Burlington Resources Achieves 10 Percent Production Growth as Second-Quarter Earnings Increase 36 Percent to $379 Million.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; -- 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. Inc. (NYSE NYSE See: New York Stock Exchange :BR)(TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :B) today reported estimated earnings of $379 million, or $0.96 per 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, during the second quarter of 2004, a 36 percent increase over the $278 million, or $0.69 per diluted share, earned during the second quarter of 2003. The per-share results reflect the 2-for-1 split of the company's common stock on June June: see month. 1, 2004. The higher quarterly earnings were attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to increases in production as well as commodity prices. The company's total production increased 10 percent to 2,758 million cubic feet of natural gas equivalent per day (MMcfed), from 2,502 MMcfed during the prior year's quarter. Net cash provided by operating activities increased to $802 million from $733 million during the prior year's quarter. Discretionary cash flow Discretionary cash flow Cash flow that is available after the funding of all positive net present value (NPV) capital investment projects; it is available for paying cash dividends, repurchasing common stock, retiring debt, and so on. (1) increased to $825 million from $596 million during the prior year's quarter. In addition, at the end of the second quarter Burlington's balance sheet included more than $1.3 billion in cash and cash equivalents, a $282 million increase during the quarter. Share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. during the quarter totaled 3.1 million shares for $105 million at an average cost of $33.93 per share. This brings the cumulative number of shares acquired since the company resumed share repurchases in late 2000 to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 53.6 million shares for $1.25 billion, or an average cost of $23.31 per share. These share amounts reflect the recent stock split. "As our strong quarterly performance confirms, we are making exceptional financial and operational progress, driven by our ability to increase domestic and international production during a time of extremely favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. commodity prices," said Bobby S. Shackouls, chairman, president and chief executive officer. "During the months ahead, we look forward to the start-up Start-up The earliest stage of a new business venture. of the Rivers Fields in the East Irish Sea Irish Sea, arm of the Atlantic Ocean, c.40,000 sq mi (103,600 sq km), 130 mi (209 km) long and up to c.140 mi (230 km) wide, lying between Ireland and Great Britain. It is connected with the Atlantic by the North Channel and (on the south) by St. George's Channel. , to further production growth in a number of areas, and to continuing our emphasis on cost control." The company's natural gas production during the second quarter increased 1 percent to 1,899 million cubic feet per day (MMcfd), from 1,879 MMcfd during the prior year's quarter. Natural gas liquids (NGLs) production was 59.0 thousand 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. (Mbd), compared to 63.1 Mbd during the prior year's quarter. Crude oil production increased 107 percent to 84.2 Mbd, from 40.7 Mbd during the prior year's quarter. Natural gas volume increases were achieved in the Madden mad·den v. mad·dened, mad·den·ing, mad·dens v.tr. 1. To make angry; irritate. 2. To drive insane. v.intr. To become infuriated. Field with completion of gathering line repairs, as well as in Canada's Deep Basin BASIN Boulder Area Sustainability Information Network (Boulder, Colorado) BASIN Brothers And Sisters In Need and Whitecourt areas, South Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , the Fort Worth Basin of
Texas and the CLAM properties in the North Sea. The increases were
partially offset by declines in Canada's O'Chiese and
Viking-Kinsella areas, and in the East Irish Sea. Higher crude oil
volumes were achieved during the quarter from the Cedar Creek Cedar Creek, small tributary of the North Fork of the Shenandoah River, N of Strasburg, N Va. It was the scene of a Civil War battle (Oct. 19, 1864) in which Union general P. H. Sheridan defeated J. A. Early. Anticline anticline: see fold. in the Williston Williston, city (1990 pop. 13,131), seat of Williams co., NW N.Dak., on the Missouri River; inc. 1904. An early riverboating town, its importance increased with the arrival of the Great Northern Railway (1887) and later by the discovery (1951) of rich oil reserves in Basin in the U.S., and from fields in Algeria Algeria (ăljēr`ēə), Arab. Al Djazair, Fr. Algérie, officially People's Democratic Republic of Algeria, republic (2005 est. pop. , offshore
China and Ecuador Ecuador (ĕk`wədôr) [Span., = equator], officially Republic of Ecuador, republic (2005 est. pop. 13,364,000), 109,483 sq mi (283,561 sq km), W South America. . 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. natural gas liquids volumes declined due to
an unanticipated six-week shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of an industry pipeline that serves key producing areas. During the quarter Burlington Burlington, town, Canada Burlington, town (1991 pop. 129,575), SE Ont., Canada, on Lake Ontario. First settled (1798) by Mohawk Loyalist Joseph Brandt, Burlington's economy was built on the shipment of wheat, lumber, and quarried rock by waterway. also made progress on advancing the evaluation of several future unconventional resource plays in the Brassey Area of Canada's Deep Basin, the Bossier Bossier may refer to:
