Union Pacific Resources Group Inc. Posts 3rd Quarter Income of $21 Million; Credits Prices, Reduced Debt and Lowered Costs.FORT WORTH, Texas--(BUSINESS WIRE)--Oct. 25, 1999-- Union Pacific Resources Group Inc. (NYSE NYSE See: New York Stock Exchange :UPR UPR Upper UPR University of Puerto Rico UPR Universal Periodic Review (UN Human Rights Council) UPR Unia Polityki Realnej (Polish political party) UPR unfolded protein response ) today announced third quarter net income of $20.7 million 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 , or $.08 per share, compared to a loss of $13.1 million, or $.06 per share, in the same period last year. Discretionary cash flow Discretionary cash flow Cash flow that is available after the funding of all positive net present value (NPV) capital investment projects; it is available for paying cash dividends, repurchasing common stock, retiring debt, and so on. of $292.7 million for the quarter increased by nearly $79 million from last year's third quarter total of $213.8 million. A combination of higher commodity prices and successful debt and cost-reduction efforts led to the improved financial performance: -- Price realizations for the third quarter of $2.05 per thousand cubic feet of gas equivalent (MCFE MCFE MATLAB Central File Exchange ) were $.43 per MCFE higher than last year's third quarter average of $1.62 per MCFE. -- Interest expense declined by $19.9 million, from $72.5 million in the third quarter of 1998 to $52.6 million in third quarter 1999, as the Company decreased debt from $4.6 billion to $2.97 billion. -- Production costs declined by $8.1 million -- most of it associated with 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. -- from $113.2 million in the third quarter of last year to $105.1 million. Exploration costs dropped $31.7 million, from $79 million to $47.3 million. -- 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. of $18.6 million for the third quarter were $4.4 million lower than last year's third quarter total of $23 million. -- Capital expenditures of $110.8 million in the third quarter were in accord with the company's projected spending, an example of UPR's commitment to capital discipline. The Company pushed an active drilling and exploration program, operating an average of 21 rigs during the quarter, about double the number at the beginning of the year. Production volumes declined from last year's third quarter average of 2.61 billion cubic feet of gas equivalent per day (BCFED BCFED British Columbia Federation of Labour ) to an average of 2.14 BCFED -- within the Company's projected range -- for the quarter just ended. The decline was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to property sales and decreased expenditures that led to lower levels of drilling activity in the first half of the year. The Company anticipates that volumes in the fourth quarter will be down slightly, a trend it plans to reverse next year with increased 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. and increased rig activity. Several special charges and credits in the quarter largely offset one another. Positive items include $52.5 million after tax related to currency exchange gains, a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. tax settlement and gains on property sales, while negative items include $51.1 million after tax in charges for firm transportation agreements, asset impairments related to 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. Gulf Coast properties, and surrendered lease costs. "There is good reason to be pleased with UPR's performance in the third quarter," Chairman, President 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. George George, river, c.345 mi (560 km) long, rising in a lake on the Quebec-Labrador boundary, E Canada. It flows N through Indian Lake (125 sq mi/324 sq km) to Ungava Bay (an arm of Hudson Strait). Lindahl Lindahl is a Swedish or Norwegian surname, and may refer to
This page or section lists people with the surname Lindahl. III said. "I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in especially pleased with the success of our overall cost-reduction efforts -- an essential element in our plans for future success -- and in particular with our success in reducing debt and interest expense. We have already met our debt reduction goal for 1999, and reducing debt in the year 2000 by more than our stated goal of $200 million will continue to be a high priority." Union Pacific Resources, based in Fort Worth, Texas Fort Worth is the fifth-largest city in the state of Texas, 18th-largest city in the United States[1], and voted one of "America’s Most Livable Communities. , is one of the nation's largest independent oil and gas exploration and production companies. This press release, other than historical financial information, contains 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. that are based on assumptions and estimates we believe reasonable but that are subject to a wide range of risks and uncertainties. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including changes in oil and gas prices, the timing and results of oil and gas drilling and acquisition programs, the success of management's cost reduction and implementation activities, expected production efforts and volumes, budgeted capital expenditures and other risks and uncertainties detailed in the Company's SEC reports, including the reports 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 year ended December December: see month. 31, 1998 and Form 10-Q Form 10-Q See 10-Q. for the quarter ended June June: see month. 30, 1999. -0-
UNION PACIFIC RESOURCES GROUP INC.
