-----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, CmbWWm2vxTPmQyfauFOIUR1uo2MGxRbnE6ZJcQO0p9MsPV4PBdQDOE1rj5jN+HVz gRqtKciohmots47RP0y2sQ== 0000950134-03-007064.txt : 20030502 0000950134-03-007064.hdr.sgml : 20030502 20030502171108 ACCESSION NUMBER: 0000950134-03-007064 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REMINGTON OIL & GAS CORP CENTRAL INDEX KEY: 0000874992 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 752369148 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11516 FILM NUMBER: 03680419 BUSINESS ADDRESS: STREET 1: 8201 PRESTON RD STREET 2: SUITE 600 CITY: DALLAS STATE: TX ZIP: 75225 BUSINESS PHONE: 2148908000 MAIL ADDRESS: STREET 1: 8201 PRESTON RD STREET 2: SUITE 600 CITY: DALLAS STATE: TX ZIP: 75225-6211 FORMER COMPANY: FORMER CONFORMED NAME: BOX ENERGY CORP DATE OF NAME CHANGE: 19930328 10-Q 1 d05375e10vq.txt FORM 10-Q - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON DC 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-11516 REMINGTON OIL AND GAS CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 75-2369148 (State or other jurisdiction of (IRS employer incorporation or organization) identification no.)
8201 PRESTON ROAD, SUITE 600, DALLAS, TEXAS 75225-6211 (Address of principal executive offices) (Zip code) (214) 210-2650 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ] There were 26,459,991 outstanding shares of Common Stock, $0.01 par value, on May 1, 2003. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- REMINGTON OIL AND GAS CORPORATION INDEX PART I -- FINANCIAL INFORMATION Item 1. Financial Statements.............................. 2 Condensed Consolidated Balance Sheets.................. 2 Condensed Consolidated Statements of Income............ 3 Condensed Consolidated Statements of Cash Flows........ 4 Notes to Condensed Consolidated Financial Statements... 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................... 8 Item 3. Quantitative and Qualitative Disclosures about Market Risk............................................ 10 Item 4. Controls and Procedures........................... 11 PART II -- OTHER INFORMATION Item 1. Legal Proceedings................................. 12 Item 2. Changes in Securities and Use of Proceeds......... 12 Item 3. Defaults upon Senior Securities................... 12 Item 4. Submission of Matters to a Vote of Security Holders................................................ 12 Item 5. Other Information................................. 12 Item 6. Exhibits and Reports on Form 8-K.................. 12 SIGNATURES................................................ 14 CERTIFICATIONS............................................ 15
1 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS REMINGTON OIL AND GAS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31, 2003 2002 -------------- --------------- (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE DATA) ASSETS CURRENT ASSETS Cash and cash equivalents.............................. $ 14,814 $ 14,929 Accounts receivable.................................... 47,288 32,555 Prepaid drilling costs................................. 5,775 3,115 Prepaid expenses and other current assets.............. 1,688 1,863 --------- --------- TOTAL CURRENT ASSETS...................................... 69,565 52,462 --------- --------- PROPERTIES Oil and gas properties (successful-efforts method)..... 537,974 510,921 Other properties....................................... 3,247 3,182 Accumulated depreciation, depletion and amortization... (287,027) (279,722) --------- --------- TOTAL PROPERTIES.......................................... 254,194 234,381 --------- --------- OTHER ASSETS.............................................. 2,150 2,150 --------- --------- TOTAL ASSETS................................................ $ 325,909 $ 288,993 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities............... $ 54,140 $ 47,523 Short-term notes payable and current portion of other long-term payables.................................... 2,285 1,715 --------- --------- TOTAL CURRENT LIABILITIES................................. 56,425 49,238 --------- --------- LONG-TERM LIABILITIES Notes payable.......................................... 37,400 37,400 Other long-term payables............................... 1,224 1,503 Asset retirement obligation............................ 