Burlington Resources Reports Strong Quarterly Performance.Business/Energy Editors HOUSTON--(BUSINESS WIRE)--April 18, 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. Inc. (NYSE NYSE See: New York Stock Exchange :BR) today reported estimated net income of $48 million for the first quarter of 2002, or $0.24 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 $336 million or $1.56 per diluted share during the same quarter of 2001. 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. (cash from operations before changes in working capital) during the first quarter was $341 million or $1.69 per diluted share, compared to $673 million or $3.13 per diluted share during the same quarter last year. Total production during the quarter increased by 13 percent over the prior year's first-quarter production to a record of 2,716 million cubic feet of natural gas equivalent per day (MMcfed), or by 21 percent per diluted share. The record includes a full quarter of volumes from recently acquired properties. Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 91 percent of Burlington's quarterly production came from 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. , with 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 contributing 42 percent of the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. portion. "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. performed strongly during the quarter as we withstood with·stand v. with·stood , with·stand·ing, with·stands v.tr. 1. To oppose with force or resolution. 2. To be successful in resisting. See Synonyms at oppose. v.intr. a commodity price downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. early in the year, and then benefited from our improved production profile as prices rebounded," said Bobby S. Shackouls, Burlington Resources chairman, president and chief executive officer. "In the meantime Adv. 1. in the meantime - during the intervening time; "meanwhile I will not think about the problem"; "meantime he was attentive to his other interests"; "in the meantime the police were notified" meantime, meanwhile , we continued moving forward with our major development programs and profitable growth initiatives, as well as our non-core property divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). efforts. These factors, in combination with the generally favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. outlook for natural gas, give us considerable reason for optimism Optimism See also Hope. Bontemps, Roger personification of cheery contentment. [Fr. Lit.: “Roger Bontemps” in Walsh Modern, 66] Candide beset by inconceivable misfortunes, hero indifferently shrugs them off. [Fr. ." During the first quarter, Burlington's natural gas production averaged 2,019 million cubic feet per day (MMcfd), up 15 percent from 1,756 MMcfd during the prior year's first quarter. Production of natural gas liquids (NGLs) increased 36 percent to 56.3 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 41.4 Mbd during the prior year's first quarter, attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the recent property acquisitions in Canada. Oil production averaged 59.9 Mbd compared to 66.0 Mbd during the prior year's first quarter, with the decline occurring primarily in the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east and the North Sea. Natural gas price realizations averaged $2.88 per thousand cubic feet (Mcf) during the quarter, down from the $5.71 per Mcf realized during the prior year's first quarter. This year's first-quarter realizations included gains of $0.38 per Mcf attributable to the company's gas 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. program. Oil price realizations of $21.68 per barrel barrel: see English units of measurement. were down from $25.81 per barrel realized during the prior year's first quarter, with hedging contributing $0.58 per barrel. NGLs price realizations of $12.45 per barrel were down from $22.05 per barrel during the prior year's first quarter. Cash costs, excluding taxes other than income taxes, averaged $0.99 per Mcfe, representing approximately a 9 percent improvement compared to 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) averaged $0.90 per Mcfe for the first quarter of 2002. DD&A was $0.79 per Mcfe for the first quarter of 2001. Exploration expenses of $57 million were down from $70 million during the prior year's first quarter due to reduced dry hole expenses. During the quarter Burlington completed the acquisition of the ATCO ATCO Air Traffic Control Officer ATCO Association of Transport Coordinating Officers (UK) ATCO Air Tanker/Fixed Wing Coordinator ATCO Aviation Transportation Coordination Office ATCO Air Taxi and Commercial Operator producing properties in the Viking-Kinsella area of Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. , Canada, for approximately $344 million. The company also received better-than-expected response to its planned divestiture program, encouraging it to raise its estimate of sales proceeds to a range of $750 million-to-$1.2 billion, from the previous target of $500 million. Burlington expects to utilize the proceeds to reduce debt. Remaining Year Outlook For the remainder of 2002, Burlington expects overall production to decline from the first-quarter totals as a result of planned property divestitures as well as annual plant and pipeline maintenance usually scheduled during the second and third quarters. The company expects second-quarter 2002 production of natural gas to range from 1,750-to-1,950 MMcfd; with NGLs production to range from 50-to-60 Mbd and crude oil production estimated to range from 42-to-56 Mbd. Total equivalent production is expected to range from 2,300-to-2,640 MMcfed. 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. breakdowns for the second quarter and the full year follow:
2nd-Quarter 2002 Full-Year 2002
Estimate Estimate
Natural Gas (MMcfd)
U.S. 870 - 950 855 - 990
Canada 760 - 830 765 - 830
Other International 120 - 170 130 - 180
--------------- ---------------
Total 1,750 - 1,950 1,750 - 2,000
Natural Gas Liquids (Mbd)
U.S. 26.0 - 31.0 27.0 - 30.0
Canada 24.0 - 29.0 23.0 - 26.0
Other International 0.0 - 0.0 0.0 - 0.0
--------------- ---------------
Total 50.0 - 60.0 50.0 - 56.0
Crude Oil (Mbd)
U.S. 29.5 - 37.0 28.5 - 35.0
Canada 7.5 - 12.0 7.0 - 9.0
Other International 5.0 - 7.0 4.5 - 6.0
--------------- ---------------
Total 42.0 - 56.0 40.0 - 50.0
The company 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. 40-to-45 percent of its second-quarter North American natural gas production, with a floor price of roughly $3.10 per Mcf, as well as approximately 50 percent of third-quarter production with a floor price of roughly $2.95 per Mcf and approximately 25 percent of fourth-quarter production with a floor price of roughly $2.85 per Mcf. 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). prices are given on a Henry Hub Henry Hub is the pricing point for natural gas futures contracts traded on the New York Mercantile Exchange (NYMEX). It is a point on the natural gas pipeline system in Erath, Louisiana. It is owned by Sabine Pipe Line LLC. equivalent basis. Cash costs, excluding taxes other than income taxes, are anticipated to average between $1.01 and $1.07 per Mcfe for the second quarter of 2002 and between $1.00 and $1.06 per Mcfe for the full year. DD&A expense is expected to average $0.86 to $0.89 per thousand cubic feet equivalent for both the second quarter and the full year. Timing of property sales will impact actual performance. Preliminary estimates for exploration expense are $70-to-$85 million for the second quarter of 2002 and $250-to-$280 million for the entire year, including estimated dry hole expense. Actual dry hole expense could differ based on timing and results of wells. Pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta interest expense is estimated to range from $70-to-$75 million for the second quarter and $270-to-$295 million for full-year 2002. The actual amount of interest expense for the year is dependent upon timing and amount of asset sales and the use of sale proceeds in reducing debt. 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 natural gas comprising the vast majority of its reserves. 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 a statistical table 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
(UNAUDITED)
FIRST QUARTER
----------------
2002 2001
------ -------
(In Millions, Except
per Share Amounts)
Revenues $683 $1,152
------ -------
Costs and Expenses
Taxes Other than Income Taxes 33 67
Transportation Expense 67 72
Production and Processing 136 118
Depreciation, Depletion and Amortization 220 170
Exploration Costs 57 70
Administrative 38 44
------ -------
Total Costs and Expenses 551 541
------ -------
Operating Income 132 611
Interest Expense 72 45
Other Expense (Income) - Net (1) 9
------ -------
Income Before Income Taxes 61 557
Income Tax Expense 13 224
------ -------
Net Income Before Cumulative
Effect of Change in Accounting
Principle 48 333
Cumulative Effect of
Change in Accounting
Principle - Net -- 3
------ -------
Net Income $48 $336
====== =======
Earnings per Common Share
Basic
Before Cumulative Effect of
Change in Accounting Principle $0.24 $1.56
Cumulative Effect of
Change in Accounting
Principle - Net -- 0.01
------ -------
Net Income $0.24 $1.57
====== =======
Diluted
Before Cumulative Effect of
Change in Accounting Principle $0.24 $1.55
Cumulative Effect of
Change in Accounting
Principle - Net -- 0.01
------ -------
Net Income $0.24 $1.56
====== =======
Basic Common Shares 201 214
====== =======
Diluted Common Shares 202 215
====== =======
This statement should be read in conjunction with the attached
press release.
BURLINGTON RESOURCES INC.
