EX-99.4 6 h12007exv99w4.txt PRESS RELEASE DATED JANUARY 21, 2004 . . . EXHIBIT 99.4 (BURLINGTON RESOURCES LOGO) NEWS RELEASE ------------------------------------------------------------------------------------------------ TO: DAILY PAPERS, TRADE PRESS FOR: IMMEDIATE COMPANY CONTACTS: FINANCIAL AND SECURITY ANALYSTS RELEASE FINANCIAL: JOHN CARRARA 713-624-9548 MEDIA: JAMES BARTLETT 713-624-9354 BURLINGTON RESOURCES WEB SITE: www.br-inc.com BR0406 ------------------------------------------------------------------------------------------------ BURLINGTON RESOURCES REPORTS RECORD ANNUAL EARNINGS OF $1.2 BILLION AND 142 PERCENT RESERVE REPLACEMENT AT $1.19 UNIT COST HOUSTON, TEXAS, JAN. 21, 2004 -- Burlington Resources (NYSE: BR and TSX: B) today announced record quarterly earnings during the fourth quarter of 2003 of $404 million, or $2.04 per diluted share, compared to prior-year fourth-quarter earnings of $157 million, or $0.78 per diluted share. Included in these results is a benefit of $0.88 per diluted share, attributable to lower Canadian tax obligations of $203 million, which was partially offset by $30 million of after-tax charges for impairment of several small producing properties and abandonment of certain deepwater acreage. Net cash provided by operating activities increased to $552 million from $376 million during the prior year's fourth quarter. Discretionary cash flow(1) was $629 million, compared to $528 million during prior year's fourth quarter. Total production during the fourth quarter of 2003 was 2,723 million cubic feet of natural gas equivalent per day (MMcfed), an 11 percent increase from 2,464 MMcfed during the prior year's fourth quarter. Natural gas production was 1,957 million cubic feet per day (MMcfd), compared to 1,883 MMcfd during the prior year's quarter. Natural gas liquids production was 69.2 thousand barrels per day (Mbd), compared to 59.6 Mbd during the prior year's quarter. Oil production was 58.5 Mbd, compared to 37.3 Mbd during the prior year's quarter. Fourth-quarter 2003 price realizations for natural gas averaged $4.40 per thousand cubic feet (Mcf), compared to $3.82 per Mcf during the prior year's fourth quarter. Natural gas liquids price realizations were $20.54 per barrel, compared to $16.18 per barrel during the prior year's quarter. Oil price realizations were $25.40 per barrel, compared to $25.01 per barrel during the prior year's quarter. Results for the full year of 2003 included record annual net income of $1.218 billion, or $6.08 per diluted share, compared to the previous year's $454 million, or $2.25 per diluted share. Net cash provided from operations increased to $2.539 billion, from $1.549 billion in 2002. Discretionary cash flow(1) was a record $2.597 billion, compared to the prior year's $1.538 billion. Total production in 2003 was essentially flat at 2,567 MMcfed, compared to 2,571 MMcfed the previous year, but when adjusted for property sales in 2002, volumes increased by 10 percent. Price realizations for natural gas were $4.83 per Mcf, compared to $3.20 per Mcf during 2002. Natural gas liquids price realizations were $20.40 per barrel, compared to $14.46 per barrel in 2002. Oil price realizations were $27.22 per barrel, compared to $24.11 per barrel in 2002. Burlington also announced that it has agreed to acquire interests in 10 producing fields in South Louisiana from ChevronTexaco for $71.5 million, with closing anticipated during the first quarter. The company already has a rising production base in South Louisiana, as well as 660,000 acres of mineral fee lands and numerous state leases. The additional properties currently produce about 15 MMcfed net, and a number of development opportunities have been identified. The properties are located in Burlington's core areas and overlap with its fee acreage. "Burlington had an outstanding year in 2003, both operationally and financially. We grew volumes from our high-quality asset positions and controlled our costs, thereby reaping the benefits of the strong prices," said Bobby S. Shackouls, chairman, president and chief executive officer. "Meanwhile, we have completed or are approaching completion on several major development projects and looking forward to accelerating our production growth. During 2004 we expect to reach the upper end of our target of achieving 3 percent to 8 percent average annual production growth. Our objectives for 2004 include a continued focus on profitability, while turning our attention to longer-term growth initiatives for 2005 and the years beyond." Highlights for 2003 included: o BASIN EXCELLENCE(SM) - Burlington's core assets performed well. Adjusted for production from properties divested in 2002, volumes rose 10 percent during 2003. This included increases of 8 percent in Canada and 5 percent in the U.S. Burlington attributes this performance to its Basin Excellence(SM) concept, which concentrates operations in roughly a dozen high-potential core areas where the company holds significant competitive advantages. o CONTINUED LOW RESERVE REPLACEMENT COSTS - Burlington's average reserve replacement cost during 2003 was $1.19 per thousand cubic feet of natural gas equivalent (Mcfe) including acquisitions, which, despite continuing industry service cost inflation and considerable expenditures to develop previously booked reserves, is in line with the three-year average of $1.18 per Mcfe achieved from 2000 through 2002. Excluding acquisitions, the 2003 replacement cost was $1.23 per Mcfe. o RIGOROUS COST CONTROL - Unit production and processing costs as well as administrative costs were essentially flat from 2002 to 2003. Burlington continues benefiting from acquisitions of lower-cost assets and the sale of higher-cost assets, and from a global purchasing initiative that is generating significant savings and improving capital efficiency by mitigating rising industry service costs. o MOMENTUM ON INTERNATIONAL PROJECTS - Production from international operations increased to 13 percent of total volumes during the fourth quarter, an all-time high. During 2003, oil production began from the Burlington-operated MLN and satellite -2- fields in Algeria. The company should benefit from a full year of production from these fields in 2004. In late 2003, oil production began from the partner-operated Bootes and Ursa fields offshore China and the Yuralpa Field in Ecuador, and these fields are expected to increase production during 2004. In addition, Burlington anticipates the start-up of gas production from the Rivers Fields in the East Irish Sea in the first half of 2004. o VALUE-ADDED ACQUISITIONS - Property acquisitions in the San Juan and Fort Worth basins in the U.S., in Canada, in the Dutch North Sea and elsewhere totaled $228 million and added 228 billion cubic feet equivalent (Bcfe) in proved reserves, at an average cost of $1.00 per Mcfe. All the acquisitions strengthened Burlington's presence in core operating areas. o HEIGHTENED FINANCIAL FLEXIBILITY - Total debt to total capitalization declined to 41 percent in 2003, from 51 percent the year before. In addition, net debt to total capitalization(1) declined to 36 percent at year-end, from 48 percent a year ago. High net income, debt repayments of $75 million and favorable currency exchange translation adjustments accounted for the stronger balance sheet position. The company's balance sheet included approximately $757 million in cash and cash equivalents at year-end 2003, compared to $443 million at the end of 2002. o SHARE REPURCHASES AND INCREASED DIVIDENDS - The company repurchased approximately 7.4 million shares of its common stock during 2003 for a total of $361 million, or an average price of $48.63 per share. As of year-end, approximately $762 million remains in the current share repurchase authorization. In addition, Burlington's ordinary share dividend was increased by 9.1 percent in 2003. o FAVORABLE INVESTMENT RETURNS - Burlington's return on capital employed(1) more than doubled to 17.9 percent during 2003, compared to 2002. In addition, total shareholder return was 31.3 percent. RESERVES UPDATE Total reserves at year-end increased to 11.8 trillion cubic feet equivalent (Tcfe), up about 3 percent from 11.4 Tcfe the year before. Burlington replaced 142 percent of its 2003 worldwide production from all sources. Excluding acquisitions, the replacement rate was 118 percent. Worldwide reserve additions from all sources totaled 1,426 Bcfe. Extensions, discoveries and additions totaled 1,107 Bcfe including revisions. Acquisitions added 228 Bcfe, primarily in the San Juan Basin, the Fort Worth Basin and the Dutch North Sea. 2004 OUTLOOK Production - Burlington expects volumes to rise during 2004 as a result of anticipated increases in North American oil and gas production and in international oil and gas production. The geographic breakdown by product follows: -3-

