HADSON ENERGY RESOURCES CORPORATION ANNOUNCES SECOND QUARTER RESULTS; EARNINGS AND CASH FLOWS IMPACTED BY PROPOSED COMBINATION
OKLAHOMA CITY, Aug. 13 /PRNewswire/ -- Hadson Energy Resources Corporation (AMEX: HDX) today reported a net loss of $2.6 million for the second quarter of 1993, or $.43 per share, on total revenue of $9.3 million. This compares with net earnings of $949,000, or $.15 per share, on total revenue of $10.2 million for the second quarter of 1992. Cash flows provided by operating activities (before change in non-cash working capital) decreased to $1.6 million ($.26 per share) from the $5.4 million ($.89 per share) reported for the same quarter of 1992. The decrease in earnings and cash flows reported for the quarter was due, in part, to a $3 million accrual for severance and transactions costs associated with the proposed business combination with Apache Corporation. Operating results were further reduced by a non-cash charge of $3.7 million associated with the company's election to abandon the Bunyu Production Sharing Contract in Indonesia. For the six-month period ended June 30, 1993, the company reported a net loss of $1.8 million, or $.29 per share, on total revenue of $19.4 million. This compares with net earnings of $1.8 million, or $.30 per share, on total revenue of $20.2 million for the first six months of 1992. Cash flows from operating activities for the first half of 1993 decreased to $7.2 million from the $11 million reported for the comparable period of 1992. The lower results for the current year period were also largely attributable to the accrued merger costs and the Bunyu abandonment costs previously mentioned.
Relatively Constant Total Production
For the quarter, the company produced approximately 581,000 barrels of oil equivalent, which was relatively flat in relation to the 583,000 barrels of oil equivalent produced during the comparable period of 1992. Australian oil and liquids production from the company's offshore oil and gas fields decreased 20 percent to 228,000 barrels compared to 287,000 barrels reported for the second quarter of 1992. This decrease is principally the result of an anticipated decline in Harriet Field production and a short-term limitation on produced water-handling capacity. In late July 1992, the company recorded its first international gas sales from its offshore gas gathering facility. The company's share of this new gas production for the second quarter of 1993 was 333 million cubic feet, less than anticipated due to curtailment by the State Energy Commission of Western Australia ("SECWA"). Pursuant to the associated contract, SECWA has continued to pay the company for its share of the minimum contract deliveries. SECWA has indicated that it intends to make up the curtailed volumes during the remainder of 1993. Domestically, the company produced 100,000 barrels of oil compared to 108,000 barrels for the second quarter of 1992, a decline of 7 percent. Gas production for the quarter, however, improved to 1.2 billion cubic feet of gas compared to 1.1 billion cubic feet, an increase of 5 percent.
Improved Gas Prices - Lower Oil Prices
In the United States, the company realized significantly higher prices for its domestic gas production. For the second quarter, this average price was $2.09 per thousand cubic feet, a 36 percent increase over the 1992 average price of $1.54 per thousand cubic feet. In Australia, the average gas price received was $1.86 per thousand cubic feet. Oil prices, however, experienced declines during the current period. In the United States, the company realized an average price of $17.76 per barrel compared to $19.21 for the second quarter of 1992, a decrease of 8 percent. In Australia, the average price declined to $19.91 per barrel compared to $21.93 for the comparable period of 1992.
Proposed Merger Transaction
On June 17, 1993, the company was notified by Apache Corporation that it had entered into stock purchase agreements with certain stockholders to acquire approximately 68 percent of the company's outstanding common stock (approximately 4.2 million shares). Apache Corporation further announced its intentions to put forth a merger proposal for the balance of the company's outstanding shares on substantially the same terms as those offered to the selling shareholders. At June 30, 1993, an accrual of $3 million had been recorded to reflect the estimated severance and transaction costs associated with the proposed business combination. The company's board of directors has established a special committee of independent directors to evaluate the merger proposal. Management's Comment John C. Capshaw, chairman, president and chief executive officer, stated, "Negotiation of the merger agreement with Apache Corporation is proceeding smoothly at this time. I expect that the remaining terms will be finalized shortly and that our board will convene soon thereafter to vote on the agreement." Hadson Energy Resources Corporation is an energy company engaged in domestic and international crude oil and natural gas acquisition, exploration, development and production. Selected financial and operating statistics for the three-month and six-month periods ended June 30, 1993 and 1992 are presented below: HADSON ENERGY RESOURCES CORP. FINANCIAL RESULTS Three Months Ended Six Months Ended June 30, June 30, 1993 1992 1993 1992 Revenue ($M) $ 9,299 $10,206 $19,413 $20,234 Net earnings (loss)($M) $(2,628) $ 949 $(1,798) $ 1,824 Net earnings (loss) per share $ (.43) $ .15 $ (.29) $ .30 Cash flows from operations ($M) $ 1,598 $ 5,440 $ 7,220 $10,982 Weighted average shares outstanding (M) 6,130 6,128 6,130 6,128 Operating Statistics Production: USA oil (MBbls) 100 108 202 225 USA gas (MMcf) 1,180 1,126 2,339 2,303 Australia oil (MBbls) 228 287 470 573 Australia gas (MMcf) 333 - 869 - Average Prices: USA oil (per Bbl) $ 17.76 $ 19.21 $ 17.89 $ 18.55 USA gas (per Mcf) $ 2.09 $ 1.54 $ 1.96 $ 1.52 Australia oil (per Bbl) $ 19.91 $ 21.93 $ 20.53 $ 21.49 Australia gas (per Mcf) $ 1.86 $ - $ 1.84 $ - -0- 08/13/93 CONTACT: William C. Rankin, senior vice president and chief financial officer, Hadson Energy Resources Corporation, 405-232-2212; or Warren M. Shimmerlik, Shimmerlik Corporate Communications, Inc., 212-247-5200 (HDX) CO: HADSON ENERGY RESOURCES CORPORATION IN: OIL SU: ERN ST: OK
-- NY022 -- X559 08/13/93
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|Date:||Aug 13, 1993|
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