Exhibit 99.1
NEWFIELD ANNOUNCES THIRD QUARTER RESULTS**
FOR IMMEDIATE RELEASE
Houston —(October 27, 2004) — Newfield Exploration Company (NYSE:NFX) today announced its financial and operating results for the third quarter of 2004. A conference call to discuss the results is planned for 8 a.m. (CDT), Thursday, October 28. To participate in the call, dial 719-457-2623. A listen-only broadcast will also be provided over the Internet. Simply go to the Investor Relations section athttp://www.newfld.com.
Newfield also announced that it will hold an investor conference in Houston from 8 a.m. — 3:30 p.m. on November 9, 2004. Through the Company’s website, slides will be available the day of the conference and a replay will be made available the next day.
Third Quarter 2004
For the third quarter of 2004, Newfield reported net income of $81.6 million, or $1.35 per share (all per share amounts are on a diluted basis). Stated without the effect of $9.7 million ($6.3 million after-tax), or $0.10 per share, of net gain related to unrealized commodity derivative transactions, net income for the third quarter was $75.3 million, or $1.25 per share. Revenues in the third quarter of 2004 were $327.7 million. Net cash provided by operating activities before changes in operating assets and liabilities was $267.7 million in the third quarter of 2004. SeeExplanation and Reconciliation of Non-GAAP Financial Measures.
Newfield’s results for the third quarter of 2004 compare favorably to the same period of the prior year. Net income from continuing operations in the third quarter of 2003 was $58.4 million, or $1.04 per share. Stated without the effect of $3.6 million ($2.3 million after-tax), or $0.04 per share, of net gain related to unrealized commodity derivative transactions, net income from continuing operations for the third quarter was $56.1 million, or $1.00 per share. The loss from discontinued operations was $9.0 million, or $0.16 per share. Revenues in the third quarter of 2003 were $248.7 million. Net cash provided by continuing operating activities before changes in operating assets and liabilities was $185.6 million in the third quarter of 2003.
Newfield’s production in the third quarter of 2004 was 60.7 billion cubic feet equivalent (Bcfe), an 8% increase over production of 56.1 Bcfe in the third quarter of 2003. The following tables detail production and average realized prices for the third quarter of 2004 and 2003.
Quarterly Sales / Production
For the Three Months Ended September 30
| | | | | | | | | | | | | |
| | | 3Q04
| | 3Q03
| | % Change
|
| United States | | | | | | | | | | | | |
| Natural gas sales (Bcf) | | | 48.6 | | | | 47.4 | | | | 3 | % |
| Average natural gas production (MMcf/d) | | | 528.8 | | | | 514.8 | | | | 3 | % |
| Oil and condensate sales (MMBbls) | | | 1.59 | | | | 1.47 | | | | 8 | % |
| Average oil and condensate production (BOPD) | | | 17,272 | | | | 15,935 | | | | 8 | % |
| International | | | | | | | | | | | | |
| Natural gas sales (Bcf) | | | 0.113 | | | | | | | | | |
| Average natural gas production (MMcf/d) | | | 1.2 | | | | | | | | | |
| Oil and condensate sales (MMBbls) | | | 0.405 | | | | | | | | | |
| Average oil and condensate production (BOPD) | | | 3,478 | | | | | | | | | |
| Total | | | | | | | | | | | | |
| Natural gas sales (Bcf) | | | 48.8 | | | | 47.4 | | | | 3 | % |
| Average natural gas production (MMcf/d) | | | 530.0 | | | | 514.8 | | | | 3 | % |
| Oil and condensate sales (MMBbls) | | | 2.00 | | | | 1.47 | | | | 36 | % |
| Average oil and condensate production (BOPD) | | | 20,750 | | | | 15,935 | | | | 30 | % |
| Total sales (Bcfe) | | | 60.7 | | | | 56.1 | | | | 8 | % |
Average Realized Prices+
For the Three Months Ended September 30
| | | | | | | | | | | | | |
| | | 3Q04
| | 3Q03
| | % Change
|
| United States | | | | | | | | | | | | |
| Natural gas (per Mcf) | | $ | 5.10 | | | $ | 4.40 | | | | 16 | % |
| Oil and condensate (per Bbl) | | $ | 36.97 | | | $ | 26.50 | | | | 40 | % |
| International | | | | | | | | | | | | |
| Natural gas (per Mcf) | | $ | 3.94 | | | | | | | | | |
| Oil and condensate liftings (per Bbl) | | $ | 46.34 | | | | | | | | | |
| Total | | | | | | | | | | | | |
| Natural gas (per Mcf) | | $ | 5.10 | | | $ | 4.40 | | | | 16 | % |
| Oil and condensate (per Bbl) | | $ | 38.85 | | | $ | 26.50 | | | | 47 | % |
| Total (per Mcfe) | | $ | 5.37 | | | $ | 4.40 | | | | 22 | % |
+Prices shown are net of all applicable transportation expenses, which reduced the realized price of natural gas by $0.02 per Mcf for both periods and the realized price of oil and condensate by $0.28 and $0.32 per Bbl for the three months ended September 30, 2004 and 2003, respectively. Average realized prices also include the effects of hedging other than our three-way collar contracts, which do not qualify for hedge accounting under SFAS No. 133. Had we included the realized loss on our three-way collar contracts, our average realized price for natural gas would have been $5.03 per Mcf and our average realized price for oil and condensate would have been $36.20 per Bbl for the third quarter of 2004. No three-way contracts were settled in the third quarter of 2003.
Stated on a unit of production basis, Newfield’s lease operating expense (LOE) in the third quarter of 2004 was $0.66 per Mcfe compared to LOE from continuing operations of $0.55 per Mcfe in the same period of 2003. Production taxes in the third quarter of 2004 increased to $0.21 per Mcfe compared to production taxes from continuing operations of $0.13 per Mcfe in the same period of 2003. DD&A expense in the third quarter of 2004 was $1.95 per Mcfe compared to DD&A expense from continuing operations of $1.80 per Mcfe in the same period of 2003. The increase in DD&A expense is due primarily to the third quarter acquisition of Denbury’s Gulf of Mexico properties. G&A expense (including stock compensation) in the third
quarter of 2004 was $0.36 per Mcfe compared to G&A expense from continuing operations of $0.25 in the same period of 2003. G&A expense in the third quarter of 2004 is net of capitalized direct internal costs of $9.1 million. Capitalized direct internal costs were $6.2 million in the third quarter of 2003.
Capital expenditures in the third quarter of 2004 were $1.2 billion, including $719 million allocated for financial accounting purposes to the oil and gas properties acquired in the $575 million purchase of Inland Resources, Inc. Capital expenditures for the quarter also include the recognition of asset retirement costs of $44 million associated with our recent acquisitions.
Year-to-Date 2004
For the first nine months of 2004, Newfield posted net income of $226.9 million, or $3.91 per share. Revenues for the first nine months of 2004 were $915.8 million. This compares to net income from continuing operations of $170.8 million, or $3.06 per share, on revenues of $772.1 million for the first nine months of 2003. Net cash provided by continuing operating activities before changes in operating assets and liabilities was $660.9 million in the first nine months of 2004 compared to $538.9 million in the same period of 2003. SeeExplanation and Reconciliation of Non-GAAP Financial Measures.
