Unocal's preliminary adjusted after-tax earnings for the second quarter 2005 were $488 million, or $1.77 per share (diluted). This compares with the Thomson/First Call mean of analyst estimates (published July 25, 2005) of $1.63 per share. In the second quarter 2004, Unocal's adjusted after-tax earnings were $231 million, or 86 cents per share (diluted). In the first quarter 2005, Unocal's adjusted after-tax earnings were $441 million, or $1.62 per share (diluted). Adjusted after-tax earnings are net earnings excluding special items (discussed below) and the cumulative effect of accounting changes.
CONSOLIDATED RESULTS (UNAUDITED) Millions of dollars except 2nd Q 1st Q 2nd Q per share amounts 2005 2005 2004 Earnings from continuing operations $440 $432 $267 Earnings from discontinued operations 35 22 74 Net earnings 475 454 341 Less: Special items in continuing operations (25) 11 54 Less: Special items in discontinued operations 12 2 56 Adjusted after-tax earnings $488 $441 $231 DILUTED EARNINGS PER SHARE DATA (UNAUDITED) Net earnings per share: Continuing operations $1.60 $1.58 $0.98 Discontinued operations 0.13 0.08 0.27 Total net earnings per share $1.73 $1.66 $1.25 Adjusted after-tax earnings per share $1.77 $1.62 $0.86 REVENUES FROM CONTINUING OPERATIONS (UNAUDITED) $2,213 $2,068 $1,858
"Unocal recorded another quarter of strong earnings as the company increased worldwide crude oil and natural gas production and benefited from continued strong crude oil and natural gas prices and lower interest expense," said Charles R. Williamson, Unocal chairman and chief executive officer. "We initiated production from the final two major projects in our 2005 development pipeline -- K2 in the deepwater Gulf of Mexico and the oil expansion project in Thailand."
Recent operational and financial highlights
Some of Unocal's recent operational highlights and other developments include:
2Q 2005 financial and operating details
Unocal's second quarter 2005 adjusted after-tax earnings (compared with 2Q 2004) reflected higher worldwide crude oil and natural gas prices, higher international production, lower exploration and dry hole costs and lower interest expense. These positive factors were offset partially by lower North America natural gas production.
In the second quarter 2005, after-tax special items included a $12 million after-tax gain from the sale of Unocal's 76 Seadrift LLC subsidiary. This gain was offset by $25 million after-tax charges for environmental and litigation provisions. All of the special items are detailed in the Adjusted After-tax Earnings Reconciliation table included at the end of this news release.
Worldwide hydrocarbon liquids and natural gas production for the second quarter 2005 averaged 459,000 BOE per day, up nearly 14 percent from 404,000 BOE per day in the same period a year ago. The production increase was due primarily to higher liquids and natural gas production in Asia.
Second-quarter 2005 worldwide price realizations (including hedging activities) for natural gas averaged $4.20 per thousand cubic feet (mcf), up from $3.65 during the prior year's second quarter. The company's second quarter 2005 worldwide liquids price realizations (including hedging activities) were $47.94 per barrel, up from $32.61 in the second quarter 2004. Hedging activities in the 2005 second quarter decreased worldwide liquids realizations by 24 cents per barrel and had no impact on worldwide natural gas realizations.
Unocal's preliminary EBITDAX for the second quarter 2005 was $1.18 billion, or $4.28 per share (diluted). This compares with $762 million, or $2.74 per share (diluted), for the same period in 2004. EBITDAX is net earnings before interest, taxes, depreciation, depletion and amortization, impairments, exploration expenses, dry hole costs, special items, and the cumulative effect of accounting changes.
Six-months 2005 financial and operating details
Unocal's preliminary net earnings for the first six months 2005 were $929 million, or $3.39 per share (diluted), 52 percent above the $610 million, or $2.25 per share (diluted), reported in the same period a year ago.
Preliminary adjusted after-tax earnings for the first six months of 2005 were also $929 million, or $3.39 per share (diluted). This compares with $470 million, or $1.75 per share (diluted), reported for the first six months of 2004.
CONSOLIDATED RESULTS (UNAUDITED) For the Six Months Millions of dollars except Ended June 30, per share amounts 2005 2004 Earnings from continuing operations $872 $522 Earnings from discontinued operations 57 88 Net earnings 929 610 Less: Special items in continuing operations (14) 84 Less: Special items in discontinued operations 14 56 Adjusted after-tax earnings $929 $470 DILUTED EARNINGS PER SHARE DATA (UNAUDITED) Net earnings per share: Continuing operations $3.18 $1.93 Discontinued operations 0.21 0.32 Total net earnings per share $3.39 $2.25 Adjusted after-tax earnings per share $3.39 $1.75 REVENUES FROM CONTINUING OPERATIONS (UNAUDITED) $4,281 $3,633
Full-year 2005 production outlook
Unocal currently expects worldwide average production for the full-year 2005 to exceed 430,000 BOE per day, compared with 440,000 BOE per day that was previously estimated. The change reflects the expected loss of production from the planned sale of Unocal's Northrock subsidiary in the third quarter 2005.
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