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| Costilla Energy Reports Third Quarter Financial Results |
MIDLAND, Texas, Nov. 15 /PRNewswire/ -- Costilla Energy, Inc.
(OTC Bulletin Board: COSE) today reported cash flow(1) of $2.1 million, or
$0.15 per share, and a net loss applicable to common equity of $5.9 million,
or $0.42 per share, for the third quarter ended September 30, 1999. The net
loss included a non-cash charge of $943,000 as a result of the impairment of
an oil and gas property(2) due to the expiration of leasehold acreage located
in east Texas to which proved undeveloped reserves had been attributed.
These results compare with cash flow of $2.6 million, or $0.26 per share,
and a net loss applicable to common equity of $8.2 million, or $0.83 per
share, for the quarter ended September 30, 1998. Adjusted EBITDA(3) for the
third quarter of 1999 was $6.0 million compared with $7.2 million for the
quarter ended September 30, 1998.
Costilla produced 4.3 Billion cubic feet of natural gas and 124,000
barrels of crude oil and condensate, or a total of about 5.0 Billion cubic
feet of natural gas equivalent (Bcfe) during the third quarter of 1999, an
average rate of approximately 54.6 Million cubic feet of natural gas
equivalent (Mmcfe) per day. This compares with 7.6 Bcfe, or approximately
82.3 Mmcfe per day produced in the third quarter of 1998. The reduction in
production is attributable primarily to various sales of producing properties
during the first half of 1999, and the Company's inability to continue its
drilling efforts due to financial constraints.
During the third quarter of 1999, Costilla sold natural gas at an average
net price of $2.13 per thousand cubic feet (Mcf), after a hedging cost of
$0.17 per Mcf, compared with $2.06 per Mcf during the third quarter of 1998,
which included hedging revenue of $0.22 per Mcf. The Company sold oil at an
average net price of $14.87 per barrel, after a hedging cost of $4.75 per
barrel during the third quarter of 1999, compared with $14.96 per barrel,
including $4.58 per barrel from hedging, during the quarter ended
September 30, 1998.
Oil and gas revenues for the third quarter ended September 30, 1999,
totaled $11.0 million, after hedging costs of $1.3 million, compared with
$16.8 million for the same quarter of 1998, which included $3.2 million in
revenues from hedging.
Costilla's cost management efforts resulted in continued reductions in
lease operating expenses (LOE) during the quarter ended September 30, 1999.
Third quarter LOE, excluding production taxes, was $0.57 per Mcfe, down from
$0.63 per Mcfe for the second quarter of 1999, and $0.80 per Mcfe for the
quarter ended September 30, 1998.
General and administrative expenses (G&A) were also significantly reduced
for the three months ended September 30, 1999, to $1.9 million, which included
$682,000 related to reorganization costs, from $2.8 million in the third
quarter of 1998. Per Mcfe, G&A for the third quarter of 1999 was $0.23,
excluding reorganization costs, compared with $0.37 per Mcfe for quarter ended
September 31, 1998.
The Company reported that the counter-party to its commodity price hedging
contracts elected an early termination of the contracts and asserted claimed
losses of approximately $15.9 million related to the open positions, and
$3.6 million for unpaid invoices. The amount due for the hedging obligations
and the secured nature, if any, of those obligations is subject to review by
the Company.
The Company continues to conduct operations in ordinary course under
Chapter 11 of the United States Bankruptcy Code. Management is actively
engaged in negotiations with certain potential purchasers, equity investors or
merger partners and intends to submit a plan of reorganization for
consideration by the Bankruptcy Court as soon as practicable. The
consummation of any plan of reorganization will require approval of the
Bankruptcy Court.
Costilla Energy, Inc. is an independent oil and gas company with
operations primarily in the Gulf Coast region of South Texas and the Permian
Basin of West Texas and Southeastern New Mexico.
(1) Cash flow is the net loss for the period, plus deferred taxes,
depreciation, depletion and amortization, impairment of oil and gas
properties, exploration and abandonments, other non-cash items, and
extraordinary items.
(2) In accordance with Statement of Financial Accounting Standards No.
121, Accounting for the Impairment of Long-Lived Assets and Assets to be
Disposed Of, an impairment loss is indicated if the sum of the expected
undiscounted future cash flows, on a depletable basis, is less than the
carrying amount of oil and gas assets. The impairment loss is the amount by
which the carrying amount of the asset exceeds the fair value of the asset,
based upon discounted future net cash flows.
(3) Adjusted EBITDA is earnings before income taxes, interest,
depreciation, depletion and amortization, impairment of oil and gas
properties, exploration and abandonments, other non-cash items and
extraordinary items
Certain statements in this news release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance, or achievements of Costilla Energy, Inc. to be materially
different from any future results, performance, or achievements expressed or
implied by such forward-looking statements. Such factors include, among
others, the following: the volatility of oil and gas prices; the Company's
ability to replace its oil and gas reserves; the availability of capital
resources; the reliance upon estimates of proved reserves; operating hazards
and uninsured risks; competition; government regulation; and the ability of
the Company to implement its business strategy. Additional information is
available in the Company's filings with the Securities and Exchange
Commission, which are incorporated by this reference as though fully set forth
herein.
