ATP Oil & Gas Corporation Announces Record Production and Second Quarter 2006 Results.HOUSTON Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; -- ATP ATP: see adenosine triphosphate. ATP in full adenosine triphosphate Organic compound, substrate in many enzyme-catalyzed reactions (see catalysis) in the cells of animals, plants, and microorganisms. Oil & Gas Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ATPG ATPG Automatic Test Pattern Generation ATPG Automatic Test Program Generator ) today announced an operations update and second quarter 2006 results: --Achieved record quarterly production of 13.5 Bcfe, an increase of 128% over first quarter 2006 production of 5.9 Bcfe; --Recorded quarterly revenue of $108.9 million and net income available to common shareholders of $6.4 million; --Improved the financial strength of our Term Loan by reducing the interest rate from LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). plus 5.50% to LIBOR plus 3.25% and increasing the size from $350.0 million to $525.0 million; --Added new production in the second quarter from Tors and South Marsh Island 166, bringing to five the number of wells placed on production in the first half of 2006; --Acquired four deepwater Deepwater or Deep Water may refer to:
--Finalizing completion of the third well at Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by Canyon canyon Very narrow, deep valley cut by a river through resistant rock and having steep, almost vertical sides. Canyons occur most often in arid or semiarid regions. Some canyons (e.g., the Grand Canyon) are spectacular natural features. See also submarine canyon. 711 - well tie-in tie-in n. One thing that is related to or connected with another. Noun 1. tie-in - a fastener that serves to join or connect; "the walls are held together with metal links placed in the wet mortar during construction" early 2007 Results of Operations Oil and natural gas revenues were $108.9 million from production of 13.5 Bcfe for the second quarter of 2006. Comparable amounts in the second quarter of 2005 for oil and natural gas revenues were $33.5 million from production of 5.0 Bcfe. Improvements in the prices of hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. volumes and overall higher commodity prices in the second quarter of 2006 resulted in a 20% increase in average realized prices to $8.05 per Mcfe, compared to $6.73 per Mcfe in the same period in 2005. Lease operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. (LOE LOE Ley Orgánica de Educación (Spanish) LOE Level Of Effort LOE Limited Objective Experiment LOE Letter of Explanation LOE Language Other than English. ) for the second quarter totaled $21.3 million or $1.57 per Mcfe compared to $6.0 million or $1.21 per Mcfe for the second quarter of 2005. The increase was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. increase in production. Included in second quarter LOE was uninsured hurricane hurricane, tropical cyclone in which winds attain speeds greater than 74 mi (119 km) per hr. Wind speeds reach over 190 mi (289 km) per hr in some hurricanes. repairs performed on our oil and gas properties in the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east . LOE in the Gulf of Mexico was $1.65 per Mcfe, of which approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 19% was associated with properties that did not contribute to production for the period. For those properties with production, LOE in the Gulf of Mexico amounted to $1.35 per Mcfe. LOE in the North Sea was $1.35 per Mcfe for the second quarter. General and administrative expenses (G&A) totaled $4.1 million for the second quarter, compared to $5.2 million for the second quarter of 2005. The decrease was primarily due to compensation related to the ATP Employee Volvo Volvo Cars is the luxury car maker using the Volvo Trademark. The Volvo Group is a Swedish supplier of commercial transport solutions providing products such as trucks, buses and construction equipment, drive systems for marine and industrial applications, aerospace Challenge Plan which was charged to expense in 2005. The plan was satisfied in the first quarter of 2006 and no such provision was necessary in the second quarter of 2006. Depreciation, depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able , and amortization (DD&A) per Mcfe was $3.20 for the second quarter, slightly above $3.07 for the second quarter 2005. ATP recorded a tax provision during the second quarter, related to our foreign jurisdictions, based on the expected 2006 effective tax rate of each jurisdiction. The rates were determined based on the projected results of operations for the year, the valuation allowance that had previously been recorded at each jurisdiction and any permanent differences affecting the overall tax rate. ATP recorded net income available to common shareholders of $6.4 million or $0.21 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share in the second quarter, compared to net loss available to common shareholders in the second quarter 2005 of $3.3 million or $0.11 per basic and diluted share. The Company's selected operating statistics and financial information, included within this press release, contain additional information on our activities for the second quarter 2006 and the comparable period in 2005.
