HOUSTON, March 12 /PRNewswire-FirstCall/ -- Endeavour International
Corporation (NYSE-Alt: END) (LSE:ENDV) today reported net income to
common stockholders for 2008 increased to $45.7 million or $0.32
per diluted share as compared to a loss of $60.3 million or $0.49
per diluted share in 2007. Revenues in 2008 increased more than 47
percent to $260.4 million from $176.1 million in 2007. The company
reported adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) of $176.5 million from $124.1 million in
2007. Discretionary cash flow for the year was $120.8 million. For
the fourth quarter 2008, net income to common stockholders was
$56.4 million or $0.29 per diluted share as compared to a net loss
of $29.6 million or $0.23 per diluted share for the same period in
2007. Revenues for the quarter were $41.4 million reflecting sales
of 7,900 barrels of oil equivalent per day (boepd) compared to
revenues of $54.5 million from sales of 8,300 boepd in the prior
period in 2007. Adjusted EBITDA was $33.7 million, a decrease from
$35.2 million in the same quarter in 2007. "This past year was a
breakthrough period for us as we achieved both significant
financial and operational success," said William L. Transier,
chairman and chief executive officer. "We met our forecasted
production goals and that combined with our hedging strategy
resulted in cash flow that funded our growth activities and allowed
us to significantly pay down debt. The company recorded an uncommon
industry feat with 100 percent technical success for the seven
exploratory and appraisal wells drilled during the year. As we move
forward, Endeavour is involved in three significant development
projects that are expected to more than double our production by
the end of 2010. All of this was accomplished in a highly volatile
and challenging marketplace." Endeavour also reported a reserve
replacement rate of 175 percent of 2008 production. Proved and
probable reserves at year-end 2008 increased to 32.2 million
barrels of oil equivalent (mmboe) compared to 29.8 mmboe a year ago
(see Table). Extensions, discoveries and upward revisions to prior
estimates added 5.6 mmboe, more than replacing production of 3.2
mmboe or approximately 8,800 boepd during 2008. Net Reserves at
December 31, 2008 Oil NGL Gas Equivalents (mbl) (mbl) (mcf) (mboe)
Proved Developed Producing 1,811 320 11,496 4,047 Non-Producing 618
27 416 714 Proved Undeveloped 773 6 20,886 4,260 Proved (1P) 3,202
353 32,798 9,021 Probable 8,128 435 87,503 23,147 Proved + Probable
(2P) 11,330 788 120,301 32,168 Possible 14,736 489 113,125 34,079
Proved + Probable + Possible (3P) 26,066 1,277 233,426 66,247
Source: Netherland, Sewell and Associates, Inc. Other highlights
for the fourth quarter and the year are as follows: Drilled two
highly successful appraisal wells -- Endeavour participated in the
drilling of two strategic appraisal wells in the United Kingdom
sector of the North Sea both of which significantly extended the
potential of previous discoveries. -- Rochelle - The commerciality
of the undeveloped Rochelle discovery in Block 15/27 was confirmed
when the Rochelle 15/27-11 well was drilled to a total depth of
10,369 feet and tested at flow rates of 41 million cubic feet of
gas per day and 2,300 barrels of oil condensate per day. Endeavour
holds a 55.6 percent interest in the well and is the operator for
the block. -- Cygnus - The Cygnus 44/12a-3 appraisal well in the
Southern Gas Basin established the presence of recoverable gas
reserves in a second fault block near the 2006 discovery well in
Block 44/11. The well was drilled to a total depth of 12,433 feet
and flow tested at rates up to 32 million cubic feet of gas per
day. Endeavour holds a 12.5 percent interest in the Cygnus field
area spread over two United Kingdom blocks, 44/11a and 12a.
Launched onshore exploration program in the United States -- An
initiative to develop a production base in the United States
resulted in a commercial natural gas discovery and first production
in late 2008. -- Garwood prospect - Production began from the
Cochran #1 well in the Garwood prospect in Colorado County, Texas
at an initial rate of 170 boepd net during December 2008. Endeavour
has a 20 percent equity interest and approximately a 15 percent net
revenue interest in the well. -- Alligator Bayou prospect -
Endeavour holds a 10 percent equity interest and seven percent net
revenue interest in the Alligator Bayou prospect. The first well to
be drilled, the Armour Runnels ST #1 well in Matagorda County,
Texas, reached a total depth of 23,830 feet. Flow tests are
underway for multiple deep zones. Conducted successful exploratory
activities in Norway -- During 2008, the company made three
discoveries in satellite drilling near producing fields in the
Norwegian Continental Shelf. The Galvort prospect in production
license 348 and the Noatun C prospect in production license 107
were drilled as satellites to the Njord field and both encountered
natural gas reservoirs. Endeavour holds a 2.5 percent equity
interest in the two discoveries and the Njord field. In the Brage
field, an oil discovery was made at the Knockandoo prospect in
production license 055 that flowed during testing at 18,000 gross
(800 net) barrels of oil per day and began producing in December.
