PITTSBURGH, Oct. 25 /PRNewswire-FirstCall/ -- Equitable Resources, Inc.
(NYSE: EQT) today announced third quarter 2007 earnings of $0.27 per
diluted share on net income of $32.9 million. This compares with diluted
earnings of $0.26 per share on net income of $31.8 million in the third
quarter of 2006.
Quarterly Results by Business
Equitable Supply
Equitable Supply had operating income for the quarter of $62.2 million,
slightly lower than the $63.2 million earned in the same period last year.
Production revenues were $93.4 million, essentially unchanged from the
third quarter 2006 as slightly lower reported volumes were offset by a
higher average well-head price. Production sales volumes decreased by 0.5
Bcfe to 19.0 Bcfe as volumes from new wells were more than offset by 1.2
Bcfe from wells sold in the second quarter of 2007 and by normal declines.
The average well-head sales price increased by 3% to $4.78 per Mcfe.
Gathering operating income was $6.3 million, $3.2 million lower than
the third quarter 2006. The decrease in operating income was a result of
the gathering asset contribution to Nora Gathering, LLC. Gathered volumes,
gathering revenues and gathering-related expenses related to the Nora Field
gathering activities are no longer included in Equitable Supply's operating
results. The Company reported Equity in Earnings of $1.3 million from its
ownership in Nora Gathering, LLC.
Total operating expenses for the 2007 third quarter totaled $55.0
million compared to $57.8 million in the 2006 third quarter. The decrease
is primarily attributable to lower expenses due to the Nora Field
transaction and lower selling, general and administrative expenses related
to reserves established in the third quarter 2006 for royalty disputes and
legal expenses, partially offset by higher depreciation, depletion and
amortization.
Equitable Utilities
Equitable Utilities had operating income for the third quarter of $4.1
million compared to $4.0 million reported for the same period last year.
Net operating revenues for the three months ended September 30, 2007 were
$40.9 million compared to $39.7 million for the same period last year, as
higher Marketing net revenues resulting from storage optimization were
partially offset by lower distribution and pipeline net revenues.
Total operating expenses for the quarter were $36.8 million, $1.1
million higher than the $35.7 million reported during the same period last
year. Increases in general overhead and operating and maintenance costs
were partially offset by a reduction of expenses incurred in connection
with the transition planning for the pending acquisition of Peoples Natural
Gas and Hope Gas. Equitable incurred $1.3 million of costs associated with
transition planning for Peoples and Hope in the quarter, $2.4 million less
than in the third quarter of 2006.
Other Business
Roaring Fork Field
In September 2007, the Company purchased 12.3 Bcf of proved reserves in
the Equitable operated Roaring Fork Field in Virginia, consisting of
approximately 10.1 Bcf of proved developed reserves and approximately 2.2
Bcf of proved undeveloped reserves, for $28.5 million. The purchase
increased the Company's working interest by 13.5% to approximately 97.0%.
Hedging
There was no change to the Company's hedge position during the quarter.
The approximate volumes and prices of Equitable's hedges for the last three
months of 2007 through 2009 are:
2007** 2008 2009
Swaps
Total Volume (Bcf) 13 50 37
Average Price per Mcf (NYMEX)* $4.72 $4.62 $5.91
Collars
Total Volume (Bcf) 3 10 10
Average Floor Price per Mcf (NYMEX) *$7.61 $7.61 $ 7.61
Average Cap Price per Mcf (NYMEX) *$11.27 $11.27 $11.27
* The above price is based on a conversion rate of 1.05 MMbtu/Mcf
**October through December
Operating Income
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 Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Operating income (thousands):
Equitable Supply $62,166 $63,230 $188,203 $200,656
Equitable Utilities 4,107 3,969 84,185 78,858
Unallocated expenses (8,905) (6,064) (54,647) (16,603)
Operating Income $57,368 $61,135 $217,741 $262,911
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.
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 seven days.
Equitable Resources is an integrated energy company with emphasis on
Appalachian area natural gas supply, gathering, processing, transmission
and distribution. For information, please visit Equitable's website,
http://www.eqt.com.
Equitable Resources management speaks to investors from time to time.
Slides for these discussions will be available online via Equitable's
website. The slides are updated periodically.
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 programs and
initiatives, infrastructure projects, production and sales volumes,
marketing revenues and margins, executive compensation, capital
expenditures, the pending acquisition of The Peoples Natural Gas Company
and Hope Gas, Inc. and the financing of that acquisition and the Company's
move to a holding company structure. 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 most recently filed Form 10-K.
Any forward-looking statement speaks only as of the date on which such
statement is made and the Company does not intend 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 Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Operating revenues $226,806 $232,801 $976,592 $914,127
Cost of sales 68,722 72,155 405,687 367,085
Net operating
revenues 158,084 160,646 570,905 547,042
Operating expenses:
Operation and
maintenance 25,602 25,282 78,614 74,252
Production 16,009 16,176 48,646 47,965
Selling, general and
administrative 32,198 32,904 143,978 90,659
Office consolidation
impairment charges - - - (2,908)
Depreciation,
depletion and
amortization 26,907 25,149 81,926 74,163
Total operating
expenses 100,716 99,511 353,164 284,131
Operating income 57,368 61,135 217,741 262,911
Gain on sale of
assets, net - - 119,401 -
Other income 2,204 489 5,530 886
Equity in earnings of
nonconsolidated
investments 1,423 70 2,198 120
Interest expense 11,557 12,779 35,604 36,128
Income before income
taxes 49,438 48,915 309,266 227,789
Income taxes 16,513 17,120 112,380 79,726
Net income $32,925 $31,795 $196,886 $148,063
Earnings per share of
common stock:
Basic:
Weighted average
common shares
outstanding 121,380 120,172 121,319 119,929
Net income $0.27 $0.26 $1.62 $1.23
Diluted:
Weighted average
common shares
outstanding 122,838 122,103 122,818 121,961
Net income $0.27 $0.26 $1.60 $1.21
(A) Due to the seasonal nature of the Company's natural gas distribution
and energy marketing business, and the volatility of gas and oil
commodity prices, the interim statements for the three and nine month
periods are not indicative of results for a full year.
