EX-99.1 3 h08276exv99w1.txt PRESS RELEASE DATED AUGUST 12, 2003 (PLAINS RESOURCES LETTERHEAD) NEWS RELEASE CONTACT: Stephen A. Thorington Executive Vice President and Chief Financial Officer (713) 739-6700 or (800) 934-6083 FOR IMMEDIATE RELEASE PLAINS RESOURCES REPORTS SECOND QUARTER EARNINGS Houston, Texas - August 12, 2003 - Plains Resources Inc. (NYSE:PLX) today reported net income of $1.1 million, or $0.04 per diluted share for the second quarter of 2003 compared to income from continuing operations of $1.5 million or $.04 per diluted share for the second quarter of 2002. Net income includes an after-tax noncash mark-to-market loss of $0.7 million ($0.03 per diluted share) to reflect the change in fair value of the Company's oil swap positions. Including income from discontinued operations for Plains Exploration & Production Company (NYSE: PXP), which the Company distributed to its stockholders in a tax-free spin-off on December 18, 2002, the Company reported net income of $9.7 million in the second quarter of 2002. The Company reported equity in earnings from its investment in Plains All American Pipeline, L.P. (NYSE: PAA) of $5.4 million compared to $5.3 million in the second quarter of 2002. The Company's cash distribution from PAA was $7.8 million in the second quarter of 2003, an 8% increase from the second quarter 2002 distribution of $7.2 million. Oil production volumes were 2,264 barrels per day in the second quarter of 2003 compared to 2,527 barrels per day in the prior year quarter. In accordance with SEC Staff Accounting Bulletin 101, the Company's results reflect revenue from oil production in the period it is sold as opposed to when it is produced. The Company reported sales of 2,231 barrels of oil per day in the second quarter of 2003 compared to 2,226 barrels per day in the second quarter of 2002. Unit gross margin declined to $6.41 per barrel in the second quarter of 2003 as compared to $11.57 in the second quarter of 2002 due to lower realized oil prices and increased production expenses due to higher electricity and fuel costs. The Company's average wellhead oil price, which is net of quality differentials, hedging and derivative cash settlements, was $19.53 per barrel in the second quarter of 2003 as compared to $23.06 per barrel in last year's second quarter, primarily due to higher quality differentials to NYMEX prices. For the first six months of the year net income was $8.4 million, or $0.32 per diluted share, compared to income from continuing operations of $2.2 million, or $0.06 per diluted share, in 2002. Including income from discontinued operations, the Company reported net income of $16.3 million, or $0.64 per diluted share, for the six months ended June 30, 2002. Net income for -MORE- the 2003 period includes a $3.2 million after-tax noncash gain related to the equity offering of PAA completed in the first quarter of 2003 and a $0.9 million net of tax gain from the adoption of SFAS 143. "Clearly, the most significant event during the quarter was the retirement of the Series D Preferred coupled with the restructuring of the bank facility. Additionally, consistent with previous statements, the active Treasury Share Program continues as evidenced by the common share repurchases through the quarter," stated Mr. John T. Raymond, Chief Executive Officer and President. Through its Treasury Share Program the Company repurchased 677,275 common shares at an average price of $10.82 per share in the second quarter of 2003. Since the beginning of 2003, the Company has repurchased a total of 819,975 common shares at an average price of $10.95 per share. All of the common share repurchases were funded out of available cash. In addition, in the second quarter the Company paid $23.3 million to retire the entire 46,600 outstanding shares of Series D Preferred Stock that was convertible into 1,671,416 shares of common stock at a price of $13.94 per share. CONFERENCE CALL/WEBCAST INSTRUCTIONS: The Company will host a conference call to discuss the results and other forward-looking items on Tuesday, August 12, 2003. The call will begin at 10:00 a.m. (central time). The dial-in conference number is: 800-223-9488 or international: 785-832-1508. Reference Conference I.D.