Burlington Resources Reports Second-Quarter Income of $278 Million.Energy Editors/Business Editors HOUSTON--(BUSINESS WIRE)--July 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)(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 $278 million for the second quarter of 2003, or $1.38 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 $170 million or $0.84 per diluted share during the same quarter of 2002. The increase was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to higher commodity price realizations. The results included a $30 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge to income attributable to 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. of several small properties. Net cash provided by operating activities during the second quarter increased to $733 million from $415 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 second quarter increased to $596 million from $378 million during the same quarter last year.(1) Production during the second quarter of 2003 averaged 2,502 million cubic feet of natural gas equivalent per day (MMcfed), which, adjusted for asset sales in 2002, represented growth of 7 percent. The prior year's second-quarter production average of 2,646 MMcfed included approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 303 MMcfed of volumes from properties subsequently sold during 2002. 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 approximately 1.96 million shares for $97 million at an average cost of $49.71 per share. Cumulative repurchases since the program was re-instituted in late 2000 total approximately 19.97 million shares at an average cost of $43.54 per share. Approximately $947 million remains under the current share repurchase authorization The right or permission to use a system resource; the process of granting access. See access control. . "We continued our strong financial and operational performance, while making progress on the major development programs that will drive our production growth in the near future," said Bobby S. Shackouls, Burlington Resources chairman, president and chief executive officer. "The 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. started up on schedule and we are looking forward to achieving production from offshore China later this year and from 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. early next year. We are very pleased with the growth momentum that we see building for 2004." In operational news, the company achieved higher production from 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 , with significant increases from the Deep Basin and Viking-Kinsella fields. Increases were also realized from the Barnett Shale The Barnett Shale is a geological formation of economic significance. It consists of sedimentary rocks of Mississippian age in the U.S. State of Texas. The formation is estimated to stretch from the city of Dallas to west of the city of Fort Worth and south, covering 5,000 square trend in North Texas as acreage acquired last year undergoes development, from South Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. as older producing fields are yielding
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. and extension drilling opportunities, and from the East Lookout Butte Butte, city, United States Butte (by t), city (1990 pop. 33,336), seat of Silver Bow co., SW Mont.; inc. 1879. It is a trade, ranching, and industrial center. and 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. oil fields This list of oil fields includes major fields of the past and present. The list is incomplete; there are more than 40,000 oil and gas fields of all sizes in the world[1]. as their waterflood Wa´ter`flood`n. 1. A flood of water; an inundation. programs exhibit increasing production response. Sales of oil began from the MLN Field after the quarter ended. Late in the quarter, production from 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's This article is about the shopping centre in Denmark. For the Canadian chain of department stores, see Fields (department store). Field's is the biggest shopping centre in Denmark and the second-largest in Scandinavia, surpassed only by Nordstan in deeper Madison Madison, cities, United States Madison. 1 City (1990 pop. 12,006), seat of Jefferson co., SE Ind., on the Ohio River; settled c.1806, inc. 1838. It is a port of entry and a tobacco marketing center. Formation was curtailed as a result of deformations found in several sections of the gas gathering lines. "We have initiated repairs and although it is early in the process, we now expect to ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight to approximately 80 million cubic feet per day (MMcfd) by 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. . This will restore the deeper Madison production to essentially the same rate we had prior to the 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 in June June: see month. ," Shackouls added. Second-quarter natural gas production averaged 1,879 MMcfd compared to 1,927 MMcfd during the prior year's second quarter. Natural gas liquids (NGLs) production averaged 63.1 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 65.0 Mbd during the prior year's second quarter. Oil production averaged 40.7 Mbd compared to 54.8 Mbd during the prior year's second quarter. The year-over-year production declines were primarily attributable to property sales during 2002. Price realizations increased substantially. Natural gas price realizations averaged $4.96 per thousand cubic feet (Mcf) during the quarter, up from $3.22 per Mcf during the prior year's second quarter. NGLs price realizations of $18.53 per barrel were up from $13.86 per barrel during the prior year's second quarter. Oil price realizations increased to $27.53 per barrel from $24.64 per barrel during the prior year's second quarter. Production and processing costs were $0.49 per thousand cubic feet of natural gas equivalent (Mcfe) compared to $0.46 per Mcfe during the prior year's second quarter. General 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. were $0.17 per Mcfe compared to $0.16 per Mcfe during the prior year's second quarter. Transportation costs were $0.45 per Mcfe compared to $0.35 during the prior year's second quarter, with the increase largely attributable to the sale of the Val Verde Val Verde may mean:
loonie dollar - the basic monetary unit in many countries; equal to 100 cents . Exploration costs were $52 million compared to $104 million during the prior year's second quarter. Outlook Production -- During 2003 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. expects to achieve volumes of 2,500 MMcfed to 2,640 MMcfed. This range reflects the previously announced downtime The time during which a computer is not functioning due to hardware, operating system or application program failure. at the Madden Field and the more gradual The Gradual (Latin: graduale, sometimes called the Grail) is a chant in the extraordinary form of the Roman Catholic Mass, sung after the reading or singing of the Epistle and before the Alleluia, or, during penitential seasons, before the Tract. ramp-up to peak production of the MLN Field. 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 third quarter and full year of 2003 on the basis of location and product follows:
3rd-Quarter 2003 Full-Year 2003
Estimate Estimate
Gas (MMcfd)
U.S. 815 - 865 845 - 880
Canada 845 - 890 865 - 900
Other International 120 - 160 155 - 165
------------- -------------
Total 1,780 - 1,915 1,865 - 1,945
Natural Gas Liquids (Mbd)
U.S. 34.4 - 36.7 34.0 - 36.4
Canada 26.1 - 27.3 27.0 - 28.1
Other International 0.0 - 0.0 0.0 - 0.0
------------- --------------
Total 60.5 - 64.0 61.0 - 64.5
Crude Oil (Mbd)
U.S. 27.7 - 30.5 27.6 - 29.7
Canada 5.4 - 5.8 5.2 - 5.6
Other International 11.4 - 15.5 12.0 - 16.0
-------------- ---------------
Total 44.5 - 51.8 44.8 - 51.3
Total Equivalent 2,410 - 2,610 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 the date of this release, Burlington has hedged a portion of its North American natural gas production using costless price collars. For the third quarter of 2003, 590 MMcfd is hedged at a floor price of $3.51 per Mcf and ceiling price of $5.37 per Mcf. For the fourth quarter, 606 MMcfd is hedged at a floor price of $3.57 per Mcf and ceiling price of $5.53 per Mcf. For the first quarter of 2004, 125 MMcfd is hedged at a floor price of $4.44 per Mcf and ceiling price of $7.27 per Mcf. 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 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 Schedule page at www.br-inc.com/docs/hedge.pdf. Other 2003 Financial Parameters -- On a gas-equivalent-per-unit basis, Burlington expects production and processing costs to range from $0.55 to $0.59 per Mcfe for the third quarter and $0.49 to $0.53 per Mcfe for the full year; administrative costs to range from $0.17 to $0.19 per Mcfe for the third quarter and full year; transportation costs to range from $0.42 to $0.45 per Mcfe for the third quarter and full year; DD&A costs to range from $0.97 to $1.01 per Mcfe for the third quarter and $0.95 to $0.99 per Mcfe for the full year; and interest costs to range from $0.28 to $0.31 per Mcfe for the third quarter and full year. Burlington expects exploration costs to range from $65 million to $85 million during the third quarter, and from $230 million to $250 million for the full year. The company estimates that its 2003 effective income tax rate will range from 30 percent to 34 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). 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.
Second Quarter
--------------
2003 2002
----- -----
Net cash provided by operating activities $733 $415
Adjustments:
Working capital (113) (33)
Changes in other assets and liabilities (24) (4)
----- -----
Discretionary cash flow $596 $378
===== =====
(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
rating 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
-------------- ---------------
2003 2002 2003 2002
------- ------ ------- -------
(In Millions, Except
per Share Amounts)
Revenues $1,059 $ 783 $2,187 1,486
------ ----- ------ ------
Costs and Other Income - Net
Taxes Other than Income
Taxes 46 30 94 63
Transportation Expense 102 82 201 168
Production and Processing 112 112 214 248
Depreciation, Depletion
and Amortization 227 215 430 436
Exploration Costs 52 104 120 161
Impairment of Oil and Gas
Properties 30 - 30 -
Administrative 39 39 81 77
Interest Expense 63 70 127 142
(Gain)/Loss on Disposal of
Assets 1 (73) - (73)
Other Expense (Income)
- Net 11 (3) 15 (4)
------ ----- ------ ------
Total Costs and Other
Income - Net 683 576 1,312 1,218
------ ----- ------ ------
Income Before Income Taxes
and Cumulative Effect of
Change in Accounting
Principle 376 207 875 268
Income Tax Expense 98 37 269 50
------ ----- ------ ------
Income Before Cumulative
Effect of Change in
Accounting Principle 278 170 606 218
Cumulative Effect of Change
in Accounting Principle -
Net - - (59) -
------ ----- ------ ------
Net Income $278 $170 $547 $218
====== ===== ====== ======
Earnings per Common Share
Basic
Before Cumulative
Effect of Change in
Accounting Principle $1.39 $0.84 $3.03 $1.08
Cumulative Effect of
Change in Accounting
Principle - Net - - (0.30) -
------ ----- ------ ------
Net Income $1.39 $0.84 $2.73 $1.08
====== ===== ====== ======
Diluted
Before Cumulative
Effect of Change in
Accounting Principle $1.38 $0.84 $3.00 $1.08
Cumulative Effect of
Change in Accounting
Principle - Net - - (0.30) -
------ ----- ------ ------
Net Income $1.38 $0.84 $2.70 $1.08
====== ===== ====== ======
Basic Common Shares 200 201 200 201
====== ===== ====== ======
Diluted Common Shares 202 202 203 202
====== ===== ====== ======
This statement should be read in conjunction with the attached press
release.
