EX-99.1 3 h05073exv99w1.txt PRESS RELEASE EXHIBIT 99.1 [BURLINGTON RESOURCES LOGO] NEWS RELEASE -------------------------------------------------------------------------------- TO: DAILY PAPERS, TRADE PRESS COMPANY CONTACTS: FINANCIAL AND SECURITY ANALYSTS FINANCIAL: JOHN CARRARA 713-624-9548 MEDIA: JAMES BARTLETT 713-624-9354 FOR: IMMEDIATE RELEASE BURLINGTON RESOURCES WEB SITE: www.br-inc.com BR0308 -------------------------------------------------------------------------------- BURLINGTON RESOURCES REPORTS FIRST-QUARTER INCOME AND REESTABLISHES $1 BILLION SHARE REPURCHASE AUTHORIZATION HOUSTON, TEXAS, APRIL 24, 2003 - Burlington Resources Inc. (NYSE: BR and TSX: B) today reported estimated net income of $269 million for the first quarter of 2003, or $1.33 per diluted share, compared to net income of $48 million or $0.24 per diluted share during the same quarter of 2002. The quarter's results included the impact of a previously announced non-cash after-tax charge against earnings of $59 million for the cumulative effect of a change in accounting principle related to adoption of Statement of Financial Accounting Standards No. 143, which specifies accounting for future asset retirement obligations. The charge did not impact the company's cash flows. Income before the cumulative effect of the change in accounting principle was $328 million or $1.62 per diluted share. Operationally, during the quarter Burlington benefited from higher commodity prices, higher production on a divestiture-adjusted basis, and lower production and processing costs. Net cash provided by operating activities during the first quarter increased to $589 million from $361 million during the same quarter last year. Discretionary cash flow during the first quarter increased to $721 million from $341 million during the same quarter last year.(1) Production during the first quarter of 2003 averaged 2,490 million cubic feet of natural gas equivalent per day (MMcfed), which, adjusted for asset sales in 2002, represented growth of 6 percent. The prior year's first-quarter production averaged 2,716 MMcfed, including approximately 367 MMcfed of volumes from properties that were subsequently sold during 2002. During the quarter Burlington resumed share repurchases under a previous $1 billion authorization approved in late 2000, acquiring approximately 1.7 million shares for $79 million at an average cost of about $45.50 per share. Cumulative repurchases total 18 million shares for $772 million under the existing authorization. Subsequent to the quarter, Burlington's board of directors approved restoring the share repurchase authorization level to $1 billion. "These first-quarter results establish a milestone that demonstrates the success of our multi-year repositioning of Burlington's asset base," said Bobby S. Shackouls, Burlington Resources chairman, president and chief executive officer. "From the assets now in our portfolio, we believe we can achieve meaningful and profitable production growth as well as sector-leading financial returns. We are working toward the start-up of several major development projects during the months ahead while continuing highly active programs in our core producing areas, which are predominately exposed to the strong underlying pricing fundamentals of the North American natural gas market. We are also pleased to be active once again in our share repurchase program, which should further enhance the company's per-share performance." In operational news, Burlington conducted record field activity in Canada during the quarter, completing more than 300 new wells and achieving an 8 percent increase in production over the prior year's quarter on a divestiture-adjusted basis. In addition, Burlington progressed toward the scheduled startups of oil production from Algeria's MLN Field by mid 2003 and from the Panyu offshore development program in China by late 2003, with the startup of gas production from new fields in the East Irish Sea expected by early 2004. First-quarter natural gas production averaged 1,872 million cubic feet per day (MMcfd), compared to 2,019 MMcfd during the prior year's first quarter. Natural gas liquids (NGLs) production increased 13 percent to 63.7 thousand barrels per day (Mbd) from 56.3 Mbd during the prior year's first quarter. Oil production decreased to 39.3 Mbd from 59.9 Mbd during the prior year's first quarter. The lower gas and oil volumes during the first quarter were attributable solely to last year's property sales. Natural gas price realizations averaged $5.29 per thousand cubic feet (Mcf) during the quarter, up from $2.99 per Mcf during the prior year's first quarter. NGLs price realizations of $22.07 per barrel were up from $12.45 per barrel during the prior year's first quarter. Oil price realizations increased to $29.74 per barrel from $21.68 per barrel during the prior year's first quarter. Production and processing costs were $0.45 per thousand cubic feet equivalent (Mcfe) during the first quarter, down from $0.61 per Mcfe during last year's first quarter, reflecting the upgrading during 2002 of Burlington's asset portfolio and sale of the Val Verde processing plant. General and administrative costs averaged $0.19 per Mcfe, compared to $0.16 per Mcfe during last year's first quarter. Depreciation, depletion and amortization (DD&A) expenses were flat at $0.91 per Mcfe. Exploration expenses were $68 million compared to the prior year's first-quarter expenses of $57 million, primarily due to higher dry hole expenses. Transportation expenses were $0.44 per Mcfe compared to the prior year's first-quarter expenses of $0.35 per Mcfe, with the increase primarily attributable to the sale of the Val Verde facility. -2- OUTLOOK Production - Burlington expects to deliver long-term volume growth averaging in the 3 percent to 8 percent range. As previously announced, the company expects to achieve the low end of the range in 2003, and the upper end in 2004. The geographic breakdown of production guidance by product for 2003 follows:

2nd-Quarter 2003 Full-Year 2003 Estimate Estimate Gas (MMcfd) U.S. 870 - 905 885 - 915 Canada 870 - 910 890 - 920 Other International 120 - 135 140 - 150 ------------- ------------- Total 1,860 - 1,950 1,915 - 1,985 Natural Gas Liquids (Mbd) U.S. 31.5 - 35.0 33.0 - 35.5 Canada 27.5 - 29.0 27.0 - 28.5 Other International 0.0 - 0.0 0.0 - 0.0 ------------- ------------- Total 59.0 - 64.0 60.0 - 64.0 Crude Oil (Mbd) U.S. 26.5 - 28.0 27.0 - 29.0 Canada 4.5 - 5.0 4.5 - 5.0 Other International 10.0 - 12.0 18.5 - 22.0 ------------- ------------- Total 41.0 - 45.0 50.0 - 56.0 Total Equivalent 2,460 - 2,604 2,575 - 2,705

North American Natural Gas Hedges - As of the date of this release, Burlington has hedged a portion of its 2003 North American natural gas production using costless price collars. For the balance of the year, 590 MMcfd is hedged at floor prices of $3.51 per Mcf, with ceiling prices of $5.37 per Mcf during the second and third quarters, and $5.45 per Mcf during the fourth quarter. All prices are weighted averages adjusted to a NYMEX equivalent price using an estimate of differentials between the NYMEX price and regional prices on which the collars are based. Detailed information on hedging is available on Burlington's Web site at www.br-inc.com by selecting the Investor Relations page and then the Hedge Schedule page at www.br-inc.com/docs/hedge.pdf. Other 2003 Financial Parameters - For the second quarter and full year of 2003, on a gas-equivalent-per-unit basis, Burlington expects transportation expenses to range from $0.42 to $0.45 per Mcfe; production and processing costs to range from $0.48 to $0.52 per Mcfe; DD&A expense to range from $0.93 to $0.97 per Mcfe; administrative expenses to range from $0.17 to $0.19 per Mcfe; and interest expenses to range from $0.28 to $0.30 per Mcfe. Burlington expects exploration expenses to range from $50 million to $65 million during the second quarter, and from $210 million to $240 million -3- for the full year. The company estimates that its 2003 effective income tax rate will range from 32 percent to 37 percent, based on current commodity price projections. The breakdown between current and deferred taxes could vary widely depending on commodity prices for the year. Headquartered in Houston, Texas, Burlington Resources is one of the world's largest independent oil and gas companies. The company has production in the U.S., Canada, the United Kingdom, Africa and South America, with exploration and development programs under way in these areas as well as in China. Additional information is available on the Burlington Resources Web site at www.br-inc.com. (1) See accompanying table for a reconciliation of GAAP and non-GAAP measure utilized in calculating discretionary cash flow, and a statement indicating why management believes the non-GAAP measure of discretionary cash flow is useful information to investors. -------------------------------------------------------------------------------- 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. -------------------------------------------------------------------------------- -4- BURLINGTON RESOURCES INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

FIRST QUARTER --------------------------- 2003 2002 ------- ----- (In Millions, Except per Share Amounts) Revenues ................................................................. $ 1,128 $ 703 ------- ----- Costs and Other Income - Net Taxes Other than Income Taxes ............................................ 48 33 Transportation Expense ................................................... 99 86 Production and Processing ................................................ 102 136 Depreciation, Depletion and Amortization ................................. 203 221 Exploration Costs ........................................................ 68 57 Administrative ........................................................... 42 38 Interest Expense ......................................................... 64 72 Gain on Disposal of Assets ............................................... (1) -- Other Expense (Income) - Net ............................................. 4 (1) ------- ----- Total Costs and Other Income - Net ................................ 629 642 ------- ----- Income Before Income Taxes ............................................... 499 61 Income Tax Expense ....................................................... 171 13 ------- ----- Income Before Cumulative Effect of Change in Accounting Principle ........ 328 48 Cumulative Effect of Change in Accounting Principle - Net ................ (59) -- ------- ----- Net Income ............................................................... $ 269 $ 48 ======= ===== Earnings per Common Share Basic Before Cumulative Effect of Change in Accounting Principle .......... $ 1.63 $0.24 Cumulative Effect of Change in Accounting Principle - Net ........... (0.29) -- ------- ----- Net Income .......................................................... $ 1.34 $0.24 ======= ===== Diluted Before Cumulative Effect of Change in Accounting Principle .......... $ 1.62 $0.24 Cumulative Effect of Change in Accounting Principle - Net ........... (0.29) -- ------- ----- Net Income .......................................................... $ 1.33 $0.24 ======= ===== Basic Common Shares ...................................................... 201 201 ======= ===== Diluted Common Shares .................................................... 202 202 ======= =====

This statement should be read in conjunction with the attached press release. -5- BURLINGTON RESOURCES INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURE (a) MARCH 31, 2003 ($ IN MILLIONS) Below is a reconciliation of net cash provided by operating activities to discretionary cash flow.