#: Plains. The replay will be available for 2 weeks at 800-934-2729 or international at 402-220-1140. To access the Internet webcast, please go to the Company's website at www.plainsresources.com, under investor relations section choose "conference calls." Following the live webcast, the call will be archived for a period of sixty (60) days on the Company's website. Plains Resources is an independent energy company engaged in the acquisition, development and exploitation of crude oil and natural gas. Through its ownership in Plains All American Pipeline, L.P., Plains Resources has interests in the midstream activities of marketing, gathering, transportation, terminaling and storage of crude oil. Plains Resources is headquartered in Houston, Texas. Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, among other things, economic conditions, oil and gas price volatility, uncertainties inherent in the exploration for and development and production of oil and gas and in estimating reserves, regulatory changes and other factors discussed in Plains Resources' filings with the Securities and Exchange Commission. -MORE- PLAINS RESOURCES INC. CONSOLIDATED STATEMENTS OF INCOME (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, -------------------------- -------------------------- 2003 2002 2003 2002 ---------- ---------- ---------- ---------- REVENUES Oil sales $ 4,347 $ 4,787 $ 11,624 $ 8,966 Hedging -- (128) (307) (251) ---------- ---------- ---------- ---------- 4,347 4,659 11,317 8,715 ---------- ---------- ---------- ---------- COSTS AND EXPENSES Production expenses 1,520 1,304 3,378 2,697 Production and ad valorem taxes 233 125 637 228 Oil transportation expenses 910 891 2,028 1,830 General and administrative 1,595 1,708 3,407 3,375 Depreciation, depletion and amortization 1,028 1,168 2,433 2,327 Accretion of asset retirement obligation 57 -- 113 -- Other operating expenses 137 -- 137 -- ---------- ---------- ---------- ---------- 5,480 5,196 12,133 10,457 ---------- ---------- ---------- ---------- OTHER INCOME (EXPENSE) Equity in earnings of Plains All American Pipeline, L.P. 5,397 5,256 11,722 9,606 Gain on Plains All American Pipeline, L.P. unit offering -- -- 6,108 -- Gain (loss) on derivatives Change in fair value (1,299) -- (633) -- Cash settlements (382) -- (1,114) -- Interest expense (508) (1,790) (1,009) (3,477) Interest and other income 31 8 106 27 ---------- ---------- ---------- ---------- 3,239 3,474 15,180 6,156 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 2,106 2,937 14,364 4,414 Income tax benefit (expense) Current (210) (363) (2,601) 2,405 Deferred (800) (1,118) (4,276) (4,631) ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS 1,096 1,456 7,487 2,188 Income from discontinued operations, net of tax -- 8,218 -- 14,082 ---------- ---------- ---------- ---------- INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 1,096 9,674 7,487 16,270 Cumulative effect of accounting change, net of tax -- -- 933 -- ---------- ---------- ---------- ---------- NET INCOME 1,096 9,674 8,420 16,270 Preferred dividends (253) (350) (603) (700) ---------- ---------- ---------- ---------- INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 843 $ 9,324 $ 7,817 $ 15,570 ========== ========== ========== ========== EARNINGS PER SHARE (IN DOLLARS) Basic Income from continuing operations $ 0.04 $ 0.05 $ 0.29 $ 0.06 Discontinued operations -- 0.34 -- 0.60 Change in accounting policy -- -- 0.04 -- ---------- ---------- ---------- ---------- $ 0.04 $ 0.39 $ 0.33 $ 0.66 ========== ========== ========== ========== Diluted Income from continuing operations $ 0.04 $ 0.04 $ 0.28 $ 0.06 Discontinued operations -- 0.33 -- 0.58 Change in accounting policy -- -- 0.04 -- ---------- ---------- ---------- ---------- $ 0.04 $ 0.37 $ 0.32 $ 0.64 ========== ========== ========== ========== Weighted average shares outstanding Basic 23,475 23,883 23,727 23,759 Diluted 25,151 24,585 24,172 24,373
-MORE- PLAINS RESOURCES INC. FINANCIAL AND OPERATING DATA
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, -------------------------- -------------------------- 2003 2002 2003 2002 ---------- ---------- ---------- ---------- DISTRIBUTIONS FROM PAA (THOUSANDS OF DOLLARS) General partner interest $ 816 $ 516 $ 1,498 $ 953 Limited partner units 6,978 6,666 13,800 13,187 ---------- ---------- ---------- ---------- $ 7,794 $ 7,182 $ 15,298 $ 14,140 ========== ========== ========== ========== PRODUCTION AND SALES VOLUMES Production volumes (MBbls) 206 230 438 477 Daily average production volumes (Bbls) 2,264 2,527 2,420 2,635 Sales volumes (MBbls) 203 202 479 418 Daily average sales volumes (Bbls) 2,231 2,226 2,646 2,313 UNIT ECONOMICS ($/Bbl) Average oil sales price Average NYMEX $ 28.91 $ 26.27 $ 31.32 $ 24.02 Hedging and derivative cash settlements (1.88) (0.63) (2.97) (0.60) Differential (7.50) (2.58) (7.05) (2.57) ---------- ---------- ---------- ---------- Net realized price 19.53 23.06 21.30 20.85 Production expenses (7.49) (6.46) (7.05) (6.45) Production and ad valorem taxes (1.15) (0.62) (1.33) (0.55) Oil transportation expenses (4.48) (4.41) (4.23) (4.38) ---------- ---------- ---------- ---------- Gross margin $ 6.41 $ 11.57 $ 8.69 $ 9.47 ========== ========== ========== ==========