1st-Quarter 2004 Full-Year 2004 Estimate Estimate ---------------- ---------------- Gas (MMcfd) U.S. 835 - 875 860 - 905 Canada 850 - 880 855 - 895 Other International 185 - 215 185 - 230 ---------------- ---------------- Total 1,870 - 1,970 1,900 - 2,030 Natural Gas Liquids (Mbd) U.S. 37.5 - 40.5 37.5 - 40.0 Canada 26.5 - 28.0 26.5 - 28.5 Other International 0.0 - 0.0 0.0 - 0.0 ---------------- ---------------- Total 64.0 - 68.5 64.0 - 68.5 Crude Oil (Mbd) U.S. 30.5 - 33.2 30.5 - 34.0 Canada 4.5 - 5.0 4.5 - 5.0 Other International 27.0 - 35.0 28.5 - 34.0 ---------------- ---------------- Total 62.0 - 73.2 63.5 - 73.0 ================ ================ Total Equiv. Prod. (MMcfed) 2,626 - 2,820 2,665 - 2,879

North American Natural Gas Hedges - As of January 12, 2004, Burlington had hedged the following volumes of future North American natural gas production using costless price collars or fixed price contracts. All prices are weighted averages adjusted to a NYMEX equivalent price using an estimate of differentials between the NYMEX price and regional prices. Detailed hedging information is available on Burlington's Web site at www.br-inc.com/docs/hedge.pdf.

1st-Q. 2004 2nd-Q. 2004 3rd-Q. 2004 ----------- ----------- ----------- Costless collar volumes 437 MMcfd 283 MMcfd 149 MMcfd Floor price $4.57/Mcf $4.50/Mcf $4.59/Mcf Ceiling price $6.94/Mcf $6.39/Mcf $6.38/Mcf Fixed-price volumes 395 MMcfd 39 MMcfd 39 MMcfd Fixed-price sales price $6.40/Mcf $3.55/Mcf $3.62/Mcf

-4- Other 2004 Financial Parameters - Estimated expenses for the first quarter and full year are:

1st-Q. 2004 Full-Year 2004 ----------- -------------- Production & processing costs $0.51 to $0.55/Mcfe $0.50 to $0.54/Mcfe Administrative costs $0.17 to $0.20/Mcfe $0.15 to $0.18/Mcfe Transportation costs $0.42 to $0.45/Mcfe $0.40 to $0.44/Mcfe Depletion, depreciation & amortization $1.08 to $1.12/Mcfe $1.11 to $1.16/Mcfe Interest expense $68 MM to $72 MM $275 MM to $280 MM Exploration costs $60 MM to $80 MM $235 MM to $255 MM

In addition, Burlington anticipates an effective income tax rate of 33 to 37 percent for the full year of 2004. The breakdown between current and deferred taxes for the year could vary widely depending on commodity prices and other factors. A financial statement, as well as reserves, statistics and non-GAAP reconciliation tables, accompany this release. As a reminder, Burlington will webcast a conference call to discuss its fourth-quarter and full-year 2003 earnings and operations. The call will take place on Thursday, January 22 at 1 p.m. Central time. All materials and information related to the conference call, this press release and a package of financial and statistical information, may be accessed from the Burlington Resources Web site home page (www.br-inc.com) by selecting the link entitled "4th Qtr 2003 Conference Call Info Page," and then selecting the resource desired. Burlington Resources ranks among the world's largest independent oil and gas companies, and holds one of the industry's leading positions in North American natural gas reserves and production. Headquartered in Houston, Texas, the company conducts exploration, production and development operations in the U.S., Canada, the United Kingdom, Africa, China and South America. For additional information see the Burlington Resources Web site at www.br-inc.com. (1) See the accompanying tables for a reconciliation of GAAP and non-GAAP measures utilized in calculating discretionary cash flow, net debt to total capitalization, and return on capital employed. -------------------------------------------------------------------------------- FORWARD-LOOKING STATEMENTS This press release may contain projections and other forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Any such projections or statements reflect the company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that such projections will be achieved and actual results could differ materially from those projected. A discussion of important factors that could cause actual results to differ materially from those projected is included in the company's periodic reports filed with the Securities and Exchange Commission. -------------------------------------------------------------------------------- -5- BURLINGTON RESOURCES INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURE (a) DISCRETIONARY CASH FLOW ($ IN MILLIONS) Below is a reconciliation of net cash provided by operating activities to discretionary cash flow.

Twelve Months Fourth Quarter ------------------ ----------------- 2003 2002 2003 2002 ------- ------- ------- ------- Net cash provided by operating activities $ 2,539 $ 1,549 $ 552 $ 376 Adjustments: Working capital 80 (45) 59 126 Changes in other assets and liabilities (22) 34 18 26 ------- ------- ------- ------- Discretionary cash flow $ 2,597 $ 1,538 $ 629 $ 528 ======= ======= ======= =======

(a) GAAP - Generally Accepted Accounting Principles. Management believes that the non-GAAP measure of discretionary cash flow is useful information for investors because it is used internally and accepted by the investment community as a means of measuring the company's ability to fund its capital and dividend programs and to service its debt. Discretionary cash flow is also useful because it is widely used by professional research analysts in valuing, comparing ratings and providing investment recommendations of companies in the oil and gas exploration and production industry. Many investors use this published research in making investment decisions. -6- BURLINGTON RESOURCES INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURE (a) NET DEBT TO TOTAL CAPITAL RATIO ($ IN MILLIONS) Below is a reconciliation of debt to total capital ratio to net debt to total capital ratio.

December 31, 2003 -------- Total debt $ 3,873 Stockholders' equity 5,531 -------- Total capital $ 9,404 ======== Total debt $ 3,873 Adjustment: Less: Cash and cash equivalents 757 -------- Net debt $ 3,116 ======== Net debt $ 3,116 Stockholders' equity 5,531 -------- Total adjusted capital $ 8,647 ======== Debt to total capital ratio 41% Adjustment: Less: Impact of cash and cash equivalents 5% -------- Net debt to total capital ratio 36% ========

(a) GAAP - Generally Accepted Accounting Principles. Total debt to total capital ratio is calculated by dividing total debt by total debt plus stockholders' equity. Management believes that total debt to total capital ratio is useful to investors because it is helpful in determining a company's leverage. Management also believes that since it has the ability to and may elect to use a portion of cash and cash equivalents to retire debt or incur additional expenditures without increasing debt, it is appropriate to apply cash and cash equivalents to debt in calculating net debt to capital (Non-GAAP). -7- BURLINGTON RESOURCES INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURE (a) RETURN ON CAPITAL EMPLOYED (ROCE) ($ IN MILLIONS) Net Income - 2003 $ 1,218 Add: Interest expense after tax 211 -------- Earnings before after-tax interest expense $ 1,429 ========

December December 31, 2003 31, 2002 -------- -------- Total debt (GAAP) $ 3,873 $ 3,916 Less: Cash and cash equivalents 757 443 -------- -------- Net debt (Non-GAAP) 3,116 3,473 Stockholders' equity 5,531 3,832 -------- -------- Total adjusted capital 8,647 7,305 Plus: Cash and cash equivalents 757 443 -------- -------- Total Capital $ 9,404 $ 7,748 ======== ======== ROCE (GAAP) 16.7% Impact of cash and cash equivalents 1.2% -------- ROCE (Non-GAAP) 17.9% ========

(a) GAAP - Generally Accepted Accounting Principles. ROCE is defined as net income plus after-tax interest expense divided by average capital (total debt plus stockholders' equity). Above is a reconciliation of ROCE calculated using net debt (total debt less cash and cash equivalents) in the average capital calculation (considered Non-GAAP) compared to ROCE calculated using total debt in the average capital calculation. (Note: interest expense is taxed based on the company's effective tax rate.) Management believes that ROCE is a useful measure because it indicates the return on all capital, which includes equity and debt, employed in the business. Since management has the ability to and may elect to use a portion of the cash and cash equivalents to retire debt, the debt balance has been reduced for cash and cash equivalents. Management also believes that ROCE is an additional measure of efficiency when considered in conjunction with return on equity which measures the return on only the shareholders' equity component of total capital employed. -8- BURLINGTON RESOURCES INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

