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PetroQuest Energy, Inc. Announces Second Quarter ResultsFriday July 30, 8:30 am ET
LAFAYETTE, La., July 30 /PRNewswire-FirstCall/ -- PetroQuest Energy,
Inc. (Nasdaq: PQUE
- News) announced
today net income for the quarter ended June 30, 2004 of $4,237,000 or
$0.09 per share, compared to a net loss for the second quarter 2003
of $1,698,000 or $(0.04) per share. Net cash flow provided by operating
activities before working capital changes for the second quarter of
2004 was $16,363,000, as compared to $5,046,000 for the comparable 2003
period. For the first six months of 2004, the Company reported net income
of $7,409,000 or $0.16 per share. The Company reported net income of
$1,295,000 or $0.03 per share for the first six months of 2003. Net
income for the first six months of 2003 includes an after tax gain of
$849,000 for the cumulative effect of a change in accounting principle
related to the adoption of Statement of Accounting Standards No. 143,
"Accounting For Asset Retirement Obligations." For the first six months
of 2004, net cash flow provided by operating activities before working
capital changes was $29,833,000. Net cash flow provided by operating
activities before working capital changes for the first six months of
2003 was $17,048,000. See the attached schedule for a reconciliation
of net cash flow provided by operating activities to net cash flow provided
by operating activities before working capital changes.
Oil and gas sales during the second quarter of 2004 increased 137% to $21,436,000 as compared to $9,060,000 in the second quarter of 2003. For the first six months of 2004, sales increased 57% to $39,568,000 from $25,214,000 in the first six months of 2003. Stated on a Mcfe basis, unit prices received during the second quarter and first six months of 2004 were 26% and 13% higher, respectively, than the prices received during the comparable 2003 periods. Lease operating expenses for the second quarter of 2004 decreased 40% to $0.77 per Mcfe from $1.29 per Mcfe in the second quarter of 2003. For the first six months of 2004, lease operating expenses decreased 25% to $0.80 per Mcfe from $1.06 per Mcfe in the comparable period of 2003. In addition, depreciation, depletion and amortization for the second quarter of 2004 decreased 17% to $2.51 per Mcfe from $3.02 per Mcfe in the second quarter of 2003. For the first six months of 2004, depreciation, depletion and amortization decreased 14% to $2.49 per Mcfe from $2.89 per Mcfe for the comparable period of 2003. Drilling activity during the quarter included wells at our Roux, Beignet and Boudin prospects as well as six horizontal coalbed methane wells in the Hartshorne Coal Formation in the Arkoma Basin. The well at the Company's Roux prospect, located at East Cameron Block 129, has been drilled to a total depth of 7,733 feet. It logged 80 feet (TVD) of net productive sands. The well began producing in late June and is currently producing at a gross rate of approximately 3,400 Mcfe per day. PetroQuest has an approximate 27% net revenue interest in the well. The well at the Beignet Prospect, located in Vermilion Parish, Louisiana, has been drilled to a total depth of 17,200 feet. The primary objective of the well was determined to be non-productive; however, 16 feet of apparent gas pay was encountered in a sand immediately above the primary objective. Current plans are to complete the well in this interval and to test it to determine its commerciality. PetroQuest has an approximate 18% working interest in the well. At its approximate 23% net revenue interest owned Boudin Prospect at Ship Shoal 225, the Company has drilled to a total depth of 10,914 feet encountering approximately 165 feet (TVD) of net productive sands. This well is expected to begin producing in early August at a gross rate of approximately 10,600 Mcfe per day. Six coalbed methane wells with an average working interest of 78% have been drilled and completed in the Hartshorne Coal Formation in Pittsburg County, Oklahoma. Subsequent to dewatering, which is estimated to take approximately 8 weeks, production is expected to average approximately 250 Mcf per day per well. The Company has an interest in 22 sections in this area and an average working interest of 40%. Ten more wells (57% average working interest) are planned for this year with 72 thereafter on existing acreage. Reserves are expected to average approximately 700 MMcf per well. Also, on the PetroQuest acreage, there is additional potential in the Spiro and Cromwell Sands. In addition, as an update to information provided in our first quarter press release, we have completed the infrastructure for the discovery at the Tasso Prospect at High Island 201. It began producing in late June and is currently producing at a gross rate of approximately 30,000 Mcfe per day. The Company has an approximate 7.5% net revenue interest in this well. The following table sets forth certain information with respect to the oil and gas operations of the Company for the three- and six-month periods ended June 30, 2004 and 2003: Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Production:
Oil (Bbls) 246,052 183,034 424,531 417,864
Gas (Mcf) 2,160,311 845,931 4,322,051 2,452,248
Total Production
(Mcfe) 3,636,623 1,944,135 6,869,237 4,959,432
Sales:
Total oil sales $8,507,123 $5,013,976 $14,310,726 $12,249,095
Total gas sales $12,928,781 $4,046,220 $25,257,755 $12,964,789
Total oil and gas
sales $21,435,906 $9,060,196 $39,568,481 $25,213,884
Average sales prices:
Oil (per Bbl) $34.57 $27.39 $33.71 $29.31
Gas (per Mcf) $5.98 $4.78 $5.84 $5.29
Per Mcfe $5.89 $4.66 $5.76 $5.08
The following initiates guidance for the third and fourth quarter of 2004:
Guidance for Guidance for
Description 3rd Quarter 2004 4th Quarter 2004
Production volumes (MMcfe/d) 40-42 42-44
Percent gas 60% 65%
Expenses:
Lease operating expenses
(per Mcfe) $0.85-$0.95 $0.85-$0.95
Production taxes (per Mcfe) $0.12-$0.13 $0.12-$0.13
Depreciation, depletion and
amortization (per Mcfe) $2.45-$2.55 $2.35-$2.45
General and administrative
(in millions) $1.50-$1.70 $1.50-$1.70
Interest expense (in millions) $0.75-$0.85 $0.75-$0.85
Effective tax rate (all deferred) 35% 35%
PetroQuest Energy, Inc. is an independent energy company engaged in the exploration, development, acquisition and production of oil and natural gas reserves in the Arkoma Basin, East Texas, South Louisiana and the shallow waters of the Gulf of Mexico. This press release contains "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are our estimate of the sufficiency of our existing capital sources, our ability to raise additional capital to fund cash requirements for future operations, the uncertainties involved in estimating quantities of proved oil and natural gas reserves, in prospect development and property acquisitions and in projecting future rates of production, the timing of development expenditures and drilling of wells, and the operating hazards attendant to the oil and gas business. In particular, careful consideration should be given to cautionary statements made in the various reports PetroQuest has filed with the Securities and Exchange Commission. PetroQuest undertakes no duty to update or revise these forward-looking statements. PETROQUEST ENERGY, INC.
Consolidated Statements of Operations
(unaudited)
(Amounts In Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Revenues:
Oil and gas sales $21,436 $9,060 $39,568 $25,214
Interest and other income 61 41 131 52
21,497 9,101 39,699 25,266
Expenses:
Lease operating expenses 2,784 2,504 5,506 5,266
Production taxes 420 125 864 335
Depreciation, depletion and
amortization 9,132 5,878 17,073 14,351
General and administrative 1,833 1,126 3,127 2,348
Accretion of asset retirement
obligation 170 136 401 276
Interest expense 665 230 1,346 254
Derivative effects (benefit) (9) 1,714 --- 1,749
14,995 11,713 28,317 24,579
Income (loss) from operations 6,502 (2,612) 11,382 687
Income tax expense (benefit) 2,265 (914) 3,973 241
Income (loss) before cumulative effect
of change in accounting principle $4,237 $(1,698) $7,409 $446
Cumulative effect of change in
accounting principle --- --- --- 849
Net income (loss) $4,237 $(1,698) $7,409 $1,295
Earnings (loss) per common share:
Basic
Income (loss) before cumulative
effect of change in accounting
principle $0.10 $(0.04) $0.17 $0.01
Cumulative effect of change in
accounting principle --- --- --- 0.02
Net income (loss) $0.10 $(0.04) $0.17 $0.03
Diluted
Income (loss) before cumulative
effect of change in accounting
principle $0.09 $(0.04) $0.16 $0.01
Cumulative effect of change in
accounting principle --- --- --- 0.02
Net income (loss) $0.09 $(0.04) $0.16 $0.03
Weighted average number of common
shares:
Basic 44,588 42,895 44,573 42,874
Diluted 46,104 42,895 45,912 43,880
PETROQUEST ENERGY, INC.
Non-GAAP Disclosure Reconciliation
(Amounts In Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Net cash flow provided by operating
activities $13,317 $6,363 $23,537 $13,051
Changes in working capital accounts 3,046 (1,317) 6,296 3,997
Net cash flow provided by operations
before working capital changes $16,363 $5,046 $29,833 $17,048
Note: Management believes that net cash flow provided by operating
activities before working capital changes is relevant and useful
information, which is commonly used by analysts, investors and
other interested parties in the oil and gas industry as a
financial indicator of an oil and gas company's ability to
generate cash used to internally fund exploration and development
activities and to service debt. Net cash flow provided by
operating activities before working capital changes is not a
measure of financial performance prepared in accordance with
generally accepted accounting principles ("GAAP") and should not
be considered in isolation or as an alternative to net cash flow
provided by operating activities. In addition, since net cash
flow provided by operating activities before working capital
changes is not a term defined by GAAP, it might not be comparable
to similarly titled measures used by other comp
Contact: PetroQuest Energy Inc. |
