Exhibit 99
| | | | |
| For Immediate Release | | | | For Further Information Contact: |
| Wednesday, May 4, 2005 | | | | Robert E. Phaneuf |
| | | | | Vice President - Corporate Development |
| | | | | (918) 592-0101 |
VINTAGE PETROLEUM REPORTS FIRST QUARTER RESULTS,
20 PERCENT INCREASE IN PRODUCTION;
2005 TARGETS INCREASED
Tulsa, Oklahoma – Vintage Petroleum, Inc. (NYSE:VPI) today announced income from continuing operations before previously announced non-cash unrealized derivative losses (a non-GAAP measure) of $43.4 million, or $0.65 per diluted share, in the first quarter of 2005. This compares to income from continuing operations of $18.4 million, or $0.28 per diluted share, in the same quarter last year. The significant increase was driven by a 20 percent increase in production and significantly higher oil and gas prices. Income from continuing operations (the GAAP measure) in the first quarter of 2005 was $21.2 million, or $0.32 per diluted share, reflecting the previously announced non-cash unrealized derivative losses of $22.2 million after tax, or $0.33 per diluted share.
Net income was $31.9 million, or $0.48 per diluted share, for the first quarter of 2005 compared to $19.1 million, or $0.29 per diluted share, in the year earlier quarter. Included in net income for the first quarter of 2005 is income from discontinued operations of $10.7 million, or $0.16 per diluted share.
Cash flow, a non-GAAP measure, was $103.0 million for the first quarter of 2005, up 58 percent from cash flow of $65.2 million in the first quarter of 2004. See the attached table for reconciliations of these non-GAAP financial measures to the corresponding GAAP amounts of cash provided by operating activities of $103.0 million for the first quarter of 2005 and $84.5 million for the same quarter in 2004.
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Production Up 20 Percent
Total production from continuing operations for the quarter of 6.8 million barrels of oil equivalent (BOE) was 20 percent above the comparable 5.6 million BOE in the first quarter of 2004. This increase was driven by a 24 percent increase in oil production and a 12 percent increase in gas production compared to the prior-year quarter.
Argentina oil production, before the impact of changes in inventories, in the first quarter of 2005 averaged 31,379 net barrels of oil per day (BOPD), an increase of 15 percent over the 27,203 net BOPD produced in the comparable quarter of 2004. The prior year’s quarter was negatively impacted by a labor strike reducing first quarter 2004 reported production by approximately 1,800 BOPD. The remaining increase over the prior year’s quarter is a result of the company’s acquisition of properties in the San Jorge basin during September 2004 and additional production resulting from the company’s drilling and workover programs.
Oil production in Yemen made its initial contribution in the second quarter of 2004 and averaged 3,825 net BOPD during the first quarter of 2005, before the impact of changes in inventories. All of the An Nagyah field production is being trucked to a nearby facility for processing and transporting to an export terminal until the company’s planned pipeline is operational. The trucking capacity is approximately 7,500 gross BOPD (3,900 net). An 18-mile (28 km) pipeline to the processing facility is under construction and scheduled to be operational late in the second quarter of 2005 with initial throughput anticipated at 10,000 gross BOPD (5,200 net). A central processing facility with an initial capacity of 10,000 to 12,000 gross BOPD (5,200 to 6,250 net) is scheduled to start up during the third quarter of 2005.
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Total net gas production from continuing operations continued to show strong increases, fueled by U.S. exploitation successes and the December 2004 acquisition of producing properties in the Gulf Coast area of Alabama. Net gas production in the U.S. increased 23 percent from last year’s first quarter to average 85,360 Mcf per day in the first quarter of 2005.
The company estimates that U.S. production for the first quarter of 2005 was reduced by 192 MBbls of oil and 238 MMcf of gas, or 232 MBOE as a result of heavy rains and mudslides in Ventura County, California. Currently, production of approximately 400 BOPD and 950 Mcf per day remains shut in. It is expected this production will be restored by the end of the second quarter.
