-----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, USHYrc7limdCuJheOvsCJdzXGTHfaGB+wEmwkbbs6vXba2/164bTKH+MQryCCNwE YURuPJ8pcUg8s78MWNl8zg== 0000904080-01-500006.txt : 20010504 0000904080-01-500006.hdr.sgml : 20010504 ACCESSION NUMBER: 0000904080-01-500006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010502 ITEM INFORMATION: FILED AS OF DATE: 20010503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STONE ENERGY CORP CENTRAL INDEX KEY: 0000904080 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 721235413 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-12074 FILM NUMBER: 1620672 BUSINESS ADDRESS: STREET 1: 625 E KALISTE SALOOM RD CITY: LAFAYETTE STATE: LA ZIP: 70508 BUSINESS PHONE: 3182370410 MAIL ADDRESS: STREET 1: 625 E KALISTLE SALOOM RD CITY: LAFAYETTE STATE: LA ZIP: 70508 8-K 1 f8k-050201.txt FORM 8-K 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): May 2, 2001 STONE ENERGY CORPORATION (Exact name of registrant as specified in its charter) - -------------------------------- ----------------- ------------------- Delaware 1-12074 72-1235413 (State or other jurisdiction (Commission File (I.R.S. employer of incorporation or organization) Number) identification no.) - --------------------------------- ----------------- ------------------- 625 E. Kaliste Saloom Road Lafayette, Louisiana 70508 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (337) 237-0410 Item 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibit 99 - Press Release dated May 2, 2001 SIGNATURE 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 thereunto duly authorized. STONE ENERGY CORPORATION Date: May 2, 2001 By: /s/ James H. Prince -------------------------- James H. Prince Chief Financial Officer EX-99 2 f8k-exh99.txt EXHIBIT 99 Exhibit 99 Stone Energy Corporation today announced first quarter 2001 net income and net cash flow from operations before working capital changes, excluding non-recurring merger expenses, of $57.7 million, or $2.18 per share, and $115.1 million, or $4.35 per share, respectively. These represent increases of 199% and 119%, respectively, when compared to first quarter 2000 net income of $19.3 million, or $0.74 per share, and net cash flow of $52.5 million, or $2.01 per share. Results for all periods reflect the combination of Stone and Basin. In connection with the Basin merger, which was effective February 1, 2001, Stone incurred non-recurring merger expenses of $25.5 million, or $18.4 million after-taxes. Including the impact of the non-recurring merger expenses, net income for the quarter ended March 31, 2001 totaled $39.3 million, or $1.49 per share, and net cash flow from operations before working capital changes totaled $96.7 million, or $3.66 per share. As a result of higher realized prices, first quarter 2001 oil and gas revenues increased 104% to $143 million, compared to first quarter 2000 oil and gas revenues of $69.9 million. Prices realized during the first quarter of 2001 averaged $29.30 per barrel of oil and $6.66 per Mcf of gas. This represents a 107% increase, on an Mcfe basis, over first quarter 2000 average realized prices of $24.90 per barrel of oil and $2.60 per Mcf of gas. All unit pricing amounts include the effects of hedging. Stone's average daily production rate for the first quarter of 2001 of 256.5 MMcfe was virtually unchanged from 2000's first quarter average daily rate. Oil production during the first quarter of 2001 increased to approximately 1,010,000 barrels compared to first quarter 2000 production of 988,000 barrels, while natural gas production during the first quarter of 2001 totaled approximately 17 billion cubic feet, compared to first quarter 2000 gas production of 17.4 billion cubic feet. On a gas equivalent basis, production volumes for the first quarter of 2001 totaled 23.1 Bcfe compared to first quarter 2000 production of 23.4 Bcfe. Stone's current daily production rate is approximately 290 MMcfe or 13% higher than the first quarter 2001 average daily production rate. Based on current projections, Stone estimates second quarter 2001 average daily production will approximate 281 MMcfe or 10% higher than the average daily production rate achieved during the first quarter of 2001. Normal operating costs during the first quarter of 2001 increased to $10.7 million, compared to $9.2 million for the comparable quarter in 2000, due primarily to industry-wide increases in the costs of oil field products and services. Depreciation, depletion and amortization (DD&A) expense on oil and gas properties for the first quarter of 2001 totaled $36.2 million, or $1.57 per Mcfe. DD&A expense was $26.1 million, or $1.12 per Mcfe, for the first quarter of 2000. On February 1, 2001, Stone retired approximately $48 million of bank debt assumed in the merger with Basin. As a result of the reduction in debt and the increase in capitalized interest on unevaluated properties, interest expense for the first quarter of 2001 decreased to $1.1 million from $2.6 million for the comparable 2000 period. General and administrative expenses for the first quarter of 2001 were unchanged from the 2000 amount of $2.7 million, or $0.12 per Mcfe. The increase in the number of employees eligible to participate in the incentive compensation plan resulted in incentive compensation expense of $0.5 million compared to $0.3 million for the first quarter of 2000. In accordance with SFAS No. 109, "Accounting for Income Taxes," Stone has determined its statutory federal income tax rate to be 35%. However, Stone estimated that approximately $5.2 million of its merger-related expenses were not tax deductible. This resulted in an effective tax rate of 38%. Hedge premium expense of $0.5 million represents the historical cost associated with oil put contracts that settled during the first quarter of 2001. Stone adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," effective January 1, 2001. Under this statement, Stone's current hedge instruments are considered effective cash flow hedges. To the extent hedges are effective, changes in fair value of the hedge instruments are reflected in other comprehensive income. Stone has not entered into any hedging contracts subsequent to the combined hedging contracts disclosed in its 2000 Form 10-K. Stone Energy's 2001 capital expenditures budget, excluding acquisitions, is currently $270 million for properties it owns. Capital expenditures during the first quarter of 2001 totaled $102.1 million, including $3.1 million of capitalized general and administrative expenses and $1.5 million of capitalized interest. These investments were financed by cash flow from operations and working capital. During the first quarter of 2001, Stone drilled 23 successful wells, including three wells currently drilling with logged pay, and four dry holes. Stone has spudded 10 wells during the second quarter of 2001. To date, six of these second quarter wells are drilling, including three with logged pay, three wells are shut-in awaiting completion and/or facilities and one well was a dry hole. Through May 2, 2001, Stone has spudded 37 of the 73 planned wells for 2001. With 29 discoveries and five dry holes, Stone has achieved an 85% drilling success rate. Of the 29 discoveries that have been made in 2001, 16 are currently producing, seven are shut-in awaiting completion and/or facilities and six wells are drilling with logged pay. The following is an update of certain ongoing operations: VERMILION BLOCK 255. Drilling operations continue at a depth of 16,270 feet at an open water location on the third well on the Indigo project. The OCS-G 2082 No. J-4 Well has encountered 483 net feet of pay in nine sands between 10,315 and 16,120 feet. Casing has been run across eight of the productive sands and drilling is in progress toward a planned total depth of 17,455 feet to evaluate an undrilled area on the southeast flank of the field downthrown to a major fault. Stone increased the planned total depth of the well to test for oil and gas in deeper sands that produce in the field on separate structures to the north at shallower depths along the same fault system. After drilling is completed on the J-4 Well, Stone has budgeted one additional well from this surface location to test the Medusa prospect, a planned 10,725 foot test for attic gas reserves on the west flank of the Indigo project area. Installation of the "J" production platform over the four wells is planned for the third quarter of 2001. Production from the four wells is expected to begin during the fourth quarter of 2001. Stone is the operator and has working interests between 66.7% and 83.3% (55.2% to 