HOUSTON, May 17, 2004 (PRIMEZONE) -- Whittier Energy Corporation (the "Company") (OTCBB:WHIT) announced today net operating income of approximately $341,000 for the quarter ended March 31, 2004, before a non-cash impairment of the Company's investment in certain marketable securities. The Company generated record oil and gas production and revenues during the recent quarter, which were offset by a $645,000 reclassification of its unrealized loss in Chaparral Resources, Inc. into earnings. After the impairment, the Company generated a net loss of $276,000, or $0.03 per share, for the quarter ended March 31, 2004, compared to net income of $252,000, or $0.03 per share, for the comparable period ended March 31, 2003. Cash flows from operations were $619,000 for the three months ended March 31, 2004, compared to $441,000 for the three months ended March 31, 2003.
During the quarter ended March 31, 2004, Whittier generated oil and gas revenues of approximately $1.9 million, or $29.80 per barrel of oil equivalent ("Boe"), on production of approximately 63,865 Boe. For the comparable period in 2003, we generated revenues of approximately $1.5 million, or $28.86 per Boe, on production of approximately 52,015 Boe. The 27% increase in revenues was based primarily upon 23% higher production volumes, as well as slightly higher prices obtained for oil and gas sold during the current period, net of hedge settlements. The increase in production resulted from the acquisition of working interests in the East Corning and Bonnie View Fields during September and November 2003, respectively, as well as higher production attributable to the Company's investment in the Greater Mayfield area in Oklahoma.
Lease operating expenses ("LOE") decreased by $29,000, or 6%, from $504,000 for the quarter ended March 31, 2003 to $475,000 for the quarter ended March 31, 2004, while LOE per unit of production decreased by 23% from $9.69 per Boe to $7.44 per Boe between the two periods. Depletion, depreciation, and amortization ("DD&A") increased from approximately $235,000, or $4.52 per Boe, for the quarter ended March 31, 2003, to $519,000, or $8.13 per Boe, for the quarter ended March 31, 2004. The decrease in operating costs relates to non-recurring workover and stimulation costs incurred during 2003 in order to enhance production in the Beaver Dam Creek and Big Wells Fields. The increase in DD&A is related to greater total production during the current period, as well as a higher DD&A rate per unit of production associated with our recent producing property acquisition in East Corning and production from new wells coming on stream in the Greater Mayfield area.
General and administrative expenses were approximately $408,000 for the three months ended March 31, 2004, compared to $140,000 for the comparable period ended March 31, 2003. The increase of $268,000 reflects our enhanced operational activity from the prior period, including establishing new corporate headquarters in Houston, Texas, transitioning from a private to a public company, and increasing the Company's staff from 1 to 4 full-time employees. Additional non-recurring costs relating to the September 2003 merger of Whittier Energy and Olympic Resources Ltd., include approximately $68,000 in general and administrative costs associated with the maintaining an office in Vancouver through March 31, 2004.
During the quarter ended March 31, 2004, the Company reclassified its unrealized loss in Chaparral Resources, Inc. as "other than temporary" and recognized a non-cash impairment of approximately $645,000. The Company is evaluating its options to dispose of its investment in Chaparral and intends to monetize its investment in order to utilize the proceeds for the acquisition, exploration and development of oil and gas properties.
During the current period, the Company also recognized a gain of approximately $242,000 on the sale of an approximate 5% working interest in the Cascade Unit in Los Angeles County, California, for $525,000. The Company did not dispose of any oil and gas properties during the comparable quarter in 2003.
Management Comments
Bryce Rhodes, the Company's President and CEO, said "Our strong field level results for the recent quarter point to what lies ahead for the Company. Higher production and revenues, combined with lower operating costs per unit of production, helped generate a 40% quarter to quarter increase in net cash flow from operations. This is a trend we expect to continue throughout 2004."
About Whittier
Whittier Energy Corporation is an independent oil and gas exploration and production company headquartered in Houston, Texas, with operations in Texas and Louisiana. Whittier Energy also holds non-operated interests in fields located in the Gulf Coast, Oklahoma, Wyoming and California.
Forward-Looking Statements
Certain statements included in this news release are intended as "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. The Company cautions that actual future results may vary materially from those expressed or implied in any forward-looking statements. More information about the risks and uncertainties relating to these forward-looking statements are found in the Company's SEC filings, which are available free of charge on the SEC's web site at http://www.sec.gov.
FINANCIAL HIGHLIGHTS
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(in thousands, except per share data)
Quarter Ended March 31
2004 2003
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Oil and gas revenues $ 1,903 $ 1,501
Lease operating expenses (475) (504)
Production taxes (160) (182)
Depletion, depreciation and amortization (519) (235)
General and administrative expenses (408) (140)
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Income from operations 341 440
Impairment of marketable securities (645) --
Gain from property sales 242 --
Other expense (15) (46)
Income tax expense (199) (136)
Cumulative effect of change in
accounting principal -- (6)
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Net income (loss) available to common
stockholders $ (276) $ 252
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Basic and diluted earnings per share:
Net income (loss) per share $ (0.03) $ 0.03
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Weighted average number of shares
outstanding (basic and diluted) 10,065,404 10,046,296
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