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 June 30, 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 1-14344
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. ¨
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 33,815,710 shares of common stock outstanding on August 1, 2003, exclusive of 1,359,292 common shares held in treasury stock.
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. All such adjustments are of a normal recurring nature. All share and per share amounts for all periods have been restated to reflect the 5-for-4 stock split which was effected in the form of a stock dividend to common stockholders of record as of May 27, 2003 with a payment date of June 4, 2003.
2
PATINA OIL & GAS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
| December 31, 2002 |
June 30, 2003 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets |
||||||||
| Cash and equivalents |
$ | 1,920 | $ | 1,928 | ||||
| Accounts receivable |
33,555 | 48,591 | ||||||
| Inventory and other |
5,453 | 12,459 | ||||||
| Deferred income taxes |
— | 17,576 | ||||||
| Unrealized hedging gains |
8,294 | 626 | ||||||
| 49,222 | 81,180 | |||||||
| Unrealized hedging gains |
15,558 | 2,751 | ||||||
| Oil and gas properties, successful efforts method |
1,104,205 | 1,267,742 | ||||||
| Accumulated depletion, depreciation and amortization |
(466,947 | ) | (508,781 | ) | ||||
| 637,258 | 758,961 | |||||||
| Field equipment and other |
12,194 | 14,588 | ||||||
| Accumulated depreciation |
(5,087 | ) | (6,104 | ) | ||||
| 7,107 | 8,484 | |||||||
| Other assets |
9,945 | 8,264 | ||||||
| $ | 719,090 | $ | 859,640 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 41,773 | $ | 54,845 | ||||
| Accrued liabilities |
14,298 | 15,848 | ||||||
| Unrealized hedging losses |
13,001 | 46,878 | ||||||
| 69,072 | 117,571 | |||||||
| Senior debt |
200,000 | 239,000 | ||||||
| Deferred income taxes |
96,569 | 101,851 | ||||||
| Other noncurrent liabilities |
15,012 | 37,991 | ||||||
| Unrealized hedging losses |
1,787 | 18,118 | ||||||
| Deferred compensation liability |
38,070 | 50,949 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity |
||||||||
| Preferred Stock, $.01 par, 5,000,000 shares authorized, none issued |
— | — | ||||||
| Common Stock, $.01 par, 156,250,000 shares authorized, 35,162,233 and 35,413,302 shares issued |
352 | 354 | ||||||
| Less Common Stock Held in Treasury, at cost, 1,295,339 and 1,359,292 shares |
(6,817 | ) | (8,716 | ) | ||||
| Capital in excess of par value |
175,537 | 176,584 | ||||||
| Retained earnings |
123,707 | 164,142 | ||||||
| Accumulated other comprehensive income (loss) |
5,801 | (38,204 | ) | |||||
| 298,580 | 294,160 | |||||||
| $ | 719,090 | $ | 859,640 | |||||
The accompanying notes are an integral part of these financial statements.
3
PATINA OIL & GAS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||
| 2002 |
2003 |
2002 |
2003 |
|||||||||||
| Revenues |
||||||||||||||
| Oil and gas sales |
$ | 50,948 | $ | 90,952 | $ | 98,956 | $ | 180,482 | ||||||
| Other |
(255 | ) | 1,466 | 3,623 | 1,903 | |||||||||
| 50,693 | 92,418 | 102,579 | 182,385 | |||||||||||
| Expenses |
||||||||||||||
| Lease operating |
6,582 | 13,948 | 13,736 | 24,646 | ||||||||||
| Production taxes |
2,877 | 6,407 | 4,933 | 12,892 | ||||||||||
| Exploration |
184 | 1,036 | 348 | 2,169 | ||||||||||
| General and administrative |
3,453 | 4,237 | 6,046 | 8,683 | ||||||||||
| Interest and other |
618 | 1,937 | 1,252 | 4,102 | ||||||||||
| Deferred compensation adjustment |
1,752 | 8,861 | 6,069 | 9,919 | ||||||||||
| Depletion, depreciation and amortization |
16,169 | 23,270 | 30,964 | 44,357 | ||||||||||
| 31,635 | 59,696 | 63,348 | 106,768 | |||||||||||
| Pre-tax income |
19,058 | 32,722 | 39,231 | 75,617 | ||||||||||
| Provision for income taxes |
||||||||||||||
| Current |
1,563 | 4,663 | 4,307 | 10,775 | ||||||||||
| Deferred |
5,108 | 7,771 | 9,460 | 17,959 | ||||||||||
| 6,671 | 12,434 | 13,767 | 28,734 | |||||||||||
| Net income before change in accounting principle |
$ | 12,387 | $ | 20,288 | $ | 25,464 | $ | 46,883 | ||||||
| Cumulative effect of change in accounting principle |
— | — | — | (2,613 | ) | |||||||||
| Net Income |
$ | 12,387 | $ | 20,288 | $ | 25,464 | $ | 44,270 | ||||||
| Net income per share before cumulative effect of change in accounting principle |
||||||||||||||
| Basic |
$ | 0.38 | $ | 0.59 | $ | 0.78 | $ | 1.38 | ||||||
| Diluted |
$ | 0.36 | $ | 0.57 | $ | 0.75 | $ | 1.32 | ||||||
| Net loss per share from cumulative effect of change in accounting principle |
||||||||||||||
| Basic |
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | (0.08 | ) | |||||
| Diluted |
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | (0.08 | ) | |||||
| Net income per share |
||||||||||||||
| Basic |
$ | 0.38 | $ | 0.59 | $ | 0.78 | $ | 1.30 | ||||||
| Diluted |
$ | 0.36 | $ | 0.57 | $ | 0.75 | $ | 1.24 | ||||||
| Weighted average shares outstanding |
||||||||||||||
| Basic |
32,785 | 34,158 | 32,526 | 34,052 | ||||||||||
| Diluted |
34,614 | 35,850 | 34,158 | 35,616 | ||||||||||
The accompanying notes are an integral part of these financial statements.
4
PATINA OIL & GAS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
| Preferred Stock |
Common Stock |
Treasury | Capital in Excess of |
Retained | Accumulated Other Comprehensive |
|||||||||||||||||||||||||
| Amount |
Shares |
Amount |
Stock |
Par Value |
Earnings |
(Loss) |
Total |
|||||||||||||||||||||||
| Balance, December 31, 2001 |
$ | — | 33,191 | $ | 332 | $ | (5,866 | ) | $ | 146,234 | $ | 71,513 | $ | 37,361 | $ | 249,574 | ||||||||||||||
| Repurchase of common |
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