Endeavour holds a 4.44 percent equity interest in the Brage field.
Established capital budget of up to $90 million -- Endeavour will
continue to fund its planned capital spending from cash flow
generated by its operations. A significant portion of the budget
will be directed toward moving its three major development projects
in the United Kingdom toward first production. Approximately $12 -
$15 million will be spent for infield drilling and facilities
improvements to maintain production levels. Endeavour will continue
its ongoing exploration campaign in the North Sea and South Texas
based on internal cash availability with plans for seven to nine
wells, two of which will be fully carried. Guidance for Year 2009
The table below sets forth estimates of the company's operating
statistics for the full year ending December 31, 2009. Estimated
Average Production (A) Daily Production (boepd) 6,500 to 7,500
Differentials (B) Oil ($/bbl) $(4.50) to $(5.50) Gas ($/mcf)
$(0.10) to $(0.20) Gas Percentage of Total 45% to 50% Lease
operating expense (per barrel) $11.00 to $13.00 (A) Actual results
may differ materially from these estimates. (B) For purposes of the
estimates, assumptions of price differentials are based on
location, quality and other factors, excluding the effects of
derivative financial instruments. Gas price differentials are
stated as premiums (discounts) from National Balancing Point
pricing, and oil price differentials are stated as premiums
(discounts) from Dated Brent pricing. Earnings Conference Call
Today, Thursday, March 12, 2009 at 9:00 a.m., Central Daylight
Time, 2:00 p.m. Greenwich Mean Time Endeavour will host an analyst
conference call and web cast today on Thursday, March 12, 2009 to
discuss 2008 fourth quarter and full-year results and update
operational plans at 9 A.M. Central Daylight Time. To participate
and ask questions during the conference call, dial the local
country telephone number and the confirmation code 5204926. The
toll-free numbers are 888-708-5692 in the United States, 0 800 051
7166 in the United Kingdom, and 800 191 83 in Norway. Other
international callers should dial 913-312-0962 (tolls apply). To
listen only to the live audio webcast, access Endeavour's home page
at http://www.endeavourcorp.com/. A replay will be available
beginning at 12:00 p.m. Central Daylight Time on March 12 through
12:00 p.m. Central Daylight Time on March 18 by dialing toll free
888-203-1112 (U.S.) or 719-457-0820 (international), confirmation
code 5204926. Endeavour International Corporation is an oil and gas
exploration and production company focused on the acquisition,
exploration and development of energy reserves in the North Sea and
the United States. For more information, visit
http://endeavourcorp.com/. Additional information for investors:
Certain statements in this press release are forward-looking and
are based upon Endeavour's current belief as to the outcome and
timing of future events. All statements, other than statements of
historical facts, that address activities that Endeavour plans,
expects, believes, projects, estimates, or anticipates will, should
or may occur in the future, including future production of oil and
gas, future capital expenditures and drilling of wells and future
financial or operating results are forward-looking statements.
Important factors that could cause actual results to differ
materially from those in the forward-looking statements herein
include the timing and extent of changes in commodity prices for
oil and gas, operating risks and other risk factors as described in
Endeavour's Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q as filed with the Securities and Exchange Commission
(SEC). Should one or more of these risks or uncertainties occur, or
should underlying assumptions prove incorrect, Endeavour's actual
results and plans could differ materially from those expressed in
the forward-looking statements. The SEC permits oil and gas
companies, in their filings with the SEC, to disclose only proved
reserves that a company has demonstrated by actual production or
conclusive formation tests to be economically and legally
producible under existing economic and operating conditions. We may
use certain terms such as probable and possible reserves that the
SEC's guidelines strictly prohibit us from including in our filings
with the SEC. These estimates are by their nature more speculative
than estimates of proved reserves and accordingly are subject to
substantially greater risk of being actually realized by Endeavour.
Endeavour is also subject to the requirements of the London Stock
Exchange and considers the disclosures in this release to be
appropriate and/or required under the guidelines of that exchange.
