The Meridian Resource Corporation Announces Year-End and Fourth Quarter Results.HOUSTON--(BUSINESS WIRE)--March 23, 1999--The Meridian Meridian (mərĭd`ēən), city (1990 pop. 41,036), seat of Lauderdale co., E Miss., near the Ala. line; settled 1831, inc. 1860. Resource Corporation (NYSE NYSE See: New York Stock Exchange :TMR TMR total mixed ration. TMR 1 Trainable mentally retarded 2 Transmyocardial revascularization, see there ) today announced that proved oil and gas reserves totaled 304 billion cubic feet of natural gas equivalent (BCFE BCFE Boundary Committee for England BCFE Ballyfermot College of Further Education (Dublin, Ireland) BCFE Board Certified Forensic Examiner Bcfe Billions of Cubic Feet Equivalent (Per Day; Gas Exploration) ) at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1998, an increase of 80% from year-end 1997. The Company's reserve base was 56% natural gas on an equivalent basis. Proved reserve additions (net of revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. ) totaled 169.8 BCFE in 1998, representing 488% replacement of production. During 1998, daily production rose 73% to an average of 95 MMCFE per day, comprised of 56 MMCF MMCF Million Cubic Feet MMCF Multimedia Communications Forum MMCF Mint Mocha Chip Frappuccino MMCF Multi Media Communication Forum of natural gas and 6,500 barrels of oil. During the fourth quarter, daily production reached record highs averaging 145 MMCFE per day. Despite the low commodity price environment, Meridian had record production, revenues and operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. during 1998. Total revenues increased 27% to $74.0 million from $58.3 million in 1997. Total production increased 73% to 34.8 BCFE from 20.1 BCFE in 1997. Operating cash flow increased 12% to $31.6 million from $28.1 million during 1997. The increases were the result of the successful integration of the Shell and Cairn assets and the additions recognized from the drillbit on both transactions. For the year, the Company reported a net loss applicable to common shareholders of $230.7 million ($5.80 per share) compared to a net loss of $28.5 million ($0.85 per share) for 1997. The net loss was a direct result of the negative impact of lower average commodity prices of $12.19 per barrel barrel: see English units of measurement. of oil and $2.16 per MCF MCF malignant catarrhal fever. of natural gas, a decrease of 38% and 20%, respectively, when compared to realized prices in 1997. Included in the reported loss for 1998 were the non-cash ceiling test writedowns of $245.0 million, which compared to $24.1 million in 1997. Capital expenditures during 1998 totaled $411.0 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. included $259.5 million for proved acquisitions, $43.5 million for exploration, $51.8 million for development, $39.7 million for seismic and $16.5 million for acreage. This reflects an all-inclusive finding cost of $2.42/MCFE during 1998, compared to $4.37/MCFE during 1997. The drillbit finding cost (excluding land, seismic, revisions and acquisitions) was $1.23/MCFE, compared to $1.98/MCFE during 1997. The decrease is the result of the Company's drilling success in the field coupled with management's commitment to build and maintain a balanced risk portfolio of low-to-medium projects blended blend v. blend·ed or blent , blend·ing, blends v.tr. 1. To combine or mix so that the constituent parts are indistinguishable from one another: with a mix of both 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. and offshore high potential exploration projects. During 1998, the Company had extensions and discoveries totaling 77 BCFE (222% of production) and net reserve purchases totaling 145 BCFE (416% of production). Offsetting these additions were downward revisions and reserve category changes totaling 52 BCFE, the majority of which were associated with offshore properties and price changes. The PV-10 value of Meridian's oil and natural gas properties at 1998 year-end of $293.4 million was calculated using prices of $10.13/Bbl and $2.14/Mcf. This represents a 37% increase from $213.9 million at year-end 1997, despite the decrease in oil and natural gas prices of 41% and 16%, respectively. The increase in Meridian's carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. reflects the assets added from the Shell acquisitions. For the fourth quarter of 1998, the Company reported a net loss applicable to common shareholders of $47.9 ($1.04 per share) compared with a net loss of $37.1 million ($1.11 per share) for the fourth quarter of 1997, primarily due to lower commodity prices and resulting ceiling test writedowns. Realized oil and gas prices decreased 40% and 31%, respectively, when compared to the same quarter a year ago. The loss includes a non-cash ceiling test writedown writedown A reduction in the value of an asset carried on a firm's financial