![]() | 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 NINE MONTHS ENDED SEPTEMBER 30, 2004
Dallas, TX, October 27, 2004 — Remington Oil and Gas Corporation (NYSE: REM) announced financial results for the three and nine months ended September 30, 2004.
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
(in thousands, except per-share and production data) | ||||||||||||||||
Total revenues | $ | 60,096 | $ | 46,965 | $ | 164,641 | $ | 135,306 | ||||||||
Net income | $ | 15,639 | $ | 10,068 | $ | 41,626 | $ | 34,020 | ||||||||
Basic net income per share | $ | 0.57 | $ | 0.38 | $ | 1.53 | $ | 1.28 | ||||||||
Diluted income per share | $ | 0.55 | $ | 0.36 | $ | 1.47 | $ | 1.22 | ||||||||
Production (BCFE) | 10.2 | 9.5 | 27.7 | 25.1 |
Oil and natural gas production for the three months ended September 30, 2004, increased 7.3% to 10.2 Bcfe compared to 9.5 Bcfe for the same three months of 2003. This represents the highest production volume ever achieved by the Company in spite of significant downtime due to Hurricane Ivan. For the nine months, oil and natural gas production increased by 10.4% to 27.7 Bcfe in 2004 compared to 25.1 Bcfe in 2003.
Net income for the three months ended September 30, 2004, increased by $5.6 million to $15.6 million, or $0.55 diluted income per share, and net income for the nine months ended September 30, 2004, increased by $7.6 million to $41.6 million, or $1.47 diluted income per share. Cash flow from operations increased by $39.5 million to $128.5 million, or 44.4%, for the nine months ended September 30, 2004, compared to the same period in 2003.
Production increases and higher commodity prices combined to raise total revenues 28% to $60.1 million for the third quarter and 21.7% to $164.6 million for the first nine months of 2004. Natural gas revenues climbed 23.6% to $42.7 million and oil revenues grew 39.8% to $17.2 million for the third quarter, respectively. For the nine month period, natural gas revenues increased 21.9% to $117.6 million and oil revenues grew 21.2% to $46.7 million.
Impairment expense during the third quarter of 2004 equaled $3.4 million due largely to a $3.1 million charge associated with High Island Block 441. For the first nine months of 2004, impairment expense amounted to $8.4 million.
Results versus Guidance
The Company estimates total production for 2004 to be approximately 40 Bcfe, or 15% above the 34.8 Bcfe produced in 2003. Achieving our targeted production goal for the year is dependent on both weather conditions and timely availability of offshore installation equipment and personnel for several new projects scheduled for installation during the fourth quarter 2004.
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Third quarter DD&A was $18.5 million or $1.81 per Mcfe produced. For the first nine months of 2004 DD&A was $51.3 million or $1.85 per Mcfe produced. DD&A was forecast to be between $1.80 and $1.95 per Mcfe produced for the year.
Lease operating expenses (LOE) were $6.8 million or $0.66 per Mcfe produced for the third quarter of 2004. For the first nine months LOE was $18.9 million or $0.68 per Mcfe produced. Annual guidance is for LOE to be between $0.60 and $0.70 per Mcfe produced.
G&A expense was $1.3 million or $0.12 per Mcfe produced for the third quarter. For the first nine months, G&A was $4.8 million or $0.17 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 $939,000 of stock-based compensation for the nine month period and $207,000 for the third quarter. Interest and financing costs were $305,000 for the quarter and $783,000 for the first nine 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.
Exploration costs, reflecting geological and geophysical costs and dry hole costs, were $5.5 million in the third quarter. Geological and geophysical costs were approximately $3.0 million, reflecting $1.0 million for this quarter’s license fees for deeper water 3-D seismic data and $1.9 million in costs associated with prior seismic agreements. Dry hole costs were $2.5 million for the third quarter and $9.2 million for the first nine months. Annualized guidance for dry hole expense is between $20 million and $24 million.
