Contour Reports Third Quarter Results.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; , TEXAS--(BUSINESS WIRE)--Nov. 12, 1999-- CONTOUR ENERGY CO. ("Contour" or the "Company") today reported its unaudited third quarter results. The third quarter of 1999 is the first full quarter's results since the Company restructured a portion of its debt and sold assets in May 1999. Operationally, during the quarter the Company's production remained stable at an average daily rate of 58 million cubic feet of natural gas equivalent (Mmcfe) or 5.4 billion cubic feet of natural gas equivalent (Bcfe) for the third quarter, with approximately 90% attributable to natural gas production. While this is a 40% decrease from the comparable quarter in 1998, the primary factor is the sale of certain of the Company's property interests in the Bryceland Bryceland can refer to: A place:
NYMEX See New York Mercantile Exchange (NYM). price of $2.13 per Mcf expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. in October October: see month. 1999. The Company has hedged 700 barrels of oil per day through December December: see month. 1999 at $20.00 per barrel. Total production expenses (including severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and ad valorem taxes Ad Valorem Tax A tax based on the assessed value of real estate or personal property. In other words ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenues for state and municipal governments. ) were $3.0 million, 35% lower than the comparable 1998 period, again due primarily to the May 1999 sale of certain property interests in north Louisiana. On a unit basis, production expenses averaged $0.56 per natural gas equivalent (Mcfe) compared to $0.50 per Mcfe in the third quarter 1998. The decrease in total costs and the increase in per unit costs, is in line with expectations following the sale of the north Louisiana properties in May 1999. Exploration expenses for the third quarter of 1999 decreased to $1.1 million from $3.0 million for the third quarter of 1998, primarily due to decreased dry hole expenses and leasehold An estate, interest, in real property held under a rental agreement by which the owner gives another the right to occupy or use land for a period of time. leasehold n. abandonments. 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 for the quarter was $10.5 million, which included $4.4 million related to the Bayou bayou (bī`ō, bī`  ) [Louisiana Fr.; from Choctaw bayuk=small stream], term used mainly in U.S. Sauveur field. This results from the
amortization of the total well costs of both the Bourg bourg n. 1. A market town. 2. A medieval village, especially one situated near a castle. [French, from Old French, from Late Latin burgus, fortress, No. 1 and Bourg No. 2 wells over the current proved developed reserves in the Bayou Sauveur field. Excluding the Bayou Sauveur field, DD&A for the quarter would have been $1.12 per Mcfe. 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. , excluding $0.8 million of a non-recurring nature, were $1.3 million in the current quarter, compared to $1.9 million in the third quarter 1998. On a unit basis, ongoing general and administrative costs were $0.25 per Mcfe, a 19% increase over 1998. Interest costs totaled $8.1 million (excluding non-cash items) compared to $7.1 million in the comparable quarter of 1998. The Company's consolidated operations during the third quarter of 1999 resulted in total revenues of $12.6 million and a net loss of $13.3 million, or ($1.10) per share of common stock, compared to 1998 third quarter total revenues of $18.6 million and a net loss of $8.4 million, or ($0.76) per share of common stock. EBITDAX Earnings Before Interest, Taxes, Depreciation, Depletion, Amortization, and Exploration Expenses - EBITDAX An indicator of a company's financial performance calculated as: for the current quarter was $7.6 million compared to $12.2 million in the third quarter of 1998. Operationally, the Company participated in four wells in the third quarter, with three completed as producers - the Roberts No. 1 and Lee No. 1 wells in north Louisiana and the A-21 ST well in Main Pass Block 77 of 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 . Subsequent to the third quarter, as previously reported, Contour participated in the drilling and completion of the A-20 ST well in Main Pass Block 77. Daily production rates continue to increase at this well since Contour's November November: see month. 5, 1999 press release. On October 29, 1999 drilling commenced at the A-22 well, which is the fourth well in Main Pass Block 77 that Contour has elected to participate in this year. The Main Pass area was acquired in the SCANA SCANA South Carolina Association of Nurse Anesthetists SCANA Self Contained Adverse Night Attack acquisition of December 1997. Additional planned drilling operations: - Location dredging dredging, process of excavating materials underwater. It is used to deepen waterways, harbors, and docks and for mining alluvial mineral deposits, including tin, gold, and diamonds. is now underway and drilling is estimated to commence mid-December Noun 1. mid-December - the middle part of December period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" Dec, December - the last (12th) month of the year at the Lake Billiot No. 1 in south Louisiana Louisiana (ləwē'zēăn`ə, l ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. (Contour's working interest 33.3%). This