DENVER, May 3, 2012 /PRNewswire/ -- Bill Barrett Corporation (NYSE: BBG)
today reported first quarter 2012 results and announced operational updates
highlighted by:
- Successful Niobrara exploration results at Chalk Bluffs
in the Denver-Julesburg Basin, with the first two wells producing at an
average 24-hour peak rate of 905 Boe/d
- Joint venture agreement with a major independent to
partner on 112,000 acres in the Paradox Basin
- Oil and natural gas production growth, up 21% to 28.2
Bcfe; oil production up 62%
- Average realized price of $6.41 per Mcfe, reflecting
the benefit of strong oil and NGL pricing as well as hedging gains. Oil
and NGL sales increased to 56% of pre-hedge sales revenues
- Discretionary cash flow of $99.0 million or $2.09 per
diluted common share
- Adjusted net income of $9.5 million or $0.20 per
diluted common share
Chairman, Chief Executive Officer and President Fred Barrett commented:
"I have emphasized the importance of execution in 2012 and our team is
delivering. Oil production growth of 62%, exploration success in the Niobrara
oil program that opens-up the potential to expand the Denver-Julesburg
("DJ") Basin program, bringing in a partner to kickstart activity on
our vast Paradox Basin position, realizing strong pricing and significantly
increasing the contribution from oil and NGL sales �all demonstrate execution
on our strategy. Based on sales volumes (see "Disclosure Statements"
below), where we benefit from our election with third parties to process
natural gas production for natural gas liquids ("NGLs"), first
quarter 2012 volumes were 9% oil, 20% NGL-related and 71% dry gas. Oil and
NGL-related sales accounted for more than half of first quarter revenue as our
transition to an increased proportion of liquids is well underway.
"Our actions in the first quarter continue to better position the
Company for the long-term. During the quarter, we reduced our 2012 capital
program by approximately $100 million and all development and exploration
drilling activity for the remainder of the year will target oil and NGL-rich
resources. Today, we are further modifying our drilling program (see
"Additional Financial Information - Guidance" below) as we move an
additional rig into the DJ Basin this month, following strong drilling results,
and as we move our one remaining West Tavaputs gas rig to provide for an
earlier expansion of drilling in the Uinta Oil Program. The short-term outcome
of our revised 2012 program includes higher oil growth and an approximate 6 Bcf
reduction in dry gas production. The uplift from oil against low natural gas
prices drives little, if any, impact to projected 2012 cash flows while better
positioning the Company for future oil production growth.
"Looking ahead, we have the visibility and large oil drilling inventory
to continue this momentum. I am particularly excited about our pace of growth
in the Uinta and DJ Basins, as well as results to date in Chalk Bluffs where we
plan to drill several Niobrara wells this year. I also look forward to getting
back to work in the Paradox Basin, where we control more than 350,000 net acres
as well as testing a diversity of exciting new exploration projects across the
Rockies � all for continued robust oil and NGL exposure."
OPERATING AND FINANCIAL RESULTS
Oil and natural gas production totaled 28.2 billion cubic feet equivalent
("Bcfe") in the first quarter of 2012, up 21% from 23.2 Bcfe in the
first quarter of 2011, including a 62% increase in oil production. Production
growth was predominantly from West Tavaputs following start-up of full-field
development in the first quarter of 2011, from the Uinta Oil Program where
activity was expanded from one rig in the first quarter of 2011 to three rigs
currently, and from the DJ Basin, where the Company is successfully expanding
production following its mid-2011 acquisition.
Realized pricing in the first quarter of 2012 remained strong despite
natural gas prices reaching 10-year lows. The average realized sales price was
$6.41 per thousand cubic feet equivalent ("Mcfe") and included a $1.14
per Mcfe benefit from NGL-related pricing and $1.04 per Mcfe benefit from
realized hedges. The average realized price is down from $7.18 per Mcfe in the
first quarter of 2011 due to lower natural gas prices partially offset by
higher oil prices. The average realized natural gas price in the first quarter
was $5.46 per Mcf and the average realized oil price was $88.42 per barrel
(Bbl). (See "Selected Operating Highlights" below for more detail.)