FOURTH QUARTER YEAR ENDED ------------------ ------------------ 2003 2002 2003 2002 ------- ------- ------- ------- (In Millions, Except per Share Amounts) Revenues .............................................................................. $ 1,065 $ 830 $ 4,311 $ 2,968 ------- ------- ------- ------- Costs and Other Income - Net Taxes Other than Income Taxes ....................................................... 46 31 187 123 Transportation Expense .............................................................. 107 88 408 354 Production and Processing ........................................................... 143 102 475 467 Depreciation, Depletion and Amortization ............................................ 258 202 927 833 Exploration Costs ................................................................... 77 72 252 286 Impairment of Oil and Gas Properties ................................................ 33 -- 63 -- Administrative ...................................................................... 45 48 164 161 Interest Expense .................................................................... 67 67 260 274 Gain on Disposal of Assets .......................................................... (10) (1) (8) (68) Other Expense (Income) - Net ........................................................ -- (13) 13 (31) ------- ------- ------- ------- Total Costs and Other Income - Net .............................................. 766 596 2,741 2,399 ------- ------- ------- ------- Income Before Income Taxes and Cumulative Effect of Change in Accounting Principle .... 299 234 1,570 569 Income Tax Expense (Benefit) .......................................................... (105) 77 293 115 ------- ------- ------- ------- Income Before Cumulative Effect of Change in Accounting Principle ..................... 404 157 1,277 454 Cumulative Effect of Change in Accounting Principle - Net ............................. -- -- (59) -- ------- ------- ------- ------- Net Income ............................................................................ $ 404 $ 157 $ 1,218 $ 454 ======= ======= ======= ======= Earnings per Common Share Basic Before Cumulative Effect of Change in Accounting Principle ........................ $ 2.05 $ 0.78 $ 6.42 $ 2.26 Cumulative Effect of Change in Accounting Principle - Net ......................... -- -- (0.30) -- ------- ------- ------- ------- Net Income ........................................................................ $ 2.05 $ 0.78 $ 6.12 $ 2.26 ======= ======= ======= ======= Diluted Before Cumulative Effect of Change in Accounting Principle ........................ $ 2.04 $ 0.78 $ 6.38 $ 2.25 Cumulative Effect of Change in Accounting Principle - Net ......................... -- -- (0.30) -- ------- ------- ------- ------- Net Income ........................................................................ $ 2.04 $ 0.78 $ 6.08 $ 2.25 ======= ======= ======= ======= Basic Common Shares ................................................................... 197 201 199 201 ======= ======= ======= ======= Diluted Common Shares ................................................................. 198 202 200 202 ======= ======= ======= =======

This statement should be read in conjunction with the attached press release. -9- BURLINGTON RESOURCES INC. SALES VOLUMES AND PRICES

2003 2002 ------------------------------------- ------- Year Ended First Second Third Fourth Fourth ----------------------------- Quarter Quarter Quarter Quarter Quarter 2003 2002 2001 ------- ------- ------- ------- ------- ------- ------- ------- SALES VOLUMES Gas (MMCF/Day) U.S 867 875 848 870 917 865 949 1,121 Canada 852 868 873 876 829 867 802 433 Other International 153 136 168 211 137 167 165 170 ------- ------- ------- ------- ------- ------- ------- ------- Worldwide 1,872 1,879 1,889 1,957 1,883 1,899 1,916 1,724 ------- ------- ------- ------- ------- ------- ------- ------- NGLs (MBBLS/Day) U.S 35.7 34.6 35.9 43.1 32.7 37.4 32.7 34.6 Canada 28.0 28.5 27.1 26.1 26.9 27.4 27.4 12.5 ------- ------- ------- ------- ------- ------- ------- ------- Worldwide 63.7 63.1 63.0 69.2 59.6 64.8 60.1 47.1 ------- ------- ------- ------- ------- ------- ------- ------- Oil (MBBLS/Day) U.S 27.6 28.8 30.0 30.7 29.3 29.3 35.4 44.0 Canada 5.1 5.2 5.2 4.9 4.7 5.1 7.8 11.9 Other International 6.6 6.7 12.1 22.9 3.3 12.1 5.9 7.3 ------- ------- ------- ------- ------- ------- ------- ------- Worldwide 39.3 40.7 47.3 58.5 37.3 46.5 49.1 63.2 ------- ------- ------- ------- ------- ------- ------- ------- Total Equivalent (MMCFE/D) 2,490 2,502 2,551 2,723 2,464 2,567 2,571 2,386 ------- ------- ------- ------- ------- ------- ------- ------- AVERAGE REALIZED PRICES Gas ($/MCF) U.S $ 5.27 $ 4.94 $ 4.91 $ 4.38 $ 3.96 $ 4.87 $ 3.39 $ 3.99 Canada 5.72 5.34 4.90 4.57 3.86 5.12 3.17 4.60 Other International 3.02 2.72 2.46 3.81 2.67 3.07 2.27 2.83 ------- ------- ------- ------- ------- ------- ------- ------- Combined including hedging 5.29 4.96 4.68 4.40 3.82 4.83 3.20 4.03 Hedging loss (gain) 0.23 0.07 0.04 0.03 0.01 0.09 (0.16) 0.48 ------- ------- ------- ------- ------- ------- ------- ------- Combined before hedging $ 5.52 $ 5.03 $ 4.72 $ 4.43 $ 3.83 $ 4.92 $ 3.04 $ 4.51 ------- ------- ------- ------- ------- ------- ------- ------- NGLs ($/BBL) U.S $ 19.54 $ 17.26 $ 17.81 $ 18.96 $ 14.78 $ 18.42 $ 13.23 $ 14.75 Canada 25.31 20.07 23.88 23.16 17.89 23.08 15.92 22.50 ------- ------- ------- ------- ------- ------- ------- ------- Combined $ 22.07 $ 18.53 $ 20.42 $ 20.54 $ 16.18 $ 20.40 $ 14.46 $ 16.79 ------- ------- ------- ------- ------- ------- ------- ------- Oil ($/BBL) U.S $ 30.87 $ 26.93 $ 27.66 $ 27.09 $ 23.98 $ 28.08 $ 23.16 $ 22.63 Canada 35.68 27.96 32.30 28.52 31.90 31.11 28.32 26.51 Other International 20.32 29.74 23.67 22.48 24.31 23.49 24.30 23.42 ------- ------- ------- ------- ------- ------- ------- ------- Combined including hedging 29.74 27.53 27.16 25.40 25.01 27.22 24.11 23.45 Hedging loss (gain) 0.44 -- -- -- -- 0.09 (0.18) 1.10 ------- ------- ------- ------- ------- ------- ------- ------- Combined before hedging $ 30.18 $ 27.53 $ 27.16 $ 25.40 $ 25.01 $ 27.31 $ 23.93 $ 24.55 ------- ------- ------- ------- ------- ------- ------- -------

