EXHIBIT 99
| | |
| For Immediate Release | | For Further Information Contact: |
| Wednesday, August 3, 2005 | | Robert E. Phaneuf |
| | | Vice President - Corporate Development |
| | | (918) 592-0101 |
VINTAGE PETROLEUM REPORTS SECOND QUARTER RESULTS,
17 PERCENT INCREASE IN PRODUCTION;
2005 TARGETS INCREASED
Tulsa, Oklahoma – Vintage Petroleum, Inc. (NYSE:VPI) today announced net income of $57.7 million, or $0.86 per diluted share, in the second quarter of 2005, a 66 percent increase over income from continuing operations of $34.7 million, or $0.53 per diluted share, in the same quarter last year. This substantial increase was driven by a 17 percent increase in production from continuing operations and significantly higher oil and gas prices. Net income for the second quarter of 2004 was $37.4 million, or $0.57 per diluted share, including income from discontinued operations of $2.7 million, or $0.04 per diluted share.
Cash flow, a non-GAAP measure, was $107.1 million for the second quarter of 2005, up 58 percent from cash flow of $67.7 million in the second 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 $82.3 million for the second quarter of 2005 and $57.8 million for the same quarter in 2004.
Production Up 17 Percent
Total production from continuing operations for the quarter of 6.9 million barrels of oil equivalent (BOE) was 17 percent above the comparable 5.9 million BOE in the second quarter of 2004. This increase was driven by a 26 percent increase in oil production with Argentina, Yemen and the U.S. each contributing to this growth. The oil increase was slightly offset by a four percent decline in gas production from continuing operations as a result of reduced market demand in Bolivia compared to the prior-year quarter.
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Argentina oil production, before the impact of changes in inventories, in the second quarter of 2005 averaged 33,318 net barrels of oil per day (BOPD), an increase of 24 percent over the 26,978 net BOPD produced in the comparable quarter of 2004. The increase over the prior year’s quarter is primarily a result of additional production resulting from the company’s drilling and workover programs and the company’s acquisition of properties in the San Jorge basin during September 2004. In addition, the prior year’s quarter was negatively impacted by a labor strike reducing second quarter 2004 reported production by an estimated 2,200 BOPD.
Oil production in Yemen made its initial contribution in the second quarter of 2004 at 1,186 net BOPD and almost quadrupled to average 4,294 net BOPD during the second quarter of 2005, before the impact of changes in inventories. All of the An Nagyah field production during the second quarter was trucked to a nearby facility for processing and transporting to an export terminal. An 18-mile (28 km) pipeline to the processing facility was completed and became operational in early July. As a result the company expects production to increase to approximately 10,000 gross BOPD (5,200 net) by the middle of the third quarter.
U.S. oil production also showed a strong increase during the second quarter of 2005 rising 13 percent over the prior year’s second quarter to average 18,967 net BOPD, driven by the December 2004 acquisition of producing properties in the Gulf Coast area of Alabama and 2005 exploitation successes. Partially offsetting these increases, the company estimates the second quarter of 2005 was reduced by 400 net BOPD as a result of certain wells shut-in for part of the quarter due to damage from heavy rains and mudslides in California earlier in the year. These shut-in wells have now been returned to production.
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Total net gas production from continuing operations was down four percent from the prior year’s second quarter. U.S. and Argentina net gas production was up slightly during the second quarter of 2005; however, the anticipated lower sales volumes into Brazil caused Bolivia gas production to decrease 32 percent leading to the overall decline in total net gas production. In addition, the company estimates that U.S. gas production for the second quarter of 2005 was reduced by 66 MMCF of gas as a result of the heavy rains and mudslides in California.
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 26 percent to an average of $36.48 per barrel in the second quarter of 2005, compared with last year’s second quarter average price of $29.04 per barrel. The company’s realized price for gas, including the impact of hedges, increased 27 percent to $4.92 per Mcf compared to $3.88 per Mcf in the second quarter of 2004. As a result of the increases in production and oil and gas prices, oil and gas revenues increased 48 percent to $238.3 million for the second quarter of 2005 from $160.6 million in the same quarter of 2004.