Commodity Prices and Revenues
Including the impact of derivative financial instruments accounted for as hedges, the company’s realized price for oil from continuing operations increased 18 percent to an average of $33.62 per barrel in the first quarter of 2005, compared with last year’s first quarter average price of $28.54 per barrel. The company’s realized price for gas, including the impact of hedges, increased 27 percent to $4.47 per Mcf compared to $3.51 per Mcf in the first quarter of 2004. As a result of the increases in production and oil and gas prices, oil and gas revenues increased 45 percent to $215.4 million for the first quarter of 2005 from $148.5 million in the same quarter of 2004.
Costs and Expenses
Production costs from continuing operations totaled $6.44 per BOE in the first quarter of 2005, which is one percent higher than the $6.35 per BOE for the previous year’s quarter. During the first quarter of 2005, the company incurred approximately $3.5 million to repair mudslide damage on its properties in Ventura County, California caused by heavy rains early in the quarter. The company expects to spend an additional $4.0 million in total during the second and third quarters of 2005 on these repairs. The prior year’s first quarter included $1.9 million for costs to repair damage resulting from fires in California during late 2003.
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First quarter export taxes in Argentina increased from $6.2 million in 2004 to $13.3 million in 2005 primarily as a result of the increased export tax rates announced in August 2004.
Production, transportation and storage costs combined with production, ad valorem and export taxes (total LOE) increased to $9.99 per BOE in the first quarter of 2005 from $8.72 per BOE in the year-earlier quarter, primarily attributable to the increased export taxes in Argentina.
Exploration costs of $10.3 million for the first quarter of 2005 consisted of $6.3 million of seismic, geological and geophysical costs, $2.6 million of dry hole costs, primarily in Yemen, and $1.4 million of leasehold impairments. This compares to exploration expense for the first quarter of 2004 of $1.2 million, comprised entirely of seismic, geological and geophysical costs.
Interest expense declined 18 percent to $11.6 million in the first quarter of 2005 compared to the first quarter of 2004 primarily due to a 19 percent reduction in average debt outstanding.
Income from discontinued operations of $10.7 million resulted from the reversal of a contingent tax liability established in conjunction with a prior-year asset disposition.
Previously Announced Derivative Losses
The previously announced non-cash unrealized derivative losses of $22.2 million after tax were recorded in the first quarter of 2005 as a result of a substantial increase in oil prices during January and February when most of the company’s oil price swap agreements were accounted for under mark-to-market accounting. As these oil price swap agreements are settled in future periods, the pre tax $36.4 million non-cash charge for unrealized losses (included in non-operating income or expense) will be offset by higher reported oil revenues in those periods than would be reported had this non-cash charge not been recognized in the first quarter. As of March 1, 2005, the company re-designated all of its oil price swap agreements as cash flow hedges and resumed hedge
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accounting for these agreements. Under hedge accounting, the effective portion of the gain or loss on a derivative instrument is reported as a part of “accumulated other comprehensive income” (a component of stockholders’ equity) and reflected as an adjustment to oil and gas sales revenues in the same period during which the hedged volumes are sold.
2005 Cash Flow and EBITDAX Targets Increased
The company is increasing its production target for 2005 from the previously announced 26.4 million BOE to 26.8 million BOE. The increase is due to the company’s success in returning wells shut in by the mudslides in California to production faster than was originally anticipated plus additional gas sales in Argentina and Bolivia as a result of increased market demands.
Due to strong oil prices experienced during the first quarter and the strength of the forward price curve, the company has increased its average NYMEX price assumption for 2005 to $50 per barrel versus the previous assumption of $40 per barrel. The company’s gas price assumption for 2005 remains unchanged at $6.50 per MMBtu. At the increased NYMEX price assumption of $50 per barrel for oil, the company expects the above normal contract differentials recently experienced in Argentina to continue during 2005 and has adjusted its expected net realized prices for oil production as a percent of NYMEX prices during 2005 to be 71 percent versus the previous target of 75 percent.
After considering the impact of the increase in targeted production, assumed NYMEX oil and gas prices, realized price assumptions and the other assumptions enumerated in the accompanying table, “Vintage Petroleum, Inc. and Subsidiaries, Revised 2005 Targets,” the company is increasing its target for 2005 cash flow (as defined in the attached table) by 11 percent to $354 million, which is $34 million higher than the previous target of $320 million. Similarly the revised target for 2005 EBITDAX has been raised by 10 percent, or $46 million, to $486 million from the previous target of $440 million.