STATEMENTS OF INCOME
For the Period Ended September 30
(Dollars in Millions, except where noted)
Third Quarter Nine Months
------------------- -------------------
1999 1998 1999 1998
--------- --------- --------- ---------
Operating revenues:
Producing properties $403.0 $388.7 $1,065.2 $1,190.3
Other oil and gas revenues 27.3 130.9 104.0 162.3
Minerals 32.8 38.8 95.7 115.5
--------- --------- --------- ---------
Total operating revenues 463.1 558.4 1,264.9 1,468.1
--------- --------- --------- ---------
Operating expenses:
Production 105.1 113.2 288.8 337.2
Exploration 47.3 79.0 152.4 229.6
Minerals 0.5 0.5 1.0 1.8
Depreciation, depletion and
amortization 253.0 261.5 621.4 702.3
General and administrative 18.6 23.0 65.1 68.0
Restructuring charge -- -- 14.5 --
--------- --------- --------- ---------
Total operating expenses 424.5 477.2 1,143.2 1,338.9
Operating income 38.6 81.2 121.7 129.2
Other income (loss) - net 8.7 (48.2) 41.4 (32.9)
Interest expense (52.6) (72.5) (167.6) (179.5)
--------- --------- --------- ---------
Income (loss) before
income taxes (5.3) (39.5) (4.5) (83.2)
Income tax (expense) benefit 26.0 26.4 82.8 61.0
--------- --------- --------- ---------
Income (loss) from continuing
operations 20.7 (13.1) 78.3 (22.2)
Income (loss) from discontinued
operations - net of tax -- (4.2) (23.8) 18.8
Gain on sale of discontinued
operations - net of tax -- -- 157.0 --
Net income (loss) $20.7 $(17.3) $211.5 $(3.4)
--------- --------- --------- ---------
--------- --------- --------- ---------
Per Share:
Income (loss) from continuing
operations - basic and diluted $0.08 $(0.06) $0.31 $(0.09)
Net Income (loss) -
basic and diluted $0.08 $(0.07) $0.85 $(0.01)
Average shares outstanding
(millions) basic 249.0 247.8 248.9 247.7
Average shares outstanding
(millions) diluted 249.6 247.8 249.2 247.7
UNION PACIFIC RESOURCES GROUP INC.
STATEMENTS OF FINANCIAL POSITION
(Dollars in Millions)
ASSETS
As of As of
September 30 December 31
1999 1998
------------ -----------
Current assets:
Cash and temporary investments $137.3 $8.8
Accounts receivable 317.0 261.0
Inventories 53.0 64.6
Other current assets 57.7 107.0
------------ -----------
Total current assets 565.0 441.4
------------ -----------
Properties - net: 5,615.8 6,093.3
Intangible and other assets 177.1 180.8
Net assets of discontinued operations -- 926.9
------------ -----------
Total assets $6,357.9 $7,642.4
------------ -----------
------------ -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $223.5 $270.5
Advanced payment 43.1 --
Accrued taxes payable 247.5 64.9
Other current liabilities 215.6 157.5
Short-term debt 3.0 853.8
------------ -----------
Total current liabilities 732.7 1,346.7
Long-term debt 2,966.1 3,744.9
Deferred income taxes 1,250.2 1,291.6
Other long-term liabilities 528.6 531.0
Common shareholders' equity 880.3 728.2
------------ -----------
Total liabilities and
shareholders' equity $6,357.9 $7,642.4
------------ -----------
------------ -----------
UNION PACIFIC RESOURCES GROUP INC.
