Burlington Resources Reports Full-Year 2001 Earnings of $561 Million, Record Discretionary Cash Flow and 268 Percent Reserve Replacement.Business/Energy Editors HOUSTON--(BUSINESS WIRE)--Jan. 23, 2002 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. (NYSE NYSE See: New York Stock Exchange :BR) today announced a fourth-quarter 2001 loss of $79 million or $0.39 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, which includes previously announced pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta special charges of $184 million for 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. , primarily of properties held for sale, and $10 million for restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . Excluding these charges, net income was $43 million or $0.21 per share. During the same quarter of 2000, net income was $304 million or $1.41 per share. 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. was $290 million or $1.44 per share, compared to $653 million or $3.02 per share during the fourth quarter of 2000. Total equivalent production in the fourth quarter, which included one month of contributions from recently acquired 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. Hunter Hun·ter , John 1728-1793. British surgeon who founded pathological anatomy in England. hunter a horse used for hunting. Exploration Ltd., was 2,480 million cubic feet of natural gas equivalent per day (MMcfed), up 6 percent on an absolute basis from 2,329 MMcfed during the prior year's fourth quarter, and up 14 percent on a per-share basis. Natural gas production of 2,077 million cubic feet per day (MMcfd) was up 9 percent from the prior year's quarter, while oil production of 67 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) decreased 4 percent. Average price realizations for natural gas were $2.65 per thousand cubic feet (Mcf), compared to $4.68 per Mcf during the fourth quarter of 2000. Oil price realizations were $19.29 per barrel barrel: see English units of measurement. , compared to $26.39 during the prior year's quarter. For the full year of 2001, net income totaled $561 million, or $2.70 per share, compared to the previous year's $675 million, or $3.12 per share. Discretionary cash flow was a record $1.9 billion, or $9.22 per share, compared to the prior year's $1.8 billion, or $8.49 per share. Total equivalent production was 2,399 MMcfed, compared to 2,429 MMcfed the previous year, representing growth of 3 percent on a per-share basis. Average price realizations for natural gas increased to $3.69 per Mcf from $3.32 per Mcf during the prior year. Oil price realizations fell to $23.66 per barrel from $25.40 per barrel during the prior year. "We view 2001 as a pivotal year for 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. . The company is significantly transformed and uniquely positioned for growth in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. natural gas business. We substantially upgraded our future opportunity portfolio through major acquisitions, while de-emphasizing or rationalizing less successful programs. We made progress on several large development programs, both in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and overseas. We began the process of divesting our more mature, higher-cost assets, and we repurchased nearly 8 percent of our outstanding shares. As a result of all these steps, we expect to achieve profitable per-share growth in the years ahead," said Bobby S. Shackouls, chairman, president and chief executive officer. The year's achievements included: -- Strengthening the opportunity portfolio. Burlington completed the $2.1 billion acquisition of Canadian Hunter, and received regulatory approval for the approximately $350 million acquisition of the ATCO Viking-Kinsella properties, also in Canada. The ATCO transaction closed on Jan. 3, 2002. Canada now represents more than 35 percent of current production, and the properties acquired are believed to hold substantial near- and long-term exploration and exploitation opportunities. -- Moving to divest properties. To complete the upgrading of its portfolio, Burlington announced the planned sale of its Gulf of Mexico Shelf and certain onshore properties. Sales of these properties are expected to conclude during 2002, and will enable the company to reduce debt and focus its efforts and capital in areas where it has greater competitive advantages. -- Expanding the reserve base. Reserves per share grew by 19 percent during 2001, as Burlington replaced 268 percent of its production with new reserves including acquisitions, or 108 percent excluding acquisitions. At year-end 2001, Burlington's reserves were 11.8 trillion cubic feet of natural gas equivalent (Tcfe). -- Achieving low replacement costs. The average cost of reserve replacement was $1.31 per thousand cubic feet of natural gas equivalent (Mcfe) including acquisitions, or $1.15 per Mcfe excluding acquisitions. Over the last three years, despite high industry activity and drilling cost inflation, Burlington's replacement costs have averaged $1.05 per Mcfe including acquisitions, or $0.92 per Mcfe excluding acquisitions. -- Enhancing value through share repurchases. A major share repurchase program initiated in late 2000 continued during 2001 with the repurchase of 16.1 million shares at an average cost of $42.52 per share. These repurchased shares represent nearly 8 percent of the company's outstanding common shares. Since Burlington's inception, the company has repurchased 51.6 million shares at an average cost of approximately $40 per share. -- Progress on major development programs. Expansion of the processing plant serving the Madden Field is on schedule for completion later this year. Plans have also been approved to initiate oil production in both Algeria and China by 2003, and natural gas production from the Rivers Fields in the East Irish Sea by 2004. Reserves Update Burlington replaced 268 percent of its 2001 worldwide production from all sources at an average cost of $1.31 per Mcfe. Excluding acquisitions, the company replaced 108 percent of its 2001 production at an average cost of $1.15 per Mcfe. Worldwide reserve additions from all sources totaled 2.4 Tcfe. Total reserves stood at 11.8 Tcfe at 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. 