Triton Energy Reports 1998 Full-Year and Fourth Quarter Financial Results
Tuesday February 2, 9:26 am Eastern Time
Company Press Release
SOURCE: Triton Energy Limited
Triton Energy Reports 1998 Full-Year and Fourth
Quarter Financial Results
DALLAS, Feb. 2 /PRNewswire/ -- Triton Energy Limited (NYSE: OIL - news) today reported financial results for the full year and fourth quarter ended December 31, 1998.
1998 Results
Triton's 1998 loss was $190.6 million, or $5.21 per diluted share, compared with a loss of $9.3 million ($0.25 per diluted share) in 1997. Results for both periods are reported after preference dividends.
The 1998 results included a non-cash, after-tax charge to earnings of $267.4 million, or $7.30 per diluted share, associated with the application of the Securities and Exchange Commission's (SEC) mandated ceiling test to the Company's Cusiana and Cupiagua oil reserves ($184.5 million, or $5.04 per diluted share) and the write-off of certain exploration projects and other assets ($82.9 million, or $2.26 per diluted share). These charges were partially offset by gains from the sale of Triton's equity interest in the OCENSA pipeline ($50.2 million, or $1.37 per diluted share) and the sale of one-half of the subsidiary that contains Triton's Gulf of Thailand Joint Development Area gas project ($63.2 million or $1.73 per diluted share). Triton received net proceeds of $240 million from the sale of these assets.
Excluding the effect of extraordinary and unusual items, Triton's 1998 loss would have been $33.9 million, or $0.93 per diluted share, compared with a loss of $1.0 million ($0.03 per diluted share) in 1997. The increased loss is primarily the result of substantially lower oil prices in 1998. Triton's realized oil price averaged $12.31 per barrel in 1998, a decrease of 30 percent from the prior year.
Management Comment
James C. Musselman, President and interim Chief Executive Officer, said: ''The sharp drop in commodity prices during 1998 has severely affected the oil and gas industry. However, with a strong balance sheet, cash on hand of over $200 million and a forecasted 23 percent increase in 1999 oil production, Triton has the financial flexibility and strength needed to successfully implement its strategy.''
Fourth-Quarter Results
Triton's 1998 fourth quarter loss was $130.3 million, or $3.55 per diluted share, compared with a loss of $3.8 million ($0.10 per diluted share) in the comparable 1997 period, after preference dividends. The fourth quarter results include a non-cash charge to earnings of $126.3 million after tax ($3.45 per diluted share), primarily associated with the application of the SEC's mandated ceiling test based on year-end oil price (Cusiana crude oil held constant into the future at $10.83 per barrel). Excluding the effect of extraordinary and unusual items, the fourth- quarter loss would have been $6.7 million, or $0.18 per diluted share, compared with a loss of $0.5 million ($0.01 per diluted share) in the comparable 1997 period. Increased production partially offset the effect of a 35 percent drop in oil price realizations compared with the year ago quarter.
Fourth quarter production reached a new record with average daily gross production of 425,000 barrels of oil per day from the Company's Cusiana and Cupiagua fields, a 44 percent increase over the fourth quarter of 1997. During the quarter, the second and final oil production unit at the Cupiagua Central Processing Facility began operations.
The following table provides details on full-year and fourth-quarter 1998 results:
In millions, except per share data
Three months ended Twelve months ended
12/31/98 12/31/97 12/31/98 12/31/97
Revenues $50.2 $46.2 $228.6 $149.5
Oil and Gas Sales $45.7 $46.2 $160.9 $145.4
As reported after preference dividends:
Net loss $(130.3) $(3.8) $(190.6) $ (9.3)
Loss per diluted
share $(3.55) $(0.10) $(5.21) $(0.25)
Adjusted for extraordinary and unusual items:
Net loss $(6.7) $(0.5) $(33.9) $(1.0)
Loss per diluted
share $(0.18) $(0.01) $(0.93) $(0.03)
Average diluted shares
outstanding 36.6 36.5 36.6 37.0
Capital Spending
Triton anticipates 1999 capital spending of up to $117 million, a 25 percent reduction from $157 million in 1998, primarily focused on the final development phases of the Cusiana and Cupiagua oil fields where average gross production is currently about 438,000 barrels of oil per day. The Company's capital spending plan also includes implementation of the Company's refocused and scaled-down exploration program.
Additionally, the 1999 capital spending plan includes development drilling in the Cusiana and Cupiagua fields of approximately 17 wells; completion of a third gas handling system for Cupiagua; implementation of the second phase of the Cusiana pressure maintenance water flood; and strategic worldwide exploration activity including drilling in Equatorial Guinea.
Triton's capital spending plan, including capitalized general and administrative costs, is detailed in the following table:
$million 1999 1998
Cusiana/Cupiagua - development $ 83 $ 100
Exploration - drilling $ 22 $ 15
Exploration - G&G and other $ 10 $ 27
Block A-18 (JDA) and other $ 2 $ 15
Total Capital Spending $ 117 $ 157
As a result of low commodity prices in the oil and gas industry, the Company will continue its efforts to reduce capital spending and general and administrative expenses in 1999. During 1998, Triton implemented a restructuring plan that will reduce its annual gross general and administrative costs by approximately 50 percent.
Reserves
Triton's estimated year-end proved oil and gas reserves are 240 million barrels of oil equivalent (mmboe). The 1998 year-end reserves reflect the sale of one-half of the subsidiary that contains Triton's Gulf of Thailand Joint Development Area gas project and production during 1998 of ten mmboe from the Cusiana and Cupiagua fields. Triton's year-end estimated resource base, which includes proved, probable and other resources is 634 mmboe.
Using the SEC standard measures for calculating the value of oil and gas reserves, Triton's estimated after-tax year-end value for proved oil and gas reserves discounted at ten percent annually is $656 million. The decrease from year-end 1997 levels reflects lower crude oil prices, the aforementioned sale of one-half of the subsidiary that contains Triton's Gulf of Thailand Joint Development Area gas project and production from the Cusiana and Cupiagua fields during 1998.
The ceiling test charge has not resulted in any downward adjustment to the Cusiana and Cupiagua reserve volumes. Like most other exploration and production companies, the ceiling test charge was triggered by 1998's steep drop in oil prices.
About Triton
Triton Energy Limited is a Dallas-based international oil and gas exploration and production company with major oil and gas assets in Latin America and Southeast Asia. For more information about Triton: www.tritonenergy.com.
Certain statements in this news release regarding future expectations and financial performance, other than historical information, may be regarded as ''forward-looking statements'' within the meaning of the U.S. Securities Litigation Reform
Act. They are subject to various risks and uncertainties, such as the timely completion and cost of exploration, appraisal and development activities, capital spending plans, estimates of underground accumulations of oil and gas and their net present value, anticipated production volumes and quarterly fluctuations in results. These are discussed in detail in the Company's Securities and Exchange Commission filings, including the report on Form 10-Q for the quarter ended September 30, 1998. Actual results may vary materially.
TRITON ENERGY
Condensed Consolidated Financial Information
(Preliminary Unaudited)
(in thousands)
Pro Forma (a)
December 31, December 3l, December 3l,
1998 l998 1997
Cash and cash
equivalents $ 237,186 $ 19,122 $ 13,451
Short-term borrowings and
current maturities
of long-term debt 19,027 19,027 184,975
Long-term debt,
excluding current
maturities 413,465 413,465 443,312
Shareholders' equity 441,871 223,807 296,620
Total ordinary shares
outstanding 36,643 36,643 36,541
Average diluted ordinary
shares outstanding 36,609 36,609 37,008
(a) The Pro Forma Selected Balance Sheet Items as of December 31, 1998 are
adjusted to give effect to the January 4, 1999 issuance of 3,177,500
8% Preference Shares at $70 per share for proceeds of $222.4 million
(before closing expenses of $4.4 million) as if the transaction was
consummated on December 31, 1998.
Consolidated Oil Production Statistics (Net to Triton)
Three months ended Year ended
December 3l, December 31,
1998 1997 1998 1997
Average revenue realized
per Bbl* $ 10.97 $ 16.76 $ 12.31 $ 17.54
Sales volumes -
Bbls/day 36,901 21,424 27,340 15,825
Forward oil sale
deliveries - Bbls/day 8,283 8,283 8,356 6,745
Total revenue
Bbls/day 45,184 29,707 35,696 22,570
* Includes Ecopetrol reimbursement barrels and oil delivered under the
forward oil sale
SOURCE: Triton Energy Limited
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