Exhibit 99.1
EVERGREEN RESOURCES REPORTS RECORD FINANCIAL RESULTS IN THIRD QUARTER
DENVER, Oct. 18 -- EVERGREEN RESOURCES, INC. (NYSE: EVG) today reported record
quarterly earnings of $2.4 million in the third quarter, or 15 cents per diluted
share, compared to $1.4 million, or 9 cents per diluted share, in the third
quarter of 1999.
With increased production and a higher gas price realization, natural gas
revenues in the third quarter increased to a record $12.0 million, an increase
of 107% over 1999's third quarter total of $5.8 million. Cash flow before
changes in operating assets and liabilities in the third quarter totaled $7.5
million, or 47 cents per diluted share, which compared to $3.7 million, or 24
cents per diluted share, in the third quarter of 1999.
Third quarter 2000 results included Evergreen's acquisition of producing
properties from KLT Gas Inc., an affiliate of Kansas City Power & Light Company,
which was effective September 1, 2000. An estimated 153 billion cubic feet (Bcf)
of proved gas reserves have been attributed to these acquired properties, which
generated daily net sales of 28 million cubic feet (MMcf) of gas during
September.
Net gas sales in the third quarter averaged 54 MMcf per day, up 41% from the
39-MMcf-per-day average in the corresponding 1999 period. Evergreen had 473 net
gas wells connected to pipeline at September 30, 2000, including 151 net
producing wells acquired in the KLT transaction. As of September 30, 1999, the
company was producing natural gas from a total of 220 net gas wells. Evergreen
drilled 21 coal bed methane wells in the Raton Basin during this year's third
quarter.
Evergreen's realized net gas price of $2.41 per thousand cubic feet (Mcf) in the
third quarter represented a 47% improvement over last year's third quarter
average of $1.64 per Mcf. Evergreen realized a lower than current market price
due to approximately 77% of the company's net daily gas sales being hedged at
approximately $2.00 per Mcf. A substantial portion of these fixed-price gas
sales expire in the fourth quarter, reducing Evergreen's hedged gas sales to
about 45% in the fourth quarter and to approximately 20% in 2001.
Lease operating expenses for the three months ended September 30, 2000, were
$2.2 million or 44 cents per Mcf of gas, compared to $1.3 million or 36 cents
per Mcf for the same period in 1999. The increase in lease operating expenses in
this year's third quarter as compared to 1999's third quarter was due to
increased contract labor costs and additional field personnel. Production taxes
increased to 11 cents per Mcf for the three months ended September 30, 2000,
compared to 3 cents per Mcf in the third quarter of 1999. The increase in
production taxes was due to higher gas prices in 2000.
For the first nine months of 2000, net income totaled $6.5 million, nearly
double the $3.3 million reported in the first nine months of 1999. Earnings in
the first nine months of 1999 included a one-time, after-tax gain of $452,000 or
3 cents per diluted share from the sale of Evergreen's 49% ownership in a well
service company. Net income in the first nine months of 2000 rose to 41 cents
per diluted share, versus 25 cents per diluted share in the corresponding 1999
period.
Natural gas revenues in the first nine months of 2000 increased to $27.7
million, up 78% from $15.5 million in the corresponding 1999 period, while cash
flow before changes in operating assets and liabilities totaled $17.0 million or
$1.08 per diluted share, up from $8.7 million or 66 cents per diluted share in
the first nine months of 1999.
Net gas sales in the first nine months of 2000 totaled 12.6 Bcf or 46 MMcf per
day, an increase of 27% over the volumes reported for the first nine months of
1999, during which net sales totaled 9.9 Bcf or 36 MMcf of gas per day. The 21
wells that the company drilled in the third quarter brought to 78 the number of
new
Evergreen wells drilled in the first nine months of 2000. This 78-well total
puts Evergreen on schedule with its plan to drill 100 wells in the Raton Basin
in 2000.
Evergreen recently reported a 47% increase in its estimated proved reserves
since year-end 1999. As of September 1, 2000, the company's proved reserves were
estimated to be 822 Bcf of gas, including the 153 Bcf of proved reserves
acquired from KLT. The present value of estimated future net revenues from
Evergreen's proved reserves, discounted at 10%, was $1.17 billion as of
September 1, 2000. This calculation was based on an unescalated average net gas
price of $4.00 per Mcf. Using a $3.00 per Mcf gas price assumption, the present
value of Evergreen's proved reserves came to $843 million.
On the company's coal bed methane gas properties in the United Kingdom,
Evergreen has drilled nine wells to date, five of which are coal bed methane
wells and four of which are mine-gas interaction and gob gas wells. Evergreen
anticipates that an evaluation of the company's drilling program will be
completed in early 2001. Evergreen holds a 100% working interest and a 100% net
revenue interest in about 470,000 acres in the U.K.
Evergreen President and CEO Mark S. Sexton commented, "As predicted at the
beginning of the year, every quarter in 2000 has yielded record results for the
company. We expect this to continue as we enter the fourth quarter with the
strongest natural gas market in history. We anticipate further production
increases in the fourth quarter, having drilled 78 new coal bed methane wells
during the first nine months of this year and having completed the property
acquisition from KLT. We also recently completed a number of upgrades to our gas
collection and compression system, which takes advantage of recent expansions of
transport capacity by Colorado Interstate Gas Company in the Raton Basin.
