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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 27, 2003
PLAINS RESOURCES INC.
(Exact name of registrant as specified in charter)
Delaware 13-2898764
(State of Incorporation) (I.R.S. Employer Identification No.)
0-9808
(Commission File No.)
500 Dallas Street, Suite 700
Houston, Texas 77002
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: (713) 739-6700
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ITEM 5. Other Events
On February 27, 2003, Plains Resources Inc. issued a press release reporting
2002 earnings. The following was included in the press release:
Houston, Texas - February 27, 2003 - Plains Resources Inc. (NYSE:PLX) today
reported net income of $10.1 million, or $0.40 per diluted share for the fourth
quarter of 2002 compared to net income of $19.1 million, or $0.75 per diluted
share for the fourth quarter of 2001. Income from continuing operations was $3.8
million, or $0.14 per diluted share for the fourth quarter of 2002 compared to
$11.5 million, or $0.45 per diluted share for the fourth quarter of 2001.
Results for Plains Exploration & Production Company (NYSE: PXP), which the
Company distributed to its stockholders in a tax-free spin-off on December 18,
2002, are reflected as discontinued operations in the accompanying financial
statements.
"The accomplishments of 2002 set the stage for the future of Plains Resources as
a stand alone entity post the effective separation date of December 18, 2002. As
a result, we enter 2003 with a solid balance sheet coupled with the anticipation
of a strong free cash flow profile" stated Mr. John T. Raymond, Chief Executive
Officer & President.
The Company reported equity in earnings from its investment in Plains All
American Pipeline, L.P. (NYSE: PAA) of $4.7 million compared to $2.7 million in
the fourth quarter of last year. The Company's cash distribution from PAA was
$7.5 million in the fourth quarter of 2002.
Fourth quarter volumes from the Company's Florida properties were up 24% on an
"as produced" basis, with production volumes of 2,848 barrels per day in the
fourth quarter of 2002 compared to 2,304 barrels per day in the prior year
quarter. In accordance with SEC Staff Accounting Bulletin 101, the Company's
results reflect revenue from oil production in the period it is sold as opposed
to when it is produced. The Company reported sales of 2,457 barrels of oil per
day in the fourth quarter of 2002 compared to 3,163 barrels per day in the
fourth quarter of 2001.
Annual Results:
For the full year, the Company reported net income of $37.5 million, or $1.48
per diluted share compared to net income of $153.3 million, or $4.75 per diluted
share for 2001. Results for 2001 were impacted by special items including $170.2
million of pre-tax gains related to the sale of a portion of the Company's
investment in PAA and gains related to PAA's 2001 equity offerings. Net income
from continuing operations was $9.7 million, or $0.34 per diluted share for 2002
compared to $100.6 million, or $2.81 per diluted share for 2001.
For the full year, equity in earnings from PAA was $18.8 million compared to
$18.5 million in 2001. The Company's cash distribution from PAA was $29.1
million in 2002.
Annual volumes from the Company's Florida properties increased 2% on an "as
produced" basis, to 2,658 barrels per day in 2002 compared to 2,614 barrels per
day in 2001. Reported sales
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volumes decreased to 2,381 barrels of oil per day in 2002 compared to 2,904
barrels per day in 2001.
Total proved reserves for the Company's Florida properties were 16.3 million
barrels with a pre-tax net present value (discounted at 10%) of $87.9 million at
December 31, 2002.
Conference Call/Webcast Instructions:
The Company will host a conference call to discuss the results and other
forward-looking items on Thursday, February 27, 2003. The call will begin at
10:00 a.m. (central time). The dial-in conference number is: 800-233-2795 or
international: 785-832-1077. Reference Conference I.D.#: Plains. The replay will
be available for 2 weeks at 800-934-2729 or international at 402-220-1140.
To access the Internet webcast, please go to the Company's website at
www.plainsresources.com http://www.plainsresources.com, under investor
relations section choose "conference calls." Following the live webcast, the
call will be archived for a period of sixty (60) days on the Company's website.
Plains is an independent energy company engaged in the acquisition, development
and exploitation of crude oil and natural gas. Through its ownership in Plains
All American Pipeline, L.P., Plains has interests in the midstream activities of
marketing, gathering, transportation, terminalling and storage of crude oil.
Plains is headquartered in Houston, Texas.
Except for the historical information contained herein, the matters discussed in
this news release are forward-looking statements that involve certain risks and
uncertainties that could cause actual results to differ materially. These risks
and uncertainties include, among other things, economic conditions, oil and gas
price volatility, uncertainties inherent in the exploration for and development
and production of oil and gas and in estimating reserves, regulatory changes and
other factors discussed in Plains Resources' filings with the Securities and
Exchange Commission.
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Plains Resources Inc.