11,847 -- Deferred income taxes.................................. 13,261 7,192 --------- --------- TOTAL LONG-TERM LIABILITIES............................... 63,732 46,095 --------- --------- TOTAL LIABILITIES...................................... 120,157 95,333 --------- --------- Commitments and contingencies (Note 6) STOCKHOLDERS' EQUITY Preferred stock, $.01 par value, 25,000,000 shares authorized, no shares outstanding..................... -- -- Common stock, $.01 par value, 100,000,000 shares authorized, 26,495,553 shares issued and 26,388,801 shares outstanding in 2003, 26,327,195 shares issued and 26,236,459 shares outstanding in 2002............. 265 263 Additional paid-in capital............................. 117,144 115,827 Restricted common stock................................ 4,508 5,468 Unearned compensation.................................. (2,845) (3,192) Treasury stock (72,393 shares in 2003 and 56,377 shares in 2002).............................................. (1,278) (977) Retained earnings...................................... 87,958 76,271 --------- --------- TOTAL STOCKHOLDERS' EQUITY................................ 205,752 193,660 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................. $ 325,909 $ 288,993 ========= =========
See accompanying Notes to Condensed Consolidated Financial Statements. 2 REMINGTON OIL AND GAS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, ---------------------- 2003 2002 --------- --------- (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) REVENUES Oil sales................................................. $13,575 $ 7,030 Gas sales................................................. 28,593 12,234 Other income.............................................. 33 43 ------- ------- TOTAL REVENUES.............................................. 42,201 19,307 ------- ------- COSTS AND EXPENSES Operating................................................. 4,256 3,146 Exploration............................................... 7,098 3,664 Depreciation, depletion and amortization.................. 10,757 9,568 General and administrative................................ 1,291 1,246 Stock based compensation.................................. 419 457 Interest and financing.................................... 400 829 ------- ------- TOTAL COSTS AND EXPENSES.................................... 24,221 18,910 ------- ------- INCOME BEFORE INCOME TAXES.................................. 17,980 397 Income tax expense........................................ 6,293 139 ------- ------- NET INCOME.................................................. $11,687 $ 258 ======= ======= Basic income per share...................................... $ 0.44 $ 0.01 ======= ======= Diluted income per share.................................... $ 0.42 $ 0.01 ======= =======
See accompanying Notes to Condensed Consolidated Financial Statements. 3 REMINGTON OIL AND GAS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, ------------------- 2003 2002 -------- -------- (UNAUDITED) (IN THOUSANDS) CASH FLOW PROVIDED BY OPERATIONS NET INCOME................................................ $ 11,687 $ 258 Adjustments to reconcile net income Depreciation, depletion and amortization............... 10,757 9,568 Deferred income taxes.................................. 6,293 139 Amortization of deferred charges....................... 64 47 Dry hole and impairment costs.......................... 6,745 3,492 Cash paid for dismantlement............................ (296) (4) Stock based compensation............................... 419 457 -------- -------- CASH FLOW PROVIDED BY OPERATIONS BEFORE CHANGES IN WORKING CAPITAL................................................ 35,669 13,957 -------- -------- CHANGES IN WORKING CAPITAL (Increase) in accounts receivable...................... (14,733) (1,932) (Increase) in prepaid expenses and other current assets................................................ (2,549) (1,714) Increase (decrease) in accounts payable and accrued expenses.............................................. 6,617 (7,314) -------- -------- NET CASH FLOW PROVIDED BY OPERATIONS...................... 