HOUSTON, Jan. 25 /PRNewswire/ -- Ocean Energy, Inc. (NYSE: OEI) today
announced its best financial performance ever with 2000 net income of
$228 million or $1.31 per diluted share, excluding special items, on revenues
of $1.1 billion. This represents more than a three-fold increase over 1999
net income of $53 million or $0.33 per diluted share, excluding special items.
Fourth quarter net income also reached record levels for the period with
net income of $80 million or $0.46 per diluted share, excluding impairment of
oil and gas properties in Yemen. This compares to net income excluding
special items of $44 million or $0.26 per diluted share for the fourth quarter
of 1999.
"The year 2000 was an outstanding one, both operationally and financially,
with record reserve replacement, lower finding and development costs for the
second year in a row, and continued strengthening of our balance sheet," said
James T. Hackett, Chairman, President and Chief Executive Officer. "During
2001 we will launch one of the industry's most active deepwater programs with
plans to drill from 24 to 28 deepwater exploratory and development wells in
the Gulf of Mexico and West Africa. These efforts coupled with the
exploitation opportunities from our existing properties will serve as a
platform for accelerated future growth."
Discretionary cash flow (income from continuing operations before DD&A,
impairments, deferred taxes and other non-cash operating activities) for the
full year was $698 million, compared to $364 million in 1999. Discretionary
cash flow per diluted share for 2000 was $3.99 compared to $2.41 for the
previous year. For the fourth quarter, discretionary cash flow was
$209 million, compared to $121 million in 1999. Discretionary cash flow per
diluted share for the period totaled $1.19 compared to $0.72 in the prior
fourth quarter.
Total production for the full year was 50 million barrels of oil
equivalent (BOE). Average daily production for the full year was 407 million
cubic feet of natural gas and 67,627 barrels of oil, or 135,388 BOE per day.
Average daily production for the fourth quarter was 418 million cubic feet of
gas and 69,830 barrels of oil, or 139,439 BOE per day. This amount represents
a six percent increase from the prior quarter and the second consecutive
quarter of higher daily production.
Significant results for the year include:
-- Almost tripled 2000 production with new reserves. Ocean ended the
year with a 269 percent reserve replacement rate and a finding and
development cost of $4.28 per barrel of oil equivalent.
-- Achieved investment grade status from Standard and Poor's and Moody's
Investor Services after decreasing debt-to-total capitalization ratio
from 58 percent to 47 percent. The improvement in the debt ratio will
cut projected annual interest expense in 2001 to nearly half of 1999
levels.
-- Completed a total of 287 wells, with an 80 percent success rate. Of
that number, 52 were exploratory and 235 were development wells. The
exploratory program was marked with favorable results especially in
deepwater Gulf of Mexico, where Ocean is developing with its partners
the Nansen and Boomvang fields in the East Breaks area. Also, Ocean
and another partner announced the standalone commerciality of the
Magnolia deepwater prospect in the Garden Banks Block 783.
-- Strengthened position as one of the premier operators among
independents in West Africa. With the ongoing development of the
Zafiro field offshore Equatorial Guinea and the installation of the
Jade Platform, Ocean owns a 23.75 percent working interest in
27 producing wells operating at a rate of more than 130,000 barrels of
oil per day from the area. In 2001, the company plans to drill four
to six high-impact exploratory wells off the coast of West Africa that
will significantly contribute to its worldwide exposure of more than
3 billion net unrisked barrels of oil equivalent over the next two
years.
The following is a reconciliation of net income excluding special items to
net income (loss):
Three Months Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
Net Income (Excluding Special
Items) $ 79,907 $ 43,515 $ 228,373 $ 53,114
Net Income (Excluding Special
Items) per Diluted Share 0.46 0.26 1.31 0.33
Effect of Special Items, Net of
Income Tax:
Impairment of Oil and Gas
Properties (13,043) (11,368) (13,043) (43,168)
Merger and Integration Costs --- (3,667) (2,127) (31,498)
Extraordinary Loss --- (23,413) --- (23,413)
Income from Discontinued
Operations --- 1,205 --- 1,127
(13,043) (37,243) (15,170) (96,952)
Net Income (Loss) $ 66,864 $ 6,272 $ 213,203 $ (43,838)
Net Income (Loss) per
Diluted Share $ 0.38 $ 0.03 $ 1.22 $ (0.31)
As a result of the consensus on Emerging Issues Task Force Issue 00-10,
Accounting for Shipping and Handling Fees and Costs, Ocean restated all
periods to reflect transportation expenses incurred as operating expenses,
instead of as a deduction from revenues as previously recorded. While this
restatement had no effect on net income, it did increase revenues and
operating expenses by $24 million and $22 million for the year ended
December 31, 2000 and 1999, respectively, and $6 million and $7 million for
the fourth quarter of 2000 and 1999, respectively.
