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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT:
MICHAEL O. ALDRIDGE [LOGO]
V. P. - CORPORATE COMMUNICATIONS
8440 JEFFERSON HIGHWAY, SUITE 420
BATON ROUGE, LA 70809
(504) 927-1450
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OCEAN ENERGY ANNOUNCES 60% INCREASE IN PRODUCTION,
45% INCREASE IN RESERVES AND 1997 YEAR END FINANCIAL RESULTS
February 19, 1998
Baton Rouge, LA - Ocean Energy, Inc. ("OEI") today announced earnings of $37.4
million, or $1.86 per share, before an extraordinary item, for the year ended
December 31, 1997, a 79% increase over 1996 earnings of $21.0 million, or $1.13
per share. Discretionary cash flow for 1997 increased 62% to $182.4 million, or
$9.07 per share, as compared to the prior year's discretionary cash flow of
$112.5 million, or $6.05 per share. Including the effect of the extraordinary
item, the Company reported earnings for the year ended December 31, 1997 of
$18.1 million or $0.90 per share. Average net daily production increased 60% in
1997 to 45,016 barrels of oil equivalent ("BOE"), as compared to 28,058 BOE in
the prior year.
James C. Flores, Chairman, President and CEO, stated, "This proved to be another
outstanding year for Ocean Energy as we reached record levels of production,
reserves and cash flow. Our historical drilling success and production momentum
positions us to achieve our 1998 targeted production growth while allowing us to
focus on further increasing reserves and asset value through greater exploration
spending. We look forward to continued production growth and expanded high
potential exploration opportunities after our proposed merger with United
Meridian."
OEI's success in 1997 was also evidenced by a 55% increase in oil and gas
revenues to $292.2 million as compared to $188.5 million in the prior year.
EBITDA (earnings before interest, taxes, depreciation, and amortization) for the
year ended December 31, 1997 increased by 61% to $208.3 million from $129.1
million in 1996. Lifting costs (including production taxes) per BOE decreased to
$4.13 in 1997 from $4.59 in the prior year.
The Company's estimated proved reserves as of December 31, 1997 were 108.4
million barrels of oil equivalent ("MMBOE") (63% oil, 37% gas), a 45% increase
over 1996 estimated proved reserves of 75.0 MMBOE. Total additions to estimated
proved reserves for the year represent 295% of 1997 production.
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CERTAIN STATEMENTS IN THIS NEWS RELEASE REGARDING FUTURE EXPECTATIONS, PLANS FOR
ACQUISITIONS, DISPOSITIONS, AND OIL AND GAS EXPLORATION, DEVELOPMENT, PRODUCTION
AND PRICING MAY BE REGARDED AS "FORWARD LOOKING STATEMENTS" WITHIN THE MEANING
OF THE SECURITIES LITIGATION REFORM ACT. THEY ARE SUBJECT TO VARIOUS RISKS, SUCH
AS OPERATING HAZARDS, DRILLING RISKS, AND THE INHERENT UNCERTAINTIES IN
INTERPRETING ENGINEERING DATA RELATING TO UNDERGROUND ACCUMULATIONS OF OIL AND
GAS, AS WELL AS OTHER RISKS DISCUSSED IN DETAIL IN THE COMPANY'S SEC FILINGS,
INCLUDING THE ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996.
ACTUAL RESULTS MAY VARY MATERIALLY.
OCEAN ENERGY, INC. IS AN INDEPENDENT ENERGY COMPANY ENGAGED IN THE EXPLORATION,
DEVELOPMENT, PRODUCTION, AND ACQUISITION OF CRUDE OIL AND NATURAL GAS. OEI'S
COMMON STOCK IS TRADED ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL "OEI."
FOR FURTHER INFORMATION, PLEASE CONTACT INVESTOR RELATIONS AT (504) 928-6222 OR
MAIL REQUESTS TO INVESTOR RELATIONS, 8440 JEFFERSON HIGHWAY, SUITE 420, BATON
ROUGE, LA 70809.
ADDITIONAL INFORMATION ON OCEAN ENERGY, INC. IS AVAILABLE ON THE INTERNET AT
WWW.OCEANENERGY.COM.