25,004 2,997 -------- -------- CASH FROM INVESTING ACTIVITIES Capital expenditures................................... (24,614) (20,387) -------- -------- NET CASH (USED IN) INVESTING ACTIVITIES................... (24,614) (20,387) -------- -------- CASH FROM FINANCING ACTIVITIES Payments on notes payable and other long-term payables.............................................. (267) (44,652) Common stock issued.................................... 63 53,313 Purchase of treasury stock............................. (301) (255) -------- -------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES....... (505) 8,406 -------- -------- NET (DECREASE) IN CASH AND CASH EQUIVALENTS................. (115) (8,984) Cash and cash equivalents at beginning of period....... 14,929 19,377 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD.................. $ 14,814 $ 10,393 ======== ========
See accompanying Notes to Condensed Consolidated Financial Statements. 4 REMINGTON OIL AND GAS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. ACCOUNTING POLICIES AND BASIS OF PRESENTATION Remington Oil and Gas Corporation is an independent oil and gas exploration and production company incorporated in Delaware. Our oil and gas properties are located in the offshore Gulf of Mexico and the onshore Gulf Coast. We prepared these financial statements according to the instructions for Form 10-Q. Therefore, the financial statements do not include all disclosures required by generally accepted accounting principles. However, we have recorded all transactions and adjustments necessary to fairly present the financial statements included in this Form 10-Q. The adjustments made are normal and recurring. The following notes describe only the material changes in accounting policies, account details, or financial statement notes during the first three months of 2003. Therefore, please read these financial statements and notes to the financial statements together with the audited financial statements and notes to financial statements in our 2002 Form 10-K. The income statements for the three months ended March 31, 2003, cannot necessarily be used to project results for the full year. We have made certain reclassifications to prior year financial statements in order to conform to current year presentations. NOTE 2. NEW ACCOUNTING POLICIES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE We adopted Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations," effective January 1, 2003. The statement requires that we estimate the fair value for our asset retirement obligations (dismantlement and abandonment of oil and gas wells and offshore platforms) in the periods the assets are first placed in service. We then adjust the current estimated obligation for estimated inflation and market risk contingencies to the projected settlement date of the liability. The result is then discounted to a present value from the projected settlement date to the date the asset was first placed in service. We recorded the present value of the asset retirement obligation as an additional property cost and as an asset retirement liability. A combination of the amortization of the additional property cost (using the unit of production method) and the accretion of the discounted liability is recorded as a periodic expense in our income statement. Prior to this adoption, we accrued an estimated dismantlement, restoration and abandonment liability using the unit of production method over the life of a property and included the accrued amount in depreciation, depletion and amortization expense. The total accrued liability ($5.5 million) was reflected as additional accumulated depreciation, depletion and amortization of oil and gas properties on our balance sheet. 5 REMINGTON OIL AND GAS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) In conformity with the new statement we recorded the cumulative effect of this accounting change as of January 1, 2003 as if we had used this method in the prior years. At January 1, 2003, we increased our oil and gas properties by $9.0 million, recorded $11.8 million as an Asset Retirement Obligation liability and reduced our accumulated depreciation by $2.8 million ($5.5 million accrued dismantlement in prior years less accumulated depreciation, depletion and amortization of $2.7 million on the increased property costs). The adoption of the new standard had no material effect on our net income. The following table reflects the reconciliation of the asset retirement obligations during the first quarter of 2003.
