PITTSBURGH, April 27 /PRNewswire-FirstCall/ -- Equitable Resources,
Inc. (NYSE: EQT) today announced first quarter 2006 earnings per diluted
share (EPS) of $0.59. This compares with EPS of $0.60 from continuing
operations, and EPS of $0.61 including discontinued operations, reported
for the first quarter 2005.
Quarterly Results by Business
Equitable Utilities
Equitable Utilities had operating income for the first quarter of $61.0
million compared to $62.4 million reported for the same period last year.
Overall net operating revenues were $98.9 million compared to $99.3 million
for the first quarter 2005. Distribution net operating revenues were $54.1
million, 19% lower than last year's $66.8 million, as weather was 13%
warmer than normal and 10% warmer than last year, measured by heating
degree days. Use per heating degree day was also lower than the previous
year due to conservation, consistent with high commodity prices.
Pipeline net operating revenues increased by $8.6 million over the
first quarter 2005 to $25.1 million. Equitrans received final approval of
its rate case in the quarter, resulting in net operating revenues of $8.1
million at Pipeline and $1.1 million at Marketing. Provisions of the rate
increase were implemented in September 2004, subject to refund, so a large
percentage of incremental revenues and expenses had been reserved pending
final regulatory approval. Net operating revenues in Marketing were $19.7
million, $3.7 million higher than the first quarter 2005, primarily
attributable to storage asset optimization resulting from high gas price
volatility in the quarter.
Operating expenses increased year over year to $37.8 million from $36.9
million. Higher operating expenses attributable to the rate case settlement
totaled $2.3 million. Excluding the reserve adjustment of $1.7 million
related to the rate case, operating expenses decreased slightly.
Equitable Supply
Equitable Supply had operating income for the quarter of $72.0 million,
10% higher than the $65.4 million earned in the same period last year.
Total revenues were $122.4 million, $9.1 million higher than total
operating revenue of $113.3 million in 2005, primarily due to a 7% increase
in the average well- head sales price and an 11% increase in gathering
revenues as higher gathering rates offset lower gathered volumes.
Production revenues increased $6.4 million quarter over quarter to $95.5
million in 2006 from $89.1 million in 2005 and gathering revenues were $2.7
million higher at $26.9 million, compared with $24.2 million in 2005. Sales
volumes were unchanged as the volumes from recent drilling offset the 0.9
Bcf from wells that were sold in May 2005 and the natural decline of
production from base wells. Excluding property dispositions, sales volumes
were up by 5%. The Company expects to sell between 76 and 77 Bcf of natural
gas in 2006. Gathered volumes declined by 5.9 Bcf or 18%, primarily due to
the transfer of certain regulated gathering facilities to Equitable
Utilities for segment reporting purposes, third-party customer volume
shut-ins caused by extended unexpected maintenance projects on interstate
pipelines and the sale of certain non-core gathering assets in May 2005.
These factors were partially offset by increased gathered volumes for
Equitable Supply production in the quarter.
Operating expenses for the quarter were $50.5 million compared to $47.9
million last year. Production taxes were $2.8 million higher than last
year, selling, general and administrative expenses were $0.7 million
higher, and depreciation, depletion and amortization expenses were $0.5
million higher. Partially offsetting the higher expenses was a reduction in
lease operating expenses of $0.8 million.
During the quarter, the Company drilled 133 wells, compared with the 66
wells for the same period in 2005. The Company expects to drill 550 wells
in 2006.
Other Business
Peoples Gas and Hope Gas Acquisition
On March 2, 2006, Equitable announced that it has entered into a
definitive agreement to acquire Dominion Resources' natural gas
distribution and midstream assets in Pennsylvania and its natural gas
distribution assets in West Virginia for approximately $970 million,
subject to adjustments, in a cash transaction. The Company expects to
receive the required regulatory approvals by the end of 2006. Equitable
will finance the transaction through a combination of equity and debt
issuances and possibly asset sales.
2006 Earnings Guidance
The Company reiterates its 2006 earnings guidance of $1.90 - $2.00 per
diluted share, excluding expenses associated with the purchase of Peoples
Gas and Hope Gas.
