Vintage Pete (NYSE:VPI)
Historical Stock Chart
From Jul 2019 to Jul 2024
Vintage Petroleum, Inc. (NYSE:VPI) today announced net
income of $57.7 million, or $0.86 per diluted share, in the second
quarter of 2005, a 66 percent increase over income from continuing
operations of $34.7 million, or $0.53 per diluted share, in the same
quarter last year. This substantial increase was driven by a 17
percent increase in production from continuing operations and
significantly higher oil and gas prices. Net income for the second
quarter of 2004 was $37.4 million, or $0.57 per diluted share,
including income from discontinued operations of $2.7 million, or
$0.04 per diluted share.
Cash flow, a non-GAAP measure, was $107.1 million for the second
quarter of 2005, up 58 percent from cash flow of $67.7 million in the
second quarter of 2004. See the attached table for reconciliations of
these non-GAAP financial measures to the corresponding GAAP amounts of
cash provided by operating activities of $82.3 million for the second
quarter of 2005 and $57.8 million for the same quarter in 2004.
Production Up 17 Percent
Total production from continuing operations for the quarter of 6.9
million barrels of oil equivalent (BOE) was 17 percent above the
comparable 5.9 million BOE in the second quarter of 2004. This
increase was driven by a 26 percent increase in oil production with
Argentina, Yemen and the U.S. each contributing to this growth. The
oil increase was slightly offset by a four percent decline in gas
production from continuing operations as a result of reduced market
demand in Bolivia compared to the prior-year quarter.
Argentina oil production, before the impact of changes in
inventories, in the second quarter of 2005 averaged 33,318 net barrels
of oil per day (BOPD), an increase of 24 percent over the 26,978 net
BOPD produced in the comparable quarter of 2004. The increase over the
prior year's quarter is primarily a result of additional production
resulting from the company's drilling and workover programs and the
company's acquisition of properties in the San Jorge basin during
September 2004. In addition, the prior year's quarter was negatively
impacted by a labor strike reducing second quarter 2004 reported
production by an estimated 2,200 BOPD.
Oil production in Yemen made its initial contribution in the
second quarter of 2004 at 1,186 net BOPD and almost quadrupled to
average 4,294 net BOPD during the second quarter of 2005, before the
impact of changes in inventories. All of the An Nagyah field
production during the second quarter was trucked to a nearby facility
for processing and transporting to an export terminal. An 18-mile (28
km) pipeline to the processing facility was completed and became
operational in early July. As a result the company expects production
to increase to approximately 10,000 gross BOPD (5,200 net) by the
middle of the third quarter.
U.S. oil production also showed a strong increase during the
second quarter of 2005 rising 13 percent over the prior year's second
quarter to average 18,967 net BOPD, driven by the December 2004
acquisition of producing properties in the Gulf Coast area of Alabama
and 2005 exploitation successes. Partially offsetting these increases,
the company estimates the second quarter of 2005 was reduced by 400
net BOPD as a result of certain wells shut-in for part of the quarter
due to damage from heavy rains and mudslides in California earlier in
the year. These shut-in wells have now been returned to production.
Total net gas production from continuing operations was down four
percent from the prior year's second quarter. U.S. and Argentina net
gas production was up slightly during the second quarter of 2005;
however, the anticipated lower sales volumes into Brazil caused
Bolivia gas production to decrease 32 percent leading to the overall
decline in total net gas production. In addition, the company
estimates that U.S. gas production for the second quarter of 2005 was
reduced by 66 MMCF of gas as a result of the heavy rains and mudslides
in California.
Commodity Prices and Revenues
Including the impact of derivative financial instruments accounted
for as hedges, the company's realized price for oil from continuing
operations increased 26 percent to an average of $36.48 per barrel in
the second quarter of 2005, compared with last year's second quarter
average price of $29.04 per barrel. The company's realized price for
gas, including the impact of hedges, increased 27 percent to $4.92 per
Mcf compared to $3.88 per Mcf in the second quarter of 2004. As a
result of the increases in production and oil and gas prices, oil and
gas revenues increased 48 percent to $238.3 million for the second
quarter of 2005 from $160.6 million in the same quarter of 2004.