Costs and Expenses
Production costs from continuing operations totaled $6.38 per BOE in the second quarter of 2005, which is eight percent higher than the $5.90 per BOE for the previous year’s quarter. During the second quarter of 2005, the company incurred approximately $2.2 million, or $0.32 per BOE, to repair mudslide damage on its properties in Ventura County, California caused by heavy rains early in the year. The company expects to spend an additional $2.5 million during the third quarter of 2005 bringing the total expected cost in 2005 for the mudslide repairs to $8.2 million.
Second quarter export taxes in Argentina increased from $6.7 million in 2004 to $16.3 million in 2005 primarily as a result of the increased export tax rates announced in August 2004 and higher oil prices.
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Production, transportation and storage costs combined with production, ad valorem and export taxes (total lease operating expense) increased to $10.60 per BOE in the second quarter of 2005 from $8.44 per BOE in the year-earlier quarter, primarily attributable to increased production taxes and Argentina export taxes.
Exploration costs of $7.4 million for the second quarter of 2005 consisted of $3.7 million of seismic, geological and geophysical costs, and $3.7 million of dry hole costs, primarily in Yemen. This compares to exploration expense for the second quarter of 2004 of $7.3 million, comprised of $1.7 million of seismic, geological and geophysical costs, $4.4 million of dry hole costs, primarily in Italy, and $1.2 million of leasehold impairments.
Six Months Results
Net income for the six months ended June 30, 2005, was $89.6 million, or $1.33 per diluted share, compared to net income of $56.5 million, or $0.87 per diluted share, for the six months ended June 30, 2004. Income from continuing operations of $78.9 million, or $1.17 per diluted share, compares to $53.1 million, or $0.82 per diluted share for the six months ended June 30, 2004.
The company was required to account for certain oil price swap agreements using mark-to-market accounting during January and February 2005. As a result, the company recorded $41.0 million of derivative losses during the first quarter of 2005. As of June 30, 2005, $12.9 million of these losses had been realized and $28.1 million remained unrealized. Net income for the six months ended June 30, 2005, was reduced by $17.2 million ($28.1 million pre-tax), or $0.26 per diluted share, related to these unrealized losses. As these oil price swap agreements are settled in future periods, the company will report higher oil revenues in those future periods than would have been reported had the unrealized losses not been recognized in the first quarter of 2005. As of March 1, 2005, the company resumed hedge accounting for all of its derivative financial instruments.
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Cash flow, a non-GAAP measure, was $210.1 million for the six months ended June 30, 2005, up 58 percent compared to $132.9 million for the six months ended June 30, 2004, reflecting the increase in production and oil and gas prices from the six months ended 2004 levels. See the attached table for reconciliations of these non-GAAP financial measures to the corresponding GAAP amounts of cash provided by operating activities of $185.3 million for the six months ended June 30, 2005, and $142.2 million for the six months ended June 30, 2004.
2005 Targets Updated
As a result of the continued strong price environment and positive results from its development drilling programs in the U.S. and Yemen, the company is increasing its capital budget and production targets for 2005. The company’s 2005 capital budget has been increased 14 percent from $250 million to $285 million with the increases primarily allocated to the U.S. and Yemen development drilling programs.
The company is increasing its production target for 2005 from the previously announced 26.8 million BOE to 27.3 million BOE. The increase is due to positive results from its U.S. development drilling and workover programs, production performance of its wells in Yemen and an acceleration or expansion of various development drilling programs in the U.S. and Yemen as evidenced by the increased capital budget.
Due to strong oil and gas prices experienced during the first half of 2005 and the strength of the forward price curve, the company has increased its average NYMEX price assumptions for 2005 to $55.00 per barrel of oil and $7.00 per MMBtu of gas versus the previous assumptions of $50.00 per barrel and $6.50 per MMBtu. During the second quarter of 2005, the company experienced an improvement in the contract differentials in Argentina from those witnessed at year-end 2004 and earlier in 2005. Indications early in the third quarter are that this improvement has been sustained. Accordingly, the company has adjusted its expected net realized prices for oil production as a percent of NYMEX prices during 2005 to be 74 percent versus the previous target of 71 percent.