-MORE- PLAINS RESOURCES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS OF DOLLARS)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ---------------------- ---------------------- 2003 2002 2003 2002 --------- --------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,096 $ 9,674 $ 8,420 $ 16,270 Items not affecting cash flows from continuing operating activities Income from discontinued operations, net of tax -- (8,218) -- (14,082) Equity in earnings of Plains All American Pipeline, L.P. (5,397) (5,256) (11,722) (9,606) Gain on Plains All American Pipeline, L.P. unit offering -- -- (6,108) -- Distributions received from Plains All American Pipeline, L.P. 7,794 7,182 15,298 14,140 Other 3,905 2,334 7,976 7,679 Change in assets and liabilities from operating activities (1,559) 17,386 (1,602) 2,768 --------- --------- --------- --------- Net cash provided by continuing activities 5,839 23,102 12,262 17,169 Net cash provided by discontinued activities -- 10,238 -- 19,776 --------- --------- --------- --------- Net cash provided by operating activities 5,839 33,340 12,262 36,945 --------- --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to oil and gas properties (945) (4,164) (1,494) (4,720) Additions to other property and equipment -- (14) -- (31) Investment in Plains All American Pipeline, L.P. -- -- (589) -- --------- --------- --------- --------- Net cash used in continuing activities (945) (4,178) (2,083) (4,751) Net cash used in discontinued activities -- (18,397) -- (42,358) --------- --------- --------- --------- Net cash used in investing activities (945) (22,575) (2,083) (47,109) --------- --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Net change in credit facility 19,500 (13,500) 15,000 6,000 Retirement of Series D preferred stock (23,300) -- (23,300) -- Treasury stock purchases (7,328) -- (8,977) -- Other (99) 2,793 69 4,061 --------- --------- --------- --------- Net cash provided by (used in) continuing activities (11,227) (10,707) (17,208) 10,061 Net cash provided by (used in) discontinued activities -- -- -- -- --------- --------- --------- --------- Net cash provided by (used in) financing activities (11,227) (10,707) (17,208) 10,061 --------- --------- --------- --------- Net increase (decrease) in cash and cash equivalents (6,333) 58 (7,029) (103) Cash and cash equivalents, beginning of period 8,111 1,018 8,807 1,179 --------- --------- --------- --------- Cash and cash equivalents, end of period $ 1,778 $ 1,076 $ 1,778 $ 1,076 ========= ========= ========= =========
-MORE- PLAINS RESOURCES INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS OF DOLLARS)
JUNE 30, DECEMBER 31, 2003 2002 ------------ ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,778 $ 8,807 Accounts receivable and other current assets 4,624 3,104 Inventories 1,788 2,305 ------------ ------------ 8,190 14,216 ------------ ------------ PROPERTY AND EQUIPMENT, AT COST Oil and gas properties - full cost method 352,062 349,517 Other property and equipment 27 27 ------------ ------------ 352,089 349,544 Less allowance for depreciation, depletion and amortization (298,403) (299,214) ------------ ------------ 53,686 50,330 ------------ ------------ INVESTMENT IN PLAINS ALL-AMERICAN PIPELINE, L.P. 82,202 70,042 ------------ ------------ OTHER ASSETS Deferred income taxes 8,460 16,957 Other 10,294 9,867 ------------ ------------ 18,754 26,824 ------------ ------------ $ 162,832 $ 161,412 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and other current liabilities $ 9,369 $ 8,187 Current maturities of long-term debt 20,000 18,000 ------------ ------------ 29,369 26,187 ------------ ------------ LONG-TERM BANK DEBT 40,000 27,000 ------------ ------------ ASSET RETIREMENT OBLIGATION 1,957 -- ------------ ------------ OTHER LONG-TERM LIABILITIES 2,937 2,716 ------------ ------------ STOCKHOLDERS' EQUITY Series D cumulative convertible preferred stock -- 23,300 Common stock 2,823 2,806 Additional paid-in capital 275,781 273,162 Retained earnings (deficit) (96,066) (103,882) Accumulated other comprehensive income 2,023 (2,862) Treasury stock, at cost (95,992) (87,015) ------------ ------------ 88,569 105,509 ------------ ------------ $ 162,832 $ 161,412 ============ ============
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