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OIL (MMBbls) NGL (MMBBbls) ---------------------------------------- --------------------------------------- USA CANADA INT'L. TOTAL USA CANADA INT'L. TOTAL ------- ------- ------- ------- ------- ------- ------- ------- PROVED DEVELOPED AND UNDEVELOPED RESERVES JANUARY 1, 2001 204.2 57.5 70.0 331.7 222.2 44.0 -- 266.2 ------------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- Revision of previous estimates (10.7) (0.6) 0.4 (10.9) 5.8 (12.9) -- (7.1) ------- ------- ------- ------- ------- ------- ------- ------- Extensions, discoveries and other additions 66.7 2.9 2.5 72.1 9.6 4.8 -- 14.4 ------- ------- ------- ------- ------- ------- ------- ------- Production (16.1) (4.3) (2.7) (23.1) (12.6) (4.6) -- (17.2) ------- ------- ------- ------- ------- ------- ------- ------- Purchases of reserves in place 0.4 1.2 0.8 2.4 2.7 16.4 -- 19.1 ------- ------- ------- ------- ------- ------- ------- ------- Sales of reserves in place (0.2) (0.1) -- (0.3) -- -- -- -- ------------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- DECEMBER 31, 2001 244.3 56.6 71.0 371.9 227.7 47.7 -- 275.4 ------------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- Revision of previous estimates (2.0) (1.4) (1.6) (5.0) 9.8 14.7 -- 24.5 ------- ------- ------- ------- ------- ------- ------- ------- Extensions, discoveries and other additions 2.8 5.3 6.3 14.4 15.7 9.2 -- 24.9 ------- ------- ------- ------- ------- ------- ------- ------- Production (13.0) (2.8) (2.1) (17.9) (11.9) (10.0) -- (21.9) ------- ------- ------- ------- ------- ------- ------- ------- Purchases of reserves in place 1.2 -- 19.9 21.1 -- 0.2 -- 0.2 ------- ------- ------- ------- ------- ------- ------- ------- Sales of reserves in place (46.1) (43.3) (7.2) (96.6) (0.9) (2.0) -- (2.9) ------------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- DECEMBER 31, 2002 187.2 14.4 86.3 287.9 240.4 59.8 -- 300.2 ------------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- Revision of previous estimates (4.9) 0.4 1.7 (2.8) 19.8 (0.7) -- 19.1 ------- ------- ------- ------- ------- ------- ------- ------- Extensions, discoveries and other additions 11.0 2.8 -- 13.8 22.9 12.0 -- 34.9 ------- ------- ------- ------- ------- ------- ------- ------- Production (10.7) (1.9) (4.4) (17.0) (13.6) (10.0) -- (23.6) ------- ------- ------- ------- ------- ------- ------- ------- Purchases of reserves in place 0.5 0.1 -- 0.6 0.6 0.3 -- 0.9 ------- ------- ------- ------- ------- ------- ------- ------- Sales of reserves in place (0.3) (0.1) -- (0.4) (0.5) (0.1) -- (0.6) ------------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- DECEMBER 31, 2003 182.8 15.7 83.6 282.1 269.6 61.3 -- 330.9 ------------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- PROVED DEVELOPED RESERVES ------------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- January 1, 2001 169.7 43.0 10.4 223.1 177.6 35.5 -- 213.1 ------- ------- ------- ------- ------- ------- ------- ------- December 31, 2001 163.7 38.4 8.8 210.9 175.5 39.3 -- 214.8 ------- ------- ------- ------- ------- ------- ------- ------- December 31, 2002 155.2 12.9 12.9 181.0 179.2 53.1 -- 232.3 ------- ------- ------- ------- ------- ------- ------- ------- December 31, 2003 176.5 13.1 50.8 240.4 188.6 50.8 -- 239.4 ------------------------------------------- ------- ------- ------- ------- ------- ------- ------- -------

