(TOREADOR LOGO) 4809 Cole Avenue
Suite 108
Dallas, TX 75205
214.559.3933
Fax 214.559.3945
www.toreador.net
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NEWS RELEASE
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TOREADOR REPORTS IMPROVED SECOND-QUARTER RESULTS
DALLAS, TEXAS - (AUGUST 12, 2003) - Toreador Resources Corporation
(NASDAQ: TRGL; TSX: TRX) today reports improved second-quarter 2003 financial
results, with income applicable to common shares of $445,000, or $0.05 per
diluted share, compared with a loss applicable to common shares of $581,000, or
$0.06 per diluted share, for the second quarter of 2002. Operating income for
the second quarter of 2003 was $508,000, compared with operating income of
$482,000 for the same period last year.
Lower general and administrative expenses and DD&A primarily accounted
for the improvement in second-quarter 2003 operating results compared with the
year-ago period. Results include a one-time charge of $466,000 for a reduction
in force implemented during the second quarter, which includes the company's
severance obligation. In addition, the company reduced long-term debt 26% for
the 12 months ended June 30, 2003.
A decline in oil and gas sales and an $816,000 loss related to oil and
gas production hedges reduced second-quarter 2003 revenues to $5.1 million, down
18% from the year-ago period. Revenues of $6.2 million for the second quarter of
2002 included a loss of $288,000 related to oil and gas production hedges.
"We have refocused our operating strategy and aggressively reduced
debt, and we are pleased with our continued profitability," said G. Thomas
Graves III, President and Chief Executive Officer of Toreador. "A vast
improvement in net cash provided by operating activities in the second quarter
is indicative of our more efficient management of the business. The financial
outlook for the remainder of the year is positive.
"We have reduced the work force by one-third since year-end 2002 and
beginning in the third quarter, G&A expenses should level off to a normalized
quarterly range of about $1.3 million-$1.5 million," he continued.
Toreador expects to strengthen its balance sheet by continuing to
reduce long-term debt and increasing stockholders' equity, according to Graves.
The company continues to diligently explore alternatives to refinance all or
part of its capital structure.
During the second quarter of 2003, Toreador's oil and gas production
was 231,100 barrels of oil equivalent (BOE) versus second-quarter 2002
production of 267,700 BOE. The
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2 - Toreador Resources Corporation
company's oil production declined due to the third-quarter 2002 sale of its 25%
working interest in a Kansas oil field and lower production volumes from four
100%-owned French oil fields in the Neocomian complex. During the third quarter,
an extensive well workover program was initiated to improve production from the
French fields. In addition, natural-gas production also declined as a result of
the temporary loss of two gas producing wells in which the company has
interests.
Lower oil and gas sales volumes were somewhat offset by higher
commodity prices in the quarter. The company's second-quarter 2003 average
realized price per BOE rose 12% to $25.65 from $22.95 per BOE for the second
quarter of 2002.
In 2003, the company has hedged approximately 85% 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.
Approximately 50% of oil and gas production on a BOE basis is hedged at an
average ceiling price of approximately $26.65 per BOE.
"With slightly more than 50% of our estimated 2003 production free of
hedges, we should be able to continue to participate in higher commodity
pricing," said Graves. "Nearly two-thirds of our oil production remains
unhedged; therefore, we expect stronger oil prices to have a positive impact on
results. Based on current natural-gas futures prices, we estimate a gain on
commodity derivatives for the third quarter of 2003. Current hedges are
primarily in place to satisfy credit-facility requirements."
SIX-MONTH RESULTS
For the first six months of 2003, Toreador reports significantly
improved financial results. Income applicable to common shares was $1.1 million,
or $0.12 per diluted share, compared with a loss applicable to common shares of
$2.5 million, or $0.27 per diluted share, for the second quarter of 2002.
Operating income for the first half of 2003 was $2.1 million, compared with an
operating loss of $1.4 million for the same period last year. Higher oil and gas
prices and lower general and administrative expenses and DD&A primarily
accounted for the improvement in six-month 2003 results compared with the
year-ago period.
Six-month revenues were $11.5 million, which included a loss of $2.2
million related to oil and gas production hedges. As discussed earlier in this
news release, lower oil and gas sales volumes were somewhat offset by higher
commodity prices in the first six months of 2003. Revenues of $9.6 million for
the first six months of 2002 included a loss of $2.4 million related to oil and
gas production hedges.
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3 - Toreador Resources Corporation
During the first six months of 2003, Toreador's oil and gas production
was 482,700 BOE, compared with 563,100 BOE for the same period last year. The
company's average realized price per BOE for the first six months of 2003 was
$28.36, a 41% increase from an average realized price per BOE of $20.06 for the
first six months of 2002.
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 is the Thrace Basin and Sinop
areas of western and northern Turkey.
Toreador tested the Barbaros-1 well in the Thrace Basin gas play west
of Istanbul and perforated two zones. Based on well-log evaluation,
noncommercial quantities of gas were recovered, and the well was plugged and
abandoned.
As previously announced, Toreador drilled a low-cost, shallow
exploratory well, the Tahtatepe-1 well, on the Gallipoli Peninsula in the Thrace
Basin, 40 miles southwest of Barbaros-1. The well followed up on gas shows
encountered by other operators. The Tahtatepe-1 was deemed noncommercial, and
the well was plugged and abandoned. Additional drilling in the area is being
evaluated based on well results.
