Nuevo Energy 8-K Nuevo Energy Reports a 141% Increase in Income From Continuing Operations

EXHIBIT 99.1

Nuevo Energy Reports a 141% Increase in Income
From Continuing Operations

HOUSTON — Nuevo Energy Company (NYSE: NEV) today reported net income of $10.0 million, or $0.51 per diluted share in the third quarter 2003, compared to $6.2 million, or $0.35 per diluted share in the third quarter 2002. Income from continuing operations for the third quarter 2003 was $9.4 million, or $0.48 per diluted share versus $3.9 million, or $0.22 per diluted share in the year ago period. The 141% increase in income from continuing operations in the third quarter 2003 versus the year ago period reflects higher realized natural gas prices, increased crude oil and natural gas production, and reduced interest expense and exploration costs.

Net cash provided by operating activities was $45.2 million in the third quarter 2003 compared to $38.5 million in the same period in 2002. Discretionary cash flow, a non-GAAP financial measure, was $37.4 million in the third quarter 2003 compared to $33.4 million in the third quarter 2002.

“This was another strong quarter for Nuevo in terms of financial performance,” commented Jim Payne, Chairman, President and CEO. “Our financial results reflect an increase in oil and gas production and continued financial discipline which in turn resulted in a significant decline in our financial leverage.”

Production and Prices
Total production from continuing operations increased 9% to 48.8 thousand barrels of oil equivalent (MBOE) per day in the third quarter 2003 compared to 44.9 MBOE per day in the year ago period. Production from our discontinued operations was 0.7 MBOE per day in the third quarter 2003 and 4.0 MBOE per day in the third quarter 2002. Crude oil production of 42.4 thousand barrels (MBbls) per day was 6% higher than 39.9 MBbls per day in the comparable period in 2002 primarily attributable to increased production from the Point Pedernales Field offshore California (increased working interest) and the Belridge Field onshore California, and production from our September 2002 West Texas acquisition. The realized crude oil price decreased 3% to $18.99 per barrel in the third quarter 2003 versus $19.56 per barrel in the year ago period. Included in the realized crude oil prices are hedging losses of $2.03 per barrel in the third quarter 2003 and $1.59 per barrel in the comparable period a year ago.

Nuevo’s third quarter 2003 natural gas production increased 29% to 38.3 million cubic feet (MMcf) per day from 29.7 MMcf per day in the third quarter 2002 due to production from our West Texas acquisition which more than offset lower production offshore California primarily attributable to a natural field decline at the Pitas Point Field. Nuevo’s realized natural gas price increased 18% to $3.86 per thousand cubic feet (Mcf) in the third quarter 2003 compared to $3.26 per Mcf in the year ago period. Included in the realized natural gas price is a hedging loss of $0.08 per Mcf in the third quarter 2003. No natural gas was hedged in the year ago period.

Drilling Update
The completion of the thermal drilling program onshore California resulted in a production increase of 700 barrels per day in the third quarter 2003 compared to the second quarter 2003. Production is expected to increase further in the fourth quarter 2003 as production from these new wells will be enhanced by steaming operations.

In the third quarter 2003, two thrusted Strawn wells were drilled in the Pakenham Field in West Texas. The most prolific of these wells had an initial production rate of 2.8 MMcf per day in the third quarter 2003, compared to an average initial production rate per well of 1.5 MMcf per day from the thrusted Strawn formation. For the remainder of the year, Nuevo will drill two additional shallow Wolfcamp wells in the Pakenham Field which will complete the 2003 drilling program of six shallow non-thrusted and three

thrusted wells. In the deeper formation in the Pakenham Field, the Ellenburger test well, spudded in July 2003, was plugged and abandoned due to downhole drilling complications and mechanical problems. Early in the fourth quarter, Nuevo moved the rig to a new location in the Pakenham Field and spudded a second Ellenburger well.

Costs and Expenses
Total costs and expenses in the third quarter 2003 were $64.5 million versus $63.3 million in the year ago period.

Lease operating expense was $39.6 million in the third quarter 2003 compared to $36.8 million in the year ago period. Excluding the natural gas cost, lease operating expense was $29.3 million in the third quarter 2003 versus $28.7 million in the comparable period in 2002. Natural gas costs increased 20% to $3.69 per Mcf in the third quarter 2003 versus $3.08 per Mcf in the year ago period. Natural gas is used to generate steam which in turn facilitates production of heavy oil onshore California. Exploration costs declined 87% to $0.3 million in the third quarter 2003 compared to $2.3 million in the year ago period which included the write-off of our Anaguid permit in Tunisia. DD&A declined 4% to $17.3 million in the third quarter 2003 compared to $18.0 million in the year ago period primarily due to a lower DD&A rate which more than offset an increase in crude oil and natural gas production. The DD&A expense averaged $3.86 per barrel oil equivalent (BOE) in the third quarter 2003 compared to $4.36 per BOE in the year ago period. General and administrative costs remained relatively flat year-over-year at $6.6 million in the third quarter 2003 versus $6.5 million in the same period in 2002.

Interest expense declined 35% to $6.2 million in the third quarter 2003 compared to $9.5 million in the year ago period due to the second quarter 2003 redemption of $159.6 million of 9 1/2% Notes, resulting in $3.8 million of interest expense savings in the third quarter 2003.

Capital Expenditures
Capital expenditures in the third quarter 2003 were $18.6 million compared to $10.6 million in the third quarter 2002. Capital expenditures for the nine months 2003 were $51.1 million compared to $41.2 million in the comparable period in 2002. Our 2003 capital program will be in the range of $60-$65 million.

Balance Sheet
At September 30, 2003, total debt outstanding was $276.3 million versus $438.3 million at year-end 2002. At the end of the third quarter 2003, Nuevo’s debt to capital ratio, as defined in our credit agreement, declined to 42% compared to 57% at year-end 2002. The fixed charge coverage ratio improved to 4.9 times for the four quarters ending September 30, 2003 versus 3.7 times at year-end 2002.

For the nine months ended September 30, 2003, Nuevo repaid $160 million of high coupon debt. As of November 5, 2003, Nuevo completed the redemption of an additional $25 million of 9 1/2% Senior Subordinated Notes due 2008, leaving a balance outstanding for this issue of $75 million.

As of September 30, 2003, Nuevo had assets held for sale with a book value of approximately $37.1 million related to California real estate assets.

Third Quarter Conference Call
Nuevo will host a conference call to review third quarter 2003 financial results today at 3:00 p.m. EST (2:00 p.m. CST). There will also be a simultaneous web cast of the conference call which can be accessed from Nuevo’s web site at www.nuevoenergy.com. A copy of this press release will also be posted on our web site.

Financial Guidance
The fourth quarter 2003 and year 2003 financial and operating guidance is provided in a separate press release and will be posted on our web site.

Nuevo Energy Company is a Houston, Texas-based company primarily engaged in the acquisition, exploitation, development, exploration and production of crude oil and natural gas. Nuevo’s domestic producing properties are located onshore and offshore California and in West Texas. Nuevo is the largest independent producer of crude oil and natural gas in California. The Company’s international producing property is located offshore the Republic of Congo in West Africa. To learn more about Nuevo, please refer to the Company’s internet site at http://www.nuevoenergy.com.

This press release includes “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this press release, including without limitation, estimated quantities and net present value of reserves, estimated production volumes, business strategies, plans and objectives of management of the Company for future operations and covenant compliance and capital expenditures are forward-looking statements. Although the Company believes that the assumptions upon which such forward-looking statements are based are reasonable, it can give no assurances that such assumptions will prove to have been correct. Important factors that could cause actual results to differ materially from the Company’s expectations (“Cautionary Statements”) and projections include volatility in oil and gas prices, operating risks, the risks associated with reserve replacement, competition from other companies and other factors set forth in the Company’s Annual Report on Form 10-K and other filings made with the SEC and incorporated herein. All subsequent written and oral forward-looking statements and projections attributable to the Company or to persons acting on its behalf are expressly qualified by the Cautionary Statements.