Costs and Expenses
Production costs from continuing operations totaled $6.38 per BOE
in the second quarter of 2005, which is eight percent higher than the
$5.90 per BOE for the previous year's quarter. During the second
quarter of 2005, the company incurred approximately $2.2 million, or
$0.32 per BOE, to repair mudslide damage on its properties in Ventura
County, California caused by heavy rains early in the year. The
company expects to spend an additional $2.5 million during the third
quarter of 2005 bringing the total expected cost in 2005 for the
mudslide repairs to $8.2 million.
Second quarter export taxes in Argentina increased from $6.7
million in 2004 to $16.3 million in 2005 primarily as a result of the
increased export tax rates announced in August 2004 and higher oil
prices.
Production, transportation and storage costs combined with
production, ad valorem and export taxes (total lease operating
expense) increased to $10.60 per BOE in the second quarter of 2005
from $8.44 per BOE in the year-earlier quarter, primarily attributable
to increased production taxes and Argentina export taxes.
Exploration costs of $7.4 million for the second quarter of 2005
consisted of $3.7 million of seismic, geological and geophysical
costs, and $3.7 million of dry hole costs, primarily in Yemen. This
compares to exploration expense for the second quarter of 2004 of $7.3
million, comprised of $1.7 million of seismic, geological and
geophysical costs, $4.4 million of dry hole costs, primarily in Italy,
and $1.2 million of leasehold impairments.
Six Months Results
Net income for the six months ended June 30, 2005, was $89.6
million, or $1.33 per diluted share, compared to net income of $56.5
million, or $0.87 per diluted share, for the six months ended June 30,
2004. Income from continuing operations of $78.9 million, or $1.17 per
diluted share, compares to $53.1 million, or $0.82 per diluted share
for the six months ended June 30, 2004.
The company was required to account for certain oil price swap
agreements using mark-to-market accounting during January and February
2005. As a result, the company recorded $41.0 million of derivative
losses during the first quarter of 2005. As of June 30, 2005, $12.9
million of these losses had been realized and $28.1 million remained
unrealized. Net income for the six months ended June 30, 2005, was
reduced by $17.2 million ($28.1 million pre-tax), or $0.26 per diluted
share, related to these unrealized losses. As these oil price swap
agreements are settled in future periods, the company will report
higher oil revenues in those future periods than would have been
reported had the unrealized losses not been recognized in the first
quarter of 2005. As of March 1, 2005, the company resumed hedge
accounting for all of its derivative financial instruments.
Cash flow, a non-GAAP measure, was $210.1 million for the six
months ended June 30, 2005, up 58 percent compared to $132.9 million
for the six months ended June 30, 2004, reflecting the increase in
production and oil and gas prices from the six months ended 2004
levels. See the attached table for reconciliations of these non-GAAP
financial measures to the corresponding GAAP amounts of cash provided
by operating activities of $185.3 million for the six months ended
June 30, 2005, and $142.2 million for the six months ended June 30,
2004.
2005 Targets Updated
As a result of the continued strong price environment and positive
results from its development drilling programs in the U.S. and Yemen,
the company is increasing its capital budget and production targets
for 2005. The company's 2005 capital budget has been increased 14
percent from $250 million to $285 million with the increases primarily
allocated to the U.S. and Yemen development drilling programs.
The company is increasing its production target for 2005 from the
previously announced 26.8 million BOE to 27.3 million BOE. The
increase is due to positive results from its U.S. development drilling
and workover programs, production performance of its wells in Yemen
and an acceleration or expansion of various development drilling
programs in the U.S. and Yemen as evidenced by the increased capital
budget.
Due to strong oil and gas prices experienced during the first half
of 2005 and the strength of the forward price curve, the company has
increased its average NYMEX price assumptions for 2005 to $55.00 per
barrel of oil and $7.00 per MMBtu of gas versus the previous
assumptions of $50.00 per barrel and $6.50 per MMBtu. During the
second quarter of 2005, the company experienced an improvement in the
contract differentials in Argentina from those witnessed at year-end
2004 and earlier in 2005. Indications early in the third quarter are
that this improvement has been sustained. Accordingly, the company has
adjusted its expected net realized prices for oil production as a
percent of NYMEX prices during 2005 to be 74 percent versus the
previous target of 71 percent.
After considering the impact of the increases in targeted
production, assumed NYMEX oil and gas prices, realized price
assumptions and the other assumptions enumerated in the accompanying
table, "Vintage Petroleum, Inc. and Subsidiaries, Revised 2005
Targets," the company is increasing its target for 2005 cash flow (as
defined in the attached table) by 23 percent to $435 million, which is
$81 million higher than the previous target of $354 million. Similarly
the revised target for 2005 EBITDAX has been raised by 21 percent, or
$100 million, to $586 million from the previous target of $486
million.
Vintage to Webcast Second-Quarter 2005 Conference Call
The company's second-quarter 2005 teleconference call to review
second quarter results will be broadcast live on a listen-only basis
over the internet on Thursday, August 4 at 3 p.m. Central Time.
Interested parties may access the webcast by visiting the Vintage
Petroleum, Inc. website at www.vintagepetroleum.com and selecting the
microphone icon, or at www.fulldisclosure.com and typing VPI in the
ticker search box and selecting "Go". The teleconference may be
accessed by dialing 800-362-0574 and providing the call identifier
"Vintage" to the operator. The webcast and the accompanying slide
presentation will be available for replay at the company's website. An
audio replay will be available until August 9, 2005, by dialing
402-530-9315.
Forward-Looking Statements
This release includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements in this
release, other than statements of historical facts, that address
estimates of future production, operating costs, capital spending,
EBITDAX, cash flow, NYMEX prices of oil and gas and company
realizations, the impact of oil and gas hedging activities, and events
or developments that the company expects or believes are
forward-looking statements. Although the company believes the
expectations expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of future
performance and actual results or developments may differ materially
from those in the forward-looking statements. Factors that could cause
actual results to differ materially from those in forward-looking
statements include oil and gas prices, exploitation and exploration
successes, actions taken and to be taken by Argentina as a result of
its political and economic conditions and changes in the estimated
impact on the company, as well as continued availability of capital
and financing, and general economic, market or business conditions as
well as other risk factors described from time to time in the
company's filings with the SEC. The company assumes no obligation to
update publicly such forward-looking statements, whether as a result
of new information, future events or otherwise.
Vintage Petroleum, Inc. is an independent energy company engaged
in the acquisition, exploitation, exploration, and development of oil
and gas properties and the marketing of natural gas and crude oil.
Company headquarters are in Tulsa, Oklahoma, and its common shares are
traded on the New York Stock Exchange under the symbol VPI. For
additional information, visit the company website at
www.vintagepetroleum.com
-0-
*T
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
REVENUES:
Oil, condensate and NGL
sales $186,089 $117,507 $351,646 $230,938
Gas sales 52,166 43,058 102,052 78,126
Sulfur sales 994 242 1,732 715
Gas marketing 16,124 17,462 34,702 32,234
--------- --------- --------- ---------
Total revenues 255,373 178,269 490,132 342,013
--------- --------- --------- ---------
COSTS AND EXPENSES:
Production costs 43,836 34,806 87,195 70,165
Transportation and storage
costs 4,300 2,741 8,529 5,061
Production and ad valorem
taxes 8,332 5,519 15,216 10,825
Export taxes 16,332 6,706 29,668 12,912
Exploration costs 7,429 7,329 17,755 8,565
Gas marketing 15,124 16,480 32,666 30,551
General and administrative 16,821 16,791 34,171 34,856
Depreciation, depletion and
amortization 34,353 21,881 67,750 45,967
Impairment of proved oil and
gas properties - - - 3,915
Accretion 1,792 1,629 3,539 3,247
Other operating (income)
expense 1,912 1,213 2,929 (3,604)
--------- --------- --------- --------
Total costs and expenses 150,231 115,095 299,418 222,460
--------- --------- --------- ---------
OPERATING INCOME 105,142 63,174 190,714 119,553
--------- --------- --------- ---------
NON-OPERATING (INCOME) EXPENSE:
Interest expense 11,600 12,674 23,155 26,695
Loss on early extinguishment
of debt - - - 9,903
Losses on derivative
transactions 2,728 440 43,444 444
(Gain) loss on disposition
of assets (16) 4 (16) (55)
Foreign currency exchange
(gain) loss 1,069 (1,969) 2,335 (826)
Other non-operating income (726) (162) (1,157) (173)
--------- --------- --------- --------
Net non-operating expense 14,655 10,987 67,761 35,988
--------- --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 90,487 52,187 122,953 83,565
--------- --------- --------- ---------
INCOME TAX PROVISION:
Current 24,182 16,269 38,586 28,413
Deferred 8,587 1,216 5,467 2,089
--------- --------- --------- --------
Total income tax
provision 32,769 17,485 44,053 30,502
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS 57,718 34,702 78,900 53,063
INCOME FROM DISCONTINUED
OPERATIONS - 2,707 10,743 3,481
--------- --------- --------- ---------
NET INCOME $ 57,718 $ 37,409 $ 89,643 $ 56,544
========= ========= ========= =========
*T
-0-
*T
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Continued)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2005 2004 2005 2004
---------- -------- --------- -------
BASIC INCOME PER SHARE:
Income from continuing
operations $0.86 $0.54 $1.19 $0.83
Income from discontinued
operations - 0.04 0.16 0.05
---------- -------- --------- -------
Net income $0.86 $0.58 $1.35 $0.88
========== ======== ========= =======
DILUTED INCOME PER SHARE:
Income from continuing
operations $0.86 $0.53 $1.17 $0.82
Income from discontinued
operations - 0.04 0.16 0.05
---------- -------- --------- -------
Net income $0.86 $0.57 $1.33 $0.87
========== ======== ========= =======
Weighted average common shares
outstanding:
Basic 66,799 64,741 66,471 64,535
Diluted 67,472 65,487 67,182 65,258
*T
-0-
*T
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and per share amounts)
(Unaudited)
ASSETS
June 30, December 31,
2005 2004
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 155,804 $ 124,221
Accounts receivable -
Oil and gas sales 127,098 107,870
Joint operations 11,854 12,479
Income taxes receivable 39,460 31,571
Deferred income taxes 22,639 15,364
Prepaids and other current assets 17,758 23,648
----------- ------------
Total current assets 374,613 315,153
----------- ------------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Oil and gas properties, successful efforts
method 2,289,876 2,163,176
Oil and gas gathering systems and plants 23,926 23,926
Other 33,313 31,932
----------- ------------
2,347,115 2,219,034
Less accumulated depreciation, depletion
and amortization 1,009,816 942,656
----------- ------------
Total property, plant and equipment,
net 1,337,299 1,276,378
----------- ------------
DEFERRED INCOME TAXES 10,959 13,200
----------- ------------
OTHER ASSETS, net 50,513 40,161
----------- ------------
$1,773,384 $1,644,892
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revenue payable $ 28,154 $ 33,740
Accounts payable - trade 55,925 50,775
Current income taxes payable 18,954 23,565
Derivative financial instruments payable 80,966 27,672
Other payables and accrued liabilities 74,401 73,748
----------- ------------
Total current liabilities 258,400 209,500
----------- ------------
LONG-TERM DEBT 549,952 549,949
----------- ------------
DEFERRED INCOME TAXES 77,646 80,383
----------- ------------
LONG-TERM LIABILITY FOR ASSET RETIREMENT
OBLIGATIONS 92,008 90,707
----------- ------------
OTHER LONG-TERM LIABILITIES 39,195 30,675
----------- ------------
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par, 5,000,000
shares authorized, zero shares issued and
outstanding - -
Common stock, $0.005 par, 160,000,000
shares authorized, 67,514,467 and
66,541,984 shares issued and 66,977,600
and 66,012,252 outstanding, respectively 338 333
Capital in excess of par value 380,782 361,120
Retained earnings 425,352 342,707
Accumulated other comprehensive loss (40,083) (13,088)
----------- -----------
766,389 691,072
Less treasury stock, at cost, 536,867 and
529,732 shares, respectively 4,319 4,319
Less unamortized cost of non-vested stock
awards 5,887 3,075
----------- ------------
Total stockholders' equity 756,183 683,678
----------- ------------
$1,773,384 $1,644,892
=========== ============
*T
-0-
*T
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
-------------------
2005 2004
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 89,643 $ 56,544
Adjustments to reconcile net income to cash
provided by operating activities -
Income from discontinued operations, net
of tax (10,743) (3,481)
Depreciation, depletion and amortization 67,750 45,967
Impairment of proved oil and gas
properties - 3,915
Accretion 3,539 3,247
Dry hole costs, impairments of unproved
oil and gas properties and other 12,010 5,684
Provision for deferred income taxes 5,467 2,089
Foreign currency exchange (gain) loss 2,335 (826)
Gain on dispositions of assets (16) (55)
Loss on early extinguishment of debt - 9,903
Stock compensation 3,130 5,938
Losses on derivative transactions 43,444 444
Other non-cash items included in net income 613 647
Increase in receivables (18,928) (16,675)
Increase (decrease) in payables and
accrued liabilities (10,618) 1,744
Other working capital changes (2,296) 4,708
---------- ---------
Cash provided by continuing operations 185,330 119,793
Cash provided by discontinued
operations - 22,415
---------- ---------
Cash provided by operating
activities 185,330 142,208
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures -
Oil and gas properties (132,743) (95,744)
Gathering systems and other (1,440) (1,430)
Payments on non-hedge derivative
transactions (12,841) -
Other (8,266) (913)
---------- ---------
Cash used by investing activities -
continuing operations (155,290) (98,087)
Cash used by investing activities -
discontinued operations - (16,123)
---------- ---------
Cash used by investing activities (155,290) (114,210)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 8,565 4,029
Purchase of treasury stock - (129)
Redemption of 9 3/4% Senior Subordinated
Notes due 2009 - (157,313)
Advance on revolving credit facility and
other borrowings 45,000 294,000
Payments on revolving credit facility and
other borrowings (45,000) (144,900)
Dividends paid (6,626) (5,798)
Other 106 (3,052)
---------- ---------
Cash provided (used) by financing
activities 2,045 (13,163)
---------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (502) 634
---------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 31,583 15,469
CASH AND CASH EQUIVALENTS, beginning of period 124,221 32,264
---------- ---------
CASH AND CASH EQUIVALENTS, end of period $155,804 $ 47,733
========== =========
*T
-0-
*T
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
SUMMARY OPERATING DATA
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2005 2004 2005 2004
---------- -------- --------- -------
PRODUCTION:
Oil (MBbls) -
U.S. (b) 1,727 1,532 3,191 3,045
Argentina (a)(c) 3,017 2,434 6,101 4,875
Bolivia (a) 15 21 30 41
Yemen (a) 342 59 703 59
Continuing operations 5,101 4,046 10,025 8,020
Canada - 215 - 450
Total 5,101 4,261 10,025 8,470
Gas (MMcf) -
U.S. (b) 7,141 7,125 14,824 13,365
Argentina (c) 2,228 2,147 4,381 4,179
Bolivia 1,236 1,829 2,567 3,548
Continuing operations 10,605 11,101 21,772 21,092
Canada - 3,868 - 7,806
Total 10,605 14,969 21,772 28,898
MBOE from continuing operations 6,869 5,896 13,654 11,535
Total MBOE 6,869 6,756 13,654 13,286
(a) Oil production (in MBbls) before the impact of changes in
inventories:
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2005 2004 2005 2004
--------- --------- --------- -------
Argentina 3,032 2,455 5,856 4,931
Bolivia 14 22 27 43
Yemen 391 108 735 109
(b) U.S. production for the three months and six months ended June 30,
2005, is estimated to have been reduced as a result of mudslides
in Ventura County, California by 36 MBbls of oil and 66 MMcf of
gas, or 47 MBOE, and 228 MBbls of oil and 304 MMcf of gas, or 279
MBOE, respectively
(c) Argentina production for the three months and six months ended
June 30, 2004, is estimated to have been reduced as the result of
a labor strike by 200 MBbls of oil and 165 MMcf of gas, or 228
MBOE and 365 MBbls of oil and 300 MMcf of gas, or 415 MBOE,
respectively.
MBbls - thousand barrels
MMcf - million cubic feet
MBOE - thousand barrels of oil equivalent
*T
-0-
*T
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
SUMMARY OPERATING DATA
(Continued)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2005 2004 2005 2004
---------- -------- --------- -------
Average Sales Price (including
impact of hedges):
Oil (per Bbl) -
U.S. $38.36 $27.12 $36.82 $27.53
Argentina 33.83 30.29 32.67 29.62
Bolivia 22.62 24.67 22.87 24.26
Yemen 51.02 29.15 48.57 29.15
Continuing operations 36.48 29.04 35.08 28.80
Canada - 28.80 - 28.30
Gas (per Mcf) -
U.S. $6.68 $5.45 $6.32 $5.24
Argentina 0.96 0.66 0.86 0.58
Bolivia 1.87 1.54 1.78 1.62
Continuing operations 4.92 3.88 4.69 3.70
Canada - 5.02 - 4.85
Average Sales Price (excluding
impact of hedges):
Oil (per Bbl) -
U.S. $45.55 $34.54 $44.07 $33.54
Argentina 33.83 30.29 32.67 29.62
Bolivia 22.62 24.67 22.87 24.26
Yemen 51.02 29.15 48.57 29.15
Continuing operations 38.91 31.85 37.39 31.08
Canada - 33.94 - 32.29
Gas (per Mcf) -
U.S. $6.80 $5.52 $6.29 $5.28
Argentina 0.96 0.66 0.86 0.58
Bolivia 1.87 1.54 1.78 1.62
Continuing operations 5.00 3.92 4.67 3.72
Canada - 5.02 - 4.85
*T
-0-
*T
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
REVISED 2005 TARGETS
Previous Revised
2005 2005
Targets Targets(c)
---------- ----------
Oil production (MMBbls):
U.S. 6.0 6.3
Argentina 12.3(e) 12.3(e)
Bolivia 0.1 0.1
Yemen 1.4 1.6
Total 19.8 20.3
Gas Production (Bcf):
U.S. 28.3 28.4
Argentina 8.5 8.5
Bolivia 5.0 5.0
Total 41.8 41.9
Total MMBOE 26.8 27.3
Assumed NYMEX(a) prices:
Oil $50.00 $55.00
Gas $6.50 $7.00
Net realized price (before impact of
hedging) as a percent of
NYMEX(a) - Total Company:
Oil 71% 74%
Gas 68% 70%
DD&A per BOE (oil and gas only) $4.85 $5.00
G&A per BOE $2.45 $2.40
Production, transportation and storage
costs per BOE $7.25 $7.25
Production, ad valorem and export taxes
per BOE 3.05 3.55
---------- ----------
Total LOE per BOE $10.30 $10.80
Non-Acquisition Capital Spending Budget
(in millions) $250 $285
Cash Flow (before all exploration
expenses, working capital changes
and current taxes associated with
property sales) (in millions) (d) $354 $435
EBITDAX (in millions)(b)(d) $486 $586
MMBbls - million barrels
Bcf - billion cubic feet
MMBOE - million barrels of oil equivalent
(a) NYMEX
Oil - Average of the daily settlement price per barrel for the
near-month contract for light crude oil as quoted on the New
York Mercantile Exchange.
Gas - Average of the settlement price per MMBtu for the last three
trading days for the applicable contract month for natural
gas as quoted on the New York Mercantile Exchange.
(b) EBITDAX: Earnings before interest, taxes, DD&A, impairments,
exploration expenses, cumulative effect of change in accounting
principle, loss on early extinguishment of debt, gains/losses on
property sales and other non-cash items.
(c) Targets do not reflect any future acquisitions or dispositions of
assets. Targets reflect the impact of existing hedges. See "2005
Targets Updated" and "Forward-Looking Statements" elsewhere in the
release.