well isprojected to a true vertical depth (TVD TVD Tuvalu Dollar (ISO currency code) TVD True Vertical Depth (oil drilling) TVD Total-Variation-Diminishing TVD Total Vertical Depth (oil and gas) ) of 3,300' and will test a seismically defined untested fault block on the southwest flank flank (flank) the side of the body between ribs and ilium. flank n. 1. The side of the body between the pelvis or hip and the last rib; the side. 2. of the Golden Meadow meadow grassland, used for grazing and/or haying. meadow buttercup ranunculusacris. meadow crowfoot ranunculusacris. meadow rue see thalictrum. field in the 2,700' oil sand, a zone producing in other areas of the field. - Drilling should commence in the next few weeks at the Contour-operated Walker No.1 in south Louisiana (Contour's working interest 50%). This well is projected to a TVD of 10,600' and will test a seismic amplitude amplitude (ăm`plĭt d'), in physics, maximum displacement from a zero value or rest position. (bright spot) at the Tex Wlevel in the northwest Orange Grove area. - Drilling is currently estimated to commence late this year at the Landry No. 1 in south Louisiana (Contour's working interest 11.5%). This well is projected to a TVD of 15,000' and will penetrate a seismically defined untested fault block on the north flank of the Lapeyrouse field to test the multiple Cib Carst sand field pays. At the Bayou Sauveur field, information obtained from drilling the Bourg No. 2 well has been integrated and the seismic data set re-worked resulting in improved definition of the Cib Carst 7 interval, which is currently producing in the Bourg No. 1. A potential Cib Carst 7 sidetrack location is being considered. The Company and its working interest partners are continuing their evaluation efforts of the deeper Tex W sand potential. The accompanying condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. financial statements and summary production information also provide comparable nine-month financial and production information. Contour Energy Co. is engaged in the development, exploration, acquisition and production of oil and natural gas. Natural gas represents about 90% of the Company's equivalent production and proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. . Contour Energy Co. common stock and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. are traded on the OTC Bulletin Board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. under the symbols CONC and CONCP. Cautionary Statement as to Forward-Looking Information Statements made herein (as well as information included in oral or other written statements made or to be made by the Company or its representatives) that are forward-looking in nature are intended to be "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. " within the meaning of Section 27A of the Securities Act of 1933, 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. , and Section 21E of the Securities Exchange Act of 1934, as amended, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc matters such as anticipated operating and financial performance, business prospects, future reserves, cash flow and value, developments and results of the Company. Actual performance, prospects, reserves, cash flow and value, developments and results may differ materially from any or all anticipated results due to economic conditions and other risks, uncertainties and circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or partly or totally outside the control of the Company, including rates of inflation, natural gas prices, uncertainty of reserve estimates, rates and timing of future production of oil and gas, exploratory and development activities, acquisition risks, changes in the level and timing of future costs and expenses related to drilling and operating activities and those risk factors described on pages 13, 14 and 15 of the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 1998. Words such as "anticipated", "expect", "estimate", "project" and similar expressions are intended to identify forward-looking statements. Forward-looking statements include the risk factors described in the Company's Form 10-K mentioned above. -0-
Contour Energy Co.
Condensed Income Statements
(In thousands, except per share data)
(Unaudited)
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
---------------- ----------------
1999 1998 1999 1998
---- ---- ---- ----
Oil and gas
revenues $ 12,120 $ 18,630 $ 40,477 $ 62,839
Interest and
other income 591 16 1,655 82
Gain (loss)
on sale of
properties (135) -- 25,556 --
Total
revenues 12,576 18,646 67,688 62,921
Production
expenses 3,011 4,556 12,559 15,300
Exploration
expenses 1,117 3,043 4,229 9,712
General and
administrative
expenses 2,142 1,913 6,177 5,530
Interest and
other debt
expenses 9,069 8,342 29,036 24,657
Depreciation,
depletion and
amortization 10,479 9,203 28,505 30,389
Net loss before
extraordinary
item (13,242) (8,411) (12,818) (22,667)
Extraordinary
income (loss) (13) -- 10,959 --
Net loss (13,255) (8,411) (1,859) (22,667)
Cumulative
preferred
stock
dividends (1,036) (1,122) (3,310) (3,413)
Net loss
applicable to
common stock (14,291) (9,533) (5,169) (26,080)
Basic and
diluted loss
per common
share before
extraordinary
item(1) (1.09) (0.76) (1.26) (2.07)
Basic and
diluted loss
per common
share(1) (1.10) (0.76) (0.41) (2.07)
Average
common shares
outstanding(1) 13,044 12,577 12,756 12,574
(1) Restated to reflect the Company's reverse stock split.
