<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A No. 1
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-9971
BURLINGTON RESOURCES INC.
(Exact name of registrant as specified in its charter)
Delaware 91-1413284
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5051 Westheimer, Suite 1400, Houston, Texas 77056
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 624-9500
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding
----- -----------
Common Stock, par value $.01 per share,
as of March 31, 2000 215,289,195
<PAGE> 2
--------------------------------------------------------------------------------
Burlington Resources Inc. (the "Company") is filing this amendment to
its quarterly report on Form 10-Q for the first quarter of 2000 in order to
restate the Financial Statements and revise the Management's Discussion and
Analysis of Financial Condition and Results of Operations. The Company
discovered an accounting error that resulted in a $26 million overstatement of
revenues for the fourth quarter of 1998. The net effect, after adjusting for
income tax of $9 million, is a $17 million increase in net loss from $321
million to $338 million for the year ended December 31, 1998 and a $17 million
reduction in stockholders' equity at December 31, 1998 and 1999 and March 31,
2000. See Note 5 of Notes to Consolidated Financial Statements.
--------------------------------------------------------------------------------
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
BURLINGTON RESOURCES INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
FIRST QUARTER
---------------------
2000 1999
-------- --------
(In Millions, Except per Share Amounts)
<S> <C> <C>
Revenues .................................... $ 652 $ 436
-------- --------
Costs and Expenses
Production Taxes ........................... 33 19
Production and Processing .................. 118 115
Depreciation, Depletion and Amortization ... 180 156
Exploration Costs .......................... 95 54
Administrative ............................. 39 38
-------- --------
Total Costs and Expenses .................... 465 382
-------- --------
Operating Income ............................ 187 54
Interest Expense ............................ 50 53
Other Income - Net .......................... -- 4
-------- --------
Income Before Income Taxes .................. 137 5
Income Tax Expense .......................... 60 5
-------- --------
Net Income .................................. $ 77 $ --
======== ========
Basic Earnings per Common Share ............. $ .36 $ --
======== ========
Diluted Earnings per Common Share ........... $ .35 $ --
======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE> 4
BURLINGTON RESOURCES INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
March 31,
2000 December 31,
(Restated) 1999
------------ ------------
(In Millions, Except Share Data)
<S> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents .......................................... $ -- $ 89
Accounts Receivable ................................................ 467 473
Inventories ........................................................ 56 53
Other Current Assets ............................................... 30 26
------------ ------------
553 641
------------ ------------
Oil & Gas Properties (Successful Efforts Method) ..................... 12,948 12,834
Other Properties ..................................................... 943 935
------------ ------------
13,891 13,769
Accumulated Depreciation, Depletion and Amortization ............... 7,602 7,412
------------ ------------
Properties - Net ................................................. 6,289 6,357
------------ ------------
Deferred Income Taxes ................................................ 23 32
------------ ------------
Other Assets ......................................................... 121 135
------------ ------------
Total Assets ................................................... $ 6,986 $ 7,165
============ ============
LIABILITIES
Current Liabilities
Accounts Payable ................................................... $ 381 $ 449
Taxes Payable ...................................................... 62 93
Accrued Interest ................................................... 44 36
Other Current Liabilities .......................................... 46 19
Current Maturities of Long-term Debt ............................... -- 51
------------ ------------
533 648
------------ ------------
Long-term Debt ....................................................... 2,651 2,769
------------ ------------
Deferred Income Taxes ................................................ 142 96
------------ ------------
Other Liabilities and Deferred Credits ............................... 409 423
------------ ------------
Put Options on Common Stock .......................................... 3 --
------------ ------------
Commitments and Contingent Liabilities
STOCKHOLDERS' EQUITY
Preferred Stock, Par Value $.01 Per Share
(Authorized 75,000,000 Shares; One Share Issued) .................. -- --
Common Stock, Par Value $.01 Per Share
(Authorized 325,000,000 Shares; Issued 241,188,770 Shares) ........ 2 2
Paid-in Capital ...................................................... 3,961 3,966
Retained Earnings .................................................... 375 328
