Denver-based Western Gas Resources (WGR) reported last week thatits net income for the fourth quarter and end-of-year reachedall-time highs during 2000. The independent diversified natural gascompany posted fourth quarter net income of $18.1 million ($0.47per share), compared to a loss of $1.2 million ($0.12 per share) in1999 for the same time period.
For the year 2000, the company reported net income of $56.1million ($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 thecompany to achieve record results. Average gas prices increased 80%to $3.90/Mcf in 2000, the company said. The company drilled about950 wells in the Powder River Basin in 2000, and expects to drillanother 840 in 2001.
“The fourth quarter and year 2000 were exceptional for Westernas we set records for net income, revenue and EBITDA in bothperiods. After several years of depressed prices and limiteddrilling activity, we are now benefiting in all of our operatingsegments by greatly improved commodity prices and increasedvolume,” said Lanny Outlaw, CEO of Western. “We believe that thedemand for clean burning natural gas will increase and prices willremain at levels which will continue to provide opportunities for acompany 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 companyadded 164 Bcf of reserves, or replaced 586% of its 2000 productionof 28 Bcf.
WGR also released it 2001 capital expenditure budget, whichincreased 29% from 1999’s $105.5 million, to $136.4 million. Of the2001 budget, $71.8 million will go to gathering, processing andpipeline assets, $56.9 million will go into exploration andproduction and the remaining $7.7 million will be used foradministrative and miscellaneous expenses. In addition, the companysaid it would pursue an active growth strategy throughacquisitions.
“Over the last two years we have sold several non-strategicassets and have substantially improved our balance sheet andfinancial position. In 2001, we will aggressively targetacquisitions and actively seek to identify and pursue newopportunities for expanding both our gathering and productionbusiness segments primarily in the Rockies and Canada,” saidOutlaw. “Based on our 2001 forecast assumptions, we believe we havethe capacity to invest $50 to $100 million in acquisitions or othergrowth projects over and above our current capital budget and stillmaintain our debt to cap level at 50% or less at year-end 2001.”
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