-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Sx9rA3SXZiztM5WOMw+e3dT+5Lp31uPt/qFytmC+HiH1E7h7JQYKDbNVcAXhRU5z hAZmwZppSod6FUifsYub7g== 0000899243-02-002926.txt : 20021114 0000899243-02-002926.hdr.sgml : 20021114 20021114085113 ACCESSION NUMBER: 0000899243-02-002926 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021113 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20021114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MISSION RESOURCES CORP CENTRAL INDEX KEY: 0000319459 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 760437769 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-09498 FILM NUMBER: 02821945 BUSINESS ADDRESS: STREET 1: 1331 LAMAR STREET 2: SUITE 1455 CITY: HOUSTON STATE: TX ZIP: 77010 BUSINESS PHONE: 7134953000 MAIL ADDRESS: STREET 1: 1221 LAMAR STREET 2: STE 1600 CITY: HOUSTON STATE: TX ZIP: 77010-3039 FORMER COMPANY: FORMER CONFORMED NAME: BELLWETHER EXPLORATION CO DATE OF NAME CHANGE: 19920703 8-K 1 d8k.txt CURRENT REPORT ON FORM 8-K 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): November 14, 2002 (November 13, 2002) Mission Resources Corporation (Exact Name of Registrant as Specified in Charter) Delaware 000-09498 76-0437769 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 1331 Lamar Suite 1455 Houston, Texas 77010-3039 (Address and Zip Code of Principal Executive Offices) (713) 495-3000 (Registrant's telephone number, including area code) Item 5. Other Events. On November 13, 2002, Mission Resources Corporation issued a press release announcing, among other things, third quarter 2002 results. The press release is filed as an exhibit hereto and is incorporated herein by reference. Item 7. Financial Statements and Exhibits. (a) Financial Statements of business acquired. None. (b) Pro Forma Financial Information. None. (c) Exhibits. 99.1 Press Release. SIGNATURE 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 hereunto duly authorized. MISSION RESOURCES CORPORATION Date: November 14, 2002 By: /s/ Richard W. Piacenti --------------------------------- Name: Richard W. Piacenti Title: Senior Vice President and Chief Financial Officer EX-99.1 3 dex991.txt PRESS RELEASE [MISSION RESOURCES LOGO] Mission Resources Corporation 1331 Lamar, Suite 1455 Houston, Texas 77010-3039 NEWS RELEASE - -------------------------------------------------------------------------------- Contact: Ann Kaesermann Vice President - Accounting and Investor Relations, CAO investors@mrcorp.com (713) 495-3100 Mission Resources Announces Third-Quarter Results HOUSTON, November 13, 2002-- Mission Resources Corporation (NASDAQ: MSSN) today announced a third quarter 2002 loss of $2.4 million, or $0.10 per fully diluted share, on total revenues of $27.6 million. Discretionary cash flow for the period totaled $4.8 million, or $0.20 per diluted share, and earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) totaled $11.4 million. In comparison, net income in the third quarter of 2001 was $0.7 million, or $0.03 per diluted share, on revenues of $40.5 million. Discretionary cash flow was $13.3 million, or $0.56 per diluted share, and EBITDA was $20.4 million. The third quarter of 2001 was the first full quarter following the merger which formed Mission. Third Quarter Results Production volumes averaged 13,469 barrels of oil equivalent (boe) per day in the third quarter of 2002 compared to 20,473 boe per day in the third quarter of 2001. The decline from the prior year is primarily the result of the property sales completed since mid-2001, production declines in the Gulf of Mexico and a one week shut-in of coastal and offshore properties for Hurricane Isidore. Mission's realized oil and gas prices in the third quarter averaged $22.78 per barrel of oil and $3.02 per thousand cubic feet (Mcf), including the effects of hedging, compared to $23.42 per barrel and $2.65 per Mcf, respectively, in the third quarter of 2001. Oil hedges reduced the realized price by $1.08 per barrel in the current quarter while gas hedges had no material impact. Total lease operating expenses in the current quarter of $9.8 million were 28% below those of the prior year quarter, primarily due to the property sales and cost reductions. On a unit basis, operating costs were $7.92 per boe in the third quarter of 2002. Administrative costs of $2.3 million in the third quarter of 2002, excluding non-recurring staff transition costs of $2.8 million, were 32% below the $3.5 million of the third quarter of 2001. This reduction is primarily from the termination of various administrative outsourcing arrangements and the reduction of staff. The quarter had approximately $.5 million in non-recurring items which netted to a positive after tax effect of approximately $0.4 million or about $0.02 per share. We recorded a $1.8 million gain on our interest rate swap and we recorded a $1.7 million gain on the settlement of a royalty calculation dispute with the Minerals Management Service. This was partially offset by two negative items. We recorded additional general and administrative expenses of $2.8 million primarily for severance costs related to the change in management and $0.2 million for FAS 133 ineffectiveness. Financial and Liquidity Position Capital expenditures were $5.3 million in the third quarter and were almost entirely for exploitation. Mission received net proceeds of $38.5 million for property sales in the third quarter, the bulk of which were used to reduce outstanding bank debt. At September 30, 2002 Mission had $7.0 million of debt on its senior revolver outstanding and $225.0 million of subordinated notes. Of the $16.9 million cash balance at the end of the quarter, $12.2 million was used the following day for the semiannual interest payment on the subordinated notes. As previously announced, Mission's senior revolver borrowing base is currently $50.0 million. As of today Mission has $3.0 million of senior revolver debt outstanding which gives the Company net unused availability under the revolver of $47.0 million. Interest expense in the third quarter of 2002 totaled $5.4 million. The Company is in compliance with all of the covenants for its senior revolver and its subordinated notes. Subsequent Events In October Mission entered into additional gas hedges for 2003, in the form of costless collars that cover 5,000 MMBtu per day and have average floor and ceiling prices of $3.68 and $4.30, respectively. A schedule outlining the oil and gas hedges currently in place is attached. Hurricane Lili passed through the Gulf of Mexico and South Louisiana during the first week of October. Four fields in which the Company holds interests sustained damage in the storm. Two Company operated platforms at Eugene Island 307 are currently being repaired and will be producing at full rates by the end of November. A non-operated platform in the area was heavily damaged, and the field is expected to remain off production until next week. Mission's net production at that field is 660 boe per day. The Lac Blanc field in inland waters of Louisiana sustained nominal damage, and is producing. Mission has filed claims with its insurance carriers on these properties, and we expect our financial exposure from property damage to only be the applicable deductible. In total, we anticipate that fourth quarter production will be affected by about 600 boe per day as a result of Hurricane Lili, but do not expect any effect into the first quarter of 2003. Outlook for Fourth Quarter 2002 With the property sales early in the third quarter of 2002 and reduced capital expenditures, oil production volumes are expected to be lower than those reported in the third quarter. These estimates include the effect of Hurricane Lili as noted above. 