HOUSTON, Nov. 4 /PRNewswire-FirstCall/ -- Endeavour International
Corporation (NYSE Amex: END) (LSE:ENDV) today reported
discretionary cash flow for the third quarter of 2009 of $7.6
million and net income (loss), as adjusted, of $(6.4) million. For
the nine months ended September 30, 2009, discretionary cash flow
was $50.0 million and net income (loss), as adjusted, was $27.5
million. "We continue to make significant progress on our
developments in the United Kingdom and build momentum on our
initiatives in the United States," said William L. Transier,
chairman, chief executive officer and president. "Our third quarter
operating results were challenged by planned and unplanned downtime
in the North Sea, especially on Goldeneye. We expect the fourth
quarter to return to more normal levels." On a GAAP basis, net
income (loss) to common stockholders was ($7.2) million for the
third quarter of 2009 as compared to $75.5 million in the same
quarter in 2008. On a GAAP basis, net income (loss) to common
stockholders was ($19.6) million for the nine months ended
September 30, 2009 as compared to ($10.7) million in the same
period in 2008. Highlights for the third quarter are as follows:
Debt repayment - During 2009, Endeavour has repaid bank debt of $65
million using cash from operations and proceeds from the sale of
Norwegian assets. The mid-year redetermination resulted in no
required repayments. As developments in the United Kingdom progress
and the Field Development Plan (FDP) filing and approval process
continues, the company is engaged with its bank group to expand
current borrowing arrangements to include a typical development
facility providing additional funding flexibility. Acquisition of
working interest in five fields in the United States - Endeavour
has acquired 50 percent of the working interest owned by Cohort
Energy Company, a subsidiary of J-W Operating Company, in 24 wells
located in five fields and certain proved undeveloped locations
associated with the proved developed assets in North Louisiana and
East Texas for $15 million. Endeavour estimates that net proved
producing reserves associated with these assets are 4.3 billion
cubic feet equivalent of natural gas and that total net proved
reserves are 13.1 billion cubic feet equivalent with inclusion of
proved undeveloped locations. Net production acquired is currently
3.9 million cubic feet per day of natural gas or 650 barrels of oil
equivalent per day. Continued exploration and appraisal drilling in
the United Kingdom - Endeavour is scheduled to drill two
exploratory wells in late 2009 or early 2010 and two appraisal
wells in the North Sea during the first half of next year. The
activities include: -- Two wells are planned for the Cygnus field
to appraise the gas potential of the western half of the field. The
wells have the potential to double the size of the estimated
recoverable reserves from the previous exploration and appraisal
activities now estimated at 535 billion cubic feet. Endeavour has a
12.5 percent interest in the field. -- The company has entered into
a farm-in agreement with Nexen Petroleum U.K. Limited to drill the
Deacon prospect in Block 15/28c with a spud date anticipated as
early as the fourth quarter. The well will test a Jurassic prospect
in the company's R-block area of the North Sea with an estimated
volume of up to 60 million barrels of condensate. Endeavour holds
10 percent interest in the prospect. -- The Platypus exploratory
well in Block 48/1 is slated for drilling in early 2010. The
prospect will test the Rotliegendes formation with an estimated
volume of up to 80 billion cubic feet of natural gas. Endeavour
holds a 25 percent interest in the prospect. Onshore activity in
the United States - Endeavour currently has underway drilling
projects in New Mexico and Texas. -- Three wells are at various
stages of maturity in the emerging Wolfcamp oil play in Southeast
New Mexico. Endeavour holds a 42 percent net revenue interest in
the wells. -- The Lucky Penny well has been completed and is
currently producing. -- The Moore Bailout well has been drilled and
is currently flow testing. -- The Bada Bing well is currently
drilling. -- Additional testing has been approved for the Armour
Runnels #1 exploration well located in Matagorda County in South
Texas. The shallower Middle Wilcox section has up to eight stage
tests planned that will involve flow testing and procedures to
stimulate production. Endeavour holds a seven percent net revenue
