Burlington Resources Reports First-Quarter Income and Reestablishes $1 Billion Share Repurchase Authorization.Energy Editors/Business Editors HOUSTON--(BUSINESS WIRE)--April 24, 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) and (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 $269 million for the first 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 $48 million or $0.24 per diluted share during the same quarter of 2002. The quarter's results included the impact of a previously announced non-cash 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. charge against earnings of $59 million for the cumulative effect of a change in accounting principle related to adoption of Statement of Financial Accounting Standards No. 143, which specifies accounting for future asset retirement obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. . The charge did not impact the company's cash flows. Income before the cumulative effect of the change in accounting principle was $328 million or $1.62 per diluted share. Operationally, 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. benefited from higher commodity prices, higher production on a divestiture-adjusted basis, and lower production and processing costs. Net cash provided by operating activities during the first quarter increased to $589 million from $361 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. during the first quarter increased to $721 million from $341 million during the same quarter last year.(1) Production during the first quarter of 2003 averaged 2,490 million cubic feet of natural gas equivalent per day (MMcfed), which, adjusted for asset sales in 2002, represented growth of 6 percent. The prior year's first-quarter production averaged 2,716 MMcfed, including approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 367 MMcfed of volumes from properties that were subsequently sold during 2002. During the quarter Burlington resumed 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. under a previous $1 billion authorization The right or permission to use a system resource; the process of granting access. See access control. approved in late 2000, acquiring approximately 1.7 million shares for $79 million at an average cost of about $45.50 per share. Cumulative repurchases total 18 million shares for $772 million under the existing authorization. Subsequent to the quarter, Burlington's board of directors approved restoring the share repurchase authorization level to $1 billion. "These first-quarter results establish a milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. that demonstrates the success of our multi-year repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. of Burlington's asset base," said Bobby S. Shackouls, Burlington Resources chairman, president and chief executive officer. "From the assets now in our portfolio, we believe we can achieve meaningful and profitable production growth as well as sector-leading financial returns. We are working toward the start-up Start-up The earliest stage of a new business venture. of several major development projects during the months ahead while continuing highly active programs in our core producing areas, which are predominately exposed to the strong underlying pricing fundamentals of the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. natural gas market. We are also pleased to be active once again in our share repurchase program, which should further enhance the company's per-share performance." In operational news, Burlington conducted record field activity 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 during the quarter, completing more than 300 new wells and achieving an 8 percent increase in production over the prior year's quarter on a divestiture-adjusted basis. In addition, Burlington progressed toward the scheduled startups of oil production from Algeria's 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 by mid 2003 and from the 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. offshore development program in China by late 2003, with the startup (STARTing UP) "At startup" means when the computer is first turned on or when a program is first loaded. See Startup folder. of gas production from new 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. expected by early 2004. First-quarter natural gas production averaged 1,872 million cubic feet per day (MMcfd), compared to 2,019 MMcfd during the prior year's first quarter. Natural gas liquids (NGLs) production increased 13 percent to 63.7 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 56.3 Mbd during the prior year's first quarter. Oil production decreased to 39.3 Mbd from 59.9 Mbd during the prior year's first quarter. The lower gas and oil volumes during the first quarter were attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk solely to last year's property sales. Natural gas price realizations averaged $5.29 per thousand cubic feet (Mcf) during the quarter, up from $2.99 per Mcf during the prior year's first quarter. NGLs price realizations of $22.07 per barrel barrel: see English units of measurement. were up from $12.45 per barrel during the prior year's first quarter. Oil price realizations increased to $29.74 per barrel from $21.68 per barrel during the prior year's first quarter. Production and processing costs were $0.45 per thousand cubic feet equivalent (Mcfe) during the first quarter, down from $0.61 per Mcfe during last year's first quarter, reflecting the upgrading during 2002 of Burlington's asset portfolio and sale of the Val Verde Val Verde may mean:
n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. averaged $0.19 per Mcfe, compared to $0.16 per Mcfe during last year's first quarter. Depreciation, 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 and amortization (DD&A) expenses were flat at $0.91 per Mcfe. Exploration expenses were $68 million compared to the prior year's first-quarter expenses of $57 million, primarily due to higher dry hole expenses. Transportation expenses were $0.44 per Mcfe compared to the prior year's first-quarter expenses of $0.35 per Mcfe, with the increase primarily attributable to the sale of the Val Verde facility. Outlook Production - Burlington expects to deliver 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. volume growth averaging in the 3 percent to 8 percent range. As previously announced, the company expects to achieve the low end of the range in 2003, and the upper end in 2004. The 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. 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. of production guidance by product for 2003 follows:
2nd-Quarter 2003 Full-Year 2003
Estimate Estimate
Gas (MMcfd)
U.S. 870 - 905 885 - 915
Canada 870 - 910 890 - 920
Other International 120 - 135 140 - 150
--------------- ----------------
Total 1,860 - 1,950 1,915 - 1,985
Natural Gas Liquids (Mbd)
U.S. 31.5 - 35.0 33.0 - 35.5
Canada 27.5 - 29.0 27.0 - 28.5
Other International 0.0 - 0.0 0.0 - 0.0
--------------- ---------------
Total 59.0 - 64.0 60.0 - 64.0
Crude Oil (Mbd)
U.S. 26.5 - 28.0 27.0 - 29.0
Canada 4.5 - 5.0 4.5 - 5.0
Other International 10.0 - 12.0 18.5 - 22.0
--------------- ---------------
Total 41.0 - 45.0 50.0 - 56.0
Total Equivalent 2,460 - 2,604 2,575 - 2,705
North American Natural Gas Hedges -- As of the date of this release, Burlington has 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. a portion of its 2003 North American natural gas production using costless price collars. For the balance of the year, 590 MMcfd is hedged at floor prices of $3.51 per Mcf, with ceiling prices of $5.37 per Mcf during the second and third quarters, and $5.45 per Mcf during the fourth quarter. 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 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. is available on Burlington's Web site at www.br-inc.com by selecting the Investor Relations Investor relations The process by which the corporation communicates with its investors. page and then the Hedge hedge, ornamental or protective barrier composed of shrubs or small trees growing in close rows. The plants may be allowed to grow naturally or may be trimmed to various heights and shapes (see topiary work). Schedule page at www.br-inc.com/docs/hedge.pdf. Other 2003 Financial Parameters -- For the second quarter and full year of 2003, on a gas-equivalent-per-unit basis, Burlington expects transportation expenses to range from $0.42 to $0.45 per Mcfe; production and processing costs to range from $0.48 to $0.52 per Mcfe; DD&A expense to range from $0.93 to $0.97 per Mcfe; administrative expenses to range from $0.17 to $0.19 per Mcfe; and interest expenses to range from $0.28 to $0.30 per Mcfe. Burlington expects exploration expenses to range from $50 million to $65 million during the second quarter, and from $210 million to $240 million for the full year. The company estimates that its 2003 effective income tax rate will range from 32 percent to 37 percent, based on current commodity price projections. The breakdown between current and deferred taxes could vary widely depending on commodity prices for the year. 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. The company has production in the U.S., Canada, the United Kingdom, Africa 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. , with exploration and development programs under way in these areas as well as in China. Additional information is available on 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). to non-GAAP measure 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.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
FIRST QUARTER
-----------------------
2003 2002
--------- ---------
(In Millions, Except per
Share Amounts)
Revenues $1,128 $703
--------- ---------
Costs and Other Income - Net
Taxes Other than Income Taxes 48 33
Transportation Expense 99 86
Production and Processing 102 136
Depreciation, Depletion and Amortization 203 221
Exploration Costs 68 57
Administrative 42 38
Interest Expense 64 72
Gain on Disposal of Assets (1) -
Other Expense (Income) - Net 4 (1)
--------- ---------
Total Costs and Other Income - Net 629 642
--------- ---------
Income Before Income Taxes 499 61
Income Tax Expense 171 13
--------- ---------
Income Before Cumulative Effect of Change in
Accounting Principle 328 48
Cumulative Effect of Change in Accounting
Principle - Net (59) -
--------- ---------
Net Income $269 $48
========= =========
Earnings per Common Share
Basic
Before Cumulative Effect of Change in
Accounting Principle $1.63 $0.24
Cumulative Effect of Change in Accounting
Principle - Net (0.29) -
--------- ---------
Net Income $1.34 $0.24
========= =========
Diluted
Before Cumulative Effect of Change in
Accounting Principle $1.62 $0.24
Cumulative Effect of Change in Accounting
Principle - Net (0.29) -
--------- ---------
Net Income $1.33 $0.24
========= =========
Basic Common Shares 201 201
========= =========
Diluted Common Shares 202 202
========= =========
This statement should be read in conjunction with the attached press
release.
