x
|
Quarterly Report
Pursuant To Section 13 or 15(d) of The Securities Exchange Act of
1934
|
o
|
Transition
Report Pursuant To Section 13 or 15(d) of The Securities Exchange Act of
1934
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Delaware
|
43-2083519
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(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
717
Texas, Suite 2800, Houston, TX
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77002
|
(Address
of principal executive offices)
|
(Zip
Code)
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(Registrant's
telephone number, including area code) (713)
335-4000
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Large
accelerated filer x
|
Accelerated
filer o
|
Non-Accelerated
filer o
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Smaller
Reporting Company o
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(Do
not check if smaller reporting
company)
|
Part
I – Financial Information
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||
3
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15
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24
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25
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Part
II – Other Information
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||
25
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||
25
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||
26
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26
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||
27
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||
27
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||
28
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||
29
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September
30,
2008
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December
31,
2007
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|||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 135,183 | $ | 3,216 | ||||
Accounts
receivable
|
53,504 | 55,048 | ||||||
Derivative
instruments
|
4,623 | 3,966 | ||||||
Prepaid
expenses
|
5,550 | 10,413 | ||||||
Other
current assets
|
4,068 | 4,249 | ||||||
Total
current assets
|
$ | 202,928 | $ | 76,892 | ||||
Oil
and natural gas properties, full cost method, of which $32.0 million at
September 30, 2008 and $40.9 million at December 31, 2007 were excluded
from amortization
|
1,752,569 | 1,566,082 | ||||||
Other
fixed assets
|
7,738 | 6,393 | ||||||
1,760,307 | 1,572,475 | |||||||
Accumulated
depreciation, depletion, and amortization and impairment
|
(649,007 | ) | (295,749 | ) | ||||
Total
property and equipment, net
|
1,111,300 | 1,276,726 | ||||||
Deferred
loan fees
|
1,310 | 2,195 | ||||||
Other
assets
|
1,567 | 1,401 | ||||||
Total
other assets
|
2,877 | 3,596 | ||||||
Total
assets
|
$ | 1,317,105 | $ | 1,357,214 | ||||
Liabilities
and Stockholders' Equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 36,995 | $ | 33,949 | ||||
Accrued
liabilities
|
54,078 | 64,216 | ||||||
Royalties
payable
|
24,065 | 18,486 | ||||||
Derivative
instruments
|
518 | 2,032 | ||||||
Prepayment
on gas sales
|
23,078 | 20,392 | ||||||
Deferred
income taxes
|
1,529 | 720 | ||||||
Total
current liabilities
|
140,263 | 139,795 | ||||||
Long-term
liabilities:
|
||||||||
Derivative
instruments
|
3,371 | 13,508 | ||||||
Long-term
debt
|
245,000 | 245,000 | ||||||
Asset
retirement obligation
|
25,858 | 18,040 | ||||||
Deferred
income taxes
|
46,730 | 67,916 | ||||||
Total
liabilities
|
461,222 | 484,259 | ||||||
Commitments
and contingencies (Note 9)
|
||||||||
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 50,987,406
shares and 50,542,648 shares at September 30, 2008 and December 31, 2007,
respectively
|
50 | 50 | ||||||
Additional
paid-in capital
|
771,471 | 762,827 | ||||||
Treasury
stock, at cost; 151,476 and 109,303 shares at September 30, 2008 and
December 31, 2007, respectively
|
(2,876 | ) | (2,045 | ) | ||||
Accumulated
other comprehensive income (loss)
|
461 | (7,225 | ) | |||||
Retained
earnings
|
86,777 | 119,348 | ||||||
Total
stockholders' equity
|
855,883 | 872,955 | ||||||
Total
liabilities and stockholders' equity
|
$ | 1,317,105 | $ | 1,357,214 |
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Revenues:
|
||||||||||||||||
Natural
gas sales
|
$ | 114,308 | $ | 79,061 | $ | 362,894 | $ | 225,658 | ||||||||
Oil
sales
|
15,728 | 10,657 | 49,941 | 26,730 | ||||||||||||
Total
revenues
|
130,036 | 89,718 | 412,835 | 252,388 | ||||||||||||
Operating
Costs and Expenses:
|
||||||||||||||||
Lease
operating expense
|
12,857 | 11,912 | 40,445 | 33,274 | ||||||||||||
Depreciation,
depletion, and amortization
|
46,951 | 38,186 | 150,103 | 105,079 | ||||||||||||
Impairment
of oil and gas properties
|
205,659 | - | 205,659 | - | ||||||||||||
Treating
and transportation
|
1,780 | 1,412 | 4,624 | 3,057 | ||||||||||||
Marketing
fees
|
840 | 518 | 2,602 | 1,850 | ||||||||||||
Production
taxes
|
2,336 | 1,243 | 11,528 | 3,428 | ||||||||||||
General
and administrative costs
|
15,419 | 12,032 | 41,042 | 29,999 | ||||||||||||
Total
operating costs and expenses
|
285,842 | 65,303 | 456,003 | 176,687 | ||||||||||||
Operating
(loss) income
|
(155,806 | ) | 24,415 | (43,168 | ) | 75,701 | ||||||||||
Other
(income) expense
|
||||||||||||||||
Interest
expense, net of interest capitalized
|
3,186 | 4,332 | 11,209 | 13,382 | ||||||||||||
Interest
income
|
(586 | ) | (240 | ) | (1,141 | ) | (1,469 | ) | ||||||||
Other
(income) expense, net
|
(40 | ) | (105 | ) | (170 | ) | (287 | ) | ||||||||
Total
other expense
|
2,560 | 3,987 | 9,898 | 11,626 | ||||||||||||
(Loss)
income before provision for income taxes
|
(158,366 | ) | 20,428 | (53,066 | ) | 64,075 | ||||||||||
Provision
for income taxes
|
(58,991 | ) | 7,715 | (20,495 | ) | 24,280 | ||||||||||
Net
(loss) income
|
$ | (99,375 | ) | $ | 12,713 | $ | (32,571 | ) | $ | 39,795 | ||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$ | (1.96 | ) | $ | 0.25 | $ | (0.64 | ) | $ | 0.79 | ||||||
Diluted
|
$ | (1.96 | ) | $ | 0.25 | $ | (0.64 | ) | $ | 0.79 | ||||||
Weighted
average shares outstanding:
|
||||||||||||||||
Basic
|
50,813 | 50,409 | 50,636 | 50,363 | ||||||||||||
Diluted
|
50,813 | 50,570 | 50,636 | 50,572 |
Nine
Months Ended
September
30,
|
||||||||
2008
|
2007
|
|||||||
Cash
flows from operating activities
|
||||||||
Net
(loss) income
|
$ | (32,571 | ) | $ | 39,795 | |||
Adjustments
to reconcile net (loss) income to net cash from operating
activities
|
||||||||
Depreciation,
depletion and amortization
|
150,103 | 105,079 | ||||||
Impairment
of oil and gas properties
|
205,659 | - | ||||||
Deferred
income taxes
|
(24,939 | ) | 24,195 | |||||
Amortization
of deferred loan fees recorded as interest expense
|
885 | 885 | ||||||
Income
from unconsolidated investments
|
(418 | ) | (117 | ) | ||||
Stock
compensation expense
|
4,975 | 4,090 | ||||||
Change
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
1,544 | 84 | ||||||
Other
current assets
|
5,044 | (11,417 | ) | |||||
Other
assets
|
192 | 331 | ||||||
Accounts
payable
|
3,046 | 12,267 | ||||||
Accrued
liabilities
|
4,516 | 3,636 | ||||||
Royalties
payable
|
8,265 | 4,725 | ||||||
Net
cash provided by operating activities
|
326,301 | 183,553 | ||||||
Cash
flows from investing activities
|
||||||||
Acquisition
of oil and gas properties
|
(29,570 | ) | (38,656 | ) | ||||
Purchases
of property and equipment
|
(167,629 | ) | (205,310 | ) | ||||
Disposals
of property and equipment
|
27 | 1,104 | ||||||
Other
|
0 | 25 | ||||||
Net
cash used in investing activities
|
(197,172 | ) | (242,837 | ) | ||||
Cash
flows from financing activities
|
||||||||
Borrowing
from revolving credit facility
|
- | 10,000 | ||||||
Proceeds
from stock options exercised
|
3,669 | 571 | ||||||
Purchases
of treasury stock
|
(831 | ) | (411 | ) | ||||
Net
cash provided by financing activities
|
2,838 | 10,160 | ||||||
Net
increase (decrease) in cash
|
131,967 | (49,124 | ) | |||||
Cash
and cash equivalents, beginning of period
|
3,216 | 62,780 | ||||||
Cash
and cash equivalents, end of period
|
$ | 135,183 | $ | 13,656 | ||||
Supplemental
non-cash disclosures:
|
||||||||
Capital
expenditures included in accrued liabilities
|
$ | 23,316 | $ | 28,575 |
(1)
|
Organization
and Operations of the Company
|
(2)
|
Summary
of Significant Accounting Policies
|
(3)
|
Property,
Plant and Equipment
|
September
30,
2008
|
December
31,
2007
|
|||||||
(In
thousands)
|
||||||||
Proved
properties
|
$ | 1,686,035 | $ | 1,499,046 | ||||
Unproved/unevaluated
properties
|
32,020 | 40,903 | ||||||
Gas
gathering systems and compressor stations
|
34,514 | 26,133 | ||||||
Other
|
7,738 | 6,393 | ||||||
Total
oil and natural gas properties
|
1,760,307 | 1,572,475 | ||||||
Less:
Accumulated depreciation, depletion, and amortization
|
(649,007 | ) | (295,749 | ) | ||||
Total
property and equipment, net
|
$ | 1,111,300 | $ | 1,276,726 |
(4)
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Commodity
Hedging Contracts and Other
Derivatives
|
Settlement
Period
|
Derivative
Instrument
|
Hedge
Strategy
|
Notional
Daily Volume MMBtu
|
Total
of Notional Volume MMBtu
|
Average
Underlying Prices MMBtu
|
Total
of Proved Natural Gas Production Hedged (1)
|
Fair
Market Value Gain/(Loss) (In thousands)
|
|||||||||||||||
2008
|
Swap
|
Cash
flow
|
67,892 | 6,246,092 | 7.75 | 52 | % | $ | 5,246 | |||||||||||||
2009
|
Swap
|
Cash
flow
|
52,141 | 19,031,465 | 7.65 | 44 | % | (4,942 | ) | |||||||||||||
2010
|
Swap
|
Cash
flow
|
10,000 | 3,650,000 | 8.31 | 9 | % | (374 | ) | |||||||||||||
28,927,557 | $ | (70 | ) |
Settlement
Period
|
Derivative
Instrument
|
Hedge
Strategy
|
Notional
Daily Volume MMBtu
|
Total
of Notional Volume MMBtu
|
Average
Floor Price MMBtu
|
Average
Ceiling Price MMBtu
|
Total
of Proved Natural Gas Production Hedged (1)
|
Fair
Market Value Gain/(Loss) (In thousands)
|
||||||||||||||||||
2008
|
Costless
Collar
|
Cash
flow
|
5,000 | 460,000 | $ | 8.00 | $ | 10.55 | 4 | % | $ | 501 | ||||||||||||||
2009
|
Costless
Collar
|
Cash
flow
|
5,000 | 1,825,000 | $ | 8.00 | $ | 10.05 | 4 | % | 821 | |||||||||||||||
2,285,000 | $ | 1,322 |
Settlement
Period
|
Derivative
Instrument
|
Hedge
Strategy
|
Average
Fixed Rate
|
Fair
Market Value Gain/(Loss) (In thousands)
|
||||||
2008
|
Swap
|
Cash
Flow
|
4.41 | % | $ | (156 | ) | |||
2009
|
Swap
|
Cash
Flow
|
4.55 | % | (362 | ) | ||||
$ | (518 | ) |
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
Natural
Gas
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Quantity
settled (MMBtu)
|
6,706,092 | 6,009,100 | 19,498,524 | 17,750,400 | ||||||||||||
Increase
(Decrease) in natural gas sales revenue (In thousands)
|
$ | (12,125 | ) | $ | 10,333 | $ | (29,420 | ) | $ | 17,810 |
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
Interest
Rate Swaps
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Decrease
in interest expense (In thousands)
|
(372 | ) | $ | - | (832 | ) | $ | - |
(5)
|
Fair
Value Measurements
|
|
·
|
Level
1 inputs are quoted prices (unadjusted) in active markets for identical
assets or liabilities.
|
|
·
|
Level
2 inputs are quoted prices for similar assets and liabilities in active
markets or inputs that are observable for the asset or liability, either
directly or indirectly through market corroboration, for substantially the
full term of the financial
instrument.
|
|
·
|
Level
3 inputs are measured based on prices or valuation models that require
inputs that are both significant to the fair value measurement and less
observable from objective
sources.
|
At
fair value as of September 30, 2008
(In
thousands)
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
Assets
(Liabilities):
|
||||||||||||||||
Commodity
derivative contracts
|
- | - | 1,252 | 1,252 | ||||||||||||
Interest
rate swap contracts
|
- | - | (518 | ) | (518 | ) | ||||||||||
Total
|
- | - | 734 | 734 |
Derivatives Asset
(Liability)
(In
thousands)
|
||||
Balance
as of January 1, 2008
|
$ | (10,792 | ) | |
Total
(gains) losses (realized or unrealized)
|
||||
included
in earnings
|
- | |||
included
in other comprehensive income
|
(18,725 | ) | ||
Purchases,
issuances and settlements
|
30,251 | |||
Transfers
in and out of level 3
|
- | |||
Balance
as of September 30, 2008
|
$ | 734 | ||
Change
in unrealized gains (losses) relating to derivatives still held as of
September 30, 2008
|
$ | - |
(6)
|
Asset
Retirement Obligation
|
Nine
Months Ended September 30, 2008
|
||||
(In
thousands)
|
||||
ARO
as of December 31, 2007
|
$ | 22,670 | ||
Revision
of previous estimates
|
1,519 | |||
Liabilities
incurred during period
|
1,428 | |||
Accretion
expense
|
1,501 | |||
ARO
as of September 30, 2008
|
$ | 27,118 |
(7)
|
Long-Term
Debt
|
(8)
|
Income
Taxes
|
(9)
|
Commitments
and Contingencies
|
(10)
|
Comprehensive
Income
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||||||||||
Accumulated
other comprehensive (loss) income beginning of period
|
$ | (96,756 | ) | $ | (8,636 | ) | $ | (7,225 | ) | $ | 6,315 | |||||||||||||||||||||
Net
(loss) income
|
(99,375 | ) | 12,713 | (32,571 | ) | 39,795 | ||||||||||||||||||||||||||
Change
in fair value of derivative hedging instruments
|
142,431 | 19,723 | (18,002 | ) | 3,202 | |||||||||||||||||||||||||||
Hedge
settlements reclassed to income
|
12,497 | (10,333 | ) | 30,251 | (17,810 | ) | ||||||||||||||||||||||||||
Tax
provision related to hedges
|
(57,711 | ) | (3,539 | ) | (4,563 | ) | 5,508 | |||||||||||||||||||||||||
Total
other comprehensive income (loss)
|
97,217 | 97,217 | 5,851 | 5,851 | 7,686 | 7,686 | (9,100 | ) | (9,100 | ) | ||||||||||||||||||||||
Comprehensive
income (loss)
|
(2,158 | ) | 18,564 | (24,885 | ) | 30,695 | ||||||||||||||||||||||||||
Accumulated
other comprehensive income (loss)
|
$ | 461 | $ | (2,785 | ) | $ | 461 | $ | (2,785 | ) |
(11)
|
Earnings
Per Share
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(In
thousands)
|
||||||||||||||||
Basic
weighted average number of shares outstanding
|
50,813 | 50,409 | 50,636 | 50,363 | ||||||||||||
Dilution
effect of stock option and awards at the end of the period
|
- | 161 | - | 209 | ||||||||||||
Diluted
weighted average number of shares outstanding
|
50,813 | 50,570 | 50,636 | 50,572 | ||||||||||||
Anti-dilutive
stock awards and shares
|
611 | 415 | 617 | 403 |
(12)
|
Geographic
Area Information
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2008
(1)
|
2007
(1)
|
2008
(1)
|
2007
(1)
|
|||||||||||||
(In
thousands)
|
||||||||||||||||
California
|
$ | 38,310 | $ | 22,110 | $ | 118,898 | $ | 77,705 | ||||||||
Rocky
Mountains
|
6,993 | 2,463 | 23,400 | 6,749 | ||||||||||||
Mid-Continent
|
615 | 494 | 1,878 | 1,851 | ||||||||||||
Lobo
|
53,263 | 30,792 | 150,183 | 84,059 | ||||||||||||
Perdido
|
6,678 | 5,951 | 24,514 | 19,289 | ||||||||||||
State
Waters
|
13,555 | 529 | 44,292 | 2,176 | ||||||||||||
Other
Onshore
|
11,424 | 5,473 | 35,564 | 14,795 | ||||||||||||
Gulf
of Mexico
|
11,323 | 11,573 | 43,527 | 27,954 | ||||||||||||
$ | 142,161 | $ | 79,385 | $ | 442,256 | $ | 234,578 |
September
30, 2008
|
December
31, 2007
|
|||||||
(In
thousands)
|
||||||||
California
|
$ | 578,132 | $ | 540,924 | ||||
Rocky
Mountains
|
131,392 | 76,343 | ||||||
Mid-Continent
|
14,620 | 14,698 | ||||||
Lobo
|
576,736 | 515,096 | ||||||
Perdido
|
89,426 | 76,259 | ||||||
Texas
State Waters
|
64,430 | 55,918 | ||||||
Other
Onshore
|
141,984 | 130,977 | ||||||
Gulf
of Mexico
|
155,849 | 155,867 | ||||||
Other
|
7,738 | 6,393 | ||||||
Total
property and equipment
|
$ | 1,760,307 | $ | 1,572,475 |
(13)
|
Subsequent
Events
|
·
|
The
supply and demand for natural gas and
oil;
|
·
|
The price of
natural gas and oil;
|
·
|
Conditions
in the energy and economic markets;
|
·
|
Changes
or advances in technology;
|
·
|
Reserve
levels;
|
·
|
Inflation;
|
·
|
The
availability and cost of relevant raw materials, goods and
services;
|
·
|
Commodity
prices;
|
·
|
Future
processing volumes and pipeline
throughput;
|
·
|
The
occurrence of property acquisitions or
divestitures;
|
·
|
Drilling
and exploration risks;
|
·
|
The
availability and cost of processing and
transportation;
|
·
|
Developments
in oil-producing and natural gas-producing
countries;
|
·
|
Competition
in the oil and natural gas
industry;
|
·
|
The
ability and willingness of our current or potential counterparties or
vendors to enter into transactions with us and/or to fulfill their
obligations to us;
|
·
|
Our
ability to access the capital markets on favorable terms or at
all;
|
·
|
Our
ability to obtain credit and/or capital in desired amounts and/or on
favorable terms;
|
·
|
Failure
of our joint interest partners to fund any or all of their portion of any
capital program;
|
·
|
Present
and possible future claims, litigation and enforcement
actions;
|
·
|
Effects
of the application of applicable laws and regulations, including changes
in such regulations or the interpretation
thereof;
|
·
|
Relevant
legislative or regulatory changes, including retroactive royalty or
production tax regimes, changes in environmental regulation, environmental
risks and liability under federal, state and foreign environmental laws
and regulations;
|
·
|
General
economic conditions, either internationally, nationally or in
jurisdictions affecting our
business;
|
·
|
Failure
of the bankruptcy court to approve the settlement agreement and if the
court fails to approve the settlement agreement, the amount of resources
expended in connection with Calpine’s bankruptcy and its fraudulent
conveyance action, including significant ongoing costs for lawyers,
consultants, experts and all related expenses, as well as all lost
opportunity costs associated with our internal resources dedicated to
these matters and possible impacts on our
reputation;
|
·
|
Disputes
with mineral lease and royalty owners regarding calculation and payment of
royalties;
|
·
|
The
weather, including the occurrence of any adverse weather conditions and/or
natural disasters affecting our business;
and
|
·
|
Any
other factors that impact or could impact the exploration of oil or
natural gas resources, including but not limited to the geology of a
resource, the total amount and costs to develop recoverable reserves,
legal title, regulatory, natural gas administration, marketing and
operational factors relating to the extraction of oil and natural
gas.
|
·
|
Production
on an equivalent basis increased
27%;
|
·
|
Total
revenue, including the effects of hedging, increased $160.4 million or
64%;
|
·
|
Impairment
of oil and gas properties of $205.7 million pre-tax ($129.1 million net of
tax) that includes the impact of unfavorable reserve
revisions;
|
·
|
Net
loss of $32.6 million; net income/loss, excluding the impairment charge of
$129.1 million, would have increased $56.8 million or
143%;
|
·
|
Diluted loss
per share of $0.64; diluted earnings/loss per share, excluding the
impairment charge of $129.1 million, would have increased $1.10 or
139%;
|
·
|
Drilled
112 gross wells with a success rate of 86%;
and
|
·
|
In
mid September 2008, we sustained damage to our Sabine Lake and East
Cameron 88/89 production facilities as a result of Hurricane
Ike. Repairs at Sabine Lake have now been completed and
production resumed on October 28, 2008. All critical long-lead
equipment and materials have been secured for the commencement of repairs
at the East Cameron facility and production is anticipated to resume there
before the end of the year.
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||||||||||
2008
|
2007
|
%
Change Increase/ (Decrease)
|
2008
|
2007
|
%
Change Increase/ (Decrease)
|
|||||||||||||||||||
(In
thousands, except percentages and per unit amounts)
|
||||||||||||||||||||||||
Natural
gas sales
|
$ | 114,308 | $ | 79,061 | 45 | % | $ | 362,894 | $ | 225,658 | 61 | % | ||||||||||||
Oil
sales
|
15,728 | 10,657 | 48 | % | 49,941 | 26,730 | 87 | % | ||||||||||||||||
Total
revenues
|
$ | 130,036 | $ | 89,718 | 45 | % | $ | 412,835 | $ | 252,388 | 64 | % | ||||||||||||
Production:
|
||||||||||||||||||||||||
Gas
(Bcf)
|
12.1 | 10.7 | 13 | % | 38.1 | 29.7 | 28 | % | ||||||||||||||||
Oil
(MBbls)
|
130.3 | 141.4 | (8 | %) | 436.2 | 410.7 | 6 | % | ||||||||||||||||
Total
Equivalents (Bcfe)
|
12.9 | 11.6 | 11 | % | 40.8 | 32.2 | 27 | % | ||||||||||||||||
$
per unit:
|
||||||||||||||||||||||||
Avg.
Gas Price per Mcf
|
$ | 9.47 | $ | 7.39 | 28 | % | $ | 9.51 | $ | 7.60 | 25 | % | ||||||||||||
Avg.
Gas Price per Mcf, excluding Hedging
|
10.47 | 6.42 | 63 | % | 10.28 | 7.00 | 47 | % | ||||||||||||||||
Avg.
Oil Price per Bbl
|
120.66 | 75.37 | 60 | % | 114.48 | 65.08 | 76 | % | ||||||||||||||||
Avg.
Revenue per Mcfe
|
10.08 | 7.73 | 30 | % | 10.12 | 7.84 | 29 | % |
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||||||||||
2008
|
2007
|
%
Change Increase/ (Decrease)
|
2008
|
2007
|
%
Change Increase/ (Decrease)
|
|||||||||||||||||||
(In
thousands, except percentages and per unit amounts)
|
||||||||||||||||||||||||
Lease
operating expense
|
$ | 12,857 | $ | 11,912 | 8 | % | $ | 40,445 | $ | 33,274 | 22 | % | ||||||||||||
Production
taxes
|
2,336 | 1,243 | 88 | % | 11,528 | 3,428 | 236 | % | ||||||||||||||||
Depreciation,
depletion and amortization
|
46,951 | 38,186 | 23 | % | 150,103 | 105,079 | 43 | % | ||||||||||||||||
Impairment
of oil and gas properties
|
205,659 | - | 100 | % | 205,659 | - | 100 | % | ||||||||||||||||
General
and administrative costs
|
15,419 | 12,032 | 28 | % | 41,042 | 29,999 | 37 | % | ||||||||||||||||
$
per unit:
|
||||||||||||||||||||||||
Avg.
lease operating expense per Mcfe
|
$ | 1.00 | $ | 1.03 | (3 | %) | $ | 0.99 | $ | 1.03 | (4 | %) | ||||||||||||
Avg.
production taxes per Mcfe
|
0.18 | 0.11 | 64 | % | 0.28 | 0.11 | 155 | % | ||||||||||||||||
Avg.