interest. Ongoing progress in development of three new fields in
the North Sea - Work continues on the development of three
discoveries following successful appraisal programs that heightened
the potential of the fields: -- Rochelle - The development project
is progressing strongly and the FDP filing is expected in December
2009. Production is expected to begin in the second quarter of
2011. Endeavour holds a 55.6 percent interest in the development
and is the operator. -- Cygnus - Following the successful appraisal
of the eastern area of the field early in 2009, the development
project is progressing well with production from the first phase
expected to begin mid 2011. The two appraisal wells in the western
half in early 2010 will provide data to scale the facilities in the
second and third phases of the development. -- Columbus - Having
now identified the most likely export host facility, the
development project is progressing with production expected in
2012. Endeavour holds a 25 percent interest in the development.
2009 Outlook The table below sets forth a range of estimates for
the company's operating statistics for the full year ending
December 31, 2009 following the completion of the sale of Norwegian
assets. Estimated Average Production (A) Daily Production (BOE per
day) 4,000 to 5,000 Differentials (B) Oil ($/Bbl) $(5.50) to
$(6.50) Gas($Mcf) $(0.10) to $(0.20) Gas percentage of Total 50% to
55% Lease Operating Expense ($per barrel) $9.50 to $12.00 (A)
Actual results may differ materially from these estimates. (B) For
purposes of the estimates, assumptions of price differentials are
based on location, quality and other factors, excluding the effects
of derivative financial instruments. Gas price differentials are
stated as premiums (discounts) from National Balancing Point
pricing, and oil price differentials are stated as premiums
(discounts) from Dated Brent pricing Earnings Conference Call
Today, Wednesday, November 4, 2009 at 9:00 a.m., Central Standard
Time, 3:00 p.m. Greenwich Mean Time Endeavour will host an analyst
conference call and web cast today, Wednesday, November 4, 2009, to
discuss its 2009 third quarter financial and operating results at 9
a.m. Central Standard Time, 3 p.m. Greenwich Mean Time. To
participate and ask questions during the conference call, dial the
local country telephone number and the confirmation code 68628760.
The toll-free numbers are 888-713-4217 in the United States and
080-8234-7616 in the United Kingdom. Other international callers
should dial 617-213-4869 (tolls apply). To listen only to the live
audio web cast access Endeavour's home page at
http://www.endeavourcorp.com/. A replay will be available beginning
at 12:00 p.m. Central Standard Time on November 4 through 12:00
p.m. on November 11 by dialing toll free 888-286-8010 (U.S.) or
617-801-6888 (international), confirmation code 52548682 Endeavour
International Corporation is an oil and gas exploration and
production company focused the development, exploration and
acquisition of energy reserves in the North Sea and the United
States. For more information, visit http://www.endeavourcorp.com/.
Additional information for investors: Certain statements in this
press release are forward-looking and are based upon Endeavour's
current belief as to the outcome and timing of future events. All
statements, other than statements of historical facts that address
an activity that Endeavour 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 and
other risk factors as described in Endeavour's Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q as filed with the
Securities and Exchange Commission (SEC). Should one or more of
these risks or uncertainties occur, or should underlying
assumptions prove incorrect, Endeavour's actual results and plans
could differ materially from those expressed in the forward-looking
statements. The SEC permits oil and gas companies, in their filings
with the SEC, to disclose only proved reserves that a company has
demonstrated by actual production or conclusive formation tests to
be economically and legally producible under existing economic and
operating conditions. Endeavour is also subject to the requirements
of the London Stock Exchange and considers the disclosures in this
release to be appropriate and/or required under the guidelines of
that exchange. We may use certain terms, such as probable, possible
and potential reserves or resources, that the SEC's guidelines
strictly prohibit us from including in our filings with the SEC.
