Belco Oil & Gas Corp. Reports Third Quarter 2000 Results; Operations Update.Business Editors NEW YORK--(BUSINESS WIRE)--Nov. 10, 2000 Belco Oil & Gas Corp. (NYSE NYSE See: New York Stock Exchange :BOG bog, very old lake without inlet or outlet that becomes acid and is gradually overgrown with a characteristic vegetation (see swamp). Peat moss, or sphagnum, grows around the edge of the open water of a bog (peat is obtained from old bogs) and out on the surface. ) today announced its results for the third quarter 2000. THIRD QUARTER Third quarter 2000 average daily production increased approximately 8% from 160 to 173 million cubic feet equivalent (MMcfe) when compared to the third quarter of 1999. The higher production is the result of new wells placed on line and property acquisitions, partially offset by the sale of North Texas properties during the current quarter which were producing approximately 7.5 MMcfe per day at the time of sale. Oil and gas revenues net of hedging activities increased 34% to $51.0 million from $38.2 million when compared to the third quarter of 1999. This increase is due to substantially higher realized oil and gas prices and higher production volumes. Third quarter 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. , before working capital changes, was $21.3 million or $0.63 per basic common share after payment of preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) as compared to $0.61 in the prior year comparable period. For the first nine months of 2000 and 1999, operating cash flow, before working capital changes, was $67.2 million or $2.00 per basic common share and $55.8 million or $1.60 per basic common share, respectively, after payment of preferred dividends. Average hedged oil prices realized increased by 24% to $25.27 per barrel during the quarter, compared to $20.41 per barrel realized in the prior year comparable period, while average hedged natural gas prices realized increased by 20% to $2.62 per Mcf compared to $2.19 per Mcf realized in the prior year third quarter. Third quarter 2000 commodity price risk management ("CPRM CPRM Content Protection for Recordable Media CPRM Companhia de Pesquisa de Recursos Minerais CPRM Common Property Resource Management CPRM Communist Party of the Republic of Moldova CPRM Commodity Price Risk Management CPRM Country Portfolio Review Mission ") activities reduced reported revenues by $27.8 million representing cash settlements paid on both hedge and non-hedge transactions. In the prior year comparable period, similar CPRM activities reduced revenues by $2.3 million in cash settlements paid. For the first nine months of 2000, CPRM activities reduced reported revenues by $54.5 million in cash settlements paid, as substantially higher average oil and gas prices exceeded hedge related contract amounts. In the prior year first nine months, $7.8 million in cash settlements were received by the Company as we benefitted from average oil and gas prices that were below our hedge related contract amounts. 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. increased by $3.5 million over the prior year third quarter due to workovers of existing wells, new wells placed on production during the year and an escalation es·ca·late v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. of certain operating costs operating costs npl → gastos mpl operacionales . Production taxes were higher by $0.5 million over the prior year comparable period due to higher commodity prices. Costs and expenses for the third quarter and first nine months of 2000 include $21.0 million and $70.6 million, respectively, in non-cash mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. losses related to the change in fair value of commodity derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. recorded in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with current accounting rules. In the prior year comparable periods, the Company recorded $22.2 million and $45.2 million, respectively, in similar non-cash mark-to-market losses. Third quarter 2000 net loss per basic common share was $0.32 compared to a net loss of $0.35 per basic common share in the 1999 third quarter. Excluding the non-cash mark-to-market CPRM losses, third quarter and first nine months of 2000 net income per share would have been $0.11 and $0.38, respectively, compared to $0.10 and $0.16, respectively, for the prior year comparable periods. Basic common shares outstanding for the third quarter were approximately 31.4 and 31.6 million shares for 2000 and 1999, respectively. 2000 PROJECTION The following projections and estimates are based on current projections for the Company's performance for the full-year 2000. The current production forecast for the year 2000 is approximately 65 billion cubic feet of gas equivalent ("Bcfe"), with 63% natural gas. Costs and expenses are not expected to be materially different from the amounts reported on an Mcfe unit basis for the first nine months of 2000. Through September 30, 2000, net capital expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. by the Company totaled $136.0 million, including $70.0 million identified with the acquisition of properties and property dispositions of $10.7 million. Capital expenditures for the full year 2000 are expected to total approximately $150.0 million net. For the fourth quarter of 2000, the Company has CPRM derivatives, including hedge and non-hedge, in an amount equating e·quate v. e·quat·ed, e·quat·ing, e·quates v.tr. 1. To make equal or equivalent. 2. To reduce to a standard or an average; equalize. 3. to approximately 90% of its oil production at a weighted average price of $18.75 per barrel and 55% of its natural gas production at a weighted average price of $2.40 per MMBtu pursuant to CPRM related activities and commitments. For additional details and information related to CPRM activities, including hedge and non-hedge derivatives instruments, reference is made to our most recent annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed for the calendar year 1999 and Form 10-Q Form 10-Q See 10-Q. filings for the year 2000. OPERATIONS UPDATE Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. Three rigs continue development drilling in the Elm Grove Elm Grove may refer to:
North Dakota North Dakota, state in the N central United States. It is bordered by Minnesota, across the Red River of the North (E), South Dakota (S), Montana (W), and the Canadian provinces of Saskatchewan and Manitoba (N). Belco has drilled a total of 11 horizontal Mission Canyon wells this year in North Dakota. Three discoveries have been made and a fourth possible discovery well is being tested. The remaining seven wells are either development or delineation wells. Belco operates all of the wells and has a 100% working interest in the three discoveries and a 50% working interest in the fourth well. Belco's net acreage position has also increased to over 50,000 net acres. Two rigs are currently drilling in this play. Wyoming A total of 21 wells have spudded this year in a two rig drilling program along the Moxa moxa (mok´sah) [Japanese] the dried leaves of Artemisia vulgaris, burned on or near acupoints in moxibustion. mox·a n. Arch trend in southwest Wyoming and the production results have exceeded our original expectations. Belco is operator most of the wells in this program and has a net 61% average working interest in these wells. Texas Belco is currently testing the Blackstone Unit No.1 well in Liberty County, Texas Liberty County is a county located in the U.S. state of Texas within the Houston–Sugar Land–Baytown Metropolitan Area. As of the 2000 U.S. Census, the population is 70,154. Its county seat is Liberty6. Geography According to the U.S. . This is Belco's first Lower Wilcox test within its 140 square mile HLM HLM Habitation à Loyer Modéré (France) HLM Houston Lake Mining, Inc (Val Caron, ON, Canada) HLM Heart-Lung Machine HLM Hierarchical Linear Modelling HLM Holland, Michigan 3-D survey. Testing of the well commenced at the bottom of the well bore. The two lower zones tested gas with some water. The lowest zone tested 961 MCFD, 120 BWPD BWPD Barrels of Water Per Day on a 14/64" choke (jargon) choke - To fail to process input or, more generally, to fail at any endeavor. E.g. "NULs make System V's "lpr(1)" choke." See barf, gag. at 1,283 psi PSI - Portable Scheme Interpreter flowing tubing pressure. The second zone encountered rates of 2,006 MCFD, 36 BOPD BOPD Barrels of Oil Per Day BOPD Bataan Ocean Petroleum Depot , 17 BWPD on a 15/64" choke at 1,818 psi flowing tubing pressure. Testing of the third and most promising of five potential test intervals should occur later in November. In addition, a second Lower Wilcox exploratory well, based on the same 3-D seismic shoot, is expected to spud in late November. Belco is the operator and has a 46% carried working interest in this project. Belco is participating in a significant Georgetown horizontal re-entry RE-ENTRY, estates. The resuming or retaking possession of land which the party lately had. 2. Ground rent deeds and leases frequently contain a clause authorizing the landlord to reenter on the non-payment of rent, or the breach of some covenant, when the well in Washington County, Texas Washington County is known for the Convention of 1836 where the signing of the Texas Declaration of Independence took place. Thus, forming the Republic of Texas. Washington county is located in the U.S. state of Texas. As of 2000, the population was 30,373. . The Ricks No.1-H well, in which Belco has a 30% working interest, was originally drilled as a single lateral lateral /lat·er·al/ (-il) 1. denoting a position farther from the median plane or midline of the body or a structure. 2. pertaining to a side. lat·er·al adj. 1. in the Austin Chalk formation See See also: Chalk and produced approximately 9.6 Bcf of gas. This well bore is being re-entered to add a Georgetown formation lateral and has drilled over 3,000 feet horizontally with strong indications of gas. At least six potential additional Georgetown formation re-entry candidate wells have been identified that are nearing 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 in the Austin Chalk formation. REPORTS AVAILABLE ON WEBSITE Commencing with the first quarter of 2000, no hard copy quarterly reports have been published by the Company. Shareholders can view press releases including quarterly data, operations updates, SEC filings and other Company documents as soon as they are electronically released on our website at www.belcooil-gas.com or request through investor relations Investor relations The process by which the corporation communicates with its investors. to be placed on our e-mail list. Belco Oil & Gas Corp. is an independent energy company engaged in the exploration, development, acquisition and production of natural gas and oil. This press release includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although BOG believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements herein include the timing and extent of changes in commodity prices for oil and gas, the need to develop and replace reserves, environmental risks, drilling and operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. , risks related to exploration and development, uncertainties about the estimates of reserves, competition, government regulation and the ability of the Company to meet its stated business goals. For a description of these and other risks, please refer to Belco's annual report on Form 10-K as filed with the Securities and Exchange Commission.
