-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UiL10jlP3zW5ekBh/7k29mUqwv9+9ipT0JFXLvm5zYPbfa385+z+a9Kb9meCrudl QCD6hEVxRyEHO4QK2a09vQ== 0000950129-04-001292.txt : 20040315 0000950129-04-001292.hdr.sgml : 20040315 20040315120747 ACCESSION NUMBER: 0000950129-04-001292 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040311 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KCS ENERGY INC CENTRAL INDEX KEY: 0000832820 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 222889587 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13781 FILM NUMBER: 04668411 BUSINESS ADDRESS: STREET 1: 5555 SAN FELIPE ROAD CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 9086321770 FORMER COMPANY: FORMER CONFORMED NAME: KCS GROUP INC DATE OF NAME CHANGE: 19920310 8-K 1 h13633e8vk.txt KCS ENERGY, INC. - DATED MARCH 11, 2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): March 11, 2004 KCS ENERGY, INC. (Exact name of registrant as specified in its charter) DELAWARE 001-13781 22-2889587 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation) File Number) Identification No.) 5555 SAN FELIPE ROAD, SUITE 1200 HOUSTON, TEXAS 77056 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713) 877-8006 NOT APPLICABLE (Former name or former address, if changed since last report.) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (C) EXHIBITS. Exhibit 99.1 KCS Energy, Inc. Press Release dated March 11, 2004 reporting financial and operating results for the fourth quarter and year ended December 31, 2003. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On March 11, 2004, KCS Energy, Inc. issued a press release reporting financial and operating results for the fourth quarter and year ended December 31, 2003. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated herein by reference. The information in this report is being furnished, not filed, pursuant to Item 12 of Form 8-K. Accordingly, the information in Item 12 of this report will not be incorporated by reference into any registration statement filed by KCS Energy, Inc. under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. KCS Energy, Inc. Date: March 12, 2004 /s/ Frederick Dwyer --------------------------- Frederick Dwyer Vice President, Controller and Secretary EXHIBIT INDEX EXHIBIT DESCRIPTION ------- ----------- 99.1 KCS Energy, Inc. Press Release dated March 11, 2004 reporting financial and operating results for the fourth quarter and year ended December 31, 2003. EX-99.1 3 h13633exv99w1.txt PRESS RELEASE DATED MARCH 11, 2004 EXHIBIT 99.1 F I N A N C I A L NEWS RELATIONS BOARD 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: March 11, 2004 KCS ENERGY REPORTS 2003 FOURTH QUARTER AND FULL YEAR RESULTS RESERVES UP 37%, NET INCOME OF $68.6 MILLION, DEBT REDUCED FOR FIFTH CONSECUTIVE YEAR HOUSTON, TX, MARCH 11, 2004 -- KCS Energy, Inc. (NYSE: KCS) today announced financial and operating results for the fourth quarter and year ended December 31, 2003. James W. Christmas, Chairman and Chief Executive Officer, said, "2003 was one of the most successful years in the Company's history both operationally and financially. We started the year by repaying the remaining $61.3 million of Senior Notes at maturity and then commenced a focused drilling program in our core operating areas. We drilled 78 wells in 2003 and completed 72 for a success rate of 92%. This drilling program enabled us to increase our production 24% from an average of 83.9 MMcfe per day in the first quarter of 2003 to an average of 104.1 MMcfe per day in the fourth quarter of 2003. Our oil and gas reserves increased 37% for the year from 195.6 Bcfe to 268.3 Bcfe, which reflects a reserve replacement rate of 336% of our 2003 net production at a finding and development cost of less than $1.00 per Mcfe. "Our financial achievements in 2003 were also noteworthy. We had record net income, strengthened our capital structure and increased our financial flexibility. In the fourth quarter, we amended and restated our bank credit facility to increase the availability and reduce the cost of borrowing, and raised $52 million in net proceeds from a new equity offering which improved our overall capital structure. During 2003, we reduced debt for the fifth consecutive year from $186.8 million, or $0.95 per Mcfe, at the beginning of the year to $142.0 million, or $0.53 per Mcfe, at the end of the year. The combination of significantly lower debt and lower borrowing costs means interest costs will be dramatically lower in 2004. In 2004, we intend to increase our capital program 19% which should enable us to drill over 100 wells. We believe that we will continue to build on the achievements in 2003 and, with our multi-year drilling prospect inventory, are well-positioned to continue to increase production and reserves in 2004 and beyond." Financial Highlights ($ thousands except per share) 4th Qtr. 2003 4th Qtr. 2002 ------------------ -------------------- Revenue and other $ 40,984 $ 29,246 Operating Income $ 14,360 $ 8,445 Net Income $ 15,708 $ 3,349 Diluted Earnings Per Share $ 0.35 $ 0.08 Page 1 of 9 12 mos. 2003 12 mos. 2002 ----------------- ------------------- Revenue and other $ 164,827 $ 118,819 Operating Income $ 70,155 $ 29,481 Income Before Income Taxes $ 49,297 $ 9,815 Income (Loss) Before Cumulative Effect of Accounting Change $ 69,526 $ (3,948) Net Income (Loss) $ 68,592 $ (10,114) Diluted Earnings (Loss) Per Share Before Accounting Change $ 1.63 $ (0.14) Diluted Earnings (Loss) Per Share $ 1.61 $ (0.31) Note: The year ended December 31, 2003 includes a $19.0 million ($8.0 million in the fourth quarter) non-cash income tax benefit related to the reversal of a portion of the Company's valuation allowance against net deferred income tax assets while 2002 includes a non-cash income tax expense from an increase in the valuation allowance of $15.9 million for the same period in 2002. In addition, 2003 includes a $0.9 million non-cash charge related to the cumulative effect of an accounting change as a result of the adoption of SFAS No. 143, "Accounting for Asset Retirement Obligations" while 2002 includes a non-cash charge of $6.2 million for the cumulative effect of an accounting change to the "units of production" method of amortizing oil and gas properties. Income before income taxes and cumulative effect of accounting change for the year ended December 31, 2003 increased over 400% to $49.3 million compared to $9.8 million in 2002. This increase was primarily attributable to a 43% increase in average realized natural gas and oil prices and the sale of $4.9 million of emission credits, partially offset by decreased oil and gas production due to the expiration of the Company's VPP program and the sale of certain non-core oil and gas properties during 2002. Income tax benefit for 2003 was $20.2 million compared to an income tax expense of $13.8 million in 2002 due to changes in the Company's valuation allowance against net deferred income tax assets. The cumulative effect of an accounting change was $0.9 million, or a $0.02 loss per diluted share, in 2003 resulting from the adoption of SFAS No. 143 "Accounting For Asset Retirement Obligations". In 2002, the cumulative effect of accounting change was $6.2 million, or a $0.17 loss per diluted share, which reflected the change from the future gross revenue method of accounting for amortization of capitalized costs related to oil and gas properties to the unit-of-production method. Net income was $68.6 million, or $1.61 per diluted share, for the year ended December 31, 2003 compared to a net loss of $10.1 million, or $0.31 per diluted share, in 2002. Net income for the three months ended December 31, 2003 was $15.7 million compared to $3.3 million for the same period a year ago. Included in the 2003 three-month period is an $8.0 million non-cash income tax benefit related to the reversal of a portion of the Company's valuation allowance against net deferred income tax assets, partially offset by a $2.8 million non-cash write-off of deferred financing costs associated with the amendment and restatement of the Company's bank credit facility, and a $1.4 million non-cash expense related to stock options. DRILLING PROGRAM INCREASES PRODUCTION AND RESERVES Continuing success in KCS' drilling program resulted in increased production for each quarter of 2003. Fifteen wells were drilled in the fourth quarter, and 13 were successful. For the year KCS drilled 78 wells (55.4 net). Drilling included 19 wells in the Elm Grove Field in north Louisiana, 18 wells in the Sawyer Canyon Field in west Texas and 18 wells in south Texas. As a result, production increased 4% from 100.4 MMcfepd in the third quarter of 2003 to 104.1 MMcfepd in the fourth quarter. These volumes were substantially above the 83.9 MMcfepd and 92.1 MMcfepd produced in the first and second quarters of 2003, respectively. First quarter 2004 production Page 2 of 9 is expected to be relatively unchanged, as fourth quarter drilling was curtailed. Resumed production growth is anticipated in the second quarter and total 2004 production guidance has been increased to reflect anticipated growth of 12-21% in 2004, or 22-32% net production growth after considering delivery obligations associated with the production payment sold in 2001. Total oil and gas reserves as audited by Netherland, Sewell & Associates, Inc. increased to 268.3 Bcfe, compared to 195.6 Bcfe at year-end 2002, as the Company replaced production with the drill bit. Reserve additions were 93.8 Bcfe; positive reserve revisions were 10.3 Bcfe, which included upward price revisions of approximately 4.5 Bcfe; sales of reserves were 3.7 Bcfe; and 27.9 Bcfe of net reserves were produced in 2003. At December 31, 2003, the pre-tax present value of the proved reserves, based on constant prices and costs and discounted at 10% (PV-10), totaled $634 million, an 85% increase for the year. The PV-10 was