69% NRI) in the Indigo project. WEST DELTA BLOCK 121/122. As previously announced, Stone participated in the drilling of the OCS-G 13645 No. A-9 Well which encountered 443 net feet of pay in seven sands in a previously untested fault block on the northeast flank of the salt dome that traps production in the field. The success of the A-9 Well proves potential on the east flank of the dome which is only partially drilled in the deep, normally pressured sand section. The initial completion, from the lowest sand accessible in the well, is flowing at a gross daily rate of 18.4 million cubic feet of gas and 464 barrels of condensate with a flowing tubing pressure of 3,137 PSI. Stone has a 25% working interest and a 17.7% NRI in the well. The operator has skidded the rig and is drilling the OCS-G 19843 No. A-10 Well, a planned 16,064 foot test of field pay sands in an undrilled fault block on the northwest flank of the dome. Stone has a 32.9% working interest and a 26.6% NRI in the well. The lower 1,000 feet of the A-9 Well, containing 115 feet of net pay, was lost because of stuck pipe before drilling all of the objective section. The operator plans to drill another well during 2001 to access these reserves along with shallower objectives that were untested when the No. A-9 Well drilled through salt. The operator has also proposed to sidetrack the OCS-G 13645 No. A-8 Well to a depth of 9,252 feet. All of the operations discussed above have been, or will be, conducted from the West Delta Block 122 "A" Platform, which Stone expects will allow for the timely commencement of production. VERMILION BLOCK 46. The OCS-G 0079 No. 7 Well on the Spec prospect was completed in the deepest of 11 pay sands encountered during drilling. The well tested at a daily rate of 9.5 million cubic feet of gas and 375 barrels of condensate with a flowing tubing pressure of 6,358 PSI. Due to the fine-grained nature of the reservoir rock, Stone employed the first fracturing and sand proppant completion in the field as a means to achieve higher sustainable production rates. The 15,300 foot sand has produced over 31 billion cubic feet of gas from two wells and one reservoir, but at low average rates. First production from the No. 7 Well was April 28, 2001. Stone has identified a number of offset drilling locations in adjacent fault blocks to develop the 15,300 foot sand using sand frac completions. After completing the No. 7 Well, drilling operations commenced on the OCS-G 0079 No. 8 Well. The No. 8 Well was drilled to develop new reserves encountered in the No. 7 Well. Completion operations are in progress and first production from the No. 8 Well is expected in mid-May 2001. Stone is the operator of the field and has an 85% working interest (71.6% NRI) in both wells. EUGENE ISLAND BLOCK 243. Drilling and completion operations have concluded on the OCS-G 2899 No. D-3 Well on the Narwhal prospect. The well was drilled to a total depth of 14,263 feet and encountered 54 net feet of pay in three sands. A completion in the deepest pay sand tested at the daily rate of 9.5 million cubic feet of gas and 500 barrels of condensate with a flowing tubing pressure of 6,820 PSI. First production from the D-3 Well is expected in June 2001 following the installation of the A auxiliary platform. The A auxiliary platform, which will have six slots for future drilling, will increase field production capacity and will process production from the recently completed D-3 Well and the D-1 Well, which is shut-in due to capacity limitations. Stone has budgeted two additional wells in the field during 2001. The No. A-8 and A-9 Wells will be drilled from the A auxiliary platform. The No. A-8 Well will evaluate the Hook prospect, designed to test upper "O" sands by entering the fault block at a shallower depth in the same fault trap proven productive by the deeper A-7 Well. The A-9 Well is designed as a horizontal test to evaluate shallow gas sands encountered in numerous wells but not previously produced in the field. Stone is the operator of the field and has a 91% working interest (73% NRI). SOUTH PELTO BLOCK 23. The recent successful recompletion of the OCS-G 1238 No. D-2 Well has provided the first take point from the X-2 sand. The well is currently flowing at a gross rate of 19 million cubic feet of gas and 1,341 barrels