NUEVO ENERGY COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)

			Three Months Ended September 30,						Nine Months Ended September 30,
			2003			2002			2003			2002
Production
	Crude oil and liquids (MBbls)			3,902			3,674			11,527			11,279
		Per Day		42.4			39.9			42.2			41.3
	Natural Gas (MMcf)			3,527			2,733			10,380			7,852
		Per Day		38.3			29.7			38.0			28.8
	MBOE			4,490			4,130			13,257			12,588
		Per Day		48.8			44.9			48.6			46.1
Prices
	Crude oil and liquids ($/Bbl)
		Unhedged	$	21.02		$	21.15		$	23.05		$	18.61
		Hedged		18.99			19.56			20.62			18.32
	Natural gas ($/Mcf)
		Unhedged	$	3.94		$	3.26		$	4.34		$	2.87
		Hedged		3.86			3.26			4.08			2.87
Revenues
	Crude oil and liquids		$	74,093		$	71,838		$	237,713		$	206,595
	Natural gas			13,614			8,897			42,352			22,551
	Other			127			3,515			540			3,563
				87,834			84,250			280,605			232,709
Costs and Expenses
	Lease operating expenses			39,632			36,841			121,068			103,881
	Exploration costs			284			2,318			1,673			3,800
	Depletion, depreciation, amortization and accretion			17,349			18,018			52,447			52,724
	Impairment			—			—			469			—
	General and administrative			6,572			6,525			19,635			19,840
	Other			394			186			254			(12	)
	Loss (gain) on disposition of properties			223			(620	)		(4,234	)		(15,946	)
				64,454			63,268			191,312			164,287
Income From Operations				23,380			20,982			89,293			68,422
	Derivative gain (loss)			358			(3,371	)		(1,369	)		(4,304	)
	Interest income			16			53			319			227
	Interest expense			(6,232	)		(9,528	)		(24,588	)		(27,744	)
	Loss on early extinguishment of debt			—			—			(10,892	)		—
	Dividends on TECONS			(1,653	)		(1,653	)		(4,959	)		(4,959	)
Income From Continuing Operations
Before Income Tax				15,869			6,483			47,804			31,642
	Income tax expense
		Current		(1,756	)		1,025			324			1,025
		Deferred		8,233			1,601			18,813			11,800
				6,477			2,626			19,137			12,825
Income From Continuing Operations				9,392			3,857			28,667			18,817
	Income from discontinued operations, including gain(loss) on disposition, net of income taxes			640			2,298			5,964			5,366
	Cumulative effect of a change in accounting principle, net of income taxes			—			—			8,496			-
Net Income			$	10,032		$	6,155		$	43,127		$	24,183
Earnings Per Share
	Basic
		Income from continuing operations	$	0.49		$	0.22		$	1.49		$	1.10
		Income from discontinued operations		0.03			0.13			0.31			0.31
		Cumulative effect of change in accounting principle		—			—			0.44			—
		Net income	$	0.52		$	0.35		$	2.24		$	1.41
	Diluted
		Income from continuing operations	$	0.48		$	0.22		$	1.47		$	1.09
		Income from discontinued operations		0.03			0.13			0.30			0.31
		Cumulative effect of change in accounting principle		—			—			0.44			—
		Net income	$	0.51		$	0.35		$	2.21		$	1.40
Weighted Average Shares Outstanding
	Basic			19,387			17,399			19,283			17,161
	Diluted			19,635			17,502			19,472			17,308

NUEVO ENERGY COMPANY
SUMMARY BALANCE SHEET
(In thousands)

