Energen Reports 1st Quarter Results, Initiates 2007 Earnings Guidance; 2006 Earnings Guidance Revised with New Price Assumptions.BIRMINGHAM Birmingham, cities, United States Birmingham (bûr`mĭnghăm') 1 City (1990 pop. 265,968), seat of Jefferson co., N central Ala., in the Jones Valley near the southern end of the Appalachian system; founded and inc. , Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. . -- Energen Based in Birmingham, Alabama, Energen Corporation is a diversified energy company with an oil and gas acquisition and development company and a natural gas utility. Corporation (NYSE NYSE See: New York Stock Exchange : EGN EGN External Gateway Network (WorldCom) EGN East Gate News EGN European Games Network ) announced today that its strong earnings growth in the first quarter of 2006 was driven largely by the impact of higher commodity prices on its oil and gas acquisition and development company, Energen Resources Corporation Energen Resources Corporation is the largest subsidiary of Energen Corporation, a diversified energy company headquartered in Birmingham, Alabama. It is a growing oil and gas acquisition and development company that has approximately 1. . Energen also initiated earnings guidance for 2007 in a range of $3.80-$4.20 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 and adjusted its earnings guidance downward slightly for 2006 primarily due to relatively lower natural gas commodity prices. The new earnings guidance range for 2006 is $3.10-$3.30 per diluted share. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: earnings for the quarter ended March 31, 2006, totaled $87.5 million, or $1.18 per diluted share; this compared with net income of $59.0 million, or 80 cents per diluted share, in the first quarter of 2005. In the prior year, first quarter net income included a non-cash loss of $9.4 million, or 13 cents per diluted shared, associated with the timing of mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. . The increase in quarterly earnings largely was due to a 55 percent increase in per-unit revenues from the natural gas, oil and natural gas liquids (NGL NGL - A dialect of IGL. ) production of Energen Resources. As commodity prices rose through 2005, Energen was able to enter into hedges for some of its 2006 production at prices well-above those in place for 2005. In addition, the higher commodity prices benefited Energen Resources' unhedged production. High natural gas prices were not welcome at the Company's natural gas utility, Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). Gas Corporation (Alagasco Alabama Gas Corporation (Alagasco) is the largest natural gas utility in north and central Alabama that provides energy to 460,000 homes and businesses. Its history dates back more than 150 years and has operating divisions in Anniston, Birmingham, Gadsden, Montgomery, Opelika, ), which experienced a 4 percent decline in earnings in the first quarter of 2006. "Because of high natural gas prices this winter, our customers' bills increased significantly; this led to energy conservation and, thus, less-than-anticipated gas sales, primarily to our core, residential customers," said Energen President James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. T. McManus McManus is a family name that may refer to: People:
"I think many people still mistakenly mis·tak·en v. Past participle of mistake. adj. 1. Wrong or incorrect in opinion, understanding, or perception. 2. Based on error; wrong: a mistaken view of the situation. believe that Alagasco makes money when natural gas prices are high," McManus said. "That simply is not the case. The costs Alagasco incurs to secure natural gas supplies for its customers are passed on to our customers, penny for penny, without mark-up mark-up Noun an amount added to the cost of something to provide the seller with a profit Verb mark up to increase the cost of something by an amount or percentage in order to make a profit ." "All in all, 2006 is off to a great start," said Mike Warren
conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with first quarter actual results, made some adjustments to our 2006 earnings guidance. "While our new range of $3.10 to $3.30 per diluted share is slightly below our previous guidance of $3.25-$3.60 per diluted share, it represents a tighter range and still suggests impressive EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. growth from 2005 to 2006 of 32 to 40 percent," Warren Warren. 1 City (1990 pop. 144,864), Macomb co., SE Mich., a suburb of Detroit; est. 1837, inc. as a city 1957. It is an important metalworking center where steel is processed. added. "In addition, the potential for continued growth at Energen is underscored by our earnings outlook for 2007," he said. "We are pleased to be initiating guidance for 2007 with an earnings range of $3.80-$4.20 per diluted share." FIRST QUARTER 2006 RESULTS First quarter 2006 earnings per diluted share increased 27 percent after adjusting for a timing-related loss in the prior-year first quarter. Consolidated earnings for the first three months of 2006 totaled $87.5 million, or $1.18 per diluted share, and compared with net income of $59.0 million, or 80 cents per diluted share, in the first quarter of 2005. In the prior year, first quarter net income included a non-cash loss of $9.4 million, or 13 cents per diluted shared, associated with the timing of mark-to-market derivatives. Discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. at Energen Resources generated a loss of $7,000 and income of $104,000 in the current- and prior-year first quarters, respectively. Energen Resources Corporation Energen Resources' first quarter 2006 income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the totaled $49.8 million as compared with net income of $19.5 million in the same period a year ago. In the prior year, first quarter net income included a non-cash loss of $9.4 million associated with the timing of mark-to-market derivatives. Revenues per unit of production for Energen Resources' natural gas, oil and NGL production increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 55 percent to $7.23 per thousand cubic feet (Mcf) equivalent. Relative to the first quarter in 2005, the Company's per-unit revenues from its natural gas production increased 65 percent in the first quarter of 2006 to $7.57 per Mcf; per-unit oil production revenues rose 43 percent to $45.94 per barrel barrel: see English units of measurement. ; and per-unit NGL production revenues increased 14 percent to 58 cents per gallon gallon: see English units of measurement. . In addition to higher prices, Energen Resources benefited from higher production volumes. Production in the first quarter of 2006 increased 6 percent to 23.2 billion cubic feet equivalent (Bcfe). Oil production increased 12 percent largely due to the acquisition of Permian Basin The Permian Basin is a sedimentary basin largely contained in the western part of the U.S. state of Texas. It reaches from just south of Lubbock, Texas, to just south of Midland & Odessa, extending westward into the southeastern part of the adjacent state of New Mexico. oil properties in December December: see month. 2005. NGL and natural gas production also increased period-over-period at 5 percent and 4 percent, respectively. These increases largely were due to continued development activities in the San Juan Basin The San Juan Basin is a drainage basin and geologic structural basin in the Four Corners region of the Southwestern United States; its main portion covers around 4,600 square miles, encompassing much of northwestern New Mexico, northeastern Arizona, and parts of Colorado and Utah. and accelerated maintenance of existing wells due to mild winter weather in New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). and southern Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. . Per-unit lease operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. (LOE LOE Ley Orgánica de Educación (Spanish) LOE Level Of Effort LOE Limited Objective Experiment LOE Letter of Explanation LOE Language Other than English. ) for the first three months of 2006 increased 34 percent over the same period last year to $2.02 per Mcf equivalent (Mcfe). This increase was due to a 19 percent rise in price-related production taxes, accelerated maintenance expenses in the San Juan Basin, generally higher field services costs and the December 2005 acquisition of Permian Basin oil properties. 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 in the first quarter of 2006 increased 5 cents per unit to 99 cents per Mcfe and was due largely to the December 2005 acquisition of Permian Basin oil properties. Alabama Gas Corporation Alagasco's natural gas distribution operations earned net income of $37.4 million as compared with $39 million in the prior-year first quarter. This 4 percent decline reflected a decrease in usage driven by the high price of natural gas supplies and was partially offset by the utility's ability to earn on a higher level of equity representing investment in utility plant. RESULTS OF THE TRAILING 12 MONTHS For the 12 months ended March 31, 2006, Energen's net income totaled $201.5 million, or $2.73 per diluted share. This compared with $126.3 million, or $1.72 per diluted share, in the same period a year ago. Income from discontinued operations totaled $14,000 and $229,000 in the 12 months ending March 31, 2006 and 2005, respectively. Energen Resources Corporation Energen Resources' income from continuing operations in the trailing 12-months period totaled $165.5 million and compared with $90.2 million in the same period last year. Relative to the same period a year ago, the Company's per-unit revenues from its natural gas production increased 40 percent to $6.71 per Mcf; per-unit oil production revenues rose 30 percent to $38.80 per barrel; and per-unit NGL production revenues increased 17 percent to 56 cents per gallon. In addition to higher commodity prices, Energen Resources benefited from higher production volumes. Production