HOUSTON, Jan. 31 /PRNewswire/ -- Ocean Energy, Inc. (NYSE: OEI) today
announced fourth quarter net income excluding special items of $43 million or
$0.26 per basic share, compared to net loss excluding special items of
$31 million or $0.30 per basic share in the same period last year. Including
the effect of the various special items, net income available to common
shareholders for the fourth quarter of 1999 was $5 million or $0.03 per basic
share versus a loss of $230 million or $2.27 per basic share in fourth quarter
1998.
For the full year, the Company had net income excluding special items of
$50 million or $0.33 per basic share, compared to a loss excluding special
items of $40 million or $0.39 per basic share in 1998. Including the effect of
the various special items, net loss to common shareholders was $47 million or
$0.31 per basic share, compared to a loss of $407 million or $4.04 per basic
share in 1998.
"It was a highly productive and rewarding year for us that may not be
reflected in our financial performance because of special items, primarily
related to restructuring costs associated with the merger with Seagull
Energy," said James T. Hackett, Chairman, President and Chief Executive
Officer. "Ocean is now poised for growth in 2000 as a result of improved cost
efficiencies, a stronger financial position, and an exciting exploratory
inventory to be drilled during the year."
Cash flow from operations before changes in working capital for the
full-year was $336 million, compared to $219 million in 1998. For the fourth
quarter, cash flow from operations before changes in working capital was $121
million, compared to $46 million in 1998.
Total production for the full year increased by more than 26 percent to 53
million barrels of oil equivalent (BOE). Average daily production for the
full year was 422.5 million cubic feet of natural gas and 73,933 barrels of
oil, or 144,332 BOE per day. Average daily production for the fourth quarter
of 1999 was 397.2 million cubic feet of gas and 73,837 barrels of oil, or
140,033 BOE per day, compared to 120,913 BOE per day for the same period in
1998. The production increases are primarily a result of the Seagull
acquisition partially offset by property sales during 1999.
Ocean reported marked improvements in 1999 for lease operating expense
(LOE) including severance tax -- declining to $4.12 per BOE as compared to
$4.38 per BOE in 1998. In the fourth quarter, total LOE was $4.01 per BOE, in
comparison to $4.46 per BOE for the same period of the prior year.
Other significant financial results for the year include:
-- A successful asset rationalization program that exceeded $700 million
in sales.
-- A reduced debt-to-equity ratio from 78% at year-end to 58% at year-end
1999.
-- An improved all-in cost per barrel of $12.57 per BOE down from $13.27
in 1998.
Earlier, Ocean announced reserve replacement of 504% of production and a
finding and development cost of $5.13 per BOE for 1999. It also reported
continued successful appraisal drilling on the Nansen/Boomvang discoveries in
the East Breaks area of the Gulf of Mexico. Ocean believes its estimated net
reserves attributable to the area could exceed its total estimated year 2000
production.
The following is a reconciliation of income (loss) excluding special items
to net income (loss) to common shareholders:
Three Months Ended
December 31, Year Ended December 31,
1999 1998 1999 1998
Income (Loss) (Excluding
Special Items) $42,707 $(30,593) $49,850 $(39,700)
Income (Loss)(Excluding
Special Items) per
Basic Share 0.26 (0.30) 0.33 (0.39)
Effect of Special Items,
Net of Income Tax:
Impairment of Oil and Gas
Properties (A) (11,368) (199,344) (43,168) (334,747)
Merger Expenses (B) (3,667) --- (31,498) (32,886)
Extraordinary Loss (C) (23,413) --- (23,413) ---
Income from Discontinued
Operations 1,205 --- 1,127 ---
(37,243) (199,344) (96,952) (367,633)
Net Income (Loss)
to Common
Shareholders $ 5,464 $(229,937) $ (47,102) $(407,333)
Net Income (Loss)
per Basic Share $ 0.03 $ (2.27) $ (0.31) $ (4.04)
(A) Includes non-cash impairments of Bangladesh, Canada and other
international operations in 1999 and non-cash impairments under full
cost ceiling limitations in 1998.
(B) Includes merger expenses related to the Company's acquisition of
Seagull in 1999 and merger with United Meridian Corporation in 1998.
(C) Includes expenses incurred to repurchase certain senior debt.
