| | | | | |
 | | PRESS RELEASE |
| | FOR IMMEDIATE RELEASE |
| | |
| | Contact: | Steven J. Craig
Sr. Vice President
(214) 210-2675 |
REMINGTON OIL AND GAS ANNOUNCES FINANCIAL RESULTS FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2004
Dallas, TX, July 28, 2004 – Remington Oil and Gas Corporation (NYSE: REM) announced financial results for the three and six months ended June 30, 2004.
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | June 30,
| | June 30,
|
| | | 2004
| | 2003
| | 2004
| | 2003
|
Total revenues | | $ | 58,384 | | | $ | 46,003 | | | $ | 104,545 | | | $ | 88,340 | |
Net income | | $ | 14,988 | | | $ | 12,264 | | | $ | 25,987 | | | $ | 23,951 | |
Basic net income per share | | $ | 0.55 | | | $ | 0.46 | | | $ | 0.96 | | | $ | 0.91 | |
Diluted income per share | | $ | 0.53 | | | $ | 0.44 | | | $ | 0.92 | | | $ | 0.86 | |
Cash flow provided by operations | | $ | 48,133 | | | $ | 38,212 | | | $ | 77,595 | | | $ | 63,216 | |
Production Bcfe | | | 9.4 | | | | 8.5 | | | | 17.5 | | | | 15.6 | |
Oil and gas production for the three months ended June 30, 2004, increased by 11% to 9.4 Bcfe compared to 8.5 Bcfe for the same three months of 2003. For the six months oil and gas production increased by 12% to 17.5 Bcfe in 2004 compared to 15.6 Bcfe in 2003.
Net income for the three months ended June 30, 2004, increased by $2.7 million to $15.0 million, or $0.53 diluted income per share, and net income for the six months ended June 30, 2004, increased by $2.0 million to $26.0 million, or $0.92 diluted income per share. Net income in the second quarter was decreased by a $4.8 million pre-tax property impairment charge, $4.5 million of which was associated with the unsuccessful completion of the Fleishaker #2 well at the Tatum Dome prospect in Mississippi. Cash flow from operations increased by $9.9 million, or 26%, and by $14.4 million, or 23%, for the three and six months ended June 30, 2004, compared to the same periods in 2003 respectively. The increases in net income and cash flow from operations reflect primarily the higher revenues from increased production.
Results versus Guidance
The Company provided production guidance of 17.5 Bcfe to 18.5 Bcfe for the first six months of the year. Actual production was 8.1 Bcfe in the first quarter and 9.4 Bcfe in the second quarter for a combined total of 17.5 Bcfe for the first six months of 2004. This was 12% above the first six months of 2003. Total annual production for 2004 is expected to be approximately 40 Bcfe, or 15% above the 34.8 Bcfe produced in 2003.
DD&A was forecast to be between $1.80 and $1.95 per Mcfe produced for the year. Second quarter DD&A was $17.6 million or $1.87 per Mcfe produced. For the first six months of 2004 DD&A was $32.8 million or $1.87 per Mcfe produced. DD&A in the second quarter and for the first six months of 2003 was $1.50 and $1.51, respectively, per Mcfe produced. This increase of $0.36 per Mcfe produced, or 24%, represents the impact of increased finding and development costs over the past few years.
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Lease operating expenses (LOE) were $6.0 million or $0.64 per Mcfe produced for the second quarter of 2004. For the first six months LOE was $12.1 million or $0.69 per Mcfe produced. Annual guidance is for LOE to be between $0.60 and $0.70 per Mcfe produced.
G&A expense was $1.6 million or $0.17 per Mcfe produced for the second quarter. For the first six months, G&A was $3.5 million or $0.20 per Mcfe produced. Guidance was for annual G&A expense to be between $0.21 and $0.28 per Mcfe produced. Included in the G&A is $371,000 in the first quarter and $732,000 for the first six months for stock-based compensation. This is $0.04 per Mcfe produced in both periods. Interest and financing costs were $250,000 for the quarter and $478,000 for the first six months or $0.03 per Mcfe produced. Guidance was for interest costs to be between $0.03 and $0.05 per Mcfe produced for the year.
Dry hole costs for the second quarter were $1.1 million and $6.8 million for the first six months. Annualized guidance for dry hole expense is between $20 million and $24 million. Geological and geophysical costs, which are included in exploration costs on the income statement, were $3.7 million in the second quarter reflecting the initial payment on the purchase of 1,400 blocks of deeper water 3-D data and costs associated with prior seismic agreements. It is anticipated that $2.5 to $3.0 million of geophysical costs will be incurred in each of the remaining quarters of 2004 associated with the same programs.
