HOUSTON, May 8, 2008 (PRIME NEWSWIRE) -- Rosetta Resources Inc. (Nasdaq:ROSE) ("Rosetta" or the "Company") today reported first quarter 2008 financial and operating results and provided an updated outlook for 2008. Randy L. Limbacher, President and Chief Executive Officer, will host a conference call, Friday, May 9, 2008 at 7:30 a.m. Central Time, to review this information. To participate in the call, dial (877) 440-5803 or listen through the website at http://www.rosettaresources.com.
2008 FIRST QUARTER RESULTS
Rosetta's net income and production for the first quarter of 2008 were at their highest levels since it has been a stand alone company.
Net income was $27.5 million, up 96% compared to net income of $14.0 million in the first quarter of 2007. First quarter diluted earnings per share were $0.54 in 2008, up 93% compared to $0.28 in the first quarter of 2007.
For the first quarter, production averaged 152 MMcfe/d, up 41% from the 108 MMcfe/d reported for the comparable period of 2007. Average realized gas prices for the quarter were $8.74 per Mcf, including the effects of hedging; and realized oil prices averaged $100.10 per Bbl.
Revenues for Rosetta totaled $128.3 million, including a negative hedging effect of $0.7 million. Revenues were up 69% from the $75.8 million reported in 2007.
Total lease operating expense ("LOE"), which includes direct LOE, workovers, ad-valorem taxes, and insurance, was $13.4 million or $0.97 per Mcfe. Direct LOE was $8.8 million or $0.64 per Mcfe, workover costs were $1.2 million or $0.09 per Mcfe, ad valorem taxes were $2.8 million or $0.20 per Mcfe and insurance was $0.6 million or $0.04 per Mcfe for the period. Production taxes were $3.4 million or $0.25 per Mcfe and treating, transportation and marketing charges were $2.1 million or $0.14 per Mcfe. Depreciation, depletion and amortization was $51.4 million, based on a DD&A rate of $3.72 per Mcfe.
General and administrative costs were $12.1 million for the first quarter, and include $0.3 million in non-cash stock compensation expenses, and costs associated with the Calpine lawsuit.
Randy L. Limbacher, Rosetta's President and Chief Executive Officer, commented. "We are very pleased with our performance in this quarter, which delivered on expectations and positioned us for additional success in the year. Our volumes are on track to meet guidance for the year and our capital program is performing as planned. During the quarter, we made significant progress in filling key operations leadership roles, identifying potential future inventory for Rosetta, and vigorously asserting our position in the pending Calpine lawsuit."
First Quarter Operational Highlights
During the first quarter, the Company drilled 36 gross and 32 net wells with a net success rate of 83%. The majority of this drilling activity took place in the Sacramento Basin, South Texas, and the DJ Basin.
In California's Sacramento Basin, the Company drilled 6 wells, with 5 successful. The Company continued to extend the southern limits of the Rio Vista field by drilling 3 wells. Average production from the Basin was 48 MMcfe/d for the quarter.
In South Texas, Rosetta drilled 12 wells in the Lobo area with 10 successful on acreage that is covered by 320 square miles of 3D seismic. Average production for the Lobo was 38 MMcfe/d in the first quarter.
In the Perdido trend, a rig moved into the field in late March and was drilling ahead at the end of the quarter. Production averaged approximately 11 MMcfe/d in the quarter.
In the DJ Basin Niobrara Play, the Company drilled 13 wells, 11 of which were successful. Average production for the quarter was 7 MMcfe/d.
In Sabine Lake, three producing wells averaged 13 MMcfe/d net to Rosetta for the quarter.
2008 OUTLOOK
For 2008, the Company's volume and organic capital guidance are unchanged at 140-150 MMcfe/d and $290MM, respectively. Unit cash costs are expected to be in line with first quarter actual results. Unit depletion, depreciation and amortization costs are expected to average $3.55-$3.75/Mcfe.
The Company's hedge position is unchanged with 67,909 MMBtu/d hedged for the balance of 2008 at an average price of $7.75 per MMBtu. For 2009, 52,141 MMBtu/d are hedged at an average price of $7.65 per MMBtu, along with 10,000 MMBtu/d for 2010 at an average price of $8.30 per MMbtu.
Additionally, the Company has also entered into costless collar transactions for 5,000 MMBtu/d for 2008 and 2009. The costless collars have an average floor price of $8.00 per MMBtu and an average ceiling price of $10.27 per MMBtu.
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 press release are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the intent, belief or current expectations of Rosetta Resources Inc. and its subsidiaries (the "Company") and its management. These forward-looking statements are based upon current expectations and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those herein described. Accordingly, Recipients are cautioned that these forward-looking statements are not guarantees of future performance. Please refer to Company's risks, uncertainties and assumptions as it discloses from time to time in the Company's reports and registration statements filed with the SEC, including the risk factors identified in its Annual Report on Form 10-K for the year ended December 31, 2007, which can also be found on the Company's website at www.rosettaresources.com. The Company undertakes no duty to update the information contained herein except as required by law.
Rosetta Resources Inc.
Consolidated Balance Sheet
(In thousands, except share amounts)
March 31, December 31,
2008 2007
----------- -----------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 45,893 $ 3,216
Accounts receivable 62,640 55,048
Derivative instruments -- 3,966
Deferred income taxes 20,650 --
Prepaid expenses 9,696 10,413
Other current assets 4,087 4,249
----------- -----------
Total current assets 142,966 76,892
----------- -----------
Oil and natural gas properties,
full cost method, of which $41.7
million at March 31, 2008 and
$40.9 million at December 31,
2007 were excluded from
amortization 1,612,306 1,566,082
Other fixed assets 6,903 6,393
----------- -----------
1,619,209 1,572,475
Accumulated depreciation,
depletion, and amortization (346,757) (295,749)
----------- -----------
Total property and equipment, net 1,272,452 1,276,726
Deferred loan fees 1,900 2,195
Other assets 1,154 1,401
----------- -----------
Total other assets 3,054 3,596
----------- -----------
Total assets $ 1,418,472 $ 1,357,214
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 37,281 $ 33,949
Accrued liabilities 47,552 64,216
Royalties payable 24,334 18,486
Derivative instruments 55,436 2,032
Prepayment on gas sales 25,647 20,392
Deferred income taxes -- 720
----------- -----------
Total current liabilities 190,250 139,795
Long-term liabilities:
Derivative instruments 21,917 13,508
Long-term debt 245,000 245,000
Asset retirement obligation 20,686 18,040
Deferred income taxes 79,907 67,916
----------- -----------
Total liabilities 557,760 484,259
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value;
authorized 5,000,000 shares; no
shares issued in 2008 or 2007 -- --
Common stock, $0.001 par value;
authorized 150,000,000 shares;
issued 50,672,022 shares and
50,542,648 shares at March 31,
2008 and December 31, 2007,
respectively 50 50
Additional paid-in capital 764,588 762,827
Treasury stock, at cost; 118,271
and 109,303 shares at March 31,
2008 and December 31, 2007,
respectively (2,224) (2,045)
Accumulated other comprehensive
(loss) income (48,539) (7,225)
Retained earnings 146,837 119,348
----------- -----------
Total stockholders' equity 860,712 872,955
----------- -----------
Total liabilities and
stockholders' equity $ 1,418,472 $ 1,357,214
=========== ===========
Rosetta Resources Inc.
Consolidated/Combined Statement of Operations
(In thousands, except per share amounts
Three Months Ended
March 31,
2008 2007
--------- ---------
Revenues:
Natural gas sales $ 112,445 $ 69,161
Oil sales 15,888 6,635
--------- ---------
Total revenues 128,333 75,796
Operating Costs and Expenses:
Lease operating expense 13,414 8,796
Depreciation, depletion, and
amortization 51,414 30,551
Treating and transportation 1,305 763
Marketing fees 748 663
Production taxes 3,437 985
General and administrative costs 12,107 8,069
--------- ---------
Total operating costs and
expenses 82,425 49,827
--------- ---------
Operating income 45,908 25,969
Other (income) expense
Interest expense, net of
interest capitalized 3,554 4,370
Interest income (239) (972)
Other (income) expense, net (41) --
--------- ---------
Total other expense 3,274 3,398
--------- ---------
Income before provision for
income taxes 42,634 22,571
Provision for income taxes 15,145 8,580
--------- ---------
Net income $ 27,489 $ 13,991
========= =========
Earnings per share:
Basic $ 0.54 $ 0.28
========= =========
Diluted $ 0.54 $ 0.28
========= =========
Weighted average shares outstanding:
Basic 50,485 50,325
Diluted 50,719 50,483
Rosetta Resources Inc.
Consolidated/Combined Statement of Cash Flows
(In thousands, except per share amounts)
Three Months Ended
March 31,
2008 2007
-------- --------
Cash flows from operating
activities
Net income $ 27,489 $ 13,991
Adjustments to reconcile net
income to net cash from
operating activities
Depreciation, depletion and
amortization 51,414 30,551
Deferred income taxes 15,145 8,580
Amortization of deferred loan
fees recorded as interest
expense 295 295
Income from unconsolidated
investments -- (47)
Stock compensation expense 273 1,352
Change in operating assets and
liabilities:
Accounts receivable (7,592) (366)
Prepaid expenses 717 (10,537)
Other current assets 162 (479)
Other assets 187 296
Accounts payable 3,332 2,647
Accrued liabilities 720 (2,285)
Royalties payable 11,103 2,523
-------- --------
Net cash provided by operating
activities 103,245 46,521
-------- --------
Cash flows from investing
activities
Purchases of property and
equipment (61,879) (58,452)
Disposals of property and
equipment 2 --
Other -- 3
-------- --------
Net cash used in investing
activities (61,877) (58,449)
-------- --------
Cash flows from financing
activities
Proceeds from issuances of
common stock 1,488 114
Purchases of treasury stock (179) (59)
-------- --------
Net cash provided by financing
activities 1,309 55
-------- --------
Net increase (decrease) in cash 42,677 (11,873)
Cash and cash equivalents,
beginning of period 3,216 62,780
-------- --------
Cash and cash equivalents, end
of period $ 45,893 $ 50,907
======== ========
Supplemental non-cash disclosures:
Capital expenditures included in
accrued liabilities $ 19,254 $ 26,352