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, Midcontinent and Rocky Mountain
regions. Internationally, Ocean explores for and produces oil and gas in West
Africa (Cote d'Ivoire and Equatorial Guinea), Egypt, Russia and Indonesia.
Ocean Energy also has exploration programs underway in Angola, Pakistan and
Yemen.
On March 30, 1999, Ocean Energy, Inc. merged with and into Seagull Energy
Corporation and the resulting company was renamed Ocean Energy, Inc. The
merger was treated for accounting purposes as an acquisition of Seagull by
Ocean Energy in a purchase business transaction. As such, the financial
results presented here for full-year 1998 and for the fourth quarter of 1998
represent Ocean Energy, Inc. on a stand-alone basis.
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, 1998. 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,
1999 1998 1999 1998
Revenues $219,225 $124,816 $735,518 $522,150
Costs of Operations:
Operating expenses 51,703 49,616 216,981 185,076
Depreciation,
depletion and
amortization 83,755 76,186 317,487 293,905
Impairment of oil
and gas properties 17,903 321,523 46,403 539,915
General and
administrative 3,863 5,563 21,901 19,209
157,224 452,888 602,772 1,038,105
Operating Profit (Loss) 62,001 (328,072) 132,746 (515,955)
Other (Income) Expense:
Interest expense 19,480 22,290 106,081 62,852
Merger expense 5,775 --- 49,603 39,000
Interest income and
other (931) 865 (1,314) (1,229)
24,324 23,155 154,370 100,623
Income (Loss) Before
Income Taxes 37,677 (351,227) (21,624) (616,578)
Income Tax Expense
(Benefit) 9,197 (121,744) (72) (209,699)
Income (Loss) from
Continuing Operations 28,480 (229,483) (21,552) (406,879)
Income from Discontinued
Operations, Net of
Income Taxes 1,205 --- 1,127 ---
Income (Loss) Before
Extraordinary Item,
Net of Income Taxes 29,685 (229,483) (20,425) (406,879)
Extraordinary Loss,
Net of Income Taxes (23,413) --- (23,413) ---
Net Income (Loss) 6,272 (229,483) (43,838) (406,879)
Preferred Stock Dividend 808 454 3,264 454
Net Income (Loss)
Available to Common
Shareholders $ 5,464 $(229,937) $(47,102) $(407,333)
Basic Earnings (Loss)
Per Common Share:
Income (Loss) from
Continuing
Operations $ 0.16 $ (2.27) $ (0.16) $ (4.04)
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 $ 0.03 $ (2.27) $ (0.31) $ (4.04)
Diluted Earnings (Loss)
Per Common Share:
Income (Loss) from
Continuing
Operations $ 0.16 $ (2.27) $ (0.16) $ (4.04)
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 $ 0.03 $ (2.27) $ (0.31) (4.04)
Weighted Average Number
of Common Shares
Outstanding:
Basic 166,898 101,182 151,022 100,705
Diluted 168,776 101,182 151,022 100,705
Ocean Energy, Inc.
Condensed Consolidated Balance Sheets
(Amounts in Thousands)
(Unaudited)
December 31, December 31,
1999 1998
Assets:
Current Assets $ 289,950 $ 153,781
Property, Plant and Equipment, Net 2,203,010 1,581,639
Other Assets 290,183 271,540
Total Assets $2,783,143 $2,006,960
Liabilities And Shareholders' Equity:
Current Liabilities $ 381,941 $ 237,182
Long-Term Debt 1,333,410 1,371,890
Other Noncurrent Liabilities 120,097 20,945
Shareholders' Equity 947,695 376,943
Total Liabilities and Shareholders'
Equity $2,783,143 $2,006,960
Ocean Energy, Inc.