4Q 2002 Est. ------------- Crude oil (barrels per day) 7,000 - 7,500 Natural gas (MMcf per day) 22 - 27 Based on the above production levels, the following per unit recurring expenses are anticipated in the fourth quarter of 2002: Per BOE 4Q 2002 Est. ------- ------------ Lease operating expenses $9.50 - 9.75 (including workovers) Production taxes $1.00 - 1.10 G&A $1.85 - 1.95 DD&A (oil & gas) $8.00 - 8.10 Our reported proved reserves at the end of 2001 were approximately 67 million boe. Reduced by production, revisions and an estimated 12 million boe of year-to-date property divestitures, our internal estimates show that year-end reserves will be approximately 45 million boe. This could be further reduced by up to 2.5 million boe from non-core properties that are being exposed for sale at auction in November. A complete report will be prepared by Netherland Sewell and our year-end reported reserves could be somewhat lower. (The estimates above for fourth quarter 2002 are forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Actual results may differ based on the risks and uncertainties described in the company's periodic reports filed with the Securities and Exchange Commission.) Conference Call Information The company will hold its quarterly conference call to discuss third quarter results on Thursday, November 14, at 10:00 a.m. Central Time. To participate, dial 877/894-9681 a few minutes before the call begins. Please reference Mission Resources, conference ID 6487571. The call will also be broadcast live over the Internet from the company's home page at www.mrcorp.com/pwwebcasts.asp. A replay of the conference call will be available approximately two hours after the end of the call. It will be available until Friday, November 29. To access the replay, dial 800/642-1687 and reference conference ID 6487571. In addition, the call will also be archived on the company's Web site for 30 days. About Mission Resources Mission Resources Corporation is a Houston-based independent exploration and production company which acquires, develops and produces crude oil and natural gas in the Permian Basin of West Texas, along the Texas and Louisiana Gulf Coast and in the Gulf of Mexico. This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are our estimate of the sufficiency of our existing capital sources, our ability to raise additional capital to fund cash requirements for future operations, the uncertainties involved in estimating quantities of proved oil and natural gas reserves, in prospect development and property acquisitions and in projecting future rates of production, the timing of development expenditures and drilling of wells, and the operating hazards attendant to the oil and gas business. In particular, careful consideration should be given to cautionary statements made in the various reports the Company has filed with the Securities and Exchange Commission. The Company undertakes no duty to update or revise these forward-looking statements. MISSION RESOURCES STATEMENTS OF OPERATIONS (Amounts in thousands, except per share amounts) (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, -------------------- -------------------- 2002 2001 (1) 2002 2001 (1) -------- --------- -------- --------- REVENUES: Oil revenues - U. S. $ 16,606 $25,128 $ 55,614 $ 54,912 Oil revenues - Ecuador - - - 1,877 Gas revenues 9,242 12,906 30,482 46,963 Gas plant revenues - 1,152 - 4,275 Interest and other income (expense) 1,723 1,311 (7,959) 1,528 -------- ------- -------- -------- 27,571 40,497 78,137 109,555 -------- ------- -------- -------- COSTS AND EXPENSES: Lease operating expense - U. S. 9,808 13,542 35,908 28,314 Lease operating expense - Ecuador - - - 3,071 Production taxes 1,200 1,398 3,973 3,205 Gas plant expenses - 559 - 1,971 Transportation costs 73 10 211 60 Mining venture costs - 41 - 907 Loss on asset sales - 381 2,719 11,602 Depreciation, depletion and amortization - U. S. 9,718 13,458 31,917 32,529 Depreciation, depletion and amortization - Ecuador - - - 504 General and administrative expenses - U. S. 5,142 3,453 10,349 8,746 General and administrative expenses - Ecuador - - - 722 Interest expense 5,365 6,226 20,420 16,058 -------- ------- -------- -------- 31,306 39,068 105,497 107,689 -------- ------- -------- -------- INCOME (LOSS) BEFORE TAXES AND CHANGE IN ACCTG METHOD (3,735) 1,429 (27,360) 1,866 Income tax expense (benefit) Current - 491 - 1,334 Deferred (1,307) 245 (9,576) (550) -------- ------- -------- -------- (1,307) 736 (9,576) 784 -------- ------- -------- -------- INCOME (LOSS) BEFORE CHANGE IN ACCOUNTING METHOD $ (2,428) $ 693 $(17,784) $ 1,082 -------- ------- -------- -------- Cumulative effect of a change in accounting method, net of tax - - - 2,767 NET INCOME (LOSS) $ (2,428) $ 693 $(17,784) $ (1,685) ======== ======= ======== ======== Earnings (loss) per share before change in acctg method ($0.10) $ 0.03 ($0.75) $0.06 Earnings (loss) per share before change in acctg method - diluted (2) ($0.10) $ 0.03 ($0.75) $0.06 Earnings (loss) per share ($0.10) $ 0.03 ($0.75) ($0.09) Earnings (loss) per share - diluted (2) ($0.10) $ 0.03 ($0.75) ($0.09) Weighted avg. common shares outstanding 23,586 23,586 23,586 18,860 Weighted avg. common shares outstanding - diluted 23,586 23,681 23,586 18,860 Discretionary cash flow (3) $4,831 $13,336 $17,831 $ 45,861 Discretionary cash flow per share $0.20 $0.57 $0.76 $2.43 Discretionary cash flow per share - diluted $0.20 $0.56 $0.75 $2.39 EBITDA excluding non cash and other items (4) $11,417 $20,419 $37,869 $ 62,746
(1) Includes Bargo merger effective May 16, 2001. (2) Due to a potential antidilutive effect in loss periods, weighted avg. common shares outstanding were used for periods with a loss. (3) Discretionary cash flows consists of net income excluding non cash and other items. Non cash and other items include depreciation, depletion and amortization, compensation expense related to stock options, gain (loss) due to hedge ineffectiveness (FAS 133), gain (loss) on interest rate swap, amortization of debt issue costs, amortization of bond premium, write offs of uncollectable receivables, loss on asset sales and deferred taxes. (4) EBITDA excluding non cash and other items consist of earnings before interest expense, taxes, depreciation, depletion and amortization, excluding non cash and other items detailed in footnote (3). MISSION RESOURCES SUMMARY OPERATING INFORMATION (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, --------------------- -------------------- 2002 2001 (1) 2002 2001 (1) ------- --------- ------- --------- AVERAGE SALES PRICE, INCLUDING THE EFFECT OF HEDGES: Oil and condensate ($/Bbl) - U. S. $ 22.78 $ 23.42 $ 21.20 $ 23.21 Oil and condensate ($/Bbl) - Ecuador $ - $ - $ - $ 19.76 Gas ($/Mcf) $ 3.02 $ 2.65 $ 2.98 $ 3.47 Equivalent ($/Boe) $ 20.86 $ 20.19 $ 19.90 $ 21.99 AVERAGE SALES PRICE, EXCLUDING THE EFFECT OF HEDGES: Oil and condensate ($/Bbl) - U. S. $ 23.86 $ 23.42 $ 21.35 $ 23.21 Oil and condensate ($/Bbl) - Ecuador $ - $ - $ - $ 19.76 Gas ($/Mcf) $ 3.01 $ 2.79 $ 2.86 $ 4.62 Equivalent ($/Boe) $ 21.48 $ 20.53 $ 19.70 $ 25.29 AVERAGE DAILY PRODUCTION: Oil and condensate (Bbls) - U. S. 7,924 11,663 9,608 8,667 Oil and condensate (Bbls) - Ecuador - - - 348 Total oil and condensate (Bbls) 7,924 11,663 9,608 9,015 Gas (Mcf) 33,272 52,859 37,454 49,604 Equivalent (Boe) 13,469 20,473 15,850 17,282 Equivalent (Mcfe) 80,816 122,837 95,102 103,694 TOTAL PRODUCTION: Oil and condensate (MBbls) - U. S. 729 1,073 2,623 2,366 Oil and condensate (MBbls) - Ecuador - - - 95 Total oil and condensate (MBbls) 729 1,073 2,623 2,461 Gas (MMcf) 3,061 4,863 10,225 13,542 Equivalent (MBoe) 1,239 1,884 4,327 4,718 OPERATING COSTS PER MBOE: Lease operating expense $ 7.92 $ 7.19 $ 8.30 $ 6.65 Production taxes $ 0.97 $ 0.74 $ 0.92 $ 0.68 General and administrative expenses $ 4.15 $ 1.83 $ 2.39 $ 2.01 Depreciation, depletion, and amortization (2) $ 7.75 $ 6.59 $ 7.26 $ 6.54