Burlington Resources Inc.
Reconciliation of GAAP to Non-GAAP Measure (a)
March 31, 2003
($ in Millions)
Below is a reconciliation of net cash provided by operating activities
to discretionary cash flow.
First Quarter
---------------
2003 2002
------- ------
Net cash provided by operating activities $589 $361
Adjustments:
Working capital 122 (24)
Changes in other assets and liabilities 10 4
------- ------
Discretionary cash flow $721 $341
======= ======
(a) GAAP - Generally Accepted Accounting Principles.
Management believes that the non-GAAP measure of discretionary cash
flow is useful information to investors because it is widely used by
professional research analysts in the valuation, comparison, rating
and investment recommendations of companies within the oil and gas
exploration and production industry. Many investors use the published
research of these analysts in making their investment decisions.
BURLINGTON RESOURCES INC.
SALES VOLUMES AND PRICES
2003 2002
-------------------------------------------
First First Second Third Fourth
Quarter Quarter Quarter Quarter Quarter
----------------------------------------------------------------------
Production Volumes
Gas (MMCF/Day)
USA 867 1,031 953 900 917
Canada 852 790 805 782 829
Other International 153 198 169 157 137
----------------------------------------------------------------------
Worldwide 1,872 2,019 1,927 1,839 1,883
----------------------------------------------------------------------
NGLs (MBBLS/Day)
USA 35.7 27.4 36.5 34.5 32.7
Canada 28.0 28.9 28.5 25.1 26.9
----------------------------------------------------------------------
Worldwide 63.7 56.3 65.0 59.6 59.6
----------------------------------------------------------------------
Oil (MBBLS/Day)
USA 27.6 41.0 37.4 34.2 29.3
Canada 5.1 11.3 9.9 5.4 4.7
Other International 6.6 7.6 7.5 5.1 3.3
----------------------------------------------------------------------
Worldwide 39.3 59.9 54.8 44.7 37.3
----------------------------------------------------------------------
Total Equivalent
(MMCFE/D) 2,490 2,716 2,646 2,465 2,464
----------------------------------------------------------------------
Average Realized Prices
Gas ($/MCF)
USA $5.27 $3.17 $3.42 $2.92 $3.96
Canada 5.72 2.74 3.29 2.74 3.86
Other International 3.02 2.58 1.82 2.01 2.67
----------------------------------------------------------------------
Combined including
hedging $5.29 $2.99 $3.22 $2.77 $3.82
Hedging loss (gain) 0.23 (0.38) (0.14) (0.11) 0.01
----------------------------------------------------------------------
Combined before
hedging $5.52 $2.61 $3.08 $2.66 $3.83
----------------------------------------------------------------------
NGLs ($/BBL)
USA $19.54 $11.22 $12.17 $14.43 $14.78
Canada 25.31 13.61 16.01 16.32 17.89
----------------------------------------------------------------------
Combined $22.07 $12.45 $13.86 $15.22 $16.18
----------------------------------------------------------------------
Oil ($/BBL)
USA $30.87 $21.46 $23.21 $24.39 $23.98
Canada 35.68 21.82 31.07 33.56 31.90
Other International 20.32 22.63 23.47 28.13 24.31
----------------------------------------------------------------------
Combined including
hedging 29.74 21.68 24.64 $25.90 $25.01
Hedging loss (gain) 0.44 (0.58) - - -
----------------------------------------------------------------------
Combined before
hedging $30.18 $21.10 $24.64 $25.90 $25.01
Year Ended
-----------------------
2002 2001 2000
------------------------------------------------------------
Production Volumes
Gas (MMCF/Day)
USA 949 1,121 1,265
Canada 802 433 341
Other International 165 170 118
------------------------------------------------------------
Worldwide 1,916 1,724 1,724
------------------------------------------------------------
NGLs (MBBLS/Day)
USA 32.7 34.6 36.1
Canada 27.4 12.5 11.1
------------------------------------------------------------
Worldwide 60.1 47.1 47.2
------------------------------------------------------------
Oil (MBBLS/Day)
USA 35.4 44.0 51.6
Canada 7.8 11.9 12.5
Other International 5.9 7.3 9.6
------------------------------------------------------------
Worldwide 49.1 63.2 73.7
------------------------------------------------------------
Total Equivalent
(MMCFE/D) 2,571 2,386 2,449
------------------------------------------------------------
Average Realized Prices
Gas ($/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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