UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): February 24, 2009
BERRY PETROLEUM
COMPANY
(Exact
Name of Registrant as Specified in its Charter)
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DELAWARE
(State
or Other Jurisdiction of
Incorporation
or Organization)
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1-9735
(Commission
File Number)
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77-0079387
(IRS
Employer
Identification
Number)
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1999 BROADWAY, SUITE 3700,
DENVER, COLORADO
(Address
of Principal Executive Offices)
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80202
(Zip
Code)
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Registrant’s
telephone number, including area code: (303) 999-4400
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
- 1
- -
Item
2.02 Results of Operations and Financial Condition
On
February 24, 2009, Berry Petroleum Company issued a news release announcing its
financial and operational results for the fourth quarter and full-year ended
December 31, 2008. These results are discussed in the news release attached
hereto as Exhibit 99.1, which is incorporated by reference in its
entirety.
Item 9.01
Financial
Statements and Exhibits
(d)
Exhibits
99.1 -
News Release by Berry Petroleum Company dated February 24, 2009, titled "Berry
Petroleum Reports 2008 Earnings of $2.94 Per Share and Total Production of
31,970 BOE/D" announcing the Registrant's results for the fourth quarter
and full-year ended December 31, 2008.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereto
duly authorized.
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BERRY PETROLEUM
COMPANY
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By:
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/s/ Kenneth A.
Olson
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Kenneth
A. Olson
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Corporate
Secretary
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Date: February
24, 2009
- 2
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Berry Petroleum Company News
Contact:
Berry Petroleum Company
1999 Broadway, Suite
3700
Denver, CO
80202
303-999-4400
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Contacts:
David Wolf 303-999-4400 Todd Crabtree
866-472-8279
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Berry
Petroleum Reports 2008 Earnings of $2.94 Per Share and Total Production of
31,970 BOE/D
2008
Proved Reserves Increase 45% to 246 MMBOE with an F&D Cost of
$12.30/BOE
Total
Reserve Replacement Rate of 756% with Organic Reserve Replacement of
329%
Denver, Colorado. -- (BUSINESS WIRE)
- -- February 24, 2009 -- Berry Petroleum Company
(NYSE:BRY) earned net income of $134 million, or $2.94 per diluted share, for
the twelve months ended December 31, 2008, up 3% from 2007 net income of $130
million, or $2.89 per diluted share, according to Robert F. Heinemann, president
and chief executive officer. Total revenues were $802 million for 2008 compared
to $583 million in 2007. Oil and gas revenues totaled $698 million in 2008
compared to $467 million in 2007. Operating cash flow totaled $410 million in
2008 compared to $239 million in 2007.
The
reported net income includes items that affect year-on-year comparisons such as
the Flying J bankruptcy, dry hole & abandonment expense and reductions to
rig carrying values. In total, for the full-year 2008, these items decreased net
income by approximately $25 million or $0.56 per diluted share. The
Flying J bankruptcy accounts for 84% of this decrease.
Mr.
Heinemann said, “2008 was another year of growth for Berry Petroleum. 2008
production averaged 31,970 barrels of oil equivalent per day (BOE/D) primarily
due to the continued successful development of our Diatomite and Poso Creek
California oil assets, development of our Piceance asset and our mid-year East
Texas gas acquisition. Operating cash flow was very strong in 2008, up 71% from
2007 due to strong mid-year commodity prices and increasing production. We
increased total proved reserves by 45% to end 2008 with 246 MMBOE at a finding
and development cost (F&D) of $12.30 per BOE. Our organic
replacement from development drilling was 329% of production. Our reserve life
is now 19 years and we had no impairments related to the value of our
reserves. In response to the Flying J bankruptcy and other market
conditions, the Company has taken several steps including marketing of our
California production to other refiners, an amendment of our debt covenants,
cost reductions, and additional hedging to put our Company on sound financial
footing going forward.”