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Vintage to Webcast First-Quarter 2005 Conference Call
The company’s first-quarter 2005 teleconference call to review first quarter results will be broadcast live on a listen-only basis over the internet on Thursday, May 5 at 3 p.m. Central Time. Interested parties may access the webcast by visiting the Vintage Petroleum, Inc. website atwww.vintagepetroleum.com and selecting the microphone icon, or atwww.fulldisclosure.com and typing VPI in the ticker search box and selecting “Go”. The teleconference may be accessed by dialing 800-362-0571 and providing the call identifier “Vintage” to the operator. The webcast and the accompanying slide presentation will be available for replay at the company’s website. An audio replay will be available until May 10, 2005, by dialing 402-220-1123.
Forward-Looking Statements
This release includes certain statements that may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical facts, that address estimates of future production, operating costs, capital spending, EBITDAX, cash flow, NYMEX prices of oil and gas and company realizations, the impact of oil and gas hedging activities, and events or developments that the company expects or believes are forward-looking statements. 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. Factors that could cause actual results to differ materially from those in forward-looking statements include oil and gas prices, exploitation and exploration successes, actions taken and to be taken by Argentina as a result of its political and economic conditions and changes in the
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estimated impact on the company, as well as continued availability of capital and financing, and general economic, market or business conditions as well as other risk factors described from time to time in the company’s filings with the SEC. The company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise.
Vintage Petroleum, Inc. is an independent energy company engaged in the acquisition, exploitation, exploration, and development 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.
-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| | | | | | | | |
| | | Three Months Ended
March 31,
| |
| | | 2005
| | | 2004
| |
REVENUES: | | | | | | | | |
Oil, condensate and NGL sales | | $ | 165,557 | | | $ | 113,431 | |
Gas sales | | | 49,886 | | | | 35,068 | |
Sulfur sales | | | 738 | | | | 473 | |
Gas marketing | | | 18,578 | | | | 14,772 | |
| | |
|
|
| |
|
|
|
Total revenues | | | 234,759 | | | | 163,744 | |
| | |
|
|
| |
|
|
|
COSTS AND EXPENSES: | | | | | | | | |
Production costs | | | 43,670 | | | | 35,827 | |
Transportation and storage costs | | | 3,918 | | | | 1,852 | |
Production and ad valorem taxes | | | 6,884 | | | | 5,306 | |
Export taxes | | | 13,336 | | | | 6,206 | |
Exploration costs | | | 10,326 | | | | 1,236 | |
Gas marketing | | | 17,542 | | | | 14,071 | |
General and administrative | | | 15,844 | | | | 14,303 | |
Stock compensation | | | 1,506 | | | | 3,762 | |
Depreciation, depletion and amortization | | | 33,397 | | | | 24,086 | |
Impairment of proved oil and gas properties | | | — | | | | 3,915 | |
Accretion | | | 1,747 | | | | 1,618 | |
Other operating (income) expense | | | 1,017 | | | | (4,817 | ) |
| | |
|
|
| |
|
|
|
Total costs and expenses | | | 149,187 | | | | 107,365 | |
| | |
|
|
| |
|
|
|
OPERATING INCOME | | | 85,572 | | | | 56,379 | |
| | |
|
|
| |
|