Factors affecting ultimate recovery include oil and gas pricing,
the scope of our ongoing drilling program, which will be directly
affected by the availability of capital, drilling and production
costs, availability of drilling services and equipment, drilling
results, transportation constraints, regulatory approvals and other
factors; and actual drilling results, including geological and
mechanical factors affecting recovery rates. Investors are urged to
consider closely the disclosure in our Form 10-K and each of our
Form 10-Qs, available free of charge on our internet site
(http://www.endeavourcorp.com/). You can also obtain these forms
from the SEC on the SEC's internet site (http://www.sec.gov/) or by
calling 1-800-SEC-0330. Endeavour International Corporation
Comparative Condensed Consolidated Balance Sheets (Unaudited)
(Amounts in thousands) December 31, 2008 2007 Assets Current
Assets: Cash and cash equivalents $38,156 $16,440 Restricted cash
20,739 22,000 Accounts receivable 26,884 33,291 Prepaid expenses
and other current assets 47,626 46,516 Total Current Assets 133,405
118,247 Property and Equipment, Net 312,957 335,023 Goodwill
281,943 283,324 Other Assets 9,165 11,029 Total Assets $737,470
$747,623 Liabilities and Stockholders' Equity Current Liabilities:
Accounts payable $42,348 $31,036 Current maturities of debt 13,000
- Accrued expenses and other 55,155 50,013 Total Current
Liabilities 110,503 81,049 Long-Term Debt 214,855 266,250 Deferred
Taxes 104,127 135,552 Other Liabilities 65,014 69,623 Total
Liabilities 494,499 552,474 Commitments and Contingencies Series C
Convertible Preferred Stock 125,000 125,000 Stockholders' Equity
117,971 70,149 Total Liabilities and Stockholders' Equity $737,470
$747,623 Endeavour International Corporation Comparative Condensed
Consolidated Statement of Operations (Unaudited) (Amounts in
thousands, except per share data) Three Months Year Ended December
31, Ended December 31, 2008 2007 2008 2007 Revenues $41,370 $54,484
$260,441 $176,064 Cost of Operations: Operating expenses 11,689
11,060 46,576 41,044 Depreciation, depletion and amortization
17,661 20,661 81,734 76,850 Impairment of oil and gas properties
36,970 - 36,970 - General and administrative 5,083 5,256 19,636
19,878 Total Expenses 71,403 36,977 184,916 137,772 Income (Loss)
From Operations (30,033) 17,507 75,525 38,292 Other Income
(Expense): Derivatives: Realized gains (losses) 2,697 (3,309)
(28,578) 12,048 Unrealized gains (losses) 117,905 (47,792) 76,666
(89,132) Interest expense (4,410) (5,137) (22,548) (18,742) Other
6,680 850 12,154 (723) Total Other Income (Expense) 122,872
(55,388) 37,694 (96,549) Income (Loss) Before Income Taxes 92,839
(37,881) 113,219 (58,257) Income Tax Expense (Benefit) 33,728
(10,992) 56,729 (9,180) Net Income (Loss) 59,111 (26,889) 56,490
(49,077) Preferred Stock Dividends 2,696 2,709 10,809 11,238 Net
Income (Loss) to Common Stockholders $56,415 $(29,598) $45,681
$(60,315) Net Income (Loss) Per Common Share: Basic $0.44 $(0.23)
$0.36 $(0.49) Diluted $0.29 $(0.23) $0.32 $(0.49) Weighted Average
Number of Common Shares Outstanding: Basic 128,148 126,492 128,312
123,118 Diluted 212,661 126,492 178,312 123,118 Endeavour
International Corporation Comparative Condensed Consolidated
Statement of Cash Flows (Unaudited) (Amounts in thousands) Year
Ended December 31, 2008 2007 Cash Flows from Operating Activities:
Net income (loss) $56,490 $(49,077) Adjustments to reconcile net
loss to net cash provided by operating activities: Depreciation,
depletion and amortization 81,734 76,850 Impairment of oil and gas
properties 36,970 - Deferred tax expense (benefit) 17,682 (12,925)
Unrealized (gain) loss on derivative instruments (76,666) 89,132
Amortization of non-cash compensation 3,226 4,968 Foreign currency
exchange (gain) loss on non-operating liabilities (10,508) 1,078
Other 11,879 2,948 Changes in working capital 12,373 15,532 Net
Cash Provided by Operating Activities 133,180 128,506 Cash Flows
From Investing Activities: Capital expenditures (66,370) (88,007)
(Increase) decrease in restricted cash and other investing
activities 1,519 (20,133) Net Cash Used in Investing Activities
(64,851) (108,140) Cash Flows From Financing Activities: Net
repayment of borrowings (32,000) (40,000) Payment of preferred
