Benton Oil and Gas Company Reports Higher Third Quarter Net Income and Announces Financial and Strategic Initiatives.Business Editors CARPINTERIA, Calif.--(BUSINESS WIRE)--Nov. 10, 2000 Benton Benton, city (1990 pop. 18,177), seat of Saline co., central Ark.; founded 1836. Once a significant aluminum producer, the city manufactures fabricated-metal and wood products. Oil and Gas Company (NYSE NYSE See: New York Stock Exchange :BNO BNO Beroepsorganisatie Nederlandse Ontwerpers BNO Boys' Night Out (band) BNO Boyz Nite Out BNO Big Night Out (band) BNO Bau- und Nutzungsordnung BNO Baksan Neutrino Observatory ) today reported for the quarter ended September September: see month. 30, 2000 net income of $9.0 million ($0.29 per share on a 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. basis) compared to a loss of $14.1 million ($0.48 per share on a diluted basis) for the quarter ended September 30, 1999. Adjusted for extraordinary gains of $3.1 million on the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of debt, net income for third quarter 2000 was $5.9 million ($0.19 per diluted share). This compares to a net loss for the third quarter 1999 of $1.1 million ($0.04 per diluted share) adjusted for non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $13.0 million. Revenues for the third quarter ended September 30, 2000 were $38.0 million compared to $24.6 million for the same quarter in 1999. Oil sales for the third quarter were 2.4 million barrels, or 26.0 thousand barrels of oil per day, compared to 2.3 million barrels, or 25.0 thousand barrels of oil per day in the year earlier quarter. Oil prices realized in Venezuela Venezuela (vĕnəzwā`lə, Span. vānāswā`lä), officially the Bolivarian Republic of Venezuela, republic (2005 est. pop. 25,375,000), 352,143 sq mi (912,050 sq km), N South America. , which are subject to an operating services agreement, were $15.81 per barrel, compared to $10.70 per barrel in the third quarter of 1999. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , before working capital changes, for the quarter ended September 30, 2000 was $10.1 million ($0.33 per diluted share) compared to $3.6 million ($0.12 per diluted share) for the third quarter 1999. Earnings before interest, taxes, 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 , depreciation and amortization ("EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ") for the period ended September 30, 2000 was $22.2 million, compared to EBITDA of $11.1 million for the third quarter 1999. Capital expenditures for the period were $16.8 million, primarily related to the infill in·fill n. 1. The use of vacant land and property within a built-up area for further construction or development, especially as part of a neighborhood preservation or limited growth program. 2. drilling program in Venezuela, compared to $4.9 million last year. Dr. Peter J. Hill, Benton's President and Chief Executive Officer, said, "The improvements quarter-on-quarter and year-on-year are encouraging. The Company continues to benefit from higher crude prices, but now is also beginning to realize the benefits from its efforts to achieve reductions in its cost structure and to improve operating and capital efficiencies. Oil prices increased 48% from last year's third quarter while our G&A has decreased by 15% over the same period. We continue to attack costs to improve margins." Dr. Hill also said, "The Company, with the full support of its reconstituted Board of Directors, has adopted a comprehensive business strategy. The strategy concentrates on two initiatives to enhance shareholder value: restoring the Company's financial flexibility and exploiting the Company's core assets. In connection with these initiatives and the financial challenges it faces, the Company has retained Wasserstein Was·ser·stein , Wendy Born 1950. American playwright noted for her comedies, such as The Heidi Chronicles (1988), for which she won a Pulitzer Prize. Perella & Co. as its financial advisor to assist in analyzing financial alternatives, with particular focus on strengthening the balance sheet. Many options are being considered and analyzed an·a·lyze tr.v. an·a·lyzed, an·a·lyz·ing, an·a·lyz·es 1. To examine methodically by separating into parts and studying their interrelations. 