After considering the impact of the increases in targeted production, assumed NYMEX oil and gas prices, realized price assumptions and the other assumptions enumerated in the accompanying table,
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“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 23 percent to $435 million, which is $81 million higher than the previous target of $354 million. Similarly the revised target for 2005 EBITDAX has been raised by 21 percent, or $100 million, to $586 million from the previous target of $486 million.
Vintage to Webcast Second-Quarter 2005 Conference Call
The company’s second-quarter 2005 teleconference call to review second quarter results will be broadcast live on a listen-only basis over the internet on Thursday, August 4 at 3 p.m. Central Time. Interested parties may access the webcast by visiting the Vintage Petroleum, Inc. website at www.vintagepetroleum.com and selecting the microphone icon, or at www.fulldisclosure.com and typing VPI in the ticker search box and selecting “Go”. The teleconference may be accessed by dialing 800-362-0574 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 August 9, 2005, by dialing 402-530-9315.
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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 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 June 30,
| | | Six Months Ended June 30,
| |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
REVENUES: | | | | | | | | | | | | | | | | |
Oil, condensate and NGL sales | | $ | 186,089 | | | $ | 117,507 | | | $ | 351,646 | | | $ | 230,938 | |
Gas sales | | | 52,166 | | | | 43,058 | | | | 102,052 | | | | 78,126 | |
Sulfur sales | | | 994 | | | | 242 | | | | 1,732 | | | | 715 | |
Gas marketing | | | 16,124 | | | | 17,462 | | | | 34,702 | | | | 32,234 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total revenues | | | 255,373 | | | | 178,269 | | | | 490,132 | | | | 342,013 | |
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|
|
| |
|
|
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|
|
| |
|
|
|
COSTS AND EXPENSES: | | | | | | | | | | | | | | | | |
Production costs | | | 43,836 | | | | 34,806 | | | | 87,195 | | | | 70,165 | |
Transportation and storage costs | | | 4,300 | | | | 2,741 | | | | 8,529 | | | | 5,061 | |
Production and ad valorem taxes | | | 8,332 | | | | 5,519 | | | | 15,216 | | | | 10,825 | |
Export taxes | | | 16,332 | | | | 6,706 | | | | 29,668 | | | | 12,912 | |
Exploration costs | | | 7,429 | | | | 7,329 | | | | 17,755 | | | | 8,565 | |
Gas marketing | | | 15,124 | | | | 16,480 | | | | 32,666 | | | | 30,551 | |
General and administrative | | | 16,821 | | | | 16,791 | | | | 34,171 | | | | 34,856 | |
Depreciation, depletion and amortization | | | 34,353 | | | | 21,881 | | | | 67,750 | | | | 45,967 | |
Impairment of proved oil and gas properties | | | — | | | | — | | | | — | | | | 3,915 | |
Accretion | | | 1,792 | | | | 1,629 | | | | 3,539 | | | | 3,247 | |
Other operating (income) expense | | | 1,912 | | | | 1,213 | | | | 2,929 | | | | (3,604 | ) |
| | |
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|
| |
|
|
| |
|
|
| |
|
|
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Total costs and expenses | | | 150,231 | | | | 115,095 | | | | 299,418 | | | | 222,460 | |
| | |
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| |
|
|
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|
|
| |
|
|
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OPERATING INCOME | | | 105,142 | | | | 63,174 | | | | 190,714 | | | | 119,553 | |
| | |
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|