Three Months Ended Six Months Ended
June 30, June 30,
---------------- ----------------
2006 2005 2006 2005
---------------- ----------------
Selected Operating Statistics
Production
Natural gas (MMcf) 8,621 3,721 13,654 8,315
Oil and condensate (MBbls) 816 205 966 403
Natural gas equivalents (MMcfe) 13,518 4,951 19,452 10,730
Gulf of Mexico (GOM, in MMcfe) 9,989 4,580 15,315 9,818
North Sea (MMcfe) 3,529 371 4,137 912
Average Prices (includes effect of
cash flow hedges)
Natural gas (per Mcf) $ 7.06 $ 6.55 $ 7.28 $ 6.41
Natural gas (per Mcf) - GOM 7.48 6.74 7.44 6.36
Natural gas (per Mcf) - N. Sea 6.44 5.47 6.89 6.95
Oil and condensate (per Bbl) - GOM 58.83 43.57 56.64 41.87
Natural gas, oil and condensate
(per Mcfe) 8.05 6.73 7.92 6.55
Lease operating expense (per Mcfe) 1.57 1.21 1.64 0.99
Lease operating expense (per Mcfe)
- GOM 1.65 1.21 1.72 0.96
Lease operating expense (per Mcfe)
- N. Sea 1.35 1.25 1.35 1.25
Other Expenses, per Mcfe
Depreciation, depletion and
amortization (DD&A) $ 3.20 $ 3.07 $ 3.11 $ 3.33
DD&A - GOM 3.15 3.01 3.04 3.27
DD&A - N. Sea 3.34 3.80 3.38 3.93
Selected Financial Data
(In Thousands, Except Per Share Data)
Oil and gas revenues, including
settled derivatives (1) $108,877 $33,316 $154,102 $70,295
Net income (loss) 17,360 (3,322) 14,315 (2,321)
Preferred dividends (10,986) - (17,804) -
Net income (loss) available to
common shareholders 6,374 (3,322) (3,489) (2,321)
Net income (loss) per share - basic
and diluted $ 0.21 $ (0.11) $ (0.12)$ (0.08)
Average number of common shares
outstanding
Basic 29,715 28,979 29,576 28,952
================ ================
Diluted 30,396 29,794 30,302 29,788
================ ================
-----------
(1) See oil and gas revenue reconciliation on the last page of this
press release.
Acquisitions Update Thus far in 2006, ATP has acquired five blocks, all with a 100% working interest and all operated by ATP. The blocks, Telemark (Atwater Atwater, city (1990 pop. 22,282), Merced co., central Calif., in the San Joaquin valley; inc. 1922. It is the processing and commercial center of an irrigated farming area. National wildlife refuges are nearby. Valley 63), Mirage (Mississippi Canyon - "MC" - 941), Oasis (MC 943), Morgus (MC 942) and Green Canyon 37 are located in the Gulf of Mexico deepwater. These blocks demonstrate a continuing commitment by ATP to expand its inventory of future developments on projects where previous operations have shown the presence of hydrocarbons hydrocarbons (hīˈ·drō·kärˑ·b  nz),n. . Four of the five blocks have previous drilling where hydrocarbons have been discovered but have not yet been developed. In addition there are several identified exploration targets on these blocks. ATP is currently working with its independent reservoir reservoir (rĕz`əvôr, -vwär), storage tank or wholly or partly artificial lake for storing water. Building an embankment or dam to preserve a supply of water for irrigation is an ancient practice; India and Egypt have many old and engineers to determine their estimates of the amount and classification of the oil and gas reserves associated with these acquisitions. Development Update We are finalizing the completion of the third well at MC 711 (100% WI). On August 2, 2006, we flowed hydrocarbons to the surface to clean up the well. The well is scheduled to be tied back to our production platform, located in the southern portion of the block, in early 2007. Upon completion of current well operations, the drilling rig will move to Ladybug ladybug or ladybird beetle Any of the approximately 5,000 widely distributed beetles of the family Coccinellidae. The name originated in the Middle Ages, when the beetle was dedicated to the Virgin Mary and called “beetle of Our Lady. (Garden Banks 409 - 50% WI), where it will spud a new well targeting an updip attic location to the currently producing zone. In addition, we will move uphole in the existing wellbore at Ladybug to produce two zones that have been behind pipe since first production in 2001. Hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. Update ATP has hedged an additional 