in the 12 months ended March 31, 2006, totaled 92.4 Bcf, reflecting a 4.7 percent increase over the same period a year ago. Alabama Gas Corporation Alagasco's natural gas distribution operations earned net income of $35.3 million in the 12 months ended March 31, 2006. This compared with net income of $36.5 million in the same period last year. 2006 EARNINGS OUTLOOK REVISED Energen's revised earnings guidance for 2006 is $3.10 to $3.30 per diluted share. The primary change in Energen's assumptions for 2006 was related to commodity prices applicable to Energen Resources' unhedged production. "Natural gas makes up about two-thirds of our estimated annual production. And almost two-thirds of our estimated natural gas production for the remainder of the year is 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. ," said President McManus at today's Annual Meeting of Shareholders. "Natural gas prices have been on something of a roller-coaster ride. The post-hurricane highs in excess of $14 per thousand cubic feet gave way to more moderate pricing in the $6.50 to $7 range in the face of a generally warm winter," McManus said. "Recently, they have risen to the $9 range for the balance of the year. "Clearly, things like the coming hurricane season Hurricane season refers to a period in a year when hurricanes usually form. For more information see: Tropical cyclone#Times of formation. For a lists of past seasons, see:
1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the of oil prices will influence natural gas prices," he added. "Our prior earnings guidance for 2006 was based, in part, on natural gas prices applicable to our unhedged production of $10 per Mcf. While this may still turn out to be realistic, the natural gas price moderation over the last several months has prompted us to rerun re·run n. The act or an instance of rebroadcasting a recorded movie or a recorded television performance. tr.v. re·ran , re·run, re·run·ning, re·runs To present a rerun of. our 2006 earnings model with a price estimate for the remainder of the year that averages $9 per Mcf (NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). )," McManus said. "Oil prices, on the other hand, have continued to rise," he noted. "Even though some 75 percent of our estimated oil production for the rest of the year is hedged, we have incorporated into our new guidance an assumed oil price of $70 per barrel NYMEX applicable to our unhedged volumes for the remainder of the year - that's up from our prior assumption of $58 per barrel." Energen's revised guidance also includes a slightly lower price for Energen Resources' unhedged NGL production of 86.3 cents per gallon. Some 44 percent of estimated liquids production for the remainder of the year is already hedged. "Other changes reflected in our 2006 earnings guidance include higher basis differentials and the expectation that Alagasco will earn below its allowed range of return on equity given the conservation response to high natural gas prices during the past winter," McManus said. 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). Position for the Remainder of 2006 Energen Resources' 2006 hedge position by commodity for the remainder of 2006 (April through December) is as follows: Estimated 2006 NYMEX-equiv. Commodity Hedge Vols. Production % Hedged price ---------------------------------------------------------------------- Natural Gas 28.4 Bcf 44.8 Bcf 63% $ 8.14 per Mcf ---------------------------------------------------------------------- Oil 2.1 MMBbl 2.8 MMBbl 75% $53.28 per barrel ---------------------------------------------------------------------- NGL 22.7 MMgal 51.2 MMgal 44% $ 0.56 per gallon ---------------------------------------------------------------------- Note: Actual April data used, as available, to calculate unit prices. Energen Resources' 2006 natural gas hedge position by hedge type for the remainder of the year (April through December) is as follows:
Assumed Basis Price/Mcf
Hedge Type Volumes (Bcf) Difference (NYMEX equiv)
----------------------------------------------------------------------
NYMEX Hedges 12.1 -- $8.07
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San Juan Basin-specific 15.6 $1.75 $8.12
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Permian Basin-specific 0.4 $1.45 $9.99
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Houston Ship Channel 0.3 $0.70 $9.64
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Note: Actual April data used, as available, to calculate unit prices.
Energen Resources' 2006 oil hedge position by hedge type for the remainder of the year (April through December) is as follows:
Assumed Sour Oil Price/Barrel
Hedge Type Volumes (MBbl) Difference (NYMEX equiv)
----------------------------------------------------------------------
NYMEX Hedges 684 -- $51.52
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Sour Oil (WTS) 1,426 $5.75 $54.12
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Note: Actual April data used, as available, to calculate unit prices.
