-----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, O61ozZGWU49m5kDRtYY52EVRXQ2Wj/XA87yorc+YYIrWk7RTDAVbIxJlcmCYSSIt YeJKpdjRKFpAMXHanEX8KQ== 0000950134-01-508082.txt : 20020410 0000950134-01-508082.hdr.sgml : 20020410 ACCESSION NUMBER: 0000950134-01-508082 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011109 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Change in fiscal year FILED AS OF DATE: 20011109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUEVO ENERGY CO CENTRAL INDEX KEY: 0000861819 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 760304436 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10537 FILM NUMBER: 1779162 BUSINESS ADDRESS: STREET 1: 1021 MAIN SUITE 2100 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7136520706 8-K 1 h91917e8-k.txt NUEVO ENERGY COMPANY - NOVEMBER 9, 2001 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 November 9, 2001 Date of Report (Date of earliest event reported) NUEVO ENERGY COMPANY (Exact name of registrant as specified in its charter) Delaware 0-10537 76-0304436 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 1021 Main Street, Suite 2100 Houston, Texas 77002 (Address of principal executive offices, including zip code) (713) 652-0706 (Registrant's telephone number, including area code) Not Applicable (Former name and former address, if changed since last report) ITEM 1. CHANGES IN CONTROL OF REGISTRANT. Not applicable to this filing. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. Not applicable to this filing. ITEM 3. BANKRUPTCY OR RECEIVERSHIP. Not applicable to this filing. ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS. Not applicable to this filing. ITEM 5. OTHER EVENTS. Not applicable to this filing. ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS. Not applicable to this filing. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Not applicable to this filing. (b) PRO FORMA FINANCIAL INFORMATION. Not applicable to this filing. (c) EXHIBITS. EXHIBIT NUMBER TITLE OF DOCUMENT ------- ----------------- 99.1 Nuevo Energy Company Fourth Quarter 2001 Financial Guidance ITEM 8. CHANGE IN FISCAL YEAR. Not applicable to this filing. ITEM 9. REGULATION FD DISCLOSURE. The information attached hereto as Exhibit 99.1 is incorporated herein 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. NUEVO ENERGY COMPANY By: /s/ Robert M. King ------------------------------- Dated: November 9, 2001 Robert M. King Senior Vice President and Chief Financial Officer EXHIBIT INDEX
EXHIBIT NUMBER TITLE OF DOCUMENT - ------- ----------------- 99.1 Nuevo Energy Company Fourth Quarter 2001 Financial Guidance
EX-99.1 3 h91917ex99-1.txt FOURTH QUARTER 2001 FINANCIAL GUIDANCE EXHIBIT 99.1 NUEVO ENERGY COMPANY 2001 Forecast - Web CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts)
Restated Actual Actual | Forecast --------------- ------ | -------- 3 months ended 3 months ended 3 months ended | 3 months ended March 31, 2001 June 30, 2001 September 30, 2001 | December 31, 2001 2001 -------------- -------------- ------------------ | ----------------- --------- REVENUES: | Oil revenues ................................ $ 65,099 $ 65,160 $ 71,156 | $ 63,461 $ 264,876 Gas revenues ................................ 50,723 33,902 10,414 | 9,816 104,855 Liquids revenues ............................ 1,324 1,198 1,014 | 664 4,200 Gain on sales of assets ..................... - - 115 | - 115 Interest and other income(1) ................ 705 241 366 | 80 1,392 --------- --------- --------- | --------- --------- Total revenues ........................ $ 117,851 $ 100,501 $ 83,065 | $ 74,021 $ 375,437 --------- --------- --------- | --------- --------- | COSTS & EXPENSES: | Lease operating expenses .................... $ 57,287 $ 49,038 $ 40,167 | $ 39,949 $ 186,441 Depreciation, depletion and amortization .... 19,627 20,398 18,790 | 16,803 75,618 Exploration costs ........................... 2,665 5,382 5,959 | 12,359 26,365 General and administrative expenses(2) ...... 7,276 9,229 9,502 | 7,796 33,803 Interest expense ............................ 11,135 10,449 10,635 | 10,596 42,815 TECONS - Dividends expense .................. 1,653 1,653 1,653 | 1,653 6,612 Other expense(1) ............................ 