|
|
NON-OPERATING (INCOME) EXPENSE: | | | | | | | | |
Interest expense | | | 11,555 | | | | 14,021 | |
Loss on early extinguishment of debt | | | — | | | | 9,903 | |
Losses on derivative transactions | | | 40,716 | | | | 4 | |
Gain on disposition of assets | | | — | | | | (59 | ) |
Foreign currency exchange loss | | | 1,266 | | | | 1,143 | |
Other non-operating income | | | (431 | ) | | | (11 | ) |
| | |
|
|
| |
|
|
|
Net non-operating expense | | | 53,106 | | | | 25,001 | |
| | |
|
|
| |
|
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | | | 32,466 | | | | 31,378 | |
| | |
|
|
| |
|
|
|
INCOME TAX PROVISION (BENEFIT): | | | | | | | | |
Current | | | 14,404 | | | | 12,144 | |
Deferred | | | (3,120 | ) | | | 873 | |
| | |
|
|
| |
|
|
|
Total income tax provision | | | 11,284 | | | | 13,017 | |
| | |
|
|
| |
|
|
|
INCOME FROM CONTINUING OPERATIONS | | | 21,182 | | | | 18,361 | |
| | |
INCOME FROM DISCONTINUED OPERATIONS | | | 10,743 | | | | 774 | |
| | |
|
|
| |
|
|
|
NET INCOME | | $ | 31,925 | | | $ | 19,135 | |
| | |
|
|
| |
|
|
|
-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Continued)
(In thousands, except per share amounts)
(Unaudited)
| | | | | | |
| | | Three Months Ended
March 31,
|
| | | 2005
| | 2004
|
BASIC INCOME PER SHARE: | | | | | | |
Income from continuing operations | | $ | 0.32 | | $ | 0.29 |
Income from discontinued operations | | | 0.16 | | | 0.01 |
| | |
|
| |
|
|
Net income | | $ | 0.48 | | $ | 0.30 |
| | |
|
| |
|
|
DILUTED INCOME PER SHARE: | | | | | | |
Income from continuing operations | | $ | 0.32 | | $ | 0.28 |
Income from discontinued operations | | | 0.16 | | | 0.01 |
| | |
|
| |
|
|
Net income | | $ | 0.48 | | $ | 0.29 |
| | |
|
| |
|
|
Weighted average common shares outstanding: | | | | | | |
Basic | | | 66,139 | | | 64,328 |
Diluted | | | 66,888 | | | 65,030 |
-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | | | | | | | |
| | | Three Months Ended
March 31,
| |
| | | 2005
| | | 2004
| |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | |
Net income | | $ | 31,925 | | | $ | 19,135 | |
Adjustments to reconcile net income to net cash provided by operating activities - | | | | | | | | |
Income from discontinued operations, net of tax | | | (10,743 | ) | | | (774 | ) |
Depreciation, depletion and amortization | | | 33,397 | | | | 24,086 | |
Impairment of proved oil and gas properties | | | — | | | | 3,915 | |
Accretion | | | 1,747 | | | | 1,618 | |
Dry hole costs, impairments of unproved oil and gas properties and other | | | 8,266 | | | | 36 | |
Provision (benefit) for deferred income taxes | | | (3,120 | ) | | | 873 | |
Foreign currency exchange loss | | | 1,266 | | | | 1,143 | |
Gain on dispositions of assets | | | — | | | | (59 | ) |
Loss on early extinguishment of debt | | | — | | | | 9,903 | |
Stock compensation | | | 1,506 | | | | 3,762 | |
Losses on derivative activities | | | 40,716 | | | | 4 | |
Other non-cash charges included in net income | | | 305 | | | | 372 | |
(Increase) decrease in receivables | | | 1,029 | | | | (2,536 | ) |
Increase (decrease) in payables and accrued liabilities | | | (4,976 | ) | | | 18,512 | |
Other working capital changes | | | 1,675 | | | | (5,553 | ) |
| | |
|
|
| |
|
|
|
Cash provided by continuing operations | | | 102,993 | | | | 74,437 | |
Cash provided by discontinued operations | | | — | | | | 10,013 | |
| | |
|
|
| |
|
|
|
Cash provided by operating activities | | | 102,993 | | | | 84,450 | |
| | |
|
|
| |
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | |
Capital expenditures - | | | | | | | | |
Oil and gas properties | | | (59,752 | ) | | | (44,649 | ) |
Gathering systems and other | | | (509 | ) | | | (674 | ) |
Payments on non-hedge derivative transactions | | | (4,349 | ) | | | — | |
Other | | | — | | | | (1,578 | ) |
| | |
|
|
| |
|
|
|
Cash used by investing activities – continuing operations | | | (64,610 | ) | | | (46,901 | ) |
Cash used by investing activities – discontinued operations | | | — | | | | (7,379 | ) |
| | |
|
|
| |
|
|
|
Cash used by investing activities | | | (64,610 | ) | | | (54,280 | ) |
| | |
|
|
| |
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | |
Issuance of common stock | | | 5,739 | | | | 2,446 | |
Purchase of treasury stock | | | — | | | | (50 | ) |
Redemption of 9 3/4% Senior Subordinated Notes due 2009 | | | — | | | | (157,313 | ) |
Advances on revolving credit facility and other borrowings | | | 29,200 | | | | 201,900 | |
Payments on revolving credit facility and other borrowings | | | (29,200 | ) | | | (64,000 | ) |
Dividends paid | | | (3,300 | ) | | | (2,893 | ) |
Other | | | (1,061 | ) | | | 3,385 | |
| | |
|
|
| |
|
|
|
Cash provided (used) by financing activities | | | 1,378 | | | | (16,525 | ) |
| | |
|
|
| |
|
|
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH | | | (174 | ) | | | (186 | ) |
| | |
|
|
| |
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS | | | 39,587 | | | | 13,459 | |
CASH AND CASH EQUIVALENTS, beginning of period | | | 124,221 | | | | 32,264 | |
| | |
|
|
| |
|
|
|
CASH AND CASH EQUIVALENTS, end of period | | $ | 163,808 | | | $ | 45,723 | |
| | |
|
|
| |
|
|
|
-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and per share amounts)
(Unaudited)
| | | | | | | | |
| | | March 31,
2005
| | | December 31,
2004
| |
| ASSETS | | | | | | | | |
| | |
CURRENT ASSETS: | | | | | | | | |
Cash and cash equivalents | | $ | 163,808 | | | $ | 124,221 | |
Accounts receivable - | | | | | | | | |
Oil and gas sales | | | 110,311 | | | | 107,870 | |
Joint operations | | | 8,980 | | | | 12,479 | |
Income taxes receivable | | | 41,203 | | | | 31,571 | |
Deferred income taxes | | | 27,077 | | | | 15,364 | |
Prepaids and other current assets | | | 16,494 | | | | 23,648 | |
| | |
|
|
| |
|
|
|
Total current assets | | | 367,873 | | | | 315,153 | |
| | |
|
|
| |
|
|
|
PROPERTY, PLANT AND EQUIPMENT, at cost: | | | | | | | | |
Oil and gas properties, successful efforts method | | | 2,217,325 | | | | 2,163,176 | |
Oil and gas gathering systems and plants | | | 23,926 | | | | 23,926 | |
Other | | | 32,441 | | | | 31,932 | |
| | |
|
|
| |
|
|
|
| | | | 2,273,692 | | | | 2,219,034 | |
| | |
Less: Accumulated depreciation, depletion and amortization | | | 975,072 | | | | 942,656 | |
| | |
|
|
| |
|
|
|
Total property, plant and equipment, net | | | 1,298,620 | | | | 1,276,378 | |
| | |
|
|
| |
|
|
|
DEFERRED INCOME TAXES | | | 12,118 | | | | 13,200 | |
| | |
|
|
| |
|
|
|
OTHER ASSETS, net | | | 42,493 | | | | 40,161 | |
| | |
|
|
| |
|
|
|
| | | $ | 1,721,104 | | | $ | 1,644,892 | |
| | |
|
|
| |
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| | |
CURRENT LIABILITIES: | | | | | | | | |
Revenue payable | | $ | 21,570 | | | $ | 33,740 | |
Accounts payable – trade | | | 53,367 | | | | 50,775 | |
Current income taxes payable | | | 28,552 | | | | 23,565 | |
Derivative financial instruments payable | | | 96,311 | | | | 27,672 | |
Other payables and accrued liabilities | | | 81,071 | | | | 73,748 | |
| | |
|
|
| |
|
|
|
Total current liabilities | | | 280,871 | | | | 209,500 | |
| | |
|
|
| |
|
|
|
LONG-TERM DEBT | | | 549,950 | | | | 549,949 | |
| | |
|
|
| |
|
|
|
DEFERRED INCOME TAXES | | | 69,266 | | | | 80,383 | |
| | |
|
|
| |
|
|
|
LONG-TERM LIABILITY FOR ASSET RETIREMENT OBLIGATIONS | | | 90,445 | | | | 90,707 | |
| | |
|
|
| |
|
|
|
OTHER LONG-TERM LIABILITIES | | | 40,402 | | | | 30,675 | |
| | |
|
|
| |
|
|
|
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, 67,244,034 and 66,541,984 shares issued and 66,713,802 and 66,012,252 shares outstanding, respectively | | | 336 | | | | 333 | |
Capital in excess of par value | | | 376,465 | | | | 361,120 | |
Retained earnings | | | 371,306 | | | | 342,707 | |
Accumulated other comprehensive loss | | | (46,733 | ) | | | (13,088 | ) |
| | |
|
|
| |
|
|
|
| | | | 701,374 | | | | 691,072 | |
Less: Treasury stock, at cost, 530,232 and 529,732 shares, respectively | | | 4,319 | | | | 4,319 | |
Less: Unamortized cost of restricted stock awards | | | 6,885 | | | | 3,075 | |
| | |
|
|
| |
|
|
|
Total stockholders’ equity | | | 690,170 | | | | 683,678 | |
| | |
|
|
| |
|
|
|
| | | $ | 1,721,104 | | | $ | 1,644,892 | |
| | |
|
|
| |
|
|
|
-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
SUMMARY OPERATING DATA
(Unaudited)
| | | | |
| | | Three Months Ended
March 31,
|
| | | 2005
| | 2004
|
PRODUCTION: | | | | |
| | |
Oil (MBbls) - | | | | |
U.S. (b) | | 1,464 | | 1,513 |
Argentina (a) (c) | | 3,084 | | 2,441 |
Bolivia (a) | | 15 | | 20 |
Yemen (a) | | 361 | | — |
| | |
Continuing operations | | 4,924 | | 3,974 |
| | |
Canada | | — | | 235 |
| | |
Total | | 4,924 | | 4,209 |
| | |
Gas (MMcf) - | | | | |
U.S. (b) | | 7,683 | | 6,240 |
Argentina (c) | | 2,153 | | 2,032 |
Bolivia | | 1,331 | | 1,719 |
| | |
Continuing operations | | 11,167 | | 9,991 |
| | |
Canada | | — | | 3,938 |
| | |
Total | | 11,167 | | 13,929 |
| | |
MBOE from continuing operations | | 6,785 | | 5,639 |
| | |
Total MBOE | | 6,785 | | 6,531 |
| (a) | Oil production (in MBbls) before the impact of changes in inventories: |
| | | | |
| | | Three Months Ended
March 31,
|
| | | 2005
| | 2004
|
Argentina | | 2,824 | | 2,475 |
Bolivia | | 13 | | 21 |
Yemen | | 344 | | 1 |
| (b) | U.S. production for the three months ended March 31, 2005, is estimated to have been reduced as a result of mudslides in Ventura County, California by 192 MBbls of oil and 238 MMcf of gas, or 232 MBOE. |
| (c) | Argentina production for the three months ended March 31, 2004, is estimated to have been reduced as the result of a labor strike by 165 MBbls of oil and 135 MMcf of gas, or 188 MBOE. |
| | |
| MBbls | | - thousand barrels |
| MMcf | | - million cubic feet |
| MBOE | | - thousand barrels of oil equivalent |
-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
SUMMARY OPERATING DATA
(Continued)
(Unaudited)
| | | | | | | |
| | | Three Months Ended
March 31,
|
| | | 2005
| | | 2004
|
Average Sales Price (including impact of hedges): | | | | | | | |
| | |
Oil (per Bbl) - | | | | | | | |
U.S. | | $ | 35.01 | (a) | | $ | 27.94 |
Argentina | | | 31.53 | | | | 28.95 |
Bolivia | | | 23.14 | | | | 23.86 |
Yemen | | | 46.24 | | | | — |
Continuing operations | | | 33.62 | (a) | | | 28.54 |
| | |
Canada | | | — | | | | 27.84 |
| | |
Gas (per Mcf) - | | | | | | | |
U.S. | | $ | 5.99 | | | $ | 4.99 |
Argentina | | | 0.74 | | | | 0.49 |
Bolivia | | | 1.69 | | | | 1.70 |
Continuing operations | | | 4.47 | | | | 3.51 |
| | |