Condensed Consolidated Statement Of Cash Flows
(Amounts in Thousands)
(Unaudited)
Year Ended
December 31,
1999 1998
Operating Activities:
Net loss $(43,838) $(406,879)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation, depletion and
amortization 317,487 293,905
Impairment of oil and gas properties 46,403 539,915
Deferred income taxes (48,123) (213,514)
Noncash merger expenses 20,529 ---
Noncash items from discontinued
operations 5,383 ---
Extraordinary loss, net of taxes 23,413 ---
Other 14,894 5,648
336,148 219,075
Changes in operating assets and
liabilities, net of acquisitions (2,397) 10,849
Net Cash Provided By
Operating Activities 333,751 229,924
Investing Activities:
Capital expenditures of
Continuing Operations (362,084) (970,443)
Capital expenditures of
Discontinued Operations (6,942) ---
Acquisition costs, net of
cash acquired (33,169) ---
Proceeds from sales of property,
plant and equipment 704,055 2,054
Net Cash Provided By (Used In)
Investing Activities 301,860 (968,389)
Financing Activities:
Net proceeds (payments) from
revolver and other borrowings (643,251) 699,517
Proceeds from deferred revenue 100,000 ---
Premiums paid to repurchase debt (28,837) ---
Deferred financing costs (6,406) (20,230)
Other (2,934) 58,195
Net Cash Provided By (Used In)
Financing Activities (581,428) 737,482
Increase (Decrease) in Cash
and Cash Equivalents 54,183 (983)
Cash and Cash Equivalents
At Beginning of Year 10,706 11,689
Cash and Cash Equivalents
At End of Year $ 64,889 $ 10,706
Ocean Energy, Inc.
Operational Information
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
Financial Data
(Dollars in Thousands): 1999 1998 1999 1998
Operating Profit (Loss):
Oil and Gas Operations $ 67,543 $(319,748) $ 162,435 $(491,005)
Corporate (5,542) (8,324) (29,689) (24,950)
Depreciation, Depletion
and Amortization:
Oil and Gas Operations 82,076 73,425 309,699 288,164
Corporate 1,679 2,761 7,788 5,741
Operations Data:
Net Daily Natural Gas
Production (MMcf):
Domestic (A) 357.6 269.8 375.9 272.2
Canada (B) --- 33.9 10.5 27.8
Cote d'Ivoire (A) 31.5 25.0 30.3 21.4
Egypt (A) 0.9 --- 0.7 ---
Indonesia (A) 7.2 --- 5.1 ---
Total 397.2 328.7 422.5 321.4
Average Natural Gas Prices
($ per Mcf) (C):
Domestic (A) $ 2.37 $ 1.86 $ 2.11 $ 1.96
Canada (B) $ --- $ 1.60 $ 1.54 $ 1.37
Cote d'Ivoire (A) $ 1.55 $ 1.57 $ 1.68 $ 1.64
Egypt (A) $ 4.47 $ --- $ 3.66 $ ---
Indonesia (A) $ 2.79 $ --- $ 2.37 $ ---
Weighted Average $ 2.32 $ 1.81 $ 2.08 $ 1.89
Average Natural Gas
Prices Including Hedging
Activities ($ per Mcf) $ 2.37 $ 1.80 $ 2.10 $ 1.89
Net Daily Oil and
NGL Production (Bbl):
Domestic (A) 33,326 39,413 37,076 40,165
Canada (B) --- 1,208 351 1,234
Cote d'Ivoire (A) 4,824 3,990 4,835 2,960
Equatorial Guinea 20,537 21,522 20,062 17,910
Egypt (A) 10,500 --- 8,217 ---
Russia (A) 4,575 --- 3,319 ---
Indonesia (A) 75 --- 73 ---
Total 73,837 66,133 73,933 62,269
Average Oil and NGL
Prices ($ per Bbl) (C):
Domestic (A) $ 23.32 $ 11.02 $ 16.94 $ 12.46
Canada (B) $ --- $ 10.94 $ 11.27 $ 11.78
Cote d'Ivoire (A) $ 23.23 $ 11.09 $ 18.24 $ 12.56
Equatorial Guinea $ 23.10 $ 8.99 $ 17.91 $ 11.35
Egypt (A) $ 22.72 $ --- $ 19.32 $ ---
Russia (A) $ 17.59 $ --- $ 12.34 $ ---
Indonesia (A) $ 19.75 $ --- $ 16.14 $ ---
Weighted Average $ 22.81 $ 10.36 $ 17.32 $ 12.13
Average Oil and NGL
Prices Including Hedging
Activities ($ per Bbl) $ 19.55 $ 11.57 $ 15.27 $ 13.21
(A) The Company's Egyptian, Russian and Indonesian operations, and a
portion of its domestic and Cote d'Ivoirian operations were acquired
as a result of the merger on March 30, 1999.
(B) The Company's Canadian operations were sold on April 15, 1999.
(C) All price information excludes the results of hedging activities.
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:
William L. Transier, Executive Vice President
and Chief Financial Officer of Ocean Energy, Inc., 713-265-6161
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