Toreador holds working interests in four Thrace Basin licenses ranging
from 50%-100% and operates them. PEMI is Toreador's partner in two of the
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 company anticipates selecting
two well locations, with drilling targeted to begin in 2004. Toreador is
operator and holds a 49% working interest in eight Black Sea permits. The
Turkish national oil company, TPAO, holds the remaining interest.
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4 - Toreador Resources Corporation
In the Cendere Field in south central Turkey, Toreador's development
program continues. As previously disclosed, it is anticipated that a 3D seismic
survey will delineate the northeastern portion of the field 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 is
producing at a gross rate of 1,325 barrels of oil per day (BOPD) (about 260 BOPD
net).
The Zeynel Field, 15 miles to the southwest of Cendere, is producing at
a gross rate of 350 BOPD (about 30 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.
FRANCE
Current production from Toreador's five 100%-owned oil fields in France
is about 1,000 BOPD. Production from the company's four-field Neocomian complex
has declined because of routine well maintenance requirements. As noted earlier
in this news release, the company has initiated an extensive workover program to
improve production. Toreador, operator of the fields, anticipates French
production returning to a more normal level of about 1,200 BOPD when the
workover project has been completed in the third quarter.
As previously announced, if 2003 capital allocation permits, Toreador
plans to implement a development program that will include several extensive
well workovers and the drilling of development wells in the Neocomian complex to
further exploit this area.
TRINIDAD
As previously announced, Toreador holds a 1% override in Trinidad. The
company previously has stated that it was not participating in future
exploration on Trinidad's Southwest Peninsula Block.
UNITED STATES
In the second quarter of 2003, Toreador continued to earn significant
revenues, or $2.0 million, from its U.S. oil and gas perpetual-fee mineral and
royalty interest portfolio. This amount represented 33% of total revenues.
During the first six months of 2003, seven wells were completed for production
on the company's mineral holdings. Currently, two wells are being drilled. The
wells on Toreador's mineral interests are drilled and completed by various
operators at no cost or risk to the company.
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5 - Toreador Resources Corporation
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 Walton Gas Unit 2-2 well located on the 1,000-acre Walton Gas Unit
prospect has been completed and is producing at a rate of 300 Mcf per day. Part
of the Bethel Dome Project in Anderson County in East Texas, the exploratory
well was drilled to a total depth of 10,100 feet. 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, also in the San Andres, has been completed, tested and shut
in for evaluation.
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.
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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
Douglas W. Weir, SVP and CFO/
Crystal C. Bell, Investor Relations
214-559-3933 or 800-966-2141
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7 - Toreador Resources Corporation
TOREADOR RESOURCES CORPORATION
(Unaudited)
(in thousands, except per share amounts)
<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
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SELECTED FINANCIAL RESULTS 2003 2002 2003 2002
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Revenues:
Oil and gas sales $ 5,823 $ 6,244 $ 13,412 $ 11,565
Loss on commodity derivatives (816) (288) (2,158) (2,434)
Lease bonus and rentals 89 231 204 501
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Total revenues 5,096 6,187 11,458 9,632
Costs and expenses:
Lease operating 1,671 1,793 3,426 3,729
Exploration and acquisition 247 204 399 449
Depreciation, depletion, and amortization 602 1,621 1,928 3,173
Reduction in force 466 -- 466 --
General and administrative 1,602 2,087 3,098 3,669
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Total costs and expenses 4,588 5,705 9,317 11,020
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Operating income (loss) 508 482 2,141 (1,388)
Other expense 375 (1,406) 36 (1,992)
Provision (benefit) from income taxes 327 (433) 806 (1,033)
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Net income (loss) 556 (491) 1,371 (2,347)
Dividends on preferred shares 111 90 222 180
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Income (loss) applicable to common shares $ 445 $ (581) $ 1,149 $ (2,527)
============ ============ ============ ============
Basic income (loss) per share $ 0.05 $ (0.06) $ 0.12 $ (0.27)
============ ============ ============ ============
Diluted income (loss) per share $ 0.05 $ (0.06) $ 0.12 $ (0.27)
============ ============ ============ ============
Weighted average shares outstanding:
Basic 9,338 9,349 9,338 9,349
Diluted 9,361 9,349 9,361 9,349
SELECTED OPERATING RESULTS
Production
Oil production (MBbl) 166 191 338 402
Natural gas production (MMcf) 391 460 868 965
Equivalent production (MBOE) 231 268 483 563
Prices
Average oil price per Bbl $ 23.92 $ 23.13 $ 26.57 $ 20.89
Average natural gas price per Mcf 5.01 3.57 5.43 3.00
Average equivalent price (per BOE) 25.65 22.95 28.36 20.06
</Table>
<Table>
<Caption>
JUNE 30
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SELECTED BALANCE SHEET INFORMATION 2003 2002
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Cash flow from operating activities before change in working capital $ 4,121 $ 4,051
Oil and gas properties, net 77,928 73,111
Total assets 90,727 88,933
Long-term debt 23,985 32,625
Stockholders' equity 32,365 30,021
</Table>