Burlington's price realizations for natural gas during the second quarter were $5.40 per Mcf, compared to $4.96 per Mcf during the same quarter in 2003. Price realizations for NGLs were $23.81 per barrel barrel: see English units of measurement. , compared to $18.53 per barrel during the prior year's quarter. Crude oil price realizations were $34.62 per barrel, compared to $27.53 per barrel during the prior year's quarter. 2004 Outlook Production -- Burlington expects volume growth for the remainder of 2004 compared to 2003, as a result of anticipated increases in both North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. and Other International production. The guidance breakdown breakdown /break·down/ (brak´doun) 1. the act or process of ceasing to function. 2. an often sudden collapse in health. 3. loss of self-control. by geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. region and product follows:
3rd-Quarter 2004 Full-Year 2004
Estimate Estimate
------------------ -------------------
Gas (MMcfd)
U.S. 880 - 920 885 - 910
Canada 775 - 810 800 - 830
Other International 185 - 225 190 - 230
------------------ -------------------
Total 1,840 - 1,955 1,875 - 1,970
------------------- -------------------
Natural Gas Liquids (Mbd)
U.S. 39.5 - 42.0 39.3 - 42.0
Canada 23.0 - 24.0 22.5 - 23.5
Other International 0.0 - 0.0 0.0 - 0.0
------------------- -------------------
Total 62.5 - 66.0 61.8 - 65.5
------------------- -------------------
Crude Oil (Mbd)
U.S. 35.0 - 38.7 34.5 - 36.2
Canada 4.6 - 5.1 5.0 - 5.4
Other International 37.0 - 43.5 40.5 - 43.5
------------------- -------------------
Total 76.6 - 87.3 80.0 - 85.1
Total Equiv. Prod.
(MMcfed) 2,675 - 2,875 2,726 - 2,874
=================== ===================
North American Natural Gas Hedges -- As of June 30, 2004, Burlington had 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. the following volumes of future North American natural gas production using costless price collars or fixed price contracts. All prices are weighted averages adjusted to a NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). equivalent price using an estimate of differentials between the NYMEX price and regional prices. Detailed information on 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. subsequent to the first quarter of 2005 is available on Burlington's Web site at www.br-inc.com/docs/hedge.pdf.
3rd-Q. 2004 4th-Q. 2004 1st-Q. 2005
------------ ----------- ------------
Costless collar volumes 443 MMcfd 417 MMcfd 255 MMcfd
Floor price $4.96/Mcf $5.14/Mcf $5.64/Mcf
Ceiling price $6.72/Mcf $7.02/Mcf $7.68/Mcf
Sell swap 39 MMcfd 39 MMcfd 39 MMcfd
Sales price $3.64/Mcf $3.62/Mcf $3.61/Mcf
Other 2004 Financial Parameters -- Estimated expenses for the third quarter and full year are:
3rd-Q. 2004 Full-Year 2004
-------------------- -----------------------
Operating costs(a) $0.56 to $0.60/Mcfe $0.53 to $0.57/Mcfe
Administrative costs $0.17 to $0.20/Mcfe $0.18 to $0.21/Mcfe
Transportation costs $0.42 to $0.46/Mcfe $0.41 to $0.45/Mcfe
Depletion, depreciation
& amortization $1.08 to $1.13/Mcfe $1.07 to $1.12/Mcfe
Interest expense $68 MM to $72 MM $275 MM to $285 MM
Exploration costs $60 MM to $80 MM $255 MM to $275 MM
(a) Formerly production and processing
In addition, Burlington anticipates an effective income tax rate of 32 to 36 percent for the full year of 2004. The breakdown between current and deferred taxes for the year could vary widely depending on commodity prices and other factors. An income statement, statistics and non-GAAP reconciliation tables for the second quarter accompany To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require beginning drivers or drivers under a certain age to be accompanied by a licensed adult driver whenever operating an automobile. this release. Burlington will webcast a conference call to discuss its second-quarter 2004 earnings and operations. The call will take place on Thursday Thursday: see week. , July July: see month. 22 at 1 p.m. Central time. All materials and information related to the conference call, this press release and a package of financial and statistical information may be accessed from the Burlington Resources Web site home page at www.br-inc.com by selecting the link entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "2nd Qtr 2004 Conference Call Info INFO Information INFO Information (logging abbreviation) INFO Inform(ed/ation) INFO Ionic Difluoroamino Oxidizer Page," and then selecting the resource desired. Burlington Resources ranks among the world's largest independent oil and gas companies, and holds one of the industry's leading positions in North American natural gas reserves and production. Headquartered in Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the , the company conducts exploration, production and development operations in the U.S., Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , the United Kingdom, Africa, China and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . For additional information see the Burlington Resources Web site at www.br-inc.com. (1) See the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. tables for a reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and non-GAAP measures utilized in calculating discretionary cash flow. 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. This press release may contain projections and other forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as 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. . Any such projections or 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 such projections will be achieved and actual results could differ materially from those projected. A discussion of important factors that could cause actual results to differ materially from those projected is included in the company's periodic reports filed with the Securities and Exchange Commission.