statements. For example, the firm's accountants, believing the inventory is overvalued, may decide to take a writedown by reducing inventory valuation. of $48.9 million. Fourth quarter production volumes achieved record levels for a quarterly period increasing 163% over the same quarter in 1998 to 13.4 BCFE (approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 145 MMCFE/d). Oil and gas revenues during the fourth quarter of 1998 increased 69% to $27.2 million from $16.1 million during the fourth quarter of 1997. Net operating cash flow for the fourth quarter of 1998 increased 27% to $12.5 million from $9.9 million for the same period during 1997. Capital expenditures during the fourth quarter of 1998 totaled $26.2 million. Commenting on 1998, Chairman & 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. Joseph A. Reeves, Jr. stated "Meridian has 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: its position in the prolific South Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. and 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 MexicoGolfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east shelf exploration basins with the Cairn Energy Cairn Energy plc (LSE: CNE) is an independent oil exploration and production company. Its headquarters are in Edinburgh, Scotland and it is listed on the London Stock Exchange. The company was founded by Bill Gammell, who remains its CEO. USA Inc. merger and the Shell transactions. The combined company positions Meridian as a dominant player in the Louisiana onshore and Gulf of Mexico region with a mix of Gulf Coast assets that will provide its shareholders with an exposure to steady growth through the drillbit as a low cost finder finder, in law. Ordinarily the finder of lost property is entitled to retain it against anyone except the owner. It is larceny, however, for the finder to keep the property if he knows or can easily determine who owns it. and producer. Since closing the Shell transaction on June June: see month. 30, 1998, the Company hit the ground running, cutting field and 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. , and drilling successful, exploration, 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 development wells from its balanced portfolio of assets, leading to an overall 66% success rate. The Company spent approximately $50.0 million of cost while adding 98 BCFE of natural gas equivalent, for an average finding and development cost of $0.51/Mcfe. The balance of 1999 drilling activity will focus on low-risk development drilling which represents approximately $26.6 million (75%) of the remaining $35.5 million remaining for the 1999 capital expenditure budget." Certain of the foregoing statements may be deemed "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 the Securities Exchange Act of 1934. Although Meridian believes that the expectations reflected in such forward-looking statements are reasonable; there can be no assurance that such expectations will prove to have been correct. Certain risks and uncertainties inherent in Meridian's business are set forth in Meridian's filings with the Securities and Exchange Commission. These risks include (i) the continued production from existing wells at their current or projected levels, (ii) price changes for oil and gas, (iii) the ability of the Company to successfully complete those wells that have been logged and reflect potential production, (iv) the ability of the Company to successfully complete and produce those reserves scheduled as "non-producing" or "undeveloped," (v) the ability of the Company to acquire leases and timely drill its exploratory prospects, (vi) risks regarding estimates of reserves, (vii) production risks, (viii) governmental regulations and (ix) general risks regarding the exploration for, and production of, oil and gas reserves. The Meridian Resource Corporation is an independent oil and natural gas company engaged in the exploration for and development of oil and natural gas properties utilizing 3-D seismic technology, primarily in south Louisiana, southeast Texas Southeast Texas is a subregion of East Texas located in the southeast corner of the U.S. state of Texas. The subregion is geographically centered around the Houston–Sugar Land–Baytown and Beaumont–Port Arthur metropolitan areas. and offshore Gulf of Mexico. The Company controls over 614,000 gross acres (282,000 net) by lease options or production and holds licenses to 3,900 square miles A square mil is a unit of area, equal to the area of a square with sides of length one mil. A mil is one thousandth of an international inch. This unit of area is usually used in specifying the area of the cross section of a wire or cable. of 3-D seismic data. Meridian's office is located 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 and the stock is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol "TMR."