2. Chemistry To make a chemical analysis of. 3. , including, among others, refinancings, alliances, cash purchases of debt at a discount, asset disposals and debt for equity swaps Equity swap A swap in which the cash flows exchanged are based on the total return on some stock market index and an interest rate (either a fixed rate or floating rate). Related: Interest rate swap. . Their initial report will be submitted to the Board later this month, and integrated as part of the strategic plan." Since the end of the third quarter, the Company has further reduced its total debt outstanding by $4 million, having issued 1.4 million shares of common stock in a series of transactions to holders of its 11-5/8% senior notes due 2003. "The Company is already well advanced in further developing its core assets," Dr. Hill continued. "In Venezuela, a major strategic shift is being made to focus on maximizing the value of production at its South Monagas “Monagas” redirects here. For other uses, see Monagas (disambiguation). Estado Monagas is one of the 23 states (estados) into which Venezuela is divided. Unit rather than increasing production at any cost." As part of this shift, the Company, with the assistance of alliance partner Schlumberger Schlumberger Limited is the world's largest oilfield services corporation operating in approximately 80 countries, with about 70,000 people of 140 nationalities. Schlumberger supplies a wide range of products and services from seismic acquisition and processing; formation , is reviewing all aspects of operations to integrate revised computer field simulation models with improved completion technology. The goal will be a new and more effective infill drilling and workover program that is designed to deliver lower cost production in the second half of 2001. The Company believes there is significant upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside to the value of the remaining reserves in the Unit that is still to be realized and optimized. In addition, discussions are underway with PDVSA PDVSA Petroleos De Venezuela, SA , the Venezuelan state oil and gas company, to sell gas from the Unit, which could further enhance the value of the Company's position in the South Monagas area. "In Russia Russia, officially the Russian Federation, Rus. Rossiya, republic (2005 est. pop. 143,420,000), 6,591,100 sq mi (17,070,949 sq km). ," Dr. Hill said, "the Company's operating strategy for 34%-owned Geoilbent is to continue to increase production, improve drilling and completion efficiency and extend infrastructure." Geoilbent remains self-funding self-funding, n the method of providing employee benefits in which the sponsor does not purchase conventional insurance but rather elects to pay for the claims directly, generally through the services of a third-party administrator. , and is positioned to start repaying its loans from the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Bank of Reconstruction and Development and the International Moscow Moscow, city, Russia Moscow (mŏs`kou, –kō), Rus. Moskva, city (1991 est. pop. 8,802,000), capital of Russia and of Moscow region and the administrative center of the Central district, W central European Russia, on the Bank in January January: see month. 2001. Oil sales included in the Company's third quarter results were 13,300 barrels of oil per day, compared to 11,500 barrels of oil per day in the comparable period last year. At Arctic Arctic area of constant cold. [Geography: WB, A:600] See : Coldness (language, music) Arctic - A real-time functional language, used for music synthesis. ["Arctic: A Functional Language for Real-Time Control", R.B. Gas (60%-owned), the Company has been successfully expanding production of oil and condensate condensate, matter in the form of a gas of atoms, molecules, or elementary particles that have been so chilled that their motion is virtually halted and as a consequence they lose their separate identities and merge into a single entity. through the recompletion of existing wells, gaining operational experience and generating attractive cash flows. Oil sales, which began in June June: see month. , averaged just over 1,600 barrels of oil per day in September 2000. The short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. strategy is to build facilities and pipelines to optimize optimize - optimisation delivery of liquids and to start production and sales of natural gas. The technical details, scope of the pipeline links and access to the Gazprom JSC Gazprom (RTS:B>GAZP MICEX:B>GAZP LSE: OGZD; Russian: ОАО Газпром, sometimes transcribed as Gasprom[1] infrastructure have all been agreed upon Adj. 1. agreed upon - constituted or contracted by stipulation or agreement; "stipulatory obligations" stipulatory noncontroversial, uncontroversial - not likely to arouse controversy . Combined with an aggressive pursuit of gas contracts, this will demonstrate the Company's capability to economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: produce, deliver and market hydrocarbons hydrocarbons (hīˈ·drō·kärˑ·b  nz),n. from the Arctic Gas license and to tap a portion of its vast resource base. Dr. Hill concluded, "When I joined the Company at the end of August, I quickly came to appreciate the enormous resource base and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. potential of Benton's core assets and its dedicated and skilled staff. As our financial and strategic initiatives come to fruition fru·i·tion n. 1. Realization of something desired or worked for; accomplishment: labor finally coming to fruition. 