REMINGTON OIL & GAS CORP - 10-Q Quarterly Report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington DC 20549

Form 10-Q


(Mark One)
þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended September 30, 2004

or

o		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 incorporation or organization)		(IRS employer 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 þ No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o

There were 27,751,880 outstanding shares of Common Stock, $0.01 par value, on October 27, 2004.

REMINGTON OIL AND GAS CORPORATION

TABLE OF CONTENTS


		Page

PART I, FINANCIAL INFORMATION			2
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		11
Item 4.	Controls and Procedures		12

PART II, OTHER INFORMATION			12
Item 1.	Legal Proceedings		12
Item 2.	Unregistered Sales of Equity 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
Form of Amendment to the Employment Agreements
Certification of James A. Watt Pursuant to Section 302
Certification of Frank T. Smith, Jr. Pursuant to Section 302
Certification of James A. Watt Pursuant to Section 906
Certification of Frank T. Smith, Jr. Pursuant to Section 906

PART I, FINANCIAL INFORMATION


Item 1.	*Financial Statements*

REMINGTON OIL AND GAS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS


		September 30,			December 31,
		2004			2003

		(Unaudited)

		(In thousands,
		except share data)
ASSETS
Current assets
	Cash and cash equivalents	$	36,812		$	31,408
	Accounts receivable		52,039			43,004
	Prepaid expenses and other current assets		5,364			2,846

Total current assets			94,215			77,258

Properties
	Oil and natural gas properties (successful-efforts method)		713,604			609,599
	Other properties		3,123			3,450
	Accumulated depreciation, depletion and amortization		(386,178	)		(333,011	)

Total properties			330,549			280,038

Other assets			1,402			2,089

Total assets		$	426,166		$	359,385


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
	Accounts payable and accrued liabilities	$	64,617		$	58,266
	Short-term notes payable		45			45

Total current liabilities			64,662			58,311

Long-term liabilities
	Notes payable		5,000			18,000
	Asset retirement obligation		16,585			12,446
	Deferred income tax liability		48,138			28,751

Total long-term liabilities			69,723			59,197

Total liabilities			134,385			117,508

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, 27,743,639 shares issued and 27,709,280 shares outstanding in 2004, 26,946,768 shares issued and 26,912,409 shares outstanding in 2003		277			269
	Additional paid-in capital		129,954			120,925
	Restricted common stock		1,573			3,156
	Unearned compensation		(844	)		(1,668	)
	Retained earnings		160,821			119,195

Total stockholders’ equity			291,781			241,877

Total liabilities and stockholders’ equity		$	426,166		$	359,385

See accompanying Notes to Condensed Consolidated Financial Statements.

REMINGTON OIL AND GAS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME



		Three Months Ended				Nine Months Ended
		September 30,				September 30,

		2004		2003		2004		2003


		(Unaudited)
		(In thousands, except per-share amounts)
Revenues
	Gas sales	$	42,724	$	34,580	$	117,550	$	96,428
	Oil sales		17,180		12,287		46,674		38,524
	Other income		192		98		417		354

Total revenues			60,096		46,965		164,641		135,306

Costs and expenses
	Operating		6,784		5,322		18,860		14,991
	Exploration		5,562		7,654		15,968		20,671
	Depreciation, depletion and amortization		18,504		15,050		51,267		38,599
	Impairment		3,422		1,307		8,408		1,754
	General and administrative		1,271		1,710		4,818		5,634
	Interest and financing		305		433		783		1,318

Total costs and expenses			35,848		31,476		100,104		82,967

Income before taxes			24,248		15,489		64,537		52,339

	Income tax expense		8,609		5,421		22,911		18,319

Net income		$	15,639	$	10,068	$	41,626	$	34,020

Basic income per share		$	0.57	$	0.38	$	1.53	$	1.28

Diluted income per share		$	0.55	$	0.36	$	1.47	$	1.22

Weighted average shares outstanding (Basic)			27,596		26,771		27,286		26,548

Weighted average shares outstanding (Diluted)			28,503		28,046		28,294		27,953

See accompanying Notes to Condensed Consolidated Financial Statements.

REMINGTON OIL AND GAS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



			Nine Months Ended
			September 30,

			2004			2003


			(Unaudited)
			(In thousands)
Cash flow provided by operations
	Net income		$	41,626		$	34,020
	Adjustments to reconcile net income
		Depreciation, depletion and amortization		51,267			38,599
		Deferred income taxes		22,601			18,244
		Amortization of deferred charges		137			161
		Dry hole costs		9,229			19,689
		Impairment costs		8,408			1,754
		Cash paid for dismantlement costs		(1,064	)		(1,284	)
		Stock based compensation		939			1,171
	Changes in working capital:
		(Increase) in accounts receivable		(9,028	)		(11,494	)
		(Increase) in prepaid expenses and other current assets		(1,975	)		(139	)
		Increase (decrease) in accounts payable and accrued liabilities		6,351			(11,739	)

	Net cash flow provided by operations			128,491			88,982

	Cash from investing activities
		Payments for capital expenditures		(114,212	)		(89,147	)

	Net cash (used in) investing activities			(114,212	)		(89,147	)

	Cash from financing activities
		Loan origination costs		—			(293	)
		Payments on notes payable and other long-term payables		(13,000	)		(1,239	)
		Common stock issued		4,770			2,150
		Treasury stock acquired and retired		(645	)		(809	)

	Net cash (used in) financing activities			(8,875	)		(191	)

Net increase (decrease) in cash and cash equivalents				5,404			(356	)
	Cash and cash equivalents at beginning of period			31,408			14,929

Cash and cash equivalents at end of period			$	36,812		$	14,573

See accompanying Notes to Condensed Consolidated Financial Statements.

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


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 nine months of 2004. 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 2003 Form 10-K. The income statements for the three and nine months ended September 30, 2004, 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.	Net Income per Share



		Three Months Ended				Nine Months Ended
		September 30,				September 30,

		2004		2003		2004		2003


		(In thousands, except per-share amounts)
Net income available for basic income per share		$	15,639	$	10,068	$	41,626	$	34,020
Basic income per share		$	0.57	$	0.38	$	1.53	$	1.28

Diluted income per share		$	0.55	$	0.36	$	1.47	$	1.22

Weighted average common stock
	Total common shares for basic income per share		27,596		26,771		27,286		26,548
	Dilutive stock options outstanding (treasury stock method)		778		1,015		857		1,145
	Restricted common stock grant		129		260		151		260

Total common shares for diluted income per share			28,503		28,046		28,294		27,953

Non-dilutive stock options outstanding			888		1,053		787		923


Note 3.	Stock Based Compensation

Included in our general and administrative costs is stock based compensation expense as follows:

Three Months

Nine Months

Ended

September 30,

2004

2003

2004

2003

(In thousands, except per-share

amounts)

Stock based compensation

207

379

939

1,171

REMINGTON OIL AND GAS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FIN

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