EXHIBIT 99.1
(MERIDIAN RESOURCE MERIDIAN RESOURCE CORPORATION NEWS
CORPORATION LOGO)
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THE MERIDIAN RESOURCE CORPORATION ANNOUNCES YEAR-END
2004 FINANCIAL RESULTS AND RESERVE INFORMATION
Houston, Texas - March 15, 2005 - The Meridian Resource Corporation (NYSE: TMR)
today announced year-over-year increases in revenues, discretionary cash flow,
earnings per share and liquidity. The following highlights some of the
significant improvements for calendar year 2004 compared to calendar year 2003:
o Earnings per share applicable to common shareholders increased
by 306%.
o Average daily production increased by 24% on a Mcf equivalent
basis.
o Total revenues increased by 48% to $203.1 million.
o Discretionary cash flow increased by 59%, or $59.2 million to
$159.8 million.
o Net cash provided by operating activities increased by 87% to
$171.5 million.
o Debt to total capitalization declined to 18%.
For calendar year 2004 net income applicable to common shareholders increased by
$22.0 million, or 306%, to $29.2 million, or $0.37 per diluted common share,
from $7.2 million, or $0.13 per diluted common share, for the corresponding
period of 2003. For the fourth quarter of 2004 the Company's reported net income
to common shareholders increased by $7.8 million to $8.4 million, or $0.10 per
diluted common share, from $0.6 million, or $0.01 per diluted common share for
the fourth quarter of 2003. Excluding the after tax impact of higher accounting
and professional fees required as a result of implementing the expanded
compliance burden required by the Sarbanes-Oxley Act of 2002, the Company would
have reported fourth quarter 2004 net income of $9.2 million, or $0.11 per
diluted common share.
For the year ended December 31, 2004, discretionary cash flow increased 59% to
$159.8 million, compared to $100.5 million for the corresponding period of 2003.
The increase in annual discretionary cash flow was primarily the result of a 24%
increase in production coupled with a 19% increase in the average price the
Company received for its oil and natural gas sales. Discretionary cash flow for
the three months ended December 31, 2004, increased by 39% to $41.1 million
compared to $29.6 million for the corresponding period of 2003. The increase in
discretionary cash flow for the three month period was primarily a result of a
43% increase in the average price the Company received for its oil and natural
gas sales offset by a slight decline in production.
Annual production volumes increased by 24% to 35.5 billion cubic feet of gas
equivalent ("Bcfe"), or 96.9 million cubic feet of natural gas equivalent
("Mmcfe") per day, for calendar 2004 compared to 28.6 Bcfe, or 78.3 Mmcfe per
day, for calendar 2003. During 2004, the Company's drilling activity was
primarily focused in the Biloxi Marshlands ("BML") project area and the Weeks
Island field. During 2004, the Company drilled or participated in the drilling
of 31 wells of which 20 wells were completed and placed on production,
representing a 65% success rate. Additional production gains were realized from
successful workover operations in the Ramos and Weeks Island fields during 2004.
Production volumes for the fourth quarter of 2004 totaled 8.2 Bcfe compared to
8.7 Bcfe for the fourth quarter of 2003. The decline in production between the
periods was primarily a result of lost production from the Thibodeaux #3 well in
the Ramos field which is currently undergoing a workover to restore production,
coupled with delays in permitting to drill primary wells in the Biloxi
Marshlands project area.
Annual oil and natural gas revenues totaled $202.4 million, or $5.71 per
thousand cubic feet of gas equivalent ("Mcfe"), for calendar year 2004, an
increase of 48%, from $137.1 million, or $4.80 per Mcfe, for calendar year 2003.
For the three months ended December 31, 2004 oil and natural gas revenues
totaled $53.3 million, or $6.51 per Mcfe, an increase of 35% compared to oil and
natural gas revenues of $39.4 million, or $4.55 per Mcfe, for the corresponding
period of 2003.
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Lease operating expenses totaled $14.0 million for the year ended December 31,
2004 compared to $11.3 million for the same period of 2003. For the three months
ended December 31, 2004, lease operating expenses totaled $5.2 million compared
to $3.3 million for the same period of 2003. The increase between the
corresponding periods was primarily a result of the addition of successful wells
primarily in the BML project area and Weeks Island field and increases in
workover operations primarily in the Weeks Island, Ramos and Turtle Bayou
fields. For the twelve month and three month periods ended December 31, 2004,
lease operating expenses averaged $0.40 and $0.64 per Mcfe, respectively,
compared to $0.39 and $0.38 per Mcfe for the respective periods of 2003.
Production taxes totaled $9.4 million and $7.6 million for calendar years
2004 and 2003, respectively, and $2.4 million and $2.2 million for the three
month periods ended December 31, 2004 and 2003, respectively. The changes in
production taxes were primarily attributable to the previously discussed
changes in production coupled with a refund of Louisiana severance taxes for
prior periods.
For the year ended December 31, 2004, depletion and depreciation totaled $102.9
million compared to $75.4 million for the comparable period of 2003. The
increase in depletion and depreciation between calendar years 2004 and 2003, was
primarily a result of the 24% increase in production between the respective
periods. For the three months ended December 31, 2004, depletion and
depreciation increased by $2.4 million, or 10%, to $25.5 million from $23.1
million for the corresponding period of 2003. On a per Mcfe basis, depletion and
depreciation averaged $2.90 and $2.64 for the twelve month periods ended
December 31, 2004 and 2003, respectively, and $3.11 and $2.67 for the three
month periods ended December 31, 2004 and 2003, respectively.
General and administrative expenses averaged $0.43 per Mcfe for the year ended
December 31, 2004, compared to $0.41 per Mcfe for the corresponding period of
2003. For the three months ended December 31, 2004, general and administrative
expenses averaged $0.54 per Mcfe compared to $0.34 for the comparable period of
2003. The majority of the increase in general and administrative expenses is
associated with higher accounting and professional fees required as a result of
implementing the expanded compliance burden required by the Sarbanes-Oxley Act
of 2002.
Interest expense totaled $7.2 million for calendar year 2004 compared to $11.5
million for calendar year 2003. For the three months ended December 31, 2004,
interest expense decreased by $1.2 million, or 43%, to $1.6 million from $2.7
million for the three months ended December 31, 2003, due to lower outstanding
borrowings. During 2004, the Company converted or repaid an aggregate of $77.2
million of debt including $47.2 million paid toward its senior secured credit
agreement, $10 million paid on its subordinated debt and the conversion of $20.0
million of subordinated notes into 4.2 million shares of common stock. As of
December 31, 2004, the Company's debt to total capitalization ratio was 18%,
compared to 38% as of December 31, 2003.
YEAR-END 2004 RESERVES
As of December 31, 2004, the Company's year-end oil and gas reserves totaled
139.2 Bcfe of which approximately 73% were natural gas. At December 31, 2004,
proved developed reserves accounted for 82% of the Company's total proved
reserves with the remaining 18% representing proved undeveloped reserves. No
proved undeveloped locations have been included in the Company's year-end
reserve estimates for the Biloxi Marshlands project area. Utilizing Securities
and Exchange Commission price guidelines, Meridian's total proved reserves at
December 31, 2004 increased in net present value (discounted at 10%) before
income taxes by $37.8 million to approximately $544.7 million compared to $506.9
million at year-end 2003. During 2004, the Company added approximately 23.1 Bcfe
of reserves as a result of its exploration and development efforts. In addition,
the Company reported net positive revisions of approximately 5.8 Bcfe primarily
related to better than
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Fax (281) 558-5744 o www.tmrc.com
Page 2 of 7
expected performance from its Biloxi Marshlands ("BML") project area offset by
production of approximately 35.5 Bcfe.
During 2004, the Company drilled 27 exploratory wells of which 16 were completed
and placed on production. A significant portion of the Company's 2004
exploratory drilling program was focused in the BML project area where the
Company drilled 21 wells of which 12 wells have been successfully completed and
placed on production and two wells were logged and waiting on production
facility tie-ins. The Company's 2004 BML program included several smaller
reserve target wells that were in close proximity to existing infrastructure and
required minimal facility and tie-in costs. The Company also drilled four
development wells in the Weeks Island field of which all four were completed and
placed on production. The following table provides a reconciliation of the
Company's proved reserve quantities as of December 31, 2004:
<Table>
<Caption>
OIL GAS EQUIV.
