(TOREADOR RESOURCES CORPORATION LETTERHEAD)
NEWS RELEASE
TOREADOR REPORTS SIGNIFICANT IMPROVEMENT IN FIRST-QUARTER 2003
RESULTS, IN LINE WITH FORECAST
EARNINGS PER SHARE INCREASE TO $0.07; REVENUES CLIMB 88% TO $6.4 MILLION
DALLAS, TEXAS - (MAY 21, 2003) - Toreador Resources Corporation
(NASDAQ: TRGL; TSE: TRX) today reports significantly improved first-quarter 2003
financial results, with income applicable to common shares of $704,000, or $0.07
per diluted share, compared with a loss applicable to common shares of $1.9
million, or $0.21 per diluted share, for the first quarter of 2002. Operating
income for the first quarter of 2003 climbed to $1.6 million, compared with an
operating loss of $1.9 million for the same period last year. First-quarter 2003
revenues rose 88% to $6.4 million from $3.4 million for the year-ago quarter.
First-quarter 2003 results are within the ranges forecasted by Toreador earlier
this year.
Higher oil and gas prices, lower general and administrative expenses,
and more favorable oil and gas hedging arrangements accounted for the noteworthy
improvement in first-quarter 2003 results compared with the year-ago period. In
addition, the company continued to reduce long-term debt.
"With the Madison Oil Company acquisition fully and successfully
integrated, we believe first-quarter results more appropriately reflect a normal
operating environment for Toreador," said G. Thomas Graves III, President and
Chief Executive Officer of Toreador. "Our operating environment also has
improved with the advent of higher commodity prices. We plan to continue to
aggressively reduce G&A costs, which were down 20% for the quarter compared with
the year-ago period, while focusing on a near-term exploration program,
primarily in Turkey. We are prepared to move forward with a firm growth strategy
in place."
The company expects to strengthen its balance sheet by continuing to
reduce debt and increasing stockholders' equity, according to Graves. In
addition, management continues to review alternatives to refinance all or part
of Toreador's capital structure. The company is analyzing financing options that
would increase working capital, which could include the possible sale of its
French properties.
During the first quarter of 2003, Toreador's oil and gas production was
252,000 barrels of oil equivalent (BOE), a 15% decrease from first-quarter 2002
production of 296,000 BOE. Lower volumes were offset by higher commodity prices
in the quarter. The company's first-quarter 2003 average realized price per BOE
rose 72% to $30.99 from $17.99 per BOE for the first quarter of 2002.
For the first quarter of 2003, 46% of oil and gas production on a BOE
basis was hedged at an average ceiling price per BOE of approximately $28.00.
Higher first-quarter revenues were partially
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offset by a loss related to oil and gas production hedges of $1.3 million.
Revenues for the first quarter of 2002 included a loss related to hedges of $2.1
million.
In 2003, the company has hedged approximately 75% of its natural-gas
production at about $5.00 per thousand cubic feet (Mcf). In addition, Toreador
has hedged approximately 50% of its international oil production at a $26.00 per
barrel ceiling based on Brent crude pricing. None of its domestic oil is hedged.
"With more than 50% of our estimated 2003 production free from hedges,
this year we should be able to continue to participate in higher commodity
pricing," said Graves. "Despite the first-quarter hedging loss, we expect
stronger commodity prices to have a positive impact on results. Hedges currently
in place are primarily to satisfy credit-facility requirements."
EARNINGS GUIDANCE
In an effort to provide investors with more meaningful guidance
regarding future financial results, Toreador's management has established the
following policy: Forecasts of periodic quarterly or full-year results will be
provided, affirmed, updated or rescinded when the company deems it prudent and
feasible to do so.
OPERATIONS BRIEF
TURKEY
Toreador's exploration focus in 2003 will be the Thrace Basin and Sinop
areas of western and northern Turkey. The low-cost program, which is estimated
to range from $1.0-$1.5 million, is expected to include the drilling of shallow
wells and a well re-entry.
As previously reported, Toreador plans to complete the Barbaros-1 well
in the Thrace Basin gas play west of Istanbul. Based on well-log evaluation,
Toreador estimates the Barbaros-1 could produce at an initial rate of 2 million
cubic feet of gas per day. Depending on test results of the Barbaros-1, the
company could drill an appraisal well to confirm the discovery and proceed with
project development.
In addition, Toreador plans to drill three low-cost, high-potential
exploration wells on the Gallipoli Peninsula in the Thrace Basin, 40 miles
southwest of Barbaros-1, to follow up on gas shows encountered by other
operators. Toreador holds working interests in six Thrace Basin licenses ranging
from 25%-100% and operates four of them. Toreador's partner, PEMI, operates the
remaining two licenses.
