DELTA PETROLEUM CORP/CO - 10-Q Quarterly Report

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 December 31, 2004

¨	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 0-16203

Delta Petroleum Corporation

(Exact name of registrant as specified in its charter)


Colorado		84-1060803
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


370 17th Street, Suite 4300
Denver, Colorado		80202
(Address of principal executive offices)		(Zip Code)

(303) 293-9133

(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 x No ¨

40,837,000 shares of common stock $.01 par value were outstanding as of February 9, 2005.

INDEX

PART I FINANCIAL INFORMATION


		Page No.

Item 1.	Consolidated Financial Statements

	Consolidated Balance Sheets – December 31, 2004 and June 30, 2004 (unaudited)	1

	Consolidated Statements of Operations – Three Months Ended December 31, 2004 and 2003 (unaudited)	2

	Consolidated Statements of Operations – Six Months Ended December 31, 2004 and 2003 (unaudited)	3

	Consolidated Statement of Stockholders’ Equity and Comprehensive Income Six Months Ended December 31, 2004 (unaudited)	4

	Consolidated Statements of Cash Flows – Six Months Ended December 31, 2004 and 2003 (unaudited)	5

	Notes to Consolidated Financial Statements (unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

Item 4.	Controls and Procedures	30

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	31

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 3.	Defaults upon Senior Securities	32

Item 4.	Submission of Matters to a Vote of Security Holders	32

Item 5.	Other Information	32

Item 6.	Exhibits	32

The terms “Delta,” “Company,” “we,” “our,” and “us” refer to Delta Petroleum Corporation unless the context suggests otherwise.

DELTA PETROLEUM CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	December 31, 2004			June 30, 2004
	(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	1,386		$	2,078
Marketable securities available for sale		1,255			912
Trade accounts receivable, net		9,350			9,092
Prepaid assets		1,285			1,136
Inventory		4,631			1,350
Other current assets		3,226			385

Total current assets		21,133			14,953


Property and Equipment:
Oil and gas properties, successful efforts method of accounting
Undeveloped		144,217			136,467
Developed		179,045			136,425
Drilling and trucking equipment		8,148			3,965
Other		2,100			1,147

Total property and equipment		333,510			278,004
Less accumulated depreciation and depletion		(30,148	)		(21,665	)

Net property and equipment		303,362			256,339


Long term assets:
Investment in LNG project		1,022			1,022
Deferred financing costs		441			131
Partnership net assets		142			259

Total long term assets		1,605			1,412

	$	326,100		$	272,704


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Current portion of long-term debt	$	128		$	109
Accounts payable		21,903			12,326
Other accrued liabilities		1,588			1,855

Total current liabilities		23,619			14,290


Long-term Liabilities:
Bank debt, net		83,000			69,375
Asset retirement obligation		2,689			2,542
Other debt, net		236			255

Total long-term liabilities		85,925			72,172


Minority Interest		273			245


Stockholders’ Equity:
Preferred stock, $.10 par value; authorized 3,000,000 shares, none issued		—			—
Common stock, $.01 par value; authorized 300,000,000 shares, issued 40,686,000 shares at December 31, 2004 and 38,447,000 at June 30, 2004		407			384
Additional paid-in capital		228,804			207,811
Accumulated other comprehensive income		859			342
Accumulated deficit		(13,786	)		(22,540	)

Total stockholders’ equity		216,284			185,997


Commitments	$	326,100		$	272,704

See accompanying notes to consolidated financial statements.

DELTA PETROLEUM CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended December 31,
	2004			2003
	(In thousands except per share amounts)
Revenue:
Oil and gas sales	$	20,441		$	7,714
Drilling and trucking		181			—
Realized loss on derivative instruments, net		(93	)		(68	)

Total revenue		20,529			7,646

Operating expenses:
Lease operating expense		4,920			2,242
Depreciation, depletion and amortization		3,678			2,240
Exploration expense		747			138
Dry hole costs		419			177
Drilling and trucking operations		640			—
Professional fees		501			308
General and administrative		3,513			1,555

Total operating expenses		14,418			6,660


Income from continuing operations		6,111			986


Other income and (expense):
Other income (expense)		(183	)		15
Minority interest		234			—
Interest and financing costs		(1,353	)		(576	)

Total other expense		(1,302	)		(561	)


Income before discontinued operations		4,809			425

Discontinued operations:
Income (loss) from operations of properties sold, net		—			255
Loss on sale of properties		—			(28	)

Net income	$	4,809		$	652


Basic income per common share:
Income before discontinued operations	$	0.12		$	0.02
Discontinued operation		—			0.01

Net income	$	0.12		$	0.03


Diluted income per common share:
Income before discontinued operations	$	0.11		$	0.02
Discontinued operation		—			0.01

Net income	$	0.11		$	0.03

See accompanying notes to consolidated financial statements.

DELTA PETROLEUM CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Six Months Ended December 31,
	2004			2003
	(In thousands except per share amounts)
Revenue:

Oil and gas sales	$	39,657		$	14,781
Drilling and trucking		300			—
Realized loss on derivative instruments, net		(93	)		(380	)


Total revenue		39,864			14,401


Operating expenses:
Lease operating expense		9,129			4,312
Depreciation, depletion and amortization		8,659			3,792
Exploration expense		1,283			268
Dry hole costs		2,673			177
Drilling and trucking operations		1,074			—
Professional fees		847			612
General and administrative		6,104			2,721


Total operating expenses		29,769			11,882


Income from continuing operations		10,095			2,519


Other income and (expense):
Other income (expense)		(149	)		35
Minority interest		315			—
Interest and financing costs		(2,236	)		(1,085	)


Total other expense		(2,070	)		(1,050	)


Income before discontinued operations		8,025			1,469

Discontinued operations:
Income (loss) from operations of properties sold, net		729			575
Loss on sale of properties		—			(28	)


Net income	$	8,754		$	2,016


Basic income per common share:

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents