- DISCRETIONARY CASH FLOW OF $28.2 MILLION
- TOTAL YEAR END PROVED RESERVES OF 113 MILLION BARRELS
- REPOSITIONED COMPANY TO BE CALLED HARVEST NATURAL RESOURCES, INC.
HOUSTON, March 6, 2002 /PRNewswire-FirstCall/ -- Benton Oil and Gas Company (NYSE: BNO) today announced unaudited net income of $8.2 million, or $0.24 per diluted share, and discretionary cash flow of $33.9 million, or $1.00 per diluted share for 2001, before the nonrecurring items described below. This compares with net income of $16.5 million, or $0.53 per diluted share, and discretionary cash flow of $47.0 million, or $1.53 per diluted share for 2000 before extraordinary items described below.
Net income for 2001 was $43.2 million, or $1.27 per diluted share, and discretionary cash flow of $28.2 million, or $0.83 per diluted share. This performance compared with 2000 net income of $20.5 million, or $0.66 per diluted share, and discretionary cash flow of $47.3 million, or $1.53 per diluted share. Discretionary cash flow was down in 2001 primarily due to lower oil prices and certain nonrecurring items, which affected both 2000 and 2001. Net income increased primarily due to the reversal of a $42.4 million deferred tax asset valuation allowance related to net operating loss carryforwards. The expected closing of the previously announced sale of the 68 percent interest in Arctic Gas Company should enable the Company to realize the carryforwards.
Benton had $11.4 million ($7.4 million after tax and minority interest) of previously announced nonrecurring charges in 2001 and extraordinary income of $4 million in 2000.
The Company will also record an increase of $11.0 million to stockholders' equity to reflect the utilization of net operating loss carryforwards on stock option exercises. As a result of the Company's earnings and this adjustment, stockholders' equity will increase $54.7 million to $67.6 million.
Benton Oil and Gas Company President and Chief Executive Officer, Dr. Peter J. Hill, said, "This year 2001 was critically important to re-establishing Benton's financial flexibility and operating profile. We initiated a number of actions to substantially reposition our company for the future. Early in the year, we laid out two strategic priorities: (1) to deleverage the balance sheet, thereby preserving shareholder value, and (2) to enhance our producing assets and the underlying value of our strategic assets. Underpinning the growth in the value of our producing assets was our attack on the cost base. The 2001 results illustrate the progress we have made. Cash costs per barrel, including operating, overhead and taxes other than on income, declined 18 percent to $5.98 per barrel for the year. This has been particularly important since oil WTI price dropped some $5 per barrel over the year. Our goal in 2002 is to further improve our resilience to oil prices by reducing costs by another $1 to $2 per barrel through increasing production."
As of December 2001, Benton had total estimated proved reserve of 169 MMBOE, slightly down from the 173 MMBOE of 2000. Production increased four percent to 9.8 million barrels during 2001. The proved reserves to annual production (R/P) ratio remains at 17 years. Excluding Arctic Gas proved reserves, which are expected to be sold within the next 30 days, Benton proved reserves will be 113 million barrels still with an R/P ratio of 12 years.
Hill continued, "We increased production in 2001 four percent to 9.8 million barrels, despite suspending our Venezuelan drilling program for eight months while we were working on our field simulation study. As noted in earlier guidance notes, production for 2002 should increase 15 percent to 20 percent compared with last year. Two high impact Tucupita Field (Venezuela) wells have already been drilled and completed this year. Each is currently producing over 2,000 barrels of oil per day, although we do anticipate a steep decline. We intend to drill another five of these wells in Tucupita this year."
Hill concluded, "These significant events and their ongoing benefits give us renewed confidence in the Company's future. As a result, the management team, with reinvigorated plans for improving our shareholders' investment, will mark the beginning of its new quest for value by recommending to shareholders a name change to Harvest Natural Resources, Inc. at the upcoming shareholders' meeting in May."
The Company will host a conference call at 10:00 a.m. Central Time on March 7, 2002. The conference leader will be Dr. Peter J. Hill, President and Chief Executive Officer. The conference call may be accessed five to ten minutes prior to the start time at (800) 882-6637 or (706) 679-5321. A recording of the conference call will also be available for replay at (800) 642-1687, access code 3441428, through March 11, 2002. The conference call will also be transmitted over the Internet through the Company's web site at www.bentonoil.com . To listen to the live webcast, enter the web site fifteen minutes before the call to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay of the webcast will be available beginning shortly after the call, and will remain on the web site until April 5, 2002.
Benton Oil and Gas Company, headquartered in Houston, Texas, is an independent oil and gas exploration and development company with principal operations in Venezuela and Russia.
This press release may contain "Forward-Looking Statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this release may constitute forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Actual results may differ materially from the Company's expectations due to changes in operating performance, project schedules, oil and gas demands and prices, and other technical and economic factors.
