-----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, AfShyXo8wB0ffOkczO7X3vMOQMzZNdMgD4roiZf2MV9Tfa6sHfOJegayStMNpN6R +90yq2RfpFy9+XqMUBOuIg== 0000899733-01-500055.txt : 20010801 0000899733-01-500055.hdr.sgml : 20010801 ACCESSION NUMBER: 0000899733-01-500055 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010731 ITEM INFORMATION: FILED AS OF DATE: 20010731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEY PRODUCTION CO INC CENTRAL INDEX KEY: 0000837290 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 841089744 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11769 FILM NUMBER: 1694240 BUSINESS ADDRESS: STREET 1: 707 17TH STREET SUITE 3300 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3038370779 MAIL ADDRESS: STREET 1: 707 17TH STREET SUITE 3300 CITY: DENVER STATE: CO ZIP: 80202 8-K 1 earn8k73101.txt SECOND QUARTER 2001 EARNINGS RELEASE 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K [X] Current report pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934. Date of Report (Date of earliest event reported) July 31, 2001 KEY PRODUCTION COMPANY, INC. (Exact name of registrant as specified in its charter) A Delaware Corporation File Number 001-11769 IRS Employer No. 84-1089744 707 Seventeenth Street, Suite 3300 Denver, Colorado 80202 (Address of principal executive offices) Telephone Number (303) 295-3995 (Registrant's telephone number) Not applicable (Former name and address) ITEM 5. OTHER EVENTS Key Production Company, Inc. (NYSE: KP) announced its second quarter earnings by press release on July 31, 2001. A copy of the press release is attached hereto as Exhibit 99.1. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS C. Exhibits Exhibit No. Description 99.1 Press Release 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. Date: July 31, 2001 KEY PRODUCTION COMPANY, INC. By: /s/ Paul Korus -------------------------------------- Paul Korus Chief Financial Officer CONTACT: Paul Korus FOR RELEASE AT 2:00 P.M. (MST) ------- ------------------------------ (303) 295-3995 Tuesday, July 31, 2001 KEY POSTS SECOND QUARTER 2001 EARNINGS OF $0.62 PER SHARE Denver - Key Production Company, Inc. (NYSE: KP) today announced second quarter 2001 net income of $8.9 million, or $0.62 per diluted share, a 69 percent increase compared with net income of $5.3 million, or $0.43 per share, in the second quarter of 2000. Bolstered by 15 percent higher production volumes and continued strength in natural gas prices, revenues grew 37 percent to $29.9 million and cash flow from operations rose 24 percent to $20.3 million, or $1.40 per diluted share, from $16.3 million, or $1.33 per share, in the year-earlier period. Net income for the six months ended June 30, 2001 of $22.2 million, or $1.54 per diluted share, more than doubled the company's net earnings of $9.5 million, or $0.77 per share, in the year-earlier period. Revenues for the first six months of 2001 were $69.7 million, an increase of 70 percent compared with $41.1 million during the first half of 2000. Aggregate production volumes during the second quarter of 2001 increased by 15 percent to 69.3 million cubic feet (MMcf) equivalent per day, comprised of 44.4 MMcf of gas per day and 4,150 barrels of oil per day. Compared with the same three months of 2000, gas volumes grew 21 percent and oil output was up by 6 percent. The company's average gas price realization during the second quarter of 2001 was $4.87 per thousand cubic feet (Mcf) versus $3.41 per Mcf price during the same quarter a year ago. Oil prices in the second quarter of 2001 averaged $25.92 per barrel, down from $27.45 per barrel during the second quarter of 2000. Since Key has not implemented any hedging arrangements, reported gas and oil prices fully reflect changes in market conditions. We remain un-hedged. Capital expenditures totaled $20.6 and $45.4 million for the second quarter and first six months of 2001, respectively. During the first six months of 2000, capital expenditures were $24.0 million. At June 30, 2001, long-term debt was $34 million, down from $44 million at year-end 2000, and our debt to total capitalization ratio was 17 percent. Since the end of the quarter, debt has been reduced to $32 million. PRODUCTION VOLUME OUTLOOK The production and sale of oil and gas involves many complex processes that are subject to numerous uncertainties, including reservoir risk, mechanical failure, market conditions, transportation issues, human error, adverse weather conditions, and other factors. Nonetheless, we currently assume that over the remainder of 2001 our net gas production will range from 44-46 MMcf per day and net oil output will approximate 4,000-4,300 barrels per day. Moreover, we expect that 2002 aggregate production will be between 5-10 percent higher than annual 2001 volumes. The above production estimates are predicated on estimated 2001 exploration and development expenditures of $70-75 million. Key cautions that future capital expenditures are subject to all the risks and uncertainties normally incident to the exploration for and development of oil and gas. These risks include, but are not limited to, geologic and reservoir risk, price volatility, inflation, lack of availability of equipment and services, environmental risks, drilling risks, regulatory changes, and the uncertainty of estimating reserves and future production rates. Our production forecast is also based on many other assumptions, such as well performance and success rates for wells that have not been drilled yet. Therefore, we can give no assurance that our future production will be as estimated. CONFERENCE CALL Management will conduct a conference call to further review second quarter results and other operational matters on Wednesday, August 1 at 9:00 a.m. Mountain Time. Interested parties in the U.S. and Canada may access the call by dialing (800) 881-5262 and requesting the Key Production Company, Inc. teleconference. A digital recording will be available through August 8, 2001. To access the replay, call (800) 642-1687 and provide reservation number 1399138. Key is a Denver-based independent natural gas and crude oil exploration and production company with operations focused in western Oklahoma, the Gulf Coast, California and the Rocky Mountain region. Financial statements and other information follow:
KEY PRODUCTION COMPANY, INC. SUMMARY FINANCIAL INFORMATION (Unaudited) For the Three Months For the Six Months Ended June 30, Ended June 30, 2001 2000 2001 2000 ----------- ----------- ----------- ----------- SUMMARY OF OPERATIONS (In thousands, except per share data) Revenues: Gas sales $ 19,700 $ 11,335 $ 48,471 $ 19,744 Oil sales 9,789 9,823 20,492 20,286 Plant product sales 388 476 637 838 Other 9 110 57 209 ----------- ----------- ----------- ---------- 29,886 21,744 69,657 41,077 ----------- ----------- ----------- ---------- Operating expenses: Depreciation, depletion and amortization 8,207 8,320 19,430 16,264 Lease operating 4,341 2,908 8,193 5,555 Production taxes 1,845 772 4,331 1,403 General and administrative 847 701 1,698 1,421 Financing costs: Interest expense 500 1,107 1,193 2,239 Capitalized interest (306) (393) (657) (735) Interest income (47) (33) (120) (81) ----------- ----------- ----------- ---------- 15,387 13,382 34,068 26,066 ----------- ----------- ----------- ---------- Income before income taxes 14,499 8,362 35,589 15,011 Provision for income taxes 5,582 3,094 13,352 5,554 ----------- ----------- ----------- ---------- Net income $ 8,917 $ 5,268 $ 22,237 $ 9,457 =========== =========== =========== ========== Basic earnings per share $ 0.64 $ 0.44 $ 1.59 $ 0.81 =========== =========== =========== ========== Diluted earnings per share $ 0.62 $ 0.43 $1.54 $ 0.77 =========== =========== =========== ========== Weighted average common shares outstanding 13,977 11,901 13,969 11,748 =========== =========== =========== =========== Weighted average diluted shares outstanding 14,450 12,222 14,400 12,212 =========== =========== =========== ==========
KEY PRODUCTION COMPANY, INC. SUMMARY FINANCIAL INFORMATION (Unaudited) For the Three Months For the Six Months Ended June 30, Ended June 30, 2001 2000 2001 2000 ----------- ----------- ----------- ----------- PRODUCTION AND PRICING DATA Natural gas production: Million cubic feet 4,042 3,327 7,851 6,790 Average daily volumes, million cubic feet per day 44.4 36.6 43.4 37.3 Average price per thousand cubic feet $ 4.87 $ 3.41 $ 6.17 $ 2.91 Oil production: Barrels 377,700 357,800 776,100 746,200 Average daily volumes, barrels per day 4,150 3,932 4,288 4,100 Average price per barrel $ 25.92 $ 27.45 $ 26.40 $ 27.18 NET CASH PROVIDED BY OPERATING ACTIVITIES (In thousands) Net income $ 8,917 $ 5,268 $ 22,237 $ 9,457 Depreciation, depletion amortization 8,207 8,320 19,430 16,264 Deferred taxes and other 3,171 2,700 7,185 5,014 ----------- ----------- ----------- ----------- 20,295 16,288 48,852 30,735 Changes in operating assets and liabilities (3,485) (3,207) (179) (4,937) ----------- ----------- ----------- ----------- Net cash provided by operating activities $ 16,810 $ 13,081 $ 48,673 $ 25,798 =========== =========== =========== =========== CAPITALIZED COSTS INCURRED (In thousands) Exploration and development $ 19,767 $ 13,109 $ 45,200 $ 23,986 Acquisitions 840 41 172 121 Property sales - (74) (1) (127) BALANCE SHEET DATA June 30, December 31, (In thousands) 2001 2000 ------------------- ------------------ Total debt $ 34,000 $ 44,000 Shareholders' equity $ 161,026 $ 138,087 Common shares outstanding 13,979 13,921
This news release may contain projections and other forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Any such projections or statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that such projections will be achieved and actual results could differ materially from those projected. A discussion of important factors that could cause actual results to differ materially from those projected is included in the Company's periodic reports filed with the Securities and Exchange Commission. -end- -----END PRIVACY-ENHANCED MESSAGE-----