CAPITALIZED ACCUMULATED ASSET ASSET DEPRECIATION RETIREMENT RETIREMENT DEPLETION AND OBLIGATION COST AMORTIZATION LIABILITY ----------- ------------- ---------- (IN THOUSANDS) Balance January 1, 2003............................ $8,985 $2,692 $11,807 Property additions................................. 694 -- 694 Settlement of liabilities.......................... -- -- (296) Asset retirement expense........................... -- 250 200 ------ ------ ------- Balance March 31, 2003............................. $9,679 $2,942 $12,405 ====== ====== =======
Of the total asset retirement obligation, $558,000 is classified as current due to the anticipated dismantlement and abandonment of East Cameron block 305 during 2003. NOTE 3. NET INCOME PER SHARE
FOR THE THREE MONTHS ENDED MARCH 31, --------------------- 2003 2002 --------- --------- (IN THOUSANDS, EXCEPT PER SHARE DATA) Net income.................................................. $11,687 $ 258 ======= ======= Basic income per share...................................... $ 0.44 $ 0.01 ======= ======= Diluted income per share.................................... $ 0.42 $ 0.01 ======= ======= Weighted average common stock............................... 26,340 22,878 Dilutive stock options outstanding (treasury stock method)................................................... 1,259 1,535 Restricted common stock grant............................... 371 584 ------- ------- Total weighted average common shares for diluted income per share..................................................... 27,970 24,997 ======= =======
6 REMINGTON OIL AND GAS CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NOTE 4. STOCK BASED COMPENSATION The following table summarizes relevant information as to the reported results under our intrinsic value method of accounting for stock awards, with supplemental information as if the fair value recognition provision of SFAS No. 123 had been applied:
FOR THE THREE MONTHS ENDED MARCH 31, --------------------- 2003 2002 --------- --------- (IN THOUSANDS, EXCEPT PER SHARE DATA) As reported: Net income................................................ $11,687 $ 258 Basic income per share.................................... $ 0.44 $ 0.01 Diluted income per share.................................. $ 0.42 $ 0.01 Stock based compensation (net of tax) included in net income as reported............................................... $ 272 $ 297 Stock based compensation (net of tax) if using the fair value method as applied to all awards..................... $ 746 $ 654 Proforma (if using the fair value method applied to all awards): Net income................................................ $11,213 $ (99) Basic income per share.................................... $ 0.43 $ 0.00 Diluted income per share.................................. $ 0.40 $ 0.00 Weighted average shares used in computation Basic..................................................... 26,340 22,878 Diluted................................................... 27,970 24,997
NOTE 5. NOTES PAYABLE As of March 31, 2003, our credit facility of $150.0 million had a borrowing base of $75.0 million. Interest only is payable quarterly through May 3, 2004, at which time the line expires and all principal becomes due, unless the line is extended or renegotiated. On May 1, 2003, we agreed with the lenders to increase the borrowing base to $100.0 million and to extend the term to May 3, 2006. As of May 1, 2003, we had $37.4 million borrowed under the facility. The banks review the borrowing base semi-annually and may increase or decrease the borrowing base relative to a redetermined estimate of proved oil and gas reserves. Our oil and gas properties are pledged as collateral for the line of credit. Additionally, we have agreed not to pay dividends. NOTE 6. CONTINGENCIES We have no material pending legal proceedings. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion will assist in understanding our financial position and results of operations. The information below should be read in conjunction with the financial statements, the related notes to financial statements, and our Form 10-K for the year ended December 31, 2002. Our discussion contains both historical and forward-looking information. We assess the risks and uncertainties about our business, long-term strategy, and financial condition before we make any forward-looking statements, but we cannot guarantee that our assessment is accurate or that our goals and projections can or will be met. Statements concerning results of future exploration, exploitation, development and acquisition expenditures as well as expense and reserve levels are forward-looking statements. We make assumptions about commodity prices, drilling results, production costs, administrative expenses, and interest costs that we believe are reasonable based on currently available information. This discussion is primarily an update to the Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2002 Form 10-K. We recommend that you read this discussion in conjunction with the Form 10-K. Our long-term strategy is to increase our oil and gas production and reserves while keeping our operating costs and our finding and development costs competitive with our industry peers. LIQUIDITY AND CAPITAL RESOURCES The following table summarizes our contractual obligations and commercial commitments as of March 31, 2003.