Deferred Compensation - Restricted Stock ............................. (9) (3)
Accumulated Other Comprehensive Loss ................................. (53) (54)
Cost of Treasury Stock
(25,899,575 and 25,219,025 Shares for 2000 and 1999, respectively).. (1,028) (1,010)
------------ ------------
Stockholders' Equity ................................................. 3,248 3,229
------------ ------------
Total Liabilities and Stockholders' Equity ..................... $ 6,986 $ 7,165
============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
4
<PAGE> 5
BURLINGTON RESOURCES INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FIRST QUARTER
---------------------
2000 1999
------ ------
(In Millions)
<S> <C> <C>
Cash Flows From Operating Activities
Net Income ............................................... $ 77 $ -
Adjustments to Reconcile Net Income to Net Cash
Provided By Operating Activities
Depreciation, Depletion and Amortization ................ 180 156
Deferred Income Taxes ................................... 55 (5)
Exploration Costs ....................................... 95 54
Working Capital Changes
Accounts Receivable ..................................... 6 74
Inventories ............................................. (3) 1
Other Current Assets .................................... (4) (6)
Accounts Payable ........................................ (68) (41)
Taxes Payable ........................................... (31) (5)
Accrued Interest ........................................ 8 22
Other Current Liabilities ............................... 27 1
Other ..................................................... (27) (15)
------ ------
Net Cash Provided By Operating Activities ............. 315 236
------ ------
Cash Flows From Investing Activities
Additions to Properties ................................... (226) (243)
Other ..................................................... 16 (12)
------ ------
Net Cash Used In Investing Activities ................. (210) (255)
------ ------
Cash Flows From Financing Activities
Proceeds from Long-term Debt .............................. -- 496
Reduction in Long-term Debt ............................... (169) (191)
Dividends Paid ............................................ -- (24)
Common Stock Purchases .................................... (35) (9)
Other ..................................................... 10 (5)
------ ------
Net Cash Provided By (Used In) Financing Activities ... (194) 267
------ ------
Effect of Exchange Rate Changes on Cash and Cash
Equivalents................................................ -- --
------ ------
Increase (Decrease) in Cash and Cash Equivalents ............ (89) 248
Cash and Cash Equivalents
Beginning of Year ......................................... 89 --
------ ------
End of Period .............................................. $ -- $ 248
====== ======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
5
<PAGE> 6
BURLINGTON RESOURCES INC.
Notes TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The 1999 Annual Report, as amended, of Burlington Resources Inc. (the
"Company") includes certain definitions and a summary of significant accounting
policies and should be read in conjunction with this Quarterly Report on Form
10-Q ("Quarterly Report"). The financial statements for the periods presented
herein are unaudited, condensed and do not contain all information required by
generally accepted accounting principles to be included in a full set of
financial statements. In the opinion of management, all material adjustments
necessary to present fairly the results of operations have been included. All
such adjustments are of a normal, recurring nature. The results of operations
for any interim period are not necessarily indicative of the results of
operations for the entire year. The consolidated financial statements include
certain reclassifications that were made to conform to current presentation.
Amounts related to 1999 include the business activities of Poco Petroleums Ltd.
which was acquired in November 1999 and accounted for as a pooling of interests.
Basic earnings per common share ("EPS") is computed by dividing income
available to common stockholders by the weighted average number of common shares
outstanding for the period. The weighted average number of common shares
outstanding for computing basic EPS was 216 million for the first quarter of
2000 and 1999, respectively. Diluted EPS reflects the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock. The weighted average number of common
shares outstanding for computing diluted EPS, including dilutive stock options,
was 216 million and 217 million for the first quarter of 2000 and 1999,
respectively. No adjustments were made to reported net income in the computation
of EPS. EPS discussions within this document are in reference to basic EPS.
Comprehensive income consists of net income and foreign currency
translation adjustments. Foreign currency translation adjustments were $1
million and $12 million resulting in comprehensive income of $78 million and $12
million for the first quarter of 2000 and 1999, respectively.
2. COMMITMENTS AND CONTINGENT LIABILITIES
The Company is involved in several proceedings challenging the payment
of royalties for its crude oil and natural gas production.