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)
September 30, | December 31, | |||||||
Assets | 2004 | 2003 | ||||||
Current assets | (Unaudited) | |||||||
Cash and cash equivalents | $ | 36,812 | $ | 31,408 | ||||
Accounts receivable | 52,039 | 43,004 | ||||||
Prepaid expenses and other current assets | 5,364 | 2,846 | ||||||
Total current assets | 94,215 | 77,258 | ||||||
Properties | ||||||||
Oil and natural gas properties (successful-efforts method) | 713,604 | 609,599 | ||||||
Other properties | 3,123 | 3,450 | ||||||
Accumulated depreciation, depletion and amortization | (386,178 | ) | (333,011 | ) | ||||
Total properties | 330,549 | 280,038 | ||||||
Other assets | 1,402 | 2,089 | ||||||
Total assets | $ | 426,166 | $ | 359,385 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 64,617 | $ | 58,266 | ||||
Short-term notes payable | 45 | 45 | ||||||
Total current liabilities | 64,662 | 58,311 | ||||||
Long-term liabilities | ||||||||
Notes payable | 5,000 | 18,000 | ||||||
Asset retirement obligation | 16,585 | 12,446 | ||||||
Deferred income tax liability | 48,138 | 28,751 | ||||||
Total long-term liabilities | 69,723 | 59,197 | ||||||
Total liabilities | 134,385 | 117,508 | ||||||
Commitments and contingencies (Note 6) | ||||||||
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, 27,743,639 shares issued and 27,709,280 shares outstanding in 2004, 26,946,768 shares issued and 26,912,409 shares outstanding in 2003 | 277 | 269 | ||||||
Additional paid-in capital | 129,954 | 120,925 | ||||||
Restricted common stock | 1,573 | 3,156 | ||||||
Unearned compensation | (844 | ) | (1,668 | ) | ||||
Retained earnings | 160,821 | 119,195 | ||||||
Total stockholders’ equity | 291,781 | 241,877 | ||||||
Total liabilities and stockholders’ equity | $ | 426,166 | $ | 359,385 | ||||
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Remington Oil and Gas Corporation
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per-share amounts)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Revenues | ||||||||||||||||
Gas sales | $ | 42,724 | $ | 34,580 | $ | 117,550 | $ | 96,428 | ||||||||
Oil sales | 17,180 | 12,287 | 46,674 | 38,524 | ||||||||||||
Other income | 192 | 98 | 417 | 354 | ||||||||||||
Total revenues | 60,096 | 46,965 | 164,641 | 135,306 | ||||||||||||
Costs and expenses | ||||||||||||||||
Operating | 6,784 | 5,322 | 18,860 | 14,991 | ||||||||||||
Exploration | 5,562 | 7,654 | 15,968 | 20,671 | ||||||||||||
Depreciation, depletion and amortization | 18,504 | 15,050 | 51,267 | 38,599 | ||||||||||||
Impairment | 3,422 | 1,307 | 8,408 | 1,754 | ||||||||||||
General and administrative | 1,271 | 1,710 | 4,818 | 5,634 | ||||||||||||
Interest and financing | 305 | 433 | 783 | 1,318 | ||||||||||||
Total costs and expenses | 35,848 | 31,476 | 100,104 | 82,967 | ||||||||||||
Income before taxes | 24,248 | 15,489 | 64,537 | 52,339 | ||||||||||||
Income tax expense | 8,609 | 5,421 | 22,911 | 18,319 | ||||||||||||
Net income | $ | 15,639 | $ | 10,068 | $ | 41,626 | $ | 34,020 | ||||||||
Basic income per share | $ | 0.57 | $ | 0.38 | $ | 1.53 | $ | 1.28 | ||||||||
Diluted income per share | $ | 0.55 | $ | 0.36 | $ | 1.47 | $ | 1.22 | ||||||||
Weighted average shares outstanding | ||||||||||||||||
(Basic) | 27,596 | 26,771 | 27,286 | 26,548 | ||||||||||||
Weighted average shares outstanding | ||||||||||||||||
(Diluted) | 28,503 | 28,046 | 28,294 | 27,953 | ||||||||||||
Production | ||||||||||||||||
Gas (Mmcf) | 7,728 | 6,918 | 20,189 | 17,278 | ||||||||||||
Oil (Mbbls) | 416 | 436 | 1,258 | 1,308 | ||||||||||||
Mmcfe (1barrel of oil is equivalent to 6 Mcf of gas) | 10,224 | 9,534 | 27,737 | 25,126 | ||||||||||||
Average prices | ||||||||||||||||
Gas ($ per Mcf) | $ | 5.53 | $ | 5.00 | $ | 5.82 | $ | 5.58 | ||||||||
Oil ($ per Bbls) | $ | 41.30 | $ | 28.18 | $ | 37.10 | $ | 29.45 | ||||||||
$ per Mcfe | $ | 5.86 | $ | 4.92 | $ | 5.92 | $ | 5.37 |
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Remington Oil and Gas Corporation
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Nine Months Ended | ||||||||
September 30, | ||||||||
2004 | 2003 | |||||||
Cash flow provided by operations | ||||||||
Net income | $ | 41,626 | $ | 34,020 | ||||
Adjustments to reconcile net income | ||||||||
Depreciation, depletion and amortization | 51,267 | 38,599 | ||||||
Deferred income taxes | 22,601 | 18,244 | ||||||
Amortization of deferred charges | 137 | 161 | ||||||
Dry hole costs | 9,229 | 19,689 | ||||||
Impairment costs | 8,408 | 1,754 | ||||||
Cash paid for dismantlement costs | (1,064 | ) | (1,284 | ) | ||||
Stock based compensation | 939 | 1,171 | ||||||
Changes in working capital | ||||||||
(Increase) in accounts receivable | (9,028 | ) | (11,494 | ) | ||||
(Increase) in prepaid expenses and other current assets | (1,975 | ) | (139 | ) | ||||
Increase (decrease) in accounts payable and accrued liabilities | 6,351 | (11,739 | ) | |||||
Net cash flow provided by operations | 128,491 | 88,982 | ||||||
Cash from investing activities | ||||||||
Payments for capital expenditures | (114,212 | ) | (89,147 | ) | ||||
Net cash (used in) investing activities | (114,212 | ) | (89,147 | ) | ||||
Cash from financing activities | ||||||||
Loan origination costs | — | (293 | ) | |||||
Payments on notes payable and other long-term payables | (13,000 | ) | (1,239 | ) | ||||
Common stock issued | 4,770 | 2,150 | ||||||
Treasury stock acquired and retired | (645 | ) | (809 | ) | ||||
Net cash (used in) financing activities | (8,875 | ) | (191 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 5,404 | (356 | ) | |||||
Cash and cash equivalents at beginning of period | 31,408 | 14,929 | ||||||
Cash and cash equivalents at end of period | $ | 36,812 | $ | 14,573 | ||||
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