Key highlights for the first quarter of 2014 include:
- Total sales volumes of 286 thousand barrels of oil equivalent per day (MBoe/d), an increase of 20 percent from the first quarter of 2013, after adjusting for divested assets
- Delivered record horizontal production of 100 MBoe/d on average from the
DJ Basin andMarcellus Shale plays, up over 60 percent versus the first quarter of last year - Performed completion operations on initial vertical well in the Wilson play of
NE Nevada , successfully recovering oil from multiple intervals - Apparent high bidder on 12 deepwater lease blocks in the Central Gulf of Mexico Lease Sale 231
- Signed the first two regional export sales agreements for natural gas sales from Tamar and Leviathan to customers in
Jordan and the Palestinian Authority - Finalized agreement with the
Israel Anti-Trust Authority - Executed sales agreements to divest the Company's E. Texas, N. Louisiana and
Powder River Basin assets
VOLUMES AND PRICES
First quarter 2014 sales volumes averaged 286 MBoe/d, an increase of 20 percent compared to the first quarter of 2013, after adjusting for divested assets.
Global crude oil and condensate prices averaged
EXPENSES
First quarter 2014 total production costs, including lease operating expense (LOE), production and ad valorem taxes, and transportation and gathering averaged
Included in the adjustments to net income for the first quarter of 2014 was an impairment recorded to the
OPERATIONS UPDATE
In the
In the
In the deepwater
In the Eastern Mediterranean, total
Tamar and Leviathan were signed during the quarter, with larger contracts expected to follow over the next several quarters. Significant progress has been made towards sanctioning the first phase of Leviathan with an agreement reached with the
UPDATED GUIDANCE
To date in 2014, the Company has executed sales agreements for certain non-core U.S. onshore assets, including its positions in the E. Texas, N. Louisiana, Tri-State and the
As a result of these transactions,
Detailed guidance is available in the supplemental information for the conference call.
(1) |
A Non-GAAP measure, see attached Reconciliation Schedules |
WEBCAST AND CONFERENCE CALL INFORMATION
This news release contains certain "forward-looking statements" within the meaning of federal securities law. Words such as "anticipates", "believes," "expects", "intends", "will", "should", "may", and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect
This news release also contains certain historical non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating
Schedule 1 Reconciliation of Net Income to Adjusted Income (in millions, except per share amounts, unaudited) | ||||||||||||||||
Three Months Ended | ||||||||||||||||
2014 |
Per Diluted Share |
2013 |
Per Diluted Share | |||||||||||||
Net Income |
$ |
200 |
$ |
0.55 |
$ |
261 |
$ |
0.72 |
||||||||
(Gain) loss on commodity derivatives, net of cash settlements [1] |
42 |
0.12 |
79 |
0.22 |
||||||||||||
Asset impairments [2] |
97 |
0.27 |
— |
— |
||||||||||||
(Gain) loss on divestitures [3] |
1 |
— |
(52) |
(0.14) |
||||||||||||
Other adjustments |
1 |
— |
(10) |
(0.03) |
||||||||||||
Total adjustments before tax |
141 |
0.39 |
17 |
0.05 |
||||||||||||
Income tax effect of adjustments [4] |
(43) |
(0.12) |
(17) |
(0.05) |
||||||||||||
Adjusted Income |
$ |
298 |
$ |
0.82 |
$ |
261 |
$ |
0.72 |
||||||||
Weighted average number of shares outstanding |
||||||||||||||||
Diluted |
365 |
362 |
NOTE: |
Adjusted income should not be considered a substitute for net income as reported in accordance with GAAP. Adjusted income is provided for comparison to earnings forecasts prepared by analysts and other third parties. Our management believes, and certain investors may find, that adjusted income is beneficial in evaluating our financial performance. We believe such measures can facilitate comparisons of operating performance between periods and with our peers. See Schedule 2: Summary Statement of Operations |