In the first quarter of 2012, oil and NGLs made up 29% of the total sales
volumes (see "Disclosure Statements" below) and 56% of pre-hedge
revenues.. Sales volumes, including the breakdown of natural gas production
into quantities sold as dry gas and quantities that receive the benefit of NGL
related pricing from the Company's election to process natural gas, where it is
able to do so, are as follows:
|
|
1Q11
|
2Q11
|
3Q11
|
4Q11
|
1Q12
|
Reported
Production Volumes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
(Bbls/d)
|
3,299
|
3,642
|
4,304
|
5,066
|
5,286
|
|
Natural
gas, including NGLs (MMcf/d)
|
238
|
269
|
279
|
286
|
278
|
|
|
|
|
|
|
|
Reported
Realized Prices:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
(per Bbl)
|
$78.44
|
$82.40
|
$79.79
|
$81.48
|
$88.42
|
|
Natural
gas, including NGLs (per Mcf)
|
$ 6.69
|
$ 6.47
|
$ 6.48
|
$ 6.26
|
$ 5.46
|
|
|
|
|
|
|
|
Sales*
Volumes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
(Bbls/d)
|
3,299
|
3,642
|
4,304
|
5,066
|
5,286
|
|
Natural
gas sold as dry gas (MMcf/d)
|
200
|
234
|
250
|
261
|
257
|
|
NGLs
(Bbls/d)
|
10,619
|
11,024
|
11,571
|
11,476
|
11,985
|
|
|
|
|
|
|
|
*
(see "Disclosure Statements" below)
|
In the first quarter of 2012, the Company changed how it accounts for
commodity hedges by discontinuing the practice of cash flow hedge accounting.
Differences in the accounting method include:
- The Commodity derivative gain (loss) line item on the
Unaudited Consolidated Statements of Operations includes certain realized
and unrealized gains and losses on hedges, including prospective gains and
losses on hedges with future settlement dates.
- Reported net income is affected because the Derivative
gain (loss) line item under mark-to-market hedge accounting immediately
recognizes prospective, future gains and losses on all derivative
positions, based on current commodity prices, and will fluctuate with oil
and natural gas prices. Under the previous cash flow hedge accounting
method, the majority of prospective gains and losses were classified in
Accumulated Other Comprehensive Income on the Consolidated Balance Sheets
until the period they become current.
- The Commodity derivative gain (loss) line item is
reported under Other Income and Expense.
- This change in reporting does not impact reported cash
flows, the calculation of per unit realized prices or Adjusted Net Income
(a non-GAAP measure, see "Adjusted Net Income Reconciliation"
below.)
Discretionary cash flow (a non-GAAP measure, see "Discretionary Cash
Flow Reconciliation" below) in the first quarter of 2012 was $99.0
million, or $2.09 per diluted common share, down from $104.7 million in the
first quarter of 2011. The decline in discretionary cash flow is primarily due
to lower realized natural gas prices and increased interest expense, mostly
offset by higher production volumes.
Net income in the first quarter of 2012 was $35.9 million, or $0.76 per
diluted common share, up from $15.2 million, or $0.33 per diluted common share,
in the first quarter of 2011. Adjusted net income for the first quarter of 2012
(a non-GAAP measure, see "Adjusted Net Income Reconciliation" below)
was $9.5 million, or $0.20 per diluted common share, compared with $19.1
million, or $0.41 per diluted common share, in the first quarter of 2011.
Adjusted net income removes the effect of non-recurring charges such as
unrealized derivative gains and losses, impairment expenses, property sales and
one-time items.
DEBT AND LIQUIDITY
At March 31, 2012, the Company's revolving credit facility was undrawn.
Subsequent to quarter-end, the Company's lenders affirmed the borrowing base
and commitments at $900 million. After deducting an outstanding letter of
credit for $26.0 million, borrowing capacity is $874.0 million. During the
quarter, the Company completed the offering of $400 million of 7.0% senior
notes due 2022, issued at par. Proceeds from the offering were used to pay down
the Company's revolving line of credit and to fund $147.2 million of principal
amount of the 5% convertible senior notes put to the Company pursuant to the
terms of its indenture. At March 31, 2012, the Company had outstanding a total
of $1,075.3 million principal amount in senior debt with no maturity before
2016.
OPERATIONS
Production, Wells Spud and Capital Expenditures
The following table lists production, wells spud and total capital
expenditures by basin for the three months ended March 31, 2012:
|
|
Three Months ended March 31, 2012
|
|
|
Average Net
|
|
Wells
|
|
Capital
|
|
|
Production
|
|
Spud
|
|
Expenditures
|
Basin
|
(MMcfe/d)
|
|
(gross)
|
|
(millions)
|
|
|
|
|
|
|
|
Uinta:
|
|
|
|
|
|
|
UOP
|
23
|
|
21
|
|
$ 77.0
|
|
West
Tavaputs
|
100
|
|
12
|
|
47.6
|
Piceance
|
135
|
|
46
|
|
69.1
|
Denver-Julesburg
|
6
|
|
2
|
|
27.6
|
Powder
River (CBM)
|
33
|
|
2
|
|
0.1
|
Other
|
13
|
|
2
|
|
13.6
|
|
|
|
|
|
|
|
Total
|
310
|
|
85
|
|
$ 235.0
|
Operating and Drilling Update
The Company anticipates drilling or participating in approximately 296
gross/204 net development wells in 2012. The Company's development program will
focus on growth in oil production and reserves. Currently, the Company has six
rigs active in development programs including three in the Uinta Oil Program,
one in the DJ and two in Gibson Gulch with plans to add three rigs targeting
oil in the second quarter, including two in the Uinta Oil Program and one in
the DJ Basin.
