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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Atlantic Coal | LSE:ATC | London | Ordinary Share | GB00B142G994 | ORD 0.07P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.09 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS No 7243p
ATLANTIC RICHFIELD CO
22nd October 1998
ARCO'S THIRD QUARTER OPERATING RESULTS REFLECT LOWEST OIL PRICES IN 12 YEARS
Los Angeles -- ARCO (NYSE: ARC) said 1998 third
quarter operating earnings were depressed by continued low oil prices.
Net income, which includes special items and discontinued operations, was
$872 million, or $2.67 per diluted share for the 1998 third quarter. In the
1997 third quarter, net income was $516 million, or $1.57 per diluted share.
Earnings excluding special items and discontinued operations totaled
$61 million, or $0.19 per diluted share, for the 1998 third quarter, compared
to $313 million, or $0.96 per diluted share, from continuing operations on the
same basis in the 1997 third quarter.
"From an industry perspective, the 1998 third quarter results were driven
by low oil prices, which were down $5.60 per barrel relative to the same
quarter in 1997 and were the lowest seen in 12 years," ARCO Chairman and Chief
Executive Officer Mike R. Bowlin said. "Our results are sensitive to oil
prices which, of course, means when prices rise we also benefit. However, we
are not merely waiting for higher prices. As we recently announced, we are
taking a number of cost-savings steps to streamline our operations and improve
results."
Bowlin said ARCO's on-going plan to focus on its oil and gas businesses
moved ahead in the third quarter with the sale of its interest in ARCO
Chemical Company and the consolidation of Union Texas Petroleum, which ARCO
acquired late in the second quarter. ARCO's domestic coal assets were
divested in the 1998 second quarter; and the company has reached agreement to
sell its interest in two coal properties in Australia.
Bowlin said that ARCO's intent to build on its natural gas business in the
Asia Pacific region got a boost in the latest quarter when estimates of proved
gross reserves in its giant Tangguh discovery in Indonesia were increased from
6.3 trillion cubic feet (Tcf) to 14.4 Tcf, or 2.4 billion barrels of oil
equivalent. Also in the quarter, ARCO acquired a 25% interest in Block A-18
in the Malaysia/Thailand Joint Development Area, which contains over 10
trillion cubic feet of estimated proved, probable and possible reserves.
In the United Kingdom North Sea, the Britannia gas field in which ARCO
holds a 9.4% interest started production. With an expected 30-year production
life, the Britannia field is designed to reach daily gross production of
740 million cubic feet of gas and 70,000 barrels of condensate and natural gas
liquids. Britannia is the first in a series of large Central North Sea gas
condensate developments to come on stream. It will be joined in 2000 by the
Shearwater and Elgin/Franklin developments. ARCO has a 27.5% interest in
Shearwater and a small interest in Elgin/Franklin.
In Alaska, the Tarn oil field started production and earlier this month
ARCO announced the start up of the Midnight Sun field, which is the first
Prudhoe Bay satellite discovery to start production. All of these
developments point to continued growth in terms of production and reserves for
ARCO, Bowlin said.
ARCO also continued to build scale in core areas, announcing it will trade
its heavy oil holdings in California to Mobil for producing properties and
acreage in the Gulf of Mexico, where they will be owned and operated by Vastar
Resources, Inc., in which ARCO holds an 82.2% interest.
LOW PRICES OFFSET INCREASED PRODUCTION LEVELS
Worldwide, ARCO's exploration and production operations earned $38 million
after tax before net charges of $94 million related primarily to a writedown
of the California heavy oil holdings. In the 1997 third quarter, ARCO's
exploration and production operations earned $288 million after tax, including
a net benefit from special items of $22 million.
ARCO's domestic petroleum liquids prices averaged $8.76 per barrel, down
from $14.10 per barrel last year. At the same time, the company's U.S.
natural gas prices averaged $1.75 per thousand cubic feet (Mcf) compared with
an average of $1.87 per Mcf last year.
ARCO's production on an oil-equivalent basis averaged 1,022,500 barrels
per day in the 1998 third quarter, up 11% from the 1997 third quarter.
Production from the Union Texas Petroleum properties contributed 120,100
barrels of oil equivalent. In addition, production increased at the Rhourde
el Baguel field in Algeria, which reached 50,000 barrels a day gross during
the quarter. Despite the impact of hurricanes in the Gulf of Mexico, Vastar
Resources' natural gas production rose 10% to 977 million cubic feet per day
as a result of increased levels from more than a dozen offshore fields.