2. Enjoyment derived from use or possession. 3. , the Company should be able to reduce its financial leverage and exploit the value of its unique, world class projects. We believe this should result in greater values for all of our stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. ." For the nine-month period ended September 30, 2000, the Company reported net income of $11.7 million ($0.39 per diluted share) compared to a loss of $30.3 million ($1.03 per diluted share) for the period ended September 30, 1999. Adjusted for extraordinary gains and non-cash charges, net income in 2000 was $9.7 million ($0.32 per diluted share) compared to net loss in 1999 of $16.0 million ($0.54 per diluted share). Revenues for the nine-month period ended September 30, 2000 were $101.5 million compared to $61.0 million for the year earlier period. Oil sales for the nine-month period were 6.9 million barrels, or 25.1 thousand barrels of oil per day, compared to 7.4 million barrels, or 27.1 thousand barrels of oil per day in the year earlier period. The decrease is the result of the suspension in Venezuela of drilling activity in 1999 and natural field decline during the year. New production from the 2000 infill drilling program did not commence until February February: see month. . Oil prices realized in Venezuela were $14.71 per barrel, compared to $8.25 per barrel in the corresponding period of 1999. Cash flow from operations, before working capital changes, was $23.5 million ($0.78 per diluted share) as compared to negative $0.4 million (negative $0.01 per diluted share). EBITDA for the nine-month period ended September 30, 2000 was $57.8 million, compared to $20.0 million for the same period in 1999. Capital expenditures for the period were $40.1 million, compared to $29.4 million last year. Benton Oil and Gas Company, headquartered in Carpinteria, California Carpinteria is a small oceanside city located in the southeastern extremity of Santa Barbara County, California, east of Santa Barbara and northwest of Ventura. The population was 14,194 at the 2000 census. , is an independent oil and gas exploration and development company with principal operations in Venezuela and Russia. Additional information about the Company can be found at the Company's web site: www.bentonoil.com. The Company will hold a teleconference call on November November: see month. 10, 2000 at 10:00 a.m. Pacific Time. If you would like to participate, please call 1-719-457-2617 (teleconference identification number 701724) ten minutes prior to the start of the teleconference call. The conference call will also be available over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.vcall.com. This press release may contain "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. " within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical facts included in this release may constitute forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Actual results may differ materially from the Company's expectations due to changes in operating performance, project schedules, oil and gas demands and prices, and other technical and economic factors.
BENTON OIL AND GAS COMPANY
CONSOLIDATED BALANCE SHEETS
($ millions)
September 30, December 31,
2000 1999
ASSETS:
CURRENT ASSETS:
Cash and equivalents $21.1 $21.2
Restricted cash 34.6 -
Marketable securities 2.1 4.5
Accounts receivable, net 43.4 32.3
Prepaid expenses and other 0.6 1.6
Total current assets 101.8 59.6
RESTRICTED CASH 10.8 46.5
OTHER ASSETS 6.3 10.6
DEFERRED INCOME TAXES 12.2 12.2
INVESTMENTS IN AND ADVANCES TO
AFFILIATED COMPANIES 72.6 61.3
PROPERTY AND EQUIPMENT, net 113.5 86.1
TOTAL ASSETS $317.2 $276.3
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):
CURRENT LIABILITIES:
Accounts payable $11.4 $3.3
Accrued interest 9.7 4.7
Accrued expenses 24.8 17.1
Income taxes payable 12.4 2.4
Current portion of long-term debt 34.6 -
Total current liabilities 92.9 27.5
LONG TERM DEBT 217.0 264.6
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST 6.4 1.4
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock and paid-in capital 153.8 147.4
Retained deficit (152.2) (163.9)
Treasury stock (0.7) (0.7)
Total stockholders' equity (deficit) 0.9 (17.2)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $317.2 $276.3
BENTON OIL AND GAS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per BOE and per share amounts)
THREE MONTHS ENDED: September 30, 2000 September 30, 1999
Barrels of oil sold 2,393 2,297
MCF of Gas Sold 20 -
Total BOE 2,396 2,297
Average price/barrel $15.83 $10.70
Average price/mcf $4.73 -
$ $/BOE $ $/BOE
REVENUES:
Oil sales $37,878 $15.83 $24,565 $10.70
Gas sales 94 4.73 - -
37,972 15.85 24,565 10.70
EXPENSES:
Operating expenses 12,983 5.42 10,180 4.43
Depletion 3,690 1.54 3,386 1.47
Impairments - - 13,047 5.68
Depreciation and
amortization 451 0.19 391 0.17
General and
administrative 3,782 1.58 4,444 1.94
Taxes other than on income 1,364 0.57 1,094 0.48
22,270 9.30 32,542 14.17
INCOME (LOSS) FROM
OPERATIONS 15,702 6.55 (7,977) (3.47)
OTHER NON-OPERATING INCOME (EXPENSE)
Investment income and other 2,234 0.93 2,294 1.00
Interest expense (7,318) (3.05) (7,187) (3.13)
Net gain (loss) on exchange
rates 67 0.03 (16) (0.01)
(5,017) (2.09) (4,909) (2.14)
INCOME (LOSS) FROM
CONSOLIDATED COMPANIES
BEFORE INCOME TAXES AND
MINORITY INTERESTS 10,685 4.46 (12,886) (5.61)
Income tax expense 5,018 2.09 923 0.40
INCOME (LOSS) BEFORE
MINORITY INTERESTS 5,667 2.37 (13,809) (6.01)
Minority interest in
consolidated subsidiary
companies 2,007 0.84 177 0.08
INCOME (LOSS) FROM
CONSOLIDATED COMPANIES 3,660 1.53 (13,986) (6.09)
Equity in net earnings (losses)
of affiliated companies 2,213 0.92 (143) (0.06)
NET INCOME (LOSS) BEFORE
EXTRAORDINARY INCOME 5,873 2.45 (14,129) (6.15)
Extraordinary income on debt
repurchase, net of
tax of $0 3,095 1.29 - -
NET INCOME (LOSS) $8,968 $3.74 ($14,129) ($6.15)
NET INCOME (LOSS) PER
COMMON SHARE
BASIC:
Income (loss) per share
before extraordinary
income $0.19 ($0.48)
Extraordinary income on
debt repurchase 0.10 -
Net income (loss) $0.29 ($0.48)
DILUTED:
Income (loss) per share
before extraordinary
income $0.19 ($0.48)
Extraordinary income on
debt repurchase 0.10 -
Net income (loss) $0.29 ($0.48)
CASH FLOW FROM OPERATIONS,
BEFORE WORKING CAPITAL
CHANGES $10,085 $4.21 $3,574 $1.56
CASH FLOW FROM OPERATIONS,
BEFORE WORKING CAPITAL
CHANGES, Per Share $0.33 $0.12
Weighted average shares
outstanding:
Basic 30.3 million 29.6 million
Diluted 30.5 million 29.6 million
EBITDA $22.2 million $11.1 million
BENTON OIL AND GAS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per BOE and per share amounts)
NINE MONTHS ENDED: September 30, September 30,
2000 1999
Barrels of oil sold 6,885 7,398
MCF of Gas Sold 36 -
Total BOE 6,891 7,398
Average price/barrel $14.72 $10.70
Average price/mcf $4.36 -
$ $/BOE $ $/BOE
REVENUES:
Oil sales $101,357 $14.72 $61,006 $8.25
Gas sales 159 4.36 - -
101,516 14.73 61,006 8.25
EXPENSES:
Operating expenses 34,767 5.05 29,620 4.00
Depletion 10,359 1.50 11,464 1.55
Impairments 1,069 0.15 14,322 1.94
Depreciation and
amortization 1,295 0.19 1,288 0.18
General and
administrative 12,324 1.79 16,852 2.28
Taxes other than on income 3,460 0.50 2,452 0.33
63,274 9.18 75,998 10.28
INCOME (LOSS) FROM
OPERATIONS 38,242 5.55 (14,992) (2.03)
OTHER NON-OPERATING INCOME (EXPENSE)
Investment income and other 6,562 0.95 7,006 0.95
Interest expense (22,228) (3.23) (22,036) (2.98)
Net gain on exchange
rates 200 0.03 913 0.12
(15,466) (2.25) (14,117) (1.91)
INCOME (LOSS) FROM
CONSOLIDATED COMPANIES
BEFORE INCOME TAXES AND
MINORITY INTERESTS 22,776 3.30 (29,109) (3.94)
Income tax expense 13,309 1.93 2,082 0.28
INCOME (LOSS) BEFORE
MINORITY INTERESTS 9,467 1.37 (31,191) (4.22)
Minority interest in
consolidated subsidiary
companies 4,978 0.72 532 0.07
INCOME (LOSS) FROM
CONSOLIDATED
COMPANIES 4,489 0.65 (31,723) (4.29)
Equity in net earnings
of affiliated companies 4,117 0.60 1,375 0.19
NET INCOME (LOSS) BEFORE
EXTRAORDINARY INCOME 8,606 1.25 (30,348) (4.10)
Extraordinary income on
debt repurchase, net
of tax of $0 3,095 0.45 - -
NET INCOME (LOSS) $11,701 $1.70 ($30,348) ($4.10)
NET INCOME (LOSS) PER
COMMON SHARE
BASIC:
Income (loss) per share
before extraordinary
income $0.29 ($1.03)
Extraordinary income
on debt repurchase 0.10 -
Net income (loss) $0.39 ($1.03)
DILUTED:
Income (loss) per share
before extraordinary
income $0.29 ($1.03)
Extraordinary income
on debt repurchase 0.10 -
Net income (loss) $0.39 ($1.03)
CASH FLOW FROM OPERATIONS,
BEFORE WORKING
CAPITAL CHANGES $23,540 $3.42 ($418) ($0.06)
CASH FLOW FROM
OPERATIONS, BEFORE
WORKING CAPITAL CHANGES,
Per Share $0.78 ($0.01)
Weighted average shares
outstanding:
Basic 29.9 million 29.6 million
Diluted 30.1 million 29.6 million
EBITDA $57.8 million $20.0 million
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