-0101

VINTAGE PETROLEUM REPORTS CORRECTION TO NET INCOME

REPORTED IN NOVEMBER 3, 2004 EARNINGS RELEASE

Tulsa, Oklahoma – Vintage Petroleum, Inc. (NYSE:VPI) today reported that it has recorded an additional non-cash charge to the third quarter of 2004 of $5.2 million after tax ($7.5 million before tax), or $0.08 per diluted share, to reflect the discontinuance of hedge accounting for certain of its crude oil price hedges for the month of September 2004. This charge results in corrected net income for the three months and nine months ended September 30, 2004 of $27.0 million, or $0.41 per diluted share, and $83.6 million, or $1.28 per diluted share, respectively, versus the previously reported net income amounts of $32.2 million, or $0.49 per diluted share, and $88.8 million, or $1.36 per diluted share, for the comparable periods as reported in its press release dated November 3, 2004. This correction to reported earnings has no effect on previously reported cash provided by operating activities for the nine months ended September 30, 2004, nor does it impact any of the company’s previously announced revised operating and financial targets for 2004.

The Company had previously determined, in error, that certain crude oil price hedges related to its U.S. west coast production continued to qualify for hedge accounting during September 2004. The additional non-cash charge of $7.5 million was recorded to other non-operating expense. The revised total non-cash charges related to hedging activities for the third quarter of 2004 and the nine months ended September 30, 2004 are $9.7 million after tax ($14.0 million before tax), or $0.15 per diluted share, and $10.7 million after tax ($15.4 million before tax), or $0.16 per diluted share, respectively. No prior periods were affected.

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In addition, the company has revised its balance sheet to reflect certain reclassifications related to liabilities and deferred taxes associated with hedging activities and discontinued operations. See the accompanying revised tables.

Vintage Petroleum, Inc. is an independent energy company engaged in the acquisition, exploitation and exploration of oil and gas properties and the marketing of natural gas and crude oil. Company headquarters are in Tulsa, Oklahoma, and its common shares are traded on the New York Stock Exchange under the symbol VPI. For additional information, visit the company website atwww.vintagepetroleum.com.

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VINTAGE PETROLEUM, INC. AND SUBSIDIARIES

REVISED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2003			2004			2003
REVENUES:
Oil, condensate and NGL sales	$	136,382		$	105,269		$	367,320		$	323,806
Gas sales		49,158			25,282			127,284			86,545
Sulfur sales		234			440			949			1,305
Gas marketing		17,897			15,445			50,131			59,978
Total revenues		203,671			146,436			545,684			471,634
COSTS AND EXPENSES:
Production costs		34,335			33,266			105,379			91,329
Transportation and storage costs		3,318			1,761			7,500			5,120
Production and ad valorem taxes		5,732			3,997			16,557			12,756
Export taxes		12,778			7,409			25,691			25,814
Exploration costs		12,435			6,061			21,000			17,395
Gas marketing		16,857			14,798			47,409			58,093
General and administrative		12,806			11,848			41,723			34,667
Stock compensation		1,153			1,861			7,091			4,295
Depreciation, depletion and amortization		26,720			21,392			72,687			65,463
Impairment of proved oil and gas properties		—			—			3,915			—
Accretion		1,685			1,523			4,932			4,422
Other operating (income) expense		1,671			(701	)		(1,933	)		941
Total costs and expenses		129,490			103,215			351,951			320,295
OPERATING INCOME		74,181			43,221			193,733			151,339
OTHER (INCOME) EXPENSE:
Interest expense		12,625			17,818			39,321			54,328
Loss on early extinguishment of debt		—			—			9,903			1,426
(Gain) loss on disposition of assets		(17	)		—			(72	)		667
Foreign currency exchange (gain) loss		(285	)		(915	)		(1,112	)		6,653
Other non-operating expense		15,721			818			15,991			41
Net other expense		28,044			17,721			64,031			63,115
Income from continuing operations before income taxes and cumulative effect of change in accounting principle		46,137			25,500			129,702			88,224
INCOME TAX PROVISION (BENEFIT):
Current		15,701			5,128			44,114			39,609
Deferred		3,024			5,034			5,115			(2,057	)
Total income tax provision		18,725			10,162			49,229			37,552
Income from continuing operations before cumulative effect of change in accounting principle		27,412			15,338			80,473			50,672
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of income tax provision (benefit) of $(184), $221, $130 and $25,480, respectively		(397	)		(3,583	)		3,086			(14,042	)
Income before cumulative effect of change in accounting principle		27,015			11,755			83,559			36,630
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, net of income tax provision of $4,104		—			—			—			7,119
NET INCOME	$	27,015		$	11,755		$	83,559		$	43,749