STATEMENTS OF CASH FLOWS
For the Period Ended September 30
(Dollars in Millions)
Third Quarter Nine Months
------------- -----------
1999 1998 1999 1998
---- ---- ---- ----
Cash provided by operations:
Net income (loss) $ 20.7 $ (17.3) $ 211.5 $ (3.4)
(Income) loss from
discontinued operations -- 4.2 23.8 (18.8)
Gain on sale of discontinued
business - net -- -- (157.0) --
------ ------ ------ ------
Net income (loss) from
continuing operations 20.7 (13.1) 78.3 (22.2)
Depreciation, depletion and
amortization 253.0 261.5 621.4 702.3
Exploration expenses 47.3 79.0 152.4 229.6
Deferred taxes (28.3) (113.6) (53.0) (168.5)
------ ------ ------ ------
Discretionary cash flow 292.7 213.8 799.1 741.2
Working capital changes and
other 55.7 63.7 (101.9) 277.0
------ ------ ------ ------
Cash provided by operations 348.4 277.5 697.2 1,018.2
------ ------ ------ ------
Cash provided (used) by investing activities:
Capital and exploratory
expenditures (110.8) (264.8) (291.6) (1,118.0)
Acquisition of Norcen -- -- -- (2,634.3)
Proceeds from sales of assets 21.9 211.8 244.5 262.1
Proceeds from sales of
discontinued operations -- -- 1,359.1 --
Cash provided (used) by
discontinued operations 2.1 (59.9) (202.4) 176.7
Proceeds from sale of
investments -- -- -- 48.4
Other investing activities--
net -- -- -- --
------ ------ ------ ------
Cash provided (used) by
investing activities (86.8) (112.9) 1,109.6 (3,265.1)
------ ------ ------- --------
Cash provided (used) by financing activities:
Dividends paid (12.5) (12.4) (37.3) (37.2)
Debt financing - net (52.8) (165.3) (1,622.5) 2,323.2
Repurchase of common stock (1.6) (0.5) (11.1) (22.1)
Other financings-- net (82.3) (48.1) (7.4) (45.2)
------ ------ ------ ------
Cash provided (used) by
financing activities (149.2) (226.3) (1,678.3) 2,218.7
------ ------ ------- --------
Net change in cash and
temporary investments $ 112.4 $ (61.7) $ 128.5 $ (28.2)
------ ------ ------ ------
------ ------ ------ ------
UNION PACIFIC RESOURCES GROUP INC
VOLUME AND PRICE STATISTICS
For the Period Ended September 30
Third Quarter Nine Months
1999 1998 1999 1998
---- ---- ---- ----
Average daily production:
Natural gas: (Mmcfd)
United States 978.1 1,160.0 1,015.4 1,170.2
Canada 283.6 323.9 279.0 275.1
Other International 8.3 7.7 8.3 7.4
------- ------- ------- -------
Total 1,270.0 1,491.6 1,302.7 1,452.7
Natural gas liquids: (Mbbld)
United States 28.6 28.6 25.9 30.5
Canada 2.1 4.6 2.0 4.2
------- ------- ------- -------
Total 30.7 33.2 27.9 34.7
Crude oil: (Mbbld)
United States 41.5 61.9 45.0 63.5
Canada 28.7 41.1 29.3 35.0
Heavy oil 12.5 15.8 12.3 13.7
Light oil 16.2 25.3 17.0 21.3
Guatemala 22.0 24.6 22.2 20.3
Venezuela 18.1 20.2 19.3 15.3
Other International 4.0 5.0 4.2 4.0
------- ------- ------- -------
Total 114.3 152.8 120.0 138.1
Total production (Mmcfed) 2,139.9 2,607.7 2,190.1 2,489.7
Average sales prices:
Natural gas: (per Mcf)
United States $ 2.02 $ 1.71 $ 1.76 $ 1.90
Canada 1.72 1.25 1.55 1.29
Other International 1.13 1.98 1.10 1.39
Total 1.94 1.62 1.71 1.79
Natural gas liquids: (per Bbl)
United States 12.40 7.45 10.00 8.41
Canada 11.96 6.59 8.70 5.78
Total 12.37 7.33 9.90 8.09
Crude oil: (per Bbl)
United States 12.61 12.43 12.56 13.23
Canada 9.83 8.73 9.15 8.99
Heavy oil 7.37 7.49 7.59 5.45
Light oil 11.72 9.51 10.27 11.26
Guatemala 17.26 7.66 12.76 7.24
Venezuela 14.80 9.16 11.14 8.85
Other International 19.48 13.75 14.45 12.14
Total 13.40 10.28 11.60 10.76
Total sales price per Mcfe $ 2.05 $ 1.62 $ 1.78 $ 1.75
UNION PACIFIC RESOURCES GROUP INC.
OTHER INFORMATION
As of September 30
(Dollars in Millions, except where noted)
Third Quarter Nine Months
1999 1998 1999 1998
--------- --------- --------- ---------
Production expenses:
Lease operating
expense and other $75.5 $94.6 $222.5 $275.3
Severance and
property taxes 29.6 18.6 66.3 61.9
--------- --------- --------- ---------
Total production
expenses $105.1 $113.2 $288.8 $337.2
Exploration Expenses
Dry Hole $3.7 $20.6 $21.3 $62.2
Seismic 5.3 16.0 15.8 40.7
Undeveloped leasehold 32.7 33.1 94.1 99.9
Overhead and other 5.6 9.3 21.2 26.8
--------- --------- --------- ---------
Total exploration
expenses $47.3 $79.0 $152.4 $229.6
--------- --------- --------- ---------
--------- --------- --------- ---------
Unit costs: (per Mcfe)
Production costs
(including lease
operating expense) $0.53 $0.47 $0.48 $0.50
Lease operating
expense and other 0.38 0.39 0.37 0.41
DD&A - exploration
& production 1.28 1.08 1.03 1.03
General and
administrative 0.09 0.10 0.11 0.10
1999 1999 1998 1998
Pre Tax After Tax Pre Tax After Tax
--------- --------- --------- ---------
Significant items for
the third quarter:
Property sales gain
(other oil &
gas revenue) $26.1 $17.0 $128.5 $83.5
Asset impairment (DD&A) (61.1) (39.7) -- --
Surrendered lease
(exploration exp.) (4.5) (2.9) -- --
Restricted stock
forfeiture (general
& administrative) 3.5 2.2 -- --
Firm transportation
costs (other income) (13.1) (8.5) -- --
Foreign currency gain
(loss) (other income) 0.4 8.1 (43.4) (29.1)
Income tax
settlement with
Union Pacific Corp.
(other income) 20.5 25.2 -- --
Hedging Activity (as of 10/21/99)
Fixed Collars
--------------------------------------------
Nymex Nymex
Natural Gas (Mmcfd) Volume Price Volume Price
4Q 1999 162 $ 2.56 327 $2.42 - 3.10
1Q 2000 220 2.61 299 2.56 - 3.17
2Q 2000 220 2.34 283 2.32 - 2.76
3Q 2000 87 2.33 350 2.31 - 2.73
4Q 2000 20 2.36 44 2.40 - 2.82
Crude Oil (Mbbld)
4Q 1999 70 $ 14.51 0 0
1Q 2000 8 18.96 35 $17.29 - 21.77
2Q 2000 8 18.96 35 17.29 - 21.77
3Q 2000 7 18.93 35 17.29 - 21.77
4Q 2000 4 18.81 35 17.29 - 21.77
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