		September 30,		December 31,
		2003		2002
Condensed Balance Sheet
Assets
	Current assets (1)	$	57,913	$	64,863
	Assets held for sale		37,097		92,738
	Property, plant and equipment, net		699,689		613,713
	Deferred tax assets, net		17,260		43,258
	Goodwill		17,121		19,664
	Other assets		12,014		20,935
		$	841,094	$	855,171
Liabilities and Stockholders’ Equity
	Other current liabilities (2)	$	104,538	$	100,744
	Total debt		276,325		438,277
	Interest rate swap adjustment		14,777		13,834
	Long-term debt		291,102		452,111
	Asset retirement obligation		101,053		—
	Other long-term liabilities		9,525		13,040
	TECONS		115,000		115,000
	Stockholders’ equity (3)		219,876		174,276
		$	841,094	$	855,171
Common Stock Outstanding at Period End			19,473		19,181

(1) Current assets excluding SFAS 133 (Accounting for Derivative Instruments and Hedging Activities) were $49.5 million at September 30, 2003 and $57.2 million at December 31, 2002.

(2) Current liabilities excluding SFAS 133 were $79.3 million at September 30, 2003 and $79.9 million at December 31, 2002.

(3) Includes ($14.1) million and ($11.5) million of other comprehensive (loss) income in 2003 and 2002, respectively.

Reconciliation of Non-GAAP Financial Measures
(In thousands)

Discretionary cash flow represents net cash provided by operating activities before changes in assets and liabilities and exploration expense, less interest capitalized. (This definition may differ from definitions used by other companies.) Discretionary cash flow is presented because the Company believes it is a useful alternative to net cash provided by operating activities under generally accepted accounting principles (GAAP). The Company believes that discretionary cash flow is widely accepted as a financial indicator of an exploration and production (E&P) company’s ability to generate cash which is used to internally fund exploration and development activities, service debt, pay dividends or fund acquisitions. This measure is widely used by investors and security analysts in the valuation, comparison, and investment recommendations of companies within the E&P sector. Discretionary cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flow from operating, investing, or financing activities, as an indicator of cash flow, as a measure of liquidity, or as an alternative to net income.

			Three Months Ended September 30,						Nine Months Ended September 30,
			2003			2002			2003			2002
Discretionary Cash Flow			$	37,370		$	33,395		$	118,919		$	90,247
	Adjustments:
		Working capital changes, net of non-cash		7,784			4,830			11,351			(22,482	)
		Exploration costs excluding dry hole costs		(299	)		(182	)		(1,402	)		(1,603	)
		Interest capitalized		343			457			1,403			1,345
Net cash provided by operating activities			$	45,198		$	38,500		$	130,271		$	67,507

Lease operating expenses excluding steam costs is a non-GAAP financial measure. Nuevo’s heavy oil production in California is produced using thermal techniques in which natural gas is used to generate steam which facilitates the production of heavy oil. Over time, natural gas prices exhibit a high degree of price volatility. Due to natural gas price volatility and specialized thermal techniques used to produce heavy California oil, the Company believes that lease operating expenses excluding steam costs are more comparable to lease operating expenses incurred by the majority of exploration and production companies.

			Three Months Ended September 30,				Nine Months Ended September 30,
			2003		2002		2003		2002
Lease Operating Expenses Excluding Steam Costs			$	29,266	$	28,699	$	86,331	$	80,897
	Adjustment:
		Steam costs		10,366		8,142		34,737		22,984
Lease Operating Expenses			$	39,632	$	36,841	$	121,068	$	103,881

Total debt represents bank debt and long-term fixed rate debt. Total debt is presented because the Company believes it is a useful alternative to long-term debt under GAAP. The Company believes that total debt is a more accurate representation of Nuevo’s debt obligations than long-term debt which includes SFAS No. 133 adjustments associated with the Company’s interest rate swaps. Total debt is widely used by investors and security analysts in the valuation, comparison, and investment recommendations of companies within the E&P sector.

			09/30/03		12/31/02
Total Debt			$	276,325	$	438,277
	Adjustments:
		Interest rate swaps — fair value adjustment		—		2,161
		Interest rate swaps — termination gain		14,777		11,673
Long-Term Debt			$	291,102	$	452,111