2,122 (99) 243 | 267 2,533 --------- --------- --------- | --------- --------- Total expenses ........................ $ 101,765 $ 96,050 $ 86,949 | $ 89,423 $ 374,187 --------- --------- --------- | --------- --------- Net earnings before taxes ................... $ 16,086 $ 4,451 $ (3,884) | $ (15,403) $ 1,250 | Income Taxes: | Current ............................... 560 (460) (77) | (770) (747) Deferred .............................. 5,923 2,252 (1,424) | (5,391) 1,360 --------- --------- --------- | --------- --------- Net Income (loss) ........................... $ 9,603 $ 2,659 $ (2,383) | $ (9,242) $ 637 ========= ========= ========= | ========= ========= | | Earnings per share (diluted) ................ $ 0.57 $ 0.14 $ (0.14) | $ (0.55) $ 0.04 | Discretionary Cash Flow(3) .................. $ 39,324 $ 30,829 $ 21,419 | $ 15,170 $ 106,742 Discretionary Cash Flow per share (diluted).. $ 2.28 $ 1.80 $ 1.27 | $ 0.90 $ 6.23 | EBITDAX(4) .................................. $ 51,493 $ 42,135 $ 33,077 | $ 26,009 $ 152,546 | Weighted average common and dilutive | potential common shares outstanding ... 17,003 17,152 16,877 | 16,880 17,121 | | Prices: | Oil ($/BBL) - Including hedges ........ $ 15.71 $ 15.44 $ 17.40 | $ 16.67 $ 16.29 Oil ($/BBL) - reference price (NYMEX).. $ 28.73 $ 27.96 $ 26.76 | $ 22.02 $ 26.37 Gas ($/MCF) ........................... $ 13.27 $ 11.46 $ 3.45 | $ 3.02 $ 8.03 Gas ($/MCF) - reference price (NYMEX).. $ 7.27 $ 4.78 $ 2.79 | $ 3.04 $ 4.47 | Production: | Oil (MBBL) ............................ 4,144 4,220 4,089 | 3,807 16,259 BBLS/D ................................ 46,045 46,366 44,441 | 41,378 44,545 Gas (MMCF) ............................ 3,822 2,959 3,022 | 3,252 13,055 MMCF/D ................................ 43 33 33 | 35 36 Liquids (MBBL) ........................ 43 51 48 | 40 182 | MBOE - Including liquids .................... 4,825 4,763 4,640 | 4,389 18,617 | Lease Operating Expense per BOE ............. $ 11.87 $ 10.30 $ 8.66 | $ 9.10 $ 10.01 | General & Administrative Expense per BOE .... $ 1.51 $ 1.94 $ 2.05 | $ 1.78 $ 1.82 | Fixed Charge Coverage Ratio ................. 4.0 3.5 2.7 | 2.1 3.1 | Long-term Debt .............................. $ 409,702 $ 409,702 $ 409,577 | $ 436,293 $ 436,293
Notes: (1) As a matter of policy, we will not provide guidance on other income, other expense, gain or loss on sales of assets, or gain or loss on derivatives, except as specifically noted. (2) In the 2Q01, G&A includes severance costs associated with the resignation of Nuevo's CEO. (3) Calculated as Net Income, plus Deferred Taxes, plus Exploration Costs, plus DD&A, less Gain on Sale of Assets plus Loss on Sale of Assets. Actual amounts may include additional cash flow adjustments not specified above, resulting in immaterial differences. (4) Calculated as Net Earnings before Taxes, plus Exploration Costs, plus Dividends on TECONS, plus Interest Expense, plus DD&A, less Gain on Sale of Assets, plus Loss on Sale of Assets. Actual amounts may include additional cash flow adjustments not specified above, resulting in immaterial differences. FOURTH QUARTER 2001 FINANCIAL GUIDANCE The estimates listed below contain assumptions which we believe are reasonable. We caution that these estimates are based on currently available information as of the date hereof. We are not undertaking any obligation to update these estimates as conditions change or as additional information becomes available. All of the estimates and assumptions set forth in this document constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Although we believe that these forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will in fact occur and caution that actual results may differ materially from those in the forward-looking statements. A number of factors could affect our future results or the energy industry generally and could cause our expected results to differ materially from those expressed in this release. These factors include, among other things: - Increases or decreases in oil and gas prices; - Compliance with environmental regulations and other governmental laws and regulations applicable to the oil and gas industry; - Unanticipated problems or successes encountered