SALES VOLUMES AND PRICES
2002 2001
---------------------------------------------
First First Second Third Fourth
Quarter Quarter Quarter Quarter Quarter
---------------------------------------------
Production Volumes
Gas (MMCF/Day)
USA 1,031 1,189 1,133 1,088 1,076
Canada 790 404 408 401 518
Other International 198 163 138 183 197
---------------------------------------------
Worldwide 2,019 1,756 1,679 1,672 1,791
---------------------------------------------
Oil (MBBLS/Day)
USA 41.0 45.5 44.7 42.7 43.1
Canada 11.3 12.5 12.5 11.6 11.2
Other International 7.6 8.0 7.1 6.9 7.1
---------------------------------------------
Worldwide 59.9 66.0 64.3 61.2 61.4
---------------------------------------------
NGLs (MBBLS/Day)
USA 27.4 30.8 35.2 35.4 37.2
Canada 28.9 10.6 11.3 11.4 16.8
---------------------------------------------
Worldwide 56.3 41.4 46.5 46.8 54.0
---------------------------------------------
Total
Equivalent
(MMCFE/D) 2,716 2,400 2,344 2,320 2,483
Average Realized
Prices
Gas ($/MCF)
USA $3.13 $5.36 $4.21 $3.00 $3.09
Canada 2.62 7.79 5.40 3.05 2.56
Other
International 2.22 3.06 2.62 1.83 2.41
---------------------------------------------
Combined including
hedging $2.88 $5.71 $4.37 $2.89 $2.86
Hedging loss
(gain) (.38) 1.83 .76 (.26) (.41)
---------------------------------------------
Combined before
hedging $2.50 $7.54 $5.13 $2.63 $2.45
---------------------------------------------
Oil ($/BBL)
USA $21.46 $25.24 $23.18 $22.79 $19.20
Canada 21.82 28.72 28.87 27.55 19.89
Other
International 22.63 24.48 26.66 23.82 19.02
---------------------------------------------
Combined including
hedging $21.68 $25.81 $24.62 $23.81 $19.31
Hedging loss
(gain) (.58) 1.82 1.75 1.55 (.78)
---------------------------------------------
Combined before
hedging $21.10 $27.63 $26.37 $25.36 $18.53
---------------------------------------------
NGLs ($/BBL)
USA $11.22 $19.06 $17.04 $12.87 $10.77
Canada 13.61 30.78 28.75 23.49 12.35
---------------------------------------------
Combined $12.45 $22.05 $19.88 $15.46 $11.26
---------------------------------------------
Year Ended
---------------------
2001 2000 1999
---------------------
Production Volumes
Gas (MMCF/Day)
USA 1,121 1,265 1,321
Canada 433 341 376
Other International 170 118 86
---------------------
Worldwide 1,724 1,724 1,783
---------------------
Oil (MBBLS/Day)
USA 44.0 51.6 57.3
Canada 11.9 12.5 13.7
Other International 7.3 9.6 13.2
---------------------
Worldwide 63.2 73.7 84.2
---------------------
NGLs (MBBLS/Day)
USA 34.6 36.1 33.6
Canada 12.5 11.1 12.2
---------------------
Worldwide 47.1 47.2 45.8
---------------------
Total
Equivalent
(MMCFE/D) 2,386 2,449 2,563
---------------------
Average Realized Prices
Gas ($/MCF)
USA $3.94 $3.28 $2.43
Canada 4.53 4.10 2.32
Other International 2.45 2.23 1.93
---------------------
Combined including hedging $3.94 $3.37 $2.41
Hedging loss (gain) .48 .45 (.06)
---------------------
Combined before hedging $4.42 $3.82 $2.35
---------------------
Oil ($/BBL)
USA $22.63 $24.18 $16.70
Canada 26.51 29.06 17.70
Other International 23.42 27.73 17.00
---------------------
Combined including hedging $23.45 $25.44 $16.93
Hedging loss (gain) 1.10 2.62 .20
---------------------
Combined before hedging $24.55 $28.06 $17.13
---------------------
NGLs ($/BBL)
USA $14.75 $17.70 $11.66
Canada 22.50 25.38 15.87
---------------------
Combined $16.79 $19.51 $12.77
---------------------
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