- Production increased 25 percent from prior-year quarter.
- Year-end proved reserves increased 30 percent to 100.3 million BOE for
1998.
- Replaced 382 percent of 1998 production.
- Improved finding costs to $4.44 per BOE in 1998.
- Fourth quarter net loss of $12.5 million, versus net earnings of
$4.6 million in the prior-year quarter.
FORT WORTH, Texas, Feb. 11 /PRNewswire/ -- Snyder Oil Corporation
(NYSE: SNY) today reported that the Company replaced 382 percent of production
and improved its finding costs from all sources to $4.44 per BOE in fiscal
1998, increasing the Company's total proved reserves by 30 percent to more
than 100 million equivalent barrels of oil (MMBOE) at December 31, 1998.
For the fourth quarter of 1998, the Company reported a net loss of
$12.5 million (37 cents per share) compared with net income of $4.6 million
(14 cents per share) for the fourth quarter of 1997. The Company reported a
non-cash property impairment charge of $5.5 million in the fourth quarter of
1998 compared with a $2.2 million charge in the prior-year fourth quarter.
Fourth-quarter 1997 results also included a $5.4 million gain on the sale of
Patina Oil & Gas Corporation.
For the year, the Company reported a net loss of $24.7 million (74 cents
per share) compared with net income of $26.6 million (87 cents per share) for
1997, including special items and Patina's operations. Excluding special
items and Patina's operations, the Company incurred a net loss of
$26.9 million (80 cents per share) in 1998 compared with a net loss of
$4.1 million (13 cents per share) in 1997.
The declines in net income in both the quarter and full-year periods
reflect primarily the negative impact of lower oil and gas prices and higher
exploration expenses. A 26 percent increase in production between years
improved the Company's discretionary cash flow to $66.4 million in 1998,
despite a 21 percent decline in oil and gas prices.
Unless stated otherwise, full-year results in the text of this release
compare ongoing operations and exclude special items and the operations of the
Company's former majority-owned Patina subsidiary, which was sold at the end
of the third quarter 1997. The accompanying tables reflect both the
historically reported amounts along with the special items segregated.
Proved reserve additions totaled 44.1 MMBOE for the year. After
considering negative reserve revisions resulting from lower prices, the
Company replaced 382 percent of its 1998 production of 11.3 MMBOE. The
Company invested $191.1 million in oil and gas operations during 1998.
Finding costs from all sources including revisions decreased 23 percent from
the prior year to $4.44 per BOE in 1998.
The Company ended the year with 490.8 Bcf of natural gas and 18.5 million
barrels of crude oil, condensate and natural gas liquids, or 100.3 MMBOE in
reserves. Approximately 18 percent of the year-end 1998 reserves were
classified as proved undeveloped. During the year, the Company sold 8.8 MMBOE
in proved reserves.
Chairman and Chief Executive Officer John C. Snyder commented, "Our
financial results for the fourth quarter reflect some of the difficult
industry conditions faced in recent months. Nevertheless, our Company
successfully increased production, reduced finding costs and improved our
reserve position while maintaining our financial flexibility."
Average realized oil prices fell 43 percent to $9.65 per barrel in the
fourth quarter 1998 from $16.86 in the prior-year fourth quarter. The average
price for natural gas dropped 31 percent to $1.87 per mcf during the quarter,
compared with $2.70 per mcf a year earlier. A five cent per mcf hedging gain
in the fourth quarter increased realized gas prices to $1.92 per mcf. For the
year, average oil prices fell 40 percent to $11.02 per barrel and natural gas
prices declined 18 percent to $1.87 per mcf. A 13 cent per mcf hedging gain
for the year softened the overall impact of lower gas prices, resulting in a
realized gas price of $2.00 per mcf.
Higher equivalent volumes, driven by the sixth consecutive quarterly
increase in gas production, reflect increased development in the Gulf of
Mexico and ongoing contributions from the Company's Rocky Mountain
development. Exploration spending totaled $13.1 million for the fourth
quarter and $48.3 million for 1998, compared with $4.4 million for the fourth
quarter of 1997 and $16.9 million for all of 1997. Fourth-quarter exploration
expenses included ongoing seismic acquisitions, a previously reported dry hole
expense of approximately $8 million for the Katmai prospect in the Gulf of
Mexico Flex Trend program, and a dry hole at South Timbalier 233 on the
continental shelf in the Gulf.
The Company drilled the Gulf of Mexico Main Pass 259 A-10 Sidetrack #1
during the fourth quarter. The well began production in late January at
10,000 mcf per day gross.
Fourth-quarter exploration activity focused on the northern Louisiana Salt
Basin, where the Company reported successful sidetracking operations in the
100 percent-owned Bozeman #1. A new hole was drilled and pipe set to a depth
of 16,200 feet. All indications from well logs, core samples and gas shows
indicate the probability of a gas discovery, subject to actual testing to
prove or disprove productivity of this complex rock formation. The objective
Troy Lime zone contains an upper reef section of 500 feet and a lower 300
foot-section of reef debris. Completion operations have been delayed by an
exceptional amount of rainfall. Additionally, the Company has decided to
conduct separate testing of individual zones within each section. This
extensive testing is expected to yield beneficial data for future exploitation
of the reef trend, but will require additional time. Presently, an exact time
schedule can not be determined.