PAYMENTS DUE BY PERIOD ----------------------------------------------------------- LESS THAN TOTAL 1 YEAR 1-3 YEARS 4-5 YEARS AFTER 5 YEARS ------- --------- --------- --------- ------------- (IN THOUSANDS) Contractual obligations Bank debt........................ $37,400 $ -- $37,400 $ -- $ -- Other long-term payables......... $ 2,951 $1,727 $ 1,224 $ -- $ -- Office lease..................... $ 2,358 $ 441 $ 933 $984 $ -- ------- ------ ------- ---- ----- Total......................... $42,709 $2,168 $39,557 $984 $ -- ======= ====== ======= ==== =====
On March 31, 2003, our current assets exceeded our current liabilities by $13.1 million. Our current ratio was 1.23 to 1. From December 31, 2002, to March 31, 2003, our current assets increased by $17.1 million due primarily to increased accounts receivable. Cash flow from operations before changes in working capital increased by $21.7 million, or 156%, primarily because of higher oil and gas revenues during the first quarter of 2003 compared to the first quarter of 2002. Gas sales increased by $16.4 million, or 134%, and oil sales increased by $6.5 million, or 93%. The increases in sales related primarily to higher average prices in 2003 compared to the prior year. Significant changes in our working capital accounts during the first quarter of 2003 include an increase in accounts receivable due to the increase in balances due from our joint interest participants due to an increase in operating activities and an increase in oil and gas sales during the quarter. Prepaid expenses and other current assets increased due to an increase in prepaid drilling costs on non-operated properties. In addition, due to the increase in our operating activities our accounts payable increased by $6.6 million. During the first quarter of 2003, our capital expenditures totaled $24.6 million of which $22.3 million was spent in the Gulf of Mexico where we incurred costs to drill and complete wells and fabricate and install new platforms and facilities. We have budgeted $96.1 million for capital expenditures during 2003. This capital and exploration budget includes $51.3 million for 30 exploratory wells, $25.8 million for offshore platforms and development drilling, and $19.0 million for workovers and property and seismic acquisitions. We expect that 8 our cash, estimated future cash flow from operations, and available bank line of credit will be adequate to fund these expenditures for the remainder of 2003. If our exploratory drilling results in significant new discoveries, we will commit additional capital above our existing budget in order to finance the completion, development, and potential additional opportunities generated by our success. We believe that, because of the additional reserves resulting from the exploratory success and our record of reserve growth in recent years, should such outlays exceed our operating cash flow we will be able to fund such needs through bank financing and /or offerings of debt or equity securities. As of March 31, 2003, our credit facility of $150.0 million had a borrowing base of $75.0 million. Interest only is payable quarterly through May 3, 2004, at which time the line expires and all principal becomes due, unless the line is extended or renegotiated. On May 1, 2003, we agreed with the lenders to increase the borrowing base to $100.0 million and to extend the term to May 3, 2006. As of May 1, 2003, we had $37.4 million borrowed under the facility. The banks review the borrowing base semi-annually and may increase or decrease the borrowing base relative to a redetermined estimate of proved oil and gas reserves. Our oil and gas properties are pledged as collateral for the line of credit. Additionally, we have agreed not to pay dividends. RESULTS OF OPERATIONS The following table reflects oil and gas revenues, production, and prices during the first quarter of 2003 compared to the first quarter of 2002.
