Stone Energy Corporation Announces First Quarter 2000 Results.Business Editors LAFAYETTE Lafayette (lä'fēĕt`, lăf'ēĕt`). 1 City (1990 pop. 23,501), Contra Costa co., NW Calif., a residential suburb in the San Francisco–Oakland area; settled 1848, inc. 1968. , La.--(BUSINESS WIRE)--May 2, 2000 Stone Energy Corporation (NYSE NYSE See: New York Stock Exchange :SGY SGY Skagway, AK, USA (Airport Code) SGY Suomen Geoteknillinen Yhdistys (Finnish Geotechnical Society) ) today announced net income for the quarter ended March 31, 2000 of $12.2 million, or $0.65 per share, compared to first quarter 1999 net income of $1.7 million, or $0.11 per share. Net cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses before working capital changes for the first quarter of 2000 increased 70% to $34.7 million, or $1.86 per share, from the first quarter 1999 amount of $20.4 million or $1.33 per share. The Company's first quarter 2000 oil and gas revenues increased 55% to $47.2 million, compared to first quarter 1999 oil and gas revenues of $30.5 million. Prices realized during the first quarter of 2000 averaged $24.09 per barrel barrel: see English units of measurement. of oil and $2.66 per Mcf of gas. This represents a 49% increase, on a thousand cubic feet of gas equivalent (Mcfe) basis, over first quarter 1999 average realized prices of $11.81 per barrel of oil and $2.09 per Mcf of gas. All unit pricing unit pricing n. The pricing of goods on the basis of cost per unit of measure. amounts include the effects of 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. . Volumes of natural gas produced during the first quarter of 2000 increased to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10.9 billion cubic feet as compared to first quarter 1999 gas production volumes of 9.9 billion cubic feet, while volumes of oil produced during the first quarter of 2000 declined to approximately 753,000 barrels as compared to 830,000 barrels of oil produced during the first quarter of 1999. During April 2000, the Company estimates that its net average daily production rates were approximately 126 MMcf of gas and 8,465 barrels of oil, or 176.8 MMcfe MMcfe Millions of Cubic Feet Equivalent (Per Day; gas exploration) , a 4% and 10% increase from first quarter 2000 and calendar year 1999 average daily production rates, respectively. Normal operating costs operating costs npl → gastos mpl operacionales during the first quarter of 2000 increased to $6.3 million, compared to $4.8 million for the comparable quarter in 1999, due primarily to an increase in the number of producing wells operated by the Company as well as an overall increase in the costs of services. On a unit of production basis, first quarter 2000 operating costs were $0.41 per Mcfe as compared to $0.32 per Mcfe for the first quarter of 1999. When compared to fourth quarter 1999 operating costs of $0.47 per Mcfe, first quarter 2000 operating costs were 13% lower on a unit of production basis. As a result of higher oil and gas prices and increased 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. production volumes, production revenues from onshore properties during the first quarter of 2000 increased 137% from first quarter 1999. Therefore, production taxes for the first quarter of 2000 increased to $1.2 million compared to $0.5 million for the first quarter of 1999. General and administrative expenses for the first quarter of 2000 increased in total to $1.5 million or $0.10 per Mcfe, from $1.1 million, or $0.07 per Mcfe, for the first quarter of 1999. Both general and administrative and incentive compensation expenses for the first quarter of 2000 were affected by a 26% increase in the Company's staff level over the first quarter of 1999. 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 on the Company's oil and gas properties decreased to $16.9 million or $1.10 per Mcfe during the first quarter of 2000, compared to $17.4 million or $1.17 per Mcfe for the first quarter of 1999. As a result of the repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of the Company's borrowings under its bank credit facility in August 1999, interest expense for the three-month period ended March 31, 2000 decreased to $2.4 million, compared to $3.8 million for the 1999 period. One of the Company's principal goals is to continue to be a low cost producer resulting in the generation of high cash margins from its operations. By maintaining a low level of operating costs, the Company is able to immediately benefit from rising commodity prices as its high cash margins generate increased funds for exploratory and development drilling. During the first quarter of 2000, the Company achieved a 74% cash margin and a related 26% cost relationship for each dollar of production revenue. This compares to a 65% cash margin and 35% cost relationship for first quarter 1999. On February February: see month. 