Realized prices for Energen Resources' production associated with NYMEX contracts as well as for unhedged production will reflect the impact of basis differentials. For production associated with basin-specific contracts, Energen Resources will receive the contracted hedge price, regardless of basis differentials. In the tables above, the basin-specific contract prices were converted for comparability purposes to a NYMEX-equivalent price by adding to them Energen Resources' assumed basis differentials. Realized NGL prices will be net of transportation and fractionation fractionation /frac·tion·a·tion/ (frak?shun-a´shun) 1. in radiology, division of the total dose of radiation into small doses administered at intervals. 2. fees. Earnings Sensitivities to Commodity Price Changes While there are many factors that affect Energen Resources' financial results, the largest influences typically are the commodity prices applicable to the company's unhedged production. The Company's revised guidance for 2006 earnings assumes that NYMEX prices applicable to Energen Resources' unhedged production in 2006 will average $9 per Mcf for gas and $70 per barrel for oil and that NGL prices will average 86 cents per gallon. Given Energen Resources' current hedge position for the remainder of 2006 and assuming prices as outlined above for its unhedged production, the sensitivities to pricing changes applicable to Energen's earnings guidance for 2006 are as follows: --Every 10-cent change in the average NYMEX price of gas from $9 per Mcf represents an estimated net income impact of approximately $670,000 (1 cent per diluted share). --Every $1 change in the average NYMEX price of oil from $70 per barrel represents an estimated net income impact of approximately $300,000 (0.4 cents per diluted share). --Every 1-cent change in average price of NGL from $0.86 per gallon represents an estimated net income impact of approximately $125,000 (0.2 cents per diluted share). Price-related events such as substantial basis differential changes could cause earnings sensitivities to be materially different from those outlined above. Energen Resources' estimated production in 2006 remains unchanged at 92 Bcfe. The oil and gas company's development spending has been revised upward to $150 million, with exploration spending in 2006 estimated to be $9 million. Capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. at Alagasco is estimated to be approximately $65 million. Other key assumptions that support Energen's earnings guidance include: --Average diluted shares outstanding of 74 million, --The utility earning a 12-12.5 percent return on average equity of $285 million. --A DD&A rate at Energen Resources of approximately $1.00 per Mcfe and LOE including production taxes of approximately $2.05 per Mcfe. 2007 EARNINGS GUIDANCE INITIATED Energen's just-initiated earnings guidance for 2007 suggests a strong potential for continued growth at Energen. The earnings range announced today for 2007 is $3.80-$4.20 per diluted share. Embedded Inserted into. See embedded system. in Energen's 2007 earnings guidance are assumptions that NYMEX prices applicable to Energen Resources' unhedged natural gas and oil production will average $9.50 per Mcf and $65 per barrel, respectively. The assumed average price for the Company's unhedged NGL production in 2007 is approximately 85 cents per gallon. To date, approximately 43 percent of Energen Resources' estimated natural gas production in 2007 has been hedged at an average NYMEX-equivalent price of $9.66 per Mcf. Almost 48 percent of the Company's estimated 2007 oil production has been hedged at a NYMEX-equivalent price of $66.61 per barrel. And some 15 percent of its estimated NGL production has been hedged at an average price of 79.5 cents per gallon. Production in 2007 is estimated to be 89.3 Bcfe, including 58.6 Bcf of natural gas, 3.6 million barrels of oil, and 65.2 million gallons of liquids. 2007 Hedge Position Energen Resources' 2007 hedge position by commodity is as follows: Estimated 2007 NYMEX-equiv. Commodity Hedge Vols. Production % Hedged price ---------------------------------------------------------------------- Natural Gas 25.1 Bcf 58.6 Bcf 43% $ 9.66 per Mcf ---------------------------------------------------------------------- Oil 1.7 MMBbl 3.6 MMBbl 48% $66.61 per barrel ---------------------------------------------------------------------- NGL 10.1 MMgal 65.2 MMgal 15% $ 0.80 per gallon ---------------------------------------------------------------------- Energen Resources' 2007 natural gas hedge position by hedge type is as follows:
Assumed Basis Price/Mcf
Hedge Type Volumes (Bcf) Difference (NYMEX equiv)
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NYMEX Hedges 8.0 -- $9.48
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San Juan Basin-specific 14.0 $1.75 $9.74
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SNG-Louisiana 3.0 $0.04 $9.76
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Energen Resources' 2007 oil hedge position by hedge type is as follows:
Assumed Sour Oil Price/Barrel
Hedge Type Volumes (MBbl) Difference (NYMEX equiv)
----------------------------------------------------------------------
NYMEX Hedges 600 -- $59.65
