Vintage Petroleum to Acquire Producing Oil and Gas Properties in the Uinta Basin; Increases 2004 Targets
November 10 2003 - 8:16PM
PR Newswire (US)
Vintage Petroleum to Acquire Producing Oil and Gas Properties in
the Uinta Basin; Increases 2004 Targets TULSA, Okla., Nov. 10
/PRNewswire-FirstCall/ -- Vintage Petroleum, Inc. announced today
the signing of an agreement to acquire producing properties in the
Uinta basin of Utah for $52.5 million, subject to customary closing
adjustments from the transaction's June 1, 2003, effective date.
The agreement calls for Vintage to acquire an approximately 80
percent, operated working interest in fields primarily in Duchesne
and Uintah counties in Utah covering over 200,000 net acres from
various subsidiaries of El Paso Corporation. Current net production
attributable to the properties is estimated at 2,000 barrels of oil
and natural gas liquids per day and 920 thousand cubic feet of gas
per day from the Green River and Wasatch formations. Vintage
believes the properties contain significant workover, drilling and
waterflood potential which it plans to pursue along with the
implementation of operational efficiencies. In addition to the
property interests, Vintage is to acquire the majority interest and
operational control of three gas plants which will provide Vintage
with an increase in its natural gas gathering and processing
income. "These properties provide us with the type of operational
and work program opportunities in which we have excelled
historically. We are excited about operating in the Rockies and its
potential to become a significant producing area for us," said S.
Craig George, CEO. Vintage currently has just over 2.1 million
barrels of oil hedged during 2004 and nearly 1.4 million barrels of
oil hedged during 2005 at average NYMEX reference prices of $29.00
and $25.73, respectively. "We're taking advantage of the strong oil
price environment with hedges in place for 2004 and 2005, a portion
of which helps to protect our projected acquisition returns," added
S. Craig George, CEO. 2004 Targets Revised As a result of this
acquisition, Vintage is increasing its 2004 annual targets for cash
flow from continuing operations from $214 million to $230 million
and for EBITDAX from $315 million to $333 million. The 2004 annual
production target has been increased by nearly one million barrels
of oil equivalent (BOE) to 27.8 million BOE. The capital spending
budget increase of $15 million will be allocated to exploitation
spending in the United States, bringing the total capital spending
budget for 2004 to $240 million. These revised targets and others
along with the definitions of cash flow and EBITDAX are enumerated
in the accompanying table, "Vintage Petroleum, Inc., Revised
Targets for 2004" and are based on average NYMEX prices for 2004 of
$27.00 per barrel of oil and $5.00 per MMBTU of natural gas. The
transaction is scheduled to close on or before December 2, 2003,
subject to ordinary conditions precedent. Cash required at closing
will be provided by the company's existing bank credit facility.
Forward-Looking Statements This release includes certain statements
that may be deemed to be "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements in this release, other than statements of historical
facts that address future acquisitions, estimates of assumed NYMEX
prices, realized prices as a percent of NYMEX, production, capital
expenditures, cash flows, EBITDAX and events or developments that
the company expects are forward-looking statements. Although
Vintage believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance, and actual results or
developments may differ materially from those in the
forward-looking statements. Factors that could cause actual results
to differ materially from those in forward-looking statements
include conditions precedent to the closing of future acquisitions,
oil and gas prices, exploitation and exploration successes, actions
taken or to be taken by foreign governments as a result of economic
conditions or other factors, changes in foreign exchange and
inflation rates, as well as continued availability of capital and
financing, and general economic, market or business conditions and
risk factors listed from time-to-time in the company's reports and
other documents filed with the Securities and Exchange Commission.
Vintage Petroleum is an independent energy company engaged in the
acquisition, exploitation, exploration and development of oil and
gas properties and the marketing of natural gas and crude oil.
Company headquarters are in Tulsa, Oklahoma, and its common shares
are traded on the New York Stock Exchange under the symbol VPI. For
additional information visit the company website at
http://www.vintagepetroleum.com/ . VINTAGE PETROLEUM, INC. REVISED
TARGETS FOR 2004 Oil production (MMBbls): Previous Revised 2004
2004 Targets(C) Targets(C) U.S. 5.8 6.7 Canada .8 .8 Argentina 11.1
11.1 Bolivia .1 .1 Yemen .4 .4 Total 18.2 19.1 Gas production
(Bcf): U.S. 23.4 24.0 Canada 14.8 14.8 Argentina 8.5 8.5 Bolivia
5.5 5.5 Total 52.2 52.8 Total MMBOE 26.9 27.8 Assumed NYMEX (A)
prices: Oil $27.00 $27.00 Gas $5.00 $5.00 Net realized price
(before impact of hedging) as a percent of NYMEX (A) - Total
Company: Oil 84% 84% Gas 69% 69% DD&A per BOE (oil and gas
only) $4.75 $4.75 LOE per BOE (including Argentine export tax
impact) (E) $8.75 $8.90 G&A per BOE $2.20 $2.15 Non-Acquisition
Capital Spending Budget (in millions) $225 $240 Cash Flow (before
all exploration expenses, working capital changes and current taxes
associated with property sales) (in millions)(D)(E) $214 $230
EBITDAX (in millions)(B)(D)(E) $315 $333 MMBbls -million barrels
Bcf -billion cubic feet MMBOE -million barrels of oil equivalent
(a) NYMEX - Oil - Average of the daily settlement price per barrel
for the near-month contract for light crude oil as quoted on the
New York Mercantile Exchange. Gas - Average of the settlement price
per MMBtu for the last 3 trading days for the applicable contract
month for natural gas as quoted on the New York Mercantile
Exchange. (b) EBITDAX: Earnings before interest, taxes, DD&A,
impairments, exploration expenses, cumulative effect of change in
accounting principle, loss on early extinguishment of debt, and
gains/losses on property sales. (c) Targets do not reflect any
future acquisitions or dispositions of assets. Targets reflect the
impact of existing hedges. See "2004 Targets Revised" and
"Forward-Looking Statements" elsewhere in the release. (d) The
targets for non-GAAP financial measures are not reconciled to the
most directly comparable GAAP financial measures as the company
does not establish targets for such GAAP financial measures. (e)
Before costs to repair damage resulting from recent fires in
California. http://www.vintagepetroleum.com DATASOURCE: Vintage
Petroleum, Inc. CONTACT: Robert E. Phaneuf, Vice President -
Corporate Development of Vintage Petroleum, Inc., +1-918-592-0101
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