2, 2000, the Company's credit agreement was 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. to increase the facility to $200 million and to extend the maturity date to July July: see month. 30, 2005. During April 2000, the bank group reviewed the Company's reserves and increased the borrowing base of the amended credit facility by $60 million to $200 million. At March 31, 2000, the Company had outstanding letters of credit totaling $7.5 million and no outstanding borrowings. The Company had working capital of $19.1 million at March 31, 2000. The Company currently utilizes two forms of hedging contracts: fixed price swaps and collars. The Company has not entered into any hedging contracts subsequent to the contracts 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). in its 1999 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. . Stone Energy's 2000 capital expenditures budget, excluding acquisitions, is currently $130.5 million for properties it owns and operates. Capital expenditures during the first quarter of 2000 totaled $37.4 million, as the Company achieved a 75% drilling success rate with six successful wells and two dry holes. These investments were financed by cash flow from operations and working capital. A summary of first quarter 2000 drilling operations is as follows:
Current Net
Daily
Production
Rate
-----------
Date of
Status at First Oil Gas
Well Field March 31 Production (Bbls) (Mcf)
---- ----- --------- ---------- ----- ----
OCS-G 2899 No. B-1 Eugene Island
Blk 243 Drilling 4/22/00 - 8,849
OCS-G 0775 No. 21 Vermilion Blk 131 Drilling N/A - -
OCS-G 2082 No. G-5 Vermilion Blk 255 Completed 3/22/00 78 4,224
OCS-G 0762 No. 2 W. Cameron Blk 176 Completed N/A Preparing
to test
S.L. 14905 No. 2 Osprey Prospect Completed N/A 436 5,544
(a) (a)
S.L. 4237 No. 1 S. Timbalier Blk 8 Dry Hole N/A - -
LLDSB No. 9 Lake Hermitage Completed 2/9/00 28 57
LLDSB No. 30 Lake Hermitage Completed 3/25/00 15 654
Bradish
Johnson No. 1 Lake Hermitage Dry Hole N/A - -
LL&E No. 1 Lake Hermitage Drilling N/A - -
LL&E No. 198 Lafitte Completed 3/10/00 441 762
(a) Represents initial production test rate
With six successful wells and two dry holes completed during the first quarter, one well completed during April and five wells currently in progress, the Company has already invested in 14 wells of a planned 30 for 2000 compared to 15 wells for the entire year of 1999. The budgeted activities are part of a 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. plan of exploration and development of the property base while generating exposure to reserve and production rate growth. The Company expects to finance its 2000 capital budget with cash flow from operations and working capital. Although the Company does not budget acquisitions, Stone is aggressively evaluating properties and transaction alternatives to add to its existing property base. The Company has planned a conference call for 3:00 p.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT on Wednesday Wednesday: see week. , May 3, 2000 to discuss the operational and financial results for the first quarter of 2000. Anyone wishing to participate should dial 888/391-0105 and request the "Stone Energy Call". Stone Energy is an independent oil and gas company headquartered in Lafayette, Louisiana Lafayette is a city on the Vermilion River in Lafayette Parish, in the U.S. state of Louisiana. [1] [2] Lafayette is the parish seat. As of the 2000 census, the city had a total population of 110,257; a 2004 census estimate put the metro area's population at , and is engaged in the acquisition, exploitation Exploitation See also Opportunism. Barnum, P. T. (1810–1891) circus impressario famous for his saying, “Never give a sucker an even break.” [Am. Hist. and operation of oil and gas properties located in the Gulf Coast Basin BASIN Boulder Area Sustainability Information Network (Boulder, Colorado) BASIN Brothers And Sisters In Need . For additional information, contact 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. H. Prince, Chief Financial Officer at 337/237-0410-phone, 337/237-0426-fax or via e-mail at princejh@StoneEnergy.com. Certain statements in this press release are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and are based upon the Company's current belief as to the outcome and timing of future events. All statements, other than statements of historical facts, that address activities that the Company expects, believes or anticipates will, should or may occur in the future including future production of oil and gas, future capital expenditures and drilling of wells are 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. . Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include the timing and extent of changes in commodity prices for oil and gas, operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. and other risk factors as described in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect Incorrect means to not be correct and may also refer to:
STONE ENERGY CORPORATION
SUMMARY STATISTICS
(In thousands, except per share/unit amounts)
(Unaudited)
Three Months Ended
March 31,
------------------
2000 1999
------------------
TOTAL AMOUNTS
Net income $ 12,210 $ 1,746
Net income before taxes 18,785 2,690
Net cash flow from operations (1) 34,683 20,378
EBITDA (2) 38,386 24,192
TOTALS PER SHARE
Net income $ 0.65 $ 0.11
Net income before taxes 1.01 0.18
Net cash flow from operations (1) 1.86 1.33
EBITDA (2) 2.06 1.58
PRODUCTION QUANTITIES (3)
Oil (MBbls) 753 830
Gas (MMcf) 10,926 9,918
Oil and gas (MMcfe) 15,444 14,898
AVERAGE DAILY PRODUCTION (3)
Oil (MBbls) 8.3 9.2
Gas (MMcf) 120.1 110.2
Oil and gas (MMcfe) 169.7 165.5
SALES DATA (3) (4)
Total oil sales $ 18,137 $ 9,804
Total gas sales 29,089 20,686
Total sales 47,226 30,490
AVERAGE SALES PRICES (3) (4)
Oil (per Bbl) $ 24.09 $ 11.81
Gas (per Mcf) 2.66 2.09
Per Mcfe 3.06 2.05
COST DATA
Operating costs $ 6,263 $ 4,828
General and administrative 1,471 1,077
DD&A on oil and gas properties 16,930 17,367
AVERAGE COSTS (per Mcfe)
Operating costs $ 0.41 $ 0.32
General and administrative 0.10 0.07
DD&A on oil and gas properties 1.10 1.17
AVERAGE SHARES OUTSTANDING - Diluted 18,667 15,281
(1) Excludes working capital changes.
(2) EBITDA represents earnings before interest, taxes and
depreciation, depletion and amortization.
(3) 2000 results include net daily production of 7.3 MMcf at $2.24
per Mcf associated with the amortization of a volumetric
production payment.
(4) Includes the effects of hedging.
STONE ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
AND NET CASH FLOW INFORMATION
(In thousands)
(Unaudited)
Three Months Ended
March 31,
------------------
2000 1999
------------------
STATEMENT OF OPERATIONS
Revenues
Oil and gas production $ 47,226 $ 30,490
Overhead reimbursements and management fees 181 161
Other income 733 271
-------- --------
Total revenues 48,140 30,922
-------- --------
Expenses
Normal lease operating expenses 6,263 4,828
Major maintenance expenses 548 100
Production taxes 1,220 515
Depreciation, depletion and amortization 17,179 17,688
Interest 2,422 3,814
General and administrative costs 1,471 1,077
Incentive compensation plan 252 210
-------- --------
Total expenses 29,355 28,232
-------- --------
Net income before income taxes 18,785 2,690
-------- --------
Provision for income taxes
Current -- --
Deferred 6,575 944
-------- --------
6,575 944
-------- --------
Net income $ 12,210 $ 1,746
======== ========
NET CASH FLOW INFORMATION
Net income $ 12,210 $ 1,746
DD&A and other non-cash expenses 17,234 17,688
Deferred taxes 6,575 944
Non-cash effects of production payment
obligations (1,336) --
-------- --------
Net cash flow from operations excluding working
capital changes $ 34,683 $ 20,378
======== ========
STONE ENERGY CORPORATION
CONSOLIDATED BALANCE SHEET
(In thousands)
March 31, Dec. 31,
2000 1999
---------- ---------
(Unaudited)
ASSETS
------
Current assets:
Cash and cash equivalents $ 13,818 $ 13,874
Marketable securities 31,035 34,906
Accounts receivable 35,256 29,729
Other current assets 76 297
------- --------
Total current assets 80,185 78,806
Oil and gas properties, net
Proved 356,648 335,959
Unevaluated 16,957 17,182
Building and land, net 3,858 3,864
Fixed assets, net 2,865 2,850
Other assets, net 3,382 3,077
-------- --------
Total assets $463,895 $441,738
======== ========
LIABILITIES AND EQUITY
----------------------
Current liabilities:
Accounts payable to vendors $ 46,196 $ 36,060
Undistributed oil and gas proceeds 13,156 13,130
Other accrued liabilities 1,726 6,729
-------- --------
Total current liabilities 61,078 55,919
Long-term debt 100,000 100,000
Production payments 15,890 17,284
Deferred tax liability 6,871 746
Other long-term liabilities 1,152 2,202
-------- --------
Total liabilities 184,991 176,151
-------- --------
Common stock 184 183
Additional paid in capital 254,047 252,941
Retained earnings 24,673 12,463
-------- --------
Total equity 278,904 265,587
-------- --------
Total liabilities and equity $463,895 $441,738
======== ========
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