(1) Includes Bargo merger effective May 16, 2001. (2) Depreciation of gas plants, furniture and fixtures and amortization of intangibles is excluded. MISSION RESOURCES CONDENSED BALANCE SHEETS (Amounts in thousands)
September 30, 2002 December 31, (Unaudited) 2001 -------------- ------------- ASSETS: Current assets $ 34,235 $ 38,689 Property, plant and equipment, net 318,764 379,738 Leasehold, furniture and equipment, net 2,174 2,431 Long term receivables - 899 Goodwill and other intangibles 14,612 15,436 Other assets 7,044 10,571 --------- --------- $ 376,829 $ 447,764 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 35,161 $ 38,584 Long-term debt, including $1,500 unamortized premium on issuance of $125,000 bonds 233,500 261,695 Deferred tax liability 18,748 31,177 Other long-term liabilities, excluding current portion 2,355 6,068 Stockholders' equity 90,272 107,954 Other comprehensive income (loss), net of taxes (3,207) 2,286 --------- --------- $ 376,829 $ 447,764 ========= =========
MISSION RESOURCES CONDENSED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited)
Nine Months Ended September 30, ------------------------- 2002 2001 ---------- ---------- OPERATING ACTIVITIES: Net loss $ (17,784) $ (1,685) Adjustments to reconcile net loss to net cash provided by operating activities 32,896 47,546 Net changes in operating assets and liabilities (2,625) (8,640) --------- --------- Net cash provided by (used in) operating activities 12,487 37,221 INVESTING ACTIVITIES: Acquisition of oil and gas properties (419) (168,533) Capital expenditures (16,607) (29,597) Leasehold, furniture and equipment (147) (529) Proceeds from sales of properties 49,095 21,159 --------- --------- Net cash provided by (used in) investing activities 31,922 (177,500) FINANCING ACTIVITIES: Net proceeds from equity activities - 899 Net bank debt activity (28,065) 133,370 --------- --------- Net cash provided by (used in) financing activities (28,065) 134,269 --------- --------- Net increase (decrease) in cash and cash equivalents 16,344 (6,010) Cash and cash equivalents at beginning of period 603 14,464 --------- --------- Cash and cash equivalents at end of period $ 16,947 $ 8,454 ========= =========
MISSION RESOURCES HEDGE SCHEDULE
OIL GAS Fourth Quarter 2002 Fourth Quarter 2002 4,500 bbls a day in a collar at $25.00 to $25.50 8,500 mcf a day in a collar at $3.40 to $7.00 500 bbls a day in a collar at $25.00 to $25.90 November and December only 5,000 mcf a day in a collar at $3.83 to $4.36 ------------------------------------------------------------------- First Quarter 2003 First Quarter 2003 3,500 bbls a day in a swap at $24.80 10,000 mcf a day in a collar at $3.00 at $4.65 500 bbls a day in a swap at $24.92 5,000 mcf a day in a collar at $3.73 at $4.61 Second Quarter 2003 Second Quarter 2003 3,500 bbls a day in a swap at $24.30 5,000 mcf a day in a collar at $3.00 to $4.02 500 bbls a day in a swap at $24.37 5,000 mcf a day in a collar at $3.00 to $3.97 5,000 mcf a day in a collar at $3.54 to $4.08 Third Quarter 2003 Third Quarter 2003 3,000 bbls a day in a swap at $23.95 10,000 mcf a day in a collar at $3.00 to $4.10 500 bbls a day in a swap at $23.94 5,000 mcf a day in a collar at $3.56 to $4.11 Fourth Quarter 2003 Fourth Quarter 2003 3,000 bbls a day in a swap at $23.59 10,000 mcf a day in a collar at $3.00 to $4.65 500 bbls a day in a swap at $23.58 5,000 mcf a day in a collar at $3.73 to $4.32
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