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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-Q

(Mark One)
n QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 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 1-14344

PATINA OIL & GAS CORPORATION
(Exact name of registrant as specified in its charter)
         
  Delaware
(State or other jurisdiction of
incorporation or organization)		   75-2629477
(IRS Employer
Identification No.)		  
     
  1625 Broadway
Denver, Colorado
(Address of principal executive offices)		   80202
(zip code)		  

Registrant’s telephone number, including area code (303) 389-3600

Securities registered pursuant to Section 12(b) of the Act:

         
  Title of class   Name of exchange on which listed  
 
 
 
  Common Stock, $.01 par value   New York Stock Exchange  

Securities registered pursuant to Section 12(g) of the Act:
None

          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             .

 

There were 27,543,310 shares of common stock outstanding on August 1, 2002.

PART I.  FINANCIAL INFORMATION

          The financial statements included herein have been prepared in conformity with generally accepted accounting principles. The statements are unaudited but reflect all adjustments, which, in the opinion of management, are necessary to fairly present the Company’s financial position and results of operations. On May 23, 2002, the Company’s Board of Directors approved a 5-for-4 stock split to be effected in the form of a stock dividend to common stockholders of record as of June 10, 2002 with a payment date of June 20, 2002. All share and per share amounts for all periods have been restated to reflect the 5-for-4 stock split.

          On July 16, 2002, the Board of Directors of the Company approved the Audit Committee’s recommendation to hire Deloitte & Touche, LLP (“Deloitte”) as the Company’s independent auditors to replace Arthur Anderson LLP (“Arthur Anderson”), who was dismissed immediately. Deloitte’s appointment was announced on July 29, 2002. As part of the auditor selection process, Deloitte performed its normal client acceptance procedures with respect to the Company.

          While it was not required, the Company engaged Deloitte to re-audit the three years ended December 31, 2001. The re-audits are expected to be completed by September 30, 2002. Upon completion of the re-audits, there could be adjustments for the years being re-audited.

 

2


PATINA OIL & GAS CORPORATION
 
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
               
  December 31,     June 30,
     2001       2002  
 
   
 
          (Unaudited)
ASSETS
Current assets              
        Cash and equivalents $ 250     $ 628  
        Accounts receivable   16,407       15,533  
        Inventory and other   3,880       4,330  
        Unrealized hedging gains   20,134       13,368  
 
   
 
    40,671       33,859  
 
   
 
               
Unrealized hedging gains   31,872       12,188  
               
Oil and gas properties, successful efforts method   780,224       821,287  
        Accumulated depletion, depreciation and amortization   (402,213 )     (432,545 )
 
   
 
    378,011       388,742  
 
   
 
               
Field equipment and other   6,605       7,901  
        Accumulated depreciation   (3,844 )     (4,317 )
 
   
 
    2,761       3,584  
 
   
 
               
Other assets   258       173  
 
   
 
  $ 453,573     $ 438,546  
 
   
 
               
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities              
        Accounts payable $ 27,380     $ 27,511  
        Income taxes payable   6,918       -  
        Accrued liabilities   10,767       9,718  
        Unrealized hedging losses   -       4,376  
 
   
 
    45,065       41,605  
 
   
 
               
Senior debt   77,000       52,000  
Deferred income taxes   43,473       47,300  
Other noncurrent liabilities   18,891       7,970  
Unrealized hedging losses   -       2,924  
               
Commitments and contingencies              
               
Stockholders’ equity              
        Preferred Stock, $.01 par, 5,000,000 shares              
                authorized, none issued   -       -  
        Common Stock, $.01 par, 125,000,000 shares              
                authorized, 26,552,447 and 27,542,192 shares              
                issued and outstanding   266       275  
        Capital in excess of par value   145,661       159,531  
        Retained earnings   85,856       113,520  
        Other comprehensive income   37,361       13,421  
 
   
 
    269,144       286,747  
 
   
 
  $ 453,573     $ 438,546  
 
   
 
               
The accompanying notes are an integral part of these statements.
               

3


PATINA OIL & GAS CORPORATION
 
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
                   
                   
  Three Months   Six Months
  Ended June 30,   Ended June 30,
 
 
  2001            2002   2001         2002
 
 
                   
  (Unaudited)
                   
Revenues                  
        Oil and gas sales $ 53,194 $ 50,947   $ 116,759 $ 98,956
        Other   1,509   340     2,396   4,159
 
 
    54,703   51,287     119,155   103,115
 
 
                   
Expenses                  
        Lease operating   6,213   6,582     12,748   13,736
        Production taxes   3,697   2,877     9,065   4,933
        Exploration   117   184     220   348
        General and administrative   2,840   2,898     5,405   5,491
        Interest and other   1,734   617     4,783   1,251
        Depletion, depreciation and amortization   11,840   16,169     23,741   30,965
 
 
    26,441   29,327     55,962   56,724
 
 
                   
Pre-tax income   28,262   21,960     63,193   46,391
 
 
                   
Provision for income taxes                  
        Current   5,087   1,563     11,375   4,307
        Deferred   5,087   6,124     11,375   11,966
 
 
    10,174   7,687     22,750   16,273
 
 
                   
Net income $ 18,088 $ 14,273   $ 40,443 $ 30,118
 
 
                   
Net income per share (1)                  
        Basic $ 0.69 $ 0.52   $ 1.59 $ 1.11
 
 
        Diluted $ 0.63 $ 0.50   $ 1.43 $ 1.06
 
 
                   
Weighted average shares outstanding (1)                  
        Basic   26,412   27,263     25,464   27,101
 
 
        Diluted   28,642   28,726     28,316   28,406
 
 
                   
                   
                   
(1) Adjusted for the June 20, 2002 25% stock dividend                  
                   
                   
                   
                   
                   
                   
The accompanying notes are an integral part of these statements.
                   

4


PATINA OIL & GAS CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY AND OTHER COMPREHENSIVE INCOME
(In thousands)

                                            Other          
                            Capital in           Comprehensive     Total  
    Preferred Stock   Common Stock     Excess of   Retained     Income     Stockholders’  
    Shares   Amount   Shares     Amount     Par Value   Earnings     (Loss)     Equity  
                                                         
Balance, December 31, 2000   -   $ -   25,055     $ 251     $ 151,341     $ 24,854     $ -     $  176,446  
                                                         
Repurchase of common and warrants   -     -   (2,941 )     (29 )     (51,445 )     -       -       (51,474 )
                                                         
Issuance of common   -     -   841       8       7,661       -       -       7,669  
                                                         
Conversion of warrants   -     -   3,598       36       35,939       -       -       35,975  
                                                         
Tax benefit from stock options   -     -   -       -       2,165       -       -       2,165  
                                                         
Dividends   -     -   -       -       -       (3,568 )     -       (3,568 )
                                                         
Comprehensive income:                                                        
Net income   -     -