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|
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NON-OPERATING (INCOME) EXPENSE: | | | | | | | | | | | | | | | | |
Interest expense | | | 11,600 | | | | 12,674 | | | | 23,155 | | | | 26,695 | |
Loss on early extinguishment of debt | | | — | | | | — | | | | — | | | | 9,903 | |
Losses on derivative transactions | | | 2,728 | | | | 440 | | | | 43,444 | | | | 444 | |
(Gain) loss on disposition of assets | | | (16 | ) | | | 4 | | | | (16 | ) | | | (55 | ) |
Foreign currency exchange (gain) loss | | | 1,069 | | | | (1,969 | ) | | | 2,335 | | | | (826 | ) |
Other non-operating income | | | (726 | ) | | | (162 | ) | | | (1,157 | ) | | | (173 | ) |
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|
|
| |
|
|
| |
|
|
| |
|
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|
Net non-operating expense | | | 14,655 | | | | 10,987 | | | | 67,761 | | | | 35,988 | |
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|
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|
|
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INCOME FROM CONTINUING OPERATIONS | | | | | | | | | | | | | | | | |
BEFORE INCOME TAXES | | | 90,487 | | | | 52,187 | | | | 122,953 | | | | 83,565 | |
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INCOME TAX PROVISION: | | | | | | | | | | | | | | | | |
Current | | | 24,182 | | | | 16,269 | | | | 38,586 | | | | 28,413 | |
Deferred | | | 8,587 | | | | 1,216 | | | | 5,467 | | | | 2,089 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total income tax provision | | | 32,769 | | | | 17,485 | | | | 44,053 | | | | 30,502 | |
| | |
|
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| |
|
|
| |
|
|
| |
|
|
|
INCOME FROM CONTINUING OPERATIONS | | | 57,718 | | | | 34,702 | | | | 78,900 | | | | 53,063 | |
| | | | |
INCOME FROM DISCONTINUED OPERATIONS | | | — | | | | 2,707 | | | | 10,743 | | | | 3,481 | |
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|
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|
|
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|
|
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|
|
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NET INCOME | | $ | 57,718 | | | $ | 37,409 | | | $ | 89,643 | | | $ | 56,544 | |
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-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Continued)
(In thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | |
| | | Three Months Ended June 30,
| | Six Months Ended June 30,
|
| | | 2005
| | 2004
| | 2005
| | 2004
|
BASIC INCOME PER SHARE: | | | | | | | | | | | | |
Income from continuing operations | | $ | 0.86 | | $ | 0.54 | | $ | 1.19 | | $ | 0.83 |
Income from discontinued operations | | | — | | | 0.04 | | | 0.16 | | | 0.05 |
| | |
|
| |
|
| |
|
| |
|
|
Net income | | $ | 0.86 | | $ | 0.58 | | $ | 1.35 | | $ | 0.88 |
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|
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DILUTED INCOME PER SHARE: | | | | | | | | | | | | |
Income from continuing operations | | $ | 0.86 | | $ | 0.53 | | $ | 1.17 | | $ | 0.82 |
Income from discontinued operations | | | — | | | 0.04 | | | 0.16 | | | 0.05 |
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|
| |
|
| |
|
| |
|
|
Net income | | $ | 0.86 | | $ | 0.57 | | $ | 1.33 | | $ | 0.87 |
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|
| |
|
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|
| |
|
|
Weighted average common shares outstanding: | | | | | | | | | | | | |
Basic | | | 66,799 | | | 64,741 | | | 66,471 | | | 64,535 |
