DENVER, CO--(Marketwire - January 17, 2008) - Bill Barrett Corporation (NYSE: BBG) announced
today certain unaudited operating results for year-end 2007 and certain
operating and financial guidance for 2008.
Chairman and Chief Executive Officer, Fred Barrett, commented: "Our
successful 2007 development and exploration activities generated year-end
estimated proved reserves of 558 billion cubic feet equivalent (Bcfe),
which were up 30% from year-end 2006 and up 44% as adjusted for 2007
property sales. The reserve increase was achieved with total estimated
capital expenditures of $438 million, or $1.88 per Mcfe added. 2007
production of 61.2 Bcfe was up 17% from 2006, despite shut-in production
during the third and fourth quarters of 2007 totaling approximately 3 Bcfe
due to lower than acceptable pricing and infrastructure constraints. Over
the past three years we have delivered compound average reserve growth of
24% and production growth of 25%, demonstrating both our ability to execute
and our commitment to growth.
"For 2008, our board has approved a capital budget that ranges between $550
million and $600 million. Expenditures will focus on our three primary
development projects in the Uinta, Piceance and Powder River Basins. As a
result, we expect to deliver approximately 20% production growth in 2008.
Our production guidance of 70 to 77 Bcfe is based solely on our development
programs. Beyond our development activities, we are excited to move forward
with additional drilling based on the positive 2007 preliminary results at
the Yellow Jacket and Blacktail Ridge prospects, as well as continued
drilling assessment in Circus. We also look forward to drilling several new
prospects during 2008 in the Paradox, Uinta, Wind River and Big Horn
Basins. We are very pleased with our 2007 achievements, and we anticipate
continued success with our 2008 programs."
2007 Year-end Estimated Reserves and Production
(The following information is unaudited and preliminary. Audited and final
results will be provided in our Annual Report on Form 10-K for the
year-ended December 31, 2007 to be filed with the SEC at the end of
February 2008.)
Bcfe
----
2006 year-end estimated proved reserves 428
Divestitures, Williston and other (42)
2007 estimated production (61)
Reserve additions, net 233
---
2007 year-end proved reserves 558
==Reserve replacement ratio 382%
3-year average reserve replacement ratio 306%
Year-end estimated proved reserves of 558 Bcfe were 97% natural gas and 3%
oil. Further, proved reserves were 59% developed and 41% undeveloped. The
present value of proved reserves was estimated at $1.2 billion, before the
effect of income taxes, based on the December 31, 2007 natural gas price of
$6.04 per MMBtu (Colorado Interstate Gas, or CIG, price), WTI oil price of
$92.50 per barrel and a 10% per annum discount rate.
In addition to proved reserves, the Company estimates it has probable and
possible resources of 1.4 Tcfe (see Disclosure Statements section below)
for total proved, probable and possible resources of approximately 2.0
Tcfe.
Estimated production for 2007 was 61.2 Bcfe and included 94% natural gas
and 6% oil. Total production included 1.2 Bcfe from the Williston Basin and
other properties sold during 2007. Fourth quarter 2007 production was a
Company record at 17.2 Bcfe, up 21% from 14.2 Bcfe in the fourth quarter
2006 and up 17% sequentially.
2007 Estimated Proved Reserves and Production
Year-ended December 4th Qtr
31, 2007 2007
--------------------- ----------
Basin Reserves Production Production
------------ ---------- ---------- ----------
(Bcfe) (Bcfe) (Bcfe)
Uinta 243.7 25.8 6.8
Piceance 212.2 20.8 7.3
Powder River 47.7 6.0 1.5
Wind River 54.0 7.4 1.6
Other -- 1.2 --
---------- ---------- ----------
Totals 557.6 61.2 17.2
========== ========== =========
2007 Full Year Capital Expenditures
(The following information is unaudited and preliminary. Audited and final
results will be provided in our Annual Report on Form 10-K for the
year-ended December 31, 2007 to be filed with the SEC at the end of
February 2008.)
Estimated capital expenditures for 2007 were $438 million. During 2007, the
Company did not make any major acquisitions, sold its Williston Basin and
other properties for $84 million and received $12 million in proceeds from
partners to participate in joint exploration programs on projects assembled
by the Company.
2008 Operating and Financial Guidance
Capital Expenditures
Capital expenditures before the effect of major acquisitions
or divestitures ($millions) $550-600
Capital expenditures are expected to be allocated approximately 80% for
development, 10% for delineation and 10% for exploration and other and
include drilling up to 500 wells. The Company is currently focusing on
three core areas that provide significant lower risk, higher return
development opportunities, four key exploration projects that are entering
the delineation phase and several high potential exploration projects.