Burlington Resources Inc.
Reconciliation of GAAP to Non-GAAP Measure (a)
Discretionary Cash Flow
($ in Millions)
Below is a reconciliation of net cash provided by operating activities
to discretionary cash flow.
Second Quarter
-------------------
2004 2003
--------- ---------
Net cash provided by operating activities $802 $733
Adjustments:
Working capital 61 (113)
Changes in other assets and liabilities (38) (24)
--------- ---------
Discretionary cash flow $825 $596
========= =========
(a) GAAP - Generally Accepted Accounting
Principles
Management believes that the non-GAAP measure of discretionary cash
flow is useful information for investors because it is used internally
and accepted by the investment community as a means of measuring the
company's ability to fund its capital and dividend programs and to
service its debt. Discretionary cash flow is also useful because it is
widely used by professional research analysts in valuing, comparing
ratings and providing investment recommendations of companies in the
oil and gas exploration and production industry. Many investors use
this published research in making investment decisions.
BURLINGTON RESOURCES INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
SECOND QUARTER SIX MONTHS
--------------- ---------------
2004 2003 2004 2003
------- ------- ------- -------
(In Millions, Except per Share
Amounts)
Revenues $1,333 $1,059 $2,641 $2,187
------- ------- ------- -------
Costs and Other Expense - Net
Taxes Other than Income Taxes 62 46 121 94
Transportation Expense 107 102 217 201
Operating Costs 143 112 274 214
Depreciation, Depletion and
Amortization 270 227 547 430
Exploration Costs 62 52 122 120
Impairment of Oil and Gas Properties - 30 - 30
Administrative 51 39 99 81
Interest Expense 69 63 140 127
Loss on Disposal of Assets 2 1 10 -
Other Expense - Net 27 11 24 15
------- ------- ------- -------
Total Costs and Other Expense -
Net 793 683 1,554 1,312
------- ------- ------- -------
Income Before Income Taxes and
Cumulative Effect of Change in
Accounting Principle 540 376 1,087 875
Income Tax Expense 161 98 354 269
------- ------- ------- -------
Income Before Cumulative Effect of
Change in Accounting Principle 379 278 733 606
Cumulative Effect of Change in
Accounting Principle - Net - - - (59)
------- ------- ------- -------
Net Income $379 $278 $733 $547
======= ======= ======= =======
Earnings per Common Share
Basic
Before Cumulative Effect of
Change in Accounting Principle $0.96 $0.70 $1.86 $1.52
Cumulative Effect of Change in
Accounting Principle - Net - - - (0.15)
------- ------- ------- -------
Net Income $0.96 $0.70 $1.86 $1.37
======= ======= ======= =======
Diluted
Before Cumulative Effect of
Change in Accounting Principle $0.96 $0.69 $1.85 $1.50
Cumulative Effect of Change in
Accounting Principle - Net - - - (0.15)
------- ------- ------- -------
Net Income $0.96 $0.69 $1.85 $1.35
======= ======= ======= =======
Basic Common Shares 394 399 394 400
======= ======= ======= =======
Diluted Common Shares 397 403 397 405
======= ======= ======= =======
This statement should be read in conjunction with the attached press
release.
BURLINGTON RESOURCES INC.
SALES VOLUMES AND PRICES
2004 2003
----------------- -------------------------
First Second Second Third Fourth
Quarter Quarter Quarter Quarter Quarter
----------------------------------------------------------------------
Sales Volumes
Gas (MMCF/Day)
U.S. 880 905 875 848 870
Canada 846 834 868 873 876
Other International 227 160 136 168 211
----------------------------------------------------------------------
Worldwide 1,953 1,899 1,879 1,889 1,957
----------------------------------------------------------------------
NGLs (MBBLS/Day)
U.S. 40.8 40.0 34.6 35.9 43.1
Canada 26.1 19.0 28.5 27.1 26.1
----------------------------------------------------------------------
Worldwide 66.9 59.0 63.1 63.0 69.2
----------------------------------------------------------------------
Oil (MBBLS/Day)
U.S. 32.1 35.9 28.8 30.0 30.7
Canada 5.8 5.3 5.2 5.2 4.9
Other International 44.5 43.0 6.7 12.1 22.9
----------------------------------------------------------------------
Worldwide 82.4 84.2 40.7 47.3 58.5
----------------------------------------------------------------------
Total Equivalent
(MMCFE/D) 2,849 2,758 2,502 2,551 2,723
----------------------------------------------------------------------
----------------------------------------------------------------------
Average Realized Prices
Gas ($/MCF)
U.S. $5.52 $5.46 $4.94 $4.91 $4.38
Canada 5.53 5.76 5.34 4.90 4.57
Other International 3.69 3.12 2.72 2.46 3.81
----------------------------------------------------------------------
Combined including
hedging 5.31 5.40 4.96 4.68 4.40
Hedging loss (gain) (0.01) 0.04 0.07 0.04 0.03
----------------------------------------------------------------------
Combined before hedging $5.30 $5.44 $5.03 $4.72 $4.43
----------------------------------------------------------------------
NGLs ($/BBL)
U.S. $19.98 $21.01 $17.26 $17.81 $18.96
Canada 25.36 29.69 20.07 23.88 23.16
----------------------------------------------------------------------
Combined $22.08 $23.81 $18.53 $20.42 $20.54
----------------------------------------------------------------------
Oil ($/BBL)
U.S. $31.70 $33.10 $26.93 $27.66 $27.09
Canada 32.78 35.26 27.96 32.30 28.52
Other International 27.62 35.73 29.74 23.67 22.48
----------------------------------------------------------------------
Combined including
hedging 29.57 34.62 27.53 27.16 25.40
Hedging loss (gain) 0.32 0.77 - - -
----------------------------------------------------------------------
Combined before hedging $29.89 $35.39 $27.53 $27.16 $25.40
Year Ended
--------------------------
2003 2002 2001
-----------------------------------------------------------------
Sales Volumes
Gas (MMCF/Day)
U.S. 865 949 1,121
Canada 867 802 433
Other International 167 165 170
-----------------------------------------------------------------
Worldwide 1,899 1,916 1,724
-----------------------------------------------------------------
NGLs (MBBLS/Day)
U.S. 37.4 32.7 34.6
Canada 27.4 27.4 12.5
-----------------------------------------------------------------
Worldwide 64.8 60.1 47.1
-----------------------------------------------------------------
Oil (MBBLS/Day)
U.S. 29.3 35.4 44.0
Canada 5.1 7.8 11.9
Other International 12.1 5.9 7.3
-----------------------------------------------------------------
Worldwide 46.5 49.1 63.2
-----------------------------------------------------------------
Total Equivalent (MMCFE/D) 2,567 2,571 2,386
-----------------------------------------------------------------
-----------------------------------------------------------------
Average Realized Prices
Gas ($/MCF)
U.S. $4.87 $3.39 $3.99
Canada 5.12 3.17 4.60
Other International 3.07 2.27 2.83
-----------------------------------------------------------------
Combined including hedging 4.83 3.20 4.03
Hedging loss (gain) 0.09 (0.16) 0.48
-----------------------------------------------------------------
Combined before hedging $4.92 $3.04 $4.51
-----------------------------------------------------------------
NGLs ($/BBL)
U.S. $18.42 $13.23 $14.75
Canada 23.08 15.92 22.50
-----------------------------------------------------------------
Combined $20.40 $14.46 $16.79
-----------------------------------------------------------------
Oil ($/BBL)
U.S. $28.08 $23.16 $22.63
Canada 31.11 28.32 26.51
Other International 23.49 24.30 23.42
-----------------------------------------------------------------
Combined including hedging 27.22 24.11 23.45
Hedging loss (gain) 0.09 (0.18) 1.10
-----------------------------------------------------------------
Combined before hedging $27.31 $23.93 $24.55
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