LAFAYETTE, La., Oct. 29 /PRNewswire-FirstCall/ -- PetroQuest Energy,
Inc. (Nasdaq:
PQUE
-
News) announced
today net income for the quarter ended September 30, 2004 of $3,940,000
or $0.08 per share, compared to third quarter 2003 net income of $229,000
or $0.01 per share. Net cash flow provided by operating activities before
working capital changes for the third quarter of 2004 was $16,330,000,
as compared to $5,788,000 for the comparable 2003 period. For the first
nine months of 2004, the Company reported net income of $11,349,000
or $0.25 per share. The Company reported net income of $1,524,000 or
$0.03 per share for the first nine months of 2003. Net income for the
first nine 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 nine months of 2004,
net cash flow provided by operating activities before working capital
changes was $46,163,000. Net cash flow provided by operating activities
before working capital changes for the first nine months of 2003 was
$22,836,000. 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 third quarter of 2004 increased 130%
to $22,516,000 as compared to $9,800,000 in the third quarter of 2003.
For the first nine months of 2004, oil and gas sales increased 77%
to $62,084,000 from $35,014,000 in the first nine months of 2003.
Production for the third quarter and first nine months of 2004 was
87% and 53% higher, respectively, than production for the comparable
periods of 2003. Stated on an Mcfe basis, unit prices received during
the third quarter and first nine months of 2004 were 23% and 16% higher,
respectively, than the prices received during the comparable 2003
periods.
Lease operating expenses for the third quarter of 2004 decreased
2% to $1.08 per Mcfe from $1.10 per Mcfe in the third quarter of 2003.
For the first nine months of 2004, lease operating expenses decreased
16% to $0.90 per Mcfe from $1.07 per Mcfe in the comparable period
of 2003. In addition, depreciation, depletion and amortization on
oil and gas properties for the third quarter of 2004 decreased 16%
to $2.52 per Mcfe from $3.00 per Mcfe in the third quarter of 2003.
For the first nine months of 2004, depreciation, depletion and amortization
on oil and gas properties decreased 14% to $2.48 per Mcfe from $2.89
per Mcfe for the comparable period of 2003.
Drilling activity during the quarter included wells at our Chianti
and Shiraz Prospects, and six horizontal coalbed methane wells in
the Arkoma Basin.
The well at the Company's Chianti Prospect, located in the Ship Shoal
72 Field, has been drilled to a total depth of 10,578 feet. It logged
12 feet (TVD) of net productive sands with no water level. The well
is expected to begin producing by late December at a gross rate of
approximately 2,200 Mcfe per day. PetroQuest has an approximate 61%
net revenue interest in the well.
At its approximate 47% net revenue interest owned Shiraz Prospect,
also in the Ship Shoal 72 Field, the Company has drilled the well
to a total depth of 11,210 feet encountering approximately 40 feet
(TVD) of net productive sands. This well is expected to begin producing
in early January at a gross rate of approximately 3,200 Mcfe per day.
The drilling program in Pittsburg County, Oklahoma continued in the
third quarter with six additional wells drilled and completed. A total
of ten wells have been drilled and completed in the field during the
first nine months of 2004. After a dewatering period, which is estimated
to take approximately twelve weeks, production is expected to average
approximately 200-300 Mcf per day per well. PetroQuest owns an average
approximate 55% net revenue interest in these wells.
The Company is currently drilling its Jambalaya Prospect at Vermilion
287. Additionally, drilling is in progress on the first operated well
in Southeast Carthage Field and drilling continues in the Arkoma Basin.
Current plans are to spud the File and Bisque Prospects within the
next two weeks. Later in the fourth quarter, the Company expects to
spud the Cracklin Prospect, another well in Southeast Carthage Field
and two wells per month in the Arkoma Basin.
The following table sets forth certain information with respect to
the oil and gas operations of the Company for the three- and nine-month
periods ended September 30, 2004 and 2003:
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Production:
Oil (Bbls) 218,906 166,385 643,437 584,249
Gas (Mcf) 2,481,218 1,031,679 6,803,269 3,483,927
Total Production
(Mcfe) 3,794,654 2,029,989 10,663,891 6,989,421
Sales:
Total oil sales $8,013,842 $4,552,094 $22,324,568 $16,801,189
Total gas sales $14,502,074 $5,247,711 $39,759,829 $18,212,501
Average sales prices:
Oil (per Bbl) $36.61 $27.36 $34.70 $28.76
Gas (per Mcf) $5.84 $5.09 $5.84 $5.23
Per Mcfe $5.93 $4.83 $5.82 $5.01
The following updates guidance for the fourth quarter of 2004:
Description Guidance for
4th Quarter 2004
Production volumes (MMcfe/d) 33 - 35
Percent gas 65%
Expenses:
Lease operating expenses (per Mcfe) $1.10-$1.20
Production taxes (per Mcfe) $0.14-$0.15
Depreciation, depletion and amortization (per Mcfe) $2.30-$2.40
General and administrative (in millions) $1.45-$1.65
Interest expense (in millions) $0.80-$0.90
Effective tax rate (all deferred) 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 Nine Months
Ended Ended
September 30, September 30,
2004 2003 2004 2003
Revenues:
Oil and gas sales $22,516 $9,800 $62,084 $35,014
Interest and other income 56 57 187 108
22,572 9,857 62,271 35,122
Expenses:
Lease operating expenses 4,087 2,235 9,593 7,501
Production taxes 300 289 1,164 623
Depreciation, depletion and
amortization 9,701 6,197 26,774 20,549
General and administrative 1,589 1,171 4,716 3,519
Accretion of asset retirement
obligation 210 169 611 445
Interest expense 622 30 1,968 283
Derivative expense 2 (586) 2 1,163
16,511 9,505 44,828 34,083
Income from operations 6,061 352 17,443 1,039
Income tax expense 2,121 123 6,094 364
Income before cumulative effect of
change in accounting principle $3,940 $229 $11,349 $675
Cumulative effect of change in
accounting principle --- --- --- 849
Net income $3,940 $229 $11,349 $1,524
Earnings per common share:
Basic
Income before cumulative effect
of change in accounting principle $0.09 $0.01 $0.25 $0.02
Cumulative effect of change in
accounting principle --- --- --- 0.02
Net income $0.09 $0.01 $0.25 $0.04
Diluted
Income before cumulative effect
of change in accounting principle $0.08 $0.01 $0.25 $0.01
Cumulative effect of change in
accounting principle --- --- --- 0.02
Net income $0.08 $0.01 $0.25 $0.03
Weighted average number of common
shares:
Basic 44,631 44,333 44,593 43,366
Diluted 46,905 44,729 46,243 44,167
PETROQUEST ENERGY, INC.
Non-GAAP Disclosure Reconciliation
(Amounts In Thousands)
Three Months Nine Months
Ended Ended
September 30, September 30,
2004 2003 2004 2003
Net cash flow provided by operating
activities $25,935 $4,331 $49,472 $17,382
Changes in working capital accounts (9,605) 1,457 (3,309) 5,454
Net cash flow provided by operating
activities before working capital
changes $16,330 $5,788 $46,163 $22,836
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 companies.