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Sour Oil (WTS) 1,104 $6.00 $70.38
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Realized prices for Energen Resources' production associated with NYMEX contracts as well as for unhedged production will reflect the impact of basis differentials. For production associated with basin-specific contracts, Energen Resources will receive the contracted hedge price, regardless of basis differentials. In the tables above, the basin-specific contract prices were converted for comparability purposes to a NYMEX-equivalent price by adding to them Energen Resources' assumed basis differentials. Realized NGL prices will be net of transportation and fractionation fees. Earnings Sensitivities to Commodity Price Changes Given Energen Resources' current hedge position for 2007 and using the price assumptions given above for the Company's unhedged production, changes in commodity prices are estimated for have the following impact on Energen's 2007 earnings: --Every 10-cent change in the average NYMEX price of gas from $9.50 represents an estimated net income impact of approximately $1.7 million (2.3 cents per diluted share). --Every $1.00 change in the average NYMEX price of oil from $65 per barrel represents an estimated net income impact of approximately $1.0 million (1.3 cents per diluted share). --Every 1-cent change in the average price of liquids from $0.85 per gallon represents an estimated net income impact of approximately $250,000 (0.4 cents per diluted share). Price-related events such as substantial basis differential changes could cause earnings sensitivities to be materially different from those outlined above. Capital investment in 2007 is estimated to be $98 million at Energen Resources and $65 million at Alagasco. Other key assumptions that support Energen's 2007 earnings guidance include: --Average diluted shares outstanding of 74.3 million; --A DD&A rate at Energen Resources of approximately $1.05 per thousand cubic feet equivalent and LOE including production taxes of approximately $2.13 per Mcfe; and --Alagasco's earning within its allowed range of return on average equity of approximately $296 million. Energen Corporation is a diversified diversified (di·verˑ·s energy holding company with headquarters in Birmingham, Alabama Birmingham (pronounced [ˈbɝmɪŋˌhæm]) is the largest city in the U.S. state of Alabama and is the county seat of Jefferson County. . Its two lines of business are the acquisition and development of natural gas, oil and natural gas liquids onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. 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 natural gas distribution in central and north Alabama North Alabama is a region of the U.S. state of Alabama, generally thought to include these 12 counties: Cherokee, Colbert, DeKalb, Franklin, Jackson, Lauderdale, Lawrence, Limestone, Madison, Marshall, Morgan, and Winston, with a combined population of 953,247, or 20. . Additional information on Energen is available at www.energen.com. 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 release contains statements expressing expectations of future plans, objectives and performance that constitute forward-looking statements made pursuant to the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Except as otherwise disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). , the Company's forward-looking statements do not reflect the impact of possible or pending acquisitions, divestitures or restructurings. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise. All statements based on future expectations rather than on historical facts are forward-looking statements that are dependent on certain events, risks and uncertainties that could cause actual results to differ materially from those anticipated. In addition, the Company cannot guarantee the absence of errors in input data, calculations and formulas used in its estimates, assumptions and forecasts. A discussion of risks and uncertainties, which could affect future results of Energen and its subsidiaries, is included in the Company's periodic reports filed with the Securities and Exchange Commission.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the 3 months ending March 31, 2006 and 2005
----------------------------------------------------------------------
1st Quarter
----------------------
(in thousands, except per share data) 2006 2005 Change
----------------------------------------------------------------------
Operating Revenues
Oil and gas operations $ 169,519 $ 102,880 $ 66,639
Natural gas distribution 318,623 258,128 60,495
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Total operating revenues 488,142 361,008 127,134
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Operating Expenses
Cost of gas 194,050 136,855 57,195
Operations and maintenance 74,483 60,405 14,078
Depreciation, depletion and
amortization 34,297 31,425 2,872
Taxes, other than income taxes 32,679 26,550 6,129
Accretion expense 898 643 255
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Total operating expenses 336,407 255,878 80,529
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Operating Income 151,735 105,130 46,605
