HOUSTON, Aug. 13, 2007 (PRIME NEWSWIRE) -- Rosetta Resources Inc. (Nasdaq:ROSE) ("Rosetta" or the "Company") announced today that production and revenues for the second quarter of 2007 were 120 Mmcfe/d and $87 million, respectively, both representing quarterly records for the Company. Diluted earnings per share for the second quarter of 2007 were $0.26 versus 2006 earnings per share of $0.20, an increase of 30%. Diluted earnings per share for the first half of 2007 were $0.54 versus 2006 earnings per share of $0.39, an increase of 38%. In the second quarter of 2007, production and revenues were at their highest levels for the eight quarters that Rosetta has been an independent company.
OPERATIONS UPDATE
In the Sacramento Basin, the Company drilled eleven wells by mid-year, nine of which have been successful. Five of these wells are currently on production, and four are awaiting completion. This drilling effort is expected to add 4 Mmcfe/d of net production in the third quarter of 2007.
Our drilling program in the Rio Vista field, based on the Bradford Island 3D seismic survey, has had initial success, and as a result, we have installed additional pipeline infrastructure to produce this gas. Significant additions to production rate are expected in the third quarter of 2007.
Also in California, the Company expects to drill four locations on properties acquired from Output Exploration, LLC and OPEX Energy, LLC in the second half of 2007.
In the DJ Basin of Colorado, the Company drilled 35 wells in the first half of the year, of which 29 were successful. Current net production from the area is approximately 6.5 Mmcfe/d.
In South Texas, Rosetta drilled 21 wells in the Lobo play in the first half of 2007, with 17 productive for an 81% success rate. Net production from these wells is approximately 24 Mmcfe/d. Additionally, the Company is working to add significant acreage in the Lobo region.
Rosetta is drilling one well and adding another rig to its Perdido project in South Texas. Seven wells have been drilled with six wells completed and one well awaiting completion. The six completed wells are producing at a combined net rate of approximately 4 Mmcfe/d.
In the Gulf of Mexico, Rosetta's Main Pass 118 and 29 platforms came on production in April of 2007. These wells had been producing at a net rate of 8 Mmcfe/d until very recently when they were temporarily shut-in due to an off-lease facilities issue. It is now expected that they will be back on production shortly.
Rosetta drilled four wells in Sabine Lake in the first half of 2007. The State Tract 30-1 tested gas, the offset State Tract 30-2 well found pay and is currently being completed. The Sabine Lake State Tract 16-1 and the Louisiana 19071 #1 are scheduled for completion in the third quarter of 2007. Construction of production platforms and associated pipelines is currently underway with production expected to commence in the fourth quarter of 2007.
Charles Chambers, Rosetta's President and Chief Executive Officer said, "Rosetta delivered strong performance in the second quarter of 2007. Our production guidance is unchanged at 125 Mmcfe/d average production for the year, and we expect the third quarter to come in at 130 Mmcfe/d.
Our capital spending plan for organic projects remains at $250 million, and we are very excited about our recent results in the Lobo region, our success at Sabine Lake and the opportunities we see in the Sacramento Basin as a result of the OPEX acquisition. Because of these successes, we are currently evaluating an increase in our capital activity for the year.
With respect to the Calpine transaction, we continue to believe that the previously announced partial settlement is a positive development. This settlement, upon approval by the bankruptcy court, resolves certain issues between Calpine and Rosetta and does so without prejudice to each party's positions in connection with Calpine's fraudulent conveyance action. We reiterate that we believe the fraudulent conveyance lawsuit is both factually and legally without merit and will continue to vigorously defend our position. Rosetta has advised the bankruptcy court that it intends to file a motion to dismiss the complaint on or before September 10, 2007."
2007 SECOND QUARTER RESULTS
Rosetta's production for the second quarter 2007 was 10.9 Bcfe or an average of 120 Mmcfe/d. Average realized gas prices for the quarter were $7.74 per Mcf, including the effect of our hedges; and realized oil prices averaged $63.17 per Bbl.
Rosetta's average sales price, including the effects of hedging, for the second quarter of 2007 was $7.97 per Mcfe, and includes a $2.4 million benefit from the Company's hedging program.
Revenues for Rosetta totaled $86.9 million for the quarter. This represents a 37% increase versus $63.4 million of revenues in the second quarter of 2006.