Contour Energy Co.
Condensed Balance Sheets
(In thousands)
(Unaudited)
Sept. 30, Dec. 31,
1999 1998
---- ----
Assets:
Current assets $ 45,634 $ 28,251
Restricted cash 7,500 -
Property and equipment, net 171,114 256,455
Other assets 921 1,491
Total assets $225,169 $ 286,197
Liabilities and Stockholders' Deficit:
Current liabilities $ 48,107 $ 65,636
Long term debt 245,491 287,500
Stockholders' deficit (68,429) (66,939)
Total Liabilities and
Stockholders' Deficit $225,169 $286,197
-0-
Contour Energy Co.
Condensed Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended Sept. 30,
--------------------------
1999 1998
---- ----
Operating Activities:
Net loss $ (1,859) $ (22,667)
Adjustments to reconcile
net loss to net cash (used in)
provided by operating activities:
Gain on sale of assets (25,556) --
Extraordinary income (10,959) --
Depreciation, depletion
and amortization 28,505 30,389
Exploration expenses 4,229 9,712
Accretion and amortization
of debt expenses and other expenses 3,848 3,811
Cash flow from operations before
changes in operating assets
and liabilities (1,792) 21,245
Net changes in operating assets
and liabilities (2,637) 8,045
Net cash (used in) provided
by operating activities (4,429) 29,290
Investing Activities:
Capital expenditures (11,133) (48,267)
Proceeds from sale of properties 82,865 17,070
Acquisition purchase price adjustment 6,889 --
Net cash provided by
(used in) investing activities 78,621 (31,197)
Financing Activities:
Net payments on bank credit facility (111,500) (16,300)
Proceeds from sale
of common stock, net -- 33
Proceeds from conversion
of preferred stock -- (2)
Proceeds from sale of notes, net 126,063 29,576
Dividends on preferred stock -- (4,582)
Redemption of Senior Secured Notes (36,501) --
Redemption of
subordinated and senior notes (30,459) (228)
Net cash (used in) provided
by financing activities (52,397) 8,497
Increase in cash
and cash equivalents 21,795 6,590
Cash and cash equivalents,
beginning of period 8,435 162
Cash and cash
equivalents, end of period $ 30,230 $ 6,752
-0-
Contour Energy Co.
Summary Production Information
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
1999 1998 1999 1998
---- ---- ---- ----
Average Sales Price per Unit:
Oil and other liquid
hydrocarbons (per Bbl) $ 19.12 $ 12.55 $ 15.55 $ 13.52
Natural gas (per Mcf) 2.15 2.07 2.04 2.10
Natural gas equivalent
(per Mcfe) 2.26 2.07 2.09 2.11
Average Daily Production:
Oil and other
liquid hydrocarbons (Mbbls) 1.0 0.9 .9 1.1
Natural gas (Mmcf) 52.3 92.7 65.1 102.7
Natural gas
equivalent (Mmcfe) 58.3 98.2 70.8 109.4
Net Production Data:
Oil and other
liquid
hydrocarbons (Mbbls) 91.8 84 257.5 308
Natural gas (Mmcf) 4,812 8,528 17,777 28,031
Natural gas
equivalent (Mmcfe) 5,363 9,032 19,322 29,879
Cost per Mcfe:
Lifting costs $ .44 $ .39 $ .54 $ .40
Severance and
ad valorem taxes .12 .11 .11 .12
General and
administrative
expenses .40 .21 .32 .19
Depreciation, depletion and
amortization (oil and
gas activities) 1.95 1.00 1.48 1.00
Interest expense, excluding
accretion and amortization 1.50 .92 1.32 .83
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