Production
Increased 19% in 2008 to 31,970 BOE/D
For 2008,
net production averaged 31,970 barrels of oil equivalent per day (BOE/D), an
increase of 19% from the 26,900 BOE/D achieved in 2007. Production from our
North Midway Diatomite asset increased 86%, Poso Creek increased 57% and the
Piceance assets increased 103%. Additionally, our newly acquired East Texas
asset contributed approximately 5,000 BOE/D for the second half of 2008. For
2008, California accounted for 52% of daily production, the Rockies 41% and East
Texas 7%. For 2008 and 2007, net production in BOE per day was as
follows:
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2008 Production
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2007 Production
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|||||||||||||||
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Oil
(Bbls)
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20,330 | 64 | % | 19,753 | 73 | % | ||||||||||
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Natural
Gas (BOE)
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11,638 | 36 | % | 7,149 | 27 | % | ||||||||||
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Total
BOE per day
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31,968 | 100 | % | 26,902 | 100 | % | ||||||||||
1
Berry
Petroleum Company News Release - February 24, 2009
The
average realized sales price, after hedging, for the full-year 2008 was $59.81
per BOE, an increase of 26% over the $47.50 per BOE received in the 2007 period.
For 2008 and 2007, oil and gas prices were as follows:
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Average Sales Price
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2008 Prices
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2007 Prices
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% Change
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Oil
(per Bbl) before hedging
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$ | 86.90 | $ | 57.85 | +50 | % | ||||||
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Oil
(per Bbl) after hedging
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70.01 | 53.24 | +31 | % | ||||||||
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Gas
(per Mcf) before hedging
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6.87 | 4.53 | +52 | % | ||||||||
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Gas
(per Mcf) after hedging
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7.01 | 5.27 | +33 | % | ||||||||
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Per
BOE before hedging
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70.22 | 49.72 | +41 | % | ||||||||
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Per
BOE after hedging
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59.81 | 47.50 | +26 | % | ||||||||
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Avg.
operating cost (O&G) per BOE
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$ | 17.10 | $ | 14.38 | +19 | % | ||||||
2008
Capital Expenditures
Development
Capital expenditures totaled $398 million for 2008, with spending on new wells
and workovers totaling $338 million and other facilities and fixed assets
totaling $60 million. Approximately 31% of the investment was made
into the California heavy oil assets, 37% into the Rockies natural gas assets,
15% into the Rockies oil assets and 17% into the East Texas gas assets. The
Company drilled 452 gross (381 net) wells in 2008, with a success rate of 99
percent.
Michael
Duginski, executive vice president and chief operating officer, stated, "Our
capital expenditures for 2008 totaled $398 million for development funded
by $410 million in operating cash flow and $668 million in acquisitions
funded through additional borrowing on our senior secured credit facility. This
compares to our total capital expenditures in 2007 of $341 million, which
consisted of $56 million of acquisitions and $285 million in development and
other assets.”
In July
2008, the Company closed on an acquisition of properties with 100 producing
natural gas wells on 4,500 net acres in Limestone and Harrison Counties of East
Texas for approximately $668 million in cash, including various post closing
adjustments. Berry has identified over 100 drilling locations targeting stacked
pay in various productive zones including the Pettit, Travis Peak, Cotton Valley
Sands, Cotton Valley Lime, Bossier Sands and the Haynesville and Bossier Shales
as well as approximately 75 recompletion opportunities. Also included in the
acquisition is a gathering system that is expected to gather all current and
future production from the acquired properties. The Company is currently
drilling with one rig and plans to begin drilling horizontal wells in the
Haynesville Shale in Harrison County in the third quarter of 2009.
Mr.
Duginski continued, “This was a first-rate opportunity for Berry to establish a
new core area with another low geologic risk natural gas asset with a growing
production profile and strong cash operating margins. We believe this
is an excellent entry into the price-favored East Texas Basin given the
concentrated asset base, the attractive economics associated with the current
drilling inventory and the upside potential from the Haynesville and Bossier
Shales.”
2
Berry
Petroleum Company News Release - February 24, 2009
Proved
Reserves Increased 45% to 246 MMBOE
Proved
oil and gas reserves were estimated at 246 million BOE as of December 31,
2008. This represents a 45% increase compared to 169 million BOE at
year-end 2007. Including acquisitions, the Company added 88.5 million BOE at a
finding and development cost of $12.30 per BOE and replaced 756% of the 11.7
million BOE it produced in 2008. The organic replacement rate from development
drilling was 329% supported by 20 million BOE of additions each from its N.
