Newspaper article THE JOURNAL RECORD

Plains Resources' Earnings Jump 79% for First Quarter

Newspaper article THE JOURNAL RECORD

Plains Resources' Earnings Jump 79% for First Quarter

Article excerpt

HOUSTON (JR) -- Plains Resources Thursday reported a 79 percent increase in net income to $2.6 million for the first quarter of 1999.

Earnings were up from $1.4 million, or 7 cents per share, for the 1998 first quarter. After deducting accrued preferred stock dividends, net income per common share totaled 1 cent per share for the first quarter of 1999.

Revenues for the Houston-based company more than doubled to $477 million from $193.5 million. Cash flow from operations increased 29 percent to $11.8 million in the 1999 period as compared to $9.1 million a year earlier. Earnings before interest, taxes, depreciation, depletion, amortization and minority interest ("EBITDA") increased 65 percent to $25 million vs. EBITDA of $15.2 million in the first quarter of 1998. "We are very pleased that the company was able to generate improved financial results despite adverse industry conditions," said Greg L. Armstrong, Plains' president and chief executive officer. "Several factors contributed to this improvement, including favorable crude oil hedges, excellent midstream results and the financial engineering we completed in the second half of 1998." The Nymex benchmark oil price averaged $13.06 per barrel in the first quarter of 1999, nearly $3 below the $15.97 per barrel average for the first quarter of 1998 and $9.77 below the $22.83 experienced in the first quarter of 1997. During the quarter, production volumes were affected by shut-ins and production cutbacks related to lower prices and curtailments related to refinery disruptions in California as well as declines in the company's Gulf Coast production. As a result, total oil equivalent production decreased 6 percent to an average of 21,000 barrels per day -- down from 22,300 barrels per day the previous year. Armstrong noted that first quarter production volumes were in line with expectations and that implementation of the previously announced capital program should enable the company to offset overall production declines and achieve modest production growth in 1999. During the quarter, the company's average product price received at the wellhead was $11. …

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