Diluted | | | 67,472 | | | 65,487 | | | 67,182 | | | 65,258 |
-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and per share amounts)
(Unaudited)
| | | | | | | | |
| | | | | | | |
| | | June 30, 2005
| | | December 31,
2004
| |
ASSETS | | | | | | | | |
| | |
CURRENT ASSETS: | | | | | | | | |
Cash and cash equivalents | | $ | 155,804 | | | $ | 124,221 | |
Accounts receivable - | | | | | | | | |
Oil and gas sales | | | 127,098 | | | | 107,870 | |
Joint operations | | | 11,854 | | | | 12,479 | |
Income taxes receivable | | | 39,460 | | | | 31,571 | |
Deferred income taxes | | | 22,639 | | | | 15,364 | |
Prepaids and other current assets | | | 17,758 | | | | 23,648 | |
| | |
|
|
| |
|
|
|
Total current assets | | | 374,613 | | | | 315,153 | |
| | |
|
|
| |
|
|
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PROPERTY, PLANT AND EQUIPMENT, at cost: | | | | | | | | |
Oil and gas properties, successful efforts method | | | 2,289,876 | | | | 2,163,176 | |
Oil and gas gathering systems and plants | | | 23,926 | | | | 23,926 | |
Other | | | 33,313 | | | | 31,932 | |
| | |
|
|
| |
|
|
|
| | | | 2,347,115 | | | | 2,219,034 | |
| | |
Less accumulated depreciation, depletion and amortization | | | 1,009,816 | | | | 942,656 | |
| | |
|
|
| |
|
|
|
Total property, plant and equipment, net | | | 1,337,299 | | | | 1,276,378 | |
| | |
|
|
| |
|
|
|
DEFERRED INCOME TAXES | | | 10,959 | | | | 13,200 | |
| | |
|
|
| |
|
|
|
OTHER ASSETS, net | | | 50,513 | | | | 40,161 | |
| | |
|
|
| |
|
|
|
| | | $ | 1,773,384 | | | $ | 1,644,892 | |
| | |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| | |
CURRENT LIABILITIES: | | | | | | | | |
Revenue payable | | $ | 28,154 | | | $ | 33,740 | |
Accounts payable - trade | | | 55,925 | | | | 50,775 | |
Current income taxes payable | | | 18,954 | | | | 23,565 | |
Derivative financial instruments payable | | | 80,966 | | | | 27,672 | |
Other payables and accrued liabilities | | | 74,401 | | | | 73,748 | |
| | |
|
|
| |
|
|
|
Total current liabilities | | | 258,400 | | | | 209,500 | |
| | |
|
|
| |
|
|
|
LONG-TERM DEBT | | | 549,952 | | | | 549,949 | |
| | |
|
|
| |
|
|
|
DEFERRED INCOME TAXES | | | 77,646 | | | | 80,383 | |
| | |
|
|
| |
|
|
|
LONG-TERM LIABILITY FOR ASSET RETIREMENT OBLIGATIONS | | | 92,008 | | | | 90,707 | |
| | |
|
|
| |
|
|
|
OTHER LONG-TERM LIABILITIES | | | 39,195 | | | | 30,675 | |
| | |
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|
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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, 67,514,467 and 66,541,984 shares issued and 66,977,600 and 66,012,252 outstanding, respectively | | | 338 | | | | 333 | |
Capital in excess of par value | | | 380,782 | | | | 361,120 | |
Retained earnings | | | 425,352 | | | | 342,707 | |
Accumulated other comprehensive loss | | | (40,083 | ) | | | (13,088 | ) |
| | |
|
|
| |
|
|
|
| | | | 766,389 | | | | 691,072 | |
Less treasury stock, at cost, 536,867 and 529,732 shares, respectively | | | 4,319 | | | | 4,319 | |
Less unamortized cost of non-vested stock awards | | | 5,887 | | | | 3,075 | |
| | |
|
|
| |
|
|
|
Total stockholders’ equity | | | 756,183 | | | | 683,678 | |
| | |
|
|
| |
|
|
|
| | | $ | 1,773,384 | | | $ | 1,644,892 | |
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| |
|
|
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-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | | | | | | | |
| | | Six Months Ended June 30,
| |
| | | 2005
| | | 2004
| |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | |
Net income | | $ | 89,643 | | | $ | 56,544 | |
Adjustments to reconcile net income to cash provided by operating activities - | | | | | | | | |
Income from discontinued operations, net of tax | | | (10,743 | ) | | | (3,481 | ) |
Depreciation, depletion and amortization | | | 67,750 | | | | 45,967 | |
Impairment of proved oil and gas properties | | | — | | | | 3,915 | |
Accretion | | | 3,539 | | | | 3,247 | |
Dry hole costs, impairments of unproved oil and gas properties and other | | | 12,010 | | | | 5,684 | |
Provision for deferred income taxes | | | 5,467 | | | | 2,089 | |
Foreign currency exchange (gain) loss | | | 2,335 | | | | (826 | ) |
Gain on dispositions of assets | | | (16 | ) | | | (55 | ) |
Loss on early extinguishment of debt | | | — | | | | 9,903 | |
Stock compensation | | | 3,130 | | | | 5,938 | |
Losses on derivative transactions | | | 43,444 | | | | 444 | |
Other non-cash items included in net income | | | 613 | | | | 647 | |
Increase in receivables | | | (18,928 | ) | | | (16,675 | ) |
Increase (decrease) in payables and accrued liabilities | | | (10,618 | ) | | | 1,744 | |
Other working capital changes | | | (2,296 | ) | | | 4,708 | |
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|
| |
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|
Cash provided by continuing operations | | | 185,330 | | | | 119,793 | |
Cash provided by discontinued operations | | | — | | | | 22,415 | |
| | |
|
|
| |
|
|
|
Cash provided by operating activities | | | 185,330 | | | | 142,208 | |
| | |
|
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| |
|
|
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CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | |
Capital expenditures - | | | | | | | | |
Oil and gas properties | | | (132,743 | ) | | | (95,744 | ) |
Gathering systems and other | | | (1,440 | ) | | | (1,430 | ) |
Payments on non-hedge derivative transactions | | | (12,841 | ) | | | — | |
Other | | | (8,266 | ) | | | (913 | ) |
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| |
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Cash used by investing activities – continuing operations | | | (155,290 | ) | | | (98,087 | ) |
Cash used by investing activities – discontinued operations | | | — | | | | (16,123 | ) |
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Cash used by investing activities | | | (155,290 | ) | | | (114,210 | ) |
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CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | |
Issuance of common stock | | | 8,565 | | | | 4,029 | |
Purchase of treasury stock | | | — | | | | (129 | ) |
Redemption of 9 3/4% Senior Subordinated Notes due 2009 | | | — | | | | (157,313 | ) |
Advance on revolving credit facility and other borrowings | | | 45,000 | | | | 294,000 | |
Payments on revolving credit facility and other borrowings | | | (45,000 | ) | | | (144,900 | ) |
Dividends paid | | | (6,626 | ) | | | (5,798 | ) |
Other | | | 106 | | | | (3,052 | ) |
| | |
|
|
| |
|
|
|
Cash provided (used) by financing activities | | | 2,045 | | | | (13,163 | ) |
| | |
|
|
| |
|
|
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH | | | (502 | ) | | | 634 | |
| | |
|
|
| |
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS | | | 31,583 | | | | 15,469 | |
| | |
CASH AND CASH EQUIVALENTS, beginning of period | | | 124,221 | | | | 32,264 | |
| | |
|
|
| |
|
|
|
CASH AND CASH EQUIVALENTS, end of period | | $ | 155,804 | | | $ | 47,733 | |
| | |
|
|
| |
|
|
|
-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
SUMMARY OPERATING DATA
(Unaudited)
| | | | | | | | |
| | | Three Months Ended June 30,
| | Six Months Ended
June 30,
|
| | | 2005
| | 2004
| | 2005
| | 2004
|
PRODUCTION: | | | | | | | | |
Oil (MBbls) - | | | | | | | | |
U.S. (b) | | 1,727 | | 1,532 | | 3,191 | | 3,045 |
Argentina (a) (c) | | 3,017 | | 2,434 | | 6,101 | | 4,875 |
Bolivia (a) | | 15 | | 21 | | 30 | | 41 |
Yemen (a) | | 342 | | 59 | | 703 | | 59 |
| | | | |
Continuing operations | | 5,101 | | 4,046 | | 10,025 | | 8,020 |
| | | | |
Canada | | — | | 215 | | — | | 450 |
| | | | |
Total | | 5,101 | | 4,261 | | 10,025 | | 8,470 |
Gas (MMcf) - | | | | | | | | |
U.S. (b) | | 7,141 | | 7,125 | | 14,824 | | 13,365 |
Argentina (c) | | 2,228 | | 2,147 | | 4,381 | | 4,179 |
Bolivia | | 1,236 | | 1,829 | | 2,567 | | 3,548 |
| | | | |
Continuing operations | | 10,605 | | 11,101 | | 21,772 | | 21,092 |
| | | | |
Canada | | — | | 3,868 | | — | | 7,806 |
| | | | |
Total | | 10,605 | | 14,969 | | 21,772 | | 28,898 |
| | | | |
MBOE from continuing operations | | 6,869 | | 5,896 | | 13,654 | | 11,535 |
| | | | |
Total MBOE | | 6,869 | | 6,756 | | 13,654 | | 13,286 |
| (a) | Oil production (in MBbls) before the impact of changes in inventories: |
| | | | | | | | |
| | | Three Months Ended June 30,
| | Six Months Ended
June 30,
|
| | | 2005
| | 2004
| | 2005
| | 2004
|
Argentina | | 3,032 | | 2,455 | | 5,856 | | 4,931 |
Bolivia | | 14 | | 22 | | 27 | | 43 |
Yemen | | 391 | | 108 | | 735 | | 109 |
| (b) | U.S. production for the three months and six months ended June 30, 2005, is estimated to have been reduced as a result of mudslides in Ventura County, California by 36 MBbls of oil and 66 MMcf of gas, or 47 MBOE, and 228 MBbls of oil and 304 MMcf of gas, or 279 MBOE, respectively. |
| (c) | Argentina production for the three months and six months ended June 30, 2004, is estimated to have been reduced as the result of a labor strike by 200 MBbls of oil and 165 MMcf of gas, or 228 MBOE and 365 MBbls of oil and 300 MMcf of gas, or 415 MBOE, respectively. |
| | |
| 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
June 30,
| | Six Months Ended June 30,
|
| | | 2005
| | 2004
| | 2005
| | 2004
|
Average Sales Price (including impact of hedges): | | | | | | | | | | | | |
| | | | |
Oil (per Bbl) - | | | | | | | | | | | | |
U.S. | | $ | 38.36 | | $ | 27.12 | | $ | 36.82 | | $ | 27.53 |
Argentina | | | 33.83 | | | 30.29 | | | 32.67 | | | 29.62 |
Bolivia | | | 22.62 | | | 24.67 | | | 22.87 | | | 24.26 |
Yemen | | | 51.02 | | | 29.15 | | | 48.57 | | | 29.15 |
Continuing operations | | | 36.48 | | | 29.04 | | | 35.08 | | | 28.80 |
| | | | |
Canada | | | — | | | 28.80 | | | — | | | 28.30 |
| | | | |
Gas (per Mcf) - | | | | | | | | | | | | |
U.S. | | $ | 6.68 | | $ | 5.45 | | $ | 6.32 | | $ | 5.24 |
Argentina | | | 0.96 | | | 0.66 | | | 0.86 | | | 0.58 |
Bolivia | | | 1.87 | | | 1.54 | | | 1.78 | | | 1.62 |
Continuing operations | | | 4.92 | | | 3.88 | | | 4.69 | | | 3.70 |
| | | | |
Canada | | | — | | | 5.02 | | | — | | | 4.85 |
| | | | |
Average Sales Price (excluding impact of hedges): | | | | | | | | | | | | |
| | | | |
Oil (per Bbl) - | | | | | | | | | | | | |
U.S. | | $ | 45.55 | | $ | 34.54 | | $ | 44.07 | | $ | 33.54 |
Argentina | | | 33.83 | | | 30.29 | | | 32.67 | | | 29.62 |
Bolivia | | | 22.62 | | | 24.67 | | | 22.87 | | | 24.26 |
Yemen | | | 51.02 | | | 29.15 | | | 48.57 | | | 29.15 |
Continuing operations | | | 38.91 | | | 31.85 | | | 37.39 | | | 31.08 |
| | | | |
Canada | | | — | | | 33.94 | | | — | | | 32.29 |
| | | | |
Gas (per Mcf) - | | | | | | | | | | | | |
U.S. | | $ | 6.80 | | $ | 5.52 | | $ | 6.29 | | $ | 5.28 |
Argentina | | | 0.96 | | | 0.66 | | | 0.86 | | | 0.58 |
Bolivia | | | 1.87 | | | 1.54 | | | 1.78 | | | 1.62 |