calculated based on year-end prices of $5.97/Mmbtu and $29.95/Bbl. At year-end, 85% of the reserves were natural gas, 74% were proved developed and approximately 78% of the reserves were on properties operated by KCS. The Company's reserve life index was 9.6 years based on 2003 net production. Capital spent for the year was $88.1 million yielding a finding and development cost of $0.94 per Mcfe prior to considering positive revisions. Lease operating expenses per Mcfe decreased each quarter in 2003 to $.70/Mcfe for the fourth quarter reflecting the superior work being accomplished by the Company's engineering and field staff. Commenting, William N. Hahne, the Company's President and Chief Operating Officer said, "Although we are extremely pleased with our production and reserve growth in 2003, we believe the confirmation of our drilling prospect inventory is the most important aspect of our results for the year. In addition to the approximately 130 proved undeveloped locations, we have in excess of 450 identified probable and possible locations. The combination of our drilling inventory, our low full cycle costs and the recent hedging program should lock-in future profitability and growth for years to come." With the completion of the equity offering in the fourth quarter of 2003, KCS accelerated its first quarter drilling program and is currently running nine drilling rigs, and has drilled approximately 25 wells in January and February. The Company has initially set its 2004 budget at $105 million and plans to drill over 100 wells. Highlights of the drilling program include activity in the following areas: Elm Grove Field (WI=100% except where noted): - --------------------------------------------- o Four wells were drilled in the fourth quarter. (One well = 33% WI). o 19 wells were drilled in 2003 including 15 Lower Cotton Valley (Two wells = 33% WI) and 4 Hosston wells. The Lower Cotton Valley wells tested at an average initial rate of 2,400 Mcfepd. o A second rig began operations in the field in December. o Field production has surpassed 30 MMcfepd. o 37-40 wells are anticipated in 2004, of which six have been drilled to date. Joaquin Field (WI=73-100%) - -------------------------- o Six Travis Peak wells were drilled in 2003. o 10-15 wells are anticipated in 2004, four of which have been drilled to date. Talihina Field (WI=19-70%) - -------------------------- o Two wells were drilled in 2003. o 6-10 wells are anticipated in 2004, of which two have been drilled to date. Page 3 of 9 Sawyer Canyon Field (WI=91-100%) - -------------------------------- o Eighteen Canyon Sandstone wells were drilled in 2003 including four in December. o 13 additional wells have been drilled in 2004. Terryville Field (Average WI=66%) - --------------------------------- o The first field test was drilled late in the fourth quarter (WI=100%). o The well logged a number of potentially productive Cotton Valley intervals. o The bottom zone tested at an initial rate of over 1,000 Mcfepd and additional zones will be tested within the next month. o KCS has 5,200 gross acres on this prospect. Gulf Coast Activity: - -------------------- o An amine unit has been installed at the Jank #1 well, Five Mile Creek Prospect (WI=35%) and production was increased to 10,000 Mcfepd. o Six exploration wells and 11 development wells were drilled in 2003. o KCS anticipates drilling 10-12 exploration and 12-13 development wells in south Texas in 2004. o The La Reforma and Coquat exploration prospects have spudded and should reach target depth by early second quarter. HEDGING PROGRAM - --------------- The Company's hedging program consists of a series of transactions designed to limit exposure to downside price movements while continuing to allow significant participation in increasing prices. The Company's current hedge positions are summarized in the following table. AVERAGE TYPE HEDGE AMOUNT PRICE ---------- ------ ----- 1st Qtr. 2004 Natural Gas Swap 30,000 MMbtu/day $6.74 3 Way Collar 10,000 MMbtu/day $4.50/$8.50/$9.00 Crude Oil Swap 1,000 Bopd $30.78 2ND Qtr. 2004 Natural Gas Swap 21,648 MMbtu/day $5.34 Collar 10,000 MMbtu/day $4.00/$6.81 Crude Oil Swap 1,000 Bopd $30.65 3RD Qtr. 2004 Natural Gas Swap 15,000 MMbtu/day $5.16 Collar 20,000 MMbtu/day $4.42 / $6.04 Crude Oil Swap 500 Bopd $31.10 Page 4 of 9 4TH Qtr. 2004 Natural Gas Swap 5,000 MMbtu/day $5.79 Collar 20,000 MMbtu/day $4.00/$7.52 Crude Oil Swap 500 Bopd $30.30 1ST Qtr. 2005 Natural Gas Collar 5,000 MMbtu/day $5.00/$7.42 2ND Qtr. 2005 Natural Gas Swap 5,000 MMbtu/day $5.15 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 2004 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, the Company will deliver 14.1 MMcfepd in 2004, 10.7 MMcfepd in 2005 and 8.7 MMcfepd in January 2006 under the production payment sold in 2001, at the weighted average discounted price of approximately $4.05 per Mcfe. 2004 OUTLOOK - ------------ PREVIOUS REVISED ------------------------ Production (Bcfe) Working Interest 38-41 39-42 Production Payment (5.2) (5.2) Net Production 33-36 34-37 LOE ($MM) 27-29 28-30 G&A ($MM) 8-10 8-10 DD&A ($MM) 53-57 53-57 Interest Expense ($MM) 17-20 12-14 Capital Expenditures ($MM) 80-85 105 The following abbreviations are utilized herein: Net production - Production after considering delivery obligations associated with the Production Payment sold in February 2001. WI - Working Interest Bcfe - Billion Cubic Feet of Natural Gas Equivalent Mcfe - Thousand Cubic Feet of Natural Gas Equivalent MMcfepd - Million Cubic Feet of Natural Gas Equivalent Per Day Bopd - Barrels of Oil Per Day LOE - Lease operating expenses G&A - General and administrative expenses DD&A - Depreciation, depletion and amortization Page 5 of 9 This press release contains forward-looking statements that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are delays and difficulties in developing currently owned properties, the failure of exploratory drilling to result in commercial wells, delays due to the limited availability of drilling equipment and personnel, fluctuations in oil and gas prices, general economic conditions and the risk factors detailed from time to time in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission. 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 ### 5555 San Felipe, Suite 1200, Houston, TX 77056 -Financial tables follow- Page 6 of 9 KCS Energy, Inc. Statements of Consolidated Operations
Three Months Ended For the Year Ended (Amounts in Thousands December 31, December 31, Except Per Share Data) ----------------------------- --------------------------- 2003 2002 2003 2002 ----------- ------------- ------------ ------------ Oil and gas revenue $ 40,672 $ 29,446 $ 159,826 $ 120,002 Other, net 312 (200) 5,001 (1,183) - --------------------------------------------------------------------------------------------------- ---------------------------- Total revenue and other 40,984 29,246 164,827 118,819 - --------------------------------------------------------------------------------------------------- ---------------------------- Operating costs and expenses Lease operating expenses 6,664 5,907 26,461 25,246 Production taxes 2,187 1,176 8,145 5,589 General and administrative expenses 2,385 2,117 8,011 8,255 Stock compensation 1,671 116 2,715 782 Bad debt expense 314 100 339 215 Accretion of asset retirement obligation 279 - 1,116 - Depreciation, depletion and amortization 13,124 11,385 47,885 49,251 - --------------------------------------------------------------------------------------------------- ---------------------------- Total operating costs and expenses 26,624 20,801 94,672 89,338 - --------------------------------------------------------------------------------------------------- ---------------------------- Operating income 14,360 8,445 70,155 29,481 - --------------------------------------------------------------------------------------------------- ---------------------------- Interest and other income 11 158 112 279 Interest expense (7,145) (5,624) (20,970) (19,945) - --------------------------------------------------------------------------------------------------- ---------------------------- Income before income taxes 7,226 2,979 49,297 9,815 Federal and state income (taxes) benefit 8,482 370 20,229 (13,763) - --------------------------------------------------------------------------------------------------- ---------------------------- Net income (loss) before cumulative effect of accounting change 15,708 3,349 69,526 (3,948) Cumulative effect of accounting change, net of tax - - (934) (6,166) - --------------------------------------------------------------------------------------------------- ---------------------------- Net income (loss) 15,708 3,349 68,592 (10,114) - --------------------------------------------------------------------------------------------------- ---------------------------- Dividends and accretion of issuance costs on preferred stock (180) (189) (909) (1,028) - --------------------------------------------------------------------------------------------------- ---------------------------- Income (loss) available to common stockholders 15,528 $ 3,160 $ 67,683 (11,142) =================================================================================================== ============================ Earnings (loss) per share of common stock - basic Before cumulative effect of accounting change $ 0.35 $ 0.09 $ 1.73 $ (0.14) Cumulative effect of accounting change - - (0.02) (0.17) - --------------------------------------------------------------------------------------------------- ---------------------------- Earnings (loss) per share of common stock - basic 0.35 $ 0.09 $ 1.71 (0.31) =================================================================================================== ============================ Earnings (loss) per share of common stock - diluted Before cumulative effect of accounting change 0.35 $ 0.08 $ 1.63 (0.14) Cumulative effect of accounting change - - (0.02) (0.17) - --------------------------------------------------------------------------------------------------- ---------------------------- Earnings (loss) per share of common stock - diluted 0.35 $ 0.08 $ 1.61 (0.31) =================================================================================================== ============================ Average shares outstanding for computation of earnings (loss) per share Basic 44,128 36,429 39,579 35,864 Diluted 45,091 40,969 42,659 35,864 - --------------------------------------------------------------------------------------------------- ----------------------------
