EX-99.1 3 exhibit99-1.txt Exhibit 99.1 AT THE COMPANY AT FINANCIAL RELATIONS BOARD -------------- -- ------------------------- James W. Christmas Marilynn Meek - General Info (212) 445-8451 Chairman and CEO Peter Seltzberg - Analyst Info (212) 445-8457 (713) 877-8006 FOR IMMEDIATE RELEASE: ---------------------- KCS ENERGY, INC. ANNOUNCES INCREASED 2004 CAPITAL BUDGET -------------------------------------------------------- Provides Update on Hedging -------------------------- HOUSTON, TX, December 19, 2003 -- KCS Energy, Inc. (NYSE: KCS) announced today that following its recently completed public stock offering of 6,900,000 shares at an initial price of $8.00 per share in which it raised approximately $52 million, its Board has approved an increase in the previously announced 2004 capital budget to $105 million, up approximately 30% from 2003 projected capital expenditures. Current drilling planned for 2004 includes the following areas: Wells ----- Elm Grove Field 35-40 Joaquin Field 10-15 Talihina Field 6-10 Sawyer Canyon Field 10-20 Other Mid-Continent 15-19 Gulf Coast Development 10-13 Exploration 10-13 ----- Total 96-130 The Company also provided an update with respect to its hedging program, which consists of a series of transactions designed to limit exposure to downside price movements while continuing to allow significant participation in increasing prices. KCS' current hedge positions for 2004 are summarized in the following table.
Average Type Hedge Amount Price ---------- ------ ----- 1st Qtr. Natural Gas -------- ----------- Swap 26,600 MMbtu/day $6.71 3 Way Collar 10,000 MMbtu/day $4.50/$8.50/$9.00 Crude Oil --------- Swap 914 BOPD $30.59 2ND Qtr. Natural Gas -------- ----------- Swap 10,000 MMbtu/day $5.00 Collar 10,000 MMbtu/day $4.00/$6.81 Crude Oil ---------
Swap 500 BOPD $29.64 ---- -------- ------ 3RD Qtr. Natural Gas -------- ----------- Swap 10,000 MMbtu/day $4.93 Collar 10,000 MMbtu/day $4.34 / $6.00 Crude Oil --------- Swap 100 BOPD $28.50 4TH Qtr. Natural Gas -------- ----------- Collar 20,000 MMbtu/day $4.00/$7.52 Crude Oil --------- Swap 100 BOPD $28.50
The swaps effectively lock in a specific NYMEX price, while the cost free collars fix the stated floor price and allow participation up to the stated cap price. The three- way collars in the first quarter fix the stated floor price of $4.50 per MMbtu and allow the Company to retain all price upside, except for the portion of realized prices between $8.50 and $9.00. In addition to the above hedges, during 2004 the Company will deliver an average 14.1 MMcfed under the production payment sold in 2001, at an average price of approximately $4.05 per Mcfe. "Our new credit facility enables us to layer in hedges at high commodity prices without being exposed to the potential for margin calls should commodity prices continue to rise. 2003 was a breakout year for KCS; we had excellent drilling results and identified numerous new projects and confirmed a large inventory of drilling locations to develop over the next several years. Our drilling program in 2004 offers more of the same type of wells that worked so well this year" stated James W. Christmas, Chairman and CEO. Based on KCS continued drilling successes and current commodity prices, the Company expects that it will be able to fund its increased capital expenditure budget for 2004 primarily with internally generated funds. KCS is an independent energy company engaged in the acquisition, exploration, development and production of natural gas and crude oil with operations in the Mid-Continent and Gulf Coast regions. For more information on KCS Energy, Inc., please visit the Company's web site at http://www.kcsenergy.com ###