Endeavour International Corporation reported net income to common stockholders for 2008 increased to $45.7 million or $0.32 per diluted share as compared to a loss of $60.3 million or $0.49 per diluted share in 2007. Revenues in 2008 increased more than 47 percent to $260.4 million from $176.1 million in 2007. The company reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $176.5 million from $124.1 million in 2007. Discretionary cash flow for the year was $120.8 million.
For the fourth quarter 2008, net income to common stockholders was $56.4 million or $0.29 per diluted share as compared to a net loss of $29.6 million or $0.23 per diluted share for the same period in 2007. Revenues for the quarter were $41.4 million reflecting sales of 7,900 barrels of oil equivalent per day (boepd) compared to revenues of $54.5 million from sales of 8,300 boepd in the prior period in 2007. Adjusted EBITDA was $33.7 million, a decrease from $35.2 million in the same quarter in 2007.
"This past year was a breakthrough period for us as we achieved both significant financial and operational success," said William L. Transier, chairman and chief executive officer. "We met our forecasted production goals and that combined with our hedging strategy resulted in cash flow that funded our growth activities and allowed us to significantly pay down debt. The company recorded an uncommon industry feat with 100 percent technical success for the seven exploratory and appraisal wells drilled during the year. As we move forward, Endeavour is involved in three significant development projects that are expected to more than double our production by the end of 2010. All of this was accomplished in a highly volatile and challenging marketplace."
Endeavour also reported a reserve replacement rate of 175 percent of 2008 production. Proved and probable reserves at year-end 2008 increased to 32.2 million barrels of oil equivalent (mmboe) compared to 29.8 mmboe a year ago (see Table). Extensions, discoveries and upward revisions to prior estimates added 5.6 mmboe, more than replacing production of 3.2 mmboe or approximately 8,800 boepd during 2008.
Drilled two highly successful appraisal wells -- Endeavour participated in the drilling of two strategic appraisal wells in the United Kingdom sector of the North Sea both of which significantly extended the potential of previous discoveries.
Launched onshore exploration program in the United States -- An initiative to develop a production base in the United States resulted in a commercial natural gas discovery and first production in late 2008.
Conducted successful exploratory activities in Norway -- During 2008, the company made three discoveries in satellite drilling near producing fields in the Norwegian Continental Shelf. The Galvort prospect in production license 348 and the Noatun C prospect in production license 107 were drilled as satellites to the Njord field and both encountered natural gas reservoirs. Endeavour holds a 2.5 percent equity interest in the two discoveries and the Njord field. In the Brage field, an oil discovery was made at the Knockandoo prospect in production license 055 that flowed during testing at 18,000 gross (800 net) barrels of oil per day and began producing in December. Endeavour holds a 4.44 percent equity interest in the Brage field.
Established capital budget of up to $90 million -- Endeavour will continue to fund its planned capital spending from cash flow generated by its operations. A significant portion of the budget will be directed toward moving its three major development projects in the United Kingdom toward first production. Approximately $12 - $15 million will be spent for infield drilling and facilities improvements to maintain production levels. Endeavour will continue its ongoing exploration campaign in the North Sea and South Texas based on internal cash availability with plans for seven to nine wells, two of which will be fully carried.
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