On November 20, 1997, the Company and numerous other defendants entered
into a settlement agreement in a lawsuit styled as The McMahon Foundation, et
al. v. Amerada Hess Corporation, et al. This lawsuit is a proposed class action
consisting of both working interest owners and royalty owners against numerous
defendants, all of which are oil companies and/or purchasers of oil from oil
companies, including Burlington Resources Oil & Gas Company, formerly known as
Meridian Oil Inc. ("BROG") and The Louisiana Land and Exploration Company
("LL&E"). The plaintiffs allege that the defendants conspired to fix, depress,
stabilize and maintain at artificially low levels the prices paid for oil by,
among other things, setting their posted prices at arbitrary levels below
competitive market prices. Cases involving similar allegations have been filed
in federal courts in other states. On January 14, 1998, the United States
Judicial Panel on Multidistrict Litigation issued an order consolidating these
cases and
6
<PAGE> 7
transferring the McMahon case to the United States District Court for the
Southern District of Texas in Corpus Christi (In Re Lease Oil Antitrust
Litigation, MDL No. 1206). The Company and other defendants have entered into a
Settlement Agreement which received preliminary approval by the Court on October
28, 1998. Following an evidentiary hearing, the Court issued a final order dated
September 10, 1999 finding that class certification was appropriate and that the
Settlement Agreement was fair, adequate and reasonable. The Court further
ordered the dismissal of all claims against the Company and other designated
defendants. Several appeals have been filed and are pending.
The Company is also involved in several governmental proceedings
relating to the payment of royalties. Various administrative proceedings are
pending before the Minerals Management Service ("MMS") of the United States
Department of the Interior with respect to the proper valuation of oil and gas
produced on federal and Indian lands for purposes of paying royalties on
production sold by BROG to its affiliate, Burlington Resources Trading Inc.
("BRTI"), or gathered by its affiliate, Burlington Resources Gathering Inc. In
general, these proceedings stem from regular MMS audits of the Company's royalty
payments over various periods of time and involve the interpretation of the
relevant federal regulations.
In late February 1998, the Company and numerous other oil and gas
companies received a complaint filed in the United States District Court for the
Eastern District of Texas in Lufkin in a lawsuit styled as United States of
America ex rel. J. Benjamin Johnson, Jr., et al. v. Shell Oil Company, et al.
alleging violations of the civil False Claims Act. The United States has
intervened in this lawsuit as to some of the defendants, including the Company,
and has filed a separate complaint. This suit alleges that the Company underpaid
royalties for crude oil produced on federal and Indian lands through the use of
below-market posted prices in the sale of oil from BROG to BRTI. The suit
alleges that royalties paid by BROG based on these posted prices were lower than
the royalties allegedly required to be paid under federal regulations, and that
the forms filed by BROG with the MMS reporting the royalties paid were false,
thereby violating the civil False Claims Act. The Company and others have also
received document subpoenas and other inquiries from the Department of Justice
relating to the payment of royalties to the federal government for natural gas
production. These requests and inquiries have been made in the context of one or
more other False Claims Act cases brought by individuals which remain under seal
and are now being investigated by the Civil Division of the Department of
Justice. The Company has responded and continues to respond to these requests
and inquiries, but the Company does not know what action, if any, the Department
of Justice will take with regard to these other cases. If the government chooses
not to intervene and pursue these cases, the individuals who initially brought
these cases are free to pursue them in return for a share, if any, of any final
settlement or judgment. In addition, the Company has been advised that it is a
target of a criminal investigation by the United States Attorney for the
District of Wyoming into the alleged underpayment of oil and gas royalties. The
United States Attorney for the District of Wyoming has also inquired into
certain historical oil and gas accounting and financial reporting practices of
the Company. The Company has responded to numerous grand jury document subpoenas
in connection with the investigation and is otherwise cooperating with the
investigation. Management cannot predict when the investigation will be
completed or its ultimate outcome.