2001, up 14 percent from 10.3 Tcfe at year-end 2000 on an absolute basis and up 19 percent on a per-share basis. Extensions, discoveries, additions and revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. totaled 942 Bcfe. Significant reserves were added from drilling and development activities in the San Juan San Juan, city, Argentina San Juan (săn wän, Span. sän hwän), city (1991 pop. 353,476), capital of San Juan prov., W Argentina. It is a commercial and industrial center in an agricultural region. , 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 and Wind River basins and from Canadian operations. Acquisitions in 2001 totaled 1.4 Tcfe, the majority of which were 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 . For the three-year period 1999 through 2001, the company replaced an average of 174 percent of worldwide production at an average cost of $1.05 per Mcfe, including acquisitions. Excluding acquisitions, BR replaced 110 percent of worldwide production for the three-year period at an average cost of $.92 per Mcfe. Change in Volume Statistics Reporting Announced Burlington also announced that it will change its convention of reporting reserves and production volumes. This change will result in reporting reserves and production in three product categories -- natural gas, natural gas liquids, and crude oil -- instead of the past convention of reporting them in two categories -- as natural gas and crude oil. With adoption of this new convention, non-hydrocarbon gases such as carbon dioxide carbon dioxide, chemical compound, CO2, a colorless, odorless, tasteless gas that is about one and one-half times as dense as air under ordinary conditions of temperature and pressure. and hydrogen sulfide hydrogen sulfide, chemical compound, H2S, a colorless, extremely poisonous gas that has a very disagreeable odor, much like that of rotten eggs. It is slightly soluble in water and is soluble in carbon disulfide. will be excluded from reported volumes. The changes, which are effective immediately, will have no financial impact and no material impact on total equivalent production or reserves volumes. 2002 Outlook Production Guidance for 2002 includes the estimated impact of planned divestitures, the timing and level of which could be material to these estimates. Production estimates remain unchanged from prior guidance, with volume growth anticipated in the range of 3-to-8 percent for full-year 2002. 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. by product follows:
1st-Quarter 2002 Full-Year 2002
Estimate Estimate
Gas (MMcfd)
U.S. 995 - 1,080 855 - 955
Canada 750 - 840 775 - 875
Other International 155 - 180 120 - 170
------------- -------------
Total 1,900 - 2,100 1,750 - 2,000
Natural Gas Liquids (Mbd)
U.S. 22.0 - 28.0 28.0 - 31.0
Canada 18.0 - 22.0 17.0 - 21.0
Other International 0.0 - 0.0 0.0 - 0.0
-------------- ---------------
Total 40.0 - 50.0 45.0 - 52.0
Crude Oil (Mbd)
U.S. 34.5 - 38.5 27.0 - 33.2
Canada 11.0 - 12.5 10.5 - 12.0
Other International 6.5 - 9.0 6.5 - 8.8
-------------------- ------------------
Total 52.0 - 60.0 44.0 - 54.0
Other Financial Parameters On a gas-equivalent-per-unit basis, 2002 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) expense is expected to average from $0.86 to $0.89 per Mcfe. Cash costs, excluding taxes other than income taxes, are estimated to average $1.00 to $1.05 per Mcfe for the year. Exploration expense for full-year 2002 is anticipated to range from $230-to-$270 million. Pre-tax interest expense is estimated to range from $270-to-$290 million for the year. Headquartered in 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 is one of the world's largest independent oil and gas companies. The company has properties in the U.S., Canada, the United Kingdom, 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. , Africa and China. Additional information is available on the Burlington Resources Web site at www.br-inc.com. A financial statement and statistical tables are attached. 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 (LOSS)
(UNAUDITED)
FOURTH QUARTER YEAR ENDED
--------------------------------------
2001 2000 2001 2000
------- ------- ------- -------
(In Millions, Except per Share Amounts)
Revenues $611 $999 $3,326 $3,147
------- ------- ------- -------
Costs and Expenses
Taxes Other than Income Taxes 26 46 166 158
Transportation Expense 58 60 249 240
Production and Processing 141 119 505 470
Depreciation, Depletion and
Amortization 203 182 730 704
Exploration Costs 57 63 258 237
Impairment of Oil and
Gas Properties 184 -- 184 --
Administrative 36 44 149 147
------- ------- ------- -------
Total Costs and Expenses 705 514 2,241 1,956
------- ------- ------- -------
Operating Income (Loss) (94) 485 1085 1,191
Interest Expense 58 46 190 197
Other Expense (Income) - Net (15) 20 (12) 27
------- ------- ------- -------
Income (Loss) Before
Income Taxes (137) 419 907 967
Income Tax Expense (Benefit) (58) 115 349 292
------- ------- ------- -------
Net Income (Loss) Before
Cumulative Effect of Change
in Accounting Principle (79) 304 558 675
Cumulative Effect of Change
in Accounting Principle - Net -- -- 3 --
------- ------- ------- -------
Net Income (Loss) $(79) $304 $561 $675
======= ======= ======= =======
Earnings (Loss) per Common
Share
Basic
Before Cumulative Effect
of Change in Accounting
Principle $(.39) $1.41 $2.70 $3.13
Cumulative Effect of Change
in Accounting
Principle - Net -- -- .01 --
------- ------- ------- -------
Net Income (Loss) $(.39) $1.41 2.71 3.13
======= ======= ======= =======
Diluted
Before Cumulative Effect
of Change in Accounting
Principle $(.39) $1.41 2.69 3.12
Cumulative Effect of
Change in Accounting
Principle - Net -- -- .01 --
------- ------- ------- -------
Net Income (Loss) $(.39) $1.41 $2.70 $3.12
======= ======= ======= =======
Basic Common Shares 201 215 207 216
======= ======= ======= =======
Diluted Common Shares 201 216 208 216
======= ======= ======= =======
This statement should be read in conjunction with the attached
press release.