THREE MONTHS ENDED MARCH 31, ------------------------------------ % INCREASE 2003 (DECREASE) 2002 --------- ------------ --------- (DOLLARS IN THOUSANDS, EXCEPT UNIT PRICES) Oil production volume (MBbls).......................... 426 16% 367 Oil sales revenue...................................... $13,575 93% $ 7,030 Price per barrel....................................... $ 31.87 66% $ 19.15 Increase (decrease) in oil sales revenue due to: Change in prices..................................... $ 4,668 Change in production volume.......................... 1,877 ------- Total (decrease) in oil sales revenue.................. $ 6,545 ======= Gas production volume (MMcf)........................... 4,505 (5)% 4,755 Gas sales revenue...................................... $28,593 134% $12,234 Price per Mcf.......................................... $ 6.35 147% $ 2.57 (Decrease) in gas sales revenue due to: Change in prices..................................... $17,974 Change in production volume.......................... (1,615) ------- Total (decrease) in gas sales revenue.................. $16,359 ======= Total production Mcfe.................................. 7,061 6,957 Price per Mcfe......................................... $ 5.97 116% $ 2.77
Oil sales revenue increased by $6.5 million, or 93%. An increase of 59,000 barrels (16%) in oil production, primarily from new properties in the offshore Gulf of Mexico, provided an increase in revenue of approximately $1.9 million. Offshore Gulf of Mexico production increased by 82,000 barrels, or 31%, during the first quarter of 2003 compared to 2002 primarily because of production from five new properties. Onshore Gulf coast production decreased due to property sales and natural depletion of oil and gas fields. Gas Sales revenue increased by $16.4 million, or 134%, because of higher average gas prices partially offset by lower production. Average gas prices increased from $2.57 per Mcf in the first quarter of 2002 to 9 $6.35 per Mcf, or 147%, for the same quarter in 2003, causing gas sales revenues to increase by $18.0 million. Production decreased by 250,000 Mcf, or 5%, primarily because of the sales of certain South Texas properties during the second quarter of 2002, partially offset by increased production from new properties in the Gulf of Mexico. Operating expenses increased by $1.1 million during the first quarter of 2003 compared to the prior year because of addition producing properties. Exploration expenses increased by $3.4 million due to additional dry hole expense incurred during the first quarter of 2003 compared to 2002. Depreciation, depletion, and amortization including the amortization and accretion of the asset retirement obligation required by Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations," increased by $1.2 million, or 13%, primarily due to increased production and additional producing properties. We adopted the new accounting standard effective January 1, 2003. Prior to this adoption, we accrued an estimated dismantlement, restoration and abandonment liability using the unit of production method over the life of a property and included the accrued amount in depreciation, depletion and amortization expense. The total accrued liability ($5.5 million) was reflected as additional accumulated depreciation, depletion and amortization of oil and gas properties on our balance sheet. In conformity with this new standard, at January 1, 2003, we recorded an increase in our oil and gas properties totaling $9.0 million, recorded $11.8 million as an Asset Retirement Obligation liability and reduced our accumulated depreciation by $2.8 million ($5.5 million accrued dismantlement in prior years less accumulated depreciation, depletion and amortization of $2.7 million on the increased property costs). The adoption of the new standard had no material effect on our net income. General and administrative expenses did not change significantly. Stock based compensation expense includes the amortized compensation cost related to the contingent stock grant and the directors fees paid in common stock. Interest and financing costs decreased due to a decrease in the average debt outstanding and lower weighted average rates. Income tax expense increased by $6.2 million because of the higher income before taxes in the first quarter of 2003 compared to the first quarter of 2002. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK INTEREST RATE RISK Our revolving bank line of credit is sensitive to changes in interest rates. At March 31, 2003, the unpaid principal balance under the line was $37.4 million which approximates its fair value. The interest rate on this debt is based on a premium of 150 to 225 basis points over the London Interbank Offered Rate ("Libor"). The rate is reset periodically, usually every three months. If on March 31, 2003, Libor changed by one full percentage point (100 basis points) the fair value of our revolving debt would change by approximately $93,000. We have not entered into any interest rate hedging contracts. COMMODITY PRICE RISK A vast majority of our production is sold on the spot markets. Accordingly, we are at risk for the volatility in the commodity prices inherent in the oil and gas industry. Occasionally we sell forward portions of our production under physical delivery contracts that by their terms cannot be settled in cash or other financial instruments. Such contracts are not subject to the provisions of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities." Accordingly, we do not provide sensitivity analysis for such contracts. For the period January 1, 2003, through March 31, 2003, we did not have any forward sales contracts in place. For the period 10 April 1, 2003, through December 31, 2003, we have physical delivery contracts in place to sell 21,500 MMBtu of gas per day and 1,200 barrels of oil per day at the following prices:
PRICE PER -------------- PERIOD BARREL MMBTU - ------ ------ ----- April 1, 2003 through June 30, 2003......................... $30.92 $5.16 July 1, 2003 through September 30, 2003..................... $28.70 $4.89 October 1, 2003 through December 31, 2003................... $27.41 $4.95
ITEM 4. CONTROLS AND PROCEDURES Within the 90 day period prior to the filing of this report, our management, including our Chief Executive Officer and our Principal Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures. Based on that evaluation, our management, including the Chief Executive Officer and the Principal Financial Officer, concluded that our disclosure controls and procedures were effective as of the date the evaluation was concluded. Further, there were no significant changes in internal controls, or in other factors that could significantly affect internal controls, since that date. 11 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS We have no material pending legal proceedings. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 3.1# Certificate of Amendment of Certificate of Incorporation of Remington Oil and Gas Corporation. 3.3*** By-Laws as amended. 10.1++ Pension Plan of Remington Oil and Gas Corporation, as Amended and Restated effective January 1, 2000. 10.2++ Amendment Number One to the Pension Plan of Remington Oil and Gas Corporation. 10.3*** Amendment Number Two to the Pension Plan of Remington Oil and Gas Corporation. 10.4*** Amendment Number Three to the Pension Plan of Remington Oil and Gas Corporation. 10.5* Box Energy Corporation Severance Plan. 10.6## Box Energy Corporation 1997 Stock Option Plan (as amended June 17, 1999 and May 23, 2001). 10.7* Box Energy Corporation Non-Employee Director Stock Purchase Plan. 10.8+ Form of Employment Agreement effective September 30, 1999, by and between Remington Oil and Gas Corporation and two executive officers. 10.9+ Form of Employment Agreement effective September 30, 1999, by and between Remington Oil and Gas Corporation and an executive officer. 10.10** Employment Agreement effective January 31, 2000, by and between Remington Oil and Gas Corporation and James A. Watt. 10.11** Form of Contingent Stock Grant Agreement -- Directors. 10.12** Form of Contingent Stock Grant Agreement -- Employees. 10.13** Form of Amendment to Contingent Stock Grant Agreement -- Directors. 10.14** Form of Amendment to Contingent Stock Grant Agreement -- Employees. 99.1 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.2 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
- --------------- * Incorporated by reference to the Company's Form 10-K (file number 1-11516) for the fiscal year ended December 31, 1997, filed with the Commission and effective on or about March 30, 1998. 12 # Incorporated by reference to the Company's Registration Statement on Form S-4 (file number 333-61513) filed with the Commission and effective on November 27, 1998. + Incorporated by reference to the Company's Form 10-Q (file number 1-11516) for the fiscal quarter ended September 30, 1999, filed with the Commission and effective on or about November 12, 1999. ** Incorporated by reference to the Company's Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2000, filed with the Commission and effective on or about March 16, 2001. ## Incorporated by reference to the Company's Form 10-Q (file number 1-11516) for the fiscal quarter ended September 30, 2001, filed with the Commission and effective on or about November 9, 2001. ++ Incorporated by reference to the Company's Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2001, filed with the Commission and effective on or about March 21, 2002. *** Incorporated by reference to the Company's Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2002, filed with the Commission and effective on or about March 31, 2003. (b) We filed no reports on Form 8-K during the quarter ended March 31, 2003. 