1,216,000 barrels of oil for 2007 and 2008 since its first quarter earnings press release dated May 9, 2006. Included in these hedges are 365,000 barrels of crude oil puts for 2007 with $60 floors. The remaining 851,000 barrels were hedged with fixed forward contracts at prices ranging from $72.87 per barrel barrel: see English units of measurement. to $80.10 per barrel. With these additional hedges Additional hedge A protection against fallout risk in the mortgage pipeline. , our weighted average crude oil hedge price including both puts and fixed forward contracts is $60.34 per barrel for the remainder of 2006, $66.08 per barrel for 2007, and $76.55 per barrel for 2008. A detailed listing of these new hedges as well as previously existing hedges is provided near the end of this press release. Production Update Increased production in the second quarter and first half of 2006 was predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. from the five new wells located at MC 711 (2 wells), Tors, L-06d, and South Marsh Island 166 as well as resumed production from Ship Shoal 358 and Ship Shoal 321. ATP expects daily production to average more than 150 MMcfe MMcfe Millions of Cubic Feet Equivalent (Per Day; gas exploration) per day in 2006, an increase of more than 175% over 2005 production. Major development projects on the Gulf of Mexico Shelf, Deepwater Gulf of Mexico, and in the U.K. North Sea should continue to provide substantial production growth. Accordingly, we expect production to average in excess of 200 MMcfe per day in 2007. Capital Resources and Liquidity On June June: see month. 22, 2006, ATP announced that it had amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. and improved the terms of its Term Loan by expanding the credit facility from its original $350.0 million to $525.0 million and reducing the interest rate. We received proceeds of $167.4 million, net of related amendment costs. Significant terms of the amendment included: --a decrease in the overall interest rate of the credit facility from LIBOR plus 5.5% to LIBOR plus 3.25%; --the amendment or removal of certain covenants within the credit facility to provide more flexibility to ATP; --the ability to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. our existing Series A and Series B Preferred securities; and --the ability to buy back our common stock provided certain ratios are met Cash flow from operating activities was $46.6 million for the six months ended June 30, 2006, compared to $38.8 million for the same period in 2005. Cash flow from operating activities prior to changes in assets and liabilities, a non-GAAP measure frequently used by research analysts, was a record $91.1 million for the six months ended June 30, 2006, compared to $39.2 million for the same period in 2005. At June 30, 2006, ATP had working capital of approximately $114.6 million, an improvement of $114.0 million over December December: see month. 31, 2005. The improvement in working capital is primarily the result of the previously discussed financing and stronger cash flow from operating activities. ATP had $202.8 million in cash and cash equivalents on hand at June 30, 2006, compared to $65.6 million at December 31, 2005. In the first half of 2006, ATP paid $203.4 million for acquisition and development of oil and gas properties, compared to $147.0 million for the same period in 2005. The Company estimates that capital expenditures are expected to be approximately $575 - $600 million for the full year 2006. 2nd Quarter 2006 Conference Call ATP management will host a conference call on August 3, 2006 to review production and financial results for the first quarter 2006. T. Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. Bulmahn, Chairman and President; Gerald Gerald - ["Gerald: An Exceptional Lazy Functional Programming Language", A.C. Reeves et al, in Functional Programming, Glasgow 1989, K. Davis et al eds, Springer 1990]. W. Schlief, Senior Vice President; Leland Leland is the name of several places:
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. ; and Albert Albert, German churchman Albert, 1490–1545, German churchman, cardinal of the Roman Catholic Church. A member of the house of Brandenburg, he became (1514) Archbishop of Mainz. L. Reese REESE Research and Evaluation on Education in Science and Engineering (National Science Foundation) , Jr., Chief Financial Officer, will discuss the details. Date: Thursday Thursday: see week. , August 3, 2006 Time: 9:00 AM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT , 8:00 AM CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT , 7:00 AM MDT MDT abbr. Mountain Daylight Time MDT (in the US and Canada) Mountain Daylight Time MDT n abbr (US) (= mountain daylight time) → , 6:00 AM PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT To participate in the live webcast, simply log on to ATP's website at www.atpog.com at least ten minutes prior to the start of the call and click on Investor Info INFO Information INFO Information (logging abbreviation) INFO Inform(ed/ation) INFO Ionic Difluoroamino Oxidizer and then Conference Calls. To listen to the conference call via the telephone, dial 877-704-5385. If you are unable to participate during the live webcast, the webcast will be archived on ATP's website at www.atpog.com for 30 business days. A recorded replay of the conference call will be available for a period of 24 hours after the call starting at 10:00 a.m. CDT. To listen to the replay, dial 888-203-1112 with the conference identification number 9409286. About ATP Oil & Gas ATP Oil & Gas is focused on development and production of natural gas and oil in the Gulf of Mexico and the North Sea. The Company trades publicly as ATPG on the NASDAQ Global Select Market. Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements included in this news release are "forward-looking statements" under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. ATP cautions that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Some of the key factors which could cause actual results to vary from those ATP expects include changes in natural gas and oil prices, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as our ability to access them, and uncertainties regarding environmental regulations or litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and other legal or regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. developments affecting our business. More information about the risks and uncertainties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc ATP's forward-looking statements are found in our SEC filings.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
June 30, December 31,
2006 2005
---------- -----------
Assets
Current assets:
Cash and cash equivalents $ 202,809 $ 65,566
Restricted cash 12,753 12,209
Accounts receivable (net of allowances of
$348 and $367) 100,975 83,571
Derivative asset 3,123 -
Other current assets 8,704 4,454
---------- -----------
Total current assets 328,364 165,800
---------- -----------
Oil and gas properties:
Oil and gas properties (using the
successful efforts
method of accounting) 1,162,404 899,284
Less: Accumulated depletion, impairment
and amortization (333,103) (271,863)
---------- -----------
Oil and gas properties, net 829,301 627,421
---------- -----------
Furniture and fixtures, net 1,179 1,175
Deferred tax asset 5,004 4,025
Deferred financing costs, net 26,383 17,922
Other assets, net 11,639 7,420
---------- -----------
44,205 30,542
---------- -----------
Total assets $1,201,870 $ 823,763
========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accruals $ 168,243 $ 144,675
Current maturities of long-term debt 5,250 3,500
Current maturities of long-term capital
lease 22,247 8,679
Asset retirement obligation 17,082 7,097
Derivative liability - 1,282
Deferred tax liability 987 -
---------- -----------
Total current liabilities 213,809 165,233
Long-term debt 514,182 337,489
Long-term capital lease - 34,437
Asset retirement obligation 76,296 60,267
Deferred tax liability 2,093 -
Other long-term liabilities and deferred
obligations - 8,826
---------- -----------
Total liabilities 806,380 606,252
---------- -----------
Shareholders' equity:
Preferred stock: $0.001 par value 352,662 184,858
Common stock: $0.001 par value 30 29
Additional paid-in capital 144,780 149,267
Accumulated deficit (104,822) (101,333)
Accumulated other comprehensive income 3,751 (4,693)
Unearned compensation - (9,706)
Treasury stock, at cost (911) (911)
---------- -----------
Total shareholders' equity 395,490 217,511
---------- -----------
Total liabilities and shareholders'
equity $1,201,870 $ 823,763
========== ===========
CONSOLIDATED INCOME STATEMENTS
(In Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2006 2005 2006 2005
-------- ------- -------- --------
Oil and gas revenues $108,885 $33,488 $154,130 $ 70,468
-------- ------- -------- --------
Costs and operating expenses:
Lease operating 21,259 6,007 31,952 10,581
Exploration 367 2,173 508 2,507
General and administrative 4,078 5,163 9,834 9,354
Stock-based compensation 3,297 - 5,526 -
Depreciation, depletion and
amortization 43,249 15,201 60,519 35,704
Accretion 1,671 600 3,218 1,179
(Gain) loss on abandonment 3,451 76 3,506 76
-------- ------- -------- --------
Total costs and operating
expenses 77,372 29,220 115,063 59,401
-------- ------- -------- --------
Income from operations 31,513 4,268 39,067 11,067
-------- ------- -------- --------
Other income (expense):
Interest income 1,207 998 1,780 1,488
Interest expense (12,097) (8,595) (23,269) (14,884)
Other income - 7 8
-------- ------- -------- --------
Total other income (expense) (10,890) (7,590) (21,489) (13,388)
-------- ------- -------- --------
Income (loss) before income
taxes 20,623 (3,322) 17,578 (2,321)
Provision for income taxes (3,263) - (3,263) -
-------- ------- -------- --------
Net income (loss) $ 17,360 $(3,322) $ 14,315 $ (2,321)
======== ======= ======== ========
Preferred dividends (10,986) - (17,804) -
-------- ------- -------- --------
Net income (loss) available to
common shareholders $ 6,374 $(3,322) $ (3,489) $ (2,321)
======== ======= ======== ========
Net income (loss) per common
share - basic and diluted $ 0.21 $ (0.11) $ (0.12) $ (0.08)
======== ======= ======== ========
Weighted average number of
common shares:
Basic 29,715 28,979 29,576 28,952
======== ======= ======== ========
Diluted 30,396 29,794 30,302 29,788
======== ======= ======== ========
CONSOLIDATED CASH FLOW DATA
(In Thousands)
Six Months Ended
June 30,
--------------------
2006 2005
--------- ---------
Cash flows from operating activities:
Net income (loss) $ 14,315 $ (2,321)
Adjustments to operating activities 76,799 41,505
Changes in assets and liabilities (44,527) (414)
--------- ---------
Net cash provided by operating activities 46,587 38,770
--------- ---------
Cash flows from investing activities:
Additions to oil and gas properties (203,445) (146,957)
Additions to furniture and fixtures (250) (182)
Decrease in restricted cash 129 -
--------- ---------
Net cash used in investing activities (203,566) (147,139)
--------- ---------
Cash flows from financing activities:
Proceeds from long-term debt 178,500 132,113
Principal payments of long-term debt (875) (1,425)
Deferred financing costs (11,116) (10,416)
Issuance of preferred stock, net of issuance
costs 145,463 -
Principal payments of capital lease (20,869) -
Exercise of stock options 4,231 1,039
Other - (68)
--------- ---------
Net cash provided by financing activities 295,334 121,243
--------- ---------
Effect of exchange rate changes on cash (1,112) (766)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 137,243 12,108
Cash and cash equivalents, beginning of period 65,566 102,774
--------- ---------
Cash and cash equivalents, end of period $ 202,809 $ 114,882
========= =========
Hedges, Derivatives and Fixed Price Contracts
2006
---------------------------------------------
1Q 2Q 3Q 4Q FY
------------ ----------------------------------------------
Gulf of
Mexico:
Fixed
Forwards
and Swaps
------------
Natural Gas
Volumes
(MMMBtu) 2,160.0 1,363.0 1,376.0 1,073.0 5,972.0
Price
($/MMBtu) $ 8.08 $ 8.50 $ 8.50 $ 9.83 $ 8.59
Crude Oil
Volumes
(MBbls) 109.2 78.7 294.4 294.4 776.7
Price
