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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 September 30, 2002
 
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 1-10578
 
 
VINTAGE PETROLEUM, INC.
(Exact name of registrant as specified in charter)
 
Delaware
  
73-1182669
(State or other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification No.)
 
110 West Seventh Street
  
Tulsa, Oklahoma
  
74119-1029
(Address of principal executive offices)
      
(Zip Code)
 
(918) 592-0101
(Registrant’s telephone number, including area code)
 
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)
 
 
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 the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
 
Class
  
Outstanding at November 13, 2002
Common Stock, $.005 Par Value
  
63,320,272
 
 

1

PART I
 
FINANCIAL INFORMATION
 

2

ITEM 1. FINANCIAL STATEMENTS
 
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
(In thousands, except shares
and per share amounts)
(Unaudited)
 
ASSETS
 
    
September 30, 2002
   
December 31, 2001
CURRENT ASSETS:
              
Cash and cash equivalents
   
$
16,375
   
$
14,568
Accounts receivable—  
              
Oil and gas sales
   
 
94,782
   
 
74,435
Joint operations and other
   
 
11,836
   
 
12,041
Derivative financial instruments receivable
   
 
—  
   
 
4,701
Prepaids and other current assets
   
 
27,850
   
 
37,635
Assets to be sold
   
 
—  
   
 
9,172
    
  
Total current assets
   
 
150,843
   
 
152,552
    
  
PROPERTY, PLANT AND EQUIPMENT, at cost:
              
Oil and gas properties, successful efforts method
   
 
2,538,295
   
 
2,490,666
Oil and gas gathering systems and plants
   
 
22,368
   
 
20,508
Other
   
 
26,472
   
 
25,494
    
  
    
 
2,587,135
   
 
2,536,668
Less accumulated depreciation, depletion and amortization
   
 
922,981
   
 
809,522
    
  
    
 
1,664,154
   
 
1,727,146
    
  
GOODWILL, net
   
 
96,861
   
 
156,990
    
  
OTHER ASSETS, net
   
 
55,238
   
 
60,100
    
  
    
$
1,967,096
   
$
2,096,788
    
  
 
See notes to unaudited consolidated financial statements.

3

 
 
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
(In thousands, except shares
and per share amounts)
 
(Unaudited)
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
    
September 30, 2002
     
December 31, 2001
  
CURRENT LIABILITIES:
                  
Revenue payable
   
$
27,500
 
   
$
25,625
 
Accounts payable—trade
   
 
37,944
 
   
 
61,047
 
Current income taxes payable
   
 
17,218
 
   
 
21,638
 
Short-term debt
   
 
5,455
 
   
 
17,320
 
Derivative financial instruments payable
   
 
11,491
 
   
 
—  
 
Other payables and accrued liabilities
   
 
62,243
 
   
 
46,172
 
    
  
Total current liabilities
   
 
161,851
 
   
 
171,802
 
    
  
LONG-TERM DEBT
   
 
924,215
 
   
 
1,010,673
 
    
  
DEFERRED INCOME TAXES
   
 
171,090
 
   
 
166,662
 
    
  
OTHER LONG-TERM LIABILITIES
   
 
6,100
 
   
 
18,208
 
    
  
STOCKHOLDERS’ EQUITY, per accompanying statement:
                  
Preferred stock, $.01 par, 5,000,000 shares authorized,
zero shares issued and outstanding
   
 
—  
 
   
 
—  
 
Common stock, $.005 par, 160,000,000 shares authorized,
63,404,972 and 63,081,322 shares issued and 63,328,972
and 63,081,322 outstanding, respectively
   
 
317
 
   
 
315
 
Capital in excess of par value
   
 
326,163
 
   
 
324,077
 
Retained earnings
   
 
409,451
 
   
 
428,443
 
Accumulated other comprehensive loss
   
 
(29,426
)
   
 
(21,632
)
    
  
    
 
706,505
 
   
 
731,203
 
Less unamortized cost of restricted stock awards
   
 
2,665
 
   
 
1,760
 
    
  
    
 
703,840
 
   
 
729,443
 
    
  
    
$
1,967,096
 
   
$
2,096,788
 
    
  
 
See notes to unaudited consolidated financial statements.
 

4

 
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
    
Three Months Ended September 30,
     
Nine Months Ended September 30,
  
    
2002
     
2001
     
2002
     
2001
  
REVENUES:
                                    
Oil and gas sales
   
$
157,137
 
   
$
173,227
 
   
$
438,265
 
   
$
588,610
 
Gas marketing
   
 
15,482
 
   
 
20,481
 
   
 
45,215
 
   
 
115,295
 
Oil and gas gathering and processing
   
 
1,671
 
   
 
794
 
   
 
4,524
 
   
 
15,100
 
Gain (loss) on disposition of assets
   
 
(450
)
   
 
—  
 
   
 
17,259
 
   
 
24
 
Foreign currency exchange gain (loss)
   
 
(694
)
   
 
(544
)
   
 
3,408
 
   
 
(301
)
Other income (expense)
   
 
(562
)
   
 
(66
)
   
 
674
 
   
 
2,673
 
    
  
  
  
    
 
172,584
 
   
 
193,892
 
   
 
509,345
 
   
 
721,401
 
    
  
  
  
COSTS AND EXPENSES:
                                    
Lease operating, including production and export taxes
   
 
52,229
 
   
 
58,314
 
   
 
157,269
 
   
 
159,062
 
Exploration costs
   
 
5,638
 
   
 
9,516
 
   
 
21,566
 
   
 
15,178
 
Gas marketing
   
 
15,192
 
   
 
20,540
 
   
 
43,937
 
   
 
112,163
 
Oil and gas gathering and processing
   
 
1,795
 
   
 
1,299
 
   
 
5,077
 
   
 
15,776
 
General and administrative
   
 
12,258
 
   
 
12,954
 
   
 
38,258
 
   
 
36,883
 
Depreciation, depletion and amortization
   
 
43,767
 
   
 
48,072
 
   
 
140,236
 
   
 
116,060
 
Impairment of oil and gas properties
   
 
—  
 
   
 
10,706
 
   
 
—  
 
   
 
10,706
 
Amortization of goodwill
   
 
—  
 
   
 
4,417
 
   
 
—  
 
   
 
7,191
 
Interest
   
 
20,048
 
   
 
19,867
 
   
 
58,226
 
   
 
46,658
 
Loss on early extinguishment of debt
   
 
—  
 
   
 
—  
 
   
 
8,154
 
   
 
—  
 
    
  
  
  
    
 
150,927
 
   
 
185,685
 
   
 
472,723
 
   
 
519,677
 
    
  
  
  
Income from continuing operations before income taxes and cumulative effect of change in accounting principle
   
 
21,657
 
   
 
8,207
 
   
 
36,622
 
   
 
201,724
 
    
  
  
  
PROVISION (BENEFIT) FOR INCOME TAXES:
                                    
Current
   
 
7,210
 
   
 
6,370
 
   
 
19,004
 
   
 
56,565
 
Deferred
   
 
(2,307
)
   
 
(4,457
)
   
 
(16,402
)
   
 
15,650
 
    
  
  
  
    
 
4,903
 
   
 
1,913
 
   
 
2,602
 
   
 
72,215
 
    
  
  
  
Income from continuing operations before cumulative effect of change in accounting principle
   
 
16,754
 
   
 
6,294
 
   
 
34,020
 
   
 
129,509
 
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax
   
 
14,941
 
   
 
(52
)
   
 
14,485
 
   
 
(350
)
    
  
  
  
Income before cumulative effect of change in accounting principle
   
 
31,695
 
   
 
6,242
 
   
 
48,505
 
   
 
129,159
 
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
   
 
—  
 
   
 
—  
 
   
 
(60,547
)
   
 
—  
 
    
  
  
  
NET INCOME (LOSS)
   
$
31,695
 
   
$
6,242
 
   
$
(12,042
)
   
$
129,159
 
    
  
  
  
 
See notes to unaudited consolidated financial statements.

5