These estimates are by their nature more speculative than estimates
of proved reserves and accordingly are subject to substantially
greater risk of being actually realized by Endeavour. Potential
resources may not constitute reserves within the meaning of the
Society of Petroleum Engineer's Petroleum Resource Management
System and does not include any proved reserves. Actual quantities
that may be ultimately recovered from Endeavour's interests may
differ substantially. Factors affecting ultimate recovery include
oil and gas pricing, the scope of our ongoing drilling program,
which will be directly affected by the availability of capital,
drilling and production costs, availability of drilling services
and equipment, drilling results, transportation constraints,
regulatory approvals and other factors; and actual drilling
results, including geological and mechanical factors affecting
recovery rates. Investors are urged to consider closely the
disclosure in our Form 10-K and each of our Form 10-Qs, available
free of charge on our internet site
(http://www.endeavourcorp.com/). You can also obtain these forms
from the SEC on the SEC's internet site (http://www.sec.gov/) or by
calling 1-800-SEC-0330. Endeavour International Corporation
Condensed Consolidated Balance Sheets (Unaudited) (Amounts in
thousands) September 30, December 31, 2009 2008 ---- ---- Assets
Current Assets: Cash and cash equivalents $77,805 $31,421
Restricted cash 374 20,739 Accounts receivable 12,185 22,325
Prepaid expenses and other current assets 18,781 42,194 Current
assets of discontinued operations - 16,726
----------------------------------------- --- ------ Total Current
Assets 109,145 133,405 Property and Equipment, Net 243,834 232,346
Goodwill 211,886 213,949 Other Assets 5,964 9,165 Long Term Assets
of Discontinued Operations - 148,605
------------------------------------------- --- ------- Total
Assets $570,829 $737,470 ============ ======== ======== Liabilities
and Stockholders' Equity Current Liabilities: Accounts payable
$12,725 $38,630 Current maturities of debt - 13,000 Accrued
expenses and other 23,157 36,641 Current liabilities of
discontinued operations - 22,232
----------------------------------------- --- ------ Total Current
Liabilities 35,882 110,503 Long-Term Debt 169,656 214,855 Deferred
Taxes 69,847 67,299 Other Liabilities 68,426 55,791 Long-term
Liabilities of Discontinued Operations - 46,051
------------------------------------------------ --- ------ Total
Liabilities 343,811 494,499 Commitments and Contingencies Series C
Convertible Preferred Stock (Liquidation 125,000 125,000
Stockholders' Equity: 102,018 117,971 --------------------- -------
------- Total Liabilities and Stockholders' Equity $570,829
$737,470 ========================================== ========
======== Endeavour International Corporation Condensed Consolidated
Statement of Operations (Unaudited) (Amounts in thousands, except
per share data) Three Months Ended Nine Months Ended September 30,
September 30, ------------- ------------- 2009 2008 2009 2008 ----
---- ---- ---- Revenues $7,759 $44,160 $42,179 $145,312 Cost of
Operations: Operating expenses 3,876 7,154 14,455 23,681
Depreciation, depletion and amortization 5,646 14,856 24,828 53,247
Impairment of oil and gas properties - - 30,645 - General and
administrative 4,091 4,064 12,041 11,617 --------------------------
----- ----- ------ ------ Total Expenses 13,613 26,074 81,969
88,545 -------------- ------ ------ ------ ------ Income (Loss)
From Operations (5,854) 18,086 (39,790) 56,767 ------------------
------ ------ -------- ------ Other Income (Expense): Derivatives:
Realized gains (losses) 7,530 (13,631) 28,581 (31,276) Unrealized
gains (losses) (4,360) 119,089 (38,455) (41,239) Interest expense
(3,919) (4,694) (12,054) (18,489) Interest income and other 1,402
2,863 (6,932) 2,834 ------------------------- ----- ----- ------
----- Total Other Income (Expense) 653 103,627 (28,860) (88,170)
--------------------------- --- ------- -------- -------- Income
(Loss) Before Income Taxes (5,201) 121,713 (68,650) (31,403) Income
Tax Expense (Benefit) (441) 57,736 (10,477) (9,195)
--------------------------- ---- ------ -------- ------ Income
(Loss) from Continuing Operations (4,760) 63,977 (58,173) (22,208)
Discontinued Operations, net of tax: Income (loss) from operations
- 14,219 (774) 19,588 Gain on sale 277 - 47,420 - ------------ ---
--- ------ --- Income from Discontinued Operations 277 14,219
46,646 19,588 ------------------------ --- ------ ------ ------ Net
Income (Loss) (4,483) 78,196 (11,527) (2,620) Preferred Stock
Dividends 2,696 2,709 8,061 8,113 ------------------------- -----
----- ----- ----- Net Income (Loss) to Common Stockholders $(7,179)
$75,487 $(19,588) $(10,733) =========================== =======
======= ======== ======== Basic Net Income (Loss) per Common Share:
Continuing operations $(0.06) $0.48 $(0.51) $(0.23) Discontinued
operations - 0.11 0.36 0.15 ----------------------- --- ---- ----