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BENTON OIL AND GAS COMPANY
CONSOLIDATED BALANCE SHEETS
($ millions, unaudited)
December 31, December 31,
2001 2000
ASSETS:
CURRENT ASSETS:
Cash and equivalents $9.0 $15.1
Marketable securities --- 1.3
Accounts receivable, net 32.6 44.8
Prepaid expenses and other 1.9 2.4
Total current assets 43.5 63.6
RESTRICTED CASH --- 10.9
OTHER ASSETS 4.7 5.9
DEFERRED INCOME TAXES 57.7 4.3
INVESTMENTS IN AND ADVANCES TO
AFFILIATED COMPANIES 100.5 77.7
PROPERTY AND EQUIPMENT, net 141.7 124.0
TOTAL ASSETS $348.1 $286.4
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable $8.2 $12.8
Accrued expenses 25.8 25.8
Accrued interest 3.9 3.7
Income taxes payable 3.8 3.2
Short-term borrowings --- 5.7
Current portion of long-term debt 2.4 ---
Total current liabilities 44.1 51.2
LONG TERM DEBT 221.6 213.0
COMMITMENTS AND CONTINGENCIES --- ---
MINORITY INTEREST 14.8 9.3
STOCKHOLDERS' EQUITY:
Common stock and paid-in capital 168.4 157.0
Retained deficit (100.1) (143.4)
Treasury stock (0.7) (0.7)
Total stockholders' equity 67.6 12.9
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $348.1 $286.4
BENTON OIL AND GAS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per BOE and per share amounts, unaudited)
THREE MONTHS ENDED: December 31, 2001 December 31, 2000
Barrels of oil sold 2,417 2,486
MCF of Gas Sold 7
Total BOE 2,417 2,487
Average price/barrel $9.86 $15.58
Average price/MCF $5.85
$ $/BOE $ $/BOE
REVENUES:
Oil sales $23,834 $9.86 $38,728 $15.58
Gas sales 40 5.85
23,834 9.86 38,768 15.59
EXPENSES:
Operating expenses 10,571 4.37 12,663 5.09
Depletion, depreciation and
amortization 6,848 2.83 5,521 2.22
Impairments 57 0.02 277 0.11
General and administrative 4,197 1.74 4,415 1.78
Taxes other than on income 1,001 0.41 930 0.37
22,674 9.37 23,806 9.57
INCOME FROM OPERATIONS 1,160 0.49 14,962 6.02
OTHER NON-OPERATING INCOME (EXPENSE)
Investment income and other 716 0.30 1,997 0.80
Interest expense (6,411) (2.65) (6,745) (2.71)
Net gain on exchange rates 253 0.10 126 0.05
(5,442) (2.25) (4,622) (1.86)
INCOME (LOSS) FROM CONSOLIDATED
COMPANIES BEFORE INCOME TAXES AND
MINORITY INTERESTS (4,282) (1.76) 10,340 4.16
Income tax expense (benefit) (46,285) (19.15) 723 0.29
INCOME BEFORE MINORITY INTERESTS 42,003 17.39 9,617 3.87
Minority interest in consolidated
subsidiary companies 1,188 0.49 2,891 1.16
INCOME FROM CONSOLIDATED COMPANIES 40,815 16.90 6,726 2.71
Equity in net earnings of
affiliated companies (433) (0.18) 1,196 0.48
INCOME BEFORE EXTRAORDINARY INCOME 40,382 16.72 7,922 3.19
Extraordinary income on debt
repurchase, net of tax of $0 --- 865 0.34
NET INCOME $40,382 $16.72 $8,787 $3.53
NET INCOME PER COMMON SHARE:
BASIC:
Income per share before
extraordinary income $1.19 $0.24
Extraordinary income on debt
repurchase --- 0.02
Net income $1.19 $0.26
DILUTED:
Income per share before
extraordinary income $1.19 $0.24
Extraordinary income on debt
repurchase --- 0.02
Net income $1.19 $0.26
DISCRETIONARY CASH FLOW $7,352 $3.04 $23,724 $9.54
DISCRETIONARY CASH FLOW, per share $0.22 $0.71
Weighted average shares outstanding:
Basic 34.0 million 33.3 million
Diluted 34.0 million 33.3 million
EBITDA $9.0 million $22.9 million
BENTON OIL AND GAS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per BOE and per share amounts, unaudited)
YEAR ENDED: December 31, 2001 December 31, 2000
Barrels of oil sold 9,778 9,371
MCF of Gas Sold 43
Total BOE 9,778 9,378
Average price/barrel $12.52 $14.95
Average price/MCF $4.63
$ $/BOE $ $/BOE
REVENUES:
Oil sales $122,386 12.52 $140,085 $14.95
Gas sales 199 4.63
122,386 12.52 140,284 14.96
EXPENSES:
Operating expenses 42,759 4.37 47,430 5.06
Depletion, depreciation and
amortization 25,516 2.61 17,175 1.83
Write-downs of oil and gas properties
and impairments 468 0.05 1,346 0.14
General and administrative 20,072 2.05 16,739 1.78
Taxes other than on income 5,370 0.55 4,390 0.47
94,185 9.63 87,080 9.28
INCOME FROM OPERATIONS 28,201 2.89 53,204 5.68
OTHER NON-OPERATING INCOME (EXPENSE)
Investment income and other 3,088 0.32 8,559 0.91
Interest expense (24,875) (2.54) (28,973) (3.08)
Net gain on exchange rates 768 0.08 326 0.03
(21,019) (2.14) (20,088) (2.14)
INCOME FROM CONSOLIDATED COMPANIES
BEFORE INCOME TAXES AND MINORITY
INTERESTS 7,182 0.75 33,116 3.54
Income tax expense (benefit) (35,698) (3.65) 14,032 1.50
INCOME BEFORE MINORITY INTERESTS 42,880 4.40 19,084 2.04
Minority interest in consolidated
subsidiary companies 5,545 0.57 7,869 0.84
INCOME FROM CONSOLIDATED COMPANIES 37,335 3.83 11,215 1.20
Equity in net earnings of affiliated
companies 5,902 0.60 5,313 0.57
INCOME BEFORE EXTRAORDINARY INCOME 43,237 4.43 16,528 1.77
Extraordinary income on debt
repurchase, net of tax of $0 --- --- 3,960 0.42
NET INCOME $43,237 $4.43 $20,488 $2.19
NET INCOME PER COMMON SHARE:
BASIC:
Income per share before extraordinary
income $1.27 $0.54
Extraordinary income on debt
repurchase --- 0.13
Net income $1.27 $0.67
DILUTED:
Income per share before extraordinary
income $1.27 $0.53
Extraordinary income on debt
repurchase 0.13
Net income $1.27 $0.66
DISCRETIONARY CASH FLOW $28,211 2.89 $47,264 $5.04
DISCRETIONARY CASH FLOW, per share $0.83 $1.53
Weighted average shares outstanding:
Basic 34.0 million 30.7 million
Diluted 34.0 million 30.9 million
EBITDA $58.0 million $80.6 million
BENTON OIL AND GAS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Three Months Ended Year Ended
December 31, December 31,
2001 2000 2001 2000
Cash Flows From Operating Activities:
Net income $40,382 $8,787 $43,237 $20,488
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion, depreciation and
amortization 6,848 5,522 25,516 17,175
Write-down and impairment of oil
& gas properties 57 277 468 1,346
Amortization of financing costs 299 328 1,243 1,375
(Gain) loss on disposal of assets (336) 40 (336) 60
Equity in earnings of affiliated
companies 432 (1,196) (5,902) (5,313)
Allowance and write off of
employee notes and accounts
receivable 118 84 365 331
Non-cash compensation-related
charges 229 --- 474 ---
Minority interest in
undistributed earnings
of subsidiaries 1,188 2,891 5,545 7,869
Extraordinary income from
repurchase of debt --- (866) (3,960)
Tax benefits related to stock
option compensation 11,008 11,008
Deferred income taxes (52,873) 7,857 (53,407) 7,893
Changes in operating assets and
liabilities:
Accounts and notes receivable 7,552 (4,026) 11,756 (12,780)
Prepaid expenses and other (277) (1,779) 565 (769)
Accounts payable 3,935 1,445 (4,671) 9,487
Accrued expenses (4,652) (8,732) (21) (953)
Accrued interest payable (5,586) 2,959 161 7,971
Income taxes payable (6,379) (8,403) 607 1,543
Net Cash Provided By Operating
Activities 1,945 5,188 36,608 51,763
Cash Flows From Investing Activities:
Proceeds from sale of property and
equipment 800 800
Additions of property and equipment (8,754) (17,069) (43,364) (57,196)
Investment in and advances to
affiliated companies (1,557) (3,980) (16,855) (11,071)
Increase in restricted cash --- (72) (57) (271)
Decrease in restricted cash --- 34,575 10,961 35,800
Purchases of marketable securities --- 1,012 (15,067) (12,638)
Maturities of marketable securities --- (248) 16,370 15,804
Net Cash Provided By (Used In)
Investing Activities (10,311) 15,018 (48,012) (28,772)
Cash Flows From Financing Activities:
Net proceeds from exercise of stock
options and warrants --- 70 --- 330
Proceeds from issuance of short term
borrowings and notes payable --- 15,087 21,111 15,087
Payments on short term borrowings
and notes payable (1,114) (43,949) (15,746) (47,488)
(Increase) decrease in other assets 43 2,602 (69) 3,065
Net Cash Provided by (Used in)
Financing Activities (1,071) (26,190) 5,296 (29,006)
Net Decrease in Cash (9,437) (5,984) (6,108) (6,015)
Cash and Cash Equivalents at Beginning
of Period 18,461 21,116 15,132 21,147
Cash and Cash Equivalents at End of
Period $9,024 $15,132 $9,024 $15,132
Discretionary Cash Flow $7,352 $23,724 $28,211 $47,264
Discretionary Cash Flow, per share $0.22 $0.71 $0.83 $1.53
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