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IPAA Oil and Gas Investment Symposium April 20, 2004

IPAA Oil and Gas Investment Symposium April 20, 2004. NASDAQ: PETD. Forward-Looking Statements.

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IPAA Oil and Gas Investment Symposium April 20, 2004

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  1. IPAA Oil and Gas Investment Symposium April 20, 2004 NASDAQ: PETD

  2. Forward-Looking Statements This information contains predictions, estimates and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those included in the forward-looking statements include the timing and extent of changes in commodity prices for oil and gas, the need to develop and replace reserves, environmental risks, drilling and operating risks, risks related to exploration and development, uncertainties about the estimates of reserves, competition, government regulation and the ability of the company to meet its stated business goals.

  3. Financial Highlights • Record fourth quarter and full year revenue • Record fourth quarter and full year net income • Long-term debt at year end $53 million • Up from $25 million in 2002 • Total oil and gas property capital expenditures for year of $70.7 million • Fourth quarter expenditures included $11.2 million for 2 acquisitions

  4. Major Sources and Uses of Cash • Sources • Adjusted Cash Flow* from Operations- $46.2 million • Borrowing- $28 million • Uses • Drilling and development- $30.6 million • Acquisitions - $40.1 million • Stock Repurchase- $749,000 *Adjusted Cash Flow is Net Income plus non-cash charges (Depreciation, Depletion and Amortization and Deferred Income Taxes)

  5. Revenue • Fourth Quarter Revenue of $59.5 million • $37.6 million in 2002 • Revenue reflects higher O&G prices, increased production and more drilling activity • Full year Revenue up to $202.9 million from $135.3 million in 2002 • Three quarters of revenue from Williams purchase • Only fourth quarter production from other acquisitions 4th Quarter

  6. Net Income • Fourth Quarter Net Income of $8.0 million • $3.0 million in 2002 • $0.49 per share compared to $0.20 in 2002 (diluted) • 2003 Net Income of $22.6 million • $9.3 million in 2002 • $1.39 per share vs. $0.58 in 2002 • Previous high EPS $0.90 in 2001 $ Millions 4th Quarter

  7. Adjusted Cash Flow $ Millions • Fourth Quarter 2003 Adjusted Cash Flow of $16.1 million • Up from $6.9 million in 2002 • Full year Adjusted Cash Flow of $46.3 million • Up from $24.3 million in 2002 • Adjusted Cash Flow is income before deferred income taxes, depreciation, depletion and amortization • Management believes Adjusted Cash Flow is a useful measure in estimating the value of the company’s operations 4th Quarter

  8. 2003 Operating Highlights • Production 10.4 Bcfe, up almost 34% year-to–year • Fourth quarter up 60% compared to fourth quarter of 2002 • Rocky Mountain Region production increased 90% year-to-year (12 months) • Rocky Mountain Region produced 63% of total • Acquisition of producing properties from Williams Production RMT Company added 26 Bcf to estimated reserves • Purchases include Williams properties effective April 1, 2003 and two fourth quarter purchases • 111 wells drilled in 2003 vs. 70 in 2002 • 100% drilling success on 110 gross development wells • All development wells were in Colorado • Alabama exploratory dry hole cost $332,000

  9. Core Operating Areas Rocky Mountains 2003 Proved Reserves: 131.6 Bcfe 2003 Production: 6.6 Bcfe 2002 Production: 3.5 Bcfe Michigan Basin 2003 Proved Reserves: 25.6 Bcfe 2003 Production: 1.9 Bcfe 2002 Production: 2.2 Bcfe Appalachian Basin 2003 Proved Reserves: 42.0 Bcfe 2003 Production: 1.9 Bcfe 2002 Production: 2.1 Bcfe

  10. D-J Basin WMB Properties 2003 Acquisitions • Three major acquisitions completed in 2003 • Williams acquisition effective April 1 • Interests in 166 wells, most operated • Purchase price $28 million ($1.08/Mcfe) • Estimated 26 billion cubic feet (Bcf) of proved reserves • Average daily production of between 5 and 6 million cubic feet • Two fourth quarter acquisitions • Total cost $11.2 million • Estimated 9.4 Bcfe of proved reserves • Also includes development acreage Denver

  11. Production Bcfe • Fourth Quarter 2003 production of 3.14 Bcfe • Up 60.2% from 1.98 Bcfe in Q4 2002 • 83% natural gas • Full year 2003 production 10.45 Bcfe • Up 33.6% from 7.82 Bcfe in 2002 4th Quarter

  12. Regional Production Trends • Rocky Mountain region was 2003 growth area • Drilling focus in 2004 will continue in Rocky Mountain Denver-Julesburg & Piceance Basins • Williams acquisition and Codell recompletions were major contributors • Rocky Mountain region produced 63% of production in 2003 • Up from 44% in 2002 4th Quarter

  13. CIG as % of NYMEX

  14. Quarterly Production Trends 1999 2000 2001 2002 2003

  15. Geographic Diversity • Drilling and acquisition focus is Rocky Mountain Region • No drilling planned for Appalachian Basin and Michigan • Will consider acquisitions • Continue to seek low risk development opportunities in Rocky Mountain Region and other areas

  16. Sustaining Growth • Investments in 2003 included: • Drilling, Codell recompletions, and other capital assets- $30.6 million • Acquisitions- $40.1 million • Debt at year end- $53 million • Total available credit over $80 million • PDC has hundreds of economically attractive development opportunities in its two Colorado areas • We continue to search for additional acquisition opportunities • Three partnerships closed with maximum subscriptions, record program sales of 2003 partnerships totaled $78.3 million • Total partnership sales in 2002 of $55 million • Plan to offer up to $100 million in 2004

  17. 2004 Drilling Plans • Rockies: Plan drilling in Wattenberg & Piceance • Funds split equally between areas • About 3-4 Wattenberg wells per Piceance well • PDC will have a 20% interestin partnerships • Continue search for additional development opportunities • 110 successful development wells drilled in 2003 with no dry holes. • 90 in Wattenberg Field and 20 in Piceance Basin • One Exploratory dry hole testing potential development area (2003 write-off of $332,000)

  18. IPAA Oil and Gas Investment Symposium April 20, 2004 NASDAQ: PETD

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