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VINTAGE PETROLEUM, INC. AND SUBSIDIARIES

REVISED CONSOLIDATED STATEMENTS OF OPERATIONS

(Continued)

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2003			2004		2003
BASIC INCOME (LOSS) PER SHARE:
Income from continuing operations before cumulative effect of change in accounting principle	$	0.42		$	0.24		$	1.24	$	0.79
Income (loss) from discontinued operations		(0.01	)		(0.06	)		0.05		(0.22	)
Income before cumulative effect of change in accounting principle		0.41			0.18			1.29		0.57
Cumulative effect of change in accounting principle		—			—			—		0.11
Net income	$	0.41		$	0.18		$	1.29	$	0.68
DILUTED INCOME (LOSS) PER SHARE:
Income from continuing operations before cumulative effect of change in accounting principle	$	0.42		$	0.24		$	1.23	$	0.79
Income (loss) from discontinued operations		(0.01	)		(0.06	)		0.05		(0.22	)
Income before cumulative effect of change in accounting principle		0.41			0.18			1.28		0.57
Cumulative effect of change in accounting principle		—			—			—		0.11
Net income	$	0.41		$	0.18		$	1.28	$	0.68
Weighted average common shares outstanding:
Basic		65,283			64,228			64,786		63,938
Diluted		66,043			64,767			65,521		64,292

Certain 2003 amounts have been reclassified to conform with the 2004 presentation. These reclassifications had no effect on the Company’s net income.

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VINTAGE PETROLEUM, INC. AND SUBSIDIARIES

REVISED CONSOLIDATED BALANCE SHEETS

(In thousands, except shares and per share amounts)

(Unaudited)

	September 30, 2004		December 31, 2003
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	46,012	$	32,264
Accounts receivable -
Oil and gas sales		115,861		78,321
Joint operations		8,616		7,480
Deferred income taxes		21,513		—
Prepaids and other current assets		10,638		6,660
Assets of discontinued operations		253,387		224,321
Total current assets		456,027		349,046
PROPERTY, PLANT AND EQUIPMENT, at cost:
Oil and gas properties, successful efforts method		2,023,933		1,835,588
Oil and gas gathering systems and plants		23,890		23,344
Other		27,903		26,334
		2,075,726		1,885,266
Less: Accumulated depreciation, depletion and amortization		908,462		829,055
Total property, plant and equipment, net		1,167,264		1,056,211
DEFERRED INCOME TAXES		14,558		—
OTHER ASSETS, net		42,513		41,581
	$	1,680,362	$	1,446,838
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Revenue payable	$	37,541	$	22,641
Accounts payable - trade		53,578		48,548
Current income taxes payable		21,815		17,316
Derivative financial instruments payable		59,968		7,551
Other payables and accrued liabilities		88,796		54,852
Liabilities of discontinued operations		79,454		46,093
Total current liabilities		341,152		197,001
LONG-TERM DEBT		676,547		699,943
DEFERRED INCOME TAXES		85,214		54,311
LONG-TERM LIABILITY FOR ASSET RETIREMENT OBLIGATIONS		77,577		72,158
DERIVATIVE FINANCIAL INSTRUMENTS PAYABLE AND OTHER		16,338		939
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.01 par, 5,000,000 shares authorized, zero shares issued and outstanding		—		—
Common stock, $0.005 par, 160,000,000 shares authorized, 66,181,811 and 64,720,975 shares issued and 65,657,693 and 64,281,199 outstanding, respectively		331		324
Capital in excess of par value		354,217		337,080
Retained earnings		96,974		22,844
Accumulated other comprehensive income		40,293		70,482
		491,815		430,730
Less treasury stock, at cost, 524,118 and 439,776 shares		4,319		3,117
Less unamortized cost of restricted stock awards		3,962		5,127
Total stockholders’ equity		483,534		422,486
	$	1,680,362	$	1,446,838

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VINTAGE PETROLEUM, INC. AND SUBSIDIARIES