Midway Diatomite and Piceance developments. At year-end 2008, the
Company’s proved reserve mix includes 125 million barrels of crude oil,
condensate and natural gas liquids, and 724 billion cubic feet of natural gas,
or 51% oil and 49% natural gas.
Geographically,
45% of proved reserves are in California, 35% are in the Rocky Mountain
region and 20% in East Texas. The Company’s year-end reserves-to-production
ratio increased slightly to 19 years, based on annualized fourth quarter 2008
average daily production. Proved developed reserves represent 55% of total
proved reserves. At December 31, 2008 the Company had 142,000 gross developed
acres (118,000 net), 354,000 gross undeveloped acres (200,000 net), and a
drilling inventory of over 3,000 locations.
Fourth
Quarter 2008 Results - Net Loss of ($0.27) - Production of 35,580
BOE/D
For the
fourth quarter ended December 31, 2008 the Company reported a loss of ($12.0)
million, or ($0.27) per diluted share compared to $32.3 million, or $0.71 per
diluted share in the fourth quarter of 2007. The net loss resulted from a
write-off of $38.5 million (pre-tax) of accounts receivable due from Big West of
California (a subsidiary of Flying J) as a result of their bankruptcy filing in
December 2008. This write-off included crude oil sales for all of
November 2008 and 22 days of December 2008 production from most of our
California properties. Other notable charges taken in the fourth quarter of the
year included pre-tax rig termination fees of $2.3 million, $4.2 million related
to the disposal and impairment of certain drilling rigs and related equipment,
and dry hole expenses of $0.7 million.
Average
production was 35,583 BOE/D in the fourth quarter of 2008, up 27% from 28,023
BOE/D in the fourth quarter of 2007. Subsequent to the Flying J
bankruptcy, the Company entered into short-term contracts with other parties to
receive all of its California production. Operating cash flow totaled $78
million and capital expenditures during the quarter totaled $92
million. For the fourth quarter of 2008, oil and gas revenues were
$140 million compared to $133 million in 2007 and operating cash flow was $78
million for 2008 compared to $57 million for 2007. The average realized sales
price after hedging for the fourth quarter was $42.93 per BOE, down 18% from
$52.32 per BOE achieved in the fourth quarter of 2007.
David
Wolf, executive vice president and chief financial officer, stated, “We expect
our 2009 operating cash flow to be between $175 and $200 million, which will
fund our entire 2009 development program. Our hedge position makes
our 2009 operating cash flow fairly insensitive to changes in commodity prices
with a $10 change in WTI prices impacting our cash flow by approximately $2
million and a $1 change in Henry Hub prices impacting our cash flow by
approximately $6 million.
3
Berry
Petroleum Company News Release - February 24, 2009
Operating
Costs Breakdown
The table
below reflects the breakdown in these costs for 2008 and 2007.
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Per
BOE
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2008
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2007
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Change
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Operating
costs - oil and gas production
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$ | 17.10 | $ | 14.38 | 19 | % | ||||||
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Production
taxes
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2.56 | 1.75 | 46 | % | ||||||||
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DD&A
- oil and gas production
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11.81 | 9.54 | 24 | % | ||||||||
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G&A
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4.73 | 4.09 | 16 | % | ||||||||
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Interest
expense
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2.24 | 1.76 | 27 | % | ||||||||
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Total
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$ | 38.44 | $ | 31.52 | 22 | % | ||||||
Total
operating costs in 2008 averaged $38.44 per BOE, a 22% increase over 2007 costs
of $31.52 per BOE. Operating costs for oil and gas production for 2008 averaged
$17.10 per BOE, up 19% from 2007 costs of $14.38 per BOE primarily due to higher
steam costs due to increased volumes of injected steam and higher natural gas
prices, increased service and labor costs and higher gas processing costs.
Production taxes were 46% higher totaling $2.56 per BOE for 2008 compared to
$1.75 in 2007 due to the increased value of our oil and gas
production. DD&A expenses averaged $11.81 per BOE for 2008
compared to $9.54 in 2007, primarily due to production increases from our more
recent acquisitions that have a higher book cost than our legacy California
assets.
2009
Business Outlook
Mr.