THE MERIDIAN RESOURCE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As of
December 31,
1997 1998
------ ------
(in thousands)
ASSETS:
Current assets $48,278 $23,171
Property and equipment, net 391,455 268,687
Other assets 5,442 700
-------- --------
Total Assets $445,175 $292,558
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY:
Current liabilities $50,162 $34,166
Long-term debt 240,000 107,085
Litigation liabilities 6,205 6,205
Preferred stock (stated value) 135,000 --
Common stockholder's equity 13,808 145,102
-------- --------
Total Liabilities and Stockholder's
Equity $445,175 $292,558
======== =========
THE MERIDIAN RESOURCE CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended Twelve months ended
December 31, December 31,
1998 1997 1998 1997
(in thousands, except per share data)
Revenues:
Oil and natural gas $26,987 $15,847 $73,336 $57,640
Interest and other 163 224 690 693
--------- --------- ---------- ---------
27,150 16,071 74,026 58,333
Costs and expenses:
Lease operating 5,838 2,195 16,910 7,845
Depletion and
depreciation 17,566 6,614 45,390 26,337
General and
administrative 2,938 2,072 9,564 7,192
Interest 4,486 1,923 13,211 5,149
Impairment of
long-lived assets 48,885 24,141 245,011 24,141
Merger expenses -- 9,998 -- 9,998
Litigation expenses -- 6,205 -- 6,205
--------- --------- ---------- ---------
79,713 53,148 330,086 86,867
--------- --------- ---------- ---------
Income (loss)
before income taxes ($52,563) ($37,077) ($256,060) ($28,534)
--------- ========= ---------- =========
Income tax expense
(benefit) ($6,052) -- (28,052) 7
--------- --------- ---------- ---------
Net income (loss) ($46,511) ($37,077) ($228,008) ($28,541)
========= ========= ========== =========
Dividend requirement
on Preferred stock (1,350) -- (2,700) --
--------- --------- ---------- ---------
Net income applicable
to Common shareholders ($47,861) ($37,077) ($230,708) ($28,541)
--------- --------- ---------- ---------
Net income (loss)
per share:
Basic ($1.04) ($1.11) ($5.80) ($.85)
Assuming dilution ($1.04) ($1.11) ($5.80) ($.85)
Weighted average shares:
Outstanding 45,817 33,428 39,774 33,383
Assuming dilution 45,817 33,428 39,774 33,383
THE MERIDIAN RESOURCE CORPORATION
FINANCIAL AND OTHER DATA SUMMARY
(UNAUDITED)
1998
Three months ended 1998 Percentage
December 31, Increase Increase
1998 1997 (Decrease) (Decrease)
------ ------ ---------- ----------
(in thousands, except per share data)
Production:
Oil (MBbls) 1,140 255 885 347%
Natural gas (MMcf) 6,552 3,572 2,980 83%
Natural gas
equivalent (Mmcfe) 13,392 5,102 8,290 163%
Average sales prices:
Oil ($/Bbl) $11.37 $19.01 ($7.64) (40%)
Natural gas ($/Mcf) $2.14 $3.08 ($0.94) (31%)
MMCFE $2.02 $3.11 ($1.09) (35%)
Net income (loss) ($47,861) ($37,077)
Net income (loss)
per share:
Basic ($1.04) $(1.11)
Assuming dilution ($1.04) $(1.11)
Cash flow(a) $12,538 $9,881
1998
Twelve months ended 1998 Percentage
December 31, Increase Increase
1998 1997 (Decrease) (Decrease)
------ ------ ---------- ----------
(in thousands, except per share data)
Production:
Oil (MBbls) 2,365 914 1,451 159%
Natural gas (MMcf) 20,603 14,603 6,000 41%
Natural gas
equivalent (Mmcfe) 34,793 20,087 14,706 73%
Average sales prices:
Oil ($/Bbl) $12.19 $19.72 ($7.53) (38%)
Natural gas ($/Mcf) $2.16 $2.70 ($0.54) (20%)
MMCFE $2.11 $2.86 ($0.75) (26%)
Net income (loss) ($230,708) ($28,541)
Net income (loss)
per share:
Basic ($5.80) $(.85)
Assuming dilution ($5.80) $(.85)
Cash flow(a) $31,641 $28,149
(a) Cash flow includes net income (loss) plus impairment charges,
depletion, depreciation, deferred income taxes and litigation
expenses.
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