Canada | | | — | | | | 4.68 |
| | |
Average Sales Price (excluding impact of hedges): | | | | | | | |
| | |
Oil (per Bbl) - | | | | | | | |
U.S. | | $ | 42.33 | | | $ | 32.51 |
Argentina | | | 31.53 | | | | 28.95 |
Bolivia | | | 23.14 | | | | 23.86 |
Yemen | | | 46.24 | | | | — |
Continuing operations | | | 35.80 | | | | 30.28 |
| | |
Canada | | | — | | | | 30.78 |
| | |
Gas (per Mcf) - | | | | | | | |
U.S. | | $ | 5.83 | | | $ | 4.99 |
Argentina | | | 0.74 | | | | 0.49 |
Bolivia | | | 1.69 | | | | 1.70 |
Continuing operations | | | 4.36 | | | | 3.51 |
| | |
Canada | | | — | | | | 4.68 |
| (a) | The average oil sales price per barrel for the U.S. and continuing operations for the three months ended March 31, 2005, does not reflect realized losses of $2.98 and $0.89 per barrel, respectively, which relate to settlements on economic hedges. These losses have been reflected in non-operating expense. Economic hedges are derivative financial instruments, intended to hedge a specific exposure, which did not qualify or ceased to qualify for hedge accounting under SFAS 133. |
-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
REVISED 2005 TARGETS
| | | | | | | | |
| | | Previous
2005
Targets
| | | Revised
2005
Targets(c)
| |
Oil production (MMBbls): | | | | | | | | |
U.S. | | | 5.8 | | | | 6.0 | |
Argentina | | | 12.3 | (e) | | | 12.3 | (e) |
Bolivia | | | 0.1 | | | | 0.1 | |
Yemen | | | 1.4 | | | | 1.4 | |
Total | | | 19.6 | | | | 19.8 | |
| | |
Gas Production (Bcf): | | | | | | | | |
U.S. | | | 28.3 | | | | 28.3 | |
Argentina | | | 8.0 | | | | 8.5 | |
Bolivia | | | 4.5 | | | | 5.0 | |
Total | | | 40.8 | | | | 41.8 | |
| | |
Total MMBOE | | | 26.4 | | | | 26.8 | |
| | |
Assumed NYMEX(a)prices: | | | | | | | | |
Oil | | $ | 40.00 | | | $ | 50.00 | |
Gas | | $ | 6.50 | | | $ | 6.50 | |
| | |
Net realized price (before impact of hedging) as a percent of NYMEX(a) - Total Company: | | | | | | | | |
Oil | | | 75 | % | | | 71 | % |
Gas | | | 69 | % | | | 68 | % |
| | |
DD&A per BOE (oil and gas only) | | $ | 4.65 | | | $ | 4.85 | |
G&A per BOE | | $ | 2.35 | | | $ | 2.45 | |
| | |
Production, transportation and storage costs per BOE | | $ | 7.35 | | | $ | 7.25 | |
Production, ad valorem and export taxes per BOE | | | 2.35 | | | | 3.05 | |
| | |
|
|
| |
|
|
|
Total LOE per BOE | | $ | 9.70 | | | $ | 10.30 | |
| | |
Non-Acquisition Capital Spending Budget (in millions) | | $ | 250 | | | $ | 250 | |
| | |
Cash Flow (before all exploration expenses, working capital changes and current taxes associated with property sales) (in millions)(d) | | $ | 320 | | | $ | 354 | |
| | |
EBITDAX (in millions)(b)(d) | | $ | 440 | | | $ | 486 | |
| MMBOE | – million barrels of oil equivalent |
| | Oil - | Average of the daily settlement price per barrel for the near-month contract for light crude oil as quoted on the New York Mercantile Exchange. |
| | Gas - | Average of the settlement price per MMBtu for the last three trading days for the applicable contract month for natural gas as quoted on the New York Mercantile Exchange. |
| (b) | EBITDAX: Earnings before interest, taxes, DD&A, impairments, exploration expenses, cumulative effect of change in accounting principle, loss on early extinguishment of debt, gains/losses on property sales and other non-cash items. |
| (c) | Targets do not reflect any future acquisitions or dispositions of assets. Targets reflect the impact of existing hedges. See “2005 Cash Flow and EBITDAX Targets Increased” and “Forward-Looking Statements” elsewhere in the release. |
