Rosetta Boosts Q1 Profit by 47%
Rosetta Resources Inc. announced that its production and net income for the first quarter of 2007 were 108 Mmcfe/d and $14 million, respectively, both representing quarterly records for the company.
Diluted earnings per share for the first quarter of 2007 were $0.28 versus 2006 earnings per share of $0.19, an increase of 47%. In the first quarter of 2007, production and net income were at their highest levels for the seven quarters that Rosetta has been an independent company. Production of 108 Mmcfe/d was up 27% compared to production of 85 Mmcfe/d in the first quarter of 2006, and includes year over year increases of 14 Mmcfe/d in the Sacramento Basin and 16 Mmcfe/d in the Lobo.
In the Sacramento Basin, the Company has drilled seven successful wells this year. One well is on production, two are in the process of being completed, one is waiting on a pipeline acquisition and three are awaiting completion. This drilling effort is expected to add 4 Mmcfe/d of net production by June 2007.
In April, we began a drilling program in the Rio Vista field that will evaluate the reserve potential of the Bradford Island project area based on a 3D seismic survey completed in December 2006.
On April 2, 2007 we acquired properties located in the Sacramento Basin from Output Exploration, LLC and OPEX Energy, LLC at a total purchase price of $40 million, subject to final adjustments.
In the DJ Basin of Colorado, the Company has drilled 30 wells YTD, of which 26 were successful. Current net production from the area is approximately 6 Mmcfe/d.
Rosetta has drilled 15 wells in the LOBO play in 2007, two of which were drilling at year-end. Of these wells, 12 were productive with an 80% success rate. Eleven of the 12 successful wells have been completed and are currently producing at a net rate of approximately 8.8 Mmcfe/d. The remaining well is expected to be completed and on production later this month.
Currently, Rosetta is drilling 2 wells in its Perdido project in South Texas. Four wells have been completed in 2007 and are producing at a combined net rate of approximately 3.8 Mmcfe/d.
In the Gulf of Mexico, Rosetta's Main Pass 118 and 29 platforms came on production in April of 2007. These wells are currently producing at a net rate of 7.4 Mmcfe/d. Additionally, the South Timbalier 293-1 well is currently drilling to a proposed total depth of 12,000 feet. Rosetta has a 50% working interest in this block.
Rosetta drilled and completed the State Tract 30-1 well in Sabine Lake and tested gas and condensate in the Hackberry Sands below 12,600 feet. The drilling rig moved to the offset State Tract 30-2 well and found additional Hackberry Sands. A completion rig is currently completing the well to test Hackberry pay to help delineate the aerial extent of the sands found in the 30-1. A drilling rig is currently under tow to the Sabine Lake State Tract 16-1 location to test a northern Hackberry prospect in Sabine Lake. This will be the third well drilled by Rosetta in Sabine Lake in 2007.
Bill Berilgen, Rosetta's Chairman, President and Chief Executive Officer said, "The momentum we established in 2006 has continued into the first quarter of 2007 and we expect continued improvement in the upcoming 2007 quarters. We are on track to achieve our target of 125 Mmcfe/d average production for 2007."
2007 FIRST QUARTER RESULTS
Rosetta's production for the first quarter 2007 was 9.7 Bcfe or an average of 108 Mmcfe/d. Average realized gas prices for the quarter were $7.68 per Mcf, including the effect of our hedges; and realized oil prices averaged $55.29 per Bbl.
Rosetta's average sales price, including the effects of hedging, for the first quarter of 2007 was $7.81 per Mcfe, and includes a $5 million benefit from the Company's hedging program.
Revenues for Rosetta totaled $75.8 million for the quarter. This represents an 18% increase versus $64.5 million of revenues in the first quarter of 2006.
Total lease operating expense ("LOE"), which includes direct LOE, workover, ad valorem taxes, and insurance, was $8.8 million or $0.91 per Mcfe. Direct LOE was $5.7 million or $0.58 per Mcfe and workover costs were $1.1 million or $0.11 per Mcfe for the period. Production taxes were $0.10 per Mcfe and treating, transportation and marketing charges were $0.15 per Mcfe. Depreciation, depletion and amortization was $30.6 million, based on an all in DD&A rate of $3.15 per Mcfe.
General and administrative costs were $8.1 million for the first quarter, including non-cash stock compensation expenses of $1.4 million.
Net Income for the period was $14.0 million or $0.28 per share up 47% compared to $9.5 million of net income for the first quarter of 2006.
Rosetta Resources Inc. is an independent oil and gas company engaged in acquisition, exploration, development and production of oil and gas properties in North America. Our operations are concentrated in the Sacramento Basin of California, South Texas, the Gulf of Mexico and the Rocky Mountains. Rosetta is a Delaware corporation based in Houston, Texas.
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