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PETSEC ENERGY LTD
(A.C.N. 000 602 700)
May 6, 1999
PETSEC ENERGY REPORTS MARCH 1999 QUARTER RESULTS
Sydney, Australia - Petsec Energy Ltd (ASX: PSA and NYSE: PSJ), today
announced its results for the three months ended March 31, 1999.
Under Australian accounting standards, the Company reported an after tax loss
of A$9.1 million in the quarter ended March 31, 1999 (1998: a net loss of
A$14.3 million).
Under U.S. generally accepted accounting principles the Company reported a net
loss of US$5.8 million, or US$0.27 per American Depositary Receipt ("ADR"). This
is compared to a net loss in the 1998 quarter of US$8.9 million, or US$0.41 per
ADR.
Net sales in the March quarter were US$9.3 million, down from US$28.0 million in
1998. Net production of 4.1 Bcfe for the quarter was down 65% on the March 1998
quarter production of 11.7 Bcfe. The lower production and reduced net sales
follows the sale, effective January 1, 1999 of a 50% working interest in 17
production leases and 6 exploration leases, coupled with natural decline over
the twelve month period. On February 1, 1999, Petsec completed the sale to
Apache Corporation for US$68.3 million. Proceeds were used to repay bank debt.
Cash flow from operating activities in the March quarter was US$8.9
million or US$0.42 per ADR. In 1998 cash flow from operating activities
totaled US$23.3 million or US$1.08 per ADR.
The Company was the high bidder for two leases at the OCS Central Gulf of Mexico
Lease Sale in March 1999. A sole bid of US$1.7 million on Vermilion 258 was
successful, and a joint bid with Coastal Corporation for West Delta 113 was also
successful with Petsec's share being US$0.3 million. The leases are expected to
be awarded within the next two months.
No wells were drilled in the first quarter. The Company expects to commence its
1999 drilling program in the June quarter. A total of 6 to 8 wells are
anticipated to be drilled during the remainder of 1999, exposing the Company to
an unrisked 60 Bcfe in net reserve potential. It is anticipated that most of the
wells will be in joint venture with Gulf of Mexico industry partners in order to
spread risk and operate within the constraints of operating cash flow.
Petsec Energy is an independent oil and gas exploration and production company
with its operations in the offshore Gulf of Mexico (based in Lafayette,
Louisiana) and its head office in Sydney, Australia.
For further information please contact:
In Australia: In USA:
Terry Fern, Managing Director Ross Keogh, Chief Financial Officer
Petsec Energy Ltd Petsec Energy Ltd
(61) 2 9247 4605 (phone) (318) 989 1942 (phone)
(61) 2 9251 2410 (fax) (318) 989 7271 (fax)
Level 13, Gold Fields House 143 Ridgeway Drive, Suite 113
1 Alfred Street, Sydney, NSW 2000 Lafayette, Louisiana 70503-3402
Company information is available at Petsec's web site http://www.petsec.com
1 Information in this report which relates to hydrocarbon reserves is based on
information compiled by a person qualified in accordance with Listing Rule 5.11
and accurately reflects the information compiled by that person.
2 Certain statements in this report regarding future expectations and plans of
the Company may be regarded as "forward-looking statements" within the meaning
of Section 27A of the USA Securities Act of 1933 and Section 21E of the USA
Securities Exchange Act of 1934. Although the Company believes that its
expectations and plans are based upon reasonable assumptions, it can give no
assurance that its goals will be met. Actual results may vary significantly from
those anticipated due to many factors, including oil and gas prices, operating
hazards, drilling risks, environmental risks and uncertainties in interpreting
engineering and other data relating to oil and gas reservoirs, as well as other
risks discussed in the Company's SEC filings.
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PETSEC ENERGY LTD
RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 1999
(A$, AUSTRALIAN ACCOUNTING STANDARDS, UNAUDITED)
Three months ended Change Year to date ended Change
31 Mar 99 31 Mar 98 % 31 Mar 99 31 Mar 98 %
(in thousands) (in thousands)
------------------------ ------ ------------------------ ------
OIL AND GAS SALES (BEFORE DEDUCTING ROYALTIES) A$ 17,477 51,145 - 66% 17,477 51,145 - 66%
Profit and loss account
Profit before interest and abnormal items A$ (4,664) 8,150 -157% (4,664) 8,150 -157%
Net interest expense (4,478) (1,892) (4,478) (1,892)
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Operating profit (loss) before abnormal items (9,142) 6,258 (9,142) 6,258
Abnormal items - dry hole costs and impairments - (28,593) - (28,593)
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Operating profit (loss) before tax (9,142) (22,335) (9,142) (22,335)
Tax benefit (expense) - 8,023 - 8,023
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OPERATING PROFIT (LOSS) AFTER TAX (9,142) (14,312) (9,142) (14,312)
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BASIC AND DILUTED EARNINGS PER SHARE A$ (0.08) (0.13) (0.08) (0.13)
NUMBER OF SHARES OUTSTANDING (PERIOD END, THOUSANDS) 107,501 107,601 107,501 107,601
NUMBER OF SHARES OUTSTANDING (AVERAGE, THOUSANDS) 107,592 107,601 107,592 107,601
AVERAGE US$ / A$ EXCHANGE RATES 0.6259 0.6690 0.6259 0.6690
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PETSEC ENERGY LTD
RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 1999
(US$, "SUCCESSFUL EFFORTS" ACCOUNTING UNDER US GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, UNAUDITED)
Three months ended Change Year to date ended Change
March 31 March 31
1999 1998 % 1999 1998 %
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(in thousands) (in thousands)
STATEMENT OF OPERATIONS
Oil and gas sales (net of royalties) US$ 9,315 27,986 -67% 9,315 27,986 -67%
Lease operating expenses (1,740) (4,236) (1,740) (4,236)
General, administrative and other expenses (1,732) (2,197) (1,732) (2,197)
Stock compensation expense (120) (309) (120) (309)
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EBITDAX (income before interest, DD&A,
exploration, abandonments dry hole
costs & impairments) 5,723 21,244 -73% 5,723 21,244 -73%
Depletion, depreciation & amortisation (DD&A) (6,483) (15,102) (6,483) (15,102)
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INCOME FROM OPERATIONS (before exploration,
abandonments, dry hole costs & impairments) (760) 6,142 (760) 6,142
Exploration expenditures (1,645) (1,824) (1,645) (1,824)
Abandonments (888) - (888) -
Dry hole costs and impairments - (16,951) - (16,951)
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INCOME (LOSS) FROM OPERATIONS (3,293) (12,633) (3,293) (12,633)
Profit on sale of assets and other income 254 (31) 254 (31)
Interest expense (net of interest income) (2,783) (1,206) (2,783) (1,206)
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Income (loss) before tax (5,822) (13,870) (5,822) (13,870)
Income tax benefit (expense) - 5,004 - 5,004
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NET INCOME (LOSS) US$ (5,822) (8,866) (5,822) (8,866)
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CASH FLOW DATA
Net cash provided by operating activities US$ 8,931 23,350 -62% 8,931 23,350 -62%
Net cash provided by (used in)
investing activities US$ 64,339 (32,361) 64,339 (32,361)
Net cash provided by (used in)
financing activities US$ (65,000) 4,000 (65,000) 4,000
BALANCE SHEET DATA (AT END OF PERIOD)
Total assets US$ 124,782 242,830 124,782 242,830
Cash and deposits US$ 21,758 14,160 21,758 14,160
Borrowings US$ 108,662 103,636 108,662 103,636
Shareholders' equity US$ (1,410) 92,640 (1,410) 92,640
BASIC AND DILUTED EARNINGS PER SHARE
Net income per ordinary share US$ (0.05) (0.08) (0.05) (0.08)
Net income per ADR US$ (0.27) (0.41) (0.27) (0.41)
Average number of shares outstanding
(thousands) 107,592 107,601 107,592 107,601
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ADDITIONAL DATA
NET PRODUCTION
Oil (MBbls) 249 683 -64% 249 683 -64%
Gas (MMcf) 2,621 7,582 -66% 2,621 7,582 -66%
Total (MMcfe) 4,115 11,680 -65% 4,115 11,680 -65%
NET SALES
Oil (US$ in thousands) US$ 3,132 10,953 3,132 10,953
Gas (US$ in thousands) 6,183 17,033 6,183 17,033
Total (US$ in thousands) 9,315 27,986 -67% 9,315 27,986 -67%
AVERAGE SALES PRICE
Oil (US$ per Bbl) US$ 12.58 16.04 -22% 12.58 16.04 -22%
Gas (US$ per Mcf) 2.36 2.25 5% 2.36 2.25 5%
Total (US$ per Mcfe) 2.26 2.40 - 6% 2.26 2.40 - 6%
AVERAGE COSTS (US$ PER MCFE)
Lease operating expenses US$ 0.42 0.36 0.42 0.36
Depletion, depreciation and amortisation 1.58 1.29 1.58 1.29
General, administrative & other expenses 0.42 0.19 0.42 0.19
Stock compensation expense 0.03 0.03 0.03 0.03
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Total (before exploration, abandonments,
dry hole costs & impairments) 2.45 1.87 +31% 2.45 1.87 +31%
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