BURLINGTON RESOURCES INC.
SALES VOLUMES AND PRICES
----------------------------------------------------------------------
2003 2002
-------------------------------------------
First Second Second Third Fourth
Quarter Quarter Quarter Quarter Quarter
----------------------------------------------------------------------
Sales Volumes
Gas (MMCF/Day)
USA 867 875 953 900 917
Canada 852 868 805 782 829
Other International 153 136 169 157 137
----------------------------------------------------------------------
Worldwide 1,872 1,879 1,927 1,839 1,883
----------------------------------------------------------------------
NGLs (MBBLS/Day)
USA 35.7 34.6 36.5 34.5 32.7
Canada 28.0 28.5 28.5 25.1 26.9
----------------------------------------------------------------------
Worldwide 63.7 63.1 65.0 59.6 59.6
----------------------------------------------------------------------
Oil (MBBLS/Day)
USA 27.6 28.8 37.4 34.2 29.3
Canada 5.1 5.2 9.9 5.4 4.7
Other International 6.6 6.7 7.5 5.1 3.3
----------------------------------------------------------------------
Worldwide 39.3 40.7 54.8 44.7 37.3
----------------------------------------------------------------------
Total Equivalent
(MMCFE/D) 2,490 2,502 2,646 2,465 2,464
----------------------------------------------------------------------
----------------------------------------------------------------------
Average Realized Prices
Gas ($/MCF)
USA $5.27 $4.94 $3.42 $2.92 $3.96
Canada 5.72 5.34 3.29 2.74 3.86
Other International 3.02 2.72 1.82 2.01 2.67
----------------------------------------------------------------------
Combined including hedging 5.29 4.96 3.22 2.77 3.82
Hedging loss (gain) 0.23 0.07 (0.14) (0.11) 0.01
----------------------------------------------------------------------
Combined before hedging $5.52 $5.03 $3.08 $2.66 $3.83
----------------------------------------------------------------------
NGLs ($/BBL)
USA $19.54 $17.26 $12.17 $14.43 $14.78
Canada 25.31 20.07 16.01 16.32 17.89
----------------------------------------------------------------------
Combined $22.07 $18.53 $13.86 $15.22 $16.18
----------------------------------------------------------------------
Oil ($/BBL)
USA $30.87 $26.93 $23.21 $24.39 $23.98
Canada 35.68 27.96 31.07 33.56 31.90
Other International 20.32 29.74 23.47 28.13 24.31
----------------------------------------------------------------------
Combined including hedging 29.74 27.53 24.64 $25.90 $25.01
Hedging loss (gain) 0.44 - - - -
----------------------------------------------------------------------
Combined before hedging $30.18 $27.53 $24.64 $25.90 $25.01
----------------------------------------------------------------------
BURLINGTON RESOURCES INC.
SALES VOLUMES AND PRICES
----------------------------------------------------------------------
Year Ended
---------------------------
2002 2001 2000
----------------------------------------------------------------------
Sales Volumes
Gas (MMCF/Day)
USA 949 1,121 1,265
Canada 802 433 341
Other International 165 170 118
----------------------------------------------------------------------
Worldwide 1,916 1,724 1,724
----------------------------------------------------------------------
NGLs (MBBLS/Day)
USA 32.7 34.6 36.1
Canada 27.4 12.5 11.1
----------------------------------------------------------------------
Worldwide 60.1 47.1 47.2
----------------------------------------------------------------------
Oil (MBBLS/Day)
USA 35.4 44.0 51.6
Canada 7.8 11.9 12.5
Other International 5.9 7.3 9.6
----------------------------------------------------------------------
Worldwide 49.1 63.2 73.7
----------------------------------------------------------------------
Total Equivalent (MMCFE/D) 2,571 2,386 2,449
----------------------------------------------------------------------
----------------------------------------------------------------------
Average Realized Prices
Gas ($/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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