In the Sinop area northeast of Ankara, the company plans to re-enter a
well that encountered numerous oil and gas shows when it was drilled by another
operator in the late 1980s. Toreador operates and holds a 100% working interest
in six Sinop permits.
In the shallow-water western Black Sea, Toreador has identified at
least six gas prospects with per-prospect reserve potential ranging from 200
billion cubic feet to 1 trillion cubic feet. The reserve potential estimate is
the result of a 2D seismic survey completed on four contiguous permits in 2002.
The company anticipates selecting two well locations, with drilling targeted to
begin by early 2004. Toreador
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is operator and holds a 49% working interest in eight Black Sea permits. The
Turkish national oil company, TPAO, holds the remaining interest.
In the Cendere Field in south central Turkey, Toreador's development
program continues. As previously disclosed, it is anticipated that a 3D seismic
survey of the field in mid-2003 will delineate the northeastern portion and help
the company identify additional drilling locations on the structure. The Cendere
Field, in which Toreador holds a 19.6% working interest, is operated by TPAO and
producing at a gross rate of 2,100 barrels of oil per day (BOPD) (about 400 BOPD
net).
The Zeynel Field, 15 miles to the southwest of Cendere, is producing at
a gross rate of 625 BOPD (50 BOPD net). Upcoming work in the field includes
re-entering the Zeynel-6 development well to test the deeper Derdere formation.
Toreador has an 8.5% royalty interest in the Zeynel Field, which is operated by
Aladdin Middle East.
In late 2002, the East Hasancik-1 well, a new-field wildcat on the
Zeynel permit, discovered oil on a previously untested structure. The East
Hasancik-1 well is on long-term test and will be deepened to the primary
objectives of the Karababa and Derdere formations. Toreador has a 6.75% royalty
interest in the East Hasancik-1 well, located west-southwest of the Zeynel Field
on the Zeynel permit. The well operator is Aladdin Middle East.
FRANCE
Current production continues at a rate of about 1,200 BOPD from
Toreador's five 100%-owned and operated oil fields in France.
The company has expanded its international acreage position in France
with the recent government award of two permits for an initial four-year
exploration period. The Nemours and Aufferville permits cover a total of about
80,000 acres 20 miles northwest of the company's Courtenay exploration permit.
Toreador has identified deeper Jurassic Dogger leads on the Nemours and
Aufferville acreage; the Triassic formation also is prospective in this area.
In late 2002, the French government awarded Toreador the 183,000-acre
Courtenay permit for an initial four-year exploration period. The company's
analysis to date indicates the Neocomian producing trend could continue in an
east-northeast direction onto this permit. In 2003, Toreador will analyze
previously acquired seismic data and gather geological information.
As previously announced, if 2003 capital allocation permits, Toreador
plans to implement a development program that will include the drilling of six
development wells and six workover wells in the Neocomian complex to further
exploit this highly productive area.
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ROMANIA
Toreador may expand its Romanian acreage holdings later this year in a
bid round for 37 blocks offered by the government for future development,
including secondary recovery. The company is analyzing the blocks' potential
and, depending on its findings, could participate in the bid round to be held
during the second half of 2003. It is anticipated the Romanian government will
award blocks by year-end.
As previously announced, in early 2003 the Romanian government awarded
Toreador the 324,000-acre Viperesti Block in exchange for a staged work
commitment. Toreador is 100% owner and operator of the block. During a five-year
exploration period, Toreador plans to acquire and assimilate geological and
geophysical data, analyze seismic information and re-enter one of several
previously drilled wells on the block. Subsequently, Toreador could drill one or
more exploration wells.
TRINIDAD
Toreador is in the process of trading its 11.28% working interest in
Trinidad's Southwest Peninsula Block for an override in the block. As previously
disclosed, Toreador has determined not to participate in future exploration on
the block, which is operated by Trinidad Exploration and Development, Ltd.
UNITED STATES
In the first quarter of 2003, Toreador continued to earn significant
revenues from its U.S. oil and gas perpetual-fee mineral and royalty interest
portfolio, representing $2.2 million, or 35% of total revenues.
Mineral and royalty interest revenues provide a solid financial
foundation on which Toreador continues to build its worldwide exploration and
development program. Less than 5% of the more than 1.4 million net acres in the
company's U.S. mineral portfolio are leased or producing, which provides
potential for additional future revenues from the remaining unleased acreage.
The wells on Toreador's mineral holdings are drilled and completed by various
operators at no cost or risk to the company.
Toreador continues to participate in the completion, including flow
testing, of the Walton Gas Unit 2-2 well located on the 1,000-acre Walton Gas
Unit prospect. Part of the larger Bethel Dome Project in Anderson County in East
Texas, the exploratory well has been drilled to a total depth of 10,100 feet and
producing casing set to total depth. Toreador has a 5.86% interest in the well
and any subsequent offset development-well locations.