Heinemann commented on Berry’s 2009 outlook, “After experiencing the precipitous
drop in commodity prices, the Flying J bankruptcy, the proposed California
severance tax which did not pass and the ongoing global financial crisis in the
fourth quarter of 2008, the Company has taken a number of measures that improve
its business in 2009. These include:
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·
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Producing
32,000 BOE/D while balancing capital expenditures to be within cash
flow.
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·
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Marketing
all of our California production under various agreements to take
advantage of the reduced heavy oil differential, which has declined from
$14 per barrel at year-end 2008 to less than $9 per barrel
today.
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·
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Targeting
reductions in capital, operating and G&A expenses of
20-25%.
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Hedging
over 90% of our oil production, so that if WTI averages $40 per barrel,
our realization will be $65.50 per
barrel.
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Generating
between $175 and $200 million of operating cash
flow.
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Amending
the covenants under our credit facility to improve our financial
flexibility.
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Using
interest rate hedges to lock in LIBOR rates in the 2% range through July
2012.
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·
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Leveraging
our diversified portfolio by investing in high return California oil
projects and the development of our E. Texas
assets.
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Mr.
Heinemann continued, “Our 2009 capital budget is $100 million and since we
operate substantially all of our assets, we can manage our spending to be within
our internally generated cash flows. We are working actively to reduce our
operating expenses to reflect the current and expected near-term pricing
environment. Currently the budget is divided between our assets as
follows: California assets, $51 million; East Texas asset, $35 million; and
Rockies assets, $14 million.“
Debt
Covenants Amended
4
Berry
Petroleum Company News Release - February 24, 2009
On
February 19, 2009, the Company executed a second amendment to its senior secured
credit facility which, among other things, increased the maximum EBITDAX to
total funded debt ratio to 4.75 through year-end 2009, to 4.50 through year-end
2010 and to 4.00 thereafter. Additionally, the write off of $38.5
million to bad debt expense associated with the bankruptcy of Big West of
California will be excluded from the calculation of EBITDAX. The
LIBOR and prime rate margins increased to between 2.25% and 3.0% based on the
ratio of credit outstanding to the borrowing base. Additionally, the
annual commitment fee on the unused portion of the credit facility increased to
0.50%, regardless of the amount outstanding.
Mr. Wolf,
added, “The amendment to our covenants will provide Berry the flexibility to
undertake additional financing and to improve our liquidity in the current
market environment. Additionally, in late 2008 we were able to add several new
banks to our facility, increasing our bank commitments and liquidity by $130
million. At year-end 2008, our total debt was $1.16 billion, made up of our $200
million in senior subordinated notes and $957 million drawn under our senior
secured credit facility, which has bank commitments of $1.21 billion, providing
us with liquidity of $245 million. Our EBITDAX to total funded debt
ratio was 2.7 at year end.”
2009
Guidance
For 2009
the Company is issuing the following guidance ranges and previous years’
comparisons:
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Amount
per BOE
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Anticipated
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range
in 2009
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2008
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Operating
costs-oil and gas production
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$ | 13.50 – 15.00 | $ | 17.10 | |||||
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Production
taxes
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1.50 – 2.00 | 2.56 | |||||||
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DD&A
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14.00 – 16.00 | 11.81 | |||||||
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G&A
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3.75 – 4.00 | 4.73 | |||||||
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Interest
expense
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3.00 – 4.00 | 2.24 | |||||||
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Total
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$ | 35.75 – 41.00 | $ | 38.44 | |||||
Reconciliation
of Net Income
Included
in the 2008 net income number on an after tax basis are expenses related to the
write-off and impairment of certain drilling rigs and obligations ($3.6 million
or $0.08 per share), write off of bad debt related to the bankruptcy of Big West
of California ($21.1 million or $0.47 per share) and dry hole charges ($0.4
million or $0.01 per share). On an after-tax basis these items resulted in a $25
million reduction to net income, or $0.56 per share.
5
Berry
Petroleum Company News Release - February 24, 2009
Finding,
Development & Acquisition Cost Supporting Schedule
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All
expenditure amounts below are estimates (unaudited)
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(Amounts
in millions)
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2008
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Acquisition
Costs
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$ | 668.0 | ||
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Capitalized
Interest
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23.2 | |||
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Development
Costs
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397.6 | |||
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Net
Expenditures
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$ | 1,088.8 | ||
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Total
reserves added, excluding production (MMBOE)
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88.5 | |||
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Estimated
finding, development & acquisition cost per BOE
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$ | 12.30 | ||
Teleconference
Call
An
earnings conference call will be held Wednesday, February 25, 2009 at 3:00 p.m.
Eastern Time (1:00 p.m. Mountain Time). Dial 1-800-561-2601 to
participate, using passcode 58885351. International callers may dial
617-213-8065. For a digital replay available until March 11,
2009 dial 1-888-286-8010 (passcode 63530955). Listen live or via replay on the
web at www.bry.com. Transcripts of this and previous calls may be viewed at
www.bry.com in the “Investor Center.”
About
Berry Petroleum Company
Berry
Petroleum Company is a publicly traded independent oil and gas production and
exploitation company with operations in California, Colorado, Texas and Utah.
The Company uses its web site as a channel of distribution of material company
information. Financial and other material information regarding the Company is
routinely posted on and accessible at http://www.bry.com/index.php?page=investor.
Safe
harbor under the “Private Securities Litigation Reform Act of 1995”
Any
statements in this news release that are not historical facts are
forward-looking statements that involve risks and uncertainties. Words such
as "would," "will," "target," "goal," and forms of those words and others
indicate forward-looking statements. Important factors which could affect
actual results are discussed in PART 1, Item 1A. Risk Factors
of Berry's 2007 Form 10-K filed with the Securities and Exchange Commission on
February 26, 2008 under the heading "Other Factors Affecting the Company's
Business and Financial Results" in the section titled "Management's Discussion
and Analysis of Financial Condition and Results of Operations. All material
changes are updated in Part II, Item 1A within our Form 10-Qs filed subsequent
to that date and specifically in the Form 10-Q for the period ending September
30, 2008 filed on October 29, 2008."
6
Berry
Petroleum Company News Release - February 24, 2009
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CONDENSED
INCOME STATEMENTS
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(In
thousands, except per share data)
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(unaudited)
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Three Months
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Twelve Months
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12/31/08
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12/31/07
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12/31/08
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12/31/07
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Revenues
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Sales
of oil and gas
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$ | 140,288 | $ | 133,467 | $ | 697,977 | $ | 467,400 | ||||||||
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Sales
of electricity
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12,302 | 14,915 | 63,525 | 55,619 | ||||||||||||
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Gas
marketing
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$ | 7,704 | 35,750 | - | ||||||||||||
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Gain
(loss) on sale of assets
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(1,807 | ) | 2,356 | (1,297 | ) | 54,173 | ||||||||||
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Interest
and other, net
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1,481 | 2,511 | 5,576 | 6,265 | ||||||||||||
