BURLINGTON RESOURCES REPORTS STRONG SECOND QUARTER EARNINGS; A MAJOR DIVESTITURE PROGRAM FOR NON-STRATEGIC PROPERTIES; A CORPORATE REORGANIZATION AND AUTHORIZATION TO REPURCHASE AN ADDITIONAL 10 MILLION SHARES OF COMMON STOCK.HOUSTON--(BUSINESS WIRE)--July 11, 1996--Burlington Resources (BR) reported second quarter 1996 operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $96 million and net income of $48 million or $.38 per share. For the same period last year, the company reported operating income of $125,000 and net income of $2 million or $.02 per share. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. for the first half increased 35% to $272 million as compared to $201 million for the first half of 1995. Bobby Shackouls, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , stated that "this period's operating income is the highest of any quarter since the spin-off of El Paso Natural Gas El Paso Natural Gas is a system of natural gas pipelines that brings gas from the Permian Basin in Texas and the San Juan Basin in New Mexico and Colorado to West Texas, New Mexico, Nevada, California and Arizona. It also exports some natural gas to Mexico. Company in 1992. The fundamentals underpinning natural gas prices continue to be strong and we are optimistic about our future prospects." Natural gas sales volumes averaged 1,193 million cubic feet per day (mmcf/d) during the second quarter compared to 1,149 mmcf/d in the second quarter of 1995. Second quarter oil sales volumes increased to 50,400 barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. from 48,000 barrels per day a year ago. Realized natural gas prices in the second quarter increased from $1.22 per thousand cubic feet (mcf) in 1995, to $1.75 per mcf in 1996. Second quarter realized oil prices moved up from $17.07 per barrel in 1995 to $20.29 per barrel in 1996. Gas production increased from first quarter levels in spite of the volume reductions experienced in the San Juan Basin The San Juan Basin is a drainage basin and geologic structural basin in the Four Corners region of the Southwestern United States; its main portion covers around 4,600 square miles, encompassing much of northwestern New Mexico, northeastern Arizona, and parts of Colorado and Utah. for routine annual maintenance. Gas volumes achieved a record level of approximately 1,250 mmcf/d at the end of the quarter as San Juan San Juan, city, Argentina San Juan (săn wän, Span. sän hwän), city (1991 pop. 353,476), capital of San Juan prov., W Argentina. It is a commercial and industrial center in an agricultural region. production returned to normal volumes and large production increases were realized from the High Island A-371 platform 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 . Second quarter oil volumes increased over first quarter primarily as a result of drilling success in the company's River Run project in the Williston Basin. During the quarter, BR acquired 912,500 shares of its common stock to bring total 1996 purchases to 1,374,900 shares. Since it began acquiring stock in 1988, the company has purchased approximately 28,692,000 shares or 19% of its original common stock capitalization. Yesterday, the company's Board of Directors authorized management to repurchase an additional 10 million shares of common stock from time to time depending on market conditions. Divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). Program BR said it will accelerate its divestiture program which has improved operating efficiency and financial performance through the sale of non-strategic properties. Since 1994, BR has sold over 9,000 wells. Over the next twelve months, BR plans to sell its interest in approximately 20,000 wells thus reducing its pre-1994 well count by over 50%. The 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. associated with this prospective divestiture approximate 800 BCFE BCFE Boundary Committee for England BCFE Ballyfermot College of Further Education (Dublin, Ireland) BCFE Board Certified Forensic Examiner Bcfe Billions of Cubic Feet Equivalent (Per Day; Gas Exploration) while the related production represents about 10% of BR's currently produced volumes. Shackouls stated: "This program is designed to eliminate non-strategic properties, allowing the company to improve its operating focus on those assets that have important upside potential Upside potential The amount by which analysts or investors expect the price of a security may increase. upside potential The potential price or gain that may be expected in a security or in a security average, generally stated as the dollar . Essentially, this strategy is a redeployment re·de·ploy tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. of assets into higher return projects. It is driven by the company's desire to increase its efficiency and exposure to meaningful volume growth. The divestiture program comes at a time in our industry when the market for producing properties is excellent with acquisition capital readily available." Reorganization This accelerated divestiture program will allow BR to reorganize and reduce the number of its operating areas from five to three. The accelerated divestiture program and reorganization will result in more than a 20% reduction in the company's 1995 level of production expenses and employee count and over a 10% reduction in corporate administrative expenses. The company plans to substantially complete the reorganization prior to the end of the third quarter. The company will continue to manage its San Juan Basin operations out of its office located in Farmington, New Mexico Farmington (Navajo: Tótah) is a city in San Juan County, New Mexico, United States. As of the 2000 census, the city had a total population of 37,844. The Census Bureau's 2006 population estimate for the city is 43,573. . BR's Denver regional office will be closed and all of the company's remaining activities in the Rocky Mountain, Permian Basin The Permian Basin is a sedimentary basin largely contained in the western part of the U.S. state of Texas. It reaches from just south of Lubbock, Texas, to just south of Midland & Odessa, extending westward into the southeastern part of the adjacent state of New Mexico. and Mid-Continent areas will be managed by BR's existing office located in Midland, Texas Midland is the county seat of Midland CountyGR6 located on the Southern Plains of the western area of the U.S. State of Texas. As of the 2006 U.S. Census estimate, the city had a total population of 102,073. . The two regional offices located in Houston which currently oversee the company's onshore Gulf Coast and offshore Gulf of Mexico operations will be merged to form a single Gulf Coast Division. Going forward the company intends to conduct operations utilizing the Burlington Resources Burlington Resources, is an American oil and gas company. Their headquarters are in Houston, Texas. Based in Houston, Texas, BR has major offices located in Calgary, London, Farmington, Midland and Fort Worth. name rather than that of Meridian Oil. Sale Proceeds Proceeds from the divestiture program will be used to fund the company's expanded exploration program and continued share repurchases. Shackouls commented: "This asset rationalization program will position BR to continue as a premier low cost producer of oil and gas, focused on increased profitability, with substantial financial resources to invest in high quality exploration opportunities and in our common stock." Financial statement follows. -0-
BURLINGTON RESOURCES INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
SECOND QUARTER SIX MONTHS
1996 1995 1996 1995
(In Millions, Except per Share Amount)
Revenues.....................$ 295 $ 211 $ 551 $ 426 Costs and Expenses........... 199 211 392 424 Operating Income............. 96 - 159 2 Interest Expense............. 28 28 57 54 Other Income (Expense) - Net. 1 (1) 2 (1) Income (Loss) Before Income Taxes....................... 69 (29) 104 (53) Income Tax Expense (Benefit)................... 21 (31) 18 (50) Net Income (Loss)............$ 48 $ 2 $ 86 $ (3) Earnings (Loss) per Common Share.......................$ .38 $ .02 $ .68 $ (.02) Average Common Shares........ 126 127 127 127
This income statement should be read in conjuction with the
attached press release.
FORWARD-LOOKING STATEMENTS This press release contains projections and other forward- looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. These projections and statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. A discussion of these factors is included in the Company's periodic reports filed with the Securities and Exchange Commission. CONTACT: Burlington Resources, Houston James Leahy, 713/624-9364 |
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