during the exploration for and exploitation and production of oil and gas; - Political and economic events and conditions in the jurisdictions in which we operate; - Our hedging activities; - Decisions we make regarding our debt and equity structure, including the decision to issue additional capital stock or debt securities; - Our ability to deliver oil and gas to commercial markets; - Changes in consumer demand; - The impact of competition; - The uncertainty of estimates of oil and gas reserves and production rates; - The impact of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities"; - The risk factors and other conditions described in the report on Form 10-K for the year ended December 31, 2000, and in the report on Form 10-Q for the quarters ended March 31, 2001, June 30, 2001 and September 30, 2001. These estimates also assume that we will not engage in any material transactions such as acquisitions or divestitures of assets, formation of joint ventures or sale of debt or equity securities. We continually review these types of transactions as part of our corporate strategy, and may engage in any of them without prior notice. CRUDE OIL PRODUCTION We anticipate that our fourth quarter 2001 production will be between 3.7 and 3.9 million barrels (40,217 - 42,391 barrels per day) which incorporates downtime for the full quarter at the Point Pedernales Field, offshore California due to the replacement of five flanges on the crude oil pipeline. This estimate also includes downtime for pump repairs, and scheduled field maintenance. Of the fourth quarter 2001 volume, approximately 85% will be derived from California, 14% from the Republic of Congo and 1% from other U.S. However, weather, unexpected subsurface conditions, power supply disruptions and other unforeseen operating hazards may have an adverse impact on Nuevo's production volumes and better than expected development drilling results or exploration success could have a positive effect. CRUDE OIL PRICES Realized crude oil prices for the fourth quarter 2001 are expected to be between $16.00 and $17.25 Bbl. Realized prices are based on the current NYMEX WTI futures price and are adjusted for the California crude oil sales contract, the impact of hedges, and the price sharing agreements for our Point Pedernales and Congo production. o Nuevo realizes approximately 72% of the NYMEX WTI price for California crude oil production, before hedges. About half of Nuevo's California crude oil production is considered heavy oil (15 degree API quality crude oil or heavier produced by thermal operations). The market price for California heavy crude oil differs from the established market indices for oil elsewhere in the U.S., due principally to the higher transportation and refining costs associated with heavy oil. o Nuevo realizes approximately 95% of the NYMEX WTI price for East Texas crude oil production, before hedges. o Nuevo realizes approximately 80% of the NYMEX WTI price for Congo crude oil production, before hedges. Nuevo's Congo production is a relatively heavy crude oil (16 - 20 degree API gravity) which is processed into low-sulfur, No. 6 fuel oil for sale to worldwide markets. The market for residual fuel oil differs from the markets for WTI and other benchmark crudes due to its primary use as an industrial or utility fuel versus the higher value transportation fuel component, which is produced from refining most grades of crude oil. The price of crude oil is subject to large fluctuations in response to relatively minor changes in the supply of and demand for crude oil, market uncertainty and a variety of additional factors beyond Nuevo's control. Any substantial or extended decline in the price of crude oil would have an adverse effect on Nuevo. PRICE RISK MANAGEMENT POLICY Nuevo's price risk management policy was designed to accomplish the following objectives: 1) to ensure sufficient capital for reserve replacement and 2) to ensure fixed charge coverage ratios are maintained. CRUDE OIL HEDGES
SWAPS VOLUME WTI PRICE - ----- ---------- ----------- 3Q01 20,000 B/D $21.22 Bbl. 4Q01 15,500 B/D $22.95 Bbl. 1Q02 12,500 B/D $25.91 Bbl. 2Q02 2,000 B/D $23.50 Bbl. 3Q02 6,800 B/D $23.20 Bbl. 4Q02 5,000 B/D $23.90 Bbl.
