Burlington Resources Reports 238 Percent Increase in Income and Rising Production of Natural Gas, Gas Liquids and Crude Oil.Energy Editors/Business Editors HOUSTON--(BUSINESS WIRE)--Oct. 22, 2003 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 net income of $267 million for the third quarter of 2003, or $1.33 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, compared to net income of $79 million, or $0.39 per diluted share, during the same quarter of 2002. Included in last year's quarterly results was a net after-tax gain Net after-tax gain Capital gain after income taxes have been paid. of $0.12 per diluted share attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to asset sales. The 238 percent increase in net income was attributable to higher average commodity prices and rising production of natural gas, natural gas liquids and crude oil. 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 reported progress in its cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. efforts. Total production during the third quarter was 2,551 million cubic feet of natural gas equivalent per day (MMcfed), compared to the prior year's third-quarter production of 2,465 MMcfed, an increase of 3 percent on a reported basis and 11 percent when adjusted for asset sales during 2002. Net cash provided by operating activities during the third quarter increased to $665 million from $397 million during the same quarter last year. 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) was $651 million during the quarter, compared to $291 million during the same quarter last year. The company achieved favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. unit cost improvements. Combined production and processing and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. declined to $0.66 per thousand cubic feet of equivalent production (Mcfe) during the quarter, from $0.68 per Mcfe during the prior year's third quarter. During the third quarter of 2003, Burlington repurchased 2.1 million shares of its stock for $101 million at an average cost of $48.48 per share, bringing repurchases during 2003 to 5.8 million shares for $277 million, with $845 million remaining under the current 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. authorization The right or permission to use a system resource; the process of granting access. See access control. . Since resuming 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. in late 2000, Burlington has repurchased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 22.1 million shares at an average cost of $44.01 per share. As a result of the repurchases, shares outstanding declined to approximately 198.6 million at the end of the third quarter. "This was yet another outstanding quarter for our company in terms of performance. Further, we believe that we are in the early stages of an exceptional period of production growth for Burlington, which, in combination with our focus on cost efficiency and capital discipline, positions us to perform differentially dif·fer·en·tial adj. 1. Of, relating to, or showing a difference. 2. Constituting or making a difference; distinctive. 3. Dependent on or making use of a specific difference or distinction. 4. throughout price cycles," said Bobby S. Shackouls, Burlington Resources chairman, president and chief executive officer. Natural gas production averaged 1,889 million cubic feet per day (MMcfd), up 3 percent from the prior year's quarterly average of 1,839 MMcfd. Natural gas liquids (NGL NGL - A dialect of IGL. ) production increased 6 percent to 63.0 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), from 59.6 Mbd during the prior year's quarter. Oil production also increased 6 percent to 47.3 Mbd from 44.7 Mbd. The company achieved increases in natural gas and NGL volumes in 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 , and significantly higher oil volumes from international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. attributable to the addition of production from the Burlington-operated MLN MLN Million MLN Modern Language Notes (literary journal) MLN Management & Leadership Network (Northern Ireland) MLN Missouri League for Nursing MLN Main Listed Number Field in Algeria Algeria (ăljēr`ēə), Arab. Al Djazair, Fr. Algérie, officially People's Democratic Republic of Algeria, republic (2005 est. pop. . Subsequent to the quarter, oil production began from the partner-operated Panyu Panyu or Pun Yue (番禺) is a district in Guangzhou, Guangdong, China. It used to be a city before it was incorporated in the administration of Guangzhou. The name of Panyu dates back to the completion of the conquest of Guangdong by Qin Shi Huang. Field offshore China, and gas volumes were rising 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 in Wyoming Wyoming, city, United States Wyoming, city (1990 pop. 63,891), Kent co., W Mich., in the greater Grand Rapids metropolitan area, on the Grand River; settled 1832, inc. 1959. as a result of progress on the gathering line repairs. Natural gas price realizations averaged $4.68 per thousand cubic feet (Mcf) during the quarter, compared to $2.77 per Mcf during the prior year's quarter. Increased pipeline capacity in the Rocky Mountains Rocky Mountains, major mountain system of W North America and easternmost belt of the North American cordillera, extending more than 3,000 mi (4,800 km) from central N.Mex. to NW Alaska; Mt. Elbert (14,431 ft/4,399 m) in Colorado is the highest peak. has reduced basis differentials and increased prices realized for Burlington's gas production there. NGL price realizations of $20.42 per barrel barrel: see English units of measurement. were up from $15.22 per barrel realized during the prior year's quarter. Oil price realizations of $27.16 per barrel were up from $25.90 per barrel realized during the prior year's quarter. Exploration expenses were $55 million during the third quarter, compared to $53 million during the prior year's quarter. Outlook Production - Burlington's fourth-quarter 2003 volume guidance is provided below. Annual volume guidance for 2003 is unchanged from prior guidance, with a target range of 2,500 MMcfed to 2,640 MMcfed. During 2004, the company expects to achieve the higher end Coordinates: For other places with the same name, see Billinge. Higher End or Billinge Higher End is a district of the Metropolitan Borough of Wigan, in Greater Manchester, England. of its previously stated goal of averaging 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. annual volume growth in the 3 percent to 8 percent range. Production guidance for the fourth quarter and full year of 2003 on the basis of location and product follows:
4th-Q. 2003 Full-Year 2003
Estimate Estimate
-------- --------
Natural Gas (MMcfd)
U.S. 870 - 905 845 - 880
Canada 860 - 910 865 - 900
Other International 190 - 225 155 - 165
------------ -------------
Total 1,920 - 2,040 1,865 - 1,945
Natural Gas Liquids (Mbd)
U.S. 32.9 - 35.2 34.0 - 36.4
Canada 27.7 - 29.0 27.0 - 28.1
Other International 0.0 - 0.0 0.0 - 0.0
------------- --------------
Total 60.6 - 64.2 61.0 - 64.5
Crude Oil (Mbd)
U.S. 29.0 - 32.6 27.6 - 29.7
Canada 5.0 - 5.4 5.2 - 5.6
Other International 17.0 - 32.0 12.0 - 16.0
------------- --------------
Total 51.0 - 70.0 44.8 - 51.3
============= ==============
Total Equivalent
Production (MMcfed) 2,590 - 2,845 2,500 - 2,640
North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. Natural Gas Hedges - As of October October: see month. 15, 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 price collars. 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 on which the collars are based. Detailed 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. information is available on Burlington's Web site at www.br-inc.com/docs/hedge.pdf.
4th-Q. 2003 1st-Q. 2004 2nd-Q. 2004
----------- ----------- -----------
Volumes 606 MMcfd 184 MMcfd 59 MMcfd
Floor Price $3.66/Mcf $4.47/Mcf $4.33/Mcf
Ceiling Price $5.62/Mcf $7.06/Mcf $6.39/Mcf
Other 2003 Financial Parameters - Estimated expenses for the fourth quarter and full year are:
4th-Q. 2003 Full-Year 2003
----------- ---------------
Production and
processing $0.54 to $0.58/Mcfe $0.49 to $0.53/Mcfe
Administrative costs $0.17 to $0.20/Mcfe $0.17 to $0.20/Mcfe
Transportation costs $0.40 to $0.43/Mcfe $0.42 to $0.45/Mcfe
Depletion, depreciation
and amortization $0.96 to $1.00/Mcfe $0.95 to $0.99/Mcfe
Interest expense $66 MM to $69 MM $260 MM to $263 MM
Exploration costs $60 MM to $80 MM $235 MM to $255 MM
In addition, Burlington anticipates an effective income tax rate of 30 to 34 percent for the full year of 2003. The 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. between current and deferred taxes for the year could vary widely depending on commodity prices and other factors. Burlington also estimates that reserve replacement costs for the full year will range from $1.15 to $1.35 per Mcfe. 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 , Burlington Resources is one of the world's largest independent oil and gas companies, with exploration, production and development operations in the U.S., Canada, 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 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. table 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, and a statement indicating why management believes the non-GAAP measure of discretionary cash flow is useful information to investors. 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)
($ in Millions)
Below is a reconciliation of net cash provided by operating activities
to discretionary cash flow.
Third Quarter
-------------------
2003 2002
--------- ---------
Net cash provided by operating activities $665 $397
Adjustments:
Working capital 12 (116)
Changes in other assets and liabilities (26) 10
--------- ---------
Discretionary cash flow $651 $291
========= =========
(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)
THIRD QUARTER NINE MONTHS
-------------- -------------
2003 2002 2003 2002
-------------- -------------
(In Millions, Except per Share
Amounts)
Revenues $1,059 $652 $3,246 $2,138
------- ------ ------ ------
Costs and Other Income - Net
Taxes Other than Income Taxes 47 29 141 92
Transportation Expense 100 98 301 266
Production and Processing 118 117 332 365
Depreciation, Depletion and
Amortization 239 195 669 631
Exploration Costs 55 53 175 214
Impairment of Oil and Gas Properties - - 30 -
Administrative 38 36 119 113
Interest Expense 66 65 193 207
(Gain)/Loss on Disposal of Assets 2 6 2 (67)
Other Expense (Income) - Net (2) (14) 13 (18)
------- ------ ------ ------
Total Costs and Other Income - Net 663 585 1,975 1,803
------- ------ ------ ------
Income Before Income Taxes and
Cumulative Effect of Change in
Accounting Principle 396 67 1,271 335
Income Tax Expense (Benefit) 129 (12) 398 38
------- ------ ------ ------
Income Before Cumulative Effect of
Change in Accounting Principle 267 79 873 297
Cumulative Effect of Change in
Accounting Principle - Net - - (59) -
------- ------ ------ ------
Net Income $267 $79 $814 $297
======= ====== ====== ======
Earnings per Common Share
Basic
Before Cumulative Effect of Change
in Accounting Principle $1.34 $0.39 $4.37 $1.47
Cumulative Effect of Change in
Accounting Principle - Net - - (0.29) -
------- ------ ------ ------
Net Income $1.34 $0.39 $4.08 $1.47
======= ====== ====== ======
Diluted
Before Cumulative Effect of Change
in Accounting Principle $1.33 $0.39 $4.34 $1.47
Cumulative Effect of Change in
Accounting Principle - Net - - (0.29) -
------- ------ ------ ------
Net Income $1.33 $0.39 $4.05 $1.47
======= ====== ====== ======
Basic Common Shares 199 201 200 201
======= ====== ====== ======
Diluted Common Shares 201 202 201 202
======= ====== ====== ======
BURLINGTON RESOURCES INC.
SALES VOLUMES AND PRICES
2003 2002
----------------------- ------------------------
First Second Third Third Fourth
Quarter Quarter Quarter Quarter Quarter
------- ------- ------- ------------ -----------
Sales Volumes
Gas (MMCF/Day)
USA 867 875 848 900 917
Canada 852 868 873 782 829
Other
International 153 136 168 157 137
-------------------- ------- ------- ------- ------------ -----------
Worldwide 1,872 1,879 1,889 1,839 1,883
-------------------- ------- ------- ------- ------------ -----------
NGLs (MBBLS/Day)
USA 35.7 34.6 35.9 34.5 32.7
Canada 28.0 28.5 27.1 25.1 26.9
-------------------- ------- ------- ------- ------------ -----------
Worldwide 63.7 63.1 63.0 59.6 59.6
-------------------- ------- ------- ------- ------------ -----------
Oil (MBBLS/Day)
USA 27.6 28.8 30.0 34.2 29.3
Canada 5.1 5.2 5.2 5.4 4.7
Other
International 6.6 6.7 12.1 5.1 3.3
-------------------- ------- ------- ------- ------------ -----------
Worldwide 39.3 40.7 47.3 44.7 37.3
-------------------- ------- ------- ------- ------------ -----------
Total
Equivalent
(MMCFE/D) 2,490 2,502 2,551 2,465 2,464
-------------------- ------- ------- ------- ------------ -----------
Average Realized
