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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): February 3, 1998
Commission File Number 1-12480
LOUIS DREYFUS NATURAL GAS CORP.
(Exact name of registrant as specified in its charter)
OKLAHOMA 73-1098614
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
14000 QUAIL SRINGS PARKWAY, SUITE 600
OKLAHOMA CITY, OKLAHOMA 73134
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (405) 749-1300
NONE
(Former name, former address and former fiscal year, if changed since last
report.)
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LOUIS DREYFUS NATURAL GAS CORP.
FORM 8-K
FEBRUARY 3, 1998
ITEM 7 -- FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
On February 3, 1998, the Company reported its financial results for the
three months and the year ended December 31, 1997 and its proved reserves
position as of December 31, 1997. The associated news release is
attached as an exhibit to this filing.
Exhibit 99.1 -- News Release Reporting Financial Results for the Three
Months and the Year ended December 31, 1997 and the Company's Proved
Reserves Position as of December 31, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LOUIS DREYFUS NATURAL GAS CORP.
Date: February 5, 1998 By: /s/ Jeffrey A. Bonney
-------------------------------------------
Jeffrey A. Bonney
Executive Vice President and
Chief Financial Officer
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Exhibit 99.1
NEWS RELEASE
CONTACT: KEVIN R. WHITE OR SHAWN ABERNATHY
405 749-1300
FOR IMMEDIATE RELEASE
Tuesday, February 3, 1998
LOUIS DREYFUS NATURAL GAS ANNOUNCES 1997 RESULTS AND YEAR-END RESERVES
RECORD REVENUES, CASH FLOWS AND PRODUCTION; NET LOSS FROM ACQUISITION
IMPAIRMENT CHARGE
Oklahoma City, Oklahoma -- Louis Dreyfus Natural Gas Corp. (NYSE: LD)
today announced its financial results for the year ended December 31, 1997.
Excluding the effects of a fourth-quarter impairment charge, the Company
reported net income of $31.1 million, or $1.03 per share, on total revenue of
$232.9 million for 1997. This compares with net income of $21.1 million, or
$.76 per share, on total revenue of $189.5 million for 1996. The Company
reported record cash flows from operating activities (before working capital
changes) for the year ended December 31, 1997 of $127.1 million, which
compares to $101.0 million for 1996, an increase of 26%. The 1997 increase in
revenues and operating cash flows was achieved primarily through growth in oil
and gas production and higher oil and gas prices. The Company reported a net
loss of $16.1 million, or $.53 per share, after the effects of a $75.2 million
non-cash impairment charge ($47.1 million after tax), substantially all of
which was recognized as anticipated in connection with the October 1997
acquisition of American Exploration Company.
RECORD PRODUCTION LEVELS
Oil and gas production for the year ended December 31, 1997 was 12%
higher in relation to the prior year. In total, the Company produced 84.3
Bcfe in 1997 compared to 75.0 Bcfe in 1996. Natural gas production increased
to 71.7 Bcf, up 12% compared to 63.9 Bcf produced in 1996. Oil production for
1997 increased 13% to 2.1 MMBbls compared to 1.8 MMBbls for 1996. These 1997
production increases are largely attributable to the October 1997 acquisition
of American Exploration Company and the results of the Company's exploration
and development drilling program.
The Company received an average gas price of $2.52 per Mcf for its 1997
gas production, an 8% increase compared to $2.34 per Mcf for 1996. The
average oil price received for 1997 was $19.86 per Bbl compared to $19.56 per
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Bbl for 1996, an increase of 2%. The prices for both years include the
results of the Company's hedging activities.
FOURTH QUARTER 1997 RESULTS
Excluding the non-cash impairment charge, the Company reported net income
of $8.4 million, or $.23 per share, on total revenue of $80.1 million for the
quarter ended December 31, 1997. This compares to net income of $7.8 million,
or $.28 per share, on total revenue of $54.9 million for the fourth quarter of
1996. Cash flows from operating activities (before changes in working
capital) for the fourth quarter of 1997 were sharply higher, increasing 43% to
$46.8 million compared to $32.6 million for the fourth quarter of 1996. This
improvement was primarily attributable to higher oil and gas production as a
result of the American acquisition. The Company reported a net loss of $38.7
million, or $1.03 per share, after the effects of the acquisition impairment
charge.
1997 DRILLING PROGRAM
The Company expanded its exploration and development activities in each
of its core operating areas during 1997. For the year, the Company
successfully completed 311 productive wells out of 343 total wells drilled (or
91%), including 233 wells drilled in the state of Texas and 80 wells in
Oklahoma. This well count includes 48 exploratory wells, 36 (or 75%) of which
were successfully completed as producers. The Company's 1997 drilling
activities resulted in the addition of 125 Bcfe of new reserves, replacing
148% of production.
1997 YEAR-END RESERVES
The Company added 213 Bcfe to proved oil and gas reserves during 1997, a
22% increase over 1996's year-end proved reserve position of 990 Bcfe. The
Company's proved reserves at December 31, 1997 are comprised of 29.1 MMBbls of
oil and 1.0 Tcf of natural gas, or 1.2 Tcfe. The present value of the
estimated future net revenues from proved reserves discounted at 10% was $1.1
billion. In addition to the reserve growth resulting from the Company's 1997
drilling program, the Company acquired 198 Bcfe (net of sales) during 1997.
