KELLEY OIL & GAS CORPORATION 1994 LOSS MASKS SECOND HALF PRODUCTION TURNAROUND -- MAJOR OPERATING INITIATIVES WORKING; Consolidation, North Louisiana Successes and Completion of South Louisiana 3D Seismic Pave Way for Future Growth.HOUSTON--(BUSINESS WIRE)--March 24, 1995--KELLEY OIL & GAS CORPORATION (Nasdaq NM: KOGC KOGC Kimberley Oaks Golf Course (St. Charles, Michigan) ) (Kelley Kelley may refer to any of the following: People
"The year 1994 was one in which we made many difficult but necessary financial and operating improvements that will facilitate long term growth," said David L. Kelley, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We laid the groundwork for a successful consolidation, downsized our work force to optimize optimize - optimisation efficiency, completed most of the work on our extensive 3D seismic survey and arranged both equity and debt financings Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay to fund future exploration and development activity. These moves position us for improved results in 1995 and beyond." The following historical information indicates only Kelley Oil results. The pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma information reflects the February 1995 consolidation of Kelley Oil and the 80 percent interest in Kelley Partners not already owned by Kelley Oil. -0-
Kelley Oil & Gas Corporation
($ in thousands, except per share amounts)
1994 1994 1993
Pro Forma Historical Historical
Revenues $65,841 $59,821 $75,213 Production (Mmcfe) 20,817 7,723 8,539 Reserves (Mmcfe) 240,534 101,028 71,559 Net loss $(54,782) $(27,862) $(26,117) Loss per share $(1.54) $(1.58) $(1.63) Revenues Historical revenues for 1994 were 20 percent less than in 1993 due to lower natural gas prices, production volumes and gas marketing revenues. Oil and gas revenues on a historical basis decreased 21 percent in 1994 to $15.5 million as a result of a 14 percent decrease in natural gas prices to an average of $1.89 per thousand cubic feet (Mcf) and a 9 percent decrease in natural gas production to 6.7 billion cubic feet (Bcf). Oil production decreased from 202,000 barrels in 1993 to 171,000 barrels in 1994, while oil prices declined 9 percent to $16.31 per barrel in 1994. Pro forma revenues reflect sharply higher oil and gas revenues, which increased from $15.5 million to $42.3 million, partially offset by lower gas marketing revenues resulting from accounting eliminations for the consolidation. Production The Company drilled 31 successful wells in 35 attempts in 1994, with most of this success in north Louisiana North Louisiana, also known as Sportsman's Paradise, is a region in the U.S. state of Louisiana. The region has two metropolitan areas: Monroe and Shreveport-Bossier City. . Although historical 1994 production for the full year was down, an effective turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. enabled the Company to reestablish production growth during the second half of the year. Historical fourth quarter 1994 production was 2,438 Mmcfe, up 27 percent versus fourth quarter 1993 performance. Pro forma production for 1994 was 170 percent higher than historical, at 20,817 Mmcfe. Reserves Proved oil and gas reserves for the Company on a historical basis at January 1, 1995 were 93,612 Mmcf of natural gas and 1,236,000 barrels of oil and natural gas liquids, increases of 44 and 11 percent respectively, from year earlier levels. The reserve growth resulted primarily from successful 1994 drilling activities, with additional gains from Kelley Partners' acquisitions of north Louisiana properties and interests in an affiliated drilling program. On a pro forma basis, giving effect to the consolidation as of January 1, 1995, 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. were 222,438 Mmcf of natural gas and 3,016,000 barrels of oil and natural gas liquids. Factors impacting results Losses in 1994 were primarily attributable to a 9 percent increase in 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 versus 1993, primarily resulting from increases in properties subject to amortization in 1994. This $20.5 million noncash charge Noncash charge A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow. That is, this is treated as an accounting expense -- not a real expense that demands cash. , along with exploration and dry hole costs of $7.4 million, a debenture debenture (dəbĕn`chər), document acknowledging indebtedness. In Great Britain a debenture is practically the same as a bond, and debenture stock is similar to preferred stock. conversion charge of $1.4 million and a $1.8 million restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. for year end staff reductions, were primary components of the 1994 net loss. "Our strategy going forward is to pursue a balanced approach between north and south Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. ," said Matt Ralls, Chief
Financial Officer. "We will develop our lower risk interests in
north Louisiana to enhance production growth and long term stability.
At the same time, we are committed to developing our higher potential
prospects in south Louisiana, facilitated by the successful completion
of our 3D seismic survey in that area. We are confident that our south
Louisiana properties will yield major reserve increases over the next
few years."A summary of annual and quarterly financial data is set forth in the following table. Financial data for 1993 has been restated to reflect a change from the full cost method to the successful efforts method of accounting for oil and gas operations in 1994. -0-
Kelley Oil & Gas Corporation
($ in thousands, except per share amounts and prices)
Year Ended Quarter Ended
December 31, December 31,
1994 1994 1993 %change 1994 1993 %change
(Pro Forma) (Restated) (Restated)
Total revenues $65,841 $59,821 $75,213 (20)% $14,985 $17,676 (15)% Net loss before preferred dividends (48,625) (24,957) (25,223) N/A (6,434) (14,149) N/A Net loss (54,782) (27,862) (26,117) N/A (7,834) (14,373) N/A Net loss per share $(1.54) $(1.58) $(1.63) N/A $(.44) $(.82) N/A Gas production (Mmcf) 18,141 6,697 7,327 (9) 2,156 1,620 33 Average price per Mcf $1.87 $1.89 $2.20 (14) $1.58 $2.28 (31) Oil/condensate (Mbbls) 446 171 202 (15) 47 50 (6) Average price per barrel $16.30 $16.31 $17.84 (9) $16.76 $16.04 4 Average primary shares outstanding 35,461 17,653 15,967 11 17,685 17,613 --- Kelley Oil & Gas Corporation is an independent exploration and production company with oil and gas properties located primarily in Louisiana. A subsidiary of the Company is the managing general partner of Kelley Partners and separate development partnerships in which it owns controlling interests controlling interest The ownership of a quantity of outstanding corporate stock sufficient to control the actions of the firm. Controlling interest often involves ownership of significantly less than 51% of a firm's outstanding stock because many owners fail . The Company's common 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 NASDAQ National Market under the symbols KOGC and KOGCP. CONTACT: Investor Contct: Frances Gomulka Manager, Investor Relations Investor relations The process by which the corporation communicates with its investors. (713) 652-5200 or Media Contact: Russ Parker Coltrin & Associates (713) 759-6052 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion