Vintage Petroleum Reports Third Quarter Results, Earnings Increase 164 Percent; 2005 Targets Increased

Share Name	Share Symbol	Market	Type
Vintage Pete	NYSE:VPI	NYSE	Ordinary Share

Vintage Pete (NYSE:VPI)
Historical Stock Chart

From Jul 2019 to Jul 2024

Click Here for more Vintage Pete Charts.

Vintage Petroleum, Inc. (NYSE:VPI) today announced net income of $72.2 million, or $1.07 per diluted share, in the third quarter of 2005, a 164 percent increase over income from continuing operations of $27.4 million, or $0.42 per diluted share, in the same quarter last year. This substantial increase was driven by a five percent increase in production from continuing operations and significantly higher oil and gas prices. Net income for the third quarter of 2004 was $27.0 million, or $0.41 per diluted share, including a loss from discontinued operations of $0.4 million, or $0.01 per diluted share. Cash flow, a non-GAAP measure, was $113.5 million for the third quarter of 2005, up 31 percent from cash flow of $86.8 million in the third 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 $174.9 million for the third quarter of 2005 and $114.0 million for the same quarter in 2004. Production Up Five Percent Total third quarter 2005 production from continuing operations of 6.8 million barrels of oil equivalent (BOE) was five percent above the 6.4 million BOE in the third quarter of 2004, despite the negative impact on production from the Gulf Coast hurricanes and a contract oil field worker strike in Argentina. This increase was driven by a 20 percent increase in oil production with Argentina, Yemen and the U.S. each contributing to this growth. The oil increase was partially offset by a 25 percent decline in gas production from continuing operations, primarily as a result of production shut-in during the quarter due to the hurricanes in the Gulf Coast, anticipated production declines in certain U.S. fields and reduced market demand in Bolivia compared to the prior-year quarter. Argentina oil production, before the impact of changes in inventories, in the third quarter of 2005 averaged 31,862 net barrels of oil per day (BOPD), which represents an increase of 16 percent over the 27,480 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. Third quarter production for 2005 and 2004 was negatively impacted by contract oil field worker strikes reducing each quarter's production by 2,675 net BOPD and 1,760 net BOPD, respectively. The strike impacting the third quarter of 2005 was quickly resolved with production currently above pre-strike levels. Oil production in Yemen has continued to increase as a result of the company's ongoing development activities. Production in Yemen for the third quarter of 2005 was 4,685 net BOPD versus 1,886 net BOPD during the third quarter of 2004, before the impact of changes in inventories. The company expects fourth quarter 2005 production to average approximately 5,450 net BOPD (10,450 gross). U.S. oil production was also higher during the third quarter of 2005, rising five percent over the prior year's third quarter to average 17,824 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 third quarter of 2005 was reduced by 610 net BOPD as a result of certain wells shut-in for part of the quarter due to the impact of hurricanes Katrina and Rita in the Gulf Coast area. The company estimates it still has approximately 950 net BOPD shut-in as a result of damage from hurricane Katrina. Total net gas production from continuing operations was down 25 percent from the prior year's third quarter. Anticipated lower sales volumes in the domestic market and into Brazil caused Bolivia gas production to decrease 48 percent, or 1,188 MMcf (12,920 Mcf per day). In addition, the company estimates that U.S. gas production for the third quarter of 2005 was reduced by 740 MMcf (8,043 Mcf per day) as a result of the hurricanes in the Gulf Coast. As a result of damage from the hurricanes the company currently has approximately 16,000 net Mcf per day shut-in, most of which is expected to be returned to production by the middle of November 2005. Anticipated natural production declines in certain U.S. fields further contributed to the gas production decrease. 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 31 percent to an average of $41.82 per barrel in the third quarter of 2005, compared with last year's third quarter average price of $31.99 per barrel. The company's realized price for gas, including the impact of hedges, increased 44 percent to $5.49 per Mcf compared to $3.81 per Mcf in the third quarter of 2004. As a result of the increases in production and oil and gas prices, oil and gas revenues increased 45 percent to $268.1 million for the third quarter of 2005 from $185.5 million in the same quarter of 2004. Costs and Expenses Production costs from continuing operations totaled $6.91 per BOE in the third quarter of 2005, which is 30 percent higher than the $5.30 per BOE for the previous year's quarter. Higher labor costs in Argentina and increased lease power and fuel costs in the U.S. contributed to this increase. In addition, during the third quarter of 2005, the company incurred approximately $0.9 million, or $0.13 per BOE, to repair mudslide damage on its properties in Ventura County, California caused by heavy rains earlier in the year. Third quarter export taxes in Argentina increased from $12.8 million in 2004 to $19.2 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 $11.80 per BOE in the third quarter of 2005 from $8.76 per BOE in the year-earlier quarter, primarily attributable to increased production taxes, Argentina export taxes and the impact on per BOE costs due to the production interruptions from the Argentina contract labor strike and the Gulf Coast hurricanes. Exploration costs of $12.4 million for the third quarter of 2005 related primarily to exploration drilling activities in Yemen. Such costs are recoverable under the company's production sharing contract in Yemen. This compares to exploration costs for the third quarter of 2004 of $12.4 million, which were comprised primarily of dry hole costs in the U.S. and Yemen. Nine Months Results Driven by a 14 percent increase in production and significantly higher oil and gas prices, net income for the nine months ended September 30, 2005, was $161.9 million, or $2.40 per diluted share, compared to net income of $83.6 million, or $1.28 per diluted share, for the nine months ended September 30, 2004. Income from 2005 continuing operations of $151.1 million, or $2.24 per diluted share, compares to $80.5 million, or $1.23 per diluted share for the nine months ended September 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 September 30, 2005, $21.6 million of these losses had been realized and $19.4 million remained unrealized. Net income for the nine months ended September 30, 2005, was reduced by $11.8 million ($19.4 million pre-tax), or $0.18 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 $323.6 million for the nine months ended September 30, 2005, up 47 percent compared to $219.7 million for the nine months ended September 30, 2004, reflecting the increase in production and oil and gas prices from the first nine months 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 $360.2 million for the nine months ended September 30, 2005, and $256.2 million for the nine months ended September 30, 2004. 2005 Targets Updated Despite the negative impacts on production of a contract oil field worker strike in Argentina and the hurricanes in the Gulf Coast (estimated to be a reduction of approximately 0.7 million BOE over the third and fourth quarters), the company is maintaining its production target for 2005 at the previously announced 27.3 million BOE. The 27.3 million BOE represents an 11 percent increase over the Company's 2004 production level from continuing operations of 24.5 million BOE. The ability to maintain the production estimate stems from positive results in the U.S. development drilling and workover programs, production performance of the wells in Yemen and continued success in the development drilling programs in Argentina. The company has increased its average NYMEX price assumptions for 2005 to $56.50 per barrel of oil and $8.50 per MMBtu of gas versus the previous assumptions of $55.00 per barrel and $7.00 per MMBtu. The company has adjusted its expected net realized prices for gas production as a percent of NYMEX prices during 2005 to be 67 percent versus the previous target of 70 percent due to the dramatic increase in NYMEX gas prices expected during the fourth quarter and the level of the company's gas production which is sold at prices that do not fluctuate with NYMEX. After considering the impact of the changes in 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 two percent to $445 million, which is $10 million higher than the previous target of $435 million. Similarly the revised target for 2005 EBITDAX has been raised by four percent, or $24 million, to $610 million from the previous target of $586 million. Vintage to Webcast Third-Quarter 2005 Conference Call The company's third-quarter 2005 teleconference call to review third quarter results will be broadcast live on a listen-only basis over the internet on Thursday, November 3, 2005, 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 800/362-0571 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 November 11, 2005, by dialing 402/220-7223. 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 Nine Months Ended September 30, September 30, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- REVENUES: Oil, condensate and NGL sales $214,623 $136,382 $566,269 $367,320 Gas sales 53,457 49,158 155,509 127,284 Sulfur sales 702 234 2,434 949 Gas marketing 13,313 17,897 48,015 50,131 --------- --------- --------- --------- Total revenues 282,095 203,671 772,227 545,684 --------- --------- --------- --------- COSTS AND EXPENSES: Production costs 46,669 34,010 133,864 104,175 Transportation and storage costs 4,163 3,643 12,692 8,704 Production and ad valorem taxes 9,738 5,732 24,954 16,557 Export taxes 19,155 12,778 48,823 25,691 Exploration costs 12,432 12,435 30,187 21,000 Gas marketing 12,307 16,857 44,973 47,409 General and administrative 17,807 13,959 51,978 48,814 Depreciation, depletion and amortization 35,914 26,720 103,664 72,687 Impairment of proved oil and gas properties - - - 3,915 Accretion 1,819 1,685 5,358 4,932 Other operating (income) expense 549 1,671 3,478 (1,933) --------- --------- --------- -------- Total costs and expenses 160,553 129,490 459,971 351,951 --------- --------- --------- --------- OPERATING INCOME 121,542 74,181 312,256 193,733 --------- --------- --------- --------- NON-OPERATING (INCOME) EXPENSE: Interest expense 11,467 12,625 34,622 39,321 Loss on early extinguishment of debt - - - 9,903 (Gain) loss on derivative transactions (1,420) 14,917 42,024 15,361 Gain on disposition of assets (925) (17) (941) (72) Foreign currency exchange (gain) loss (676) (285) 1,659 (1,112) Other non-operating expense (income) (1,467) 804 (2,624) 630 --------- --------- --------- -------- Net non-operating expense 6,979 28,044 74,740 64,031 --------- --------- --------- --------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 114,563 46,137 237,516 129,702 --------- --------- --------- --------- INCOME TAX PROVISION: Current 41,356 15,701 79,942 44,114 Deferred 989 3,024 6,456 5,115 --------- --------- --------- -------- Total income tax provision 42,345 18,725 86,398 49,229 --------- --------- --------- --------- INCOME FROM CONTINUING OPERATIONS 72,218 27,412 151,118 80,473 INCOME (LOSS) FROM DISCONTINUED OPERATIONS - (397) 10,743 3,086 --------- --------- --------- --------- NET INCOME $72,218 $27,015 $161,861 $83,559 ========= ========= ========= ========= VINTAGE PETROLEUM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Continued) (In thousands, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------ 2005 2004 2005 2004 ---------- -------- ---------- ------- BASIC INCOME PER SHARE: Income from continuing operations $1.08 $0.42 $2.27 $1.24 Income (loss) from discontinued operations - (0.01) 0.16 0.05 ---------- -------- ---------- ------- Net income $1.08 $0.41 $2.43 $1.29 ========== ======== ========== ======= DILUTED INCOME PER SHARE: Income from continuing operations $1.07 $0.42 $2.24 $1.23 Income (loss) from discontinued operations - (0.01) 0.16 0.05 ---------- -------- ---------- ------- Net income $1.07 $0.41 $2.40 $1.28 ========== ======== ========== ======= Weighted average common shares outstanding: Basic 67,004 65,283 66,651 64,786 Diluted 67,659 66,043 67,344 65,521 VINTAGE PETROLEUM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except shares and per share amounts) (Unaudited) ASSETS September 30, December 31, 2005 2004 ------------- ------------ CURRENT ASSETS: Cash and cash equivalents $180,624 $124,221 Accounts receivable - Oil and gas sales 127,995 107,870 Joint operations and other 12,696 12,479 Income taxes receivable 440 31,571 Deferred income taxes 42,110 15,364 Prepaids and other current assets 17,291 23,648 ------------- ------------ Total current assets 381,156 315,153 ------------- ------------ PROPERTY, PLANT AND EQUIPMENT, at cost: Oil and gas properties, successful efforts method 2,419,804 2,163,176 Oil and gas gathering systems and plants 23,926 23,926 Other 33,950 31,932 ------------- ------------ 2,477,680 2,219,034 Less accumulated depreciation, depletion and amortization 1,044,978 942,656 ------------- ------------ Total property, plant and equipment, net 1,432,702 1,276,378 ------------- ------------ DEFERRED INCOME TAXES 11,795 13,200 ------------- ------------ OTHER ASSETS, net 50,151 40,161 ------------- ------------ $1,875,804 $1,644,892 ============= ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Revenue payable $29,164 $33,740 Accounts payable - trade 51,205 50,775 Current income taxes payable 24,744 23,565 Derivative financial instruments payable 99,096 27,672 Other payables and accrued liabilities 92,066 73,748 ------------- ------------ Total current liabilities 296,275 209,500 ------------- ------------ LONG-TERM DEBT 549,953 549,949 ------------- ------------ DEFERRED INCOME TAXES 87,715 80,383 ------------- ------------ LONG-TERM LIABILITY FOR ASSET RETIREMENT OBLIGATIONS 93,590 90,707 ------------- ------------ OTHER LONG-TERM LIABILITIES 38,112 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, 67,576,817 and 66,541,984 shares issued and 67,033,582 and 66,012,252 outstanding, respectively 338 333 Capital in excess of par value 381,951 361,120 Retained earnings 493,883 342,707 Accumulated other comprehensive loss (56,653) (13,088) ------------- ----------- 819,519 691,072 Less treasury stock, at cost, 543,235 and 529,732 shares, respectively 4,319 4,319 Less unamortized cost of non-vested stock awards 5,041 3,075 ------------- ------------ Total stockholders' equity 810,159 683,678 ------------- ------------ $1,875,804 $1,644,892 ============= ============ VINTAGE PETROLEUM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Nine Months Ended September 30, -------------------- 2005 2004 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $161,861 $83,559 Adjustments to reconcile net income to cash provided by operating activities - Income from discontinued operations, net of tax (10,743) (3,086) Depreciation, depletion and amortization 103,664 72,687 Impairment of proved oil and gas properties - 3,915 Accretion 5,358 4,932 Dry hole costs, impairments of unproved oil and gas properties and other 25,208 16,733 Provision for deferred income taxes 6,456 5,115 Foreign currency exchange (gain) loss 1,659 (1,112) Gain on dispositions of assets (941) (72) Loss on early extinguishment of debt - 9,903 Stock compensation 4,691 7,091 Losses on derivative transactions 42,024 15,361 Other non-cash items included in net income 923 424 (Increase) decrease in receivables 9,532 (5,532) Increase in payables and accrued liabilities 11,362 9,923 Other working capital changes (833) 1,727 --------- --------- Cash provided by continuing operations 360,221 221,568 Cash provided by discontinued operations - 34,646 --------- --------- Cash provided by operating activities 360,221 256,214 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures - Oil and gas properties (279,578) (159,538) Gathering systems and other (2,255) (2,132) Purchase of company, net of cash acquired - (26,757) Proceeds from sale of properties 4,213 67 Payments on non-hedge derivative transactions (21,586) - Other (9,120) 2,454 --------- --------- Cash used by investing activities - continuing operations (308,326) (185,906) Cash used by investing activities - discontinued operations - (23,785) --------- --------- Cash used by investing activities (308,326) (209,691) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock 9,297 11,218 Purchase of treasury stock - (1,202) Redemption of 9 3/4% Senior Subordinated Notes due 2009 - (157,313) Advances on revolving credit facility and other borrowings 79,000 370,100 Payments on revolving credit facility and other borrowings (79,000) (243,500) Dividends paid (10,299) (9,042) Other 5,860 (3,668) --------- --------- Cash provided (used) by financing activities 4,858 (33,407) --------- --------- EFFECT OF EXCHANGE RATE CHANGES ON CASH (350) 632 --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS 56,403 13,748 CASH AND CASH EQUIVALENTS, beginning of period 124,221 32,264 --------- --------- CASH AND CASH EQUIVALENTS, end of period $180,624 $46,012 ========= ========= VINTAGE PETROLEUM, INC. AND SUBSIDIARIES SUMMARY OPERATING DATA (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 2005 2004 2005 2004 --------- -------- ---------- ------- PRODUCTION: Oil (MBbls) - U.S. (b) 1,640 1,555 4,831 4,600 Argentina (a) (c) 3,004 2,578 9,105 7,453 Bolivia (a) 14 24 44 65 Yemen (a) 474 107 1,177 166 Continuing operations 5,132 4,264 15,157 12,284 Canada - 214 - 664 Total 5,132 4,478 15,157 12,948 Gas (MMcf) - U.S. (b) 6,512 8,135 21,336 21,500 Argentina (c) 1,947 2,306 6,328 6,485 Bolivia 1,278 2,466 3,845 6,014 Continuing operations 9,737 12,907 31,509 33,999 Canada - 3,785 - 11,591 Total 9,737 16,692 31,509 45,590 MBOE from continuing operations 6,755 6,415 20,409 17,951 Total MBOE 6,755 7,260 20,409 20,546 (a) Oil production (in MBbls) before the impact of changes in inventories: Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------- 2005 2004 2005 2004 ---------- -------- -------- ---------- Argentina 2,931 2,528 8,787 7,458 Bolivia 13 28 40 71 Yemen 431 174 1,166 282 (b) U.S. production for the three months and nine months ended September 30, 2005, is estimated to have been reduced as a result of the hurricanes in the Gulf Coast by 56 MBbls of oil and 740 MMcf of gas, or 179 MBOE. In addition, U.S. production for the nine months ended September 30, 2005, is estimated to have been reduced as a result of mudslides in Ventura County, California by 228 MBbls of oil and 304 MMcf of gas or 279 MBOE, respectively. (c) Argentina production for the three months and nine months ended September 30, 2004, is estimated to have been reduced as the result of a contract oil field worker strike by 162 MBbls of oil and 129 MMcf of gas, or 183 MBOE and 527 MBbls of oil and 429 MMcf of gas, or 598 MBOE, respectively. Argentina production for the three months and nine months ended September 30, 2005, is estimated to have been reduced as the result of a contract oil field worker strike by 246 MBbls of oil and 188 MMcf of gas, or 277 MBOE. MBbls - thousand barrels MMcf - million cubic feet MBOE - thousand barrels of oil equivalent VINTAGE PETROLEUM, INC. AND SUBSIDIARIES SUMMARY OPERATING DATA (Continued) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ----------------- 2005 2004 2005 2004 ---------- ------- --------- ------- Average Sales Price (including impact of hedges): Oil (per Bbl) - U.S. $40.04 $27.52 $37.91 $27.53 Argentina 40.06 34.39 35.11 31.27 Bolivia 25.22 24.68 23.61 24.42 Yemen 59.63 40.56 53.02 36.49 Continuing operations 41.82 31.99 37.36 29.90 Canada - 28.39 - 28.33 Gas (per Mcf) - U.S. $7.46 $5.31 $6.67 $5.26 Argentina 1.00 0.74 0.90 0.64 Bolivia 2.29 1.72 1.95 1.66 Continuing operations 5.49 3.81 4.94 3.74 Canada - 4.75 - 4.82 Average Sales Price (excluding impact of hedges): Oil (per Bbl) - U.S. $56.07 $38.85 $48.14 $35.34 Argentina 40.06 34.39 35.11 31.27 Bolivia 25.22 24.68 23.61 24.42 Yemen 59.63 40.56 53.02 36.49 Continuing operations 46.94 36.12 40.62 32.82 Canada - 37.10 - 33.85 Gas (per Mcf) - U.S. $8.02 $5.27 $6.82 $5.27 Argentina 1.00 0.74 0.90 0.64 Bolivia 2.29 1.72 1.95 1.66 Continuing operations 5.86 3.78 5.04 3.74 Canada - 4.75 - 4.82 VINTAGE PETROLEUM, INC. AND SUBSIDIARIES REVISED 2005 TARGETS Previous Revised 2005 2005 Targets Targets(c) -------- ---------- Oil production (MMBbls): U.S. 6.3 6.4 Argentina 12.3 12.3 (e) Bolivia 0.1 0.1 Yemen 1.6 1.7 Total 20.3 20.5 Gas Production (Bcf): U.S. 28.4 27.8 Argentina 8.5 8.2 Bolivia 5.0 5.2 Total 41.9 41.2 Total MMBOE 27.3 27.3 Assumed NYMEX(a) prices: Oil $55.00 $56.50 Gas $7.00 $8.50 Net realized price (before impact of hedging) as a percent of NYMEX(a) - Total Company: Oil 74% 74% Gas 70% 67% DD&A per BOE (oil and gas only) $5.00 $5.00 G&A per BOE $2.40 $2.50 Production, transportation and storage costs per BOE $7.25 $7.20 Production, ad valorem and export taxes per BOE 3.55 3.80 -------- ---------- Total LOE per BOE $10.80 $11.00 Non-Acquisition Capital Spending Budget (in millions) $285 $285 Cash Flow (before all exploration expenses, working capital changes and current taxes associated with property sales) (in millions) (d) $435 $445 EBITDAX (in millions)(b)(d) $586 $610 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 319,000 barrels for an expected decrease in oil inventories. VINTAGE PETROLEUM, INC. AND SUBSIDIARIES COMMODITY DERIVATIVE STATUS OIL PRICE SWAPS NYMEX Reference Price Quarter Ending Barrels $ Per Bbl ---------------------- ---------- --------- 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 $ Per Quarter Ending MMBtu MMBtu ---------------------- ---------- --------- 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 October to December Reference Price Reference Price 2005 $ Per MMBtu $ Per MMBtu ------------------------ ------------------- ------------------ 460,000 6.00 6.80 920,000 6.00 8.02 460,000 6.00 8.73 920,000 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 Nine Months Ended September 30, September 30, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- Cash provided by operating activities (GAAP measure) $174,891 $114,006 $360,221 $256,214 Adjustments to remove the impact of: Cash provided by discontinued operations - (12,231) - (34,646) Changes in working capital items related to operating activities (51,903) (16,341) (20,061) (6,118) Exploration geological and geophysical costs (766) 1,386 4,979 4,267 Payments on derivative transactions included in investing activities (8,745) - (21,586) - --------- --------- --------- --------- Cash flow (non-GAAP measure) 113,477 86,820 323,553 219,717 Current taxes 41,356 15,701 79,942 44,114 Interest expense 11,467 12,625 34,622 39,321 --------- --------- --------- --------- EBITDAX (non-GAAP measure) $166,300 $115,146 $438,117 $303,152 ========= ========= ========= ========= *T

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

VPI Vintage Pete