EX-99.1 2 h40964exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
(Endeavor International Corporation Logo)
For immediate release
For more information, contact:
Media, Janice Aston White, 713-307-8780
Investors, Rusty Fisher, 713-307-8770
Endeavour announces
2006 third quarter results
Houston, TX — November 6, 2006 — Endeavour International Corporation (AMEX:END) today reported 2006 third quarter income of $15.3 million or $0.16 per diluted share as compared to a loss of $14.5 million or $0.19 per diluted share in the same quarter in 2005. Net income for the third quarter of 2006 includes unrealized gains on commodity derivative instruments of $20.5 million. Revenues for third quarter 2006 were $6.7 million as compared to $10.9 million during the same period in 2005. Production for the quarter was 125,000 barrels of oil equivalent (BOE) at an average realized price of $54.02 per BOE. This compares to production of 199,000 BOE at an average realized price of $54.63 per BOE for the same period in 2005.
“Endeavour has been transformed into a balanced exploration and production company with a solid platform for growth,” said William L. Transier, chairman, chief executive officer and president. “With our expanded base of production, we now have the cash flow to accelerate our exploration and development activities.”
Significant events for the second half of the year include:
    Acquisition of first producing assets in the United Kingdom On November 1, 2006, Endeavour completed its acquisition of interests in eight fields in the North Sea that averaged daily production of approximately 8,800 barrels of oil equivalent during the first half of the year.
 
    Resumption of exploration drilling campaign — Two exploratory wells are currently drilling in the UK sector of the North Sea. The Columbus exploratory prospect in Block 23/16f began drilling on October 28, 2006. Endeavour holds a 25 percent working interest and serves as operator of the well that will test a Palaeocene-age geologic target. The company also has agreed to acquire a 10 percent working interest in the Bacchus prospect that is currently drilling in the northern part of Block 22/6a. The prospect will test the commercial potential of a discovery well that was drilled in 2005 and flowed oil from an Upper Jurassic sandstone. In addition, Endeavour has an option to purchase a 10 percent working interesting in the Howgate prospect in Block 9/4 in the event of a discovery. The Howgate well is expected to begin drilling in December 2006 utilizing a rig currently contracted to Endeavour for drilling the Columbus prospect. The well will target an Upper Jurassic sandstone located updip of a previously drilled well that encountered hydrocarbons.
 
    Continued development of the Enoch field with first oil expected to flow in the first quarter — Drilling operations have been successfully completed for the single, extended-reach horizontal producing well in the Enoch field. Sub-sea tie-back operations and final facilities installations are in progress with first production expected in the first quarter of 2007. Endeavour holds an eight percent working interest in this field.

 


 

    Completion of agreement for exploration activities in Outer Moray Firth region — Endeavour has entered into an agreement pursuant to which Nexen Petroleum U.K. Limited, a subsidiary of Nexen Inc., will take a 50 percent working interest in Block 15/12a in return for funding a mutually agreed one-year exploratory work program and serving as operator of the block. Nexen U.K. also has the option subsequently to utilize one of its rig commitments to drill a well on the block.
 
    Participation in the 24th UK Seaward Licensing Round — For the third year, Endeavour was active and submitted applications in the annual offshore licensing round held by the Department of Trade and Industry (DTI). The volume of applications and the number of new entrants into the round have delayed the announcement of the awards previously expected in September. The DTI is expected to announce the awards later this month. The round included 80 previously licensed blocks that were inactive and released through the government’s fallow acreage initiative.
 
    Participation in the Norwegian APA 2006 Licensing Round — Endeavour submitted applications again for the offshore licensing round conducted by the Norwegian Ministry of Petroleum and Energy (MPE). Industry participation was very high and awards normally made in December have been delayed by the MPE to early 2007.
Earnings Conference Call Tomorrow, Tuesday, November 7, 2006 at 9:00 A.M. CST (10:00 A.M. EST)
Endeavour will host an analyst conference call and web cast tomorrow to discuss 2006 third quarter results and update operational plans for the rest of the year at 10:00 a.m. Eastern Standard Time. To participate and ask questions during the conference call, dial 1-800-817-2743 (U.S., toll-free) or 913-981-4915 (international), pass code: 8929412. To listen only to the live audio web cast via the Internet access Endeavour’s internet home page at www.endeavourcorp.com. A replay will be available beginning at 12:00 p.m. Eastern Standard Time on November 7 through 12:00 p.m. Eastern Standard Time November 14, by dialing toll free 1-888-203-1112 (U.S., toll-free) or 719-457-0820 (international), pass code: 8929412.
Endeavour International Corporation is an international oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea. For more information, visit www.endeavourcorp.com.
Certain statements in this news release should be regarded as “forward-looking” statements within the meaning of the securities laws. These statements speak only as of the date made. Such statements are subject to assumptions, risk and uncertainty. Actual results or events may vary materially.

 


 

Endeavour International Corporation
Comparative Condensed Statements of Operations

(Amounts in Thousands, Except per Share Data)
                                 
    Three Months     Nine Months  
    Ended September 30,     Ended September 30,  
 
    2006     2005     2006     2005  
 
Revenues
  $ 6,726     $ 10,852     $ 22,847     $ 27,645  
 
Cost of Operations:
                               
Operating expenses
    2,556       2,569       7,712       7,943  
Depreciation, depletion and amortization
    3,374       2,399       7,901       6,860  
Impairment of oil and gas properties
          9,394       849       9,394  
Equity loss from entities with oil and gas properties
                      79  
General and administrative
    5,447       5,730       16,196       14,255  
 
Total Expenses
    11,377       20,092       32,658       38,531  
 
 
Loss From Operations
    (4,651 )     (9,240 )     (9,811 )     (10,886 )
 
 
Other (Income) Expense:
                               
Interest income
    (435 )     (770 )     (1,604 )     (1,714 )
Interest expense
    1,041       1,150       3,384       3,115  
Gain on sale of oil and gas interests
          (22 )           (14,966 )
Unrealized gain on derivative instruments
    (20,453 )           (17,151 )      
Other (income) expense
    (621 )     (26 )     158       (687 )
 
 
Total Other (Income) Expense
    (20,468 )     332       (15,213 )     (14,252 )
 
 
Income (Loss) Before Minority Interest
    15,817       (9,572 )     5,402       3,366  
Minority Interest
                      (470 )
 
 
Income (Loss) Before Income Taxes
    15,817       (9,572 )     5,402       2,896  
Income Tax Expense
    553       4,850       7,386       8,714  
 
 
Net Income (Loss)
    15,264       (14,422 )     (1,984 )     (5,818 )
Preferred Stock Dividends
    (39 )     (39 )     (118 )     (118 )
 
 
Net Income (Loss) to Common Stockholders
  $ 15,225     $ (14,461 )   $ (2,102 )   $ (5,936 )
 
 
Net Income (Loss) Per Common Share:
                               
Basic
  $ 0.19     $ (0.19 )   $ (0.03 )   $ (0.08 )
 
Diluted
  $ 0.16     $ (0.19 )   $ (0.03 )   $ (0.08 )
 
 
Weighted Average Number of Common Shares Outstanding:
                               
Basic
    80,647       74,656       79,722       74,084  
 
Diluted
    97,033       74,656       79,722       74,084  
 

 


 

Endeavour International Corporation
Comparative Condensed Consolidated Balance Sheets

(Amounts in Thousands)
                 
    September 30,     December 31,  
    2006     2005  
 
Assets                
Current Assets:
               
Cash and cash equivalents
  $ 32,543     $ 76,127  
Accounts receivable
    3,804       4,876  
Prepaid expenses and other current assets
    33,396       8,070  
 
Total Current Assets
    69,743       89,073  
 
               
Property and Equipment, Net
    94,706       59,084  
Goodwill
    27,795       27,795  
Other Assets
    17,658       11,014  
 
Total Assets
  $ 209,902     $ 186,966  
 
 
               
Liabilities and Stockholders’ Equity                
 
               
Current Liabilities:
               
Accounts payable
  $ 10,619     $ 18,194  
Accrued expenses and other
    29,834       21,240  
 
Total Current Liabilities
    40,453       39,434  
 
               
Long-Term Debt
    81,250       81,250  
Deferred Taxes
    22,045       19,185  
Other Liabilities
    7,428       6,753  
 
Total Liabilities
    151,176       146,622  
 
               
Stockholders’ Equity
    58,726       40,344  
 
Total Liabilities and Stockholders’ Equity
  $ 209,902     $ 186,966  
 

 


 

Endeavour International Corporation
Comparative Condensed Consolidated Statements of Cash Flows

(Amounts in Thousands)
                 
    Nine Months Ended  
    September 30,  
 
    2006     2005  
 
Cash Flows from Operating Activities:
               
Net loss
  $ (1,984 )   $ (5,818 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
               
Depreciation, depletion and amortization
    7,901       6,860  
Impairment of oil and gas properties
    849       9,394  
Deferred tax expense
    2,016       3,275  
Unrealized gain on derivative instruments
    (17,151 )      
Amortization of non-cash compensation
    9,179       5,131  
Fair market value adjustment of stock options
          287  
Gain on sale of oil and gas interests
          (14,966 )
Other
    503       1,011  
Changes in assets and liabilities
    (10,710 )     8,804  
 
Net Cash Provided by (Used in) Operating Activities
    (9,397 )     13,978  
 
               
Cash Flows From Investing Activities:
               
Capital expenditures
    (30,520 )     (22,648 )
Acquisitions, net of cash acquired
    (11,637 )     (1,437 )
Proceeds from sale of assets
          19,465  
Other investing
    3,650       (2,454 )
 
Net Cash Used in Investing Activities
    (38,507 )     (7,074 )
 
               
Cash Flows From Financing Activities:
               
Net proceeds from borrowings
          77,244  
Proceeds from warrant and stock option exercises
    3,210       1,518  
Financing costs paid
          (3,648 )
Other financing
          (95 )
 
Net Cash Provided by Financing Activities
    3,210       75,019  
 
               
Net Increase (Decrease) in Cash and Cash Equivalents
    (44,694 )     81,923  
Effect of Foreign Currency Changes on Cash
    1,110       (1,777 )
Cash and Cash Equivalents, Beginning of Period
    76,127       8,975  
 
 
               
Cash and Cash Equivalents, End of Period
  $ 32,543     $ 89,121