(MBbls) (MMcf) (MMcfe)
-------- -------- --------
Balance, December 31, 2003 7,892 98,469 145,821
Production (1,270) (27,839) (35,457)
Discoveries and extensions 212 21,783 23,051
Revisions of previous estimates (470) 8,586 5,768
-------- -------- --------
Balance, December 31, 2004 6,364 100,999 139,183
======== ======== ========
</Table>
NON-GAAP FINANCIAL MEASURE
In this press release, we refer to a non-GAAP financial measure we call
"discretionary cash flow." Management believes this measure is a financial
indicator of our company's ability to internally fund capital expenditures and
service outstanding debt. Management also believes this non-GAAP financial
measure of cash flow is useful information to investors because it is widely
used by professional research analysts in the valuation, comparison, rating and
investment recommendations of companies within the oil and gas exploration and
production industry. Discretionary cash flow should not be considered an
alternative to net cash provided by operating activities or net income, as
defined by GAAP. The accompanying table reconciles discretionary cash flow to
its nearest GAAP measure of Net Cash Provided By (Used In) Operating Activities.
SAFE HARBOR STATEMENT AND DISCLAIMER
Statements identified by the words "expects," "projects," "plans," and certain
of the other foregoing statements may be deemed "forward-looking statements."
Although Meridian believes that the expectations reflected in such
forward-looking statements are reasonable, these statements involve risks and
uncertainties that may cause actual future activities and results to be
materially different from those suggested or described in this press release.
These include risks inherent in the drilling of oil and natural gas wells,
including risks of fire, explosion, blowout, pipe failure, casing collapse,
unusual or unexpected formation pressures, environmental hazards, and other
operating and production risks inherent in oil and natural gas drilling and
production activities, which may temporarily or permanently reduce production or
cause initial production or test results to not be indicative of future well
performance or delay the timing of sales or completion of drilling operations;
risks with respect to oil and natural gas prices, a material decline in which
could cause the Company to delay or suspend planned drilling operations or
reduce production levels; and risks relating to the availability of capital to
fund drilling operations that can be adversely affected by adverse drilling
results, production declines and declines in oil and gas prices.
These and other risks are described in the Company's filings with the Securities
and Exchange Commission, including its reports on Form 10-K and Form 10-Q.
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The Meridian Resource Corporation is an independent oil and natural gas company
engaged in the exploration for and development of oil and natural gas in
Louisiana, Texas, and the Gulf of Mexico. Meridian has access to an extensive
inventory of seismic data and, among independent producers, is a leader in using
3-D seismic technology to analyze prospects, define risk, and target
high-potential wells for exploration and development. Meridian is headquartered
in Houston, Texas, and has a field office in Weeks Island, Louisiana. Meridian
stock is traded on the New York Stock Exchange under the symbol "TMR."
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FOR MORE INFORMATION CONTACT:
John Collins or Steven Ives at (281)-597-7000
Meridian Resource Corporation Website: www.tmrc.com
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1401 Enclave Parkway, Suite 300 o Houston, Texas 77077 o (281) 597-7000
Fax (281) 558-5744 o www.tmrc.com
Page 3 of 7
THE MERIDIAN RESOURCE CORPORATION AND SUBSIDIARIES
SUMMARY OPERATIONS DATA
(In thousands, except prices and per share data)
(Unaudited)
<Table>
<Caption>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------- -----------------------
2004 2003 2004 2003
------- ------- -------- --------
Production:
Oil (Mbbl) 293 321 1,270 1,403
Natural Gas (Mmcf) 6,430 6,735 27,839 20,142
Mmcfe 8,188 8,664 35,457 28,563
Mmcfe (Daily Rate) 89.0 94.2 96.9 78.3
Average Prices:
Oil (per Bbl) $ 31.11 $ 25.04 $ 28.40 $ 24.97
Natural Gas (per Mcf) 6.87 4.66 5.98 5.07
Per Mcfe 6.51 4.55 5.71 4.80
Oil and Natural Gas Revenues $53,291 $39,405 $202,447 $137,124
Lease Operating Expenses 5,224 3,259 14,035 11,260
Per Mcfe 0.64 0.38 0.40 0.39
Severance and Ad Valorem Taxes 2,389 2,216 9,394 7,608
Per Mcfe 0.29 0.26 0.26 0.27
General and Administrative Expense 4,446 2,948 15,169 11,610
Per Mcfe 0.54 0.34 0.43 0.41
Interest Expense 1,560 2,741 7,154 11,496
Per Mcfe 0.19 0.32 0.20 0.40
Discretionary Cash Flow (Fully Diluted)(1) $41,055 $29,551 $159,759 $100,517
Per MCFE 5.01 3.41 4.51 3.52
Net Earnings Applicable to Common Stockholders $ 8,430 $ 636 $ 29,248 $ 7,246
Per Diluted Common Share $ 0.10 $ 0.01 $ 0.37 $ 0.13
(1) See accompanying table for a reconciliation of discretionary cash flow to
net cash provided by operating activities as defined by GAAP.
