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| Costilla Energy Reports Sharp Increase in Revenues, Net Income |
* Production Up 79 Percent
* Revenues More Than Double
* Cash Flow Reaches $8.9 Million
* Board of Directors Authorizes Stock Repurchase
MIDLAND, Texas, May 7 /PRNewswire/ -- Costilla Energy, Inc.
(Nasdaq: COSE), citing a 79 percent increase in oil and natural gas production
and a 122 percent increase in oil and natural gas revenues, today reported
first-quarter net income of $2.3 million, or 22 cents per share, compared with
net income of $12,000 for the year-earlier quarter.
Cash Flow Four Times Year-Ago Level
For the first quarter ended March 31, 1997, cash flow was $8.9 million, or
85 cents per share, compared with $2.2 million, or 43 cents per share a year
earlier. Adjusted EBITDA was $11.5 million, or 4.4 times interest expense
compared with $3.9 million, or 2.3 times interest expense for the 1996 period.
Oil and gas revenues for the first quarter 1997 were $19.6 million compared
with $8.8 million in 1996 and production was 1.1 million barrels of oil
equivalent (BOE) compared with 612,000 BOE for the comparable period in 1996.
The production rate for the first quarter 1997 averaged 12,164 BOE per day
compared with 6,724 in the 1996 period.
Strong Results Mirror Growth Strategy
"Our solid first-quarter results are consistent with our strategy, since
going public in early October 1996, of increasing oil and natural gas
production rates," said Michael J. Grella, president and chief executive
officer. "Our first-quarter results, compared with last year's third quarter
that closed immediately prior to the stock offering, illustrate the ramp-up in
operations we had planned following our offering. Production is up
15.1 percent to 1.1 million barrels of oil equivalent and our average daily
production rate increased 17.7 percent to 12,164 barrels of oil equivalent."
During the first quarter 1997, the Company completed a total of 31 wells,
of which 26 were productive for a success rate of 84 percent. In the Permian
Basin 16 wells were completed, 11 of which were productive, four wells were
completed in the Gulf Coast onshore area, all of which were productive and
11 wells were completed in the Rocky Mountains, all of which were productive.
In addition, 21 wells were in the process of being drilled or completed at
March 31, 1997 which are located as follows: Permian Basin, 12 wells; Gulf
Coast, three wells; Rocky Mountains, five wells; and East Texas, one well.
Company Divests Non-Core Assets
In March 1997, the Company sold its 40.5 percent membership interest in a
Delaware limited liability company, which owns and operates gas pipelines and
associated facilities in Louisiana, for an amount equal to its original cost
of approximately $1.0 million, plus interest from the date of the Company's
investment. In April 1997, the Company sold its interests in various high-
operating-cost properties for approximately $1.8 million. This is a
continuation of the Company's strategy to divest non-core assets.
New Executive Titles
The Company also announced title changes that were effective following a
Board of Directors meeting in April 1997. Cadell S. Liedtke, previously
chairman of the board and chief executive officer, was elected chairman of the
board; Michael J. Grella, previously president and chief operating officer,
was elected president and chief executive officer; and Henry G. Musselman,
previously executive vice president, was elected executive vice president and
chief operating officer. The change in titles reflects the responsibilities
and duties of the senior management.
The Board also approved the repurchase from time to time of up to
500,000 shares, or about 4.8 percent, of its 10.5 million outstanding shares
of common stock. The approved repurchase of the shares reflects management's
belief that the current price of the Company's common stock does not
appropriately reflect the underlying value of the Company's assets and
business.
Board Expands, Names New Outside Director
The Company also announced the expansion of its Board of Directors from
five members to six members and the appointment of Samuel J. Atkins III to the
newly created Board position. Prior to his retirement on March 1, 1997,
Atkins was executive vice president of NationsBank Corporation and a director
of NationsBank of Texas, N.A. He currently is a private investor. Atkins was
installed as an outside director and is expected to make a significant
contribution to the Company's future.
Costilla Energy, Inc. is an independent energy company engaged in the
exploration, acquisition and development of oil and gas properties with
operations primarily in the Permian Basin area of Texas and New Mexico, the
Gulf Coast, and the Rocky Mountain regions. The Company and its predecessor
have been in business since 1988.
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. These factors are discussed
in more detail in the Company's recent prospectus for its initial public
offering of common stock.
COSTILLA ENERGY, INC.
SUMMARY FINANCIAL AND OTHER DATA
(in thousands, except per share data)
Three months ended
March 31,
1997 1996
Production
Oil (MBBLS) 547 338
Gas (MMCF) 3,285 1,643
MBOE 1,095 612
Average Net Sales Price
Oil (per BBL) $19.84 $17.32
Gas (per MCF) $2.67 $1.81
Revenues
Oil $10,856 $5,853
Gas $8,757 $2,979
Net income $2,279 $12
Per share $0.22 $0.00
Cash Flow (a) $8,876 $2,241
Per share $0.85 $0.43
Adjusted EBITDA (b) $11,494 $3,932
Adjusted EBITDA/Interest 4.4x 2.3x
Weighted average shares 10,476 5,200
(a) Net income plus deferred taxes, depreciation, depletion and
amortization, and exploration and abandonments.
(b) Net income plus income taxes, interest, depreciation, depletion and
amortization, exploration and abandonments.
COSTILLA ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three months ended
March 31,
1997 1996
Revenues:
Oil and gas sales $19,613 $8,833
Interest and other 255 88
Gain on sale of assets 510 30
Total 20,378 8,951
Expenses:
Oil and gas production 7,369 3,659
General and administrative 1,515 1,362
Exploration and abandonments 1,340 228
Depreciation, depletion and amortization 4,914 1,909
Interest 2,708 1,781
Total 17,846 8,939
Income before federal income taxes 2,532 12
Provision for federal income taxes
Current 62 --
Deferred 191 --
Net income $2,279 $12
Income per share:
Net income $0.22 $0.00
Weighted average shares outstanding 10,476 5,200
COSTILLA ENERGY, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31,
1997 1996
(unaudited)
ASSETS
Current assets $29,796 $30,409
Net property, plant and
equipment, at cost 136,963 126,944
Other assets 5,372 5,437
Total $172,131 $162,790
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $27,720 $20,089
Long-term debt, less current maturities 100,244 100,262
Other noncurrent liabilities 1,304 1,870
Stockholders' equity 42,863 40,569
Total $172,131 $162,790
SOURCE Costilla Energy, Inc.
back to topCONTACT:
Mike Grella, President & Chief Executive
Officer, of Costilla Energy, Inc., 915-683-3092, or General, Karl
Plath, 312-640-6738, or Analysts, Lisa Ferguson, 312-640-6788,
both of the Financial Relations Board