Production volumes for the first nine months of 2004 increased 5% over the same period last year. The Company produced 174.1 Bcfe in the first nine months of 2004 compared to production from continuing operations of 165.5 Bcfe in the first nine months of the prior year. The following tables detail production and average realized prices for the first nine months of 2004 and 2003:
Year-to-Date Sales / Production
For the Nine Months Ended September 30
| | | | | | | | | | | | | |
| | | YTD 09/04
| | YTD 09/03
| | % Change
|
| United States | | | | | | | | | | | | |
| Natural gas sales (Bcf) | | | 143.8 | | | | 138.1 | | | | 4 | % |
| Average natural gas production (MMcf/d) | | | 524.9 | | | | 505.9 | | | | 4 | % |
| Oil and condensate sales (MMBbls) | | | 4.56 | | | | 4.56 | | | | — | |
| Average oil and condensate production (BOPD) | | | 16,624 | | | | 16,703 | | | | — | |
| International | | | | | | | | | | | | |
| Natural gas sales (Bcf) | | | 0.483 | | | | | | | | | |
| Average natural gas production (MMcf/d) | | | 1.8 | | | | | | | | | |
| Oil and condensate sales (MMBbls) | | | 0.409 | | | | | | | | | |
| Average oil and condensate production (BOPD) | | | 3,089 | | | | | | | | | |
| Total | | | | | | | | | | | | |
| Natural gas sales (Bcf) | | | 144.3 | | | | 138.1 | | | | 4 | % |
| Average natural gas production (MMcf/d) | | | 526.6 | | | | 505.9 | | | | 4 | % |
| Oil and condensate sales (MMBbls) | | | 4.96 | | | | 4.56 | | | | 9 | % |
| Average oil and condensate production (BOPD) | | | 18,708 | | | | 16,703 | | | | 12 | % |
| Total sales (Bcfe) | | | 174.1 | | | | 165.5 | | | | 5 | % |
Average Realized Prices+
For the Nine Months Ended September 30
| | | | | | | | | | | | | |
| | | YTD 09/04
| | YTD 09/03
| % Change
|
| United States | | | | | | | | | | | | |
| Natural gas (per Mcf) | | $ | 5.10 | | | $ | 4.64 | | | | 10 | % |
| Oil and condensate (per Bbl) | | $ | 34.30 | | | $ | 27.71 | | | | 24 | % |
| International | | | | | | | | | | | | |
| Natural gas (per Mcf) | | $ | 3.96 | | | | | | | | | |
| Oil and condensate liftings (per Bbl) | | $ | 46.06 | | | | | | | | | |
| Total | | | | | | | | | | | | |
| Natural gas (per Mcf) | | $ | 5.10 | | | $ | 4.64 | | | | 10 | % |
| Oil and condensate (per Bbl) | | $ | 35.27 | | | $ | 27.71 | | | | 27 | % |
| Total (per Mcfe) | | $ | 5.23 | | | $ | 4.64 | | | | 13 | % |
+Prices shown are net of all applicable transportation expenses, which reduced the realized price of natural gas by $0.02 per Mcf for both periods and the realized price of oil and condensate by $0.35 and $0.37 per Bbl for the first nine months of 2004 and 2003, respectively. Average realized prices include the effects of hedging other than our three-way collar contracts, which do not qualify for hedge accounting under SFAS No. 133. Had we included the realized loss on our three-way contracts our average realized price for natural gas would have been $5.05 per Mcf and our average realized price for oil and condensate would have been $33.27 per Bbl for the nine months ended September 30, 2004. No three-way contracts were settled in the first nine months of 2003.
In the first nine months of 2004, LOE, stated on a unit of production basis, averaged $0.57 per Mcfe, compared to LOE from continuing operations of $0.52 per Mcfe in the same period of 2003. Production taxes in the first nine months of 2004 were $0.17 per Mcfe compared to production taxes from continuing operations of $0.15 per Mcfe in the same period of 2003. DD&A expense in the first nine months of 2004 was $1.89 per Mcfe compared to DD&A expense from continuing operations of $1.77 per Mcfe in the same period of 2003. G&A expense (including stock compensation) in the first nine months of 2004 was $0.34 per Mcfe compared to G&A expense from continuing operations of $0.28 per Mcfe in the prior year. G&A expense in the first nine months of 2004 is net of capitalized direct internal costs of $25.1 million. Capitalized direct internal costs were $20.4 million in the first nine months of 2003.