REFINING AND MARKETING RESULTS
The company's refining and marketing segment earned $108 million after tax
for the 1998 third quarter, compared with after-tax earnings of $136 million
in the 1997 third quarter. The benefits of a cost savings program in the
refining and marketing operation were more than offset by lower light product
margins.
OTHER OPERATIONS
Other operations, predominantly Lower 48 pipeline and aluminum,
contributed after-tax earnings of $45 million in the 1998 quarter, compared
with $20 million in the 1997 third quarter.
DISCONTINUED OPERATIONS
After-tax earnings from discontinued operations (ARCO's interest in ARCO
Chemical for part of the quarter and Australian coal operations) totaled
$12 million before provision of $90 million for the estimated loss on the
divestment of coal properties.
In the 1997 third quarter, ARCO's discontinued operations (coal operations
and interests in ARCO Chemical and Lyondell Petrochemical Company) earned
$118 million before provision of $100 million in restructuring charges for the
chemical and coal segments.
SPECIAL ITEMS
In summary, ARCO realized a net after-tax benefit of $799 million from
special items in the 1998 third quarter. A gain of $1,088 million from the
sale of ARCO's interest in ARCO Chemical was partially offset by charges for
future environmental remediation, the provision for loss on the coal
divestment and charges associated with the California heavy crude properties.
(Some of the matters discussed in this news release are forward-looking
statements that involve risks and uncertainties. Actual results could differ
materially based on numerous factors, including the realized level of crude
oil and natural gas production and other risks detailed from time to time in
the company's SEC reports, including the 1997 report on Form 10-K.)
ATLANTIC RICHFIELD COMPANY
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
PRELIMINARY
(Millions except
per share amounts) Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
REVENUES (Restated) (Restated)
Sales and other operating
revenues $2,655 $3,494 $7,755 $10,920
Other revenues 146 110 346 358
Total revenues 2,801 3,604 8,101 11,278
EXPENSES
Trade purchases 1,039 1,581 3,096 5,036
Operating expenses 889 808 1,983 2,035
Selling, general and
administrative expenses 187 213 572 597
Depreciation, depletion
and amortization 576 360 1,364 1,047
Exploration expenses
(including undeveloped
leasehold amortization) 135 113 410 329
Taxes other than income taxes 121 147 397 487
Interest(a) 123 114 326 246
Total expenses 3,070 3,336 8,148 9,777
Income (loss) before income
taxes, minority interest
& extraordinary item (269) 268 (47) 1,501
Provision (benefit) for
taxes on income (138) 52 (128) 463
Minority interest in earnings
of subsidiaries 7 9 21 31
Income (loss) from continuing
operations before extraordinary
item (138) 207 60 1,007
Income (loss) from discontinued
operations, net of income taxes
of $97 and $186 (1998) and $(22)
and $45 (1997) (78) 18 98 209
Gain on disposition of ARCO
Chemical stock (net of income
taxes of $1,540 million) 1,088 -- 1,088 --
Gain on disposition of Lyondell
Petrochemical stock (net of
income taxes of $342 million) -- 291 -- 291
Net income before
extraordinary item 872 516 1,246 1,507
Extraordinary item - loss on
extinguishment of debt (net of
income taxes of $74 million) -- -- -- (118)
Net income $872 $516 $1,246 $1,389
Earned per share:
Basic
Continuing operations $(0.43) $0.65 $0.18 $3.13
Discontinued operations 3.14 0.96 3.70 1.56
Extraordinary loss -- -- -- (0.37)
Net income $2.71 $1.61 $3.88 $4.32
Diluted
Continuing operations $(0.42) $0.64 $0.18 $3.08
Discontinued operations 3.09 0.93 3.63 1.52
Extraordinary loss -- -- -- (0.36)
Net income $2.67 $1.57 $3.81 $4.24
Dividends per common share $0.7125 $0.7125 $2.1375 $2.1125
(a) Excludes capitalized interest of $29 million and $11 million for the
three-month periods and $66 million and $25 million for the nine-month
periods ended September 30, 1998 and 1997, respectively.