James A. Watt, Chairman and Chief Executive Officer said, “This was an excellent quarter for Remington. Our balance sheet is in excellent shape, and we have dramatically expanded our seismic data base to generate new prospects for future drilling.”
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)
| | | | | | | | | |
| | | June 30, | | December 31, |
| | | 2004
| | 2003
|
| | | (Unaudited) | | | | |
Assets | | | | | | | | |
Current assets | | | | | | | | |
| Cash and cash equivalents | | $ | 38,051 | | | $ | 31,408 | |
| Accounts receivable | | | 53,643 | | | | 43,004 | |
| Prepaid expenses and other current assets | | | 2,579 | | | | 2,846 | |
| | | |
| | | |
| |
Total current assets | | | 94,273 | | | | 77,258 | |
| | | |
| | | |
| |
Properties | | | | | | | | |
| Oil and gas properties (successful-efforts method) | | | 664,662 | | | | 609,599 | |
| Other properties | | | 2,999 | | | | 3,450 | |
| Accumulated depreciation, depletion and amortization | | | (364,827 | ) | | | (333,011 | ) |
| | | |
| | | |
| |
Total properties | | | 302,834 | | | | 280,038 | |
| | | |
| | | |
| |
Other assets | | | 1,681 | | | | 2,089 | |
| | | |
| | | |
| |
Total assets | | $ | 398,788 | | | $ | 359,385 | |
| | | |
| | | |
| |
Liabilities and stockholders’ equity | | | | | | | | |
Current liabilities | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 60,829 | | | $ | 58,266 | |
| Short-term notes payable | | | 45 | | | | 45 | |
| | | |
| | | |
| |
Total current liabilities | | | 60,874 | | | | 58,311 | |
| | | |
| | | |
| |
Long-term liabilities | | | | | | | | |
| Notes payable | | | 10,000 | | | | 18,000 | |
| Asset retirement obligation | | | 13,656 | | | | 12,446 | |
| Deferred income taxes | | | 40,689 | | | | 28,751 | |
| | | |
| | | |
| |
Total long-term liabilities | | | 64,345 | | | | 59,197 | |
| | | |
| | | |
| |
Total liabilities | | | 125,219 | | | | 117,508 | |
| | | |
| | | |
| |
Commitments and contingencies | | | | | | | | |
Stockholders’ equity | | | | | | | | |
| Preferred stock, $0.01 par value, 25,000,000 shares authorized Shares issued – none | | | | | | | | |
| Common stock, $.01 par value, 100,000,000 shares authorized, 27,550,250 shares issued and 27,515,891 shares outstanding in 2004, 26,946,768 shares issued and 26,912,409 shares outstanding in 2003 | | | 275 | | | | 269 | |
| Additional paid-in capital | | | 127,552 | | | | 120,925 | |
| Restricted common stock | | | 1,573 | | | | 3,156 | |
| Unearned compensation | | | (1,013 | ) | | | (1,668 | ) |
| Retained earnings | | | 145,182 | | | | 119,195 | |
| | | |
| | | |
| |
Total stockholders’ equity | | | 273,569 | | | | 241,877 | |
| | | |
| | | |
| |
Total liabilities and stockholders’ equity | | $ | 398,788 | | | $ | 359,385 | |
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| |
Remington Oil and Gas Corporation
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per-share amounts and prices)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | June 30,
| | June 30,
|
| | | 2004
| | 2003
| | 2004
| | 2003
|
Revenues | | | | | | | | | | | | | | | | |
| Gas sales | | $ | 42,713 | | | $ | 33,196 | | | $ | 74,826 | | | $ | 61,847 | |
| Oil sales | | | 15,552 | | | | 12,584 | | | | 29,494 | | | | 26,237 | |
| Gain on sale of assets and other income | | | 119 | | | | 223 | | | | 225 | | | | 256 | |
| | | |
| | | |
| | | |
| | | |
| |
Total revenues | | | 58,384 | | | | 46,003 | | | | 104,545 | | | | 88,340 | |
| | | |
| | | |
| | | |
| | | |
| |
Costs and expenses | | | | | | | | | | | | | | | | |
| Lease operating | | | 6,028 | | | | 5,277 | | | | 12,076 | | | | 9,669 | |
| Exploration | | | 4,878 | | | | 6,115 | | | | 10,406 | | | | 13,017 | |
| Depreciation, depletion and amortization | | | 17,617 | | | | 12,792 | | | | 32,763 | | | | 23,549 | |
| Impairment | | | 4,750 | | | | 251 | | | | 4,986 | | | | 447 | |
| General and administrative | | | 1,625 | | | | 2,214 | | | | 3,547 | | | | 3,924 | |