First Quarter -------------------------- 2003 2002 ----------- ----------- Net cash provided by operating activities $589 $361 Adjustments: Working capital 122 (24) Changes in other assets and liabilities 10 4 ----------- ----------- Discretionary cash flow $721 $341 =========== ===========

(a) GAAP - Generally Accepted Accounting Principles. Management believes that the non-GAAP measure of discretionary cash flow is useful information to investors because it is widely used by professional research analysts in the valuation, comparison, rating and investment recommendations of companies within the oil and gas exploration and production industry. Many investors use the published research of these analysts in making their investment decisions. -6- BURLINGTON RESOURCES INC. SALES VOLUMES AND PRICES

----------------------------------------------------------------------------------------------------------------------------------- 2003 2002 Year Ended ---------- ------------------------------------------------ --------------------------------- First First Second Third Fourth Quarter Quarter Quarter Quarter Quarter 2002 2001 2000 ----------------------------------------------------------------------------------------------------------------------------------- PRODUCTION VOLUMES Gas (MMCF/Day) USA 867 1,031 953 900 917 949 1,121 1,265 Canada 852 790 805 782 829 802 433 341 Other International 153 198 169 157 137 165 170 118 ----------------------------------------------------------------------------------------------------------------------------------- Worldwide 1,872 2,019 1,927 1,839 1,883 1,916 1,724 1,724 ----------------------------------------------------------------------------------------------------------------------------------- NGLs (MBBLS/Day) USA 35.7 27.4 36.5 34.5 32.7 32.7 34.6 36.1 Canada 28.0 28.9 28.5 25.1 26.9 27.4 12.5 11.1 ----------------------------------------------------------------------------------------------------------------------------------- Worldwide 63.7 56.3 65.0 59.6 59.6 60.1 47.1 47.2 ----------------------------------------------------------------------------------------------------------------------------------- Oil (MBBLS/Day) USA 27.6 41.0 37.4 34.2 29.3 35.4 44.0 51.6 Canada 5.1 11.3 9.9 5.4 4.7 7.8 11.9 12.5 Other International 6.6 7.6 7.5 5.1 3.3 5.9 7.3 9.6 ----------------------------------------------------------------------------------------------------------------------------------- Worldwide 39.3 59.9 54.8 44.7 37.3 49.1 63.2 73.7 ----------------------------------------------------------------------------------------------------------------------------------- Total Equivalent (MMCFE/D) 2,490 2,716 2,646 2,465 2,464 2,571 2,386 2,449 ----------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------- AVERAGE REALIZED PRICES Gas ($/MCF) USA $ 5.27 $ 3.17 $ 3.42 $ 2.92 $ 3.96 $ 3.39 $ 3.99 $ 3.31 Canada 5.72 2.74 3.29 2.74 3.86 3.17 4.60 4.10 Other International 3.02 2.58 1.82 2.01 2.67 2.27 2.83 2.57 ----------------------------------------------------------------------------------------------------------------------------------- Combined including hedging $ 5.29 $ 2.99 $ 3.22 $ 2.77 $ 3.82 $ 3.20 $ 4.03 $ 3.42 Hedging loss (gain) 0.23 (0.38) (0.14) (0.11) 0.01 (0.16) 0.48 0.45 ----------------------------------------------------------------------------------------------------------------------------------- Combined before hedging $ 5.52 $ 2.61 $ 3.08 $ 2.66 $ 3.83 $ 3.04 $ 4.51 $ 3.87 ----------------------------------------------------------------------------------------------------------------------------------- NGLs ($/BBL) USA $ 19.54 $ 11.22 $ 12.17 $ 14.43 $ 14.78 $ 13.23 $ 14.75 $ 17.70 Canada 25.31 13.61 16.01 16.32 17.89 15.92 22.50 25.38 ----------------------------------------------------------------------------------------------------------------------------------- Combined $ 22.07 $ 12.45 $ 13.86 $ 15.22 $ 16.18 $ 14.46 $ 16.79 $ 19.51 ----------------------------------------------------------------------------------------------------------------------------------- Oil ($/BBL) USA $ 30.87 $ 21.46 $ 23.21 $ 24.39 $ 23.98 $ 23.16 $ 22.63 $ 24.18 Canada 35.68 21.82 31.07 33.56 31.90 28.32 26.51 29.06 Other International 20.32 22.63 23.47 28.13 24.31 24.30 23.42 27.73 ----------------------------------------------------------------------------------------------------------------------------------- Combined including hedging 29.74 21.68 24.64 $ 25.90 $ 25.01 $ 24.11 $ 23.45 $ 25.44 Hedging loss (gain) 0.44 (0.58) -- -- -- (0.18) 1.10 2.62 ----------------------------------------------------------------------------------------------------------------------------------- Combined before hedging $ 30.18 $ 21.10 $ 24.64 $ 25.90 $ 25.01 $ 23.93 $ 24.55 $ 28.06 -----------------------------------------------------------------------------------------------------------------------------------

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