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, 2004
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 | 75-2629477 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
| 1625 Broadway, Suite 2000 Denver, Colorado |
80202 | |
| (Address of principal executive offices) | (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 70,605,034 shares of common stock outstanding on July 28, 2004, exclusive of 2,097,912 common shares held in a deferred compensation plan which are treated as 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 dividends paid to common stockholders in June 2002 and June 2003 and for the 2-for-1 stock split paid in March 2004.
F-2
PATINA OIL & GAS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
| December 31, 2003 |
June 30, 2004 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets |
||||||||
| Cash and equivalents |
$ | 545 | $ | 1,651 | ||||
| Accounts receivable |
59,973 | 65,110 | ||||||
| Inventory and other |
17,736 | 42,148 | ||||||
| Deferred income taxes |
23,641 | 47,127 | ||||||
| Unrealized hedging gains |
137 | 719 | ||||||
| 102,032 | 156,755 | |||||||
| Unrealized hedging gains |
1,867 | 546 | ||||||
| Oil and gas properties, successful efforts method |
1,628,750 | 1,721,070 | ||||||
| Accumulated depletion, depreciation and amortization |
(560,090 | ) | (616,686 | ) | ||||
| 1,068,660 | 1,104,384 | |||||||
| Field equipment and other |
15,027 | 16,664 | ||||||
| Accumulated depreciation |
(6,506 | ) | (7,527 | ) | ||||
| 8,521 | 9,137 | |||||||
| Other assets |
15,211 | 24,724 | ||||||
| $ | 1,196,291 | $ | 1,295,546 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 61,329 | $ | 76,209 | ||||
| Accrued liabilities |
18,866 | 19,164 | ||||||
| Unrealized hedging losses |
62,349 | 124,738 | ||||||
| 142,544 | 220,111 | |||||||
| Senior debt |
416,000 | 366,000 | ||||||
| Deferred income taxes |
154,480 | 154,694 | ||||||
| Other noncurrent liabilities |
50,236 | 44,823 | ||||||
| Unrealized hedging losses |
27,631 | 81,470 | ||||||
| Deferred compensation liability |
74,888 | 84,746 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity |
||||||||
| Preferred Stock, $.01 par, 5,000,000 shares authorized, none issued |
— | — | ||||||
| Common Stock, $.01 par, 100,000,000 and 250,000,000 shares authorized, 71,504,986 and 72,683,177 shares issued |
715 | 727 | ||||||
| Less Common Stock Held in Treasury, at cost, 2,481,820 and 2,097,912 shares |
(7,850 | ) | (6,945 | ) | ||||
| Capital in excess of par value |
187,171 | 204,855 | ||||||
| Deferred compensation |
(764 | ) | (910 | ) | ||||
| Retained earnings |
205,786 | 273,039 | ||||||
| Accumulated other comprehensive loss |
(54,546 | ) | (127,064 | ) | ||||
| 330,512 | 343,702 | |||||||
| $ | 1,196,291 | $ | 1,295,546 | |||||
The accompanying notes are an integral part of these statements.
F-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, | ||||||||||||
| 2003 |
2004 |
2003 |
2004 | ||||||||||
| Revenues |
|||||||||||||
| Oil and gas sales |
$ | 90,952 | $ | 126,704 | $ | 180,482 | $ | 255,772 | |||||
| Gain on sale of properties |
— | — | — | 7,384 | |||||||||
| Other |
1,466 | 1,699 | 1,903 | 3,173 | |||||||||
| 92,418 | 128,403 | 182,385 | 266,329 | ||||||||||
| Expenses |
|||||||||||||
| Lease operating |
13,948 | 17,551 | 24,646 | 33,289 | |||||||||
| Production taxes |
6,407 | 11,222 | 12,892 | 21,758 | |||||||||
| Exploration |
1,036 | 545 | 2,169 | 638 | |||||||||
| General and administrative |
4,237 | 5,889 | 8,683 | 11,223 | |||||||||
| Interest and other |
1,937 | 3,139 | 4,102 | 6,291 | |||||||||
| Deferred compensation adjustment |
8,861 | 8,749 | 9,919 | 13,457 | |||||||||
| Depletion, depreciation and amortization |
23,270 | 30,097 | 44,357 | 59,508 | |||||||||
| 59,696 | 77,192 | 106,768 | 146,164 | ||||||||||
| Pre-tax income |
32,722 | 51,211 | 75,617 | 120,165 | |||||||||
| Provision for income taxes |
|||||||||||||
| Current |
4,663 | 7,297 | 10,775 | 17,123 | |||||||||
| Deferred |
7,771 | 12,163 | 17,959 | 28,540 | |||||||||
| 12,434 | 19,460 | 28,734 | 45,663 | ||||||||||
| Net income before change in accounting principle |
$ | 20,288 | $ | 31,751 | $ | 46,883 | $ | 74,502 | |||||
| Cumulative effect of change in accounting principle |
— | — | (2,613 | ) | — | ||||||||
| Net Income |
$ | 20,288 | $ | 31,751 | $ | 44,270 | $ | 74,502 | |||||
| Net income per share before cumulative effect of change in accounting principle |
|||||||||||||
| Basic |
$ | 0.30 | $ | 0.45 | $ | 0.69 | $ | 1.07 | |||||
| Diluted |
$ | 0.28 | $ | 0.43 | $ | 0.66 | $ | 1.02 | |||||
| Net loss per share from cumulative effect of change in accounting principle |
|||||||||||||
| Basic |
$ | 0.00 | $ | 0.00 | $ | (0.04 | ) | $ | 0.00 | ||||
| Diluted |
$ | 0.00 | $ | 0.00 | $ | (0.04 | ) | $ | 0.00 | ||||
| Net income per share |
|||||||||||||
| Basic |
$ | 0.30 | $ | 0.45 | $ | 0.65 | $ | 1.07 | |||||
| Diluted |
$ | 0.28 | $ | 0.43 | $ | 0.62 | $ | 1.02 | |||||
| Weighted average shares outstanding |
|||||||||||||
| Basic |
68,316 | 70,472 | 68,104 | 69,841 | |||||||||
| Diluted |
71,700 | 73,748 | 71,232 | 72,864 | |||||||||
The accompanying notes are an integral part of these statements.
F-4
PATINA OIL & GAS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
| Preferred Stock Amount |
Common Stock |
Treasury Stock |
Capital in Excess of Par Value |
Deferred Compensation |
Retained Earnings |
Accumulated (Loss) |
Total |
|||||||||||||||||||||||||||
| Shares |
Amount |
|||||||||||||||||||||||||||||||||
| Balance at December 31, 2002 |
$ | — | 70,324 | $ | 703 | $ | (6,817 | ) | $ | 175,186 | $ | — | $ | 123,707 | $ | 5,801 | $ | 298,580 | ||||||||||||||||
| Repurchase of common stock |
— | (1,181 | ) | (12 | ) | — | (17,218 | ) | — | — | — | (17,230 | ) | |||||||||||||||||||||
| Issuance of common stock |
— | 2,362 | 24 | — | 10,229 | (861 | ) | — | — | 9,392 | ||||||||||||||||||||||||
| Deferred compensation stock issued, net |
— | — | — | (1,033 | ) | 4,398 | — | — | — | 3,365 | ||||||||||||||||||||||||
| Amortization of stock grant |
— | — | — | — | — | 97 | — | — | 97 | |||||||||||||||||||||||||
| Issuance of warrants |
— | — | — | — | ||||||||||||||||||||||||||||||