Total lease operating expense ("LOE"), which includes direct LOE, workover, ad valorem taxes, and insurance, was $12.6 million or $1.15 per Mcfe. Direct LOE was $6.9 million or $0.63 per Mcfe and workover costs were $1.7 million or $0.16 per Mcfe for the period. Production taxes were $1.2 million or $0.11 per Mcfe and treating, transportation and marketing charges were $1.6 million or $0.15 per Mcfe. Depreciation, depletion and amortization expense was $36.3 million, based on an all in DD&A rate of $3.33 per Mcfe.
General and administrative costs were $9.9 million for the second quarter of 2007, including non-cash stock compensation expense of $1.8 million.
Net income for the period was $13.1 million or $0.26 per share, which is up 31% compared to $10.0 million of net income or $0.20 per share for the second quarter of 2006.
2007 FIRST HALF RESULTS
Rosetta's production for the first half of 2007 was 20.6 Bcfe or an average of 114 Mmcfe/d. Average realized gas prices for the period were $7.72 per Mcfe, including a $7.5 million hedge effect and realized oil prices averaged $59.68 per Bbl.
Revenues for Rosetta totaled $162.7 million for the first six months of 2007. This represents a 27% increase versus $127.9 million of revenues in the first half of 2006.
Total lease operating expense ("LOE"), which includes direct LOE, workover, ad valorem taxes, and insurance, was $21.4 million or $1.04 per Mcfe. Direct LOE was $12.6 million or $0.61 per Mcfe and workover costs were $2.7 million or $0.13 per Mcfe for the period. Production taxes were $2.2 million or $0.11 per Mcfe and treating, transportation and marketing charges were $3.0 million or $0.15 per Mcfe. Depreciation, depletion and amortization expense was $66.9 million, based on an all in DD&A rate of $3.25 per Mcfe.
General and administrative costs were $18.0 million for the first half of 2007, including non-cash stock compensation expenses of $3.2 million.
Net Income for the period was $27.1 million or $0.54 per share up 39% compared to $19.5 million of net income or $0.39 per share for the first half of 2006.
Rosetta Resources Inc. is an independent oil and gas company engaged in acquisition, exploration, development and production of oil and gas properties in North America. Our operations are concentrated in the Sacramento Basin of California, South Texas, the Gulf of Mexico and the Rocky Mountains. Rosetta is a Delaware corporation based in Houston, Texas.
For more information, visit www.rosettaresources.com.
The Rosetta Resources Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3139
Forward Looking Statements - All statements, other than statements of historical fact, included in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon current expectations and are subject to a number of risks, uncertainties and assumptions, which are more fully described in Rosetta Resources Inc.'s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. These risks, uncertainties and assumptions could cause actual results to differ materially from those described in the forward-looking statements. Rosetta Resources Inc. assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law.
ROSETTA RESOURCES INC.
CONSOLIDATED BALANCE SHEET
(In thousands, except share amounts)
June 30, December 31,
2007 2006
---------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 11,769 $ 62,780
Accounts receivable 37,900 36,408
Derivative instruments 4,035 20,538
Prepaid expenses 19,585 8,761
Other current assets 3,800 2,965
------------ ------------
Total current assets 77,089 131,452
------------ ------------
Oil and natural gas properties, full
cost method, of which $41.2 million
at June 30, 2007 and $37.8 million
at December 31, 2006 were excluded
from amortization 1,399,194 1,223,337
Other fixed assets 5,378 4,562
------------ ------------
1,404,572 1,227,899
Accumulated depreciation, depletion,
and amortization (210,712) (145,289)
------------ ------------
Total property and equipment, net 1,193,860 1,082,610
Deferred loan fees 2,785 3,375
Other assets 1,094 1,968
------------ ------------
Total other assets 3,879 5,343
----------- -----------
Total assets $ 1,274,828 $ 1,219,405
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 30,385 $ 23,040
Accrued liabilities 51,470 43,099
Royalties payable 12,272 9,010
Prepayment on gas sales 22,488 17,868
Deferred income taxes 1,521 7,743
------------ ------------