Production and Production Costs
Production (Bcfe) 70 - 77
Operating costs per unit ($/Mcfe)
Lease operating $ 0.64 - $ 0.70
Gathering & transportation $ 0.54 - $ 0.59
General & administrative ($million)
Before noncash stock-based compensation $ 36 - 38
General Corporate Update
Exploration Brief:
At Blacktail Ridge and Lake Canyon in the Uinta Basin, the Company's first
well in its eight-well 2007 program, the 7-7 BTR, has a current production
rate of approximately 300 barrels of oil per day (Bbls/d) after 75 days
online. The second well, the 12-36 BTR, tested an average daily rate of 757
Bbls during an initial 5-day test period, a rate essentially equal to, or
slightly better than, the 7-7 BTR during a comparable test period. At the
Yellow Jacket prospect in the Paradox Basin, the third vertical test well
continues to test gas after encouraging gas contents and shale composition
were recorded from the Gothic geological cores. The Company is currently
acquiring 3-D seismic data and will develop a plan for at least one
horizontal test well to be drilled during 2008. At the Circus prospect, the
Company continues to test both the Draco and Leviathan wells in the
shallower Cretaceous section. At the Draco well, the Company has an
established gas rate of 225 Mcfd in the Cody Shale. At the Leviathan well,
the Paleozoic zones tested wet, similar to results in the Draco well, and
the Company continues to test the Cody Shale.
Commodity Hedges Update:
The Company has hedges in place for approximately 70% of projected 2008
production. It is currently the Company's strategy to hedge 50% to 70% of
production through basis at regional sales points on a forward 12-month
basis in order to reduce the risks associated with unpredictable future
natural gas and oil prices and to provide certainty for a portion of its
cash flow to support its capital expenditure program.
The following table summarizes swap positions as of January 11, 2008:
Natural Gas Oil
------------------------ ------------------------
Weighted
Average Swap Weighted
Volume Price (CIG or Volume Average Swap
Period (MMBtu/d) PEPL/MMBtu) (Bbls/d) Price (WTI/Bbl)
------ -------- ------------- ------ --------------
1Q08 125,000 $ 6.96 575 $ 73.84
2Q08 110,000 6.60 575 73.84
3Q08 110,000 6.60 575 73.84
4Q08 86,130 7.00 575 73.84
1Q09 114,000 7.66 375 74.41
2Q09 70,000 6.64 375 74.41
3Q09 70,000 6.64 375 74.41
4Q09 49,445 7.18 375 74.41
In addition, the Company has hedged certain volumes with collar contracts
including: one calendar 2008 natural gas collar for 35,000 MMBtu/d at CIG
with a floor of $6.50 and ceiling of $10.00; two calendar 2009 oil collars
for 525 Bbls/d at WTI with a blended floor of $70.48 and blended ceiling of
$81.62; and one calendar 2009 oil collar for 50 Bbls/d at WTI with a floor
of $75.00 and a ceiling of $100.00.
2007 Fourth Quarter and Full Year Results to be Released February 26th:
As previously announced, the Company will release its fourth quarter and
full year 2007 results on February 26, 2008 before the market opens and
hold a webcast and conference call at noon eastern time the same day.
Please join Bill Barrett Corporation executive management for the webcast
and call for an update on operations and strategy for 2008. The webcast may
be accessed at www.billbarrettcorp.com or the call-in number is
800-344-0624 with passcode 30383795. A replay of the call will also be
available through February 29, 2008 at call-in number 800-642-1687 with
passcode 30383795.
Disclosure Statements
Reserve and resource disclosure:
The United States Securities and Exchange Commission permits oil and gas
companies, in their filings with the SEC, to disclose only proved reserves
that a company has demonstrated by actual production or conclusive
formation tests to be economically and legally producible under existing
economic and operating conditions. We use certain terms in this press
release, such as probable and possible resources, that the SEC's guidelines
strictly prohibit us from including in filings with the SEC. U.S. Investors
are urged to consider closely the disclosure in our Form 10-K, for the
year-ended December 31, 2006, and Form 10-Q, for the quarter ended
September 30, 2007, available from Bill Barrett Corporation at 1099 18th
Street, Suite 2300, Denver, CO 80202. You can also obtain these forms from
the SEC by calling 1-800-SEC-0330 or at www.sec.gov
Forward-looking statements:
This press release contains forward-looking statements, including
statements regarding projected results and future events. In particular,
the Company is providing "2008 Guidance," which contain projections for
certain 2008 operational and financial results. These forward-looking
statements are based on management's judgment as of this date and include
certain risks and uncertainties. Please refer to the Company's Annual
Report on Form 10-K for the year-ended December 31, 2006 filed with the
Securities and Exchange Commission, and subsequent filings including our
Current Report on Form 8-K, for a list of certain risk factors. Actual
results may differ materially from Company projections and can be affected
by a variety of factors outside the control of the Company including, among
other things, exploration drilling and test results, transportation,
processing, availability of third party gathering, market conditions, oil
and gas price volatility, risks related to hedging activities, the
availability and cost of services and materials, the ability to obtain
industry partners to jointly explore certain prospects, the ability to
receive drilling and other permits and regulatory approvals, surface access
and costs, uncertainties inherent in oil and gas production operations and
estimating reserves, unexpected future capital expenditures, competition,
risks associated with operating in one major geographic area, the success
of Bill Barrett Corporation's risk management activities, governmental
regulations and other factors discussed in the Company's reports filed with
the SEC. Bill Barrett Corporation encourages readers to consider the risks
and uncertainties associated with projections. In addition, the Company
assumes no obligation to publicly revise or update any forward-looking
statements based on future events or circumstances.
About Bill Barrett Corporation
Bill Barrett Corporation (NYSE: BBG), headquartered in Denver, Colorado,
explores for and develops natural gas and oil in the Rocky Mountain region
of the United States. Additional information about the Company may be found
on its Website www.billbarrettcorp.com.