---- Total $(0.06) $0.59 $(0.15) $(0.08) ===== ====== ===== ======
====== Diluted Net Income (Loss) per Common Share: Continuing
operations $(0.06) $0.29 $(0.51) $(0.23) Discontinued operations -
0.07 0.36 0.15 ----------------------- --- ---- ---- ---- Total
$(0.06) $0.36 $(0.15) $(0.08) ===== ====== ===== ====== ======
Weighted Average Number of Common Shares Outstanding: Basic 130,109
127,810 129,719 127,658 ===== ======= ======= ======= =======
Diluted 130,109 211,811 129,719 127,658 ======= ======= =======
======= ======= Endeavour International Corporation Condensed
Consolidated Statement of Cash Flows (Unaudited) (Amounts in
thousands) Nine Months Ended September 30,
------------------------------- 2009 2008 ---- ---- Cash Flows from
Operating Activities: Net loss $(11,527) $(2,620) Adjustments to
reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and Amortization 29,509 64,073 Impairment
of oil and gas properties 30,645 - Deferred tax benefit (3,269)
(5,568) Unrealized gain on derivatives 38,455 41,239 Gain on sale
of Norwegian operations (47,420) - Other 13,577 7,945 Changes in
operating assets and liabilities: (Increase) decrease in
receivables 6,593 (4,259) (Increase) decrease in other current
assets 5,060 (6,716) Increase (decrease) in liabilities (21,939)
5,520 ---------------------- ------- ----- Net Cash Provided by
Operating Activities 39,684 99,614 Cash Flows From Investing
Activities: Capital expenditures (92,766) (46,512) Proceeds from
sales, net of cash 144,765 - Decrease in restricted cash 20,366 -
--------------------------- ------ - Net Cash Provided by (Used in)
Investing Activities 72,365 (46,512) Cash Flows From Financing
Activities: Repayments of borrowings (64,458) (120,000) Borrowings
under debt agreements - 88,000 Dividends paid (7,969) (7,969)
Financing costs paid - (3,382) Other financing 27 (514)
--------------- -- ---- Net Cash Used in Financing Activities
(72,400) (43,865) Net Increase in Cash and Cash Equivalents 39,649
9,237 Cash and Cash Equivalents, Beginning of Period 38,156 16,440
--------------------------------------- ------ ------ Cash and Cash
Equivalents, End of Period $77,805 $25,677
======================================== ======= ======= Cash and
Cash Equivalents, End of Period: Continuing operations $77,805
$18,260 Discontinued operations - 7,417 ----------------------- ---
----- Total $77,805 $25,677 ===== ======= ======= Endeavour
International Corporation Operating Statistics (Unaudited) Three
Months Ended Nine Months Ended September 30, September 30,
------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ----
Sales volume (1) Oil and condensate sales (Mbbls): United Kingdom
82 235 494 834 United States 1 - 2 - ------------- - - - -
Continuing operations 83 235 496 834 Discontinued operations -
Norway - 204 310 545 ------------------------- - --- --- --- Total
83 439 806 1,379 ----- -- --- --- ----- Gas sales (MMcf): United
Kingdom 629 1,470 2,777 5,149 United States 19 - 130 -
------------- -- --- --- - Continuing operations 648 1,470 2,907
5,149 Discontinued operations - Norway - 575 686 1,640
------------------------ --- --- --- ----- Total 648 2,045 3,593
6,789 ----- --- ----- ----- ----- Oil equivalent sales (MBOE)
United Kingdom 187 480 957 1,692 United States 4 - 23 -
------------- --- --- -- --- Continuing operations 191 480 980
1,692 Discontinued operations - Norway - 299 425 819
------------------------- - --- --- --- Total 191 779 1,405 2,511
----- --- --- ----- ----- Total BOE per day 2,072 8,477 5,147 9,162
----------------- ----- ----- ----- ----- Physical production
volume (BOE per day): United Kingdom 2,777 5,075 3,675 6,064 United
States 32 - 54 - ------------- -- --- -- --- Continuing operations
2,809 5,075 3,729 6,064 Discontinued operations - Norway - 2,763
1,545 2,816 ------------------------- - ----- ----- ----- Total
2,809 7,838 5,274 8,880 ----- ----- ----- ----- ----- Realized
Prices (2) Oil and condensate price ($per Bbl): Before commodity
Derivatives $61.73 $106.22 $47.38 $101.60 Effect of commodity
derivatives 46.05 (23.70) 24.47 (20.78) ------------------- -----
------ ----- ------ Realized prices including commodity derivatives
$107.78 $82.52 $71.85 $80.82 -------------------- ------- ------
------ ------ Gas price ($per Mcf): Before commodity derivatives
$4.10 $12.14 $5.99 $11.63 Effect of commodity derivatives 5.75
(1.58) 2.46 (0.39) ------------------- ---- ------ ---- ------
Realized prices including commodity derivatives $9.85 $10.56 $8.45
$11.24 -------------------- ----- ------ ----- ------ Equivalent
oil price ($per BOE): Before commodity derivatives $40.70 $91.65
$42.51 $87.26 Effect of commodity derivatives 39.50 (17.48) 20.34
(12.46) ------------------- ----- ------ ----- ------ Realized
prices including commodity derivatives $80.20 $74.17 $62.85 $74.80
-------------------- ------ ------ ------ ------ (1) We record oil
revenues on the sales method, i.e. when delivery has occurred.
