Operating income in the fourth quarter of 2005 was $109,000, compared to an operating loss of $619,000 in the fourth quarter of 2004. Total revenues for the three months ended December 31, 2005, were $8.5 million, compared to $6.4 million for the same period in 2004. The average realized price in the fourth quarter of 2005 was $52.92 per barrel of oil equivalent (BOE), compared to $39.55 per BOE in the fourth quarter of 2004.
Earnings before interest, taxes, depreciation, amortization, and exploration expense (EBITDAX, a non-GAAP financial measure reconciled below) was $3.2 million in the three months ended December 31, 2005, compared to $2.7 million for the three months ended December 31, 2004.
"Toreador is entering a period of significant growth," said G. Thomas Graves III, President and Chief Executive Officer of Toreador. "We began 2006 with a production rate of approximately 1,600 barrels per day equivalent. During the first quarter we added roughly 500 barrels of oil per day of production in France, and by the end of the quarter should add another 1,100 barrels per day equivalent of production in Romania, which we believe will be the first-ever sales of natural gas produced by a foreign company in that country. At that point, our production rate will be approximately twice the rate we started with at the beginning of 2006 . When the first phase of production from the South Akcakoca Sub-basin offshore Turkey is brought on-line in the second half of the year, our share of the production should be approximately 3,500 barrels per day equivalent of natural gas. By the end of the year we expect to have grown our production rate by nearly four times from the rate at the beginning of the year."
In the fourth quarter of 2005, Toreador's oil and gas production was approximately 163,000 barrels of oil equivalent (MBOE) compared to 165 MBOE during the same period last year. The average realized price of oil in the fourth quarter of 2005 was $53.04 per barrel compared to $40.33 per barrel in the fourth quarter of 2004, an increase of 32%. The average realized price of natural gas in the quarter ended December 31, 2005, was $8.73 per thousand cubic feet (Mcf), compared to $5.85 per Mcf for the same period last year, an increase of 59 percent.
At year end, estimated proved reserves were approximately 15 million barrels of oil equivalent (MMBOE) compared to 13.8 MMBOE at December 31, 2004, an increase of nine percent. The discounted present value at 10 percent (pretax) of reserves at year end (a non-GAAP financial measure reconciled below) was $224.8 million compared to $115.1 million at December 31, 2004, an increase of 95 percent. An average realized oil price of $56.24 per barrel and an average realized natural gas price of $6.98 per Mcf were used to calculate reserves at December 31, 2005.
FULL YEAR RESULTS
For the full year of 2005 Toreador reported income applicable to common shares of $6.3 million or $0.42 per diluted share, compared to income available to common shares of $24.3 million, or $1.97 per diluted share, for the same period last year. In 2004 the company sold its US producing and non-producing mineral and royalty portfolio, resulting in income from discontinued operations of $17.5 million, or $1.37 per diluted share.
Operating income in 2005 was $4.7 million, up 194 percent compared to $1.6 million in 2004. Total revenues in 2005 were $30.9 million, up 47 percent compared to $21.0 million in 2004. EBITDAX (a non-GAAP financial measure reconciled below) was $14.1 million, up 66 percent compared to $8.5 million in 2004
In 2005, Toreador's oil and gas production was approximately 624 MBOE compared to approximately 634 MBOE in 2004. The average realized price of oil in 2005 was $50.17 per barrel, compared to $35.24 per barrel in 2004, an increase of 42 percent. The average realized price of natural gas in 2005 was $7.56 per Mcf compared to $5.65 per Mcf in 2004, an increase of 34%.
Offshore Turkey, the Akkaya-2 well has been drilled through the Eocene-age Kusuri formation, and has confirmed the presence of natural gas on the northern flank of the Akkaya structure. Logs indicate approximately 21 meters of net pay from 1,040 meters to 1,120 meters, which was in line with expectations. The well will be tested next week and results will be released when work is completed.
In extended testing of the Dogu Ayazli-1 well, the production rate from the bottom 10 meters of pay improved to more than 9.0 million cubic feet of gas per day (MMcfd) from an initial rate of 7.3 MMcfd as previously reported. The Prometheus jackup rig has finished operations on the Dogu Ayazli-1 and has spudded the Dogu Ayazli-2, which is being drilled toward the northwest flank of the Dogu Ayazli structure.
Atwood Oceanics has informed the company that the operator currently employing the Southern Cross has scheduled a well that will be longer in duration than originally anticipated. As a result of this unexpected event, the arrival of the Southern Cross is now estimated to be late in the third quarter, when it will be used to drill two wells for Toreador and its partners before drilling two wells for another company in Bulgaria, and then returning to Turkish waters to drill an additional well. The delayed arrival will have no effect on the delivery of first production in the second half of 2006 from the South Akcakoca Sub-basin.
Construction of the production facility for the Fauresti rehabilitation permit is complete and the facility is undergoing final testing for operations. It is expected that the necessary permits to begin selling natural gas will be granted in the coming weeks and that production will begin by the end of March. Initial production rates are expected to be approximately 6 MMcfd of natural gas and 50 barrels of condensate per day.
In Hungary, Toreador plans to drill its first exploration well in the northern part of the Szolnok block. The spud date is scheduled to be in May. The well will be drilled in the Kenderes area to test a potential gas-bearing Tertiary-age Pannonian turbidite at approximately 1,700 meters depth.
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