| Interest and financing | | | 250 | | | | 485 | | | | 478 | | | | 885 | |
| | | |
| | | |
| | | |
| | | |
| |
Total costs and expenses | | | 35,148 | | | | 27,134 | | | | 64,256 | | | | 51,491 | |
| | | |
| | | |
| | | |
| | | |
| |
Income before taxes | | | 23,236 | | | | 18,869 | | | | 40,289 | | | | 36,849 | |
| | | |
| | | |
| | | |
| | | |
| |
| Income tax expense | | | 8,248 | | | | 6,605 | | | | 14,302 | | | | 12,898 | |
| | | |
| | | |
| | | |
| | | |
| |
Net income | | $ | 14,988 | | | $ | 12,264 | | | $ | 25,987 | | | $ | 23,951 | |
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| | | |
| | | |
| | | |
| |
Basic income per share | | $ | 0.55 | | | $ | 0.46 | | | $ | 0.96 | | | $ | 0.91 | |
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| | | |
| | | |
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| |
Diluted income per share | | $ | 0.53 | | | $ | 0.44 | | | $ | 0.92 | | | $ | 0.86 | |
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| | | |
| | | |
| | | |
| |
Average shares outstanding | | | | | | | | | | | | | | | | |
| Basic | | | 27,287 | | | | 26,536 | | | | 27,131 | | | | 26,436 | |
| Diluted | | | 28,218 | | | | 27,844 | | | | 28,190 | | | | 27,910 | |
Production | | | | | | | | | | | | | | | | |
| Gas (Mcf) | | | 6,869 | | | | 5,855 | | | | 12,461 | | | | 10,360 | |
| Oil (Bbls) | | | 428 | | | | 447 | | | | 841 | | | | 872 | |
| Mcfe (1 barrel of oil is equivalent to 6 Mcf of gas) | | | 9,437 | | | | 8,537 | | | | 17,507 | | | | 15,592 | |
Average prices | | | | | | | | | | | | | | | | |
| Gas | | $ | 6.22 | | | $ | 5.67 | | | $ | 6.00 | | | $ | 5.97 | |
| Oil | | $ | 36.34 | | | $ | 28.15 | | | $ | 35.07 | | | $ | 30.09 | |
| Mcfe | | $ | 6.17 | | | $ | 5.36 | | | $ | 5.96 | | | $ | 5.65 | |
Remington Oil and Gas Corporation
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
| | | | | | | | | |
| | | Six Months Ended |
| | | June 30,
|
| | | 2004
| | 2003
|
Cash flow provided by operations | | | | | | | | |
Net income | | $ | 25,987 | | | $ | 23,951 | |
| Adjustments to reconcile net income | | | | | | | | |
| Depreciation, depletion and amortization | | | 32,763 | | | | 23,549 | |
| Deferred income taxes | | | 14,152 | | | | 12,898 | |
| Amortization of deferred charges | | | 91 | | | | 116 | |
| Dry hole costs | | | 6,753 | | | | 12,312 | |
| Impairment costs | | | 4,986 | | | | 447 | |
| Cash paid for asset retirements | | | (377 | ) | | | (614 | ) |
| Stock based compensation | | | 732 | | | | 792 | |
| Changes in working capital | | | | | | | | |
| (Increase) in accounts receivable | | | (10,630 | ) | | | (6,223 | ) |
| Decrease (increase) in prepaid expenses and other current assets | | | 575 | | | | (2,739 | ) |
| Increase (decrease) in accounts payable and accrued liabilities | | | 2,563 | | | | (1,273 | ) |
| | | |
| | | |
| |
Net cash flow provided by operations | | | 77,595 | | | | 63,216 | |
| | | |
| | | |
| |
Cash from investing activities | | | | | | | | |
| Payments for capital expenditures | | | (65,711 | ) | | | (63,460 | ) |
| | | |
| | | |
| |
Net cash (used in) investing activities | | | (65,711 | ) | | | (63,460 | ) |
| | | |
| | | |
| |
Cash from financing activities | | | | | | | | |
| Loan origination costs | | | — | | | | (293 | ) |
| Payments on notes payable and other long-term payables | | | (8,000 | ) | | | (679 | ) |
| Common stock issued | | | 3,404 | | | | 1,770 | |
| Treasury stock acquired and retired | | | (645 | ) | | | (654 | ) |
| | | |
| | | |
| |
Net cash (used in) provided by financing activities | | | (5,241 | ) | | | 144 | |
| | | |
| | | |
| |
Net increase (decrease) in cash and cash equivalents | | | 6,643 | | | | (100 | ) |
| Cash and cash equivalents at beginning of period | | | 31,408 | | | | 14,929 | |
| | | |
| | | |
| |
Cash and cash equivalents at end of period | | $ | 38,051 | | | $ | 14,829 | |
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