Uinta Basin, Utah
Uinta Oil Program (Blacktail Ridge, Lake Canyon, East Bluebell and South
Altamont) � Current net production is approximately 4,100 barrels of oil
equivalent per day ("Boe/d"). The Company currently has three
drilling rigs operating in the area and plans to add two more rigs by the end
of this month. The Company expects to drill up to 74 gross/47 net operated
wells in the area in 2012, plus participate in approximately 45 wells operated
by its partner in Lake Canyon. During 2011, the Company significantly expanded
its reserve base in the area and successfully tested the Uteland Butte
formation with seven horizontal wells. During 2012, the Company seeks to
increase recoveries and optimize development of this vast, oil-rich resource
base. During the year, the Company will continue its vertical development
program and its horizontal Uteland Butte program. The Company
also plans to test horizontally the Black Shale and Wasatch formations, to
test vertically the Mahogany formation and has received initial approval for
80-acre pilot wells to test increased density. Also during the first quarter of
2012, the Company continued to expand its acreage position in the area, adding
more than 9,600 net undeveloped acres on predominantly fee lands.
At March 31, 2012, the Company had an approximate 68% working interest in
production from 143 gross wells. Depending upon elections to participate by
partners, the Company expects to have an average 50% working interest in its
2012 drilling program. The per well working interests for the 2012 program
range from 19% to 100%.
West Tavaputs � Current net production is approximately 94 million
cubic feet equivalent per day (MMcfe/d), up from 65 MMcfe/d at this time last
year. However, due to low natural gas prices, the Company has redirected all
drilling activity from this dry natural gas program to oil and NGL-rich areas,
reducing production through the remainder of 2012. While development is
temporarily scaled back, the Company plans to complete certain facility
upgrades in anticipation of future growth as natural gas prices improve. This
program remains one of the Company's largest, long-term development assets
having 461 Bcfe of proved reserves, 1.2 Tcfe proved, probable and possible
reserves (see "Reserve Disclosure" below) and a multi-year inventory
of more than 600 gross drilling locations. The West Tavaputs program offers
growth in the shallow Mesaverde and Wasatch zones as well as upside opportunity
in the deeper Mancos formation.
At March 31, 2012, the Company had an approximate 96% working interest in
production from 289 gross wells in its West Tavaputs shallow and deep programs.
Denver-Julesburg Basin, Colorado and Wyoming
Wattenburg and Chalk Bluffs � Current DJ net production is
approximately 1,100 Boe/d. The DJ Program was initiated through an acquisition
in mid-2011. Since then, the Company has nearly doubled production through
development drilling, successful evaluation drilling, and improving production
through re-fracture stimulation of existing wells. The Company plans to add a
second rig in the basin this month, and the full year 2012 program includes
approximately 28 gross/17 net operated wells, all of which will be horizontal
and target the Niobrara formation.
During the first quarter of 2012, the Company initiated drilling on its
Chalk Bluffs acreage, drilling and completing two horizontal wells into the
Niobrara "B Chalk" formation. Results to date are very positive with
the first and second wells having peak 24-hour initial production
("IP") rates of 841 Boe/d and 968 Boe/d, respectively, and average
30-day rates of 417 Boe/d and 456 Boe/d, respectively (not consecutive 30 day
periods as wells were put on pump). The Company currently has approximately
17,300 net undeveloped acres in the Chalk Bluffs area. It is too early to
determine corresponding EURs from results to-date, yet horizontal success in
the Niobrara opens the potential for sizable expansion of the DJ Program.
At March 31, 2012, the Company had an approximate 91% working interest in
production from 220 gross wells.
Piceance Basin, Colorado
Gibson Gulch � Current net production is approximately 136 MMcfe/d.
In March 2012, the Company modified its full year capital program to reduce
drilling at Gibson Gulch from three rigs to two rigs. The Gibson Gulch program
serves as a "swing area" for the Company as it can substantially
modify the drilling program in conjunction with broader capital plans and
commodity prices. Gibson Gulch natural gas production is processed, at the
election of the Company, exposing the Company to NGL pricing. The incremental
benefit to production revenues related to natural gas liquids was $1.14 per
Mcfe to the Company-wide realized price in the first quarter of 2012. Gibson
Gulch operations offer strong margins due both to low operating costs and the
currently higher revenues related to liquids. The program continues to be a
key, lower risk development area for the Company.
