 | PRESS RELEASE | |
| FOR IMMEDIATE RELEASE |
| Contact: | Steven J. Craig | ||
| Sr. Vice President | |||
| (214) 210-2675 |
REMINGTON OIL AND GAS CORPORATION ANNOUNCES
FIRST QUARTER 2004 EARNINGS
Dallas, TX, April 27, 2004, – Remington Oil and Gas Corporation (NYSE: REM) announced the following first quarter financial information:
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2004 | 2003 | |||||||
| (In thousands, except per share data) | ||||||||
| Revenues | $ | 46,163 | $ | 42,337 | ||||
| Net income | $ | 11,001 | $ | 11,687 | ||||
| Weighted average diluted shares | 28,161 | 27,970 | ||||||
| Diluted income per share | $ | 0.39 | $ | 0.42 | ||||
| Production Bcfe | 8.1 | 7.1 | ||||||
| Average gas price | $ | 5.74 | $ | 6.36 | ||||
| Average oil price | $ | 33.76 | $ | 32.05 | ||||
Results versus 1st Quarter 2003
Total revenues and net cash flow increased during the first quarter of 2004 because of higher gas production and increased average oil prices, partially offset by lower gas prices and slightly lower oil production when compared to the first quarter of 2003. Net income decreased slightly because of higher operating costs and depreciation, depletion, and amortization expenses in 2004 compared to 2003. Gas sales revenue increased by $3.5 million, or 12%, and oil sales revenue increased by $290,000, or 2%. Total gas production increased by 24% primarily from new properties in the Gulf of Mexico. Average oil prices increased from $32.05 per barrel to $33.76 per barrel, while average gas prices decreased from $6.36 per Mcf in 2003 to $5.74 per Mcf in 2004.
Operating costs and expenses were $0.75 per Mcfe in 2004 compared to $0.62 per Mcfe in 2003 primarily due to workover costs to replace tubing on Eugene Island 148. Exploration expenses decreased primarily because of lower dry hole costs for wells drilled in the Gulf of Mexico during the first quarter of 2004. Depreciation, depletion, and amortization increased from $1.52 per Mcfe to $1.88 per Mcfe in 2004 reflecting increased finding and development costs in the Gulf of Mexico.
General and administrative expenses did not change significantly at $0.24 per Mcfe for both of the quarters ending March 31, 2004 and 2003. General and administrative expense includes stock based compensation expense consisting of the amortized compensation cost related to stock grants and directors fees paid in common stock. Interest and financing costs decreased to $0.03 per Mcfe, or by 50%, due to lower outstanding debt in 2004. At the end of the quarter our bank debt was reduced to $10.0 million from $37.4 million in the first quarter of 2003.
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Results versus Guidance
In early January, Remington provided production guidance of 17.5 – 18.5 Bcfe for the first six months of 2004. The 8.1 Bcfe for the first quarter falls within that guidance as weather downtime is normally high during this time. Production was negatively affected by a major rig workover to replace production tubing at our Eugene Island 148 field. Production has been restored in the well. DD&A for the quarter was $1.88/Mcfe versus full-year guidance of $1.80 – $1.95/Mcfe. LOE was $0.75 versus full-year guidance of $0.60 – $0.70 reflecting the added costs of the Eugene Island 148 workover. G&A and interest costs were $0.24/Mcfe and $0.03/Mcfe, respectively, for the quarter versus full-year guidance of $0.21 – $0.28/Mcfe and $0.03 – $0.05/Mcfe. Dry hole costs were estimated at $20-$24 million for the year versus $5.6 million for the quarter.
James A. Watt, President and Chief Executive Officer stated,"Production is forecast to increase in the second quarter as several recent discoveries come on line. So far this year the majority of our drilling operations have been for wells that will add production in 2004. We will now concentrate on wells that will add new reserves and establish production for 2005 and beyond.”
Remington Oil and Gas Corporation is an independent oil and gas exploration and production company headquartered in Dallas, Texas, with operations concentrating in the onshore and offshore regions of the Gulf Coast.
Statements concerning future revenues and expenses, production volumes, results of exploration, exploitation, development, acquisition and operations expenditures, and prospective reserve levels of prospects or wells are forward-looking statements. Prospect size and reserve levels are often referred to as “potential” or “un-risked” reserves and are based on the Company’s internal estimates from the volumetric calculations or analogous production. Other forward-looking statements are based on assumptions concerning commodity prices, drilling results, recovery factors for wells, production rates, and operating, administrative and interest costs that management believes are reasonable based on currently available information; however, management’s assumptions and the Company’s future performance are subject to a wide range of business, mechanical, political, environmental, and geologic risks. There is no assurance that these goals, projections, costs, expenses, reserve levels, and production volumes can or will be met. Further information is available in the Company’s filings with the Securities and Exchange Commission, which are herein incorporated by this reference. Information in this document should be reviewed in combination with the Company’s filings with the Securities and Exchange Commission and information available on the Company’s website at www.remoil.net.