Hedging
The approximate volumes and prices of Equitable's hedges for the last
nine months of 2006 through 2008 are:
Swaps 2006** 2007 2008
Total Volume (Bcf) 44 56 54
Average Price per Mcf (NYMEX)* $4.77 $4.74 $4.64
Collars 2006** 2007 2008
Total Volume (Bcf) 5 7 7
Average Floor Price per Mcf (NYMEX)* $7.35 $7.35 $7.35
Average Cap Price per Mcf (NYMEX)* $10.84 $10.84 $10.84
* The above price is based on a conversion rate of 1.05 MMbtu/Mcf
** April through December
Operating Income Reconciliation
The Company reports operating income by segment in this press release.
Both interest and income taxes are controlled on a consolidated, corporate-
wide basis, and are not allocated to the segments.
The following table reconciles operating income by segment as reported
in this press release to the consolidated operating income reported in the
Company's financial statements:
Three Months Ended
March 31,
2006 2005
Operating income (thousands):
Equitable Utilities $61,022 $62,377
Equitable Supply 71,983 65,353
Unallocated expenses (5,348) (534)
Operating Income $127,657 $127,196
The 2006 unallocated expenses are primarily due to executive
compensation. Other segment financial measures identified in this press
release are reconciled to the most comparable financial measures calculated
in accordance with GAAP on the attached operational and financial reports.
Equitrans Rate Case Revenue and Expense Detail
Three Months Ended
March 31, 2006
Reserve Current
Adjustment Period Total
Net Operating Revenue (thousands):
Pipeline $6,112 $1,983 $8,095
Marketing 921 166 1,087
Operating Expenses (1,655) (646) (2,301)
Equitable's teleconference with securities analysts, which begins at
10:30 a.m. Eastern Time today, will be broadcast live via Equitable's
website, http://www.eqt.com and will be available for replay for a seven
day period.
Equitable Resources is an integrated energy company with emphasis on
Appalachian area natural-gas supply, transmission and distribution. For
information please visit http://www.eqt.com
Forward-Looking Statements
Disclosures in this press release contain forward-looking statements.
Statements that do not relate strictly to historical or current facts are
forward-looking. Without limiting the generality of the foregoing, forward-
looking statements contained in this press release specifically include the
expectations of plans, strategies, objectives and growth and anticipated
financial and operational performance of the Company and its subsidiaries,
including guidance regarding the Company's drilling program, production
volumes, capital expenditures and earnings and the pending acquisition of
Peoples Gas and Hope Gas and the financing of that acquisition. A variety
of factors could cause the Company's actual results to differ materially
from the anticipated results or other expectations expressed in the
Company's forward- looking statements. The risks and uncertainties that may
affect the operations, performance and results of the Company's business
and forward- looking statements include, but are not limited to those set
forth under Item 1A, "Risk Factors" of the Company's Form 10-K for the year
ended December 31, 2005.
Any forward-looking statement speaks only as of the date on which such
statement is made and the Company undertakes no obligation to correct or
update any forward-looking statement, whether as a result of new
information, future events or otherwise.
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED)
(Thousands except per share amounts)
Three Months Ended
March 31,
2006 2005
Operating revenues $430,119 $401,276
Cost of sales 208,817 188,731
Net operating revenues 221,302 212,545
Operating expenses:
Operation and maintenance 23,604 23,843
Production 16,119 14,170
Selling, general and administrative 29,705 23,627
Office consolidation impairment charges - 519
Depreciation, depletion and amortization 24,217 23,190
Total operating expenses 93,645 85,349
Operating income 127,657 127,196
Equity in earnings of nonconsolidated
investments 174 89
Other income, net - 1,138
Interest expense 12,957 12,187
Income from continuing operations
before income taxes 114,874 116,236
Income taxes 42,515 41,445
Income from continuing operations 72,359 74,791
Income from discontinued operations,
net of tax of $1,051 - 1,615
Net income $72,359 $76,406
Earnings per share of common stock:
Basic:
Weighted average common shares outstanding 119,579 121,424
Income from continuing operations $0.61 $0.62
Income from discontinued operations - 0.01
Net income $0.61 $0.63
Diluted:
Weighted average common shares outstanding 121,789 124,350
Income from continuing operations $0.59 $0.60
Income from discontinued operations - 0.01
Net income $0.59 $0.61
(A) Due to the seasonal nature of the Company's natural gas distribution
and energy marketing business, and the volatility of gas and oil
commodity prices, the interim statements for the three month period
are not indicative of results for a full year.
