DevX Energy, Inc. Reports Record Earnings in 1st Quarter

Business Wire,  Nov 14, 2000  

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DALLAS--(BUSINESS WIRE)--Nov. 14, 2000

DevX Energy, Inc. (Nasdaq:DVXE) reported financial results for the three months ended September 30, 2000, the first quarter of fiscal year 2001.

DevX Energy, Inc. reported record earnings of $1.8 million, or $0.02 per common share, during the September 30, 2000, quarter. This is the second consecutive quarter in which the company has recorded positive earnings results.

For the quarter ended September 30, 2000, the company reported revenues of $11.4 million, up approximately 65% from the $6.9 million recorded in the comparable quarter in 1999. Earnings before interest, taxes and depletion, depreciation and amortization increased 93% to $8.9 million, as compared to the $4.6 million generated in the comparable quarter in 1999. Cash flow from operations was $4.4 million for the quarter, up 780% compared to $0.5 million in 1999.

The increase in revenues is attributed to an increase in oil and natural gas prices. The Company's average price per Mcfe for the September 2000 quarter was $4.19, compared to $2.27 realized during the September 1999 quarter. There were no significant changes to the property base during the first quarter of fiscal 2001 compared to the last quarter of fiscal 2000. Production for the quarter was 2.7 Bcfe, compared to 3 Bcfe in the comparable quarter in 1999. This volume decrease is primarily attributable to natural depletion of oil and natural gas reserves and limited capital spending during the past year. Production costs per Mcfe increased slightly to $0.44 in the quarter ended September 30, 2000, up from the $0.42 per Mcfe in the comparable quarter in 1999. Production and severance taxes per Mcfe rose to $0.14 for the quarter ended September 30,

2000, up $0.05 from 1999 due to an increase in oil and gas sales prices. The company paid $44,000 in cash settlements on its crude oil hedges and $1,050,000 in cash settlements on its natural gas hedges.

On October 31, 2000, the company completed a public offering of 10,000,000 shares of its common stock at a price per share to the public of $7.00. The aggregate net proceeds to the company (after deducting underwriter discount and estimated expenses) were approximately $63.5 million. Simultaneously with the closing of the offering, the company completed a recapitalization which included: (a) a reverse stock split of every 156 outstanding shares of common stock into one share; (b) the exchange of all preferred stock, all warrants exercisable for shares of common stock and all unexercised common stock repricing rights for 732,500 shares of post reverse-split common stock; and (c) the repurchase of $75 million face value of 12 1/2% senior notes for approximately $52.5 million. Additionally, the company used proceeds from the offering to pay down the balance on its revolving credit facility by $11 million.

During the quarter, the company paid interest expense of $4.5 million, and had an interest coverage ratio of nearly 2 to 1 compared to $4.2 million in interest expense and an interest coverage ratio of 1.1 to 1 during the comparable 1999 quarter. Had the equity offering and recapitalization plan been completed on July 1, 2000, the company's interest expense would have decreased by $2.7 million, resulting in an interest coverage ratio of 4.8 to 1, and earnings would have increased to approximately $4.5 million for the quarter.

Capital expenditures for the quarter ended September 30, 2000 were nearly $4 million, a ten fold increase over the comparable 1999 quarter, as higher oil and gas prices led to significantly increased operating cash flows available for investment.

Analysts' Conference Call

Members of the public are invited to listen to the Analysts' Conference Call on Wednesday November 15, 2000 at 9:30 a.m. Central Time. To access this call, please call (212) 748-2808. If you are unable to listen to the call at that time, a recording of the call will be available for a further 48 hours by calling (416) 626-4100, reservation number 16944644.

DevX Energy, Inc. is an independent energy company engaged in the exploration, development, exploitation and acquisition of on-shore oil and natural gas properties in conventional producing areas of North America. Our properties are concentrated in six producing areas or basins and over 50% of our proved reserves are concentrated in south and east Texas.

We make forward-looking statements in this document, and in our public documents to which we refer, that are subject to risks and uncertainties in addition to those set forth above. These forward-looking statements include information about possible or assumed future results of our operations. Also, when we use any of the words "believes," "expects," "anticipates" or similar expressions, we are making forward-looking statements. Many possible events or factors could affect our future financial results and performance. This could cause our results or performance to differ materially from those we express in our forward-looking statements. These and other risks are described in the company's publicly filed documents and reports that are available from the company and from the SEC.