Belco Reports Second Quarter 1998 Results; Remaining 1998 Outlook.NEW YORK--(BUSINESS WIRE)--Aug. 5, 1998--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 second quarter ended June June: see month. 30, 1998. Second quarter 1998 average daily production increased 10% over the prior year second quarter to 175 million cubic feet equivalent (MMcfe MMcfe Millions of Cubic Feet Equivalent (Per Day; gas exploration) ). Oil and gas related revenues increased 33% from $28.2 to $37.4 million (including the effects of commodity price risk management activities) when compared to second quarter 1997. 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 changes in working capital, was $20.7 million or $0.65 per basic common share for the second quarter 1998. This compares to $21.7 million or $0.69 per basic common share for the prior year comparable period, with the decline primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to lower oil prices. Weighted average oil prices realized at the wellhead well·head n. 1. The source of a well or stream. 2. A principal source; a fountainhead. 3. The structure built over a well. wellhead Noun 1. declined by 28.6% to $13.74 per barrel during the quarter, compared to $19.25 per barrel realized in the prior year comparable period. Weighted average natural gas prices realized at the wellhead increased by 9.5% to $1.9 6 per Mcf compared to $1.79 per Mcf realized in the prior year second quarter. Second quarter 1998 net 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. was $4.3 million compared to $9.6 million reported for the second quarter 1997. Net operating income per basic common share, after preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) , was $0.10 and $0.31 for the second quarter of 1998 and 1997, respectively. Net operating income is calculated before giving effect to the impact of a $74 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta ($48 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) non-cash ceiling test provision directly related to low oil prices at the end of the second quarter and a $4 million impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. provision related to marketable Marketable are securities that can be easily converted into cash. Such securities will generally have highly liquid markets allowing the security to be sold at a reasonable price very quickly. equity securities. Including the impact of the ceiling test provision and the equity securities impairment, both required by current accounting rules, the reported net loss for second quarter 1998 was $43.8 million or $1.43 per basic common share, after giving effect to the preferred dividend. Belco's Chief Financial Officer, Dominick Dom·i·nick n. Variant of Dominique. Noun 1. Dominick - American breed of chicken having barred grey plumage raised for meat and brown eggs Dominique J. Golio, commented, "It is important to note that while the non-cash ceiling test provision negatively affects reported earnings for the quarter, such provision represents accelerated recovery of past invested dollars. The ceiling test provision results from the assumption that the current low energy prices will continue throughout the entire productive life of the Company's long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. oil and gas reserves. While we believe this scenario is unlikely, given historical oil price data available for the last ten years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time objective is to present a set of financial statements as of the particular quarter or year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. being reported 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 Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ." Basic weighted average common shares outstanding are 31.6 and 31.5 million shares in 1998 and 1997, respectively. For the six months ended June 30, 1998 oil and gas revenues (including the effects of commodity price risk management activities) totaled $70.4 million, an 18% increase over revenues of $59.5 million reported for the first six months of 1997. First half 1998 operating cash flow, before changes in working capital, was $36.5 million or $1.15 per basic common share. For the first six months of 1997, the comparable operating cash flow amount reported was $49.6 million or $1.57 per basic common share. The decline is primarily due to lower commodity prices realized during the first half of 1998 when compared to 1997, despite a 15% increase in Mcfe production over the prior year comparable period. Net operating income for the six month period was $7.0 million compared to $21.6 million in the first six months of 1997. Net operating income per basic common share, after preferred dividends, was $0.16 compared to $0.69 for the first six months of 1998 and 1997, respectively. Net operating income is calculated be fore fore front, e.g. forelimb. fore cannon the third metacarpal bone of the horse. giving effect to the impact of non-cash impairment provisions of oil and gas properties and equity securities in the amount of $168.1 million ($110.2 million after-tax). Remaining 1998 Outlook As previously reported, low oil prices prompted revisions to the Company's 1998 capital budget in the form of postponing substantially all of its oil prone Gulf Coast drilling, including drilling in the prolific Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. Austin Austin.1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum Chalk trend as well as certain other projects. The Company's current 1998 capital budget is approximately $120 million ($70 million drilling related, $10 million acreage and seismic and $40 million for the previously announced purchase of producing properties in the 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. ). However, this budget may be subject to further revision depending on energy prices and whether any significant acquisitions are consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. . Belco continues to aggressively, yet carefully, look to make acquisitions in the current low commodity price environment, especially in areas where assets can be bought or controlled at attractive valuations in its existing core areas. Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. acquisition opportunities are also being pursued through the Company's recently announced investment in Big Bear Exploration Ltd. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :BDX BDX Bordeaux (France) BDX Becton-Dickinson and Company (stock symbol) BDX Business Document Exchange BDX Burst Detector X BDX Beacon Data Extractor ), a Canadian oil and gas company. Belco 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 1993 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. -0-
BELCO OIL & GAS CORP.