of condensate per day. This is only the second recompletion of the five deep wells on the block. Three of the deep wells are still producing from their original completions and all have produced in excess of original estimates. LAFITTE FIELD - JEFFERSON PARISH, LOUISIANA. On April 15, 2001, Stone spudded the Rigolets No. B-1 Well, the initial test of the Troon prospect. The well drilled to 12,166 feet in a directional hole and logged 74 net feet of pay in two sands. Evaluation of the well is in progress to be followed by casing the open hole before drilling ahead to the planned total depth of 12,904 feet. The Troon prospect is located in a complexly faulted portion of the field which has been partially drilled. The trapping fault for the logged productive sands had not previously been tested and provides a prospective trap for deeper sands. Stone is the operator of the field and has a 51% working interest (38.3%NRI) in the Troon prospect. Stone Energy has planned a conference call for 3:00 p.m. CDT on Thursday, May 3, 2001 to discuss the operational and financial results for the first quarter of 2001. Anyone wishing to participate should dial 1-800-248-9412 and request the "Stone Energy Call." Stone Energy is an independent oil and gas company headquartered in Lafayette, Louisiana, and is engaged in the acquisition, exploitation and operation of oil and gas properties located in the Gulf Coast Basin and Rocky Mountains. For additional information, contact James H. Prince, Chief Financial Officer at 337-237-0410-phone, 337-237-0426-fax or via e-mail at princejh@StoneEnergy.com. Certain statements in this press release are forward-looking and are based upon the Company's current belief as to the outcome and timing of future events. All statements, other than statements of historical facts, that address activities that the Company plans, expects, budgets, believes, projects, estimates or anticipates will, should or may occur in the future, including future production of oil and gas, future capital expenditures and drilling of wells and future financial or operating results, are forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include the timing and extent of changes in commodity prices for oil and gas, operating risks and other risk factors as described in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company's actual results and plans could differ materially from those expressed in the forward-looking statements. STONE ENERGY CORPORATION SUMMARY STATISTICS (In thousands, except per share/unit amounts) (Unaudited) Three Months Ended March 31, --------------------------------------------------------------------- 2001 2000 ----------------------------------------------- ----------------- Excluding As Reported Selected Item (1) As Reported --------------------- ---------------------- ----------------- TOTAL AMOUNTS Net income $39,259 $57,653 $19,289 Net income before taxes 63,174 88,697 27,342 Net cash flow from operations (2) 96,680 115,074 52,523 EBITDA (3) 100,885 126,408 56,497 TOTALS PER SHARE Net income $1.49 $2.18 $0.74 Net income before taxes 2.39 3.36 1.05 Net cash flow from operations (2) 3.66 4.35 2.01 EBITDA (3) 3.82 4.78 2.17 Three Months Ended March 31, ---------------------------------- 2001 2000 ------------ ------------- PRODUCTION QUANTITIES (4) Oil (MBbls) 1,010 988 Gas (MMcf) 17,025 17,423 Oil and gas (MMcfe) 23,085 23,351 AVERAGE DAILY PRODUCTION (4) Oil (MBbls) 11.2 10.9 Gas (MMcf) 189.2 191.5 Oil and gas (MMcfe) 256.5 256.6 SALES DATA (4) (5) Total oil sales $29,588 $24,598 Total gas sales 113,406 45,330 Total sales 142,994 69,928 AVERAGE SALES PRICES (4) (5) Oil (per Bbl) $29.30 $24.90 Gas (per Mcf) 6.66 2.60 Per Mcfe 6.19 2.99 COST DATA Operating costs $10,682 $9,172 General and administrative 2,724 2,719 DD&A on oil and gas properties 36,236 26,081 AVERAGE COSTS (per Mcfe) Operating costs $0.46 $0.39 General and administrative 0.12 0.12 DD&A on oil and gas properties 1.57 1.12 AVERAGE SHARES OUTSTANDING - Diluted 26,437 26,092 (1) Excludes non-recurring merger expenses of $25,523, or $18,394 after taxes. (2) Excludes working capital changes. (3) EBITDA represents earnings before interest, taxes and depreciation, depletion and amortization. (4) Includes net daily production of 7.3 MMcf at $2.24 per Mcf associated with the amortization of a volumetric production payment. (5) Includes the effects of hedging.