Transport capacity from the Raton Basin will exceed basin production for the
next several years."
Evergreen management will comment on third quarter 2000 financial results today
at 10:30 a.m. (Mountain Daylight Time). The conference call will be available
live on the Internet at
http://event.videonewswire.com/redir.asp?cmp=EVG&dat=101800 and at
www.evergreen-res.com.
On October 16, 2000, Evergreen filed a prospectus supplement with the Securities
and Exchange Commission offering 2,000,000 shares of its common stock. Evergreen
intends to use the net proceeds of the offering to repay outstanding
indebtedness under its credit facility, including indebtedness incurred in
connection with the KLT property acquisition.
Evergreen Resources is an independent energy company engaged in the exploration,
development, production, operation and acquisition of oil and gas properties.
The company's current operations are principally focused on developing and
expanding its coal bed methane properties in the Raton Basin in southern
Colorado. Evergreen also holds exploratory acreage onshore in the United
Kingdom, in northern Chile and in northwest Colorado.
This press release contains forward-looking statements within the meaning of
federal securities laws, including forward-looking statements regarding
Evergreen's natural gas reserves, the present value of its reserves and its
production. These statements are subject to various uncertainties. Actual
results could differ materially from these forward-looking statements as a
result of a variety of risks, including, among others, risks that production and
reserve estimates are inaccurate or gas prices change such that reserves become
uneconomic. Accordingly, there can be no assurance that actual results will be
as projected in these forward-looking statements.
Evergreen Resources, Inc. - Financial Highlights
Consolidated Statements of Income
(in 000's)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Revenues:
Natural gas revenues $12,047 $ 5,807 $27,696 $15,519
Interest and other 241 48 403 162
Total revenues 12,288 5,855 28,099 15,681
Expenses:
Lease operating expense 2,197 1,285 5,265 3,410
Production taxes 540 100 1,197 338
Depreciation, depletion
and amortization 2,190 1,171 4,754 3,469
General and administrative
expenses 1,219 859 3,121 2,193
Interest expense 873 83 1,675 1,624
Other 16 -- 100 --
Total expenses 7,034 3,498 16,112 11,034
Income from continuing operations
before income taxes 5,254 2,357 11,987 4,647
Income tax provision - deferred 2,049 919 4,675 1,806
Income from continuing
operations 3,205 1,438 7,312 2,841
Discontinued operations
Gain on disposal of discontinued
operations, net -- -- -- 452
Net income 3,205 1,438 7,312 3,293
Preferred stock dividends 792 -- 792 --
Net income attributable
to common stock $ 2,413 $ 1,438 $ 6,520 $ 3,293
Diluted income per common share
From continuing operations $ 0.15 $ 0.09 $ 0.41 $ 0.22
From discontinued operations -- -- -- 0.03
Diluted income per common share $ 0.15 $ 0.09 $ 0.41 $ 0.25
Natural gas sales volume (MMcf) 5,001 3,549 12,578 9,910
Rate per Mcf
Average gas price $ 2.41 $ 1.64 $ 2.20 $ 1.57
Average lease operating expense $ 0.44 $ 0.36 $ 0.42 $ 0.34
Average production tax expense $ 0.11 $ 0.03 $ 0.10 $ 0.03
General and administrative cost $ 0.25 $ 0.24 $ 0.25 $ 0.22
Depreciation, depletion
and amortization $ 0.44 $ 0.33 $ 0.38 $ 0.35
Weighted average
shares outstanding
Basic 14,975 14,441 14,929 12,390
Diluted 15,918 15,269 15,786 13,115
Evergreen Resources, Inc. - Financial Highlights - Continued
(in 000's)
Condensed Consolidated Balance Sheets
September 30, December 31,
2000 1999
Assets
Current assets $ 12,518 $ 6,421
Net property and equipment 389,930 174,334
Other assets 17,656 3,614
$420,104 $184,369
Liabilities and Equity
Current liabilities $ 13,396 $ 6,483
Other long-term 48,950 8,876
Notes payable 87,083 15,500
Redeemable preferred stock 100,000 --
Stockholders' equity 170,675 153,510
$420,104 $184,369
Condensed Consolidated Statements of Cash Flows
Nine Months Ended
September 30,
2000 1999
Cash flows from operating activities:
Net Income $ 7,312 $ 3,293
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation, depletion and amortization 4,754 3,599
Deferred income taxes 4,635 1,806
Gain on disposal of discontinued
operations, net -- (452)
Other 330 414
Cash flow from operating activities prior to
changes in operating assets and liabilities 17,031 8,660
Changes in operating assets and liabilities (1,187) 821
Net cash provided by operating activities 15,844 9,481
Cash flows from investing activities:
Investment in property and equipment, net (86,321) (33,840)
Other (572) 1,976
Net cash used by investing activities (86,893) (31,864)
Cash flows from financing activities:
Net proceeds from (payments on)
notes payable 71,583 (37,139)
Principal payments on
capital lease obligations -- (4,029)
Proceeds from issuance of common stock, net 298 65,509
Other 579 (1,604)
Net cash provided by financing activities 72,460 22,737
Effect of exchange rate changes on cash (107) 7
Increase in cash and cash equivalents 1,304 361
Cash and cash equivalents,
beginning of period 651 1,334
Cash and cash equivalents, end of period $ 1,955 $ 1,695