At March 31, 2012, the Company had an approximate 99% working interest in
production from 864 gross wells in its Gibson Gulch program.
Paradox Basin, Colorado
Yellow Jacket � The Company holds a sizable 445,000 gross/352,000 net
acreage position in the Yellow Jacket prospect. In the first quarter of 2012,
the Company re-initiated exploration drilling at the Yellow Jacket prospect.
The Company drilled two horizontal wells targeting the Gothic Shale formation
at approximately 6,000 feet in an area that holds NGL-rich resources. The
Company plans to complete both wells in the second quarter. In addition, the
Company signed a joint venture agreement with a major independent to earn-in up
to 70% on 112,000 acres in a portion of the Company's position. The joint
venture will acquire 3-dimensional seismic and plans to drill its first well by
April 2013.
Additional Financial Information
Guidance
The Company's 2012 guidance (please reference "Forward-Looking
Statements" below) is as follows. The Company may update guidance as
business conditions warrant:
- Capital expenditures of $800 to $900 million (before
acquisitions, if any).
- Oil and natural gas production of 116 to 122 Bcfe, up
9% to 14% from 2011, revised from 122 to 126 Bcfe, following continued
shift to oil.
- Lease operating costs per Mcfe of $0.60 to $0.65,
revised from $0.57 to $0.62.
- Gathering, transportation and processing costs per Mcfe
of $0.92 to $0.97, revised from $0.90 to $0.95.
- General and administrative expenses before non-cash
stock-based compensation cost per Mcfe of $0.45 to $0.49, revised from
$0.43 to $0.47.
Commodity Hedges Update
It is the Company's strategy to hedge a portion of its production to reduce
the risks associated with unpredictable future commodity prices and to provide
predictability for a portion of cash flows in order to support the Company's
capital expenditure program.
For 2012 and 2013, the Company has hedges in place as outlined in the table
below. Swap and collar hedge positions are tied to regional sales points and
include:
- For the second through fourth quarters of 2012,
approximately 63.0 Bcfe, or approximately 70% of production, at a weighted
average blended floor price of $6.59 per Mcfe. Approximately 70% of
natural gas, 70% of oil and 20% of NGL production/sales is hedged.
- For 2013, approximately 53.6 Bcfe at a weighted average
blended floor price of $6.41 per Mcfe. Based on current sales estimates,
approximately 50% of natural gas, 30% of oil and 5% of NGL
production/sales is hedged.
As of April 30, 2012:
SWAPS & COLLARS
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
Natural Gas / NGLs
|
|
Oil
|
|
EQUIVALENT
|
|
|
Volume
|
Price
|
|
Volume
|
Price
|
|
Volume
|
Price
|
|
|
MMBtu/d
|
$MMBtu
|
|
Bbl/d
|
$/Bbl
|
|
Mmcfe
|
$/Mcfe
|
|
|
|
|
|
|
|
|
|
|
2Q12
|
|
223,525
|
$4.55
|
|
5,300
|
$101.02
|
|
21,385
|
$6.60
|
3Q12
|
|
229,089
|
$4.39
|
|
5,300
|
$101.02
|
|
22,086
|
$6.42
|
4Q12
|
|
198,777
|
$4.52
|
|
5,300
|
$101.02
|
|
19,551
|
$6.75
|
1Q13
|
|
172,557
|
$3.85
|
|
4,000
|
$102.16
|
|
16,278
|
$5.94
|
2Q13
|
|
127,529
|
$3.97
|
|
4,000
|
$102.16
|
|
12,734
|
$6.53
|
3Q13
|
|
127,501
|
$3.96
|
|
4,000
|
$102.16
|
|
12,872
|
$6.53
|
4Q13
|
|
114,240
|
$4.02
|
|
4,000
|
$102.16
|
|
11,763
|
$6.78
|
In addition, the Company has natural gas basis only hedges in place for 2012
of 20,000 MMBtu/d at a basis differential price of ($1.22) per MMBtu. These
hedges are not in the money.
FIRST QUARTER 2012 RESULTS WEBCAST AND CONFERENCE CALL
As previously announced, a webcast and conference call will be held later
this morning to discuss first quarter 2012 results. Please join Bill Barrett
Corporation executive management at noon Eastern time/10:00 a.m. Mountain time
for the live webcast, accessed at www.billbarrettcorp.com, or join by telephone by calling
800-215-2410 (617-597-5410 international callers) with passcode 86881460. The
webcast will remain available on the Company's website for approximately 30
days, and a replay of the call will be available through May 10, 2012 at
call-in number 888-286-8010 (617-801-6888 international) with passcode
48429249.. The Company also has tentatively scheduled its remaining 2012
earnings conference calls for August 2 and November 1, 2012, typically at noon
Eastern time/10:00 a.m. Mountain time.
QUARTERLY REPORT ON FORM 10-Q
The Company plans to file today its Quarterly Report on Form 10-Q for the
quarter ended March 31, 2012. The 10-Q will be posted to the Company's website
at www.billbarrettcorp.com and found under "SEC
Reports".
UPCOMING EVENTS
Updated investor presentations will be posted to the homepage of the
Company's website at www.billbarrettcorp.com for each event below. Please
check the website at 5:00 Mountain time on the business day prior to the
investor event for the most recent presentation. Webcast events will also be
accessible on the homepage of the Company's website:
Annual Meeting of Stockholders
The 2012 Annual Meeting of Stockholders of Bill Barrett Corporation will be
held on May 10, 2012 at 9:30 a.m. Mountain time. The meeting will be followed
by a Company presentation and a question and answer period. The meeting,
presentation and question and answer period will be webcast and may be accessed
live and for replay on the Company's website at www.billbarrettcorp.com .
Investor Conferences
Chief Financial Officer Bob Howard will present at the Enercom London Oil
and Gas Conference on June 13, 2012 at 10:15 a.m. London time. The event will
be webcast.
Chief Operating Officer Scot Woodall will present at the Global Hunter
Securities 100 Energy Conference in San Francisco on June 25, 2012 at 2:00
p..m. Pacific time. The event will be webcast.
DISCLOSURE STATEMENTS
Calculation of Natural Gas Liquids as a Percent of Sales Volumes
The Company's natural gas production is based on wellhead volumes and its
natural gas revenue includes the incremental revenue benefit of from third
party purchasers and processors when the company elects to receive NGL values
from certain volumes of natural gas. Many oil and gas producing companies
report NGL volumes and revenues separately from natural gas volumes and
revenues. In order to provide a metric that is comparable to other oil
and gas production companies, the Company is providing the percentage of total
company sales volumes by product including oil, natural gas and NGL revenues
received from our gas purchasers or processors. The NGL volumes
identified by our gas purchasers or processors are converted to an oil
equivalent based on 42 gallons per barrel and compared to overall gas
equivalent production based on a 1 barrel to 6 Mcf ratio.
Reserve Disclosure
The SEC permits oil and gas companies to disclose probable and possible
reserves in their filings with the SEC. The Company does not plan to include
probable and possible reserve estimates in its filings with the SEC.
The Company has provided internally generated estimates for probable and
possible reserves in this release. The estimates conform to SEC guidelines..
They are not prepared or reviewed by third party engineers. Our probable and
possible reserve estimates are determined using strip pricing, which we use
internally for planning and budgeting purposes. The Company's estimate of
probable and possible reserves is provided in this release because management
believes it is useful, additional information that is widely used by the
investment community in the valuation, comparison and analysis of companies.
U.S. investors are urged to consider closely the disclosure in our Annual Report
on Form 10-K for the year ended December 31, 2011, available on the Company's
website at www.billbarrettcorp.com or from the corporate offices at
1099 18th Street, Suite 2300, Denver, CO 80202. You can also obtain this form
from the SEC by calling 1-800-SEC-0330 or at www.sec.gov.
Forward-Looking Statements
This press release contains forward-looking statements, including statements
regarding projected results and future events. In particular, the Company is
providing "2012 Guidance," which contains projections for certain
2012 operational and financial results, as well as planned drilling activity.
These forward-looking statements are based on management's judgment as of this
date and include certain risks and uncertainties. Please refer to the Company's
Annual Report on Form 10-K for the year-ended December 31, 2011 filed with the
SEC, and other filings including our Current Reports on Form 8-K and Quarterly Reports
on Form 10-Q, for a list of certain risk factors that may affect these
forward-looking statements.
Actual results may differ materially from Company projections and can be
affected by a variety of factors outside the control of the Company including,
among other things, market conditions, oil and gas price volatility,
exploration and development drilling and testing results, performance of
acquired properties, the ability to receive drilling and other permits and
rights-of-way, regulatory approvals, governmental laws and regulations and
changes in enforcement of those laws and regulations, new laws and regulations,
risks related to and costs of hedging activities including counterparty
viability, surface access and costs, availability of third party gathering,
transportation, processing and refining, the availability and cost of services
and materials, the ability to obtain industry partners to jointly explore
certain prospects and the willingness and ability of those partners to meet
capital obligations when requested, availability and costs of financing to fund
the Company's operations, uncertainties inherent in oil and gas production
operations and estimating reserves, the speculative actual recovery of
estimated potential volumes, unexpected future capital expenditures,
competition, risks associated with operating in one major geographic area, the
success of the Company's risk management activities, title to properties,
litigation, environmental liabilities, and other factors discussed in the Company's
reports filed with the SEC. Bill Barrett Corporation encourages readers
to consider the risks and uncertainties associated with projections and other
forward-looking statements. In addition, the Company assumes no obligation to
publicly revise or update any forward-looking statements based on future events
or circumstances.