Explanation and Reconciliation of Non-GAAP Financial Measures
Earnings stated without the effect of unrealized commodity derivative transactions, a non-GAAP financial measure, exclude certain items that affect the comparability of operating results. Earnings without the effect of these items are presented because the amount of these items cannot be reasonably estimated and because earnings without the effect of these items are more comparable to earnings estimates provided by securities analysts. Commodity derivative income as stated in our consolidated statement of income for the third quarter of 2004 includes an unrealized increase in the fair value of our three-way collar contracts of $9.2 million, a realized loss of $8.3 million for our three-way collar contracts and a decrease in hedge ineffectiveness of $0.5 million associated with our cash flow hedges. Commodity derivative income as stated in our consolidated statement of income for the third quarter of 2003 includes only changes in hedge ineffectiveness associated with our cash flow hedges. A reconciliation of earnings stated without the effect of the unrealized commodity derivative transactions to net income is shown below:
| | | | | | | | | |
| | | 3Q04
| | 3Q03
|
| Net income from continuing operations | | $ | 81.6 | | | $ | 58.4 | |
| Unrealized commodity derivative income | | | (9.7 | ) | | | (3.6 | ) |
| Income tax provision adjustment for above item | | | 3.4 | | | | 1.3 | |
| | | |
| | | |
| |
| Earnings stated without the effect of unrealized commodity derivative transactions | | $ | 75.3 | | | $ | 56.1 | |
Net cash provided by operating activities before changes in operating assets and liabilities is presented because of its acceptance as an indicator of an oil and gas exploration and production company’s ability to internally fund exploration and development activities and to service or incur additional debt. This measure should not be considered as an alternative to net cash provided by operating activities as defined by generally accepted accounting principles. A reconciliation of net cash provided by operating activities from continuing operations before changes in operating assets and liabilities to net cash provided by operating activities from continuing operations is shown below:
| | | | | | | | | |
| | | 3Q04
| | 3Q03
|
| Net cash provided by operating activities from continuing operations | | $ | 230.3 | | | $ | 191.1 | |
| Less: (Increase) decrease in operating assets and liabilities | | | (37.4 | ) | | | 5.5 | |
| | | |
| | | |
| |
| Net cash provided by operating activities from continuing operations before changes in operating assets and liabilities | | $ | 267.7 | | | $ | 185.6 | |
| | | |
| | | |
| |
| | | | | | | | | |
| | | YTD04
| | YTD03
|
| Net cash provided by operating activities from continuing operations | | $ | 644.6 | | | $ | 458.5 | |
| Less: (Increase) decrease in operating assets and liabilities | | | (16.3 | ) | | | (80.4 | ) |
| | | |
| | | |
| |
| Net cash provided by operating activities from continuing operations before changes in operating assets and liabilities | | $ | 660.9 | | | $ | 538.9 | |
| | | |
| | | |
| |
2005 Production Estimate
The Company expects to produce 255 — 270 Bcfe in 2005, an increase of 6 - 12% over 2004 estimated production of about 240 Bcfe. Preliminary capital spending for 2005 is estimated at about $850 — 900 million. A final budget is being prepared and will be submitted to the Company’s board of directors for approval in February 2005.
Fourth Quarter 2004 Estimates
Natural Gas Production and PricingThe Company’s natural gas production in the fourth quarter of 2004 is expected to be 49 — 54 Bcf (533 — 590 MMcf/d). The price the Company realizes for natural gas production from the Gulf of Mexico and onshore Gulf Coast on an Mcf basis after basis differentials, transportation and handling charges, typically averages $0.15 — $0.20 less per MMBtu than the Henry Hub Index. Realized gas prices for our Mid-Continent properties after basis differentials, transportation and handing charges typically average $0.70 — $0.80 per MMBtu less than Henry Hub Index. Hedging gains or losses will affect price realizations.
Crude Oil Production and PricingOil production in the fourth quarter of 2004 is expected to be 2.4 — 2.6 million barrels (25,700 — 28,400 BOPD). These estimates include approximately 4,300 BOPD from the Company’s Malaysian operations. The price the Company receives for Gulf Coast production typically averages about $2 below the NYMEX West Texas Intermediate (WTI) price. The price the Company receives for its production in the Rocky Mountains averages about $3 below WTI price. Oil production from the Mid-Continent typically sells at a $1.00 — $1.50 per barrel discount to WTI. Oil production from Malaysia typically sells at Tapis, or about even with WTI. Hedging gains or losses will affect price realizations.