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Remington Oil and Gas Corporation
Condensed Consolidated Balance Sheets
(In thousands, except share data)
| March 31, | December 31, | |||||||
| 2004 | 2003 | |||||||
| (Unaudited) | ||||||||
Assets | ||||||||
Current assets | ||||||||
| Cash and cash equivalents | $ | 22,069 | $ | 31,408 | ||||
| Accounts receivable | 49,760 | 43,004 | ||||||
| Prepaid drilling costs | 346 | 476 | ||||||
| Prepaid expenses and other current assets | 3,045 | 2,370 | ||||||
Total current assets | 75,220 | 77,258 | ||||||
Properties | ||||||||
| Oil and gas properties (successful-efforts method) | 634,947 | 609,599 | ||||||
| Other properties | 2,961 | 3,450 | ||||||
| Accumulated depreciation, depletion and amortization | (347,437 | ) | (333,011 | ) | ||||
Total properties | 290,471 | 280,038 | ||||||
Other assets | 1,883 | 2,089 | ||||||
Total assets | $ | 367,574 | $ | 359,385 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 56,427 | $ | 58,266 | ||||
| Short-term notes payable and current portion of other long-term payables | 45 | 45 | ||||||
Total current liabilities | 56,472 | 58,311 | ||||||
Long-term liabilities | ||||||||
| Notes payable | 10,000 | 18,000 | ||||||
| Asset retirement obligation | 13,131 | 12,446 | ||||||
| Deferred income taxes | 34,628 | 28,751 | ||||||
Total long-term liabilities | 57,759 | 59,197 | ||||||
Total liabilities | 114,231 | 117,508 | ||||||
| Commitments and contingencies | ||||||||
Stockholders’ equity | ||||||||
| Preferred stock, $.01 par value, 25,000,000 shares authorized, no shares Outstanding | — | — | ||||||
| Common stock, $.01 par value, 100,000,000 shares authorized, 27,047,160 shares issued and 27,012,801 shares outstanding in 2004, 26,946,768 shares issued and 26,912,409 shares outstanding in 2003 | 270 | 269 | ||||||
| Additional paid-in capital | 121,848 | 120,925 | ||||||
| Restricted common stock | 2,370 | 3,156 | ||||||
| Unearned compensation | (1,341 | ) | (1,668 | ) | ||||
| Retained earnings | 130,196 | 119,195 | ||||||
Total stockholders’ equity | 253,343 | 241,877 | ||||||
Total liabilities and stockholders’ equity | $ | 367,574 | $ | 359,385 | ||||
Remington Oil and Gas Corporation
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
| Three Months Ended March 31, | ||||||||
| 2004 | 2003 | |||||||
Revenues | ||||||||
| Oil sales | $ | 13,943 | $ | 13,653 | ||||
| Gas sales | 32,114 | 28,651 | ||||||
| Other income | 106 | 33 | ||||||
Total revenues | 46,163 | 42,337 | ||||||
Costs and expenses | ||||||||
| Operating | 6,048 | 4,392 | ||||||
| Exploration | 5,764 | 7,098 | ||||||
| Depreciation, depletion and amortization | 15,146 | 10,757 | ||||||
| General and administrative | 1,922 | 1,710 | ||||||
| Interest and financing | 228 | 400 | ||||||
Total costs and expenses | 29,108 | 24,357 | ||||||
Income before income taxes | 17,055 | 17,980 | ||||||
| Income tax expense | 6,054 | 6,293 | ||||||
Net income | $ | 11,001 | $ | 11,687 | ||||
Basic income per share | $ | 0.41 | $ | 0.44 | ||||
Diluted income per share | $ | 0.39 | $ | 0.42 | ||||
Weighted average shares outstanding (Basic) | 26,975 | 26,340 | ||||||
Weighted average shares outstanding (Diluted) | 28,161 | 27,970 | ||||||
Production | ||||||||
| Oil (MBbls) | 413 | 426 | ||||||
| Gas (MMcf) | 5,592 | 4,505 | ||||||
Average Prices | ||||||||
| Oil | $ | 33.76 | $ | 32.05 | ||||
| Gas | $ | 5.74 | $ | 6.36 | ||||
Remington Oil and Gas Corporation
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2004 | 2003 | |||||||
Cash flow provided by operations | ||||||||
Net income | $ | 11,001 | $ | 11,687 | ||||
| Adjustments to reconcile net income | ||||||||
| Depreciation, depletion and amortization | 15,146 | 10,757 | ||||||
| Deferred income taxes | 6,054 | 6,293 | ||||||
| Amortization of deferred charges | 46 | 64 | ||||||
| Dry hole and impairment costs | 5,855 | 6,745 | ||||||
| Cash paid for dismantlement | (22 | ) | (296 | ) | ||||
| Stock based compensation | 362 | 419 | ||||||
Changes in working capital | ||||||||
| (Increase) in accounts receivable | (6,754 | ) | (14,733 | ) | ||||
| (Increase) in prepaid expenses and other current assets | (387 | ) | (2,549 | ) | ||||
| Increase (decrease) in accounts payable and accrued expenses | (1,839 | ) | 6,617 | |||||
Net cash flow provided by operations | 29,462 | 25,004 | ||||||
Cash from investing activities | ||||||||
| Capital expenditures | (30,727 | ) | (24,614 | ) | ||||
Net cash (used in) investing activities | (30,727 | ) | (24,614 | ) | ||||
Cash from financing activities | ||||||||
| Payments on notes payable and other long-term payables | (8,000 | ) | (267 | ) | ||||
| Common stock issued | 162 | 63 | ||||||
| Purchase of treasury stock | (236 | ) | (301 | ) | ||||
Net cash (used in) financing activities | (8,074 | ) | (505 | ) | ||||
Net (decrease) in cash and cash equivalents | (9,339 | ) | (115 | ) | ||||
| Cash and cash equivalents at beginning of period | 31,408 | 14,929 | ||||||
Cash and cash equivalents at end of period | $ | 22,069 | $ | 14,814 | ||||
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