ATLANTIC RICHFIELD COMPANY
AFTER-TAX SEGMENT EARNINGS
(Unaudited)
PRELIMINARY
(Millions) Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
(Restated) (Restated)
Exploration and production $(56) $288 $143 $1,061
Refining and marketing 108 136 224 250
Other 45 20 98 57
Unallocated expenses (143) (159) (169) (185)
Interest expense (92) (78) (236) (176)
Income (loss) from
continuing operations (138) 207 60 1,007
Discontinued operations (78) 18 98 209
Gain on disposition of stock(a)1,088 291 1,088 291
Extraordinary item - loss on
extinguishment of debt -- -- -- (118)
Net income $872 $516 $1,246 $1,389
(a) 1998: approximate 82% interest in ARCO Chemical Company; 1997: 49.9%
interest in Lyondell Petrochemical Company
SEGMENT OPERATING INCOME
(Unaudited)
(Millions except per share amounts)
Three months ended September 30, 1998
Before
Special Special
Reported Items Items Explanation
Exploration and
production $(56) $(94) $38 Mainly CA property
writedown
Refining and marketing 108 -- 108
Other * 45 17 28 Asset sales
Unallocated expenses (143) (122) (21) Environmental; tax
adjustment
Interest expense (92) -- (92)
Income (loss) from
continuing operations (138) (199) 61
Discontinued
operations ** (78) (90) 12 Loss on coal
divestment
Gain on disposition of
ARCO Chemical stock 1,088 1,088 -- ARCO Chemical
disposition
Total $872 $799 $73
Average shares
outstanding 327.2 327.2
Earned per share $2.67 $0.22
Three months ended September 30, 1997
Before
Special Special
Reported Items Items Explanation
Exploration and
production $288 $22 $266 Mainly U.K. tax rate
change
Refining and marketing 136 -- 136
Other * 20 (3) 23 Restructure
Unallocated expenses (159) (125) (34) Environmental; tax
adjustment
Interest expense (78) -- (78)
Income (loss) from
continuing operations 207 (106) 313
Discontinued operations ** 18 (100) 118 Restructure
Gain on disposition of
Lyondell stock 291 291 -- Lyondell disposition
Total $516 $85 $431
Average shares
outstanding 327.5 327.5
Earned per share $1.57 $1.32
* Consists of ARCO Pipeline (Lower 48 pipelines) and aluminum operations
** Consists of Coal operations and interests in ARCO Chemical and
Lyondell.
ATLANTIC RICHFIELD COMPANY
CONSOLIDATED BALANCE SHEET
PRELIMINARY
(Millions)
September 30, December 31,
1998 1997
(Unaudited) (Restated)
ASSETS
Current assets:
Cash and cash equivalents $1,070 $434
Short-term investments 232 222
Accounts receivable 975 929
Inventories 502 456
Prepaid expenses and other
current assets 307 204
Total current assets 3,086 2,245
Investments and long-term receivables:
Investments accounted for on the
equity method 1,339 763
Other investments and long-term
receivables 742 1,820
2,081 2,583
Net property, plant and equipment 19,499 13,560
Net assets of discontinued operations 692 2,777
Deferred charges and other assets 1,409 1,260
Total assets $26,767 $22,425
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $1,180 $1,456
Accounts payable 1,058 948
Long-term debt due within one year 126 164
Taxes payable 1,893 308
Other 1,078 953
Total current liabilities 5,335 3,829
Long-term debt 4,511 3,619
Deferred income taxes 3,747 2,661
Other deferred liabilities and credits 4,360 3,396
Minority interest 257 240
Stockholders' equity:
Preference stocks 1 1
Common stock 815 807
Capital in excess of par value of stock 851 640
Retained earnings 7,612 7,054
Treasury stock (348) (170)
Accumulated other comprehensive income (374) 348
Total stockholders' equity 8,557 8,680
Total liabilities and stockholders'
equity $26,767 $22,425
ATLANTIC RICHFIELD COMPANY
FINANCIAL AND STATISTICAL DATA
(Unaudited)
PRELIMINARY
(Millions)
Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
(Restated) (Restated)
Additions to fixed assets
Exploration and production
(including dry hole costs) $721 $719 $2,046 $1,531
Refining and marketing 137 95 397 183
Other 7 10 34 28
Total $865 $824 $2,477 $1,742
Exploration and production
Pretax earnings, before
exploration expense:
Alaska $115 $273 $418 $1,083
International (34) 65 (41) 285
Vastar 57 83 234 304
Other Lower 48 operations* (137) 103 (49) 288
1 524 562 1,960
Exploration expense 135 113 410 329
Exploration & production
pretax earnings $(134) $411 $152 $1,631
Pretax exploration expense:
Alaska $4 $6 $32 $33
International 91 65 200 150
Vastar 36 37 168 134
Other Lower 48 4 5 10 12
Total exploration expense ** $135 $113 $410 $329
After-tax exploration and
production earnings (loss)
Alaska $70 $167 $241 $650
International (69) 19 (160) 99
Vastar 37 53 118 174
Other Lower 48 (94) 49 (56) 138
Total $(56) $288 $143 $1,061
* 1998 includes pretax charges of $176 million associated with California
heavy crude properties.
