Burlington Reports Record Production & Earnings Increase



Burlington Resources Inc. (NYSE:BR) and (TSX:B) reported estimated earnings during the first quarter of 2004 of $354 million, or $1.78 per diluted share, a 32 percent increase over the $269 million, or $1.33 per diluted share, earned during the first quarter of 2003. Included in the 2003 results was a non-cash after-tax charge of $59 million, or $0.29 per share, for a change in accounting principle related to future asset retirement obligations. The increase in 2004 first-quarter earnings was attributable to a 14 percent rise in total production to a new quarterly record of 2,849 million cubic feet of natural gas equivalent per day (MMcfed), from 2,490 MMcfed during the prior year's quarter. Commodity price realizations were essentially flat.

Net cash provided by operating activities increased to $742 million from $589 million during the prior year's quarter. Discretionary cash flow increased to $812 million from $721 million during the prior year's quarter. In addition, at the end of the first quarter the company's balance sheet included more than $1 billion in cash and cash equivalents, an increase of $270 million during the quarter.

Share repurchases during the quarter totaled approximately 1.6 million shares for $90 million at an average cost of $58.10 per share. This brings the cumulative number of shares acquired since the late-2000 resumption of Burlington's share repurchase program to more than 25.2 million shares for $1 billion, or an average cost of $45.31 per share.

"These outstanding results confirm that we are entering what we believe will be a period of sustainable growth for our company," said Bobby S. Shackouls, chairman, president and chief executive officer. "Our North American core properties continue performing strongly, while the major international development programs are ramping up during a very favorable price window. Our progress as well as our future prospects give us confidence in our goal of generating 20 percent cumulative production growth during the three-year period beginning with 2004."

Burlington's first-quarter production growth included a 4 percent increase in natural gas production to 1,953 million cubic feet per day (MMcfd), from 1,872 MMcfd during the prior year's quarter. Natural gas liquids (NGLs) production increased 5 percent to 66.9 thousand barrels per day (Mbd), from 63.7 Mbd during the prior year's quarter. Crude oil production increased 110 percent to 82.4 Mbd, from 39.3 Mbd during the prior year's quarter.

The substantially higher crude oil volumes were attributable to higher production from the Williston Basin in the U.S., and from start-ups during 2003 of several fields located in Algeria, China and elsewhere. Increases in natural gas and NGLs production resulted primarily from higher volumes in the Barnett Shale trend in North Texas, and from properties in South Louisiana and Northwestern Europe. During the quarter Burlington conducted ongoing development in virtually all its major properties.

The company's realizations for natural gas were $5.31 per Mcf, compared to $5.29 per Mcf during the same quarter in 2003. Price realizations for NGLs were $22.08 per barrel, compared to $22.07 per barrel during the prior year's quarter. Crude oil price realizations were $29.57 per barrel, down from $29.74 per barrel during the prior year's quarter.
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