FLOORS VOLUME WTI PRICE - ------ ---------- ----------- 2Q02 19,000 B/D $22.00 Bbl. 3Q02 14,000 B/D $22.00 Bbl. 4Q02 14,000 B/D $22.00 Bbl.
For a swap transaction, we receive a fixed price for our production and pay the counter party a floating price based on a market index. For a floor (purchased put), we receive the floor price if the floating price falls below the floor price. Swaps fix the price we receive for production, while floors establish a minimum price. NATURAL GAS PRODUCTION We anticipate that our fourth quarter 2001 production will be between 3.1 and 3.4 Bcf (33.7 MMcfd - 37.0 MMcfd) which incorporates downtime for the full quarter at the Point Pedernales Field, offshore California. Of this fourth quarter 2001 volume, approximately 91% will be derived from California and 9% from other U.S. However, weather, unexpected subsurface conditions, and other unforeseen operating hazards may have an adverse impact on our production volumes and better than expected development drilling results or exploration success could have a positive effect. NATURAL GAS PRICES Realized gas prices for the fourth quarter 2001 are expected to be between $2.90 and $3.10 Mcf based on our assumption regarding the California price differential versus the current NYMEX strip price. The price of natural gas is subject to large fluctuations in response to relatively minor changes in the supply of and demand for natural gas, market uncertainty and a variety of additional factors beyond Nuevo's control. CALIFORNIA NATURAL GAS MARKET VOLATILITY Nuevo continues to work to optimize the use of its gas reserves in a very volatile California gas market. The Company projects that it will produce more natural gas than it will consume in 2001. Beginning in mid-December 2000 and continuing into the first half 2001, Nuevo reduced its gas consumption related to steaming operations for higher steam-oil ratio (SOR) wells in order to capture robust California spot gas prices. Due to the dramatic decline in California gas prices in August, Nuevo restarted its cyclic steaming operations and reduced the amount of gas sold in the market. In the fourth quarter, Nuevo restarted its steam drive operations. NATURAL GAS HEDGES Nuevo does not have any of its natural gas production hedged. LIQUIDS We anticipate that our fourth quarter 2001 production will be between 39,000 and 41,000 barrels (424 and 446 barrels per day). Historically, the estimated realized price for liquids is approximately 80% of the NYMEX WTI price. The same factors that affect our oil and gas production and pricing can also have an effect on the production and pricing of liquids. FOURTH QUARTER 2001 TOTAL PRODUCTION We anticipate that our fourth quarter 2001 production will be between 4.2 and 4.5 million BOE with 87% crude oil. This production estimate includes three months of downtime at the Point Pedernales Field, offshore California. In general, our production volumes are subject to curtailments, delays, and cancellations as a result of a lack of capital or other problems such as: weather, compliance with governmental regulations or price controls, electrical shortages, mechanical difficulties or shortages or delays in the delivery of equipment. Changes to the capital budget (i.e. dollar amount and projects) and exploratory drilling success will also have an impact on production volumes. 2001 TOTAL PRODUCTION We anticipate that total production for 2001 will be between 18.4 and 18.8 MMBOE. This estimate incorporates about three weeks of oil production downtime and about eight weeks of gas production downtime due to a vessel failure at the Rincon Onshore Separation Facility (ROSF) located in Ventura County, California. As of August 11, 2001, the ROSF facility was operational and total production was restored. This estimate also incorporates production downtime from mid-September to year-end 2001 at the Point Pedernales Field, offshore California. LEASE OPERATING EXPENSE (INCLUDES PRODUCTION AND AD VALOREM TAXES) Nuevo uses natural gas to generate steam for