Discretionary cash flow from continuing operations(2) for the second quarter of 2013 was
Key highlights for the second quarter of 2013 include:
- Achieved record sales volumes of 260 thousand barrels of oil equivalent per day (MBoe/d)
- Attained record
DJ Basin horizontal production averaging 50 MBoe/d - Reached record exit rate of 150 million cubic feet equivalent per day (MMcfe/d) in the
Marcellus Shale - Confirmed primary resource target with the successful Gunflint appraisal well in the
Gulf of Mexico - Announced a natural gas discovery at the Karish prospect offshore
Israel - Reached full operation at Tamar natural gas field and averaged over 99 percent reliability since initial production in April
- Initiated first production from the Alen field offshore
Equatorial Guinea
VOLUMES AND PRICES
Second quarter 2013 sales volumes from continuing operations averaged a record 260 MBoe/d, an increase of 24 percent compared to the second quarter of 2012, after adjusting for assets divested in 2012. Sales volumes exceeded production volumes in the quarter by approximately 2 MBoe/d due to the timing of liftings. The sales volume split for the quarter was 44 percent liquids, 30 percent international natural gas, and 26 percent U.S. natural gas.
Sales volumes from international assets were a record 120 MBoe/d for the second quarter of 2013, an increase of 33 percent compared to the second quarter of 2012, excluding volumes from discontinued operations in the
U.S. volumes totaled 140 MBoe/d for the second quarter of 2013, an increase of 14 percent compared to the same quarter last year, excluding volumes from divested assets. Growth from the horizontal plays in the
Global crude oil and condensate prices averaged
OPERATING EXPENSES
Total production costs per barrel of oil equivalent (Boe), including lease operating expense (LOE), production and ad valorem taxes, and transportation were
OPERATIONS UPDATE
In the
In the
In the
In the Eastern Mediterranean, Tamar became fully operational in the second quarter and had uptime reliability of more than 99 percent. Gross production in
In
UPDATED GUIDANCE
The full year volume guidance range for 2013 remains unchanged at 270 to 282 MBoe/d. Third quarter 2013 volumes are expected to average 285 to 295 MBoe/d, with the midpoint representing an increase of 30 MBoe/d, or approximately 12 percent versus the second quarter of 2013. The increase is largely attributable to the ramp up of Alen, additional natural gas sales from Tamar and the continued acceleration of activity in the
All other annual guidance ranges remain unchanged.
(1) |
|
(2) |
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 from Continuing Operations (in millions, except per share amounts, unaudited) | ||||||||||||||||||||||||||||||||
Three Months Ended |
Six Months Ended | |||||||||||||||||||||||||||||||
2013 |
Per Diluted Share |
2012 |
Per Diluted Share [3] |
2013 |
Per Diluted Share |
2012 |
Per Diluted Share [3] | |||||||||||||||||||||||||
Net Income |
$ |
377 |
$ |
1.04 |
$ |
292 |
$ |
0.79 |
$ |
639 |
$ |
1.76 |
$ |
556 |
$ |
1.53 |
||||||||||||||||
Discontinued Operations, Net of Tax |
(19) |
(0.05) |
(17) |
(0.05) |
(49) |
(0.13) |
(32) |
(0.09) |
||||||||||||||||||||||||
Income from Continuing Operations |
358 |
0.99 |
275 |
0.74 |
590 |
1.63 |
524 |
1.44 |
||||||||||||||||||||||||
Unrealized gains on commodity derivative instruments |
(159) |
(0.44) |
(277) |
(0.77) |
(80) |
(0.22) |
(204) |
(0.56) |
||||||||||||||||||||||||
Gain on divestitures [1] |
— |
— |
(9) |
(0.02) |
(12) |
(0.03) |
(9) |
(0.03) |
||||||||||||||||||||||||
Asset impairment |
— |
— |
73 |
0.20 |
— |
— |
73 |
0.20 |
||||||||||||||||||||||||
Other adjustments |
10 |
0.03 |
— |
— |
(4) |
(0.01) |
— |
— |
||||||||||||||||||||||||
Total adjustments before tax |
(149) |
(0.41) |
(213) |
(0.59) |
(96) |
(0.26) |
(140) |
(0.39) |
||||||||||||||||||||||||
Income tax effect of adjustments [2] |
40 |
0.11 |
75 |
0.21 |
23 |
0.06 |
49 |
0.14 |
||||||||||||||||||||||||
Adjusted Income from Continuing Operations |
$ |
249 |
$ |
0.69 |
$ |
137 |
$ |
0.36 |
$ |
517 |
$ |
1.43 |
$ |
433 |
$ |
1.19 |
||||||||||||||||
Weighted average number of shares outstanding |
||||||||||||||||||||||||||||||||
Diluted |
363 |
361 |
362 |
360 |
NOTE: |
Adjusted income from continuing operations should not be considered a substitute for net income as reported in accordance with GAAP. Adjusted income from continuing operations 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 from continuing operations is beneficial in evaluating our financial performance as it primarily excludes the impact of significant non-cash items. 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] |
During the six months ended |
[2] |
The income tax effects of adjusting items for 2013 and 2012 are determined by applying the statutory tax rate to each adjusting item. Prior to first quarter 2013, the income tax effects were determined by calculating the tax provision for GAAP net income from continuing operations, which included the adjusting items, and comparing the results to the tax provision for adjusted earnings from continuing operations, which excluded the adjusting items. The difference in the tax provision calculations represented the tax impact of the adjusting items. |
[3] |
The diluted earnings per share calculations for the three and six months ended |
Schedule 2 Summary Statement of Operations (in millions, except per share amounts, unaudited) | ||||||||||||||||
Three Months Ended |
Six Months Ended | |||||||||||||||
2013 |
2012 |
2013 |
2012 | |||||||||||||
Revenues |
||||||||||||||||
Crude oil and condensate |
$ |
817 |
$ |
769 |
$ |
1,667 |
$ |
1,588 |
||||||||
Natural gas |
253 |
117 |
432 |
270 |
||||||||||||
Natural gas liquids |
42 |
48 |
97 |
112 |
||||||||||||
Income from equity method investees |
37 |
31 |
96 |
83 |
||||||||||||
Total revenues |
1,149 |
965 |
2,292 |
2,053 |
||||||||||||
Operating Expenses |
||||||||||||||||
Lease operating expense |
140 |
100 |
257 |
205 |
||||||||||||
Production and ad valorem taxes |
43 |
44 |
86 |
81 |
||||||||||||
Transportation and gathering expense |
27 |
24 |
55 |
45 |
||||||||||||
Exploration expense |
90 |
167 |
151 |
227 |
||||||||||||
Depreciation, depletion and amortization |
368 |
325 |
734 |
619 |
||||||||||||
General and administrative |
104 |
96 |
216 |
193 |
||||||||||||
Other operating expense, net |
16 |
71 |
8 |
83 |
||||||||||||
Total operating expenses |
788 |
827 |
1,507 |
1,453 |
||||||||||||
Operating Income |
361 |
138 |
785 |
600 |
||||||||||||
Other (Income) Expense |
||||||||||||||||
Gain on commodity derivative instruments |
(161) |
(276) |
(89) |
(180) |
||||||||||||
Interest, net of amount capitalized |
33 |
27 |
58 |
59 |
||||||||||||
Other non-operating (income) expense, net |
3 |
(3) |
12 |
(3) |
||||||||||||
Total other (income) expense |