Costilla Energy, Inc.
(DEBTOR-IN-POSSESSION)
SUMMARY FINANCIAL & OTHER DATA
(in thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
1999 1998 1999 1998
Production
Oil (MBBLS) 124 461 710 1,510
Gas (MMCF) 4,280 4,814 13,571 12,376
MBOE 838 1,263 2,972 3,573
MMCFE 5,027 7,580 17,831 21,436
Average Net Sales Price
Oil (per BBL) $14.87 $14.96 $12.10 $15.26
Gas (per MCF) $2.13 $ 2.06 $2.02 $ 2.08
Revenues
Oil $1,850 $6,897 $8,590 $23,049
Gas $9,127 $9,912 $27,439 $25,775
Net loss $(5,937) $(8,239) $ (78,677) $(24,854)
Per share - basic (A) $(0.42) $(0.83) $(5.76) $(2.49)
Cash Flow (B) $2,089 $2,558 $ 512 $6,621
Per share - basic $0.15 $ 0.26 $0.04 $ 0.66
Per share - diluted
as if preferred stock
converted $0.11 $ 0.18 $0.03 $ 0.56
Adjusted EBITDA (C) $5,995 $7,190 $14,651 $20,606
Weighted average
shares - basic 14,102 9,870 13,651 9,974
Weighted average shares
- as if preferred stock
converted 18,289 13,905 17,833 11,748
(A) Earnings per share - diluted will not be presented in GAAP financial
statements since an assumed conversion of the preferred stock would
be anti-dilutive to the net loss reported.
(B) Net loss plus deferred taxes, depreciation, depletion and
amortization, impairment of oil and gas properties, exploration and
abandonments, other non-cash items, and extraordinary items.
(C) Net loss plus income taxes, interest, depreciation, depletion and
amortization, impairment of oil and gas properties, exploration,
other non-cash items and abandonments and extraordinary items.
Costilla Energy, Inc.
(DEBTOR-IN-POSSESSION)
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
1999 1998 1999 1998
Revenues:
Oil and gas sales $10,977 $16,809 $36,029 $48,824
Interest and other 78 150 94 510
Gain on sale of assets 81 --- 331 337
11,136 16,959 36,454 49,671
Expenses:
Oil and gas production 3,601 6,982 14,320 21,208
General and
administrative 1,856 2,786 7,221 7,857
Exploration and
abandonments 473 2,108 2,004 7,336
Depreciation, depletion
and amortization 3,752 7,533 14,139 21,896
Loss on termination
of purchase option 219 --- 47,781 ---
Impairment 943 --- 10,097 ---
Loss on commodity
transactions 2,168 --- 3,961 ---
Interest 4,061 4,789 14,608 14,622
17,073 24,198 114,131 72,919
Loss before
extraordinary item (5,937) (7,239) (77,677) (23,248)
Extraordinary loss
resulting from early
extinguishment of debt --- --- --- (299)
Net loss $(5,937) $(7,239) $(77,677) $(23,547)
Cumulative preferred
stock dividend $ --- $ 1,000 $ 1,000 $ 1,307
Loss before
extraordinary item
applicable to common
equity $(5,937) $(8,239) $(78,677) $(24,555)
Net loss applicable
to common equity $(5,937) $(8,239) $(78,677) $(24,854)
Loss per share:
Loss before
extraordinary item $(0.42) $(0.83) $(5.76) $(2.46)
Extraordinary loss
resulting from early
extinguishment of debt --- --- --- (0.03)
Net loss $(0.42) $(0.83) $(5.76) $(2.49)
Weighted average shares
outstanding 14,102 9,870 13,651 9,974
Costilla Energy, Inc.
(DEBTOR-IN-POSSESSION)
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
September 30, December 31,
1999 1998
ASSETS
Current assets:
Cash $ 3,894 $ 5,251
Other current assets 10,317 12,041
Total current assets 14,211 17,292
Net property, plant and equipment, at cost 88,953 185,553
Other assets
Deferred hedge charges 12,502 ---
Other 7,795 8,109
Total other assets 20,297 8,109
Total $ 123,461 $ 210,954
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities Not Subject to Compromise
Long-term debt $ 45,940 $ 40,101
Other debt 6,947 3,419
52,887 43,520
Liabilities Subject to Compromise
Trade accounts payable 2,855 26,183
Other current liabilities 7,790 5,923
Long-term debt 181,608 181,780
192,253 213,886
Stockholders' deficit (121,679) (46,452)
Total Liabilities and Stockholders' Deficit $ 123,461 $ 210,954
SOURCE Costilla Energy, Inc.
back to topRelated links:
Company News On-Call:
800-758-5804, ext. 126873
CONTACT:
Guy McCrary of Costilla Energy, Inc.,
915-683-3092