its thermal production. Due to high California gas costs and a reduction in steam usage which impacted production, first half 2001 LOE averaged $11.09 BOE. We expect the fourth quarter 2001 LOE to be between $8.90 and $9.30 BOE due to lower California gas prices combined with the return to cyclic steaming and steam drive operations. DEPRECIATION, DEPLETION AND AMORTIZATION We anticipate that the DD&A rate for the fourth quarter 2001 will be between $3.60 and $4.00 BOE. Our forecasted DD&A rate has been revised downward based on estimated SEC reserves at June 30, 2001. EXPLORATION COSTS We caution that this is an inherently difficult expense category to estimate and that this estimate can be volatile due to the number of wells drilled, completed and the success rate in any given quarter and any potential changes to the capital budget. Exploration expenses for the fourth quarter 2001 are estimated to be between $11.5 million and $13.0 million. GENERAL AND ADMINISTRATIVE EXPENSE We anticipate that the G&A rate for the fourth quarter 2001 will be between $1.75 and $1.85 BOE. The factor that could have the greatest impact on G&A is the mark to market accounting for Nuevo's deferred compensation plan which is based on the price of Nuevo common stock. As a matter of policy, Nuevo accrues target EVA bonuses on a quarterly basis which may not represent actual results at year-end. INTEREST EXPENSE We anticipate that our interest expense for the fourth quarter 2001 will be between $10.0 million and $11.2 million. TERM CONVERTIBLE SECURITIES (TECONS) - DIVIDEND EXPENSE We expect our fourth quarter 2001 TECONS dividend expense to be $1.65 million. INCOME TAXES We expect our effective income tax rate for the fourth quarter 2001 to be 40% (inclusive of applicable federal and state taxes) and our deferred tax ratio to be 88%. WEIGHTED AVERAGE COMMON AND DILUTIVE POTENTIAL COMMON SHARES OUTSTANDING Nuevo repurchases its common shares under a Board authorized share repurchase program. On February 12, 2001, the Board authorized the repurchase of 1 million shares of Nuevo common stock. As of September 30, 2001, 1,007,700 shares remained authorized for repurchase at management's discretion under existing repurchase authorizations. While the Company's policy is not to comment on the status of the share repurchase program until the authorization(s) is exhausted or when quarterly financial statements are published, the weighted average shares shown for these forecast periods are updated for material changes in share balances through the forecast date which includes share repurchases and options in the money. No future anticipated share repurchases are included in the forecast. CAPITAL EXPENDITURES We expect base capital expenditures (excluding acquisitions) for 2001 to be approximately $150 million. This figure does not include deferred acquisition costs, expected to be $8 - $12 million depending on final 2001 production levels and average 2001 field price realizations on certain of our California properties, arising from a contingent payment agreement entered into upon the acquisition of the affected properties, as disclosed in our filings since the acquisition. Pursuant to Generally Accepted Accounting Principles, such payment will be accrued as capital in the fourth quarter once the size of the payment is finally determined. It is expected to be paid in the first quarter 2002. Some of the factors impacting the level of capital expenditures include crude oil and natural gas prices as well as the volatility in these prices, the cost and availability of oilfield services, exploratory drilling success, acquisitions and divestitures and the level and availability of external financing. SFAS NO. 133 Nuevo expects that SFAS No. 133 will primarily increase the volatility of other comprehensive income and results of operations. In general, the amount of volatility will vary with the level of derivative activities during any period. Nuevo will not provide guidance on this item. -----END PRIVACY-ENHANCED MESSAGE-----