BELCO OIL & GAS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2000 1999 2000 1999
---- ---- ---- ----
REVENUES:
Oil and gas sales,
net of hedging activities $50,999 $38,228 $148,841 $104,215
Non-Hedge Commodity Price
Risk Management Activities
- cash settlements (a) (9,743) (1,047) (22,738) (121)
Interest and other 214 275 714 675
-------- -------- -------- --------
Net revenues 41,470 37,456 126,817 104,769
-------- -------- -------- --------
COSTS AND EXPENSES:
Oil and gas operating
expenses 10,226 6,683 25,427 22,162
Production taxes 3,402 2,884 10,924 6,986
Depreciation, depletion
and amortization 13,500 13,247 41,666 40,259
General and administrative 1,506 1,178 4,651 3,651
Interest expenses 5,030 5,838 18,632 16,188
Non-cash change in fair
value of derivatives 21,023 22,210 70,614 45,225
-------- -------- -------- --------
Total costs and expenses 54,687 52,040 171,914 134,471
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME
TAXES (13,217) (14,584) (45,097) (29,702)
PROVISION (BENEFIT) FOR
INCOME TAXES (4,626) (5,104) (15,784) (10,396)
-------- -------- -------- --------
NET INCOME (LOSS) (8,591) (9,480) (29,313) (19,306)
PREFERRED STOCK DIVIDENDS (1,540) (1,727) (4,692) (5,205)
-------- -------- -------- --------
NET INCOME (LOSS)
APPLICABLE TO COMMON STOCK $(10,131) $(11,207) $(34,005) $(24,511)
======== ======== ======== ========
NET INCOME (LOSS) PER SHARE
OF COMMON STOCK,
Basic and fully diluted $(0.32) $(0.35) $(1.09) $(0.78)
======== ======== ======== ========
AVERAGE NUMBER OF COMMON
SHARES USED IN COMPUTATION,
Basic and fully diluted 31,427 31,600 31,259 31,600
======== ======== ======== ========
(a) Includes cash premiums received.
The following table sets forth certain operations data of the
Company for the periods presented:
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2000 1999 2000 1999
---- ---- ---- ----
Oil and Gas Sales, Net of
Hedging Activities
($'s in 000's) $50,999 $38,228 $148,841 $104,215
Weighted Average Sales Prices:
Oil (per Bbl)
- Unhedged $31.00 $20.16 $28.78 $15.75
- Hedge settlements (5.73) 0.25 (3.69) 3.42
------ ------ ------ ------
Net realized $25.27 $20.41 $25.09 $19.17
Gas (per Mcf)
- Unhedged $3.87 $2.34 $3.04 $1.90
- Hedge settlements (1.25) (0.15) (0.67) (0.03)
------ ------ ------ ------
Net realized $2.62 $2.19 $2.37 $1.87
Net Production Data:
Oil (MBbl) 981 829 2,995 2,596
Gas (MMcf) 9,998 9,745 31,049 29,153
Gas equivalent (MMcfe) 15,883 14,719 49,019 44,732
Daily production (Mmcfe) 173 160 179 164
Operations Data per Mcfe:
Oil and gas sales revenues
(Unhedged) $4.35 $2.68 $3.68 $2.15
Hedged and non-hedge cash
settlements $(1.75) $(0.16) $(1.11) $0.17
Oil and gas operating
expenses (0.64) (0.45) (0.52) (0.50)
Production taxes (0.21) (0.20) (0.22) (0.15)
General and administrative (0.09) (0.08) (0.09) (0.08)
Depreciation, depletion
and amortization (0.85) (0.90) (0.85) (0.90)
------ ------ ------ ------
Pre-tax operating profit (1) $0.81 $0.89 $0.89 $0.69
===== ===== ===== =====
Operating cash flow (1) $1.66 $1.79 $1.74 $1.59
===== ===== ===== =====
(1) Excludes non-cash mark-to-market commodity price risk management
activities, interest income and interest expense.
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