Lease Operating and Other ExpensesLOE is expected to be $45 — $50 million ($0.67 — $0.75 per Mcfe) in the fourth quarter of 2004. Production taxes in the fourth quarter of 2004 are expected to be $14 — $15 million ($0.21 - - $0.24 per Mcfe). These expenses vary and are subject to impact from, among other things, production volumes and commodity pricing, tax rates, service costs, the costs of goods and materials and workover activities.
General and Administrative ExpenseG&A expense for the fourth quarter of 2004 is expected to be $20 — $22 million ($0.31 — $0.34 per Mcfe), net of capitalized direct internal costs. Capitalized G&A expense is expected to be $8 - - $9 million. G&A expense includes stock and incentive compensation expense. Incentive compensation expense depends largely on net income.
Interest ExpenseThe non-capitalized portion of the Company’s interest expense for the fourth quarter of 2004 is expected to be $13 — $14 million ($0.10 — $0.11 per Mcfe). As of October 27, 2004, borrowings under the Company’s credit arrangements were $182 million. The remainder of long-term debt consists of three separate issuances of notes that in the aggregate total $875 million in principal amount. Capitalized interest for the fourth quarter of 2004 is expected to be about $3 — $5 million.
Income TaxesIncluding both current and deferred taxes, the Company expects its consolidated income tax rate in the fourth quarter of 2004 to be about 35 — 39%. About 60% of the tax provision is expected to be deferred.
The Company provides information regarding its outstanding hedging positions in its annual and quarterly reports filed with the SEC and in its electronic publication — @NFX. This publication can be found on Newfield’s web page at http://www.newfld.com. Through the web page, you may elect to receive @NFX through e-mail distribution.
Newfield Exploration Company is an independent crude oil and natural gas exploration and production company. The Company relies on a proven growth strategy that includes balancing acquisitions with drill bit opportunities. Newfield’s areas of operation include the Gulf of Mexico, the U.S. onshore Gulf Coast, the Anadarko and Arkoma Basins of the Mid-Continent, the Uinta Basin of the Rocky Mountains and select international ventures.
**The statements set forth in this release regarding estimated or anticipated full-year 2005 and fourth quarter 2004 results, production volumes and capital expenditures are forward looking and are based upon assumptions and anticipated results that are subject to numerous uncertainties. Actual results may vary significantly from those anticipated due to many factors, including drilling results, oil and gas prices, industry conditions, the prices of goods and services, the availability of drilling rigs and other support services, the availability of capital resources, labor conditions and other factors set forth in the Company’s Annual Report onForm 10-K for the year ended December 31, 2003. In addition, the drilling of oil and gas wells and the production of hydrocarbons are subject to governmental regulations and operating risks.