dividends (10,625) (2,656) Financing costs paid (3,538) (263) Other
financing activities (450) (821) Net Cash Provided by (Used in)
Financing Activities (46,613) (43,740) Net Increase (Decrease) in
Cash and Cash Equivalents 21,716 (23,374) Cash and Cash
Equivalents, Beginning of Period 16,440 39,814 Cash and Cash
Equivalents, End of Period $38,156 $16,440 Endeavour International
Corporation Operating Statistics (Unaudited) Three Months Ended
Year Ended December 31, December 31, 2008 2007 2008 2007 Sales
Volume: Oil and condensate sales (Mbbl): United Kingdom 198 291
1,032 1,274 Norway 181 129 726 519 Total 379 420 1,758 1,793 Gas
sales (MMcf): United Kingdom 1,383 1,899 6,532 8,556 Norway 681 147
2,322 328 Total 2,064 2,046 8,854 8,884 Total sales (MBOE): United
Kingdom 429 608 2,121 2,700 Norway 294 153 1,113 574 Total 723 761
3,234 3,274 BOE per day 7,859 8,268 8,835 8,969 Physical Production
Volume: Total production (BOE per day) United Kingdom 5,059 6,981
5,804 7,660 Norway 3,680 1,732 3,033 1,608 Total 8,739 8,713 8,837
9,268 Realized Prices: Oil and condensate price ($per Bbl): Before
commodity derivatives $50.23 $82.03 $90.53 $67.11 Effect of
commodity derivatives $8.35 $(12.98) $(14.50) $(2.13) Realized
prices including commodity derivatives $58.58 $69.05 $76.03 $64.98
Gas price ($per Mcf): Before commodity derivatives $10.82 $9.80
$11.44 $6.27 Effect of commodity derivatives $(0.23) $1.05 $(0.35)
$1.79 Realized prices including commodity derivatives $10.59 $10.85
$11.09 $8.06 Equivalent oil price ($per BOE): Before commodity
derivatives $57.22 $71.63 $80.54 $53.78 Effect of commodity
derivatives $3.73 $(4.35) $(8.84) $3.68 Realized prices including
commodity derivatives $60.95 $67.28 $71.70 $57.46 Endeavour
International Corporation Reconciliation of GAAP to Non-GAAP
Measures (Unaudited) (Amounts in millions) As required under
Regulation G of the Securities Exchange Act of 1934, provided below
are reconciliations of net income (loss) to the following non-GAAP
financial measures: net income as adjusted, Adjusted EBITDA and
discretionary cash flow. The company uses these non-GAAP measures
as key metrics for the management of the company and to demonstrate
the company's ability to internally fund capital expenditures and
service debt. The non-GAAP measures are useful in comparisons of
oil and gas exploration and production companies as they exclude
non-operating fluctuations in assets and liabilities. Three Months
Ended Year Ended December 31, December 31, 2008 2007 2008 2007 Net
income (loss) to common shareholders, as reported $56.4 $(29.6)
$45.7 $(60.3) Impairment of oil and gas properties (net of 50% tax)
18.5 - 18.5 - Unrealized (gains) losses on derivatives (net of 50%
tax) (59.3) 23.9 (37.7) 44.6 Currency impact of deferred taxes
(16.5) (3.1) (20.8) 4.8 Net income (loss) as adjusted $(0.9) $(8.8)
$5.7 $(10.9) Net income (loss) to common shareholders, as reported
$56.4 $(29.6) $45.7 $(60.3) Unrealized (gains) losses on
derivatives (117.9) 47.8 (76.7) 89.1 Net interest expense 4.2 4.6
21.3 16.4 Depreciation, depletion and amortization 17.6 20.7 81.7
76.9 Impairment of oil and gas properties 37.0 - 37.0 - Income tax
expense (benefit) 33.7 (11.0) 56.7 (9.2) Preferred stock dividends
2.7 2.7 10.8 11.2 Adjusted EBITDA $33.7 $35.2 $176.5 $124.1 Net
income (loss) $59.1 $(26.9) $56.5 $(49.1) Depreciation, depletion
and amortization 17.6 20.7 81.7 76.9 Impairment of oil and gas
properties 37.0 - 37.0 - Deferred tax expense (benefit) 23.3 (11.5)
17.7 (12.9) Unrealized (gains) losses on derivatives (117.9) 47.8
(76.7) 89.1 Amortization of non-cash compensation 0.8 1.0 3.2 5.0
Other (4.2) 2.5 1.4 4.0 Discretionary cash flow $15.7 $33.6 $120.8
$113.0 Discretionary cash flow is equal to cash flow from operating
activities before the changes in operating assets and liabilities.
DATASOURCE: Endeavour International Corporation CONTACT: Investor
Relations, Mike Kirksey, +44 (0) 207-451-2381, +1-713-307-8788; or
Jeffrey Auld of Canaccord Adams - UK Broker, + 44 (0) 207 050 6500,
or Philip Dennis, +44 (0) 207 743 6363, or Henry Lerwill, +44 (0)
203 178 6242, both of Pelham Public Relations - UK Media, all for
Endeavour International Corporation Web Site:
http://www.endeavourcorp.com/
Copyright