(125) |
(252) |
(19) |
(124) |
||||||||||||
Income from Continuing Operations Before Income Taxes |
486 |
390 |
804 |
724 |
||||||||||||
Income Tax Provision |
128 |
115 |
214 |
200 |
||||||||||||
Income from Continuing Operations |
358 |
275 |
590 |
524 |
||||||||||||
Discontinued Operations, Net of Tax |
19 |
17 |
49 |
32 |
||||||||||||
Net Income |
$ |
377 |
$ |
292 |
$ |
639 |
$ |
556 |
||||||||
Earnings Per Share [1] |
||||||||||||||||
Basic |
||||||||||||||||
Income from continuing operations |
$ |
1.00 |
$ |
0.77 |
$ |
1.64 |
$ |
1.47 |
||||||||
Discontinued operations, net of tax |
0.05 |
0.05 |
0.14 |
0.09 |
||||||||||||
Net Income |
$ |
1.05 |
$ |
0.82 |
$ |
1.78 |
$ |
1.56 |
||||||||
Diluted |
||||||||||||||||
Income from continuing operations |
$ |
0.99 |
$ |
0.74 |
$ |
1.63 |
$ |
1.44 |
||||||||
Discontinued operations, net of tax |
0.05 |
0.05 |
0.13 |
0.09 |
||||||||||||
Net Income |
$ |
1.04 |
$ |
0.79 |
$ |
1.76 |
$ |
1.53 |
||||||||
Weighted average number of shares outstanding [1] |
||||||||||||||||
Basic |
359 |
356 |
358 |
355 |
||||||||||||
Diluted |
363 |
361 |
362 |
360 |
[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 |
Six Months Ended | |||||||||||||||
2013 |
2012 |
2013 |
2012 | |||||||||||||
Crude Oil and Condensate Sales Volumes (MBbl/d) |
||||||||||||||||
|
58 |
46 |
60 |
44 |
||||||||||||
|
31 |
34 |
29 |
35 |
||||||||||||
|
4 |
5 |
4 |
5 |
||||||||||||
Total consolidated operations |
93 |
85 |
93 |
84 |
||||||||||||
Equity method investee |
1 |
1 |
2 |
2 |
||||||||||||
Total sales volumes |
94 |
86 |
95 |
86 |
||||||||||||
Crude Oil and Condensate Realized Prices ($/Bbl) |
||||||||||||||||
|
$ |
94.29 |
$ |
94.49 |
$ |
95.02 |
$ |
97.70 |
||||||||
|
101.44 |
104.55 |
106.20 |
111.38 |
||||||||||||
|
97.92 |
115.41 |
103.66 |
120.93 |
||||||||||||
Consolidated average realized prices |
$ |
96.84 |
$ |
99.67 |
$ |
98.87 |
$ |
104.70 |
||||||||
Natural Gas Sales Volumes (MMcf/d) |
||||||||||||||||
|
404 |
431 |
406 |
432 |
||||||||||||
|
252 |
215 |
249 |
222 |
||||||||||||
|
220 |
60 |
166 |
84 |
||||||||||||
Total consolidated operations |
876 |
706 |
821 |
738 |
||||||||||||
Natural Gas Realized Prices ($/Mcf) |
||||||||||||||||
|
$ |
4.04 |
$ |
2.10 |
$ |
3.68 |
$ |
2.36 |
||||||||
|
0.27 |
0.27 |
0.27 |
0.27 |
||||||||||||
|
4.92 |
5.44 |
5.00 |
4.84 |
||||||||||||
Consolidated average realized prices |
$ |
3.18 |
$ |
1.82 |
$ |
2.91 |
$ |
2.01 |
||||||||
Natural Gas Liquids Sales Volumes (MBbl/d) |
||||||||||||||||
|
15 |
16 |
15 |
16 |
||||||||||||
Equity method investee |
5 |
4 |
6 |
5 |
||||||||||||
Total sales volumes |
20 |
20 |
21 |
21 |
||||||||||||
Natural Gas Liquids Realized Prices ($/Bbl) |
||||||||||||||||
|
$ |
30.05 |
$ |
33.06 |
$ |
34.63 |
$ |
37.46 |
||||||||
Barrels of Oil Equivalent Volumes (MBoe/d) |
||||||||||||||||
|
140 |
134 |
143 |
132 |
||||||||||||
|
73 |
70 |
70 |
72 |
||||||||||||
|
37 |
10 |
28 |
14 |
||||||||||||
|
4 |
5 |
4 |
5 |
||||||||||||
Total consolidated operations |
254 |
219 |
245 |
223 |
||||||||||||
Equity method investee |
6 |
5 |
8 |
7 |
||||||||||||
Total barrels of oil equivalent from continuing operations |
260 |
224 |
253 |
230 |
||||||||||||
Total barrels of oil equivalent from discontinued operations |
2 |
7 |
1 |
7 |
||||||||||||
Total barrels of oil equivalent |
262 |
231 |
254 |
237 |
Schedule 4 Condensed Balance Sheets (in millions, unaudited) | ||||||||
|
| |||||||
