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Kerr-McGee, Noble post third quarter profits Independents climb out of hole after losing financial performances a year ago Petroleum News
Exploration and production independents Kerr-McGee and Noble Energy, which reported losing financial performances a year ago, turned it around in the 2003 third-quarter, the companies said Oct. 29.
Oklahoma-based Kerr-McGee posted net income of $28.8 million or 29 cents per share in the third quarter, compared to a loss from continuing operations of $86.8 million or 86 cents per share for the year-ago quarter. The company reported cash flow from operations totaling $1.2 billion for the first three quarters of 2003, up 14 percent from last year. It achieved results even with the sale of non-core assets representing about 15 percent of last year’s oil and gas production volumes.
“We will continue to focus on cost containment in all of our operations as we concentrate on value-adding exploration, acquisition and divestiture opportunities,” said Luke Corbett, Kerr-McGee’s chief executive officer. Sale of non-core assets has impact Kerr-McGee’s daily oil production for the 2003 third quarter averaged 141,000 barrels, versus 192,900 barrels for the prior-year period. The decrease was attributed to the sale of nearly $1 billion of non-core producing properties.
The average sales price for oil, including effects of the company’s hedging program, was $25.76 per barrel, up from $23.38 per barrel for the same third quarter period last year, the company said.
Daily volumes of natural gas averaged 699 million cubic feet in the 2003 third quarter, compared with 789 million cubic feet for the same 2002 quarter.
The average sales price for the 2003 third quarter, including the effects of the company’s hedging program, was $4.20 per thousand cubic feet, a 51 percent increase from the 2002 third quarter.
Sales from continuing operations totaled $1 billion for the 2003 third quarter, compared with $965 million for the 2002 third quarter. Capital expenditures were $267.6 million versus $293.7 million for the same period last year. Noble’s cash flow up 33% Houston-based Noble Energy reported 2003 third-quarter net income of $35.1 million, or 62 cents per share, compared to a net loss of $1.2 million, or 2 cents per share, for the same period last year. Discretionary cash flow increased 33 percent to $153.2 million compared to $115.2 million for the year-ago period.
Excluding the effect of the after-tax gain on disposition of assets and the write down of assets held for sale, Noble’s net income would have been $40.6 million, or 72 cents per share, the company said Oct. 29. Lower exploration costs a factor Noble attributed the increase in net income and discretionary cash flow mainly to higher commodity prices and lower exploration expense during the third quarter.
Increased production also contributed to strong year-on-year financial and operating improvements, the company said.
“The continuing strong commodity price environment has significantly enhanced our financial results,” said Charles Davidson, Noble’s chief executive officer.
The company’s realized natural gas prices for the third quarter 2003 were $4.10 per thousand cubic feet, 50 percent above last year’s $2.73. Realized oil prices were $27.49 per barrel, an increase of 5 percent compared to $26.19 per barrel for the third quarter 2002.
Reported production — net of adjustments for discontinued operations — was 90,236 barrels of oil equivalent per day, an increase of 4 percent compared to 86,807 barrels per day of equivalent for the same period last year. Increase comes from China, Ecuador The increase in volumes was attributed to the start-up of production in China and a substantial increase in production volumes in Ecuador, partially offset by lower domestic and North Sea volumes.
As a result of property sales, overall production declined by about 950 barrels per day of equivalent compared to the 2003 second quarter, Noble said.
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