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Other Income (Expense)
Interest expense (13,177) (11,670) (1,507)
Other income 707 353 354
Other expense (229) (268) 39
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Total other expense (12,699) (11,585) (1,114)
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Income From Continuing Operations
Before Income Taxes 139,036 93,545 45,491
Income tax expense 51,535 34,603 16,932
----------------------------------------------------------------------
Income From Continuing Operations 87,501 58,942 28,559
----------------------------------------------------------------------
Discontinued Operations, Net of Taxes
Loss from discontinued operations (7) (19) 12
Gain on disposal of discontinued
operations - 123 (123)
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Income (Loss) From Discontinued
Operations (7) 104 (111)
----------------------------------------------------------------------
Net Income $ 87,494 $ 59,046 $ 28,448
----------------------------------------------------------------------
Diluted Earnings Per Average
Common Share (a)
Continuing operations $ 1.18 $ 0.80 $ 0.38
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 1.18 $ 0.80 $ 0.38
----------------------------------------------------------------------
Basic Earnings Per Average
Common Share (a)
Continuing operations $ 1.19 $ 0.81 $ 0.38
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 1.19 $ 0.81 $ 0.38
----------------------------------------------------------------------
Diluted Avg. Common Shares
Outstanding (a) 74,094 73,657 437
----------------------------------------------------------------------
Basic Avg. Common Shares
Outstanding (a) 73,268 72,952 316
----------------------------------------------------------------------
Dividends Per Common Share (a) $ 0.11 $ 0.10 $ 0.01
----------------------------------------------------------------------
(a) Share and per share data have been restated to reflect a 2-for-1
stock split effective June 1, 2005.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the 12 months ending March 31, 2006 and 2005
----------------------------------------------------------------------
Trailing 12 Months
----------------------
(in thousands, except per share data) 2006 2005 Change
----------------------------------------------------------------------
Operating Revenues
Oil and gas operations $ 594,334 $ 416,942 $ 177,392
Natural gas distribution 661,195 529,666 131,529
----------------------------------------------------------------------
Total operating revenues 1,255,529 946,608 308,921
----------------------------------------------------------------------
Operating Expenses
Cost of gas 372,817 258,006 114,811
Operations and maintenance 282,805 241,443 41,362
Depreciation, depletion and
amortization 134,563 123,518 11,045
Taxes, other than income taxes 100,112 77,218 22,894
Accretion expense 2,902 2,418 484
----------------------------------------------------------------------
Total operating expenses 893,199 702,603 190,596
----------------------------------------------------------------------
Operating Income 362,330 244,005 118,325
----------------------------------------------------------------------
Other Income (Expense)
Interest expense (48,307) (44,095) (4,212)
Other income 2,517 2,436 81
Other expense (671) (1,458) 787
----------------------------------------------------------------------
Total other expense (46,461) (43,117) (3,344)
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Income From Continuing Operations
Before Income Taxes 315,869 200,888 114,981
Income tax expense 114,423 74,793 39,630
----------------------------------------------------------------------
Income From Continuing Operations 201,446 126,095 75,351
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Discontinued Operations, Net of Taxes
Income from discontinued operations 5 98 (93)
Gain on disposal of discontinued
operations 9 131 (122)
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Income From Discontinued Operations 14 229 (215)
----------------------------------------------------------------------
Net Income $ 201,460 $ 126,324 $ 75,136
----------------------------------------------------------------------
Diluted Earnings Per Average
Common Share (a)
Continuing operations $ 2.73 $ 1.72 $ 1.01
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 2.73 $ 1.72 $ 1.01
----------------------------------------------------------------------
Basic Earnings Per Average
Common Share (a)
Continuing operations $ 2.75 $ 1.74 $ 1.01
Discontinued operations - - -
----------------------------------------------------------------------
Net Income $ 2.75 $ 1.74 $ 1.01
----------------------------------------------------------------------
Diluted Avg. Common Shares
Outstanding (a) 73,904 73,252 652
----------------------------------------------------------------------
Basic Avg. Common Shares
Outstanding (a) 73,160 72,661 499
----------------------------------------------------------------------
Dividends Per Common Share (a) $ 0.41 $ 0.385 $ 0.025
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(a) Share and per share data have been restated to reflect a 2-for-1
stock split effective June 1, 2005.
