HOUSTON, Aug. 1 /PRNewswire/ -- Ocean Energy, Inc. (NYSE: OEI) today
announced that a 22 percent growth in production and favorable commodity
pricing have contributed to an 85 percent increase in year-over-year second
quarter performance. On a recurring basis, net income for the quarter ending
June 30, 2001 was $84 million or $0.47 per diluted share. The quarter
reflects a non-recurring adjustment of $3 million or $0.01 per diluted share
for an extraordinary loss related to the early extinguishment of debt. For
the quarter, net income after non-recurring charges was $81 million or
$0.46 per diluted share on revenues of $356 million as compared to $45 million
or $0.26 per diluted share on revenues of $242 million for the second quarter
of 2000.
"Ocean continues to produce solid investment returns while economically
growing its production base and expanding its deepwater exploratory program,"
said James T. Hackett, chairman, president and chief executive officer. "This
is our fourth successive quarter of increased production, and with new
production from the Nansen and Boomvang deepwater fields in the Gulf of
Mexico, this should continue into 2002."
Average daily production for the quarter was approximately 157 thousand
barrels of oil equivalent with volumes split evenly between oil and gas.
Production grew 10 percent over first quarter 2001. The increase is primarily
attributable to higher production from the Zafiro field in Equatorial Guinea,
exploitation activities of Gulf of Mexico shelf properties as well as two
earlier acquisitions in 2001 of onshore producing properties in Texas and
Louisiana.
Discretionary cash flow for the second quarter was $236 million, compared
to $148 million for the same period in 2000. Discretionary cash flow per
diluted share for the second quarter was $1.32 compared to $0.83 for the same
period in 2000. The year-over-year increase in cash flow was the result of
increased production combined with higher realized gas prices.
Recent operational accomplishments include:
Exploratory success in the deepwater Gulf of Mexico -- Ocean is a
12.75 percent partner in the Trident deepwater prospect in Alaminos Canyon
Block 903 that encountered more than 300 feet of hydrocarbon-bearing pay
section and additional zones of interest. The well is located 185 miles east
of Corpus Christi, Texas, in 9,687 feet of water. Following further
evaluation of the drilling data, appraisal drilling is expected to begin in
early 2002.
In the Magnolia area, two appraisal wells have been drilled with positive
results. Assessment of the drilling data is continuing with plans for the
project to be sanctioned by the end of this year. Ocean holds a 25 percent
working interest in a two-block unit that includes Garden Banks Block 783 and
Garden Banks Block 784.
As one of the most active independents in the deepwater of the Gulf of
Mexico, Ocean holds interests in approximately 1.5 million gross acres of
deepwater leasehold, covering 284 blocks. The company is currently drilling
the Red Hawk prospect in Garden Banks 877, the first well that is a part of a
deepwater exploration agreement with Kerr-McGee Oil & Gas Corp., a wholly
owned subsidiary of Kerr-McGee Corp. (NYSE: KMG). That well is expected to be
followed by the Ocean-operated Titan South prospect in Walker Ridge Block 313
in which the company holds a
50 percent working interest.
In addition, Ocean will operate the appraisal drilling of the Zia prospect
in Mississippi Canyon Block 496 planned to commence in the second half of the
year. The company holds a 65 percent working interest in the well.
The construction of the world's first truss spar for the Nansen field has
been completed in Finland, and the spar has set sail for the Gulf of Mexico.
Initial production from that field is anticipated in the fourth quarter. The
company has successfully logged the Balboa well in East Breaks 597, in which
it holds a 50 percent interest. Production from Balboa will tie into the
nearby Boomvang facility that is scheduled to come on-line in early 2002.
Continued progress in West Africa -- The first prospect in the Kwanza
Basin on Block 24 in Angola was drilled. The 12,300-foot Semba well
encountered two oil-bearing reservoirs that flowed at a combined test rate of
3,039 barrels per day. Ocean's subsidiary, Ocean Angola Corporation, holds a
15 percent interest in the block.
Successful bidder on two deepwater blocks offshore Brazil during the
country's third round oil exploration license -- Ocean was named operator with
a 65 percent working interest in Block BM-C-15 that lies in the Campos Basin
off Brazil. Ocean will hold a 20 percent working interest in a second
deepwater block, BM-S-22, located in the Santos Basin in the southeastern part
of the Brazilian Continental Margin.
Sale of non-core holdings -- As part of its ongoing focus to upgrade its
asset portfolio, the company has executed an agreement to sell certain Rocky
Mountain assets. The transaction is expected to close on or before
August 15, 2001. Ocean also anticipates the divestiture of additional
properties that when combined with the Rockies sale package will total
approximately $50 - 65 million. Total production associated with these
divestitures is estimated at 3,500 barrels of oil equivalent per day for the
fourth quarter.
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 Rocky Mountains, Permian Basin, Arklatex, Anadarko,
East Texas and the Gulf Coast regions. Internationally, Ocean holds a leading
position among U.S. independents in West Africa with oil and gas activities in
Equatorial Guinea, Angola and Cote d'Ivoire. The company also conducts
operations in Egypt, Tatarstan, Brazil, 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, 2000. Actual results may vary materially.
Ocean Energy, Inc.
Condensed Consolidated Statements of Operations
(Amounts in Thousands Except Per Share Data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
Revenues $355,841 $241,874 $759,096 $493,282
Costs of Operations:
Operating expenses 78,557 63,335 153,120 125,495
Depreciation, depletion
and amortization 93,547 72,952 176,002 153,032
General and administrative 8,363 5,950 14,506 15,072
180,467 142,237 343,628 293,599
Operating Profit 175,374 99,637 415,468 199,683
Other (Income) Expense:
Interest expense 17,182 18,866 34,127 38,094
Merger and integration costs --- --- --- 3,273
Interest income and other 1,989 (93) 806 (832)
Income Before Income Taxes 156,203 80,864 380,535 159,148
Income Tax Expense 72,196 35,371 173,144 70,677
Net Income Before
Extraordinary Loss 84,007 45,493 207,391 88,471
Extraordinary Loss, Net
of Income Taxes 2,600 --- 2,600 ---
Net Income 81,407 45,493 204,791 88,471
Preferred Stock Dividends 812 812 1,625 1,625
Net Income Available to Common
Shareholders $80,595 $44,681 $203,166 $86,846
Basic Earnings Per Common Share:
Income Before Extraordinary
Loss $0.49 $0.27 $1.22 $0.52
Net Income to Common
Shareholders $0.47 $0.27 $1.20 $0.52
Diluted Earnings Per Common Share:
Income Before Extraordinary
Loss $0.47 $0.26 $1.16 $0.50
Net Income $0.46 $0.26 $1.15 $0.50
Cash Dividends Declared per
Common Share $0.04 $--- $0.08 $---
Weighted Average Shares
Outstanding:
Basic 169,853 167,217 169,111 167,022
Diluted 178,012 177,484 177,528 176,057
Ocean Energy, Inc.
Condensed Consolidated Balance Sheets
(Amounts in Thousands)
(Unaudited)
June 30, December 31,
2001 2000
Assets:
Current Assets $ 369,337 $ 324,554
Property, Plant and Equipment, Net 2,899,764 2,367,950
Other Assets 56,117 197,896
Total Assets $3,325,218 2,890,400
Liabilities And Shareholders' Equity:
Current Liabilities $ 435,373 $ 393,857
Long-Term Debt 1,194,924 1,032,564
Other Noncurrent Liabilities 309,561 311,291
Shareholders' Equity 1,385,360 1,152,688
Total Liabilities and Shareholders'
Equity $3,325,218 $2,890,400
Ocean Energy, Inc.