ABOUT BILL BARRETT CORPORATION
Bill Barrett Corporation (NYSE: BBG), headquartered in Denver, Colorado,
explores for and develops oil and natural gas in the Rocky Mountain region of
the United States. Additional information about the Company may be found on its
website www.billbarrettcorp.com.
BILL BARRETT CORPORATION
|
Selected Operating Highlights
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2012
|
2011
|
Production
Data:
|
|
|
|
|
|
Natural
gas (MMcf)
|
|
|
25,319
|
21,434
|
|
Oil
(MBbls)
|
|
|
481
|
297
|
|
Combined
volumes (MMcfe)
|
|
|
28,205
|
23,216
|
|
Daily
combined volumes (Mmcfe/d)
|
|
|
310
|
258
|
Average
Prices (before the effects of realized hedges):
|
|
|
|
|
|
Natural
gas (per Mcf)
|
(1)
|
$ 4.28
|
$ 5.61
|
|
Oil
(per Bbl)
|
|
|
89.86
|
81.18
|
|
Combined
(per Mcfe)
|
|
|
5.37
|
6.21
|
Average
Realized Prices (after the effects of realized hedges):
|
|
|
|
|
|
Natural
gas (per Mcf)
|
(1)
|
$ 5.46
|
$ 6.69
|
|
Oil
(per Bbl)
|
|
|
88.42
|
78.44
|
|
Combined
(per Mcfe)
|
|
|
6.41
|
7.18
|
Average
Costs (per Mcfe):
|
|
|
|
|
|
Lease
operating expense
|
|
|
$ 0.66
|
$ 0.57
|
|
Gathering,
transportation and processing expense
|
|
|
0.97
|
0.83
|
|
Production
tax expense
|
|
|
0.22
|
0.37
|
|
Depreciation,
depletion and amortization
|
|
|
2.63
|
2.82
|
|
General
and administrative expense,
|
|
|
|
|
|
excluding non-cash stock-based compensation
|
(2)
|
0.49
|
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Natural
gas average prices include the effect of NGL revenues.
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Management
believes the separate presentation of the non-cash component of general and
administrative expense is useful because the cash portion provides a better
understanding of cash required for general and administrative expenses.
Management also believes that this disclosure may allow for a more accurate
comparison to the Company's peers that may have higher or lower costs
associated with equity grants.
|
BILL BARRETT CORPORATION
|
Consolidated Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2012
|
|
2011
|
(in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Operating
and Other Revenues:
|
|
|
|
|
|
Oil
and gas production
|
(1)
|
$ 177,042
|
|
$ 172,197
|
|
Other
|
|
2,134
|
|
238
|
|
Total operating and other revenues
|
|
179,176
|
|
172,435
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
Lease
operating
|
|
18,638
|
|
13,299
|
|
Gathering,
transportation and processing
|
|
27,352
|
|
19,336
|
|
Production
tax
|
|
6,207
|
|
8,566
|
|
Exploration
|
|
439
|
|
1,351
|
|
Impairment,
dry hole costs and abandonment
|
|
564
|
|
283
|
|
Depreciation,
depletion and amortization
|
|
74,083
|
|
65,394
|
|
General
and administrative
|
(2)
|
13,800
|
|
13,067
|
|
Non-cash
stock-based compensation
|
(2)
|
4,640
|
|
4,629
|
|
Total operating expenses
|
|
145,723
|
|
125,925
|
Operating
Income/ (loss)
|
|
33,453
|
|
46,510
|
Other
Income and Expense:
|
|
|
|
|
|
Interest
income and other income (expense)
|
|
1,563
|
|
63
|
|
Interest
expense
|
|
(21,590)
|
|
(12,042)
|
|
Commodity
derivative gain (loss)
|
(1)
|
44,747
|
|
(11,112)
|
|
Total other income and expense
|
|
24,720
|
|
(23,091)
|
Income
before Income Taxes
|
|
58,173
|
|
23,419
|
Provision
for Income Taxes
|
|
22,280
|
|
8,204
|
Net
Income/ (loss)
|
|
$ 35,893
|
|
$ 15,215
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income Per Common Share
|
|
|
|
|
|
Basic
|
|
$ 0.76
|
|
$ 0.33
|
|
Diluted
|
|
$ 0.76
|
|
$ 0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding
|
|
|
|
|
|
Basic
|
|
47,085
|
|
46,093
|
|
Diluted
|
|
47,368
|
|
46,767
|
|
|
|
|
|
|
(1)
|
The
table below summarizes the realized and unrealized gains and losses the
Company recognized related to its oil and natural gas derivative instruments
for the periods indicated:
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2012
|
|
2011
|
|
Included
in oil and gas production revenue:
|
|
|
|
|
|
Certain
realized gains on hedges
|
|
$ 25,465
|
|
$ 27,922
|
|
|
|
|
|
|
|
Included
in commodity derivative gain (loss):
|
|
|
|
|
|
Realized
gain (loss) on derivatives not designated as
|
|
|
|
|
|
cash flow hedges
|
|
$ 3,803
|
|
$ (5,404)
|
|
Unrealized
ineffectiveness gain recognized
|
|
|
|
|
|
on derivatives designated as cash flow hedges
|
|
-
|
|
163
|
|
Unrealized
gain (loss) on derivatives
|
|
|
|
|
|
not designated as cash flow hedges
|
|
40,944
|
|
(5,871)
|
|
Total commodity derivative gain (loss)
|
|
$ 44,747
|
|
$ (11,112)
|
|
|
|
|
|
|
(2)
|
Management
believes the separate presentation of the non-cash component of general and
administrative expense is useful because the cash portion provides a better
understanding of cash required for general and administrative expenses.