Continuing operations | | | 5.00 | | | 3.92 | | | 4.67 | | | 3.72 |
| | | | |
Canada | | | — | | | 5.02 | | | — | | | 4.85 |
-Table Follows-
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
REVISED 2005 TARGETS
| | | | | | | | |
| | | Previous
2005
Targets
| | | Revised
2005
Targets(c)
| |
Oil production (MMBbls): | | | | | | | | |
U.S. | | | 6.0 | | | | 6.3 | |
Argentina | | | 12.3 | (e) | | | 12.3 | (e) |
Bolivia | | | 0.1 | | | | 0.1 | |
Yemen | | | 1.4 | | | | 1.6 | |
Total | | | 19.8 | | | | 20.3 | |
| | |
Gas Production (Bcf): | | | | | | | | |
U.S. | | | 28.3 | | | | 28.4 | |
Argentina | | | 8.5 | | | | 8.5 | |
Bolivia | | | 5.0 | | | | 5.0 | |
Total | | | 41.8 | | | | 41.9 | |
| | |
Total MMBOE | | | 26.8 | | | | 27.3 | |
| | |
Assumed NYMEX(a) prices: | | | | | | | | |
Oil | | $ | 50.00 | | | $ | 55.00 | |
Gas | | $ | 6.50 | | | $ | 7.00 | |
| | |
Net realized price (before impact of hedging) as a percent of
NYMEX(a) - Total Company: | | | | | | | | |
Oil | | | 71 | % | | | 74 | % |
Gas | | | 68 | % | | | 70 | % |
| | |
DD&A per BOE (oil and gas only) | | $ | 4.85 | | | $ | 5.00 | |
G&A per BOE | | $ | 2.45 | | | $ | 2.40 | |
| | |
Production, transportation and storage costs per BOE | | $ | 7.25 | | | $ | 7.25 | |
Production, ad valorem and export taxes per BOE | | | 3.05 | | | | 3.55 | |
| | |
|
|
| |
|
|
|
Total LOE per BOE | | $ | 10.30 | | | $ | 10.80 | |
| | |
Non-Acquisition Capital Spending Budget (in millions) | | $ | 250 | | | $ | 285 | |
| | |
Cash Flow (before all exploration expenses, working capital changes and current taxes associated with property sales) (in millions)(d) | | $ | 354 | | | $ | 435 | |
| | |
EBITDAX (in millions)(b)(d) | | $ | 486 | | | $ | 586 | |
| | |
| MMBbls | | – million barrels |
| Bcf | | – billion cubic feet |
| 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 Targets Updated” 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
|
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
|
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 July to December 2005
| | | | NYMEX Floor Reference Price $ Per MMBtu
| | NYMEX Cap Reference Price $ Per MMBtu
|
920,000 | | | | 6.00 | | 6.80 |
1,840,000 | | | | 6.00 | | 8.02 |
920,000 | | | | 6.00 | | 8.73 |
1,840,000 | | | | 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 June 30,
| | | Six Months Ended June 30,
| |
| | | |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
Cash provided by operating activities (GAAP measure) | | $ | 82,337 | | | $ | 57,758 | | | $ | 185,330 | | | $ | 142,208 | |
Adjustments to remove the impact of: | | | | | | | | | | | | | | | | |
Cash provided by discontinued operations | | | — | | | | (12,402 | ) | | | — | | | | (22,415 | ) |
Changes in working capital items related to operating activities | | | 29,570 | | | | 20,646 | | | | 31,842 | | | | 10,223 | |
Exploration geological and geophysical costs | | | 3,685 | | | | 1,681 | | | | 5,745 | | | | 2,881 | |
Payments on derivative transactions included in investing activities | | | (8,492 | ) | | | — | | | | (12,841 | ) | | | — | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Cash flow (non-GAAP measure) | | | 107,100 | | | | 67,683 | | | | 210,076 | | | | 132,897 | |
| | | | |
Current taxes | | | 24,182 | | | | 16,269 | | | | 38,586 | | | | 28,413 | |
Interest expense | | | 11,600 | | | | 12,674 | | | | 23,155 | | | | 26,695 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
EBITDAX (non-GAAP measure) | | $ | 142,882 | | | $ | 96,626 | | | $ | 271,817 | | | $ | 188,005 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
-30-