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THE MERIDIAN RESOURCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share)
(Unaudited)
<Table>
<Caption>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------ -----------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Revenues:
Oil and natural gas $ 53,291 $ 39,405 $ 202,447 $ 137,124
Price risk management activities 126 -- 126 --
Interest and other 369 58 545 355
--------- --------- --------- ---------
Total revenues 53,786 39,463 203,118 137,479
--------- --------- --------- ---------
Operating costs and expenses:
Oil and natural gas operating 5,224 3,259 14,035 11,260
Severance and ad valorem taxes 2,389 2,216 9,394 7,608
Depletion and depreciation 25,475 23,102 102,915 75,441
General and administrative 4,446 2,948 15,169 11,610
Accretion expense 187 266 601 667
Write-down of securities held -- -- 195 --
--------- --------- --------- ---------
Total operating costs & expenses 37,721 31,791 142,309 106,586
--------- --------- --------- ---------
Net earnings before interest and income taxes 16,065 7,672 60,809 30,893
Other expenses:
Interest expense 1,560 2,741 7,154 11,496
Debt conversion expense -- -- 1,188 --
Taxes on income:
Current (666) (241) 834 (731)
Deferred 6,008 2,880 18,508 4,980
--------- --------- --------- ---------
Net earnings before cumulative effect
of change in acctg principle 9,163 2,292 33,125 15,148
Cumulative effect chg acctg principle -- -- -- (1,309)
--------- --------- --------- ---------
Net earnings 9,163 2,292 33,125 13,839
Dividends on preferred stock 733 1,656 3,877 6,593
--------- --------- --------- ---------
Net earnings applicable to common stockholders $ 8,430 $ 636 $ 29,248 $ 7,246
========= ========= ========= =========
Net earnings per share:
- Basic $ 0.11 $ 0.01 $ 0.41 $ 0.14
========= ========= ========= =========
- Diluted $ 0.10 $ 0.01 $ 0.37 $ 0.13
========= ========= ========= =========
Weighted average common shares outstanding:
- Basic 79,214 59,411 72,084 53,325
- Diluted 85,532 68,217 79,033 57,144
</Table>
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1401 Enclave Parkway, Suite 300 o Houston, Texas 77077 o (281) 597-7000
Fax (281) 558-5744 o www.tmrc.com
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THE MERIDIAN RESOURCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<Table>
<Caption>
DECEMBER 31, DECEMBER 31,
2004 2003
------------ ------------
ASSETS
Cash and cash equivalents $ 24,297 $ 12,821
Other current assets 36,622 26,873
-------- --------
Total current assets 60,919 39,694
-------- --------
Property, equipment and other assets 451,473 408,706
-------- --------
Total assets $512,392 $448,400
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 58,681 $ 44,834
Current portion of long-term debt -- 10,000
-------- --------
Total current liabilities 58,681 54,834
-------- --------
Long-term debt, net of current maturities 75,129 142,320
Other liabilities 30,952 6,465
Redeemable convertible preferred stock 31,589 60,446
Common stockholders' equity 316,041 184,335
-------- --------
Total liabilities and stockholders' equity $512,392 $448,400
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THE MERIDIAN RESOURCE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURE OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS)
(UNAUDITED)
<Table>
<Caption>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------- ------------------------
2004 2003 2004 2003
--------- --------- --------- ---------
RECONCILIATION OF DISCRETIONARY CASH FLOW
(DILUTED) TO NET CASH PROVIDED BY OPERATING
ACTIVITIES:
DISCRETIONARY CASH FLOW (DILUTED) $ 41,055 $ 29,551 $ 159,759 $ 100,517
Adjustments to reconcile discretionary cash flow
to net cash provided by operating activities:
Interest on convertible sub-debt (net of tax) -- (309) (270) (1,236)
Net changes in working capital 3,375 (2,943) 12,002 (7,659)
--------- --------- --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 44,430 $ 26,299 $ 171,491 $ 91,622
========= ========= ========= =========
</Table>
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Fax (281) 558-5744 o www.tmrc.com
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