EQUITABLE SUPPLY
OPERATIONAL AND FINANCIAL REPORT
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
OPERATIONAL DATA
Production:
Natural gas and oil
production (MMcfe) 20,636 20,852 62,076 60,815
Company usage, line
loss (MMcfe) (1,684) (1,410) (4,383) (3,929)
Total sales volumes
(MMcfe) 18,952 19,442 57,693 56,886
Average (well-head)
sales price ($/Mcfe) $4.78 $4.66 $4.85 $4.82
Lease operating expense
excluding production
taxes ($/Mcfe) $0.34 $0.32 $0.33 $0.30
Production taxes
($/Mcfe) $0.44 $0.45 $0.46 $0.48
Production depletion
($/Mcfe) $0.70 $0.62 $0.70 $0.62
Gathering:
Gathered volumes
(MMcfe) 20,352 26,723 73,462 80,273
Average gathering
fee ($/Mcfe) $1.17 $1.05 $1.12 $1.02
Gathering and
compression expense
($/Mcfe) $0.54 $0.42 $0.48 $0.39
Gathering and
compression
depreciation ($/Mcfe) $0.17 $0.14 $0.16 $0.14
(in thousands)
Production operating
income $55,885 $53,690 $163,109 $172,357
Gathering operating
income 6,281 9,540 25,094 28,299
Total operating
income $62,166 $63,230 $188,203 $200,656
Production depletion $14,440 $12,888 $43,509 $37,619
Gathering and
compression
depreciation 3,496 3,811 11,723 11,399
Other depreciation,
depletion and
amortization 1,445 1,083 4,246 3,059
Total depreciation,
depletion and
amortization $19,381 $17,782 $59,478 $52,077
Capital expenditures
(thousands) $175,012 $82,580 $470,486 $204,961
FINANCIAL DATA (Thousands)
Production revenues $93,428 $92,949 $287,669 $281,141
Gathering revenues 23,726 28,042 82,626 81,626
Total operating
revenues 117,154 120,991 370,295 362,767
Operating expenses:
Lease operating
expenses excluding
production taxes 6,949 6,753 20,235 18,543
Production taxes 9,060 9,423 28,411 29,422
Gathering and
compression 10,891 11,123 35,512 31,547
Selling, general
and administrative 8,707 12,680 38,456 30,522
Depreciation, depletion
and amortization 19,381 17,782 59,478 52,077
Total operating
expenses 54,988 57,761 182,092 162,111
Operating income $62,166 $63,230 $188,203 $200,656
Gain on sale of assets,
net $- $- $119,401 $-
Equity in earnings of
nonconsolidated
investments $1,379 $71 $2,085 $53
EQUITABLE UTILITIES
OPERATIONAL AND FINANCIAL REPORT
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
OPERATIONAL DATA
Heating degree days
(30-year average:
Qtr: 124; YTD: 3,759) 65 123 3,530 3,226
Residential sales and
transportation
volumes (MMcf) 1,284 1,307 16,535 14,168
Commercial and industrial
volumes (MMcf) 3,903 4,109 19,541 17,859
Total throughput
(MMcf) - Distribution 5,187 5,416 36,076 32,027
Net operating revenues
(thousands):
Distribution
Residential $12,017 $11,887 $72,285 $65,054
Commercial & industrial 5,693 7,026 31,203 29,694
Other 1,901 2,487 5,892 5,691
Total Distribution 19,611 21,400 109,380 100,439
Pipeline 14,216 15,377 46,659 54,314
Marketing 7,103 2,878 44,571 29,522
Total net operating
revenues $40,930 $39,655 $200,610 $184,275
Operating income (thousands):
Distribution
(regulated) $(6,674) $(4,043) $23,587 $25,528
Pipeline (regulated) 4,443 5,595 18,363 24,943
Marketing 6,338 2,417 42,235 28,387
Total operating income $4,107 $3,969 $84,185 $78,858
Capital expenditures
(thousands) $23,200 $16,265 $61,104 $45,094
FINANCIAL DATA (Thousands)
Distribution revenues
(regulated) $37,467 $39,330 $319,436 $322,633
Pipeline revenues
(regulated) 14,777 15,782 48,063 55,418
Marketing revenues 86,777 81,477 312,425 262,714
Less: intrasegment
revenues (11,028) (10,986) (36,707) (41,437)
Total operating
revenues 127,993 125,603 643,217 599,328
Purchased gas costs 87,063 85,948 442,607 415,053
Net operating revenues 40,930 39,655 200,610 184,275
Operating expenses:
Operating and
maintenance 14,754 14,037 43,238 42,294
Selling, general and
administrative 14,925 14,494 51,727 44,039
Office consolidation
impairment charges - - - (2,396)
Depreciation, depletion
and amortization 7,144 7,155 21,460 21,480
Total operating
expenses 36,823 35,686 116,425 105,417
Operating income $4,107 $3,969 $84,185 $78,858
SOURCE Equitable Resources, Inc.
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Related links:
http://www.eqt.com
CONTACT:
Patrick Kane of Equitable Resources, Inc.,
+1-412-553-7833
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