($/Bbl) $ 47.14 $ 51.68 $ 65.21 $ 65.21 $ 61.30
Equivalents
Volumes
(MMMBtue) 2,815.2 1,835.2 3,142.4 2,839.4 10,632.2
Price
($/MMBtue)$ 8.03 $ 8.53 $ 9.83 $ 10.48 $ 9.30
Puts
-----------
Crude Oil
Volumes
(MBbls) 378.5 506.0 506.0 1,390.5
Floor Price
($/Bbl) $ 57.50 $ 57.50 $ 57.50 $ 57.50
North Sea:
Fixed
Forwards
and Swaps
------------
Natural Gas
Volumes
(MMMBtu) 399.0 1,256.0 1,655.0
Price
($/MMBtu)
(1) $ 11.40 $ 15.70 $ 14.69
------------- ------------------------ -------- -----------
2007 2008
-------------------------------------------- --------
1Q 2Q 3Q 4Q FY FY
------------ -------------------------------------------- --------
Gulf of
Mexico:
Fixed
Forwards
and Swaps
------------
Natural Gas
Volumes
(MMMBtu) 1,350.0 1,350.0
Price
($/MMBtu) $ 10.89 $ 10.89
Crude Oil
Volumes
(MBbls) 297.0 345.8 395.6 395.6 1,434.0 366.0
Price
($/Bbl) $ 69.61 $ 70.74 $ 70.90 $ 70.90 $ 70.60 $ 76.55
Equivalents
Volumes
(MMMBtue) 3,132.0 2,074.8 2,373.6 2,373.6 9,954.0 2,196.0
Price
($/MMBtue) $ 11.30 $ 11.79 $ 11.82 $ 11.82 $ 11.65 $ 12.76
Puts
-----------
Crude Oil
Volumes
(MBbls) 585.0 91.0 92.0 92.0 860.0
Floor Price
($/Bbl) $ 57.88 $ 60.00 $ 60.00 $ 60.00 $ 58.56
North Sea:
Fixed
Forwards
and Swaps
------------
Natural Gas
Volumes
(MMMBtu) 1,800.0 1,800.0
Price
($/MMBtu)
(1) $ 15.59 $ 15.59
----------------------------------------------------------------------
The above are hedges, derivatives and fixed price contracts that are
currently in effect or have settled prior to such date.
Additional hedges, derivatives and fixed price contracts, if any,
will be announced during the year.
----------------------------------------------------------------------
Recent Gulf of Mexico Crude Oil Fixed Forwards:
August 1, 2006: 500 bopd April 2007 - December 2007 at $78.25/bbl
August 1, 2006: 1,000 bopd January 2008 - December 2008
at $76.55/bbl
July 14, 2006: 200 bopd January 2007 - December 2007 at $80.10/bbl
June 23, 2006: 500 bopd January 2007 - June 2007 at $73.62/bbl
June 23, 2006: 1,000 bopd July 2007 - December 2007 at $72.87/bbl
Recent Gulf of Mexico Crude Oil Puts:
June 23, 2006: 1,000 bopd January 2007 - December 2007
at $60.00/bbl floor
----------------------------------------------------------------------
(1) Assumes $1.86 to GBP 1.00 currency translation rate.
Oil and Gas Revenue Reconciliation (1)
(In Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------------
2006 2005 2006 2005
-------- -------- -------- -------
Oil and gas revenues, including
the effects of settled
derivatives (1) $108,877 $33,316 $154,102 $70,295
Hedging ineffectiveness and other
(2) 8 172 28 173
-------- -------- -------- -------
Oil and gas revenue per income
statements $108,885 $33,488 $154,130 $70,468
======== ======== ======== =======
(1) Oil and gas revenues including the effects of settled derivative
activities differ from our reported revenues from oil and gas
production because such numbers omit the effects of previously
recognized changes in the fair market value of derivatives settled
during the period. Set forth above is a table reconciling the
presented information with revenues from oil and gas production.
The total of oil and gas revenues, including the effects of
settled derivative activities, is presented because of its
acceptance as an indicator of the Company's realized cash flow
from its oil and gas production during the period for which it is
presented.
(2) Hedging ineffectiveness is the portion of gains (losses) on
derivatives that is based on imperfect correlations to benchmark
oil and natural gas prices.
Cash Flow From Operating Activities
(In Thousands)
Six Months Ended
June 30,
-----------------
2006 2005
-------- -------
Cash flows from operating activities:
Net income (loss) $ 14,315 $(2,321)
Adjustments to operating activities 76,799 41,505
-------- -------
Cash flows from operating activities
before changes in assets and liabilities 91,114 39,184
Changes in assets and liabilities (44,527) (414)
-------- -------
Net cash provided by operating activities $ 46,587 $38,770
======== =======
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