Ocean Energy, Inc. is an independent energy company engaged in the
exploration, development, production, and acquisition of crude oil and natural
gas. North American operations are focused in the shelf and deepwater areas
of the Gulf of Mexico, the Permian Basin, Mid-continent and Rocky Mountain
regions. Internationally, Ocean holds a leading position among U.S.
independents in West Africa with oil and gas activities in Equatorial Guinea,
Cote d'Ivoire and Angola. The company also conducts operations in the
republics of Egypt, Tatarstan, Pakistan, and Indonesia.
Certain statements in this news release regarding future expectations,
plans for acquisitions, dispositions, and oil and gas reserves, exploration,
development, production and pricing may be regarded as "forward-looking
statements" within the meaning of the Securities Litigation Reform Act. They
are subject to various risks, such as operating hazards, drilling risks, the
inherent uncertainties in interpreting engineering data relating to
underground accumulations of oil and gas, as well as other risks discussed in
detail in the Company's SEC filings, including the Annual Report on Form 10-K
for the year ended December 31, 1999. Actual results may vary materially.
Ocean Energy, Inc.
Condensed Consolidated Statements Of Operations
(Amounts in Thousands Except Per Share Data)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
Revenues $ 312,436 $ 225,753 $1,073,554 $ 757,565
Costs of Operations:
Operating expenses 67,310 58,231 256,882 239,028
Depreciation, depletion
and amortization 81,465 83,755 311,383 317,487
Impairment of oil and
gas properties 20,066 17,903 20,066 46,403
General and administrative 7,360 3,863 28,663 21,901
176,201 163,752 616,994 624,819
Operating Profit 136,235 62,001 456,560 132,746
Other (Income) Expense:
Interest expense 17,215 19,480 75,065 106,081
Merger and integration
costs --- 5,775 3,273 49,603
Interest income and other 1,878 (931) 132 (1,314)
Income (Loss) Before
Income Taxes 117,142 37,677 378,090 (21,624)
Income Tax Expense (Benefit) 50,278 9,197 164,887 (72)
Income (Loss) from
Continuing Operations 66,864 28,480 213,203 (21,552)
Income from Discontinued
Operations, Net of
Income Taxes --- 1,205 --- 1,127
Income (Loss) Before
Extraordinary Loss 66,864 29,685 213,203 (20,425)
Extraordinary Loss,
Net of Income Taxes --- (23,413) --- (23,413)
Net Income (Loss) 66,864 6,272 213,203 (43,838)
Preferred Stock Dividend 813 808 3,250 3,264
Net Income (Loss) Available
to Common Shareholders $ 66,051 $ 5,464 $ 209,953 $ (47,102)
Basic Earnings (Loss)
Per Common Share:
Income (Loss) from
Continuing Operations $ 0.39 $ 0.16 $ 1.26 $ (0.16)
Income from Discontinued
Operations, Net of
Income Taxes --- 0.01 --- 0.01
Extraordinary Loss,
Net of Income Taxes --- (0.14) --- (0.16)
Income (Loss) to
Common Shareholders $ 0.39 $ 0.03 $ 1.26 $ (0.31)
Diluted Earnings (Loss)
Per Common Share:
Income (Loss) from
Continuing Operations $ 0.38 $ 0.16 $ 1.22 $ (0.16)
Income from Discontinued
Operations, Net of
Income Taxes --- 0.01 --- 0.01
Extraordinary Loss,
Net of Income Taxes --- (0.14) --- (0.16)
Net Income (Loss) $ 0.38 $ 0.03 $ 1.22 $ (0.31)
Weighted Average Number of
Common Shares Outstanding:
Basic 167,372 166,898 167,144 151,022
Diluted 175,278 168,776 174,749 151,022
Ocean Energy, Inc.
Condensed Consolidated Balance Sheets
(Amounts in Thousands)
(Unaudited)
December 31, December 31,
2000 1999
Assets:
Current Assets $ 324,554 $ 289,950
Property, Plant and Equipment, Net 2,367,950 2,203,010
Other Assets 197,896 290,183
Total Assets $ 2,890,400 $ 2,783,143
Liabilities And Shareholders' Equity:
Current Liabilities $ 393,857 $ 381,941
Long-Term Debt 1,032,564 1,333,410
Other Noncurrent Liabilities 311,291 120,097
Shareholders' Equity 1,152,688 947,695
Total Liabilities and Shareholders' Equity $ 2,890,400 $ 2,783,143
Ocean Energy, Inc.
Condensed Consolidated Statements Of Cash Flows
(Amounts in Thousands)
(Unaudited)
Year Ended
December 31,
2000 1999
Operating Activities:
Net income (loss) $ 213,203 $ (43,838)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation, depletion and amortization 311,383 317,487
Impairment of oil and gas properties 20,066 46,403
Deferred income taxes 142,746 (48,123)
Noncash merger and integration costs --- 20,529
Extraordinary item, net of taxes --- 23,413
Other 6,912 20,277
Changes in operating assets and liabilities,
net of acquisitions (108,604) (2,397)
Net Cash Provided By Operating Activities 585,706 333,751
Investing Activities:
Capital expenditures of continuing operations (577,518) (362,084)
Capital expenditures of discontinued operations --- (6,942)
Acquisition costs, net of cash acquired (5,598) (33,169)
Proceeds from sales of property, plant
and equipment 86,043 704,055
Other (9,295) ---
Net Cash Provided By (Used In)
Investing Activities (506,368) 301,860
Financing Activities:
Net proceeds from (payments on) borrowings (252,879) (643,251)
Increase in deferred revenue 74,947 100,000
Proceeds from conveyance of Section 29 credit
properties 69,644 ---
Purchase of treasury stock (32,217) (2,840)
Proceeds from exercise of common stock options 21,355 2,813
Premiums paid to repurchase debt --- (28,837)
Deferred financing costs --- (6,406)
Other (2,038) (2,907)
Net Cash Used In Financing Activities (121,188) (581,428)
Increase (Decrease) in Cash and Cash Equivalents (41,850) 54,183
Cash and Cash Equivalents At Beginning of Period 64,889 10,706
Cash and Cash Equivalents At End of Period $ 23,039 $ 64,889
Ocean Energy, Inc.
Operational Information
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
Financial Data (Dollars
in Thousands):
Operating Profit (Loss):
Oil and Gas Operations $ 145,177 $ 67,543 $ 491,630 $ 162,435
Corporate $ (8,942) $ (5,542) $ (35,070) $ (29,689)
Depreciation, Depletion
and Amortization:
Oil and Gas Operations $ 79,883 $ 82,076 $ 304,976 $ 309,699
Corporate $ 1,582 $ 1,679 $ 6,407 $ 7,788
Operations Data:
Wells Drilled:
Gross 46 47 287 253
Net 22 28 155 153
Success Rate 91% 78% 80% 78%
Net Daily Natural Gas
Production (MMcf):
Domestic 389 358 374 376
Cote d'Ivoire 18 31 23 30
Other International 11 8 10 17
Total 418 397 407 423
Average Natural Gas Prices
($ per Mcf) (A):
Domestic $ 5.30 $ 2.56 $ 3.95 $ 2.26
Cote d'Ivoire $ 2.67 $ 1.55 $ 2.28 $ 1.68
Other International $ 4.53 $ 2.97 $ 3.86 $ 1.89
Weighted Average $ 5.17 $ 2.49 $ 3.85 $ 2.21
Average Natural Gas Prices
Including Hedging Activities
($ per Mcf) $ 4.49 $ 2.54 $ 3.54 $ 2.23
Net Daily Oil and NGL
Production (Bbl):
Domestic 25,814 33,326 27,254 37,076
Equatorial Guinea 27,329 20,537 22,798 20,062
Cote d'Ivoire 3,397 4,824 3,849 4,835
Egypt 7,986 10,500 8,820 8,217
Other International 5,304 4,650 4,906 3,743
Total 69,830 73,837 67,627 73,933
Average Oil and NGL Prices
($ per Bbl) (A):
Domestic $ 26.74 $ 23.40 $ 25.85 $ 17.06
Equatorial Guinea $ 25.13 $ 23.10 $ 26.06 $ 17.91
Cote d'Ivoire $ 20.34 $ 23.23 $ 24.15 $ 18.24
Egypt $ 25.38 $ 22.72 $ 26.61 $ 19.32
Other International $ 22.69 $ 17.64 $ 20.14 $ 12.32
Weighted Average $ 25.34 $ 22.54 $ 25.51 $ 17.38
Average Oil and NGL Prices
Including Hedging Activities
($ per Bbl) $ 21.76 $ 19.58 $ 22.11 $ 15.33
(A) All price information excludes the results of hedging activities,
unless otherwise stated.
SOURCE Ocean Energy, Inc.
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Related links:
http://www.oceanenergy.com
Company News On-Call:
http://www.prnewswire.com/comp/913463.html or fax,
800-758-5804, ext. 913463
CONTACT:
financial, Bruce Busmire, 713-265-6161, or
media, Janice Aston White, 713-265-6164, both of Ocean Energy,
Inc.
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