EQUITABLE UTILITIES
OPERATIONAL AND FINANCIAL REPORT
Three Months Ended
March 31,
2006 2005
OPERATIONAL DATA
Heating degree days (30-year average: 2,930) 2,538 2,834
Residential sales and transportation
volume (MMcf) 10,205 12,373
Commercial and industrial volume (MMcf) 9,083 10,783
Total throughput (MMcf) - Distribution 19,288 23,156
Net Operating Revenues (thousands):
Distribution (regulated)
Residential $36,519 $43,161
Commercial & industrial 16,079 21,242
Other 1,507 2,389
Total distribution operations 54,105 66,792
Pipeline (regulated) 25,069 16,466
Marketing 19,679 16,012
Total $98,853 $99,270
Operating expenses as a % of net
operating revenues 38.27% 37.16%
Operating income (thousands):
Distribution (regulated) $27,286 $38,327
Pipeline (regulated) 14,198 8,419
Marketing 19,538 15,631
Total $61,022 $62,377
Capital expenditures (thousands) $15,454 $9,787
FINANCIAL DATA (Thousands)
Distribution revenues (regulated) $221,709 $203,730
Pipeline revenues (regulated) 25,397 16,466
Marketing revenues 105,397 96,105
Less: intrasegment revenues (17,805) (17,233)
Total operating revenues 334,698 299,068
Purchased gas costs 235,845 199,798
Net operating revenues 98,853 99,270
Operating expenses:
Operating and maintenance 13,615 13,946
Selling, general and administrative 17,062 16,315
Depreciation, depletion and amortization 7,154 6,632
Total operating expenses 37,831 36,893
Operating income $61,022 $62,377
EQUITABLE SUPPLY
OPERATIONAL AND FINANCIAL REPORT
Three Months Ended
March 31,
2006 2005
OPERATIONAL DATA
Capital expenditures (thousands) $53,912 $88,631
Production:
Total sales volumes (MMcfe) 18,329 18,328
Average (well-head) sales price ($/Mcfe) $5.09 $4.74
Company usage, line loss (MMcfe) 1,253 1,231
Natural gas inventory usage, net (MMcfe) - (51)
Natural gas and oil production (MMcfe) 19,582 19,508
Lease operating expense excluding
production tax ($/Mcfe) $0.28 $0.32
Production taxes ($/Mcfe) $0.55 $0.41
Production depletion ($/Mcfe) $0.62 $0.62
Gathering:
Gathered volumes (MMcfe) 27,282 33,152
Average gathering fee ($/Mcfe) $0.99 $0.73
Gathering and compression expense ($/Mcfe) $0.36 $0.30
Gathering and compression
depreciation ($/Mcfe) $0.14 $0.10
(in thousands)
Production operating income $62,012 $57,283
Gathering operating income 9,971 8,070
Total $71,983 $65,353
Production depletion $12,137 $12,059
Gathering and compression depreciation 3,767 3,324
Other depreciation, depletion
and amortization 942 1,002
Total depreciation, depletion and
amortization $16,846 $16,385
FINANCIAL DATA (Thousands)
Production revenues $95,521 $89,104
Gathering revenues 26,928 24,171
Total revenues 122,449 113,275
Operating expenses:
Lease operating expense excluding
production taxes 5,430 6,235
Production taxes 10,689 7,935
Gathering and compression 9,842 9,896
Selling, general and administrative 7,659 6,952
Office consolidation impairment charges - 519
Depreciation, depletion and amortization 16,846 16,385
Total operating expenses 50,466 47,922
Operating income $71,983 $65,353
SOURCE Equitable Resources, Inc.
 back to top
Related links:
http://www.eqt.com
CONTACT:
Patrick Kane of Equitable Resources, Inc.,
+1-412-553-7833
|
