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 March 31, 2005
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 72,023,526 shares of common stock outstanding on May 2, 2005, exclusive of 2,095,832 common shares held in a deferred compensation plan which are treated as treasury stock.
PART I. FINANCIAL INFORMATION
| ITEM 1. | FINANCIAL STATEMENTS |
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 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, 2004 |
March 31, 2005 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets |
||||||||
| Cash and equivalents |
$ | 3,024 | $ | 1,949 | ||||
| Accounts receivable |
83,444 | 82,209 | ||||||
| Inventory and other |
25,542 | 46,917 | ||||||
| Income taxes receivable |
7,137 | — | ||||||
| Deferred income taxes |
54,817 | 97,912 | ||||||
| Unrealized hedging gains |
7,256 | 939 | ||||||
| 181,220 | 229,926 | |||||||
| Oil and gas properties, successful efforts method |
1,893,069 | 1,978,294 | ||||||
| Accumulated depletion, depreciation and amortization |
(681,394 | ) | (715,055 | ) | ||||
| 1,211,675 | 1,263,239 | |||||||
| Field equipment and other |
18,622 | 19,869 | ||||||
| Accumulated depreciation |
(8,681 | ) | (9,382 | ) | ||||
| 9,941 | 10,487 | |||||||
| Other assets, net |
26,203 | 25,889 | ||||||
| $ | 1,429,039 | $ | 1,529,541 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 105,822 | $ | 97,701 | ||||
| Accrued liabilities |
28,135 | 31,064 | ||||||
| Unrealized hedging losses |
151,512 | 265,565 | ||||||
| 285,469 | 394,330 | |||||||
| Bank debt |
297,000 | 288,000 | ||||||
| Deferred income taxes |
203,473 | 198,629 | ||||||
| Other noncurrent liabilities |
62,477 | 58,096 | ||||||
| Unrealized hedging losses |
66,167 | 106,948 | ||||||
| Deferred compensation liability |
103,634 | 108,601 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity |
||||||||
| Preferred Stock, $.01 par, 5,000,000 shares authorized, none issued or outstanding |
— | — | ||||||
| Common Stock, $.01 par, 250,000,000 shares authorized, 72,781,701 and 73,997,459 shares issued |
728 | 740 | ||||||
| Less Common Stock Held in Treasury, at cost, 2,097,912 and 2,095,832 shares |
(6,945 | ) | (6,936 | ) | ||||
| Capital in excess of par value |
207,017 | 230,710 | ||||||
| Deferred compensation |
(1,011 | ) | (876 | ) | ||||
| Retained earnings |
341,492 | 385,391 | ||||||
| Accumulated other comprehensive loss |
(130,462 | ) | (234,092 | ) | ||||
| 410,819 | 374,937 | |||||||
| $ | 1,429,039 | $ | 1,529,541 | |||||
The accompanying notes are an integral part of these financial statements.
F-3
PATINA OIL & GAS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(Unaudited)
| Three Months Ended March 31, | ||||||
| 2004 |
2005 | |||||
| Revenues |
||||||
| Oil and gas sales (net of gathering and processing costs of $4,196 and $5,289 respectively) |
$ | 129,068 | $ | 158,254 | ||
| Gain on sale of oil and gas properties |
7,384 | — | ||||
| Other |
1,474 | 1,039 | ||||
| 137,926 | 159,293 | |||||
| Expenses |
||||||
| Lease operating |
15,738 | 19,925 | ||||
| Production taxes |
10,536 | 12,197 | ||||
| Exploration |
93 | 255 | ||||
| General and administrative |
5,334 | 7,132 | ||||
| Interest |
3,099 | 3,087 | ||||
| Other |
53 | 208 | ||||
| Deferred compensation adjustment |
4,708 | 4,913 | ||||
| Depletion, depreciation and amortization |
29,411 | 34,850 | ||||
| 68,972 | 82,567 | |||||
| Pretax income |
68,954 | 76,726 | ||||
| Provision for income taxes |
||||||
| Current |
9,826 | 14,195 | ||||
| Deferred |
16,377 | 14,194 | ||||
| 26,203 | 28,389 | |||||
| Net income |
$ | 42,751 | $ | 48,337 | ||
| Net income per share |
||||||
| Basic |
$ | 0.62 | $ | 0.68 | ||
| Diluted |
$ | 0.59 | $ | 0.65 | ||
| Weighted average shares outstanding |
||||||
| Basic |
69,209 | 71,223 | ||||
| Diluted |
72,345 | 74,621 | ||||
The accompanying notes are an integral part of these financial statements.
F-4
PATINA OIL & GAS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
| Preferred Amount |
Common Stock |
Treasury Stock |
Capital in Par Value |
Deferred Compensation |
Retained Earnings |
Accumulated (Loss) |
Total |
|||||||||||||||||||||||||||
| Shares |
Amount |
|||||||||||||||||||||||||||||||||
| Balance at December 31, 2003 |
$ | — | 71,505 | $ | 715 | $ | (7,850 | ) | $ | 187,171 | $ | (764 | ) | $ | 205,786 | $ | (54,546 | ) | $ | 330,512 | ||||||||||||||
| Repurchase of common stock |
— | (668 | ) | (7 | ) | — | (14,727 | ) | — | — | — | (14,734 | ) | |||||||||||||||||||||
| Issuance of common stock |
— | 1,945 | 20 | — | 14,372 | (832 | ) | — | — | 13,560 | ||||||||||||||||||||||||
| Deferred compensation stock issued, net |
— | — | — | 905 | 9,457 | — | — | — | 10,362 | |||||||||||||||||||||||||
| Amortization of stock grant |
— | — | — | — | — | 585 | — | — | 585 | |||||||||||||||||||||||||
| Tax benefit from stock options |
— | — | — | — | 10,744 | — | — | — | 10,744 | |||||||||||||||||||||||||
| Dividends |
— | — | — | — | — | — | (15,257 | ) | — | (15,257 | ) | |||||||||||||||||||||||
| Comprehensive income: |
||||||||||||||||||||||||||||||||||
| Net income |
— | — | — | — | — | — | 150,963 | — | 150,963 | |||||||||||||||||||||||||
| Contract settlements reclassed to income |
— | — | — | — | — | — | — | 90,251 | 90,251 | |||||||||||||||||||||||||
| Change in unrealized hedging losses |
— | — | — | — | — | — | — | (166,167 | ) | (166,167 | ) | |||||||||||||||||||||||
| Total comprehensive income |
— | — | — | — | — | — | 150,963 | (75,916 | ) | 75,047 | ||||||||||||||||||||||||
| Balance at December 31, 2004 |
— | 72,782 | 728 | (6,945 | ) | 207,017 | (1,011 | ) | 341,492 | (130,462 | ) | 410,819 | ||||||||||||||||||||||
| Issuance of common stock |
— | 1,215 | 12 | — | 11,887 | — | — | — | 11,899 | |||||||||||||||||||||||||
| Deferred compensation stock issued, net |
— | — | — | 9 | 68 | — | — | — | 77 | </ | ||||||||||||||||||||||||