DD&A per Mcfe
|
3.64 | 3.29 | 11 | % | 3.68 | 3.26 | 13 | % | ||||||||||||||||
Avg.
G&A per Mcfe
|
1.19 | 1.04 | 14 | % | 1.01 | 0.93 | 9 | % |
Nine
Months Ended September 30,
|
||||||||
2008
|
2007
|
|||||||
(In
thousands)
|
||||||||
Cash
flows provided by operating activities
|
$ | 326,301 | $ | 183,553 | ||||
Cash
flows used in investing activities
|
(197,172 | ) | (242,837 | ) | ||||
Cash
flows provided by financing activities
|
2,838 | 10,160 | ||||||
Net
increase (decrease) in cash and cash equivalents
|
$ | 131,967 | $ | (49,124 | ) |
Period
|
Total
Number of Shares Purchased (1)
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
Maximum
Number (or Approximate Dollar Value) of Shares that May yet Be Purchased
Under the Plans or Programs
|
||||||||||||
July
1 - July 31
|
22,675 | $ | 24.98 | - | - | |||||||||||
August
1 - August 31
|
2,642 | 23.28 | - | - | ||||||||||||
September
1 - September 30
|
4,520 | 20.55 | - | - | ||||||||||||
Total
|
29,837 | $ | 24.16 | - | - |
(1)
|
All
of the shares repurchased were surrendered by employees to pay tax
withholding upon the vesting of restricted stock awards. These
repurchases were not part of a publicly announced program to repurchase
shares of our common stock, nor do we have a publicly announced program to
repurchase shares of our common
stock.
|
(a)
|
Rosetta
reported on Form 8-K during the quarter covered by this report all
information required to be reported on such
form.
|
(b)
|
There
have been no material changes to the procedures by which securities
holders may recommend nominees to our board of directors since our most
recent disclosure of such procedures contained in our Annual Report on
Form 10-K for the year ended December 31, 2007 and our definitive proxy
statement filed with respect to our 2008 annual
meeting.
|
|
3.1
|
Certificate
of Incorporation (incorporated herein by reference to Exhibit 3.1 to the
Company’s Registration Statement on Form S-1 filed on October 7, 2005
(Registration No.
333-128888)).
|
|
3.2
|
Bylaws
(incorporated herein by reference to Exhibit 3.2 to the Company’s
Registration Statement on Form S-1 filed on October 7, 2005 (Registration
No. 333-128888)).
|
|
4.1
|
Registration
Rights Agreement (incorporated herein by reference to Exhibit 4.1 to the
Company’s Registration Statement on Form S-1 filed on October 7, 2005
(Registration No.
333-128888)).
|
31.1
|
Certification
of Periodic Financial Reports by Randy L. Limbacher in satisfaction of
Section 302 of the Sarbanes-Oxley Act of
2002
|
31.2
|
Certification
of Periodic Financial Reports by Michael J. Rosinski in satisfaction of
Section 302 of the Sarbanes-Oxley Act of
2002
|
32.1
|
Certification
of Periodic Financial Reports by Randy L. Limbacher and Michael J.
Rosinski in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002
and 18 U.S.C. Section 1350
|
ROSETTA
RESOURCES INC.
|
|||
By:
|
/s/
MICHAEL J. ROSINSKI
|
||
Michael
J. Rosinski
|
|||
Executive
Vice President and Chief Financial Officer
|
|||
(Duly
Authorized Officer and Principal Financial
Officer)
|
Exhibit
Number
|
Description
|
|
Certification
of Periodic Financial Reports by Randy L. Limbacher in satisfaction of
Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification
of Periodic Financial Reports by Michael J. Rosinski in satisfaction of
Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification
of Periodic Financial Reports by Randy L. Limbacher and Michael J.
Rosinski in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002
and 18 U.S.C. Section
1350
|