(d) The targets for non-GAAP financial measures are not reconciled to
the most directly comparable GAAP financial measure as the company
does not establish targets for such GAAP financial measures.
(e) Includes sales volumes of 400,000 barrels for an expected decrease
in oil inventories.
*T
-0-
*T
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
COMMODITY DERIVATIVE STATUS
OIL PRICE SWAPS
NYMEX
Reference Price
Quarter Ending Barrels $ Per Bbl
------------------------------------- ------------ -------------------
September 30, 2005 1,269,600 35.57
December 31, 2005 1,269,600 34.88
March 31, 2006 427,500 37.39
June 30, 2006 432,250 36.80
September 30, 2006 437,000 36.32
December 31, 2006 437,000 35.93
March 31, 2007 189,000 34.26
June 30, 2007 63,700 39.66
September 30, 2007 64,400 39.38
December 31, 2007 64,400 39.10
GAS PRICE SWAPS
NYMEX
Reference Price
Quarter Ending MMBtu $ Per MMBtu
----------------------------------- ---------------- ----------------
September 30, 2005 1,186,800 6.17
December 31, 2005 1,186,800 6.37
March 31, 2006 243,000 6.47
June 30, 2006 245,700 6.47
September 30, 2006 248,400 6.47
December 31, 2006 248,400 6.47
March 31, 2007 225,000 6.00
June 30, 2007 227,500 6.00
September 30, 2007 230,000 6.00
December 31, 2007 230,000 6.00
GAS PRICE COLLARS
MMBtu For NYMEX Floor NYMEX Cap
July to December Reference Price Reference Price
2005 $ Per MMBtu $ Per MMBtu
------------------------ -------------------- --------------------
920,000 6.00 6.80
1,840,000 6.00 8.02
920,000 6.00 8.73
1,840,000 6.00 9.21
*T
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
Cash flow, a non-GAAP measure, represents cash provided by
operating activities before the impact of discontinued operations,
changes in working capital items related to operating activities, all
exploration costs and further adjusted for payments on derivative
transactions no longer qualifying for hedge accounting which are
reflected as investing activities under GAAP. This non-GAAP measure is
presented because management believes it is a useful adjunct to cash
provided by operating activities under accounting principles generally
accepted in the United States (GAAP). This non-GAAP cash flow measure
is widely accepted as a financial indicator of an oil and gas
company's ability to generate cash which is used to internally fund
exploration and development activities and to service debt and is
comparable to targets established by the company. This non-GAAP
measure is not a measure of financial performance under GAAP and
should not be considered as an alternative to cash provided (used) by
operating, investing, or financing activities as an indicator of cash
flows, or as a measure of liquidity.
EBITDAX is also presented below because of its wide acceptance by
the investment community as a financial indicator of a company's
ability to internally fund exploration and development activities and
to service or incur debt. Management also views the non-GAAP measure
of EBITDAX as a useful tool for comparison of the company's financial
indicator with those of peer companies and is comparable to targets
established by the company. EBITDAX should not be considered as an
alternative to net income or cash provided by operating activities, as
defined by GAAP. The following table reconciles cash provided by
operating activities to cash flow and EBITDAX (in thousands):
-0-
*T
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
2005 2004 2005 2004
--------- -------- --------- ---------
Cash provided by operating
activities (GAAP measure) $82,337 $57,758 $185,330 $142,208
Adjustments to remove the
impact of:
Cash provided by
discontinued operations - (12,402) - (22,415)
Changes in working capital
items related to operating
activities 29,570 20,646 31,842 10,223
Exploration geological and
geophysical costs 3,685 1,681 5,745 2,881
Payments on derivative
transactions included
in investing activities (8,492) - (12,841) -
--------- -------- --------- ---------
Cash flow (non-GAAP measure) 107,100 67,683 210,076 132,897
Current taxes 24,182 16,269 38,586 28,413
Interest expense 11,600 12,674 23,155 26,695
--------- -------- --------- ---------
EBITDAX (non-GAAP measure) $142,882 $96,626 $271,817 $188,005
========= ======== ========= =========
*T