(dollars in thousands, except per share data)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30 ,
1998 1997 1998 1997
REVENUES:
Oil and gas sales $33,426 $28,173 $ 68,259 $ 62,578
Commodity price risk
management 3,937 23 2,170 (3,098)
Interest and other 140 893 425 1,268
Total revenues 37,503 29,089 70,854 60,748
COSTS AND EXPENSES:
Oil and gas operating
expenses 9,715 2,310 19,195 4,504
Depreciation, depletion and
amortization 14,333 11,262 28,794 21,698
General and administrative 1,274 867 2,399 1,670
Interest expenses 5,557 0 9,677 0
Impairment of oil and gas
properties 74,000 0 154,000 0
Impairment of equity
securities 4,000 0 14,100 0
Total costs and expenses 108,879 14,439 228,165 27,872
INCOME (LOSS) BEFORE INCOME
TAXES (71,376) 14,650 (157,311) 32,876
PROVISION (BENEFIT) FOR
INCOME TAXES (27,530) 5,018 (54,072) 11,260
NET INCOME (LOSS) ($43,846) $ 9,632 ($103,239) $21,616
PREFERRED STOCK DIVIDENDS ($1,263) $ 0 ($1,855) $ 0
EARNINGS (LOSS) ON COMMON
STOCK ($45,109) $ 9,632 ($105,094) $21,616
EARNINGS (LOSS) PER SHARE OF
COMMON STOCK, BASIC AND
FULLY DILUTED ($1.43) $ 0.31 ($3.33) $0.69
AVERAGE NUMBER OF COMMON SHARES
USED IN COMPUTATION BASIC AND
FULLY DILUTED 31,609 31,500 31,609 31,500
CONSOLIDATED STATEMENT OF CASH FLOWS DATA
Cash Flow from Operations,
before changes in working
capital $20,678 $21,701 $36,470 49,584
Cash Flow from Operations,
before changes in working
capital (Per Common Share)$ 0.65 $ 0.69 $ 1.15 $ 1.57
CONSOLIDATED BALANCE SHEET DATA
June 30, 1998 December 31, 1997
Total Assets $576,106 $697,109
Long-term Debt 288,000 352,090
Total Stockholders' Equity 185,085 184,648
The following table sets forth certain operations data of the
Company for the periods presented:
Three Months
Ended June 30, Variances
1998 1997 AMOUNT %
Oil and Gas Sales (Unhedged)
(in thousands) $33,426 $28,173 $5,253 19%
Commodity Price Risk Management 3,937 23 3,914 --
Weighted Average Sales Prices
(Unhedged):
Oil (per Bbl) $ 13.74 $ 19.25 ($5.51) (29%)
Gas (per Mcf) 1.96 1.79 0.17 10%
Net Production Data:
Oil (MBbl) 1,105 271 834 308%
Gas (MMcf) 9,296 12,814 (3,518) (27%)
Gas equivalent (MMcfe) 15,926 14,438 1,488 10%
Data per Mcfe:
Oil and gas sales revenues
(Unhedged) $ 2.10 $ 1.95 $ 0.15 8%
Commodity Price Risk
Management Activities-- 0.25 -- 0.25 --
Oil and gas operating expenses(0.61) (0.16) (0.45) 281%
General and administrative (0.08) (0.06) (0.02) 33%
Depreciation, depletion and
amortization (0.90) (0.78) (0.12) 15%
---------- ---------- -------- ---
Pre-tax operating profit (1) $ 0.76 $ 0.95 ($0.19) (20%)
======== ======== ======= =====
(1) Excluding ceiling test provision, impairment of equity
securities and interest income and expenses.
The following table sets forth certain operations data of the
Company for the periods presented:
Six Months
Ended June 30, Variances
1998 1997 AMOUNT %
---- ---- ------ -
Oil and Gas Sales (Unhedged)
(in thousands) $68,259 $62,578 $5,681 9%
Commodity Price Risk Management 2,170 (3,098) 5,268 --
Weighted Average Sales Prices
(Unhedged):
Oil (per Bbl) $ 14.09 $ 20.49 ($6.40) (31%)
Gas (per Mcf) 1.99 2.12 (0.13) 6%
Net Production Data:
Oil (MBbl) 2,179 453 1,726 381%
Gas (MMcf) 18,918 25,100 (6,183) (25%)
Gas equivalent (MMcfe) 31,994 27,818 4,175 15%
Data per Mcfe:
Oil and gas sales revenues
(Unhedged) $ 2.13 $ 2.25 ($0.12) (5%)
Commodity Price Risk
Management Activities-- 0.07 (0.11) 0.18 --
Oil and gas operating
expenses (0.60) (0.16) (0.44) 275%
General and administrative (0.07) (0.06) (0.01) 17%
Depreciation, depletion and
amortization (0.90) (0.78) (0.12) 15%
---------- ---------- -------- ---
Pre-tax operating profit(1) $ 0.63 $ 1.14 ($0.51) (45%)
======== ======== ======= =====
(1) Excluding ceiling test provision, impairment of equity securities and interest income and expenses. CONTACT: Belco Oil & Gas Corp Dominick J. Golio - Chief Financial Officer 212/508-9513 |
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