A second reef test, the Frazier #1, began drilling late in the fourth
quarter and currently is below 10,000 feet. The Company is the operator and
owns a one-third interest in the well, which is located five miles southwest
of the Bozeman #1 in Winn Parish.
The Company announced in January the pending merger with Santa Fe Energy
Resources (NYSE: SFR) creating Santa Fe Snyder Corporation. The merger is
subject to shareholder approvals, customary closing conditions and regulatory
approvals. Completion of the merger is anticipated in the second quarter of
1999.
Snyder Oil Corporation is engaged in the production, development,
acquisition and exploration of domestic oil and gas properties, primarily in
the Gulf of Mexico, the Rocky Mountains and northern Louisiana. The Company
also has investments in two international exploration and production
companies, SOCO International plc and Cairn Energy plc. The Company's shares
are traded on the New York Stock Exchange under the symbol "SNY." The
Company's news releases and other information can be found on the Internet at
http://www.snyderoil.com.
SNYDER OIL CORPORATION
(In thousands, except per share and price data)
Three Months Ended Ended December 31,
1998 1997
Oil and gas sales $33,165 $38,224
Cash expenses
Direct operating 10,118 8,872
General and administrative 4,207 4,373
Financing costs, net 4,085 2,381
Other (income) expense 1,078 12
Preferred dividends -- 1,330
Discretionary cash flow 13,677 21,256
Depletion, depreciation and amortization 14,276 11,588
Property impairments 5,497 2,150
Exploration 13,111 4,444
(19,207) 3,074
Current income tax expense -- 475
Deferred income tax expense (benefit) (6,722) 849
Net income (loss) before special items (12,485) 1,750
Special items (net of deferred taxes)
Gains on sales of properties 3 27
Gain on sale of subsidiary interest -- 2,807
Net income (loss) applicable to common $(12,482) $4,584
Net income (loss) per common share $(.37) $.14
Discretionary cash flow per common share $.41 $.66
Weighted average shares outstanding 33,339 31,975
SUMMARY OPERATIONS DATA
Oil production (Bbl/day) 5,024 5,295
Gas production (Mcf/day) 162,818 123,180
Equivalent barrels (BOE/day) 32,160 25,825
Equivalent cubic feet (Mcfe/day) 192,962 154,949
Average oil price (per Bbl) $9.65 $16.86
Average gas price (per Mcf) $1.92 $2.65
Average price per BOE $11.21 $16.09
Year Ended December 31,
Excluding As
Patina Reported
1998 1997 1997
SUMMARY STATEMENT OF OPERATIONS
Oil and gas sales $133,204 $133,851 $207,216
Cash expenses
Direct operating 38,492 35,016 48,523
General and administrative 16,440 16,566 20,363
Financing costs, net 13,350 10,556 23,029
Other (income) expense (1,511) 1,301 623
Preferred dividends -- 5,978 5,978
Discretionary cash flow 66,433 64,434 108,700
Depletion, depreciation
and amortization 53,950 43,599 79,862
Property impairments 5,497 7,275 7,275
Exploration 48,303 16,926 17,046
(41,317) (3,366) 4,517
Current income tax expense -- 975 975
Deferred income tax benefit (14,460) (277) (277)
Net income (loss)
before special items (26,857) (4,064) 3,819
Special items
(net of deferred taxes)
Gains on sales of
equity interests
in investees -- 21,320 21,320
Gains on sales of properties 2,124 5,660 5,660
Gain on sale of
subsidiary interest -- 2,807 2,807
Extraordinary item,
net of tax -- (2,848) (2,848)
Minority interest
in subsidiaries -- (616) (4,119)
Net income (loss)
applicable to common $(24,733) $22,259 $26,639
Net income (loss)
per common share $(.74) $.73 $.87
Discretionary cash flow
per common share $1.99 $2.11 $3.55
Weighted average shares
outstanding 33,416 30,588 30,588
SUMMARY OPERATIONS DATA
Oil production (Bbl/day) 5,231 5,617 9,561
Gas production (Mcf/day) 153,982 113,361 168,873
Equivalent barrels (BOE/day) 30,895 24,510 37,707
Equivalent cubic feet
(Mcfe/day) 185,368 147,061 226,240
Average oil price (per Bbl) $11.02 $18.24 $18.88
Average gas price (per Mcf) $2.00 $2.33 $2.29
Average price per BOE $11.81 $14.96 $15.06
December 31, December 31,
1998 1997
SUMMARY BALANCE SHEET DATA
Current assets $35,555 $113,875
Investments 23,983 143,066
Oil & gas properties and other long-term assets 374,399 289,147
$433,937 $546,088
Current liabilities $73,268 $57,549
Long-term debt 212,788 173,636
Other noncurrent liabilities 19,427 51,147
Stockholders' equity 128,454 263,756
$433,937 $546,088
This release contains certain forward-looking statements which are based
on assumptions which the Company believes are reasonable, but which are
subject to a wide range of uncertainties and business risks. Factors that
could cause actual results to differ materially from those anticipated are
discussed in the Company's periodic filings with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the year ended
December 31, 1997.
SOURCE Snyder Oil Corporation
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Related links:
http://www.snyderoil.com
Company News On-Call:
http://www.prnewswire.com/comp/118962.html or fax,
800-758-5804, ext. 118962
CONTACT:
Rodney L. Waller of Snyder Oil Corporation,
817-882-5937
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