| | | |
| Newfield Exploration Company | | For information, contact: |
| 363 N. Sam Houston Parkway East, Ste. 2020 | | Steve Campbell |
| Houston, TX 77060 | | (281)847-6081 |
www.newfld.com | | info@newfld.com |
###
CONSOLIDATED STATEMENT OF INCOME
(Unaudited, in thousands, except per share data)
| | | | | | | | | | | | | | | | | |
| | | For the | | For the |
| | | Three Months Ended | | Nine Months Ended |
| | | September 30,
| | September 30,
|
| | | 2004
| | 2003
| | 2004
| | 2003
|
Oil and gas revenues | | $ | 327,725 | | | $ | 248,664 | | | $ | 915,817 | | | $ | 772,107 | |
| | | |
| | | |
| | | |
| | | |
| |
Operating expenses: | | | | | | | | | | | | | | | | |
| Lease operating | | | 39,829 | | | | 31,083 | | | | 98,659 | | | | 85,807 | |
| Production and other taxes | | | 12,706 | | | | 7,488 | | | | 30,159 | | | | 25,159 | |
| Transportation | | | 1,700 | | | | 1,624 | | | | 5,082 | | | | 5,046 | |
| Depreciation, depletion and amortization | | | 118,471 | | | | 100,897 | | | | 329,548 | | | | 293,407 | |
| General and administrative (A) | | | 21,839 | | | | 13,815 | | | | 59,459 | | | | 46,008 | |
| Gas sales obligation settlement and redemption of securities | | | — | | | | — | | | | — | | | | 20,475 | |
| | | |
| | | |
| | | |
| | | |
| |
Total operating expenses | | | 194,545 | | | | 154,907 | | | | 522,907 | | | | 475,902 | |
| | | |
| | | |
| | | |
| | | |
| |
Income from operations | | | 133,180 | | | | 93,757 | | | | 392,910 | | | | 296,205 | |
Other income (expenses): | | | | | | | | | | | | | | | | |
| Interest expense | | | (14,798 | ) | | | (13,357 | ) | | | (39,265 | ) | | | (45,025 | ) |
| Capitalized interest | | | 6,270 | | | | 4,010 | | | | 14,593 | | | | 11,728 | |
| Dividends on preferred securities of Newfield Financial Trust I | | | — | | | | — | | | | — | | | | (4,581 | ) |
| Commodity derivative income (expense) * | | | 1,371 | | | | 3,569 | | | | (16,464 | ) | | | 723 | |
| Other | | | 1,330 | | | | 444 | | | | 2,330 | | | | 956 | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | (5,827 | ) | | | (5,334 | ) | | | (38,806 | ) | | | (36,199 | ) |
| | | |
| | | |
| | | |
| | | |
| |
Income from continuing operations before income taxes | | | 127,353 | | | | 88,423 | | | | 354,104 | | | | 260,006 | |
| Income tax provision | | | 45,778 | | | | 30,072 | | | | 127,206 | | | | 89,254 | |
| | | |
| | | |
| | | |
| | | |
| |
Income from continuing operations | | | 81,575 | | | | 58,351 | | | | 226,898 | | | | 170,752 | |
| Loss from discontinued operations, net of tax | | | — | | | | (8,972 | ) | | | — | | | | (16,992 | ) |
| | | |
| | | |
| | | |
| | | |
| |
Income before cumulative effect of change in accounting principle | | | 81,575 | | | | 49,379 | | | | 226,898 | | | | 153,760 | |
| Cumulative effect of change in accounting principle, net of tax** | | | — | | | | — | | | | — | | | | 5,575 | |
| | | |
| | | |
| | | |
| | | |
| |
Net income | | $ | 81,575 | | | $ | 49,379 | | | $ | 226,898 | | | $ | 159,335 | |
| | | |
| | | |
| | | |
| | | |
| |
Earnings per share: | | | | | | | | | | | | | | | | |
Basic | | | | | | | | | | | | | | | | |
| Income from continuing operations | | $ | 1.38 | | | $ | 1.04 | | | $ | 3.97 | | | $ | 3.17 | |
| Loss from discontinued operations | | | — | | | | (0.16 | ) | | | — | | | | (0.31 | ) |
| Cumulative effect of change in accounting principle, net of tax** | | | — | | | | — | | | | — | | | | 0.10 | |
| | | |
| | | |
| | | |
| | | |
| |
| Net income | | $ | 1.38 | | | $ | 0.88 | | | $ | 3.97 | | | $ | 2.96 | |
| | | |
| | | |
| | | |
| | | |
| |
Diluted | | | | | | | | | | | | | | | | |
| Income from continuing operations | | $ | 1.35 | | | $ | 1.04 | | | $ | 3.91 | | | $ | 3.06 | |
| Loss from discontinued operations | | | — | | | | (0.16 | ) | | | — | | | | (0.30 | ) |
| Cumulative effect of change in accounting principle, net of tax** | | | — | | | | — | | | | — | | | | 0.10 | |
| | | |
| | | |
| | | |
| | | |
| |
| Net income | | $ | 1.35 | | | $ | 0.88 | | | $ | 3.91 | | | $ | 2.86 | |
| | | |
| | | |
| | | |
| | | |
| |
Weighted average number of shares outstanding for basic earnings per share | | | 59,290 | | | | 55,887 | | | | 57,117 | | | | 53,785 | |
Weighted average number of shares outstanding for diluted earnings per share | | | 60,317 | | | | 56,347 | | | | 58,046 | | | | 56,778 | |
| (A) | | Includes non-cash stock compensation of $1,043 and $629 for the three months September 30, 2004 and 2003, respectively, and $3,003 and $2,115 for the nine months ended September 30, 2004 and 2003, respectively. |
* Associated with SFAS No. 133.
