The Company reported net income of $2.8 million, or $0.10 per share, a significant increase from $40,877, or $0.002 per share, for 2003. All per-share amounts are on a diluted basis. Total revenues rose to a record $57.7 million, a 46 percent increase from $39.5 million in the prior year. TXCO's total assets rose to a record $114.2 million at year end, up 36 percent from $84.2 million at year-end 2003.
Cash flow, or net cash provided by operating activities, was a record $16.4 million, 9 percent above the $15.2 million recorded in 2003. Ebitda - earnings before income taxes, interest expense, depreciation, depletion, amortization, impairment and abandonment expense - was $18.1 million, or $0.67 per share, a 43 percent increase from $12.7 million, or $0.61 per share in the prior year. Ebitdax - Ebitda plus exploration expense - was $20.6 million, or $0.76 per share, up from $14.9 million, or $0.72 per share for 2003.
Overall, TXCO had record natural gas sales and gas gathering revenues, offset partially by lower crude oil sales. Commodity price realizations were $5.96 per thousand cubic feet (Mcf) for natural gas and $38.72 per barrel for crude oil.
Reserve Growth Continues
TXCO continued its ongoing trend of strong annual reserve growth in 2004 as it recorded net proved reserve additions of 9.5 Bcfe. Combined with annual production of 4.9 Bcfe, the Company's gross reserve additions for the year were 14.4 Bcfe. Estimated year-end proved oil and gas reserves were a record 37.9 Bcfe, a third above its 28.4 Bcfe at year-end 2003.
Since year-end 2000, TXCO's reserves have increased more than 575 percent. The Company achieved a 295 percent all-source reserve replacement rate in 2004. TXCO's reserve life index now stands at 7.7 years, up from 5.9 years at year-end 2003. Its reserve mix consists of 53 percent crude oil and 47 percent natural gas. Approximately 61 percent of TXCO's oil and gas reserves are proved developed. Additional information on the Company's reserve additions will be contained in its annual report on Form 10-K, to be filed on or about March 16.
TXCO's reserve estimates were prepared by DeGolyer and MacNaughton of Dallas, an independent reservoir engineering firm, in accordance with SEC and Financial Accounting Standards Board requirements.
"The year of 2004 was a good one for us," said President and CEO James E. Sigmon. "We overcame many challenges as we pursued greater shareholder value via the drillbit by developing the Maverick Basin's potential. Obstacles included multiple severe weather events that interrupted field operations, a key partner's corporate restructuring, tight rig availability and pipeline connection delays.
"We begin 2005 with strong momentum," he added. "We have four rigs running now compared with only two at this point a year ago. The 174,000-acre lease acquisition we announced in February expands our Maverick Basin acreage block to an impressive 727,000 gross acres and allows us to accelerate the exploration and development of many promising plays, including our successful Georgetown and Glen Rose zones. I'm very optimistic we will continue our rising trends of record revenues, production and reserves going forward. We are turning the corner on numerous geologic horizons where we have demonstrated repeatable success, taking them from exploration to solid developmental drilling programs."
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