BURLINGTON RESOURCES INC.
TWO - STREAM STATISTICS
2001
----------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
Production Volumes
Gas (MMCF/Day)
Domestic 1,360 1,314 1,270 1,264
Canada 479 487 466 606
Other International 170 144 193 207
------ ------ ------ ------
Total 2,009 1,945 1,929 2,077
------ ------ ------ ------
Oil (MBBLS/Day)
Domestic 45.5 44.7 42.7 43.1
Canada 16.3 17.8 16.6 16.9
Other International 8.0 7.1 6.9 7.1
------ ------ ------ ------
Total 69.8 69.6 66.2 67.1
------ ------ ------ ------
Total Equivalent
(MMCFE/D) 2,428 2,363 2,326 2,480
------ ------ ------ ------
Average Realized Prices
Gas ($/MCF)
Domestic $5.04 $3.99 $2.84 $2.85
Canada 6.96 4.88 2.93 2.35
Other International 2.94 2.50 1.74 2.30
------ ------ ------ ------
Combined including
hedging $5.32 $4.10 $2.75 $2.65
Hedging loss (gain) 1.60 .66 (.23) (.35)
------ ------ ------ ------
Combined before
hedging $6.92 $4.76 $2.52 $2.30
------ ------ ------ ------
Oil ($/BBL)
Domestic $25.24 $23.18 $22.79 $19.20
Canada 30.71 28.79 26.87 19.64
Other International 24.48 26.66 23.82 19.02
------ ------ ------ ------
Combined including
hedging $26.43 $24.92 $23.92 $19.29
Hedging loss (gain) 1.72 1.62 1.43 (.72)
------ ------ ------ ------
Combined before
hedging $28.15 $26.54 $25.35 $18.57
------ ------ ------ ------
2000 Year Ended
------- -------------------------------
Fourth
Quarter 2001 2000 1999
------- ------ ------ ------
Production Volumes
Gas (MMCF/Day)
Domestic 1,380 1,302 1,441 1,487
Canada 403 510 397 429
Other International 128 178 122 88
------ ------ ------ ------
Total 1,911 1,990 1,960 2,004
------ ------ ------ ------
Oil (MBBLS/Day)
Domestic 45.9 44.0 51.6 57.3
Canada 15.8 16.9 17.0 19.4
Other International 8.0 7.3 9.6 13.2
------ ------ ------ ------
Total 69.7 68.2 78.2 89.9
------ ------ ------ ------
Total Equivalent
(MMCFE/D) 2,329 2,399 2,429 2,543
------ ------ ------ ------
Average Realized Prices
Gas ($/MCF)
Domestic $4.47 $3.70 $3.25 $2.36
Canada 6.04 4.15 3.96 2.22
Other International 2.58 2.34 2.16 1.93
------ ------ ------ ------
Combined including
hedging $4.68 $3.69 $3.32 $2.33
Hedging loss (gain) .76 .41 .40 (.05)
------ ------ ------ ------
Combined before
hedging $5.44 $4.10 $3.72 $2.28
------ ------ ------ ------
Oil ($/BBL)
Domestic $23.96 $22.63 $24.18 $16.70
Canada 31.29 26.47 27.80 18.36
Other International 30.74 23.42 27.73 17.00
------ ------ ------ ------
Combined including
hedging $26.39 $23.66 $25.40 $17.12
Hedging loss (gain) 2.63 1.02 2.46 .19
------ ------ ------ ------
Combined before
hedging $29.02 $24.68 $27.86 $17.31
------ ------ ------ ------
BURLINGTON RESOURCES INC.
