WGR Reports Record Results, Talks Growth
Denver-based Western Gas Resources (WGR) reported last week that
its net income for the fourth quarter and end-of-year reached
all-time highs during 2000. The independent diversified natural gas
company posted fourth quarter net income of $18.1 million ($0.47
per share), compared to a loss of $1.2 million ($0.12 per share) in
1999 for the same time period.
For the year 2000, the company reported net income of $56.1
million ($1.39 per share), when in 1999 it posted a dismal loss of
$17.1 million ($0.86 per share). Overall revenues increase by 72%
to $3.3 billion compared to 1999.
WGR said although its average gas sales volumes went down by 3%
for 2000 to 1.8 Bcf/d, the natural gas price spikes helped the
company to achieve record results. Average gas prices increased 80%
to $3.90/Mcf in 2000, the company said. The company drilled about
950 wells in the Powder River Basin in 2000, and expects to drill
another 840 in 2001.
"The fourth quarter and year 2000 were exceptional for Western
as we set records for net income, revenue and EBITDA in both
periods. After several years of depressed prices and limited
drilling activity, we are now benefiting in all of our operating
segments by greatly improved commodity prices and increased
volume," said Lanny Outlaw, CEO of Western. "We believe that the
demand for clean burning natural gas will increase and prices will
remain at levels which will continue to provide opportunities for a
company with our asset base and capabilities."
At the end of 2000, Western increased its proved reserves by 50%
to 408 Bcf from the 272 Bcf reported at year-end 1999. The company
added 164 Bcf of reserves, or replaced 586% of its 2000 production
of 28 Bcf.
WGR also released it 2001 capital expenditure budget, which
increased 29% from 1999's $105.5 million, to $136.4 million. Of the
2001 budget, $71.8 million will go to gathering, processing and
pipeline assets, $56.9 million will go into exploration and
production and the remaining $7.7 million will be used for
administrative and miscellaneous expenses. In addition, the company
said it would pursue an active growth strategy through
"Over the last two years we have sold several non-strategic
assets and have substantially improved our balance sheet and
financial position. In 2001, we will aggressively target
acquisitions and actively seek to identify and pursue new
opportunities for expanding both our gathering and production
business segments primarily in the Rockies and Canada," said
Outlaw. "Based on our 2001 forecast assumptions, we believe we have
the capacity to invest $50 to $100 million in acquisitions or other
growth projects over and above our current capital budget and still
maintain our debt to cap level at 50% or less at year-end 2001."
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