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SECOND-QUARTER EARNINGS GAIN REPORTED BY MITCHELL ENERGY & DEVELOPMENT

 THE WOODLANDS, Texas, Aug. 26 /PRNewswire/ -- Mitchell Energy & Development Corp.'s net earnings for the second quarter of its current fiscal year rose to $10.8 million from $9.3 million in the same period last year, the company reported today.
 Per share earnings for the quarter, which ended July 31, amounted to 21 cents on 51.8 million shares, compared with 20 cents on 46.9 million shares in the prior-year period. The increase in the average number of outstanding shares is primarily the result of the sale of 5.9 million shares of Class B common stock in May 1993.
 Revenues for the quarter increased to $243.7 million from the year- earlier $214.9 million.
 First-half earnings totaled $21 million, or 43 cents per share, on revenues of $474.5 million. After several non-recurring charges, the company reported a loss of $17.1 million, or 36 cents per share, on revenues of $401.2 million in the corresponding year-earlier period. Exclusive of those charges, earnings would have amounted to $14.4 million, or 31 cents per share.
 Chairman and President George P. Mitchell said the company's first- half natural gas production rose 30 percent to a record 180.9 million cubic feet per day and that market-sensitive prices were up sharply. However, the first half's natural gas gains were partly offset by effects of second-quarter declines in oil and natural gas liquids prices, by higher costs for gas consumed in processing, and by lower earnings from pipeline and real estate operations.
 Mitchell said the first half's results included some unusual items, but since the gains and charges were largely offsetting, net earnings for the period were indicative of underlying operational performance.
 Looking ahead, Mitchell said, third-quarter results will benefit from the improved fundamentals in the company's natural gas operations but will be adversely affected by continuing effects of lower oil and natural gas liquids prices and by a recent 13-day scheduled maintenance shutdown of pipelines operated by its largest gas customer. During the shutdown, an infrequent occurrence, the company's net daily production in North Texas was reduced by approximately 88 million cubic feet of natural gas and 16,000 barrels of natural gas liquids. The company took advantage of the downtime to make equipment upgrades and to perform maintenance at its largest gas processing plant, located at Bridgeport, Texas.
 Like other businesses, Mitchell said, the company also is faced with a corporate tax rate hike mandated in recently enacted federal deficit reduction legislation. The rate increase--to 35 percent from 34 percent, retroactive to the beginning of the year--will result in a relatively modest increase in taxes applicable to current-year operations. However, under generally accepted accounting principles, the company also must provide additional deferred taxes of 1 percent on the cumulative differences between the financial statement and income tax bases of its assets and liabilities. This will require a third- quarter non-cash charge of approximately $11.5 million, virtually all of which applies to basis differences generated in prior years.
 Mitchell Energy & Development Corp. is a large independent energy producer and is a major real estate developer in the Houston region. Its shares are listed on the New York and Pacific stock exchanges under the symbols MND A and MND B.
 Unaudited highlights follow:
 Three Months Ended July 31
 1993 1992(a)
 Revenues $243,652,000 $214,911,000
 Net earnings $ 10,751,000 $ 9,295,000
 Per share earnings 21 cents 20 cents
 Average common shares outstanding 51,847,000 46,888,000
 Six Months Ended July 31
 1993 1992(a)
 Revenues . $474,498,000 $401,232,000
 Earnings before extraordinary
 item and cumulative effect of
 change in accounting methods $ 21,040,000 $ 693,000(b)
 Extraordinary item -- loss from
 early retirement of debt -- (7,251,000)
 Cumulative effect of change
 in accounting methods -- (10,551,000)
 Net earnings (loss) $ 21,040,000 $(17,109,000)
 Per share earnings (loss)
 Before extraordinary item and
 cumulative effect of change in
 accounting methods 43 cents 2 cents(b)
 Extraordinary item -- loss from
 early retirement of debt -- (15 cents)
 Cumulative effect of change
 in accounting methods -- (23 cents)
 Net earnings (loss) 43 cents (36 cents)
 Average common shares outstanding 49,309,000 46,897,000


(a) As previously reported, the results for this period have been restated to give effect to the adoption during the fourth quarter of the prior year of SFAS No. 106 effective February 1, 1992. (b) Excluding the $13,706,000 after-tax effect of restructuring charges, such earnings would have been $14,399,000, or 31 cents per share.

