|
|
| Seven Seas Reports Third Quarter 2001 Results; Enters Into Contract to Protect Against Oil Price Decline |
HOUSTON, Nov. 14 /PRNewswire/ -- Seven Seas Petroleum Inc. (Amex: SEV) announced today results for the three months and nine months ended September 30, 2001. For the third quarter of 2001, the Company reported a net loss of $1.4 million or $0.04 per share, as compared with a net loss of $0.2 million or $0.01 per share in the third quarter of 2000. For the first nine months of 2001, the Company reported a net loss of $3.5 million or $0.09 per share, as compared with a net loss of $4.6 million or $0.12 per share in the first nine months of 2000. Revenue from oil sales of 222,000 barrels increased $3.4 million in the third quarter of 2001 to $4.6 million from $1.2 million in second quarter 2001. This increase was a result of a net 148,000-barrel increase in oil sales during the third quarter. Third quarter 2001 revenues exceeded the Company's previous record of $3.4 million set during the first quarter of 2001. During the third quarter of 2001, the Company completed a $45 million financing to fund its 2001 - 2002 business plan that calls for the continued development of the Guaduas Oil Field, the exploration of the west-side of the Guaduas Oil Field, and the exploration of the subthrust Dindal prospect. Seven Seas also achieved several operational successes during the quarter, which included completing the Guaduas-La Dorada pipeline, commencing pipeline production, successfully drilling the second Guaduas Oil Field development well, and sustaining oil production at an average gross rate of 7,000 barrels per day (3,230 barrels per day net). Subsequent to the third quarter, the Company has successfully completed the third development well, increasing the current gross production rate to between 8,000 and 9,000 barrels per day (3,700 and 4,200 barrels per day net). Also during the third quarter, the Company received the required environmental permit to drill the Escuela 2 well, an exploration well to test the subthrust Dindal prospect. The Company has escrowed $15 million for the drilling of this well, which is expected to commence during the fourth quarter of 2001. The Company is currently drilling the Tres Pasos 16 exploration well to test the west side of the Guaduas Oil Field. To protect against the possibility of a further decline in oil prices, the Company recently entered into a six-month financial hedging contract with a major commercial bank covering 3,750 barrels of oil per day. The contract, which cost approximately $1.2 million, provides for a payment to the Company if the average monthly West Texas Intermediate oil price falls below $20 per barrel in any of the first six months of 2002. The Company is not obligated under this contract to deliver or sell oil and retains all proceeds from oil sales. This hedging contract will help to ensure that the Company is able to fully implement its development drilling program should oil prices decline. "Securing the financing, completing the pipeline and receiving the environmental permit for the Escuela 2 subthrust exploration well were all critical achievements for the Company's near term future," stated Robert A. Hefner III, Chairman and Chief Executive Officer of Seven Seas. "We are looking forward to an eventful 2002 with the continued development of the Guaduas Oil Field and the testing of our subthrust Dindal prospect with the Escuela 2 exploration well," concluded Mr. Hefner. Seven Seas Petroleum Inc. is an independent oil and gas exploration and production company operating in Colombia, South America. The Company's primary emphasis is on further exploration, development and production of the Guaduas Oil Field, located in Colombia's prolific Magdalena Basin. Statements regarding anticipated oil and gas production and other oil and gas operating activities, including the costs and timing of those activities, are "forward looking statements" within the meaning of the Securities Litigation Reform Act. The statements involve risks that could significantly impact Seven Seas Petroleum Inc. These risks include, but are not limited to, adverse general economic conditions, operating hazards, drilling risks, inherent uncertainties in interpreting engineering and geologic data, competition, reduced availability of drilling and other well services, fluctuations in oil and gas prices and prices for drilling and other well services and government regulation and foreign political risks, as well as other risks discussed in detail in the Seven Seas Petroleum Inc.'s filings with the U.S. Securities and Exchange Commission. SEVEN SEAS PETROLEUM INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, In thousands, except share data) Three months ended Nine months ended September 30, September 30, 2001 2000 2001 2000 REVENUE Crude oil sales $4,621 $1,943 $9,232 $1,959 Interest income 224 391 624 1,397 4,845 2,334 9,856 3,356 EXPENSES Oil and gas operating expenses 1,472 255 3,578 1,209 Depletion, depreciation and amortization 1,298 581 2,721 1,094 Interest expense 1,271 97 1,656 97 General and administrative 1,097 1,676 4,208 5,409 Other (income) expense 58 (53) 193 104 Loss on legal settlement 1,000 --- 1,000 --- 6,196 2,556 13,356 7,913 NET LOSS BEFORE INCOME TAXES (1,351) (222) (3,500) (4,557) INCOME TAX EXPENSE --- 20 --- 20 NET LOSS (1,351) (242) (3,500) (4,577) BASIC AND DILUTED NET LOSS PER COMMON SHARE $(0.04) $(0.01) $(0.09) $(0.12) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 37,858,530 37,836,420 37,850,430 37,834,777SOURCE Seven Seas Petroleum Inc.
back to topRelated links:
Company News On-Call:
CONTACT:
Bryan Sanchez, Investor Relations of Seven
Seas Petroleum Inc., +1-713-622-8218