GAS (BCF) BCFE ---------------------------------------- --------- USA CANADA INT'L. TOTAL WORLDWIDE ------- ------- ------- ------- --------- PROVED DEVELOPED AND UNDEVELOPED RESERVES JANUARY 1, 2001 4,884 1,189 729 6,802 10,389 ------------------------------------------- ------- ------- ------- ------- --------- Revision of previous estimates 107 (66) (35) 6 (102) ------- ------- ------- ------- --------- Extensions, discoveries and other additions 253 165 58 476 995 ------- ------- ------- ------- --------- Production (409) (158) (62) (629) (871) ------- ------- ------- ------- --------- Purchases of reserves in place 59 1,007 207 1,273 1,402 ------- ------- ------- ------- --------- Sales of reserves in place (2) (1) -- (3) (5) ------------------------------------------- ------- ------- ------- ------- --------- DECEMBER 31, 2001 4,892 2,136 897 7,925 11,808 ------------------------------------------- ------- ------- ------- ------- --------- Revision of previous estimates (14) (140) (11) (165) (48) ------- ------- ------- ------- --------- Extensions, discoveries and other additions 350 341 85 776 1,012 ------- ------- ------- ------- --------- Production (346) (293) (60) (699) (938) ------- ------- ------- ------- --------- Purchases of reserves in place 153 268 -- 421 549 ------- ------- ------- ------- --------- Sales of reserves in place (282) (16) (70) (368) (965) ------------------------------------------- ------- ------- ------- ------- --------- DECEMBER 31, 2002 4,753 2,296 841 7,890 11,418 ------------------------------------------- ------- ------- ------- ------- --------- Revision of previous estimates (88) (57) (45) (190) (91) ------- ------- ------- ------- --------- Extensions, discoveries and other additions 425 427 54 906 1,198 ------- ------- ------- ------- --------- Production (315) (317) (61) (693) (937) ------- ------- ------- ------- --------- Purchases of reserves in place 131 9 79 219 228 ------- ------- ------- ------- --------- Sales of reserves in place (54) (4) -- (58) (64) ------------------------------------------- ------- ------- ------- ------- --------- DECEMBER 31, 2003 4,852 2,354 868 8,074 11,752 ------------------------------------------- ------- ------- ------- ------- --------- PROVED DEVELOPED RESERVES ------------------------------------------- ------- ------- ------- ------- --------- January 1, 2001 3,903 960 251 5,114 7,731 ------- ------- ------- ------- --------- December 31, 2001 3,771 1,758 384 5,913 8,467 ------- ------- ------- ------- --------- December 31, 2002 3,617 1,836 263 5,716 8,196 ------- ------- ------- ------- --------- December 31, 2003 3,715 1,837 322 5,874 8,753 ------------------------------------------- ------- ------- ------- ------- ---------

-11-