Third Quarter 2007 Financial Results:
Bois d'Arc reported an 83% increase in net income to $21.2 million, or 32 cents per diluted share, for the three months ended September 30, 2007 as compared to 2006's third quarter net income of $11.6 million, or 18 cents per diluted share. The increase in profits in the quarter was driven by strong production growth. Bois d'Arc's production in the third quarter of 2007 increased to 10.9 billion cubic feet equivalent of natural gas ("Bcfe"), 31% higher than production of 8.3 Bcfe in the third quarter of 2006. The average realized oil price in 2007's third quarter of $77.50 per barrel increased 11% over 2006's third quarter average oil price of $70.01 per barrel. The Company's average realized natural gas price of $6.46 per Mcf in 2007's third quarter was 4% lower than the $6.72 per Mcf realized in 2006's third quarter. The strong production growth resulted in a 31% increase in Bois d'Arc's third quarter oil and gas sales to $88.0 million from $67.0 million in 2006's third quarter. The higher revenues also drove cash flow higher in the quarter. Operating cash flow (before changes in working capital accounts) of $63.1 million in the third quarter was 31% higher than 2006's third quarter cash flow of $48.1 million. EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses increased 33% to $69.9 million over 2006's third quarter EBITDAX of $52.4 million.
For the nine months ended September 30, 2007, Bois d'Arc reported net income of $50.5 million or $0.75 per diluted share as compared to net income of $43.1 million ($0.67 per diluted share) for the nine months ended September 30, 2006. Oil and gas sales for the first nine months of 2007 were $255.2 million as compared to $188.4 million for the nine months ended September 30, 2006. Production in the first nine months of 2007 totaled 31.5 Bcfe, an increase of 40% over production of 22.6 Bcfe for the same period in 2006. Prices realized by the Company during the nine months ended September 30, 2007 averaged $7.10 per Mcf of natural gas and $67.99 per barrel of oil as compared to $7.27 per Mcf of natural gas and $67.00 per barrel of oil in the same period in 2006. Operating cash flow (before changes in working capital accounts) for the nine months ended September 30, 2007, was $191.1 million as compared to $136.2 million in the same period in 2006. EBITDAX totaled $209.4 million in the first nine months of 2007 as compared to $147.1 million in the first nine months of 2006.
Bois d'Arc spent $172.1 million during the first nine months of 2007 for its exploration and development activities, comprised of $167.1 million in capital expenditures for lease acquisition, drilling, facilities and other development activity and $5.0 million for seismic data acquisition and other geologic and geophysical costs. Since the beginning of 2007, Bois d'Arc has drilled six (5.6 net) successful wells out of a total of fourteen (11.0 net) wells drilled. Despite the lower drilling success rate, Bois d'Arc has had successful results from its exploration focused drilling program. Bois d'Arc estimates that 2007 discoveries and the performance of its M-8 Sand water flood project at its Ship Shoal 113 unit have added in excess of 100 Bcfe of net proved reserves in 2007.
During the last quarter of 2007, the Company expects to make an additional $48.0 million in capital expenditures. Bois d'Arc is currently drilling a development well in the Ship Shoal 113 Unit and will then drill an 18,500 foot well to test its "Chinook" prospect in South Pelto block 21.
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