Condensed Consolidated Statements of Cash Flows
(Amounts in Thousands)
(Unaudited)
Six Months Ended
June 30,
2001 2000
Operating Activities:
Net income $ 204,791 $ 88,471
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 176,002 153,032
Deferred income taxes 129,859 56,003
Extraordinary loss, net of taxes 2,600 ---
Other 14,152 3,453
Changes in operating assets and
liabilities, net of acquisitions (4,623) (87,982)
Net Cash Provided by Operating Activities 522,781 212,977
Investing Activities:
Capital expenditures (398,073) (251,348)
Acquisition costs, net of cash acquired (234,451) (309)
Proceeds from sales of property,
plant and equipment 591 92,655
Net Cash Used in Investing Activities (631,933) (159,002)
Financing Activities:
Net proceeds from (payments on) borrowings 138,566 (25,957)
Proceeds from exercise of common
stock options 28,747 11,518
Dividends paid (15,118) (1,625)
Premiums paid on debt buy back (3,167) ---
Purchase of treasury stock (5,838) (19,173)
Other --- 1,212
Net Cash Provided by (Used in)
Financing Activities 143,190 (34,025)
Increase in Cash and Cash Equivalents 34,038 19,950
Cash and Cash Equivalents at
Beginning of Period 23,039 64,889
Cash and Cash Equivalents at End of Period $ 57,077 $ 84,839
Ocean Energy, Inc.
Operational Information
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
Financial Data
(Dollars in Thousands):
Operating Profit (Loss):
Oil and Gas Operations $185,558 $107,170 $433,651 $217,920
Corporate (10,184) (7,533) (18,183) (18,237)
Depreciation, Depletion
and Amortization:
Oil and Gas Operations 91,726 71,369 172,325 149,867
Corporate 1,821 1,583 3,677 3,165
Operations Data:
Wells Drilled:
Gross 64 90 163 134
Net 32 50 64 68
Success Rate 83% 72% 87% 78%
Net Daily Barrel of Oil
Equivalent Production 156,958 128,155 150,150 135,311
Net Daily Natural Gas
Production (MMcf):
Domestic 444 344 423 359
Cote d'Ivoire 21 29 21 31
Other International 7 9 7 10
Total 472 382 451 400
Average Natural Gas Prices
($ per Mcf)(*):
Domestic $ 4.63 $ 3.53 $ 5.93 $ 3.03
Cote d'Ivoire $ 2.46 $ 2.47 $ 2.43 $ 2.23
Other International $ 4.60 $ 3.44 $ 5.05 $ 3.45
Weighted Average $ 4.53 $ 3.44 $ 5.75 $ 2.98
Average Natural Gas Prices
Including the Impact of
Financial Derivatives
($ per Mcf) $ 4.64 $ 3.21 $ 5.76 $ 2.89
Net Daily Oil and NGL
Production (MBbl):
Domestic 28 25 28 29
Equatorial Guinea 32 21 30 22
Cote d'Ivoire 4 4 4 4
Egypt 9 9 8 9
Other International 5 5 5 5
Total 78 64 75 69
Average Oil and NGL Prices
($ per Bbl)(*):
Domestic $ 23.73 $ 23.98 $ 25.19 $ 25.30
Equatorial Guinea $ 24.32 $ 27.27 $ 23.19 $ 26.81
Cote d'Ivoire $ 24.38 $ 24.07 $ 23.43 $ 23.91
Egypt $ 25.28 $ 27.20 $ 24.34 $ 26.67
Other International $ 17.51 $ 16.49 $ 16.90 $ 17.46
Weighted Average $ 23.76 $ 24.99 $ 23.64 $ 25.32
Average Oil and NGL Prices
Including the Impact of
Financial Derivatives
($ per Bbl) $ 21.99 $ 22.20 $ 21.26 $ 22.66
(*) All price information excludes the impact of financial derivatives,
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
CONTACT:
financial, Bruce Busmire, +1-713-265-6161, or
media, Janice Aston White, +1-713-265-6164, both of Ocean Energy,
Inc.
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