Management also believes that this disclosure may allow for a more accurate
comparison to the Company's peers that may have higher or lower costs
associated with equity grants.
|
BILL BARRETT CORPORATION
|
Consolidated Condensed Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
|
|
March 31, 2012
|
|
December 31, 2011
|
|
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
Cash
and cash equivalents
|
|
$
95,694
|
|
$
57,331
|
|
Other
current assets
|
(1)
|
180,257
|
|
189,012
|
|
Property
and equipment, net
|
|
2,564,273
|
|
2,406,764
|
|
Other
noncurrent assets
|
|
44,408
|
|
34,823
|
|
|
Total
assets
|
|
$ 2,884,632
|
|
$
2,687,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders' Equity:
|
|
|
|
|
|
Current
liabilities
|
(1)
|
$
201,056
|
|
$
233,198
|
|
Notes
payable to bank
|
|
-
|
|
70,000
|
|
Senior
notes
|
|
1,041,584
|
|
641,198
|
|
Convertible
senior notes
|
|
25,344
|
|
171,042
|
|
Other
long-term liabilities
|
(1)
|
375,507
|
|
353,654
|
|
Stockholders'
equity
|
|
1,241,141
|
|
1,218,838
|
|
|
Total
liabilities and stockholders' equity
|
|
$ 2,884,632
|
|
$
2,687,930
|
|
|
|
|
|
|
|
(1)
|
At
March 31, 2012, the estimated fair value of all of our commodity derivative
instruments was a net asset of $98.8 million, comprised of: $86.7 million
current assets; $12.3 million non-current assets; and ($0.2) million
non-current liabilities. This amount will fluctuate quarterly based on
estimated future commodity prices and the current hedge position.
|
BILL BARRETT CORPORATION
|
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
2012
|
|
2011
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities:
|
|
|
|
|
|
Net
income
|
|
$ 35,893
|
|
$ 15,215
|
|
Adjustments
to reconcile to net cash
|
|
|
|
|
|
provided by operations:
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
74,083
|
|
65,394
|
|
|
Impairment,
dry hole costs and abandonment expense
|
|
564
|
|
283
|
|
|
Unrealized
derivative (gain)\loss
|
|
(40,944)
|
|
5,708
|
|
|
Deferred
income taxes
|
|
22,280
|
|
8,204
|
|
|
Stock
compensation and other non-cash charges
|
|
3,322
|
|
5,091
|
|
|
Amortization
of debt discounts and deferred financing costs
|
|
3,317
|
|
3,169
|
|
|
Loss
(gain) on sale of properties
|
|
-
|
|
279
|
|
|
Change
in assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
15,207
|
|
(3,699)
|
|
|
|
Prepayments
and other assets
|
|
1,191
|
|
3,929
|
|
|
|
Accounts
payable, accrued and other liabilities
|
|
(12,434)
|
|
(16,324)
|
|
|
|
Amounts
payable to oil & gas property owners
|
|
(3,277)
|
|
(904)
|
|
|
|
Production
taxes payable
|
|
(2,402)
|
|
1,366
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by operating activities
|
|
$ 96,800
|
|
$ 87,711
|
Investing
Activities:
|
|
|
|
|
|
Additions
to oil and gas properties, including acquisitions
|
|
(230,158)
|
|
(105,172)
|
|
Additions
of furniture, equipment and other
|
|
(2,329)
|
|
(720)
|
|
Proceeds
from sale of properties and other investing activities
|
|
(112)
|
|
(344)
|
|
|
|
|
|
|
|
|
|
|
Net
cash used in investing activities
|
|
$ (232,599)
|
|
$ (106,236)
|
Financing
Activities:
|
|
|
|
|
|
Proceeds
from debt
|
|
450,000
|
|
-
|
|
Principal
payments on debt
|
|
(267,156)
|
|
-
|
|
Deferred
financing costs and other
|
|
(9,350)
|
|
(3,308)
|
|
Proceeds
from stock option exercises
|
|
668
|
|
4,353
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
$ 174,162
|
|
$ 1,045
|
|
|
|
|
|
|
|
|
Increase/(Decrease)
in Cash and Cash Equivalents
|
|
38,363
|
|
(17,480)
|
|
|
|
|
|
|
|
|
Beginning
Cash and Cash Equivalents
|
|
57,331
|
|
58,690
|
|
|
|
|
|
|
|
|
Ending
Cash and Cash Equivalents
|
|
$ 95,694
|
|
$ 41,210
|
BILL BARRETT CORPORATION
|
Reconciliation of Discretionary Cash Flow
& Adjusted Net Income
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discretionary
Cash Flow Reconciliation
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2012
|
|
2011
|
(in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income/(loss)
|
|
$ 35,893
|
|
$ 15,215
|
|
|
|
|
|
|
|
Adjustments
to reconcile to discretionary cash flow:
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
74,083
|
|
65,394
|
|
Impairment,
dry hole and abandonment expense
|
|
564
|
|
283
|
|
Exploration
expense
|
|
439
|
|
1,351
|
|
Unrealized
derivative (gain)/loss
|
|
(40,944)
|
|
5,708
|
|
Deferred
income taxes
|
|
22,280
|
|
8,204
|
|
Stock
compensation and other non-cash charges
|
|
4,923
|
|
5,091
|
|
Amortization
of debt discounts and deferred financing costs
|
|
3,317
|
|
3,169
|
|
Gain
on extinguishment of debt
|
|
(1,601)
|
|
-
|
|
Loss
(gain) on sale of properties
|
|
-
|
|
279
|
Discretionary
Cash Flow
|
|
$ 98,954
|
|
$ 104,694
|
|
|
|
|
|
|
|
|
Per
share, diluted
|
|
$ 2.09
|
|
$ 2.24
|
|
Per
Mcfe
|
|
$ 3.51
|
|
$ 4.51
|
|
|
|
|
|
|
|
|
Adjusted
Net Income Reconciliation
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2012
|
|
2011
|
(in
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Net
Income/(loss)
|
|
$ 35,893
|
|
$ 15,215
|
|
|
|
|
|
|
Adjustments
to net income:
|
|
|
|
|
|
Unrealized
derivative (gain)/loss
|
|
(40,944)
|
|
5,708
|
|
Impairment
expense
|
|
-
|
|
-
|
|
Loss
(gain) on sale of properties
|
|
-
|
|
279
|
|
One
time items:
|
|
|
|
|
|
|
Gain
on extinguishment of debt
|
|
(1,601)
|
|
-
|
|
Subtotal
Adjustments
|
|
(42,545)
|
|
5,987
|
|
Effective
tax rate
|
|
38%
|
|
35%
|
|
Tax
effected adjustments
|
|
(26,378)
|
|
3,892
|
Adjusted
Net Income
|
|
$ 9,515
|
|
$ 19,107
|
|
|
|
|
|
|
|
Per
share, diluted
|
|
$ 0.20
|
|
$ 0.41
|
|
Per
Mcfe
|
|
$ 0.34
|
|
$ 0.82
|
|
|
|
|
|
|
|
|
|
|
|
|
The
non-GAAP (Generally Accepted Accounting Principles in the United States of
America) measures of discretionary cash flow and adjusted net income are
presented because management believes that they provide useful additional
information to investors for analysis of the Company's ability to internally
generate funds for exploration, development and acquisitions as well as
adjusting net income for unusual items to allow for a more consistent
comparison from period to period. In addition, these measures are widely used
by professional research analysts and others in the valuation, comparison and
investment recommendations of companies in the oil and gas exploration and
production industry, and many investors use the published research of
industry research analysts in making investment decisions.
|
|
|
|
|
|
|
|
These
measures should not be considered in isolation or as a substitute for net
income, income from operations, net cash provided by operating activities or
other income, profitability, cash flow or liquidity measures prepared in
accordance with GAAP. Because discretionary cash flow and adjusted net income
exclude some, but not all, items that affect net income and net cash provided
by operating activities and may vary among companies, the amounts presented
may not be comparable to similarly titled measures of other companies.
|