Page 7 of 9 KCS Energy, Inc. Condensed Balance Sheets
December 31, December 31, (Thousands of Dollars) 2003 2002 ----------------------- ----------------------- Assets Cash $ 2,178 $ 6,935 Trade accounts receivable, net 23,911 16,863 Other current assets 4,720 3,396 Property, plant and equipment, net 292,005 240,294 Deferred taxes 18,818 - Deferred charges and other assets 1,334 645 - ------------------------------------------------------------------------------------------------------------------------ Total assets $ 342,966 $ 268,133 ======================================================================================================================== Liabilities and stockholders' equity (deficit) Accounts payable and accrued liabilities $ 46,501 $ 35,499 Accrued interest 5,100 8,174 Deferred revenue 38,696 66,582 Deferred credits and other liabilities 12,638 961 Long-term debt 142,000 186,774 Preferred stock - 12,859 Stockholders' equity (deficit) 98,031 (42,716) - ------------------------------------------------------------------------------------------------------------------------ Total liabilities and stockholders' equity (deficit) $ 342,966 $ 268,133 ========================================================================================================================
Condensed Statements of Cash Flow
For the Year Ended December 31, --------------------------------------------------------- 2003 2002 ------------------------------- ---------------------- Net income (loss) $ 68,592 $ (10,114) DD&A 47,885 49,251 Amortization of deferred revenue (27,886) (45,182) Deferred tax expense (benefit) (20,929) 13,763 Other non-cash charges and credits, net 14,319 13,854 - ----------------------------------------------------------------------------------------------------------------------- 81,981 21,572 Net changes in assets and liabilities (10,959) (747) - ----------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 71,022 20,825 - ----------------------------------------------------------------------------------------------------------------------- Cash flow from investing activities: Investment in oil and gas properties, net (78,279) (18,122) Other capital expenditures, net (682) 56 - ----------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (78,961) (18,066) - ----------------------------------------------------------------------------------------------------------------------- Cash flow from financing activities: Net repayments of debt (44,774) (18,026) Proceeds from common stock offering 51,995 - Deferred financing costs and other, net (4,039) (725) - ----------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities 3,182 (18,751) - ----------------------------------------------------------------------------------------------------------------------- Decrease in cash and cash equivalents $ (4,757) $ (15,992) =======================================================================================================================
Page 8 of 9 KCS Energy, Inc. Supplemental Data
Three Months Ended For the Year Ended December 31, December 31, --------------------------------------------------- ------------------------------------- 2003 2002 2003 2002 ------------------------ ------------------------- ------------------- ---------------- Production data: Natural gas (MMcf) 7,863 6,402 28,166 29,672 Oil (Mbbl) 203 227 838 1,003 Liquids (Mbbl) 83 67 258 288 Summary (MMcfe): Working Interest 9,581 7,861 34,741 34,959 Purchased VPP (a) - 305 - 2,458 ----------------------- ----------------------- ------------------- --------------- Total 9,581 8,166 34,741 37,417 Dedicated to Production Payment (1,493) (2,481) (6,807) (11,196) ----------------------- ----------------------- ------------------- --------------- Net Production 8,088 5,685 27,934 26,221 Average realized prices (b) Gas (per Mcf) $ 4.39 $ 3.70 $ 4.79 $ 3.25 Oil (per bbl) $ 24.49 $ 21.89 $ 25.34 $ 20.52 Liquids (per bbl) $ 14.04 $ 11.70 $ 14.58 $ 10.05 Total (per Mcfe) $ 4.25 $ 3.61 $ 4.60 $ 3.21
Notes: (a) The Company discontinued making new investments in 1999 and final deliveries were made in November, 2002. (b) Includes the effects of hedging and the Production Payment sold in February 2001. -----END PRIVACY-ENHANCED MESSAGE-----