2013 |
2012 | |||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ |
706 |
$ |
1,387 |
||||
Accounts receivable, net |
847 |
964 |
||||||
Other current assets |
358 |
420 |
||||||
Total current assets |
1,911 |
2,771 |
||||||
Net property, plant and equipment |
14,753 |
13,551 |
||||||
Goodwill |
631 |
635 |
||||||
Other noncurrent assets |
703 |
597 |
||||||
Total Assets |
$ |
17,998 |
$ |
17,554 |
||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Current Liabilities |
||||||||
Accounts payable - trade |
$ |
1,370 |
$ |
1,508 |
||||
Other current liabilities |
1,123 |
1,024 |
||||||
Total current liabilities |
2,493 |
2,532 |
||||||
Long-term debt |
3,547 |
3,736 |
||||||
Deferred income taxes |
2,269 |
2,218 |
||||||
Other noncurrent liabilities |
814 |
810 |
||||||
Total Liabilities |
9,123 |
9,296 |
||||||
Total Shareholders' Equity |
8,875 |
8,258 |
||||||
Total Liabilities and Shareholders' Equity |
$ |
17,998 |
$ |
17,554 |
Schedule 5 Discretionary (in millions, unaudited) | |||||||||||||||||
Three Months Ended |
Six Months Ended | ||||||||||||||||
2013 |
2012 |
2013 |
2012 | ||||||||||||||
Adjusted Income from Continuing Operations [1] |
$ |
249 |
$ |
137 |
$ |
517 |
$ |
433 |
|||||||||
Adjustments to reconcile adjusted income from continuing operations to discretionary cash flow from continuing operations: |
|||||||||||||||||
Depreciation, depletion and amortization |
368 |
325 |
734 |
619 |
|||||||||||||
Exploration expense |
90 |
167 |
151 |
227 |
|||||||||||||
(Income)/Dividends from equity method investments, net |
17 |
22 |
(18) |
(7) |
|||||||||||||
Deferred compensation (income) expense |
3 |
(11) |
14 |
(8) |
|||||||||||||
Deferred income taxes |
17 |
(16) |
88 |
51 |
|||||||||||||
Stock-based compensation expense |
20 |
17 |
38 |
33 |
|||||||||||||
Other |
1 |
(1) |
2 |
(2) |
|||||||||||||
Discretionary |
$ |
765 |
$ |
640 |
$ |
1,526 |
$ |
1,346 |
|||||||||
Reconciliation to Operating Cash Flows |
|||||||||||||||||
Net changes in working capital |
(159) |
(123) |
(168) |
(64) |
|||||||||||||
Cash exploration costs |
(60) |
(48) |
(114) |
(101) |
|||||||||||||
Current tax expense (benefit) of earnings adjustments |
— |
— |
(5) |
— |
|||||||||||||
Impact of Discontinued Operations |
1 |
33 |
(3) |
56 |
|||||||||||||
Other adjustments |
(8) |
4 |
8 |
10 |
|||||||||||||
Net Cash Provided by Operating Activities |
$ |
539 |
$ |
506 |
$ |
1,244 |
$ |
1,247 |
|||||||||
Capital expenditures (accrual based) |
$ |
1,135 |
$ |
859 |
$ |
2,040 |
$ |
1,822 |
|||||||||
Increase in other capital lease obligations [2] |
31 |
— |
36 |
— |
|||||||||||||
Total Capital Expenditures (Accrual Based) |
$ |
1,166 |
$ |
859 |
$ |
2,076 |
$ |
1,822 |
|||||||||
NOTE: |
The table above reconciles discretionary cash flow from continuing operations to net cash provided by operating activities. While discretionary cash flow from continuing operations 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 from continuing operations is broadly used as an indicator of a company's ability to fund exploration and production activities and meet financial obligations. Discretionary cash flow from continuing operations 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 from Continuing Operations. |
[2] |
Other capital lease obligations mainly represents the increase in estimated construction in progress to date on a crude oil trunkline in the |
SOURCE
News Provided by Acquire Media