In April 1999, the court unsealed and the Company was served with the
petition in the False Claims Act lawsuits styled United States of America ex
rel. Jack J. Grynberg v. Burlington Resources Oil & Gas Company, et al. and
United States of America ex rel. Jack J. Grynberg v. The Louisiana Land and
Exploration Company, et al., filed in the United States District Court of the
District of Wyoming (the "Grynberg lawsuits"). In both cases the United States
Department of Justice declined to intervene following its investigation,
resulting in these claims being pursued by Grynberg individually. Grynberg
7
<PAGE> 8
has filed seventy similar suits against more than three hundred defendants. On
October 10, 1999, the Judicial Panel on Multidistrict Litigation consolidated
sixty-six of the Grynberg False Claims Act lawsuits, including the referenced
suits against the Company, and transferred all cases to the United States
District Court for the District of Wyoming. The Grynberg lawsuits generally
allege that the Company and other defendants improperly measured and otherwise
undervalued natural gas in connection with the payment of royalties on
production from federal and Indian lands. Motions to dismiss have been filed by
the Company and numerous other defendants and are pending before the Court.
On March 28, 2000, the United States District Court for the Eastern
District of Texas, Lufkin Division, ordered that the First Amended Complaint in
the case of United States ex rel. M. Glenn Osterhoudt, III v. Amerada Hess, et
al. and the Second Amended Complaint in the case of United States of America ex
rel. Harrold E. (Gene) Wright v Agip Petroleum Company, et al. be unsealed and
served upon defendants, including the Company. In these lawsuits, the plaintiffs
have alleged violations of the civil False Claims Act. Plaintiffs contend that
defendants underpaid royalties on natural gas and natural gas liquids produced
on federal and Indian lands through the use of below-market prices, improper
deductions, improper measurement techniques and transactions with affiliated
companies. The United States has elected to intervene in these cases as to some
of the defendants, including the Company, but has not at this time filed or
served upon the Company a separate complaint.
Based on the Company's present understanding of the various
governmental and False Claims Act proceedings described above, the Company
believes that it has substantial defenses to these claims and intends to
vigorously assert such defenses. However, in the event that the Company is found
to have violated the civil False Claims Act or is indicted or convicted on
criminal charges, the Company could be subject to a variety of sanctions,
including treble damages, substantial monetary fines, civil and/or criminal
penalties and a temporary suspension from entering into future federal mineral
leases and other federal contracts for a defined period of time. While the
ultimate outcome and impact on the Company cannot be predicted with certainty,
management believes that the resolution of these proceedings will not have a
material adverse effect on the consolidated financial position of the Company,
although results of operations and cash flow could be significantly impacted in
the reporting periods in which such matters are resolved.
In addition to the foregoing, the Company and its subsidiaries are
named defendants in numerous other lawsuits and named parties in numerous
governmental and other proceedings arising in the ordinary course of business.
While the outcome of these other lawsuits and proceedings cannot be predicted
with certainty, management believes these matters, other than the
above-described proceedings, will not have a material adverse effect on the
consolidated financial position, results of operations or cash flows of the
Company.
3. COMMODITY HEDGING ACTIVITIES
In order to mitigate the impact of market price fluctuations, the
Company utilizes options and other financial instruments to sell forward and
hedge future crude oil and natural gas production. Changes in the market value
of these contracts and premiums paid for option contracts are deferred until the
gain or loss is recognized on the hedged commodity. If the contract is not a
hedge, changes in market value are recorded currently. To qualify as a hedge,
these transactions must be designated as a hedge and changes in their fair value
must correlate with changes in the price of anticipated future production such
that the Company's exposure to the effects of commodity price changes is
reduced. These hedging instruments are measured for effectiveness on an
enterprise basis both at the inception of the contract and
8
<PAGE> 9
on an ongoing basis. If these instruments are terminated prior to maturity,
resulting gains or losses continue to be deferred until the hedged item is
recognized in income.
As of March 31, 2000, the Company had an unrecognized opportunity loss
related to the market value of its oil and gas hedges of approximately $155
million for production in years 2000 through 2005. The unrecognized loss
represents the difference between hedged prices and market prices on hedged
volumes of the commodity at March 31, 2000. Gains or losses resulting from these
transactions are included in revenue as the related physical production is
delivered.
4. SEGMENT AND GEOGRAPHIC INFORMATION
The Company's reportable segments are North America and International.
Both segments are engaged principally in the exploration, development,
production and marketing of oil and gas. The North America segment is
responsible for the Company's operations in the U.S.A. and Canada and the
International segment is responsible for all operations outside that
geographical region. The accounting policies for the segments are the same as
those for the consolidated financial statements. There are no significant
intersegment sales or transfers.