| (d) | The targets for non-GAAP financial measures are not reconciled to the most directly comparable GAAP financial measure as the company does not establish targets for such GAAP financial measures. |
| (e) | Includes sales volumes of 400,000 barrels for an expected decrease in oil inventories. |
-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
COMMODITY DERIVATIVE STATUS
OIL PRICE SWAPS
| | | | |
Quarter Ending
| | Barrels
| | NYMEX Reference Price $ Per Bbl
|
June 30, 2005 | | 1,255,800 | | 36.49 |
September 30, 2005 | | 1,269,600 | | 35.57 |
December 31, 2005 | | 1,269,600 | | 34.88 |
| | |
March 31, 2006 | | 427,500 | | 37.39 |
June 30, 2006 | | 432,250 | | 36.80 |
September 30, 2006 | | 437,000 | | 36.32 |
December 31, 2006 | | 437,000 | | 35.93 |
| | |
March 31, 2007 | | 189,000 | | 34.26 |
June 30, 2007 | | 63,700 | | 39.66 |
September 30, 2007 | | 64,400 | | 39.38 |
December 31, 2007 | | 64,400 | | 39.10 |
|
| GAS PRICE SWAPS |
| | |
Quarter Ending
| | MMBtu
| | NYMEX Reference Price $ Per MMBtu
|
June 30, 2005 | | 1,173,900 | | 6.15 |
September 30, 2005 | | 1,186,800 | | 6.17 |
December 31, 2005 | | 1,186,800 | | 6.37 |
| | |
March 31, 2006 | | 243,000 | | 6.47 |
June 30, 2006 | | 245,700 | | 6.47 |
September 30, 2006 | | 248,400 | | 6.47 |
December 31, 2006 | | 248,400 | | 6.47 |
| | |
March 31, 2007 | | 225,000 | | 6.00 |
June 30, 2007 | | 227,500 | | 6.00 |
September 30, 2007 | | 230,000 | | 6.00 |
December 31, 2007 | | 230,000 | | 6.00 |
|
| GAS PRICE COLLARS |
| | |
MMBtu For April to December 2005
| | NYMEX Floor
Reference Price
$ Per MMBtu
| | NYMEX Cap
Reference Price
$ Per MMBtu
|
1,375,000 | | 6.00 | | 6.80 |
2,750,000 | | 6.00 | | 8.02 |
1,375,000 | | 6.00 | | 8.73 |
2,750,000 | | 6.00 | | 9.21 |
-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
Cash flow, a non-GAAP measure, represents cash provided by operating activities before the impact of discontinued operations, changes in working capital items related to operating activities, all exploration costs and further adjusted for payments on derivative transactions no longer qualifying for hedge accounting which are reflected as investing activities under GAAP. This non-GAAP measure 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). This non-GAAP cash flow measure 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 and is comparable to targets established by the company. This non-GAAP measure 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 and is comparable to targets established by the company. 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
March 31,
| |
| | | 2005
| | | 2004
| |
Cash provided by operating activities (GAAP measure) | | $ | 102,993 | | | $ | 84,450 | |
Adjustments to remove the impact of: | | | | | | | | |
Cash provided by discontinued operations | | | — | | | | (10,013 | ) |
Changes in working capital items related to operating activities | | | 2,272 | | | | (10,423 | ) |
Exploration geological and geophysical costs | | | 2,060 | | | | 1,200 | |
Payments on derivative transactions included in investing activities | | | (4,349 | ) | | | — | |
| | |
|
|
| |
|
|
|
Cash flow (non-GAAP measure) | | | 102,976 | | | | 65,214 | |
| | |
Current taxes | | | 14,404 | | | | 12,144 | |
Interest expense | | | 11,555 | | | | 14,021 | |
| | |
|
|
| |
|
|
|
EBITDAX (non-GAAP measure) | | $ | 128,935 | | | $ | 91,379 | |
| | |
|
|
| |
|
|
|
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