SELECTED BUSINESS SEGMENT DATA (UNAUDITED)
For the 3 months ending March 31, 2006 and 2005
----------------------------------------------------------------------
1st Quarter
(in thousands, except sales ----------------------
price data) 2006 2005 Change
----------------------------------------------------------------------
Oil and Gas Operations
Operating revenues
Natural gas $ 116,084 $ 67,600 $ 48,484
Oil 42,142 26,305 15,837
Natural gas liquids 9,677 8,145 1,532
Other 1,616 830 786
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Total $ 169,519 $ 102,880 $ 66,639
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Production volumes from continuing
operations
Natural gas (MMcf) 15,327 14,682 645
Oil (MBbl) 917 819 98
Natural gas liquids (MMgal) 16.6 15.8 0.8
Production volumes from continuing
ops. (MMcfe) 23,209 21,856 1,353
Total production volumes (MMcfe) 23,209 21,906 1,303
Revenue per unit of production
including effects of all
derivative instruments
Natural gas (Mcf) $ 7.57 $ 4.60 $ 2.97
Oil (barrel) $ 45.94 $ 32.12 $ 13.82
Natural gas liquids (gallon) $ 0.58 $ 0.51 $ 0.07
Other data from continuing
operations
Lease operating expense (LOE)
LOE and other $ 33,862 $ 22,749 $ 11,113
Production taxes 13,093 10,204 2,889
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Total $ 46,955 $ 32,953 $ 14,002
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Depreciation, depletion and
amortization $ 23,551 $ 21,012 $ 2,539
Capital expenditures $ 44,905 $ 40,485 $ 4,420
Exploration expenditures $ 109 $ 324 $ (215)
Operating income $ 88,539 $ 38,977 $ 49,562
----------------------------------------------------------------------
Natural Gas Distribution
Operating revenues
Residential $ 218,506 $ 178,154 $ 40,352
Commercial and industrial 84,557 65,300 19,257
Transportation 12,735 13,029 (294)
Other 2,825 1,645 1,180
----------------------------------------------------------------------
Total $ 318,623 $ 258,128 $ 60,495
----------------------------------------------------------------------
Gas delivery volumes (MMcf)
Residential 11,685 13,013 (1,328)
Commercial and industrial 4,941 5,295 (354)
Transportation 13,359 13,741 (382)
----------------------------------------------------------------------
Total 29,985 32,049 (2,064)
----------------------------------------------------------------------
Other data
Depreciation and amortization $ 10,746 $ 10,413 $ 333
Capital expenditures $ 18,845 $ 14,802 $ 4,043
Operating income $ 63,727 $ 66,404 $ (2,677)
----------------------------------------------------------------------
SELECTED BUSINESS SEGMENT DATA (UNAUDITED)
For the 12 months ending March 31, 2006 and 2005
----------------------------------------------------------------------
Trailing 12 Months
(in thousands, except sales ----------------------
price data) 2006 2005 Change
----------------------------------------------------------------------
Oil and Gas Operations
Operating revenues
Natural gas $ 414,120 $ 278,778 $ 135,342
Oil 132,488 101,027 31,461
Natural gas liquids 39,987 33,027 6,960
Other 7,739 4,110 3,629
----------------------------------------------------------------------
Total $ 594,334 $ 416,942 $ 177,392
----------------------------------------------------------------------
Production volumes from continuing
operations
Natural gas (MMcf) 61,693 58,143 3,550
Oil (MBbl) 3,414 3,380 34
Natural gas liquids (MMgal) 71.4 68.8 2.6
Production volumes from continuing
ops. (Mmcfe) 92,373 88,242 4,131
Total production volumes (Mmcfe) 92,402 88,351 4,051
Revenue per unit of production
including effects of all
derivative instruments
Natural gas (Mcf) $ 6.71 $ 4.79 $ 1.92
Oil (barrel) $ 38.80 $ 29.89 $ 8.91
Natural gas liquids (gallon) $ 0.56 $ 0.48 $ 0.08
Other data from continuing
operations
Lease operating expense (LOE)
LOE and other $ 115,354 $ 84,145 $ 31,209
Production taxes 55,160 39,254 15,906
----------------------------------------------------------------------
Total $ 170,514 $ 123,399 $ 47,115
----------------------------------------------------------------------
Depreciation, depletion and
amortization $ 91,879 $ 82,834 $ 9,045
Capital expenditures $ 358,132 $ 422,977 $ (64,845)
Exploration expenditures $ 461 $ 2,376 $ (1,915)
Operating income $ 293,439 $ 175,295 $ 118,144
----------------------------------------------------------------------
Natural Gas Distribution
Operating revenues
Residential $ 425,105 $ 341,723 $ 83,382
Commercial and industrial 186,214 139,385 46,829
Transportation 42,996 41,875 1,121
Other 6,880 6,683 197
----------------------------------------------------------------------
Total $ 661,195 $ 529,666 $ 131,529
----------------------------------------------------------------------
Gas delivery volumes (MMcf)
Residential 23,274 23,286 (12)
Commercial and industrial 12,144 11,570 574
Transportation 49,468 53,527 (4,059)
----------------------------------------------------------------------
Total 84,886 88,383 (3,497)
----------------------------------------------------------------------
Other data
Depreciation and amortization $ 42,684 $ 40,684 $ 2,000
Capital expenditures $ 77,319 $ 59,199 $ 18,120
Operating income $ 70,245 $ 70,589 $ (344)
----------------------------------------------------------------------
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