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Total
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159,968 | 153,249 | 801,531 | 583,457 | ||||||||||||
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Expenses
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Operating
costs – oil &
gas
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47,246 | 37,889 | 200,098 | 141,218 | ||||||||||||
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Operating
costs – electricity
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9,271 | 10,966 | 54,891 | 45,980 | ||||||||||||
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Production
taxes
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6,777 | 4,918 | 29,898 | 17,215 | ||||||||||||
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Depreciation,
depletion & amortization - oil & gas
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41,649 | 28,212 | 138,237 | 93,691 | ||||||||||||
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Depreciation,
depletion & amortization - electricity
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821 | 907 | 2,812 | 3,568 | ||||||||||||
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Gas
Marketing
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5,985 | 32,072 | - | |||||||||||||
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General
and
administrative
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18,286 | 10,918 | 55,353 | 40,210 | ||||||||||||
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Interest
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9,765 | 3,693 | 26,209 | 17,287 | ||||||||||||
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Commodity
derivatives
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186 | - | 358 | - | ||||||||||||
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Dry
hole, abandonment, impairment & exploration
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3,154 | 4,315 | 12,316 | 13,657 | ||||||||||||
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Bad
debt expense
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38,665 | - | 38,665 | - | ||||||||||||
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Total
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181,805 | 101,818 | 590,909 | 372,826 | ||||||||||||
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Income
(loss) before income
taxes
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(21,837 | ) | 51,431 | 210,622 | 210,631 | |||||||||||
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Income
tax provision
(benefit)
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(9,846 | ) | 19,170 | 77,093 | 80,703 | |||||||||||
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Net
income (loss)
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$ | (11,991 | ) | $ | 32,261 | $ | 133,529 | $ | 129,928 | |||||||
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Basic
net income (loss) per
share
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$ | (0.27 | ) | $ | 0.73 | $ | 3.00 | $ | 2.95 | |||||||
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Diluted
net income (loss) per
share
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$ | (0.27 | ) | $ | 0.71 | $ | 2.94 | $ | 2.89 | |||||||
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Cash
dividends per
share
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$ | 0.075 | $ | 0.075 | $ | .30 | $ | .30 | ||||||||
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Weighted
average common shares:
|
||||||||||||||||
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Basic
|
44,543 | 44,238 | 44,485 | 44,075 | ||||||||||||
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Diluted
|
45,155 | 45,238 | 45,395 | 44,906 | ||||||||||||
7
Berry
Petroleum Company News Release - February 24, 2009
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CONDENSED
BALANCE SHEETS
|
||||||||
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(In
thousands)
|
||||||||
|
(unaudited)
|
||||||||
|
12/31/08
|
12/31/07
|
|||||||
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Assets
|
||||||||
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Current
assets
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$ | 189,080 | $ | 161,019 | ||||
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Property,
buildings & equipment, net
|
2,254,425 | 1,275,091 | ||||||
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Fair
value of derivatives
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79,696 | - | ||||||
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Other
assets
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19,182 | 15,996 | ||||||