Actual production may differ based on the timing of tanker
liftings. We use the entitlements method to account for sales of
gas production. (2) The average sales prices reflect both our
continuing and discontinued operations and include realized gains
and losses for derivative contracts we utilize to manage price risk
related to our future cash flows. Endeavour International
Corporation Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
(Amounts in thousands) As required under Regulation G of the
Securities Exchange Act of 1934, provided below are reconciliations
of net income (loss) to the following non-GAAP financial measures:
net income, as adjusted, Adjusted EBITDA and discretionary cash
flow. We use these non-GAAP measures as key metrics for our
management and to demonstrate our ability to internally fund
capital expenditures and service debt. The non-GAAP measures are
useful in comparisons of oil and gas exploration and production
companies as they exclude non-operating fluctuations in assets and
liabilities Three Months Ended Nine Months Ended September 30,
September 30, ------------- ------------- 2009 2008 2009 2008 ----
---- ---- ---- Net income (loss) $(4,483) $78,196 $(11,527)
$(2,620) Depreciation, depletion and amortization 5,646 18,949
29,509 64,073 Impairment of oil and gas properties - - 30,645 -
Deferred tax expense (benefit) 327 52,709 (3,269) (5,568) Gain on
asset sales (277) - (47,420) - Unrealized (gain) loss on
Derivatives 4,360 (119,089) 38,455 41,239 Other 2,042 (621) 13,577
7,946 ----- --- ------ ----- Discretionary Cash Flow (1) $7,615
$30,144 $49,970 $105,070 ====== ======= ======= ======== Net income
(loss) to common shareholders $(7,179) $75,487 $(19,588) $(10,733)
Impairment of oil and gas properties (net of tax) (2) - - 15,322 -
Unrealized (gain) loss on derivatives (net of tax) (3) 2,885
(62,684) 23,632 21,549 Currency impact on deferred Taxes (2,106)
(6,926) 8,143 (4,203) ----- ----- ----- ----- Net Income (Loss) as
Adjusted $(6,400) $5,877 $27,509 $6,613 ======= ====== =======
====== Net income (loss) to common Shareholders $(7,179) $75,487
$(19,588) $(10,733) Unrealized (gain) loss on Derivatives 4,360
(119,089) 38,455 41,239 Net interest expense 3,877 4,338 11,860
17,182 Depreciation, depletion and Amortization 5,646 18,949 29,509
64,073 Impairment of oil and gas properties - - 30,645 - Income tax
expense (benefit) (441) 65,395 (5,047) 23,001 Gain on asset sales
(277) - (47,420) - Preferred stock dividends 2,696 2,709 8,061
8,113 ----- ----- ----- ----- Adjusted EBITDA $8,682 $47,789
$46,475 $142,875 ===== ====== ====== ======= (1) Discretionary cash
flow is equal to cash flow from operating activities before the
changes in operating assets and liabilities. (2) Net of tax
benefits of $(15,323) for the nine months ended September 30, 2009.
(3) Net of tax expense (benefit) of $(1,475), $56,404, $(14,823)
and $(19,689), respectively. DATASOURCE: Endeavour International
Corporation CONTACT: Endeavour - Investor Relations, Mike Kirksey,
+44 (0) 207 451 2364, +1-713-307-8788, or Canaccord Adams - United
Kingdom Broker, Jeffrey Auld, +44 (0) 207 050 6500, or Pelham
Public Relations - UK Media, Philip Dennis, +44 (0) 207 743 6363,
or Henry Lerwill, +44 (0) 203 178 6242 Web Site:
http://www.endeavourcorp.com/
Copyright