** Associated with the adoption of SFAS No. 143.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited, in thousands of dollars)
| | | | | | | | | |
| | | September 30, | | December 31, |
| | | 2004
| | 2003
|
ASSETS | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 28,856 | | | $ | 15,347 | |
| Accounts receivable, oil and gas | | | 188,086 | | | | 134,774 | |
| Inventories | | | 7,505 | | | | 553 | |
| Derivative assets * | | | 14,936 | | | | 13,786 | |
| Deferred taxes | | | 29,442 | | | | 12,893 | |
| Other current assets | | | 75,736 | | | | 61,563 | |
| | | |
| | | |
| |
| Total current assets | | | 344,561 | | | | 238,916 | |
| | | |
| | | |
| |
| Oil and gas properties, net (full cost method) | | | 3,689,908 | | | | 2,418,500 | |
| Floating production system and pipelines | | | 35,000 | | | | 35,000 | |
| Furniture, fixtures and equipment, net | | | 17,676 | | | | 5,875 | |
| Derivative assets * | | | 34,588 | | | | 2,223 | |
| Other assets | | | 20,774 | | | | 16,197 | |
| Goodwill | | | 65,990 | | | | 16,378 | |
| | | |
| | | |
| |
| Total assets | | $ | 4,208,497 | | | $ | 2,733,089 | |
| | | |
| | | |
| |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities | | $ | 376,776 | | | $ | 255,522 | |
| Derivative liabilities* | | | 89,826 | | | | 44,696 | |
| Total current liabilities | | | 466,602 | | | | 300,218 | |
| Other liabilities | | | 12,988 | | | | 13,203 | |
| Derivative liabilities * | | | 61,106 | | | | 13,244 | |
| Long-term debt | | | 1,068,101 | | | | 643,459 | |
| Asset retirement obligation ** | | | 199,155 | | | | 151,548 | |
| Deferred taxes | | | 528,161 | | | | 242,839 | |
| | | |
| | | |
| |
| Total long-term liabilities | | | 1,869,511 | | | | 1,064,293 | |
| | | |
| | | |
| |
| Commitments and contingencies | | | — | | | | — | |
STOCKHOLDERS’ EQUITY | | | | | | | | |
| Common stock | | | 632 | | | | 571 | |
| Additional paid-in capital | | | 1,095,994 | | | | 796,256 | |
| Treasury stock | | | (27,155 | ) | | | (26,679 | ) |
| Unearned compensation | | | (9,021 | ) | | | (10,912 | ) |
| Accumulated other comprehensive income (loss): | | | | | | | | |
| Foreign currency translation adjustment | | | 225 | | | | 851 | |
| Commodity derivatives * | | | (50,108 | ) | | | (26,428 | ) |
| Minimum pension liability | | | (833 | ) | | | (833 | ) |
| Retained earnings | | | 862,650 | | | | 635,752 | |
| | | |
| | | |
| |
| Total stockholders’ equity | | | 1,872,384 | | | | 1,368,578 | |
| | | |
| | | |
| |
| Total liabilities and stockholders’ equity | | $ | 4,208,497 | | | $ | 2,733,089 | |
| | | |
| | | |
| |
* Associated with SFAS No. 133.
** Associated with SFAS No. 143.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in thousands of dollars)
| | | | | | | | | |
| | | For the |
| | | Nine Months Ended |
| | | September 30,
|
| | | 2004
| | 2003
|
Cash flows from operating activities: | | | | | | | | |
| Net income | | $ | 226,898 | | | $ | 159,335 | |
| Loss from discontinued operations, net of tax | | | — | | | | 16,992 | |
| Depreciation, depletion and amortization | | | 329,548 | | | | 293,407 | |
| Deferred taxes | | | 101,710 | | | | 52,913 | |
| Stock compensation | | | 3,003 | | | | 2,115 | |
| Commodity derivative income * | | | (212 | ) | | | (723 | ) |
| Gas sales obligation settlement and redemption of securities | | | — | | | | 20,475 | |
| Cumulative effect of change in accounting principle ** | | | — | | | | (5,575 | ) |
| | | |
| | | |
| |
| | | | 660,947 | | | | 538,939 | |
| Changes in operating assets and liabilities | | | (16,389 | ) | | | (80,424 | ) |
| | | |
| | | |
| |
| Net cash provided by continuing activities | | | 644,558 | | | | 458,515 | |
| Net cash provided by discontinued activities | | | — | | | | 10,339 | |
| | | |
| | | |
| |
Net cash provided by operating activities | | | 644,558 | | | | 468,854 | |
| | | |
| | | |
| |
Cash flows from investing activities: | | | | | | | | |
| Purchases of businesses, net of cash acquired | | | (755,695 | ) | | | (91,742 | ) |
| Proceeds from sale of business | | | — | | | | 9,678 | |
| Additions to oil and gas properties | | | (601,770 | ) | | | (358,642 | ) |
| Sale of oil and gas properties | | | 16,501 | | | | — | |
| Additions to furniture, fixtures and equipment | | | (4,933 | ) | | | (2,738 | ) |
| | | |
| | | |
| |
| Net cash used in continuing activities | | | (1,345,897 | ) | | | (443,444 | ) |
| Net cash provided by (used in) discontinued activities | | | — | | | | (3,085 | ) |
| | | |
| | | |
| |
Net cash used in investing activities | | | (1,345,897 | ) | | | (446,529 | ) |
| | | |
| | | |
| |
Cash flows from financing activities: | | | | | | | | |
| Proceeds from borrowings under credit arrangements | | | 1,021,000 | | | | 1,285,500 | |
| Repayments of borrowings under credit arrangements | | | (921,000 | ) | | | (1,180,500 | ) |
| Proceeds from issuance of senior subordinated notes | | | 325,000 | | | | — | |
| Repurchases of secured notes | | | (2,895 | ) | | | (63,068 | ) |
| Deliveries under the gas sales obligation | | | — | | | | (8,442 | ) |
| Proceeds from issuances of common stock | | | 293,701 | | | | 142,147 | |
| Repayments of secured notes | | | — | | | | (11,215 | ) |
| Gas sales obligation settlement | | | — | | | | (62,017 | ) |
| Purchases of treasury stock | | | (476 | ) | | | (403 | ) |
| Redemption of trust preferred securities | | | — | | | | (148,449 | ) |
| | | |
| | | |
| |
| Net cash provided by (used in) continuing activities | | | 715,330 | | | | (46,447 | ) |
| Net cash used in discontinued activities | | | — | | | | — | |
| | | |
| | | |
| |
Net cash provided by (used in) financing activities | | | 715,330 | | | | (46,447 | ) |
| | | |
| | | |
| |
| Effect of exchange rate changes on cash and cash equivalents | | | (482 | ) | | | 194 | |
| Increase (decrease) in cash and cash equivalents | | | 13,509 | | | | (23,928 | ) |
| Cash and cash equivalents from continuing operations, beginning of period | | | 15,347 | | | | 33,798 | |
| Cash and cash equivalents from discontinued operations, beginning of period | | | — | | | | 15,100 | |
| | | |
| | | |
| |
| Cash and cash equivalents, end of period | | $ | 28,856 | | | $ | 24,970 | |
| | | |
| | | |
| |
* Associated with SFAS No. 133.
** Associated with the adoption of SFAS No. 143