** Includes $3 million and $10 million of costs recovered in the
three-month periods and $13 million and $15 million in the nine-month
periods ended September 30, 1998 and 1997, respectively, under provisions
of production-sharing agreements.
ATLANTIC RICHFIELD COMPANY
FINANCIAL AND STATISTICAL DATA
(Unaudited)
PRELIMINARY
Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
OPERATING STATISTICS
EXPLORATION AND PRODUCTION:
Crude, condensate and NGL
production (net thousand
bbls/day):
United States:
Prudhoe Bay 138.2 155.5 145.8 168.9
Kuparuk 118.9 125.4 124.4 127.0
Greater Point McIntyre 39.5 49.1 41.2 49.9
NGLs / Other 38.0 29.2 34.7 31.5
Total Alaska 334.6 359.2 346.1 377.3
Vastar liquids 44.8 49.6 48.6 51.1
Other Lower 48 liquids 136.4 130.8 138.5 127.6
Total United States 515.8 539.6 533.2 556.0
International:
Indonesia 38.6 20.1 28.9 23.2
United Kingdom 54.4 18.6 28.2 18.6
Venezuela 18.5 -- 6.2 --
Algeria 22.2 16.8 21.2 15.3
NGLs / Other 31.8 25.3 27.0 19.7
Total International (A) 165.5 80.8 111.5 76.8
Total liquids production 681.3 620.4 644.7 632.8
(A) Includes equity
affiliates 6.5 2.6 4.3 1.8
Natural gas production
(million cubic feet
per day - net)
United States:
Vastar 977.2 887.7 940.0 880.5
Other U.S. 186.3 179.0 185.0 178.2
Total United States 1,163.5 1,066.7 1,125.0 1,058.7
International:
United Kingdom 193.4 265.3 311.8 344.6
Indonesia 310.4 320.8 267.1 313.8
Indonesia LNG 193.1 -- 65.1 --
China 139.5 155.1 120.5 151.6
Other 47.1 19.0 28.6 20.8
Total International (B) 883.5 760.2 793.1 830.8
Total natural gas
production 2,047.0 1,826.9 1,918.1 1,889.5
(B)Includes equity
affiliates 55.9 -- 18.8 --
Total production (barrels
of oil equivalent) 1,022.5 924.9 964.4 947.7
ATLANTIC RICHFIELD COMPANY
FINANCIAL AND STATISTICAL DATA
(Unaudited)
PRELIMINARY
Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
OPERATING STATISTICS
Average sales prices
Oil and gas liquids
(per barrel):
Alaska $7.84 $13.26 $8.59 $15.36
Lower 48, including
Vastar $10.47 $15.77 $11.31 $17.03
U.S. composite average
price $8.76 $14.10 $9.55 $15.90
International $10.96 $17.30 $11.62 $18.36
Natural gas (per MCF):
U.S., including Vastar $1.75 $1.87 $1.85 $1.97
International $2.29 $2.51 $2.51 $2.64
Indonesia LNG $2.29 $-- $2.29 $--
REFINING AND MARKETING:
Refinery runs (bbls
per day):
Crude oil 449,700 470,600 453,200 466,400
U.S. petroleum product
sales volumes, including
intersegment sales
(bbls per day):
Gasoline 304,900 298,800 304,800 279,900
Jet fuels 97,100 118,400 106,300 119,900
Distillate fuels 83,500 76,100 79,900 77,300
Other 75,400 79,300 76,100 72,000
Total 560,900 572,600 567,100 549,100
Note To Editors: Vastar Resources, Inc. announced earnings
on October 21.
Contact: Media: Linda Dozier, 00 1 213-486-3738, or Investors: David
De Sonier, 213-486-1811, both for Atlantic Richfield Company
Web site: http://www.arco.com
(ARC VRI)
END
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