Rosetta Says 1Q08 a Record Quarter
Rosetta's net income and production for the first quarter of 2008 were at their highest levels since it has been a stand alone company.
Net income was $27.5 million, up 96% compared to net income of $14.0 million in the first quarter of 2007. First quarter diluted earnings per share were $0.54 in 2008, up 93% compared to $0.28 in the first quarter of 2007.
For the first quarter, production averaged 152 MMcfe/d, up 41% from the 108 MMcfe/d reported for the comparable period of 2007. Average realized gas prices for the quarter were $8.74 per Mcf, including the effects of hedging; and realized oil prices averaged $100.10 per Bbl.
Revenues for Rosetta totaled $128.3 million, including a negative hedging effect of $0.7 million. Revenues were up 69% from the $75.8 million reported in 2007.
Total lease operating expense ("LOE"), which includes direct LOE, workovers, ad-valorem taxes, and insurance, was $13.4 million or $0.97 per Mcfe. Direct LOE was $8.8 million or $0.64 per Mcfe, workover costs were $1.2 million or $0.09 per Mcfe, ad valorem taxes were $2.8 million or $0.20 per Mcfe and insurance was $0.6 million or $0.04 per Mcfe for the period. Production taxes were $3.4 million or $0.25 per Mcfe and treating, transportation and marketing charges were $2.1 million or $0.14 per Mcfe. Depreciation, depletion and amortization was $51.4 million, based on a DD&A rate of $3.72 per Mcfe.
General and administrative costs were $12.1 million for the first quarter, and include $0.3 million in non-cash stock compensation expenses, and costs associated with the Calpine lawsuit.
Randy L. Limbacher, Rosetta's President and Chief Executive Officer, commented. "We are very pleased with our performance in this quarter, which delivered on expectations and positioned us for additional success in the year. Our volumes are on track to meet guidance for the year and our capital program is performing as planned. During the quarter, we made significant progress in filling key operations leadership roles, identifying potential future inventory for Rosetta, and vigorously asserting our position in the pending Calpine lawsuit."
First Quarter Operational Highlights
During the first quarter, the Company drilled 36 gross and 32 net wells with a net success rate of 83%. The majority of this drilling activity took place in the Sacramento Basin, South Texas, and the DJ Basin.
In California's Sacramento Basin, the Company drilled 6 wells, with 5 successful. The Company continued to extend the southern limits of the Rio Vista field by drilling 3 wells. Average production from the Basin was 48 MMcfe/d for the quarter.
In South Texas, Rosetta drilled 12 wells in the Lobo area with 10 successful on acreage that is covered by 320 square miles of 3D seismic. Average production for the Lobo was 38 MMcfe/d in the first quarter.
In the Perdido trend, a rig moved into the field in late March and was drilling ahead at the end of the quarter. Production averaged approximately 11 MMcfe/d in the quarter.
In the DJ Basin Niobrara Play, the Company drilled 13 wells, 11 of which were successful. Average production for the quarter was 7 MMcfe/d.
In Sabine Lake, three producing wells averaged 13 MMcfe/d net to Rosetta for the quarter.
For 2008, the Company's volume and organic capital guidance are unchanged at 140-150 MMcfe/d and $290MM, respectively. Unit cash costs are expected to be in line with first quarter actual results. Unit depletion, depreciation and amortization costs are expected to average $3.55-$3.75/Mcfe.
The Company's hedge position is unchanged with 67,909 MMBtu/d hedged for the balance of 2008 at an average price of $7.75 per MMBtu. For 2009, 52,141 MMBtu/d are hedged at an average price of $7.65 per MMBtu, along with 10,000 MMBtu/d for 2010 at an average price of $8.30 per MMbtu.
Additionally, the Company has also entered into costless collar transactions for 5,000 MMBtu/d for 2008 and 2009. The costless collars have an average floor price of $8.00 per MMBtu and an average ceiling price of $10.27 per MMBtu.
- Noble Takes Rosetta-and its Eagle Ford Assets-Under its Wing (Jul 20)
- Noble Energy to Buy Rosetta Resources for About $2B (May 11)
- Rosetta Resources Raises 2013 Capital Expenditure Guidance (Apr 15)