13 SIGNATURES 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 thereunto duly authorized. REMINGTON OIL AND GAS CORPORATION By: /s/ JAMES A. WATT ------------------------------------ James A. Watt President and Chief Executive Officer Date: May 2, 2003 By: /s/ J. BURKE ASHER ------------------------------------ J. Burke Asher Vice President/Finance Date: May 2, 2003 14 CERTIFICATIONS I, James A. Watt, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Remington Oil and Gas Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 2, 2003 By /s/ JAMES A. WATT ------------------------------------ James A. Watt President and Chief Executive Officer 15 I, J. Burke Asher, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Remington Oil and Gas Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 2, 2003 By /s/ J. BURKE ASHER ------------------------------------ J. Burke Asher Vice President/Finance (Principal Financial Officer) 16 EXHIBIT INDEX 3.1# Certificate of Amendment of Certificate of Incorporation of Remington Oil and Gas Corporation. 3.3*** By-Laws as amended. 10.1++ Pension Plan of Remington Oil and Gas Corporation, as Amended and Restated effective January 1, 2000. 10.2++ Amendment Number One to the Pension Plan of Remington Oil and Gas Corporation. 10.3*** Amendment Number Two to the Pension Plan of Remington Oil and Gas Corporation. 10.4*** Amendment Number Three to the Pension Plan of Remington Oil and Gas Corporation. 10.5* Box Energy Corporation Severance Plan. 10.6## Box Energy Corporation 1997 Stock Option Plan (as amended June 17, 1999 and May 23, 2001). 10.7* Box Energy Corporation Non-Employee Director Stock Purchase Plan. 10.8+ Form of Employment Agreement effective September 30, 1999, by and between Remington Oil and Gas Corporation and two executive officers. 10.9+ Form of Employment Agreement effective September 30, 1999, by and between Remington Oil and Gas Corporation and an executive officer. 10.10** Employment Agreement effective January 31, 2000, by and between Remington Oil and Gas Corporation and James A. Watt. 10.11** Form of Contingent Stock Grant Agreement -- Directors. 10.12** Form of Contingent Stock Grant Agreement -- Employees. 10.13** Form of Amendment to Contingent Stock Grant Agreement -- Directors. 10.14** Form of Amendment to Contingent Stock Grant Agreement -- Employees. 99.1 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.2 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
- --------------- * Incorporated by reference to the Company's Form 10-K (file number 1-11516) for the fiscal year ended December 31, 1997, filed with the Commission and effective on or about March 30, 1998. # Incorporated by reference to the Company's Registration Statement on Form S-4 (file number 333-61513) filed with the Commission and effective on November 27, 1998. + Incorporated by reference to the Company's Form 10-Q (file number 1-11516) for the fiscal quarter ended September 30, 1999, filed with the Commission and effective on or about November 12, 1999. ** Incorporated by reference to the Company's Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2000, filed with the Commission and effective on or about March 16, 2001. ## Incorporated by reference to the Company's Form 10-Q (file number 1-11516) for the fiscal quarter ended September 30, 2001, filed with the Commission and effective on or about November 9, 2001. ++ Incorporated by reference to the Company's Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2001, filed with the Commission and effective on or about March 21, 2002. *** Incorporated by reference to the Company's Form 10-K (file number 1-11516) for the fiscal year ended December 31, 2002, filed with the Commission and effective on or about March 31, 2003. 17 EX-99.1 3 d05375exv99w1.txt CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Remington Oil and Gas Corporation (the "Company") on Form 10-Q for the period ending March 31, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James A. Watt, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. This certification is made solely for the purpose of 18 U.S.C. Section 1350, and not for any other purpose. /s/ JAMES A. WATT -------------------------------------- James A. Watt President and Chief Executive Officer May 2, 2003 A signed original of this written statement required by Section 906 has been provided to Remington Oil and Gas Corporation and will be retained by Remington Oil and Gas Corporation and furnished to the Securities and Exchange Commission or its staff upon request. 18 EX-99.2 4 d05375exv99w2.txt CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 EXHIBIT 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Remington Oil and Gas Corporation (the "Company") on Form 10-Q for the period ending March 31, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, J. Burke Asher, Vice President/Finance (Principal Financial Officer) of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. This certification is made solely for the purpose of 18 U.S.C. Section 1350, and not for any other purpose. /s/ J. BURKE ASHER -------------------------------------- J. Burke Asher Vice President/Finance (Principal Financial Officer) May 2, 2003 A signed original of this written statement required by Section 906 has been provided to Remington Oil and Gas Corporation and will be retained by Remington Oil and Gas Corporation and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----