MANAGEMENT COMMENT
Mark Monroe, President and Chief Executive Officer, stated, "1997 was a
year of significant achievement for Louis Dreyfus Natural Gas. Through our
drilling and acquisition efforts, the Company added reserves equal to more
than 350% of production. Compared to last year, we are a substantially
larger, stronger company, with total assets now exceeding $1.2 billion. Our
1997 drilling program established records in terms of number of wells drilled
and reserves added. We ended the year with an exciting exploration position
which has the potential to make a significant impact on our future results.
Our growth prospects for 1998 look very bright. Production averaged 320
MMcfe per day for December, a 20 MMcfe per day increase over pro forma
combined results for the first half of 1997. We will continue to focus on the
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strategy that has served us well -- large-scale, risk-balanced drilling in our
core operating areas and opportunistic acquisitions."
- -----------------------------------
This press release includes certain statements that may be deemed to be
"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. All statements, other than statements of historical
facts, included in this press release that address activities, events or
developments that the Company expects, believes or anticipates will or may
occur in the future, including drilling of wells, reserve estimates, future
production of oil and gas, future cash flows and other such matters are
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Company in light of their experience and perception
of historical trends, current conditions, expected future developments and
other factors they believe are appropriate in the circumstances. Such
statements are subject to a number of assumptions, risks and uncertainties,
many of which are beyond the control of the Company. Investors are cautioned
that any such statements are not guarantees of future performance and that
actual results or developments may differ materially from those projected in
the forward-looking statements.
# # #
Louis Dreyfus Natural Gas is an independent energy company engaged in the
acquisition, development, exploration, production and marketing of natural gas
and crude oil. Internet address: http://www.ldng.com.<PAGE>
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Presented below are selected financial and operating results for the
three-months and the years ended December 31, 1997 and 1996 (in thousands,
except per share data and as noted):
<TABLE>
Three Months Ended Year Ended
December 31, December 31,
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C>
SELECTED FINANCIAL RESULTS:
REVENUES
Oil and gas sales. . . . . . . . . . . $ 79,823 $ 53,845 $222,016 $185,558
Interest and other . . . . . . . . . . 299 1,006 10,901 3,947
-------- -------- -------- --------
80,122 54,851 232,917 189,505
-------- -------- -------- --------
EXPENSES
Operating costs. . . . . . . . . . . . 16,680 11,910 49,169 44,615
General and administrative . . . . . . 6,956 3,979 18,855 16,325
Exploration costs. . . . . . . . . . . 3,656 4,174 8,956 4,965
Depreciation, depletion and
amortization. . . . . . . . . . . . . 30,084 16,512 79,325 65,278
Impairment of oil and gas properties . 75,198 -- 75,198 --
Interest . . . . . . . . . . . . . . . 9,706 6,620 28,737 26,822
-------- -------- -------- --------
142,280 43,195 260,240 158,005
-------- -------- -------- --------
Income (loss) before income taxes. . . (62,158) 11,656 (27,323) 31,500
Income taxes . . . . . . . . . . . . . (23,454) 3,850 (11,261) 10,398
-------- -------- -------- --------
Net income (loss). . . . . . . . . . . $(38,704) $ 7,806 $(16,062) $ 21,102
======== ======== ======== ========
Net income (loss) per share. . . . . . $ (1.03) $ .28 $ (.53) $ .76
======== ======== ======== ========
Weighted average common shares
outstanding . . . . . . . . . . . . . 37,435 27,800 30,233 27,800
======== ======== ======== ========
Cash flows from operating activities
(before working capital changes). . . $ 46,786 $ 32,618 $127,074 $100,981
======== ======== ======== ========
</TABLE>
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<TABLE>
Three Months Ended Year Ended
December 31, December 31,
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C>
SELECTED OPERATING RESULTS:
PRODUCTION
Oil production (MBbls) . . . . . . . . 849 480 2,088 1,849
Natural gas production (MMcf). . . . . 23,352 16,334 71,731 63,910
Equivalent production (MMcfe). . . . . 28,443 19,212 84,262 75,004
PRICES
Average oil price (per Bbl). . . . . . $ 19.15 $ 21.34 $ 19.86 $ 19.56
Average gas price (per Mcf). . . . . . $ 2.72 $ 2.67 $ 2.52 $ 2.34
Average equivalent price (per Mcfe). . $ 2.81 $ 2.80 $ 2.63 $ 2.47
Dec. 31, Dec. 31,
1997 1996
---------- ----------
SELECTED BALANCE SHEET INFORMATION:
Net working capital. . . . . . . . . . $ 3,231 $ 4,340
Oil and gas properties, net. . . . . . 1,077,091 652,257
Total assets . . . . . . . . . . . . . 1,210,954 733,613
Long-term debt . . . . . . . . . . . . 563,344 343,907
Stockholders' equity . . . . . . . . . 469,204 263,693
PROVED RESERVE INFORMATION:
Oil (MBbls). . . . . . . . . . . . . . 29,109 23,497
Natural gas (MMcf) . . . . . . . . . . 1,028,752 849,199
Total (MMcfe). . . . . . . . . . . . . 1,203,405 990,179
</TABLE>