Total current liabilities 118,136 100,760
Long-term liabilities:
Derivative instruments 17,905 11,014
Long-term debt 240,000 240,000
Asset retirement obligation 11,989 10,253
Deferred income taxes 48,744 35,089
------------ ------------
Total liabilities 436,774 397,116
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value;
authorized 150,000,000 shares; issued
50,466,973 shares and 50,405,794 shares
at June 30, 2007 and December 31, 2006,
respectively 50 50
Additional paid-in capital 759,090 755,343
Treasury stock, at cost; 91,217 and
85,788 shares at June 30, 2007 and
December 31, 2006,respectively (1,675) (1,562)
Accumulated other comprehensive
(loss) income (8,636) 6,315
Retained earnings 89,225 62,143
------------ ------------
Total stockholders' equity 838,054 822,289
------------ ------------
Total liabilities and stockholders'
equity $ 1,274,828 $ 1,219,405
============ ============
ROSETTA RESOURCES INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
-------- -------- --------- ---------
Revenues:
Natural gas sales $ 77,436 $ 53,682 $ 146,597 $ 110,417
Oil sales 9,438 9,699 16,073 17,508
-------- -------- --------- ---------
Total revenues 86,874 63,381 162,670 127,925
Operating Costs and
Expenses:
Lease operating expense 12,566 8,323 21,362 17,881
Depreciation, depletion,
and amortization 36,342 25,601 66,893 49,668
Treating and
transportation 882 831 1,645 1,726
Marketing fees 669 484 1,332 1,108
Production taxes 1,200 1,626 2,185 3,323
General and
administrative costs 9,898 7,078 17,967 16,329
-------- -------- --------- ---------
Total operating costs
and expenses 61,557 43,943 111,384 90,035
-------- -------- --------- ---------
Operating income 25,317 19,438 51,286 37,890
Other (income) expense
Interest expense, net
of interest
capitalized 4,680 4,371 9,050 8,503
Interest income (257) (1,115) (1,229) (2,252)
Other (income) expense,
net (182) 152 (182) 177
-------- -------- --------- ---------
Total other expense 4,241 3,408 7,639 6,428
-------- -------- --------- ---------
Income before provision
for income taxes 21,076 16,030 43,647 31,462
Provision for income
taxes 7,985 6,066 16,565 11,972
-------- -------- --------- ---------
Net income $ 13,091 $ 9,964 $ 27,082 $ 19,490
======== ======== ========= =========
Earnings per share:
-------- -------- --------- ---------
Basic $ 0.26 $ 0.20 $ 0.54 $ 0.39
======== ======== ========= =========
Diluted $ 0.26 $ 0.20 $ 0.54 $ 0.39
======== ======== ========= =========
Weighted average shares
outstanding:
Basic 50,354 50,229 50,340 50,175
Diluted 50,625 50,370 50,565 50,361
ROSETTA RESOURCES INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2007 2006
--------- ---------
Cash flows from operating activities
Net income $ 27,082 $ 19,490
Adjustments to reconcile net income to net
cash from operating activities
Depreciation, depletion and amortization 66,893 49,668
Deferred income taxes 16,479 11,723
Amortization of deferred loan fees
recorded as interest expense 590 590
Income from unconsolidated investments (85) (112)
Stock compensation expense 3,176 3,322
Change in operating assets and liabilities:
Accounts receivable (1,492) 15,121
Income taxes receivable -- 6,000
Other current assets (11,659) (2,624)
Other assets 331 934
Accounts payable 7,345 3,411
Accrued liabilities (2,247) (5,385)
Royalties payable 7,882 (8,707)
--------- ---------
Net cash provided by operating
activities 114,295 93,431
--------- ---------
Cash flows from investing activities
Acquisition of oil and gas properties (38,656) (11,580)
Purchases of property and equipment (128,139) (87,983)
Disposals of property and equipment 1,005 36
Deposits 25 25
Other 1 (14)
--------- ---------
Net cash used in investing activities (165,764) (99,516)
--------- ---------
Cash flows from financing activities
Equity offering transaction fees -- 268
Proceeds from issuances of common stock 571 296
Stock-based compensation excess tax benefit -- 249
Purchases of treasury stock (113) (1,246)
--------- ---------
Net cash provided by (used in) financing
activities 458 (433)
--------- ---------
Net decrease in cash (51,011) (6,518)
Cash and cash equivalents, beginning of period 62,780 99,724
--------- ---------
Cash and cash equivalents, end of period $ 11,769 $ 93,206
========= =========
Supplemental non-cash disclosures:
Capital expenditures included in accrued
liabilities $ 6,020 $ 2,281