THREE - STREAM STATISTICS
2001
-----------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
Production Volumes
Gas (MMCF/Day)
Domestic 1,189 1,133 1,088 1,076
Canada 404 408 401 518
Other International 163 138 183 197
------ ------ ------ ------
Total 1,756 1,679 1,672 1,791
------ ------ ------ ------
Oil (MBBLS/Day)
Domestic 45.5 44.7 42.7 43.1
Canada 12.5 12.5 11.6 11.2
Other International 8.0 7.1 6.9 7.1
------ ------ ------ ------
Total 66.0 64.3 61.2 61.4
------ ------ ------ ------
NGLs (MBBLS/Day)
Domestic 30.8 35.2 35.4 37.2
Canada 10.6 11.3 11.4 16.8
Other International -- -- -- --
------ ------ ------ ------
Total 41.4 46.5 46.8 54.0
------ ------ ------ ------
Total Equivalent
(MMCFE/D) 2,400 2,344 2,320 2,483
------ ------ ------ ------
Average Realized Prices
Gas ($/MCF)
Domestic $5.36 $4.21 $3.00 $3.09
Canada 7.79 5.40 3.05 2.56
Other International 3.06 2.62 1.83 2.41
------ ------ ------ ------
Combined including
hedging $5.71 $4.37 $2.89 $2.86
Hedging loss (gain) 1.83 .76 (.26) (.41)
------ ------ ------ ------
Combined before hedging $7.54 $5.13 $2.63 $2.45
------ ------ ------ ------
Oil ($/BBL)
Domestic $25.24 $23.18 $22.79 $19.20
Canada 28.72 28.87 27.55 19.89
Other International 24.48 26.66 23.82 19.02
------ ------ ------ ------
Combined including
hedging $25.81 $24.62 $23.81 $19.31
Hedging loss (gain) 1.82 1.75 1.55 (.78)
------ ------ ------ ------
Combined before hedging $27.63 $26.37 $25.36 $18.53
------ ------ ------ ------
NGLs ($/BBL)
Domestic $15.79 $13.42 $9.61 $7.64
Canada 30.78 28.75 23.49 12.35
Other International -- -- -- --
------ ------ ------ ------
Combined $19.63 $17.15 $12.99 $9.10
------ ------ ------ ------
2000 Year Ended
-------- ----------------------------
Fourth
Quarter 2001 2000 1999
-------- ------ ------ ------
Production Volumes
Gas (MMCF/Day)
Domestic 1,201 1,121 1,265 1,321
Canada 346 433 341 376
Other International 123 170 118 86
------ ------ ------ ------
Total 1,670 1,724 1,724 1,783
------ ------ ------ ------
Oil (MBBLS/Day)
Domestic 45.9 44.0 51.6 57.3
Canada 12.1 11.9 12.5 13.7
Other International 8.0 7.3 9.6 13.2
------ ------ ------ ------
Total 66.0 63.2 73.7 84.2
------ ------ ------ ------
NGLs (MBBLS/Day)
Domestic 34.8 34.6 36.1 33.6
Canada 10.7 12.5 11.1 12.2
Other International -- -- -- --
------ ------ ------ ------
Total 45.5 47.1 47.2 45.8
------ ------ ------ ------
Total Equivalent
(MMCFE/D) 2,339 2,386 2,449 2,563
------ ------ ------ ------
Average Realized Prices
Gas ($/MCF)
Domestic $4.66 $3.94 $3.28 $2.43
Canada 6.44 4.53 4.10 2.32
Other International 2.68 2.45 2.23 1.93
------ ------ ------ ------
Combined including
hedging $4.88 $3.94 $3.37 $2.41
Hedging loss (gain) .87 .48 .45 (.06)
------ ------ ------ ------
Combined before hedging $5.75 $4.42 $3.82 $2.35
------ ------ ------ ------
Oil ($/BBL)
Domestic $23.96 $22.63 $24.18 $16.70
Canada 31.86 26.51 29.06 17.70
Other International 30.74 23.42 27.73 17.00
------ ------ ------ ------
Combined including
hedging $26.23 $23.45 $25.44 $16.93
Hedging loss (gain) 2.77 1.10 2.62 .20
------ ------ ------ ------
Combined before hedging $29.00 $24.55 $28.06 $17.13
------ ------ ------ ------
NGLs ($/BBL)
Domestic $16.36 $11.41 $14.60 $8.95
Canada 29.42 22.50 25.38 15.87
Other International -- -- -- --
------ ------ ------ ------
Combined $19.44 $14.35 $17.14 $10.79
------ ------ ------ ------
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