| $ | 2,542,383 | $ | 1,452,106 | |||||
|
Liabilities
& Shareholders’ Equity
|
||||||||
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Current
liabilities
|
$ | 260,625 | $ | 271,369 | ||||
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Deferred
taxes
|
270,323 | 128,824 | ||||||
|
Long-term
debt
|
1,131,800 | 445,000 | ||||||
|
Other
long-term liabilities
|
47,888 | 38,481 | ||||||
|
Fair
value of derivatives
|
4,203 | 108,458 | ||||||
|
Shareholders’
equity
|
827,544 | 459,974 | ||||||
|
|
$ | 2,542,383 | $ | 1,452,106 | ||||
|
CONDENSED
STATEMENTS OF CASH FLOWS
|
||||||||
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(In
thousands)
|
||||||||
|
(unaudited)
|
||||||||
|
Twelve Months
|
||||||||
|
12/31/08
|
12/31/07
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income
|
$ | 133,529 | $ | 129,928 | ||||
|
Depreciation,
depletion & amortization (DD&A)
|
141,049 | 97,259 | ||||||
|
Dry
hole & impairment
|
9,932 | 12,951 | ||||||
|
Deferred
income taxes
|
67,982 | 62,465 | ||||||
|
Commodity
derivatives
|
(108 | ) | 574 | |||||
|
Stock
based compensation
|
9,313 | 8,200 | ||||||
|
(Gain)
loss on sale of asset
|
1,297 | (54,173 | ) | |||||
|
Cash
paid for abandonment
|
(4,607 | ) | (1,188 | ) | ||||
|
Other,
net
|
(756 | ) | 3,561 | |||||
|
Change
in book overdraft
|
23,984 | (9,400 | ) | |||||
|
Allowance
for bad debt
|
38,511 | - | ||||||
|
Net
changes in operating assets and liabilities
|
(10,557 | ) | (11,298 | ) | ||||
|
Net
cash provided by operating activities
|
409,569 | 238,879 | ||||||
|
Net
cash used in investing activities
|
(1,086,769 | ) | (287,213 | ) | ||||
|
Net
cash provided by financing activities
|
677,124 | 48,234 | ||||||
|
Net
decrease in cash and cash equivalents
|
(76 | ) | (100 | ) | ||||
|
Cash
and cash equivalents at beginning of year
|
316 | 416 | ||||||
|
Cash
and cash equivalents at end of period
|
$ | 240 | $ | 316 | ||||
8
Berry
Petroleum Company News Release - February 24,
2009
|
COMPARATIVE
OPERATING STATISTICS
|
||||||||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||||||||
|
Three Months
|
Twelve Months
|
|||||||||||||||||||||||
|
|
12/31/08
|
12/31/07
|
Change
|
12/31/08
|
12/31/07
|
Change
|
||||||||||||||||||
|
Oil
and gas:
|
||||||||||||||||||||||||
|
Heavy
Oil Production (Bbl/D)
|
15,999 | 16,595 | 16,633 | 16,170 | ||||||||||||||||||||
|
Light
Oil Production (Bbl/D)
|
3,659 | 3,395 | 3,697 | 3,583 | ||||||||||||||||||||
|
Total
Oil Production (Bbl/D)
|
19,658 | 19,990 | 20,330 | 19,753 | ||||||||||||||||||||
|
Natural
Gas Production (Mcf/D)
|
95,548 | 48,196 | 69,834 | 42,895 | ||||||||||||||||||||
|
Net production-BOE
per day
|
35,583 | 28,023 | +28 | % | 31,968 | 26,902 | +19 | % | ||||||||||||||||
|
Per
BOE:
|
||||||||||||||||||||||||
|
Average
sales price before hedges
|
$ | 38.45 | $ | 60.38 | -36 | % | $ | 70.22 | $ | 49.72 | +41 | % | ||||||||||||
|
Average
sales price after hedges
|
$ | 42.93 | $ | 52.32 | -18 | % | $ | 59.81 | $ | 47.50 | +26 | % | ||||||||||||
|
Oil,
per Bbl:
|
||||||||||||||||||||||||
|
Average
WTI price
|
$ | 59.08 | $ | 90.50 | -35 | % | $ | 99.75 | $ | 72.41 | +38 | % | ||||||||||||
|
Price
sensitive royalties
|
(1.69 | ) | (6.68 | ) | (2.95 | ) | (5.03 | ) | ||||||||||||||||
|
Gravity
differential and other
|
(8.55 | ) | (9.92 | ) | (11.32 | ) | (9.53 | ) | ||||||||||||||||
|
Crude
oil hedges
|
4.69 | (13.57 | ) | (16.89 | ) | (4.61 | ) | |||||||||||||||||
|
Correction
to royalties payable
|
- | - | 1.42 | - | ||||||||||||||||||||
|
Average
oil sales price after hedging
|
53.53 | 60.33 | -11 | % | $ | 70.01 | $ | 53.24 | +31 | % | ||||||||||||||
|
Natural
gas price:
|
||||||||||||||||||||||||
|
Average
Henry Hub price per MMBtu
|
6.95 | 7.39 | -6 | % | $ | 9.04 | $ | 7.12 | +27 | % | ||||||||||||||
|
Conversion
to Mcf
|
.35 | .35 | .45 | .34 | ||||||||||||||||||||
|
Natural
gas hedges
|
.70 | .91 | .14 | .74 | ||||||||||||||||||||
|
Location,
quality differentials, other
|
(3.02 | ) | (3.21 | ) | (2.62 | ) | (2.93 | ) | ||||||||||||||||
|
Avg.
gas sales price after hedging
|
4.98 | 5.44 | -8 | % | 7.01 | 5.27 | +33 | % | ||||||||||||||||
|
Operating
costs
|
$ | 14.43 | $ | 14.70 | -2 | % | $ | 17.10 | $ | 14.38 | +19 | % | ||||||||||||
|
Production
taxes
|
2.07 | 1.91 | 8 | % | 2.56 | 1.75 | +46 | % | ||||||||||||||||
|
Total
operating costs
|
16.50 | 16.61 | -1 | % | 19.66 | 16.13 | +22 | % | ||||||||||||||||
|
DD&A -
oil and
gas
|
12.72 | 10.94 | 16 | % | 11.81 | 9.54 | +24 | % | ||||||||||||||||
|
General
& administrative expenses
|
5.59 | 4.24 | 32 | % | 4.73 | 4.09 | +16 | % | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Interest
expense
|
$ | 2.98 | $ | 1.43 | 108 | % | $ | 2.24 | $ | 1.76 | +27 | % | ||||||||||||
# #
#
9