REVISED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2004			2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	83,559		$	43,749
Adjustments to reconcile net income to cash provided by operating activities -
Income from discontinued operations, net of tax		(3,086	)		14,042
Cumulative effect of change in accounting principle, net of tax		—			(7,119	)
Depreciation, depletion and amortization		72,687			65,463
Impairment of proved oil and gas properties		3,915			—
Accretion		4,932			4,422
Exploration costs		16,733			9,910
Provision (benefit) for deferred income taxes		5,115			(2,057	)
Foreign currency exchange loss		(1,112	)		6,653
(Gain) loss on dispositions of assets		(72	)		667
Loss on early extinguishment of debt		9,903			1,426
Stock compensation		7,091			4,295
Other non-cash items included in net income		15,785			2,644
Increase in receivables		(5,532	)		(2,100	)
Increase in payables and accrued liabilities		9,923			9,490
Other working capital changes		1,727			4,265
Cash provided by continuing operations		221,568			155,750
Cash provided by discontinued operations		34,646			16,406
Cash provided by operating activities		256,214			172,156
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures -
Oil and gas properties		(159,538	)		(100,041	)
Gathering systems and other		(2,132	)		(3,232	)
Proceeds from sale of oil and gas properties		67			29,980
Purchase of company, net of cash acquired		(26,757	)		—
Proceeds from sale of company, net of cash sold		—			116,107
Other		2,454			(4,153	)
Cash provided (used) by investing activities – continuing operations		(185,906	)		38,661
Cash provided (used) by investing activities – discontinued operations		(23,785	)		8,311
Cash provided (used) by investing activities		(209,691	)		46,972
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock		11,218			1,122
Purchase of treasury stock		(1,202	)		(3,013	)
Redemption of 9 3/4% Senior Subordinated Notes due 2009		(157,313	)		—
Redemption of 9% Senior Subordinated Notes due 2005		—			(50,750	)
Advance on revolving credit facility and other borrowings		370,100			115,400
Payments on revolving credit facility and other borrowings		(243,500	)		(151,017	)
Dividends paid		(9,042	)		(7,971	)
Other		(3,668	)		1
Cash used by financing activities		(33,407	)		(96,228	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		632			480
NET INCREASE IN CASH AND CASH EQUIVALENTS		13,748			123,380
CASH AND CASH EQUIVALENTS, beginning of period		32,264			8,128
CASH AND CASH EQUIVALENTS, end of period	$	46,012		$	131,508

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VINTAGE PETROLEUM, INC. AND SUBSIDIARIES

REVISED NON-GAAP FINANCIAL MEASURES

Cash flow, a non-GAAP measure, represents cash provided by operating activities before the impact of all exploration costs, changes in working capital items related to operating activities and current taxes on property sales. It includes cash flow from Canada (now classified as a discontinued operation) in all periods presented but excludes the cash used by discontinued operations related to Ecuador which was sold in 2003 and thus no comparable amounts exist for the periods in 2004. Cash flow is presented because management believes it is a useful adjunct to cash provided by operating activities under accounting principles generally accepted in the United States (“GAAP”). Cash flow is widely accepted as a financial indicator of an oil and gas company’s ability to generate cash which is used to internally fund exploration and development activities and to service debt. Cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash provided (used) by operating, investing, or financing activities as an indicator of cash flows, or as a measure of liquidity.

EBITDAX is also presented below because of its wide acceptance by the investment community as a financial indicator of a company’s ability to internally fund exploration and development activities and to service or incur debt. Management also views the non-GAAP measure of EBITDAX as a useful tool for comparison of the company’s financial indicator with those of peer companies. EBITDAX should not be considered as an alternative to net income or cash provided by operating activities, as defined by GAAP. The following table reconciles cash provided by operating activities to cash flow and EBITDAX (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2003			2004			2003
Cash provided by operating activities (GAAP measure)	$	114,006		$	78,041		$	256,214		$	172,156
Adjustments to remove the impact of:
Changes in working capital items related to operating activities (a)		(16,605	)		(25,475	)		(1,904	)		(1,279	)
Exploration geological and geophysical costs (b)		1,526			5,037			5,268			10,128
Current tax provision associated with property sales		—			1,725			—			6,933
Cash used by Ecuador discontinued operations		—			9,441			—			30,370
Cash flow (non-GAAP measure)		98,927			68,769			259,578			218,308
Current taxes (c)		17,862			2,752			44,027			30,764
Interest expense		12,625			17,818			39,321			54,328
EBITDAX (non-GAAP measure)	$	129,414		$	89,339		$	342,926		$	303,400

(a) Includes changes in working capital items related to operating activities for Canada (a discontinued operation) of $266, $(7,400), $4,214 and $10,376 for the three months ended September 30, 2004 and 2003 and the nine months ended September 30, 2004 and 2003, respectively.

(b) Includes exploration, geological and geophysical costs related to Canada operations of $140, $809, $1,000 and $2,644 for the three months ended September 30, 2004 and 2003 and the nine months ended September 30, 2004 and 2003, respectively.

(c) Includes a current tax provision (benefit) related to Canadian operations of $2,161, $(650), $(87) and $(1,912) for the three months ended September 30, 2004 and 2003 and the nine months ended September 30, 2004 and 2003, respectively.

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