Prices
Gas ($/MCF)
USA $5.27 $4.94 $4.91 $2.92 $3.96
Canada 5.72 5.34 4.90 2.74 3.86
Other
International 3.02 2.72 2.46 2.01 2.67
-------------------- ------- ------- ------- ------------ -----------
Combined including
hedging 5.29 4.96 4.68 2.77 3.82
Hedging loss
(gain) 0.23 0.07 0.04 (0.11) 0.01
-------------------- ------- ------- ------- ------------ -----------
Combined before
hedging $5.52 $5.03 $4.72 $2.66 $3.83
-------------------- ------- ------- ------- ------------ -----------
NGLs ($/BBL)
USA $19.54 $17.26 $17.81 $14.43 $14.78
Canada 25.31 20.07 23.88 16.32 17.89
-------------------- ------- ------- ------- ------------ -----------
Combined $22.07 $18.53 $20.42 $15.22 $16.18
-------------------- ------- ------- ------- ------------ -----------
Oil ($/BBL)
USA $30.87 $26.93 $27.66 $24.39 $23.98
Canada 35.68 27.96 32.30 33.56 31.90
Other
International 20.32 29.74 23.67 28.13 24.31
-------------------- ------- ------- ------- ------------ -----------
Combined including
hedging 29.74 27.53 27.16 25.90 25.01
Hedging loss
(gain) 0.44 - - - -
-------------------- ------- ------- ------- ------------ -----------
Combined before
hedging $30.18 $27.53 $27.16 $25.90 $25.01
-------------------- ------- ------- ------- ------------ -----------
Year Ended
--------------------------
2002 2001 2000
-------- -------- --------
Sales Volumes
Gas (MMCF/Day)
USA 949 1,121 1,265
Canada 802 433 341
Other International 165 170 118
------------------------------------------- -------- -------- --------
Worldwide 1,916 1,724 1,724
------------------------------------------- -------- -------- --------
NGLs (MBBLS/Day)
USA 32.7 34.6 36.1
Canada 27.4 12.5 11.1
------------------------------------------- -------- -------- --------
Worldwide 60.1 47.1 47.2
------------------------------------------- -------- -------- --------
Oil (MBBLS/Day)
USA 35.4 44.0 51.6
Canada 7.8 11.9 12.5
Other International 5.9 7.3 9.6
------------------------------------------- -------- -------- --------
Worldwide 49.1 63.2 73.7
------------------------------------------- -------- -------- --------
Total Equivalent (MMCFE/D) 2,571 2,386 2,449
------------------------------------------- -------- -------- --------
Average Realized Prices
Gas ($/MCF)
USA $3.39 $3.99 $3.31
Canada 3.17 4.60 4.10
Other International 2.27 2.83 2.57
------------------------------------------- -------- -------- --------
Combined including hedging 3.20 4.03 3.42
Hedging loss (gain) (0.16) 0.48 0.45
------------------------------------------- -------- -------- --------
Combined before hedging $3.04 $4.51 $3.87
------------------------------------------- -------- -------- --------
NGLs ($/BBL)
USA $13.23 $14.75 $17.70
Canada 15.92 22.50 25.38
------------------------------------------- -------- -------- --------
Combined $14.46 $16.79 $19.51
------------------------------------------- -------- -------- --------
Oil ($/BBL)
USA $23.16 $22.63 $24.18
Canada 28.32 26.51 29.06
Other International 24.30 23.42 27.73
------------------------------------------- -------- -------- --------
Combined including hedging 24.11 23.45 25.44
Hedging loss (gain) (0.18) 1.10 2.62
------------------------------------------- -------- -------- --------
Combined before hedging $23.93 $24.55 $28.06
------------------------------------------- -------- -------- --------
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