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CONDENSED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA)
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(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
-------------------------------- ----------------------------------
1997 1996 1997 1996
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Operating revenues $ 87,784 $ 71,780 $ 292,180 $ 188,451
Operating expenses:
Lease operating expenses 16,348 11,261 56,825 36,192
Severance taxes 3,016 2,195 11,077 10,906
Depreciation, depletion, and amortization 37,697 26,175 121,623 74,652
General and administrative expense 5,816 6,207 19,137 16,154
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Total operating expenses 62,877 45,838 208,662 137,904
Operating income 24,907 25,942 83,518 50,547
Other expense (income):
Interest expense 6,149 5,925 27,385 17,954
Other (income) (398) (221) (1,506) (395)
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Total other expenses 5,751 5,704 25,879 17,559
Net income before income taxes & extraordinary item 19,156 20,238 57,639 32,988
Income tax expense 6,458 6,986 20,189 12,037
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Net income before extraordinary item 12,698 13,252 37,450 20,951
Extraordinary charge (net of tax) - - 19,301 -
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Net income $ 12,698 $ 13,252 $ 18,149 $ 20,951
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Earnings per share before extraordinary item - basic $ 0.59 $ 0.68 $ 1.86 $ 1.13
Earnings per share after extraordinary item - basic 0.59 0.68 0.90 1.13
Earnings per share before extraordinary item - diluted $ 0.57 $ 0.65 $ 1.79 $ 1.09
Earnings per share after extraordinary item - diluted 0.57 0.65 0.87 1.09
Common shares outstanding - basic 21,400 19,586 20,106 18,601
Common shares outstanding - diluted 22,303 20,391 20,934 19,251
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CONDENSED BALANCE SHEETS (In thousands)
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Year Ended
December 31,
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1997 1996
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Assets
Current assets $ 50,658 $ 83,859
Property and equipment, net 729,438 359,985
Other assets 42,842 16,866
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$ 822,938 $ 460,710
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Liabilities and Stockholders' Equity
Current liabilities $ 114,167 $ 64,917
Long-term debt 389,652 284,142
Deferred taxes and other non-current liabilities 13,847 6,498
Stockholders' equity 305,272 105,153
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$ 822,938 $ 460,710
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OTHER FINANCIAL DATA (In thousands, except per share data)
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Three Months Ended Year Ended
December 31, December 31,
-------------------------------- ------------------------------
1997 1996 1997 1996
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Discretionary cash flow $ 57,771 $ 47,114 $ 182,420 $ 112,545
Discretionary cash flow per share - basic 2.70 2.41 9.07 6.05
Discretionary cash flow per share - diluted 2.59 2.31 8.71 5.85
EBITDA $ 63,528 $ 52,710 $ 208,322 $ 129,100
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PRODUCTION AND PRICING DATA (In thousands, except pricing data)
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Three Months Ended Year Ended
December 31, December 31,
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1997 1996 1997 1996
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Oil production (Bbls) 3,006 2,232 9,945 7,149
Average price per Bbl (*) $ 18.21 $ 22.44 $ 19.08 $ 19.70
Gas production (Mcf) 11,227 7,047 38,916 18,720
Average price per Mcf (*) $ 2.94 $ 3.01 $ 2.63 $ 2.50
BOE production 4,877 3,406 16,431 10,269
(*) Includes results of hedging activities.
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RESERVE DATA
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Oil GAS
(MBBLS) (MMCF) MBOE
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Proved reserves as of December 31, 1996 50,776 145,358 75,002
Revisions of previous estimates 373 12,066 2,384
Purchase of producing properties 12,908 27,864 17,552
Extensions and discoveries 14,669 95,635 30,609
Production (sales) (9,944) (38,916) (16,430)
Production (consumed by the Company) - (4,323) (721)
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Proved reserves at December 31, 1997 68,782 237,684 108,396
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RESERVE DATA (IN THOUSANDS)
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Year Ended
December 31,
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1997 1996
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Estimated future net revenues $ 750,140 $ 881,774
Pre-tax present value of future net revenues discounted at 10% $ 619,451 $ 693,515
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1997 CAPITAL EXPENDITURES (IN THOUSANDS)
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Year Ended
December 31,
1997
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Acquisitions (*) $ 117,094
Other leasehold 40,459
Drilling activities 225,356
Geological and geophysical costs 18,904
Other costs 66,561
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Total costs $ 468,374
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(*) Includes $49.6 million of unevaluated costs.