Pretty impressive:
Vintage Petroleum, Inc. Reports First Quarter Results:
Record High Oil and Gas Revenues and Cash Flow
TULSA, Okla., May 3 /PRNewswire/ -- Vintage Petroleum, Inc. (NYSE: VPI)
today announced substantially improved 2000 first quarter income of
$42.7 million, or $0.67 per share. This compares to a loss of $18.1 million,
or $0.34 per share, in the same quarter last year. First quarter 2000 income
of $42.7 million represents an all-time high in quarterly income, if the net
gains on asset sales in the fourth quarter of 1999 are excluded. A
dramatically higher average price of oil and a significantly improved price of
gas, combined with higher production, resulted in a 170 percent increase in
oil and gas revenues, driving the improved income and record cash flow in this
year's first quarter.
Oil and gas production for the quarter rose 19 percent to 6.6 million
equivalent barrels (BOE) from 5.6 million BOE in last year's period. Most of
the increase is attributable to acquisitions made in Argentina, the U.S. and
Ecuador net of asset sales in 1999, an improvement in Bolivia market takes and
the return of certain domestic oil production temporarily shut-in during the
first quarter 1999 due to the low price of oil at that time. During the first
quarter of 1999, the company had production of approximately 350 thousand BOE
voluntarily shut-in. Oil production during the first quarter of 2000 grew
26 percent to 4.8 million barrels, principally from acquisitions and fourth
quarter 1999 U.S. exploitation and exploration activity, net of asset sales in
late 1999. Increases in the company's production of natural gas were limited
to three percent by the sale of properties contributing 14.3 million cubic
feet (MMcf) of daily U.S. gas production at year-end 1999.
The average prices received for gas and especially oil were substantially
higher than prices received in the year-ago quarter. The average price of oil
rose 160 percent, or $15.51 per barrel, to $25.18 a barrel in the quarter
compared to the first quarter last year. The average price of gas grew by
41 percent to $2.18 per Mcf compared to $1.55 per Mcf in the same quarter last
year.
The combination of higher production and prices resulted in oil and gas
sales rising to $144.5 million, nearly triple the $53.5 million in last year's
quarter. The effect of higher production and prices also translated into
substantially higher total revenues of $167.3 million compared to
$66.0 million in the year-ago quarter.
Lease operating costs (LOE) rose 47 percent to $35.0 million, or $5.27 per
BOE, compared to $23.8 million, or $4.26 per BOE, in last year's first
quarter. These increases were in line with company expectations and resulted
from property acquisitions in the second half of 1999, the return of certain
higher-cost U.S. production which was shut-in during the first quarter of last
year due to the low oil price environment and increased well work in the
current quarter which had been deferred during the low oil price period. As
production increases to the company's target of 29.9 million BOE for the
current year, LOE is targeted to decline to the level of $4.70 per BOE.
General and administrative expense was $1.36 per BOE compared to $1.42 per BOE
in the prior year's quarter. Exploration expense declined 61 percent to
$2.3 million, principally a function of the reduction, compared with last
year's quarter, in seismic and other geological and geophysical activities
associated with preparations for drilling in Yemen. Oil and gas DD&A expense
on a per BOE basis decreased 42 percent to $3.25 per BOE compared to a high
$5.60 per BOE in last year's quarter, primarily as a result of the reversal of
the adverse impact that the year-ago historically low oil price had on the
reserve volumes used to calculate the amortization rate. Interest expense
declined eight percent to $13.4 million in response to lower outstanding
borrowings.
Net income for the quarter just ended rose dramatically to $42.7 million,
or $0.67 per share. This compares to the first quarter 1999 loss of
$18.1 million, or $0.34 per share. Weighted average shares outstanding used
to calculate per share income were 20 percent higher in the current period,
primarily the result of the public sale of 9.2 million common shares to
partially fund the purchase of the El Huemul property in 1999. Cash flow
(before working capital changes) for the first quarter was $73.8 million
compared to $8.6 million in the year-ago quarter.
Outlook and Update
Financial
"We are pleased that at the end of the first quarter 2000, the company's
net debt-to-book capitalization ratio was reduced to 52 percent from
57 percent at year-end 1999 and 73 percent in last year's first quarter. We
are now within the range of our stated goal of lowering the net debt-to-book
capitalization ratio to the low-to-mid 50s percent ratio by year-end," said S.
Craig George, CEO. "Based on our outlook for the remainder of this year,
Vintage could make a $250 million acquisition using a portion of the company's
availability under its bank credit facility and still meet its target debt-to-
book capitalization of the low-to-mid 50s percent ratio by year-end. If the
company is not successful at making an acquisition this year, then the debt-
to-book capitalization ratio could decline to the low-to-mid 40s percent
range," added Mr. George.
Excess cash flow over $23.7 million of first quarter capital expenditures
was applied to reduce debt to $519 million at the end of the quarter. As a
result, the unused availability under the company's bank credit facility as of
the end of the first quarter was increased to approximately $400 million.
Exploration and Exploitation Update
The first of three exploration wells on the S-1 Damis Block in the
Republic of Yemen, the An Naeem #1, has been drilled and cased through the
targeted Alif zone. Initial testing of the principal formation remains
underway to determine the existence of oil in commercial quantities. Results
of testing the Alif are anticipated within a week.
Subsequent to testing the An Naeem #1, the drilling rig will be moved to a
second prospect, the Harmel #1, to test a separate, independent Alif prospect
which, like the An Naeem, was identified through the interpretation of
recently acquired 3-D seismic. The location of the Harmel exploratory well is
approximately five miles southwest of the An Naeem well. Depending upon the
results of the An Naeem and Harmel wells, the third well of the initial
program will be drilled either on the Fordus prospect or on a prospect that is
an offset to the An Nageyah well drilled by Shell in the early 1990's which
showed apparent pay in the sub-salt Lam formation.
In Bolivia, activity is underway to move a rig to the location of the
Naranjillos NJL X-111 exploration well to test the deep Devonian Huamampampa
and Santa Rosa formations at a projected target depth of approximately
20,000 feet (6,100 meters). The well is also targeted to test the lower
Iquiri in a down-dip position that has the potential to extend the known
limits of the field. This well is expected to spud in early May with target
depth estimated to be reached in the fourth quarter of this year. A second
drilling rig has been contracted to drill and test the NJL X-118 exploratory
well, a separate Huamampampa and Santa Rosa prospect. The X-118 well is
anticipated to commence drilling late in the second quarter with target depth
expected before year-end 2000. The company continues to seek and negotiate
access to alternative markets to the Bolivia-to-Brazil pipeline for a portion
of its undedicated reserves and production due to the slower than anticipated
growth in natural gas demand in Brazil. In Ecuador, the company plans to spud
its Rio Cotapino exploratory prospect on Block 19 in the third quarter of this
year. "The potential for significant impact to our reserve base from
exploration is greater this year than at any time in the company's history,"
added Mr. George.
Exploration and exploitation activity is expected to grow in the U.S.
during the second quarter. Exploration activity, begun earlier in the year in
the Stagecoach and Galveston Bay areas, is expected to expand during the
quarter. Additional exploratory wells are anticipated to spud in the Cedar
Point and El Sauz prospect areas. The State Tract 46 exploratory well, in the
shallow waters of Galveston Bay, Texas, logged 66 feet of net potential
Vicksburg pay and is currently in the process of being completed. In the
South Pass 24 field in Plaquemines Parish, Louisiana, one well has been
drilled to date, with another currently being completed and up to four more
scheduled to be drilled. Net daily production from the initial well is
currently 4.7 MMcf. Similarly, increased development drilling is anticipated
at the company's Luling field, and Main Pass area of south central Texas and
the Louisiana Gulf Coast. In order to help achieve the company's plan to
drill 45 development wells on its Argentina properties this year, a second
drilling rig was brought under contract in April.
Forward Looking Statements
This release includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements in this release, other than
statements of historical facts, that address estimates of proved oil and gas
reserves, future production and costs, exploration drilling, exploitation
activities and events or developments that the company expects are forward-
looking statements. Although Vintage believes the expectations expressed in
such forward-looking statements are based on reasonable assumptions, such
statements are not guarantees of future performance and actual results or
developments may differ materially from those in the forward-looking
statements. Factors that could cause actual results to differ materially from
those in forward-looking statements include oil and gas prices, exploitation
and exploration successes, continued availability of capital and financing,
and general economic, market or business conditions.
Vintage Petroleum is an independent energy company engaged in the
acquisition, exploitation, exploration and development of oil and gas
properties and the marketing of natural gas and crude oil. Company
headquarters are in Tulsa, Oklahoma, and its common shares are traded on the
New York Stock Exchange under the symbol VPI.
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2000 1999
REVENUES:
Oil and gas sales $144,455 $ 53,494
Gas marketing 18,462 10,318
Oil and gas gathering
and processing 3,418 1,580
Other income 987 612
167,322 66,004
COSTS AND EXPENSES:
Lease operating, including
production taxes 35,000 23,847
Exploratory expenses 2,304 5,887
Gas marketing 17,527 9,794
Oil and gas gathering
and processing 2,668 1,194
General and administrative 9,003 7,933
Depreciation, depletion, and
amortization 22,505 32,205
Interest 13,415 14,560
102,422 95,420
Income (loss) before income taxes 64,900 (29,416)
PROVISION (BENEFIT) FOR INCOME TAXES:
Current 15,926 28
Deferred 6,297 (11,323)
NET INCOME (LOSS) $ 42,677 $(18,121)
EARNINGS (LOSS) PER SHARE:
Basic $ .68 $ (.34)
Diluted $ .67 $ (.34)
Weighted average common shares outstanding:
Basic 62,412 53,107
Diluted 63,788 53,107
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
SUMMARY BALANCE SHEET DATA
(In thousands)
(Unaudited)
March 31, December 31,
2000 1999
Total current assets $114,935 $154,491
Property, plant and equipment, net 970,691 971,352
Total assets 1,129,005 1,168,134
Total current liabilities 113,372 93,902
Long-term debt 519,246 625,318
Stockholders' equity 470,818 431,129
SUMMARY OPERATING DATA
(Unaudited)
Three Months Ended
March 31,
2000 1999
Production:
Oil (MBbls) -
U.S. 2,223 2,105
Argentina 2,218 1,551
Ecuador 305 118
Bolivia 19 13
Total 4,765 3,787
Gas (MMcf) -
U.S. 8,642 10,131
Argentina 1,483 70
Bolivia 1,126 683
Total 11,251 10,884
Total MBOE 6,640 5,601
Average price:
Oil (per Bbl) -
U.S. $ 24.32(A) $ 10.07
Argentina 26.31 9.41
Ecuador 22.86 6.10
Bolivia 29.85 8.60
Total 25.18(A) 9.67
Gas (per Mcf) -
U.S. $ 2.36 $ 1.62
Argentina 1.90 .97
Bolivia 1.15 .51
Total 2.18 1.55
(A) The impact of oil hedges reduced the Company's U.S. and total average
oil prices per Bbl for the three months ended March 31, 2000 by
1.18 and $.55, respectively.
SOURCE Vintage Petroleum, Inc.
CO: Vintage Petroleum, Inc.
ST: Oklahoma
IN: OIL
SU: ERN
05/03/2000 18:28 EDT prnewswire.com |
