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|Stone Energy Corporation Announces First Quarter 2012 Results|
For the first quarter of 2012, Stone reported net income of
Daily production during the first quarter of 2012 averaged 41.0 thousand barrels of oil equivalent (MBoe) per day (246 million cubic feet of gas equivalent (MMcfe) per day), compared with daily production of 36.0 MBoe (216 MMcfe) per day in the fourth quarter of 2011, and daily production of 36.2 MBoe (217 MMcfe) per day in the first quarter of 2011. First quarter of 2012 production mix was 50% oil, 5% natural gas liquids (NGL), and 45% natural gas.
Beginning in the first quarter of 2012, Stone began capturing and reporting natural gas liquids volumes and revenues separate from gas volumes. In the past, Stone reported "wet" gas volumes, which included the NGL volumes, and provided for a positive upward adjustment in the realized natural gas price. Stone will now report NGL and "dry" gas (shrunk for removal of liquids) volumes due to its rising NGL volumes. Reporting NGL and "dry" gas volumes separately yields a slight increase in overall equivalent volumes when compared to reporting "wet" gas volumes.
Prices realized during the first quarter of 2012 averaged
Lease operating expenses during the first quarter of 2012 totaled
Depreciation, depletion and amortization (DD&A) on oil and gas properties for the first quarter of 2012 totaled
Salaries, general and administrative (SG&A) expenses for the first quarter of 2012 were
Capital expenditures before capitalized SG&A and interest during the first quarter of 2012 were approximately
Upon completion of the offering, our borrowing base under our bank credit facility was automatically reduced from $400 million to $310 million. On
La Cantera (
Pompano Field (
Garden Banks 293 – Pyrenees (
Green Canyon 490 – Wideberth (
Green Canyon 823 –
Conventional Shelf. Drilling commenced on the second well of the 4-5 well program at the Ship Shoal 113 field. The first prospect, Smokin Rooster, was successful encountering 95 feet of pay with first production expected in May. The second prospect, Jointed Thunderstick, is currently drilling at 7,700 feet. The Lionfish prospect at South Pelto 23 is currently being completed with first production expected by early June.
Lighthouse Bayou Deep Prospect (
Guidance for the second quarter and full year 2012 has been updated (updated figures are italicized) and is shown in the table below. The guidance is subject to all the cautionary statements and limitations described below and under the caption "Forward Looking Statements."
The following table illustrates our derivative positions for 2012, 2013 and 2014 as of
In addition, as previously announced,
Non-GAAP Financial Measures
In this press release, we refer to a non-GAAP financial measure we call "discretionary cash flow." Management believes discretionary cash flow is a financial indicator of our company's ability to internally fund capital expenditures and service debt. Management also believes this non-GAAP financial measure of cash flow is useful information to investors because it is widely used by professional research analysts in the valuation, comparison, rating and investment recommendations of companies in the oil and gas exploration and production industry. Discretionary cash flow should not be considered an alternative to net cash provided by operating activities or net income, as defined by GAAP. Please see the "Reconciliation of Non-GAAP Financial Measure" for a reconciliation of discretionary cash flow to cash flow provided by operating activities.
Forward Looking Statements
Certain statements in this press release are forward-looking and are based upon Stone's current belief as to the outcome and timing of future events. All statements, other than statements of historical facts, that address activities that Stone plans, expects, 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, liquidity risks, political and regulatory developments and legislation, including developments and legislation relating to our operations in the Gulf of
Estimates for Stone's future production volumes are based on assumptions of capital expenditure levels and the assumption that market demand and prices for oil and gas will continue at levels that allow for economic production of these products. The production, transportation and marketing of oil and gas are subject to disruption due to transportation and processing availability, mechanical failure, human error, hurricanes and numerous other factors. Stone's estimates are based on certain other assumptions, such as well performance, which may vary significantly from those assumed. Delays experienced in well permitting could affect the timing of drilling and production. Lease operating expenses, which include major maintenance costs, vary in response to changes in prices of services and materials used in the operation of our properties and the amount of maintenance activity required. Estimates of DD&A rates can vary according to reserve additions, capital expenditures, future development costs, and other factors. Therefore, we can give no assurance that our future production volumes, lease operating expenses or DD&A rates will be as estimated.