Supplemental Financial and Operational Data (Unaudited)

(in thousands)
 Three Months Ended Six Months Ended
 July 31 July 31
 1993 1992(a) 1993 1992(a)
 Segment Operating Earnings
 Oil and gas $ 19,241 $ 9,633 $ 34,759 $ 16,001
 Other 62 (368) (228) (1,074)
 Total 19,303 9,265 34,531 14,927
 Restructuring charges - - - (20,726)
 Total Exploration and
 Production 19,303 9,265 34,531 (5,799)
 Gas processing 7,843 11,903 19,195 23,783
 Gas gathering and
 transmission 4,787 7,546 9,520 14,295
 Other 512 708 1,347 1,338
 Total Transmission
 and Processing 13,142 20,157 30,062 39,416
 Real Estate 5,234 6,393 9,475 11,316
 Total Segment Oper. Earns. 37,679 35,815 74,068 44,933
 General and administrative
 expense 11,008 10,272 22,210 20,413
 Total Operating Earnings 26,671 25,543 51,858 24,520
 Other Expense
 Interest expense 18,225 18,045 36,509 37,587
 Capitalized interest (8,646) (8,606) (17,319) (17,970)
 Other, net 1,476 1,821 2,568 3,807
 Total 11,055 11,260 21,758 23,424
 Earnings Before Income Taxes,
 Extraordinary Item and
 Cumulative Effect of Change
 in Accounting Methods 15,616 14,283 30,100 1,096
 Income Taxes 4,865 4,988 9,060 403
 Net Earnings Before Extraordinary
 Item and Cumulative Effect of
 Change in Accounting Methods 10,751 9,295 21,040 693
 Extraordinary Item--Loss from
 Early Retirement of Debt - - - (7,251)
 Cumulative Effect of Change
 in Accounting Methods - - - (10,551)
 Net Earnings (Loss) $10,751 $ 9,295 $ 21,040 $(17,109)
 Energy Operating Statistics (b)
 Average Daily Volumes
 Natural gas sales (Mcf) 192,700 144,400 180,900 138,900
 Crude oil, condensate
 sales (Bbls) 6,100 5,900 5,900 5,900
 Natural gas liquids
 produced (Bbls) 54,000 41,100 54,100 42,400
 Pipeline throughput
 (Mcf) 546,000 563,000 552,000 573,000
 Average Sales Prices (dollars)
 Natural gas (per Mcf)$ 2.91 $ 2.69 $ 2.88 $ 2.73
 Crude oil, condensate
 (per Bbl) 17.04 19.57 17.84 18.50
 Natural gas liquids produced
 (per Bbl) 12.59 13.72 13.10 12.79


(a) As previously reported, the results for this period have been restated to give effect to the retroactive adoption of SFAS No. 106 effective Feb. 1, 1992. (b) Amounts include proportional interests in equity partnerships.

Supplemental Financial and Operational Data (Unaudited) (in thousands)
 Three Months Ended Six Months Ended
 July 31 July 31
 1993 1992(a) 1993 1992(a)


Cash Provided by Operating Activities Earnings before extraordinary
 item and cumulative effect of
 change in accounting methods $10,751 $ 9,295 $21,040 $ 693


Adjustments to reconcile earnings before extraordinary item and cumulative effect of change in accounting methods to cash provided by operating activities
 Depreciation, depletion and
 amortization 39,053 30,829 71,366 70,313
 Deferred income taxes 2,414 566 4,646 225
 Cost of land sold 6,030 6,965 12,492 14,102
 Partnership distributions
 in excess of earnings 14,755 (2,548) 12,814 (5,955)
 Residential land development,
 net of reimbursements (5,275) (1,530) (8,228) (1,998)
 Amortization of deferred
 contract restructuring
 proceeds (4,743) (5,146) (9,512) (10,418)
 Other (2,973) 4,194 (4,289) 5,662
 Total 60,012 42,625 100,329 72,624
 Changes in operating
 assets and liabilities (7,038) (9,222) (41,521) (5,142)
 Total $52,974 $33,403 $ 58,808 $ 67,482


Capital Additions (accrual basis)
Exploration and Production $ 44,804 $12,269 $ 67,893 $ 34,287
 MEC Development, Ltd. buy-out 78,251 - 78,251 -
Transmission and Processing 10,779 17,919 24,625 39,119
Real Estate 16,215 16,752 28,714 32,412
Corporate 1,299 1,039 1,673 1,436
Total $151,348 $47,979 $201,156 $107,254


Depreciation, Depletion and Amortization
Exploration and Production $31,188 $22,613 $55,604 $44,931
 Restructuring charges - - - 8,713
Transmission and Processing 5,449 5,688 10,884 11,762
Real Estate 1,792 1,819 3,614 3,539
Corporate 624 709 1,264 1,368
Total $39,053 $30,829 $71,366 $70,313
 Selected Balance Sheet Data at July 31, 1993
 Stockholders' equity $764,724
 Long-term debt 936,926
 -0- 8/26/93
 /CONTACT: Charles Simpson, or Tony Lentini, Mitchell Energy & Development, 713-377-5650/
 (MND)


CO: Mitchell Energy & Development Corp. ST: Texas IN: OIL SU: ERN

LG -- NY039 -- 6118 08/26/93 12:06 EDT
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