STONE ENERGY CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS AND NET CASH FLOW INFORMATION (In thousands) (Unaudited) Three Months Ended March 31, --------------------- 2001 2000 --------- ---------- STATEMENT OF OPERATIONS Revenues Oil and gas production ....................... $ 142,994 $ 69,928 Other income ................................. 1,007 941 --------- -------- Total revenues ...................... 144,001 70,869 --------- -------- Expenses Normal lease operating expenses .............. 10,682 9,172 Major maintenance expenses ................... 1,347 548 Production taxes ............................. 1,862 1,681 Depreciation, depletion and amortization ..... 36,636 26,513 Interest ..................................... 1,075 2,642 General and administrative costs ............. 2,724 2,719 Incentive compensation plan .................. 523 252 Hedge premium expense ........................ 455 -- Merger expenses .............................. 25,523 -- --------- -------- Total expenses ...................... 80,827 43,527 --------- -------- Net income before income taxes .................. 63,174 27,342 --------- -------- Provision for income taxes Current ...................................... 2,726 -- Deferred ..................................... 21,189 8,053 --------- -------- 23,915 8,053 --------- -------- Net income ...................................... $ 39,259 $ 19,289 ========= ======== NET CASH FLOW INFORMATION Net income ...................................... $ 39,259 $ 19,289 DD&A ............................................ 36,636 26,513 Deferred taxes .................................. 21,189 8,053 Non-cash effects of production payments ......... (1,585) (1,336) Other non-cash items ............................ 1,181 4 --------- -------- Net cash flow from operations excluding working capital changes .............................. $ 96,680 $ 52,523 ========= ======== STONE ENERGY CORPORATION CONSOLIDATED BALANCE SHEET (In thousands) (Unaudited) March 31, December 31, 2001 2000 ------------- ------------ ASSETS Current assets: Cash and cash equivalents ................... $ 35,017 $ 78,557 Marketable securities ....................... 300 300 Accounts receivable ......................... 94,543 95,722 Put contracts ............................... 4,226 1,847 Other current assets ........................ 917 2,916 -------- --------- Total current assets .................... 135,003 179,342 Oil and gas properties, net Proved ...................................... 742,055 691,882 Unevaluated ................................. 70,202 55,691 Building and land, net ............................. 5,243 4,914 Fixed assets, net .................................. 4,820 4,441 Put contracts ...................................... 6,304 3,152 Other assets, net .................................. 6,318 4,681 -------- --------- Total assets ................................ $969,945 $ 944,103 ======== ========= LIABILITIES AND EQUITY Current liabilities: Accounts payable to vendors ................. $ 88,479 $ 83,423 Undistributed oil and gas proceeds .......... 47,489 32,858 Fair value of swap contracts ................ 18,029 -- Other accrued liabilities ................... 6,182 9,996 -------- --------- Total current liabilities ............... 160,179 126,277 Long-term debt ..................................... 100,000 148,000 Production payments ................................ 9,209 10,906 Deferred tax liability ............................. 85,450 64,271 Fair value of swap contracts ....................... 12,463 -- Other long-term liabilities ........................ 1,572 2,418 -------- --------- Total liabilities ........................... 368,873 351,872 -------- --------- Common stock ....................................... 260 260 Additional paid in capital ......................... 441,282 440,729 Retained earnings .................................. 190,501 151,242 Other comprehensive loss ........................... (30,971) -- -------- --------- Total equity ................................ 601,072 592,231 -------- --------- Total liabilities and equity ................ $969,945 $ 944,103 ======== ========= -----END PRIVACY-ENHANCED MESSAGE-----