All per share and shares outstanding amounts have been retroactively adjusted for the two-for-one stock split, which was distributed on |
[1] |
Many factors impact our gain or loss on commodity derivatives, net of cash settlements, including: increases and decreases in the commodity forward curves compared to our executed hedging arrangements; increases in hedged future volumes; and the mix of hedge arrangements between NYMEX WTI, Dated Brent and NYMEX HH commodities. These gains or losses on commodity derivatives, net of cash settlements recognized in the current period will be realized in the future when cash settlement occurs. |
[2] |
Amount for 2014 primarily represents impairment related to the |
[3] |
During 2014 and 2013 we sold certain non-core onshore U.S. properties. |
[4] |
The income tax effect of adjustments are determined for each major tax jurisdiction for each adjusting item. |
Schedule 2 Summary Statement of Operations (in millions, except per share amounts, unaudited) | ||||||||
Three Months Ended | ||||||||
2014 |
2013 | |||||||
Revenues |
||||||||
Crude oil and condensate |
$ |
928 |
$ |
849 |
||||
Natural gas |
325 |
179 |
||||||
Natural gas liquids |
74 |
55 |
||||||
Income from equity method investees |
52 |
60 |
||||||
Total revenues |
1,379 |
1,143 |
||||||
Operating Expenses |
||||||||
Lease operating expense |
145 |
117 |
||||||
Production and ad valorem taxes |
49 |
43 |
||||||
Transportation and gathering expense |
38 |
27 |
||||||
Exploration expense |
74 |
61 |
||||||
Depreciation, depletion and amortization |
425 |
366 |
||||||
General and administrative |
140 |
112 |
||||||
Asset impairments |
97 |
— |
||||||
Other operating expense, net |
7 |
(8) |
||||||
Total operating expenses |
975 |
718 |
||||||
Operating Income |
404 |
425 |
||||||
Other (Income) Expense |
||||||||
(Gain) loss on commodity derivative instruments |
75 |
72 |
||||||
Interest, net of amount capitalized |
47 |
25 |
||||||
Other non-operating (income) expense, net |
5 |
10 |
||||||
Total other (income) expense |
127 |
107 |
||||||
Income from Continuing Operations Before Income Taxes |
277 |
318 |
||||||
Income Tax Provision |
77 |
86 |
||||||
Income from Continuing Operations |
200 |
232 |
||||||
Discontinued Operations, Net of Tax |
— |
29 |
||||||
Net Income |
$ |
200 |
$ |
261 |
||||
Earnings Per Share [1] |
||||||||
Basic |
||||||||
Income from continuing operations |
$ |
0.56 |
$ |
0.65 |
||||
Discontinued operations, net of tax |
— |
0.08 |
||||||
Net Income |
$ |
0.56 |
$ |
0.73 |
||||
Diluted |
||||||||
Income from continuing operations |
$ |
0.55 |
$ |
0.64 |
||||
Discontinued operations, net of tax |
— |
0.08 |
||||||
Net Income |
$ |
0.55 |
$ |
0.72 |
||||
Weighted average number of shares outstanding [1] |
||||||||
Basic |
360 |
358 |
||||||
Diluted |
365 |
362 |
[1] |
All per share and shares outstanding amounts have been retroactively adjusted for the two-for-one stock split, which was distributed on |
Schedule 3 Volume and Price Statistics (unaudited) | |||||||
Three Months Ended | |||||||
2014 |
2013 | ||||||
Crude Oil and Condensate Sales Volumes (MBbl/d) |
|||||||
|
64 |
63 |
|||||
|
34 |
27 |
|||||
Other International |
5 |
4 |
|||||
Total consolidated operations |
103 |
94 |
|||||
Equity method investee |
2 |
2 |
|||||
Total sales volumes |
105 |
96 |
|||||
Crude Oil and Condensate Realized Prices ($/Bbl) |
|||||||
|
$ |
97.02 |
$ |
95.70 |
|||
|
105.73 |
111.79 |
|||||
Other International |
104.28 |
109.22 |
|||||
Consolidated average realized prices |
$ |
100.23 |
$ |
100.90 |
|||
Natural Gas Sales Volumes (MMcf/d) |
|||||||
|
483 |
409 |
|||||
|
242 |
246 |
|||||
|
218 |
111 |
|||||
Total sales volumes |
943 |
766 |
|||||
Natural Gas Realized Prices ($/Mcf) |
|||||||
|
$ |
4.81 |
$ |
3.31 |
|||
|
0.27 |
0.27 |
|||||
|
5.60 |
5.15 |
|||||
Consolidated average realized prices |
$ |
3.83 |
$ |
2.60 |
|||
Natural Gas Liquids Sales Volumes (MBbl/d) |
|||||||
|
18 |
16 |
|||||
Equity method investee |
5 |
6 |
|||||
Total sales volumes |
23 |
22 |
|||||
Natural Gas Liquids Realized Prices ($/Bbl) |
|||||||
|
$ |
44.50 |
$ |
39.19 |
|||
Barrels of Oil Equivalent Volumes (MBoe/d) |
|||||||
|
163 |
146 |
|||||
|
74 |
68 |
|||||
|
37 |
19 |
|||||
Other International |
5 |
4 |
|||||
Total consolidated operations |
279 |
237 |
|||||
Equity method investee |
7 |
8 |
|||||
Total barrels of oil equivalent from continuing operations |
286 |
245 |
|||||
Total barrels of oil equivalent from discontinued operations |
— |
1 |
|||||
Total barrels of oil equivalent |
286 |
246 |
Schedule 4 Condensed Balance Sheets (in millions, unaudited) | ||||||||
|
| |||||||
2014 |
2013 | |||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ |
1,354 |
$ |
1,117 |
||||
Accounts receivable, net |
865 |
947 |
||||||
Other current assets |
545 |
547 |
||||||
Total current assets |
2,764 |
2,611 |
||||||
Net property, plant and equipment |
16,117 |
15,725 |
||||||
Goodwill |
621 |
627 |
||||||
Other noncurrent assets |
690 |
679 |
||||||
Total Assets |
$ |
20,192 |
$ |
19,642 |
||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Current Liabilities |
||||||||
Accounts payable - trade |
$ |
1,178 |
$ |
1,354 |
||||
Other current liabilities |
1,021 |
988 |
||||||
Total current liabilities |
2,199 |
2,342 |
||||||
Long-term debt |
5,011 |
4,566 |
||||||
Deferred income taxes |
2,449 |
2,441 |
||||||
Other noncurrent liabilities |
1,172 |
1,109 |
||||||
Total Liabilities |
10,831 |
10,458 |
||||||
Total Shareholders' Equity |
9,361 |
9,184 |
||||||
Total Liabilities and Shareholders' Equity |
$ |
20,192 |
$ |
19,642 |
Schedule 5 Discretionary (in millions, unaudited) | ||||||||
Three Months Ended | ||||||||
2014 |
2013 | |||||||
Adjusted Income [1] |
$ |
298 |
$ |
261 |
||||
Adjustments to reconcile adjusted income to discretionary cash flow: |
||||||||
Depreciation, depletion and amortization |
425 |
367 |
||||||
Exploration expense |
74 |
61 |
||||||
(Income)/Dividends from equity method investments, net |
(13) |
(35) |
||||||
Deferred compensation expense |
4 |
10 |
||||||
Deferred income taxes |
59 |
74 |
||||||
Stock-based compensation expense |
23 |
18 |
||||||
Other |
— |
1 |
||||||
Discretionary |
$ |
870 |
$ |
757 |
||||
Reconciliation to Operating Cash Flows |
||||||||
Net changes in working capital |
117 |
(9) |
||||||
Cash exploration costs |
(60) |
(54) |
||||||
Current tax benefit of earnings adjustments |
— |
(5) |
||||||
Other adjustments |
2 |
16 |
||||||
Net Cash Provided by Operating Activities |
$ |
929 |
$ |
705 |
||||
Capital expenditures (accrual based) |
$ |
951 |
$ |
910 |
||||
Increase in capital lease obligations [2] |
5 |
— |
||||||
Total Capital Expenditures (Accrual Based) |
$ |
956 |
$ |
910 |
NOTE: |
The table above reconciles discretionary cash flow to net cash provided by operating activities. While discretionary cash flow is not a GAAP measure of financial performance, our management believes it is a useful tool for evaluating our overall financial performance. Among our management, research analysts, portfolio managers and investors, discretionary cash flow is broadly used as an indicator of a company's ability to fund exploration and production activities and meet financial obligations. Discretionary cash flow is also commonly used as a basis to value and compare companies in the oil and gas industry. |
[1] |
See Schedule 1: Reconciliation of Net Income to Adjusted Income. |
[2] |
Increase in capital lease obligations represents estimated construction in progress to date on US operating assets and corporate buildings. |
SOURCE
News Provided by Acquire Media