The following tables present information about reported segment
operations.
<TABLE>
<CAPTION>
First Quarter 2000
-------------------------------------------------
North America International Total
------------- ------------- -------------
(In Millions)
<S> <C> <C> <C>
Revenues ..................... $597 $55 $652
Operating income ............. 207 25 232
Additions to properties ...... $195 $26 $221
</TABLE>
<TABLE>
<CAPTION>
First Quarter 1999
-------------------------------------------------
North America International Total
------------- ------------- -------------
(In Millions)
<S> <C> <C> <C>
Revenues ..................... $407 $ 29 $436
Operating income (loss) ...... 118 (22) 96
Additions to properties ...... $163 $ 68 $231
</TABLE>
The following is a reconciliation of segment operating income to
consolidated income before income taxes.
<TABLE>
<CAPTION>
First Quarter
---------------------
2000 1999
-------- --------
(In Millions)
<S> <C> <C>
Total operating income for reportable segments ..... $232 $96
Corporate expenses ................................. 45 42
Interest expense ................................... 50 53
Other income - net ................................. -- 4
---- ----
Consolidated income before income taxes ........... $137 $ 5
==== ====
</TABLE>
9
<PAGE> 10
The following is a reconciliation of segment additions to oil and gas
properties to consolidated amounts.
<TABLE>
<CAPTION>
First Quarter
---------------------
2000 1999
-------- --------
(In Millions)
<S> <C> <C>
Total additions to properties for reportable segments ...... $ 221 $ 231
Administrative expenditures ................................ 5 12
-------- --------
Consolidated additions to properties ....................... $ 226 $ 243
======== ========
</TABLE>
The following is revenue by geographic location.
<TABLE>
<CAPTION>
First Quarter
---------------------
2000 1999
-------- --------
(In Millions)
<S> <C> <C>
USA ........................................................ $ 471 $ 316
Canada ..................................................... 126 91
Other international ........................................ 55 29
-------- --------
Consolidated revenues ...................................... $ 652 $ 436
======== ========
</TABLE>
5. RESTATEMENT
The Company discovered an accounting error that resulted in a $26
million ($17 million net of tax) overstatement of revenues for the fourth
quarter of 1998. The net effect, after adjusting for income tax of $9 million,
is a $17 million increase in net loss from $321 million to $338 million for the
year ended December 31, 1998 and a $17 million reduction in stockholders' equity
at December 31, 1998 and 1999 and March 31, 2000. As a result, the Company has
restated its 1998 consolidated financial statements.
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Financial Condition and Liquidity
The total long-term debt to capital ratio at March 31, 2000 and
December 31, 1999 was 45 percent and 47 percent, respectively. During the first
quarter, commercial paper and credit facility notes of $169 million were repaid.
The Company has unused credit commitments in the form of revolving
facilities ("revolvers") as of March 31, 2000. A portion of these revolvers is
available to cover debt due within one year, therefore, commercial paper, credit
facility notes and fixed-rate debt due within one year are classified as
long-term debt. In addition, the Company has the capacity to issue $1 billion of
securities under a shelf registration statement filed with the Securities and
Exchange Commission. The revolvers are comprised of agreements for $600 million,
$400 million and $340 million. The $600 million revolver expires in February
2003 and the $400 million and $340 million credit facilities expire in March
2001 unless renewed by mutual consent. The Company has the option to convert the
outstanding balance on the $340 million revolver to a one year term note at
expiration of the agreement.
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<PAGE> 11
In July 1998, the Company's Board of Directors approved the repurchase
of up to two million shares of its Common Stock. During the first quarter of
2000, the Company repurchased 1,215,000 shares of its Common Stock for $35
million. Since December 1988, the Company has repurchased approximately 33
million shares. In conjunction with the Company's stock repurchase program, the
Company sold put options ("options") during 2000. The options entitle the
holders, upon exercise on the expiration dates, to sell shares of BR Common
Stock to the Company at specified prices. Alternatively, the Company retains the
ability to settle the options in cash. As of March 31, 2000, 100,000 options
remained outstanding with an average strike price of $28.56 and expiration dates
through June 2000.
Net cash provided by operating activities for the first three months of
2000 was $315 million compared to $236 million in 1999. The increase was
primarily due to higher operating income partially offset by working capital and
other changes. Operating income was higher principally as a result of higher
commodity prices.
The Company and its subsidiaries are named defendants in numerous
lawsuits and named parties in numerous governmental and other proceedings
arising in the ordinary course of business. While the outcome of lawsuits and
other proceedings cannot be predicted with certainty, management believes these
matters will not have a material adverse effect on the consolidated financial
position of the Company, although results of operations and cash flows could be
significantly impacted in the reporting periods in which such matters are
resolved.
The Company has certain other commitments and uncertainties related to
its normal operations. Management believes that there are no other commitments
or uncertainties that will have a material adverse effect on the consolidated
financial position, results of operations or cash flows of the Company.
Capital Expenditures
Capital expenditures for the first three months of 2000 totaled $226
million compared to $243 million in 1999. Capital expenditures, excluding proved
property acquisitions, are currently projected to be between $800 and $900
million for all of 2000 and are expected to be primarily for the development and
exploration of oil and gas properties and plant and pipeline expenditures.
Capital expenditures will be funded from internal cash flows, supplemented, if
needed, by external financing.
Dividends
On April 19, 2000, the Board of Directors declared a quarterly common
stock cash dividend of $.1375 per share, payable July 5, 2000.
Results of Operations - First Quarter 2000 Compared to First Quarter 1999
The Company reported net income of $77 million or $.36 per share for
the first quarter of 2000 compared to a net loss of $57 thousand or $0 per share
in 1999. Operating income for the first quarter of 2000 was $187 million
compared to $54 million in 1999. Revenues were $652 million for the first
quarter of 2000 compared to $436 million for the first quarter of 1999. Natural
gas sales prices increased 27 percent to $2.32 per MCF which increased revenues
$93 million. Natural gas sales volumes increased 5 percent to 2,121 MMCF per day
which increased revenues $22 million. Average oil sales prices increased 110
percent to $23.36 per barrel which increased revenues $101 million. Oil sales
volumes decreased 4 percent to 90.6 MBbls per day which decreased revenues $2
million. Gas sales volumes
11
<PAGE> 12
increased due to East Irish Sea production beginning in the third quarter of
1999. Oil sales volumes decreased primarily due to natural declines in the
Mid-Continent and North Sea areas.
Costs and expenses were $465 million for the first quarter of 2000
compared to $382 million in 1999. The increase was primarily due to a $41
million increase in exploration costs, a $24 million increase in depreciation,
depletion and amortization ("DD&A") and a $14 million increase in production
taxes. Exploration costs increased primarily due to higher dry hole expense of
$30 million and higher geological and geophysical expenses of $12 million. DD&A
increased primarily due to a higher unit rate and higher production volumes
resulting in increased expenses of $14 million and $7 million, respectively.
Production taxes increased primarily due to higher oil and gas revenues.
Interest expense was $50 million for the first quarter of 2000 compared
to $53 million in 1999. The decrease was primarily due to lower outstanding
commercial paper borrowings in 2000.
Other income - net was $333 thousand in the first quarter of 2000
compared to $4 million in 1999. The decrease was primarily due to foreign
exchange transactions.
Income tax expense for the first quarter of 2000 was $60 million or a
rate of 44 percent compared to an expense of $5 million or a rate of 101 percent
in 1999. The increase in income tax expense was primarily a result of higher
pretax income.
Forward-looking Statements
This Quarterly Report contains projections and other forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934. These projections and statements reflect the Company's current views with
respect to future events and financial performance. No assurances can be given,
however, that these events will occur or that these projections will be achieved
and actual results could differ materially from those projected as a result of
certain factors. A discussion of these factors is included in the Company's 1999
Form 10-K, as amended.
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<PAGE> 13
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
BURLINGTON RESOURCES INC.
(Registrant)
By /s/ John E. Hagale
--------------------------------
John E. Hagale
Executive Vice President and
Chief Financial Officer
By /s/ Philip W. Cook
--------------------------------
Philip W. Cook
Vice President, Controller and
Chief Accounting Officer
Date: August 11, 2000
13