Consolidated Statements of Income
(Amounts in Thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
------------------------ --------------------------
2002 2001 2002 2001
---------- ----------- -------------- ----------
Revenues
Crude oil
Sales $ 3,986 $ 2,902 $ 15,500 $ 12,753
Hedging (189) (850) (613) (1,172)
------- ------- -------- --------
3,797 2,052 14,887 11,581
------- ------- -------- --------
Costs and Expenses
Production expenses 1,861 2,308 6,536 7,397
General and administrative 1,060 (137) 5,747 11,083
Depreciation, depletion and amortization 870 1,268 4,139 4,816
------- ------- -------- --------
3,791 3,439 16,422 23,296
------- ------- -------- --------
Other Income (Expense)
Equity in earnings of Plains All American Pipeline, L.P. 4,747 2,742 18,807 18,540
Gains on Plains All American Pipeline, L.P. unit
transactions and public offerings - 19,068 14,512 170,157
Loss on debt extinguishment - - (10,319) -
Interest expense (65) (1,780) (5,866) (8,974)
Interest and other income (expense) (24) 56 239 (312)
------- ------- -------- --------
4,658 20,086 17,373 179,411
------- ------- -------- --------
Income From Continuing Operations Before Income Taxes 4,664 18,699 15,838 167,696
Income tax benefit (expense)
Current 140 932 963 (3,933)
Deferred (1,027) (8,094) (7,069) (63,139)
------- ------- -------- --------
Income From Continuing Operations 3,777 11,537 9,732 100,624
Income from discontinued operations, net of tax 6,300 7,572 27,800 54,693
------- ------- -------- --------
Income before cumulative effect of accounting change 10,077 19,109 37,532 155,317
Cumulative effect of accounting change, net of tax - - - (1,986)
------- ------- -------- --------
Net Income 10,077 19,109 37,532 153,331
Cumulative preferred dividends (350) (349) (1,400) (27,245)
------- ------- -------- --------
Income Available to Common Stockholders $ 9,727 $18,760 $ 36,132 $126,086
======= ======= ======== ========
Earnings Per Share (in dollars)
Basic
Income from continuing operations $ 0.14 $ 0.47 $ 0.35 $ 3.48
Discontinued operations 0.26 0.32 1.16 2.59
Change in accounting policy - - - (0.09)
------- ------- -------- --------
0.40 $ 0.79 $ 1.51 $ 5.98
======= ======= ======== ========
Diluted
Income from continuing operations $ 0.14 $ 0.45 $ 0.34 $ 2.81
Discontinued operations 0.26 0.30 1.14 2.01
Change in accounting policy - - - (0.07)
------- ------- -------- --------
$ 0.40 $ 0.75 $ 1.48 $ 4.75
======= ======= ======== ========
Weighted average shares outstanding
Basic 24,006 23,719 23,871 21,090
Diluted 24,420 25,416 24,451 27,244
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Plains Resources Inc.
Financial and Operating Data (unaudited)
Three Months Ended December 31, Year Ended December 31,
------------------------------- -----------------------
2002 2001 2002 2001
----------------- ------------ ------------ ---------
Distributions from PAA
General partner interest $ 683 $ 433 $ 2,231 $ 1,619
Limited Partner Units 6,822 6,524 26,832 29,934
------- ------- ------- -------
$ 7,505 $ 6,957 $29,063 $31,553
======= ======= ======= =======
Production Volumes
Oil and liquids (MBbls) 262 212 970 954
Daily Average Production Volumes
Oil and liquids (Bbls) 2,848 2,304 2,658 2,614
Sales Volumes
Oil and liquids (MBbls) 226 291 869 1,060
Daily Average Sales Volumes
Oil and liquids (Bbls) 2,457 3,163 2,381 2,904
Unit Economics (in dollars)
Average Oil & Liquids Sales Price ($/Bbl)
Average NYMEX $ 28.23 $ 20.53 $ 26.15 $ 26.01
Hedging revenue (expense) (0.84) (2.92) (0.71) (1.11)
Differential (10.59) (10.56) (8.31) (13.97)
------- ------- ------- -------
Net realized price 16.80 7.05 17.13 10.93
Average Production Expenses per Bbl (8.23) (7.93) (7.52) (6.98)
------- ------- ------- -------
Gross Margin per Bbl $ 8.57 $ (0.88) $ 9.61 $ 3.95
======= ======= ======= =======
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Plains Resources Inc.
Consolidated Balance Sheets
(in thousands of dollars)
December 31,
------------------------------
2002 2001
----------- ----------
ASSETS
Current Assets
Cash and cash equivalents $ 8,807 $ 1,179
Accounts receivable and other current assets 3,104 21,566
Commodity hedging contracts and other derivatives - 23,257
Inventory 2,305 6,721
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14,216 52,723
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Property and Equipment, at cost
Oil and natural gas properties - full cost method 349,517 941,404
Other property and equipment 27 4,003
-------------- -------------
349,544 945,407
Less allowance for depreciation, depletion and amortization (299,214) (437,982)
-------------- -------------
50,330 507,425
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Investment in Plains All-American Pipeline, L.P. 70,042 64,626
-------------- -------------
Other Assets
Deferred income taxes 16,957 -
Other 9,867 24,014
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26,824 24,014
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$ 161,412 $ 648,788
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and other current liabilities $ 8,187 $ 62,181
Current maturities of long-term debt 18,000 511
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26,187 62,692
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Long-Term Debt
Bank debt 27,000 11,500
Subordinated debt - 269,539
Other - 1,022
-------------- -------------
27,000 282,061
-------------- -------------
Other Long-Term Liabilities 2,716 4,889
-------------- -------------
Deferred Income Taxes - 44,294
-------------- -------------
Stockholder' Equity
Series D Cumulative Convertible Preferred Stock 23,300 23,300
Common Stock 2,806 2,768
Additional paid-in capital 273,162 268,520
Retained earnings (deficit) (103,882) 37,676
Accumulated other comprehensive income (2,862) 13,930
Treasury stock, at cost (87,015) (91,342)
-------------- -------------
105,509 254,852
-------------- -------------
$ 161,412 $ 648,788
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PLAINS RESOURCES INC.
Date: February 27, 2003 /s/ Stephen A. Thorington
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Stephen A. Thorington
Executive President and
Chief Financial Officer
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