In West Texas, the company owns a 16.6% working interest in 6,000 gross
acres where one well has been successfully completed in the San Andres formation
and a second well is being completed, also in the San Andres.
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ABOUT TOREADOR
Toreador Resources Corporation is an independent international energy
company engaged in the acquisition, development, exploration and production of
natural gas, crude oil and other income-producing minerals. The company holds
interests in developed and undeveloped oil and gas properties in France,
Romania, Turkey and Trinidad, West Indies. In the United States, Toreador
primarily owns perpetual oil and gas mineral and royalty interests in eight
states and working interests in five states. More information about Toreador may
be found at the company's web site, www.toreador.net.
Safe-Harbor Statement -- Except for the historical information
contained herein, the matters set forth in this news release are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. The company intends that all such statements be subject to the
"safe-harbor" provisions of those Acts. Many important risks, factors and
conditions may cause the company's actual results to differ materially from
those discussed in any such forward-looking statement. These risks include, but
are not limited to, estimates of reserves, estimates of production, future
commodity prices, exchange rates, interest rates, geological and political
risks, drilling risks, product demand, transportation restrictions, the ability
of Toreador to obtain additional or alternative capital, and other risks and
uncertainties described in the company's filings with the Securities and
Exchange Commission (SEC). The historical results achieved by the company are
not necessarily indicative of its future prospects. The company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
Cautionary Notes to Investors -- The Securities and Exchange Commission
(SEC) permits oil and gas companies, in their filings with the SEC, to disclose
only proved reserves that a company has demonstrated by actual production or
conclusive formation tests to be economically and legally producible under
existing economic and operating conditions. Toreador uses the term "potential
reserves" in this news release, which the SEC's guidelines strictly prohibit it
from including in filings with the SEC. Investors are urged to also consider
closely the disclosure in Toreador's Form 10-K for the fiscal year ended
December 31, 2002, available from the company by calling 214.559.3933 or
800.966.2141. This form also can be obtained from the SEC at www.sec.gov.
The term "potential," when referring to Toreador's reserves, represents
Toreador management's current belief or judgment, based on information available
to it, regarding the potential reserves that could be recovered or could be
recoverable. These numbers should not be viewed as reliable for the purposes of
estimating Toreador's reserves or its prospects. Additionally, the term
"potential" has no engineering significance and is not related to the term
"possible" as that term may be used by the Society of Petroleum Engineers.
# # #
CONTACTS:
Toreador Resources PondelWilkinson MS&L
Douglas W. Weir, SVP and CFO/ Cecilia A. Wilkinson
Crystal C. Bell, Investor Relations 323-866-6089
214-559-3933 or 800-966-2141
(Tables Follow)
TOREADOR RESOURCES CORPORATION
(UNAUDITED)
(in thousands, except per share amounts)
<Table>
<Caption>
THREE MONTHS ENDED
MARCH 31
----------------------
SELECTED FINANCIAL RESULTS 2003 2002
-------- --------
Revenues:
Oil and gas sales $ 7,589 $ 5,321
Loss on commodity derivatives (1,342) (2,146)
Lease bonus and rentals 115 270
-------- --------
Total revenues 6,362 3,445
Costs and expenses:
Lease operating 1,755 1,813
Exploration and acquisition 152 91
Depreciation, depletion, and amortization 1,326 1,552
General and administrative 1,496 1,859
-------- --------
Total costs and expenses 4,729 5,315
-------- --------
Operating income (loss) 1,633 (1,870)
Other expense (339) (586)
Provision (benefit) from income taxes 479 (600)
-------- --------
Net income (loss) 815 (1,856)
Dividends on preferred shares 111 90
-------- --------
Income (loss) applicable to common shares $ 704 $ (1,946)
======== ========
Basic income (loss) per share $ 0.08 $ (0.21)
======== ========
Diluted income (loss) per share $ 0.07 $ (0.21)
======== ========
Weighted average shares outstanding:
Basic 9,338 9,360
Diluted 10,917 9,360
SELECTED OPERATING RESULTS
Production
Oil production (MBbl) 172 212
Natural gas production (MMcf) 477 504
Equivalent production (MBOE) 252 296
Prices
Average oil price per Bbl $ 29.13 $ 18.48
Average natural gas price per Mcf 5.77 2.48
Average equivalent price (per BOE) 30.99 17.99
</Table>
31-MAR 31-DEC
<Table>
<Caption>
SELECTED BALANCE SHEET INFORMATION 2003 2002
-------- --------
Cash flow from operating activities before
change in working capital $ 2,369 $ 2,254
Oil and gas properties, net 72,871 71,872
Total assets 88,480 86,853
Long-term liabilities 42,765 42,431
Stockholders' equity 31,814 30,021
</Table>