FST » Topics » Depreciation and Depletion; Undeveloped Properties

These excerpts taken from the FST 10-K filed Mar 2, 2009.

Depreciation and Depletion; Undeveloped Properties

 
  Year Ended December 31,  
 
  2008   2007   2006  
 
  (In Thousands, Except Per Mcfe Data)
 

Depreciation and depletion expense

  $ 532,181     390,338     266,881  

Depreciation and depletion expense per Mcfe

  $ 2.81     2.51     2.20  

        Depreciation, depletion, and amortization expense ("DD&A") increased $.30 per Mcfe in 2008 compared to 2007 primarily due to price-related negative reserve revisions during 2008 caused by a decrease in oil and gas prices at December 31, 2008 compared to December 31, 2007 as well as the acquisition of Houston Exploration in June 2007. The increase of $.31 per Mcfe in 2007 compared to 2006 was primarily due to the acquisition of Houston Exploration. DD&A on a per-unit basis is

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expected to be lower in 2009 due to the $2.4 billion non-cash ceiling test impairment recorded in the fourth quarter of 2008.

        The following costs of unproved properties were not subject to depletion at the periods indicated:

December 31,
  United
States
  Canada   International   Total  
 
  (In Thousands)
 

2008

  $ 834,596     69,248     60,183     964,027  

2007

    445,949     63,951     58,610     568,510  

2006

    149,687     53,034     58,538     261,259  

        The increase in the total unproved properties of $395 million to $964 million in 2008 from $569 million in 2007 is attributable to the several acquisitions made during 2008 with significant undeveloped acreage positions. The increase in the total unproved properties of $308 million in 2007 from $261 million in 2006 is primarily attributable to the Houston Exploration acquisition completed in 2007. See Note 2 to the Consolidated Financial Statements for additional information on acquisitions and divestitures.

Depreciation and Depletion; Undeveloped Properties

 
  Year Ended December 31,  
 
  2008   2007   2006  
 
  (In Thousands, Except Per Mcfe Data)
 

Depreciation and depletion expense

  $ 532,181     390,338     266,881  

Depreciation and depletion expense per Mcfe

  $ 2.81     2.51     2.20  

        Depreciation, depletion, and amortization expense ("DD&A") increased $.30 per Mcfe in 2008 compared to 2007 primarily due to price-related negative reserve revisions during 2008 caused by a decrease in oil and gas prices at December 31, 2008 compared to December 31, 2007 as well as the acquisition of Houston Exploration in June 2007. The increase of $.31 per Mcfe in 2007 compared to 2006 was primarily due to the acquisition of Houston Exploration. DD&A on a per-unit basis is

40


Table of Contents


expected to be lower in 2009 due to the $2.4 billion non-cash ceiling test impairment recorded in the fourth quarter of 2008.

        The following costs of unproved properties were not subject to depletion at the periods indicated:

December 31,
  United
States
  Canada   International   Total  
 
  (In Thousands)
 

2008

  $ 834,596     69,248     60,183     964,027  

2007

    445,949     63,951     58,610     568,510  

2006

    149,687     53,034     58,538     261,259  

        The increase in the total unproved properties of $395 million to $964 million in 2008 from $569 million in 2007 is attributable to the several acquisitions made during 2008 with significant undeveloped acreage positions. The increase in the total unproved properties of $308 million in 2007 from $261 million in 2006 is primarily attributable to the Houston Exploration acquisition completed in 2007. See Note 2 to the Consolidated Financial Statements for additional information on acquisitions and divestitures.

Depreciation and Depletion; Undeveloped Properties

 
  Year Ended December 31,  
 
  2008   2007   2006  
 
  (In Thousands, Except Per Mcfe Data)
 

Depreciation and depletion expense

  $ 532,181     390,338     266,881  

Depreciation and depletion expense per Mcfe

  $ 2.81     2.51     2.20  

        Depreciation, depletion, and amortization expense ("DD&A") increased $.30 per Mcfe in 2008 compared to 2007 primarily due to price-related negative reserve revisions during 2008 caused by a decrease in oil and gas prices at December 31, 2008 compared to December 31, 2007 as well as the acquisition of Houston Exploration in June 2007. The increase of $.31 per Mcfe in 2007 compared to 2006 was primarily due to the acquisition of Houston Exploration. DD&A on a per-unit basis is

40


Table of Contents


expected to be lower in 2009 due to the $2.4 billion non-cash ceiling test impairment recorded in the fourth quarter of 2008.

        The following costs of unproved properties were not subject to depletion at the periods indicated:

December 31,
  United
States
  Canada   International   Total  
 
  (In Thousands)
 

2008

  $ 834,596     69,248     60,183     964,027  

2007

    445,949     63,951     58,610     568,510  

2006

    149,687     53,034     58,538     261,259  

        The increase in the total unproved properties of $395 million to $964 million in 2008 from $569 million in 2007 is attributable to the several acquisitions made during 2008 with significant undeveloped acreage positions. The increase in the total unproved properties of $308 million in 2007 from $261 million in 2006 is primarily attributable to the Houston Exploration acquisition completed in 2007. See Note 2 to the Consolidated Financial Statements for additional information on acquisitions and divestitures.

Depreciation and Depletion; Undeveloped Properties



































































 
 Year Ended December 31,  
 
 2008  2007  2006  
 
 (In Thousands, Except Per Mcfe Data)
 

Depreciation and depletion expense

 $532,181  390,338  266,881 

Depreciation and depletion expense per Mcfe

 $2.81  2.51  2.20 




        Depreciation, depletion, and amortization expense ("DD&A") increased $.30 per Mcfe in 2008 compared to 2007 primarily due to
price-related negative reserve revisions during 2008 caused by a decrease in oil and gas prices at December 31, 2008 compared to December 31, 2007 as well as the acquisition
of Houston Exploration in June 2007. The increase of $.31 per Mcfe in 2007 compared to 2006 was primarily due to the acquisition of Houston Exploration. DD&A on a per-unit basis is



40









HREF="#bg49701a_main_toc">Table of Contents






expected
to be lower in 2009 due to the $2.4 billion non-cash ceiling test impairment recorded in the fourth quarter of 2008.



        The
following costs of unproved properties were not subject to depletion at the periods indicated:
























































































December 31,



 United

States
 Canada  International  Total  
 
 (In Thousands)
 

2008

 $834,596  69,248  60,183  964,027 

2007

  445,949  63,951  58,610  568,510 

2006

  149,687  53,034  58,538  261,259 




        The increase in the total unproved properties of $395 million to $964 million in 2008 from $569 million in 2007 is
attributable to the several acquisitions made during 2008 with significant undeveloped acreage positions. The increase in the total unproved properties of $308 million in 2007 from
$261 million in 2006 is primarily attributable to the Houston Exploration acquisition completed in 2007. See Note 2 to the Consolidated Financial Statements for additional information on
acquisitions and divestitures.



Depreciation and Depletion; Undeveloped Properties



































































 
 Year Ended December 31,  
 
 2008  2007  2006  
 
 (In Thousands, Except Per Mcfe Data)
 

Depreciation and depletion expense

 $532,181  390,338  266,881 

Depreciation and depletion expense per Mcfe

 $2.81  2.51  2.20 




        Depreciation, depletion, and amortization expense ("DD&A") increased $.30 per Mcfe in 2008 compared to 2007 primarily due to
price-related negative reserve revisions during 2008 caused by a decrease in oil and gas prices at December 31, 2008 compared to December 31, 2007 as well as the acquisition
of Houston Exploration in June 2007. The increase of $.31 per Mcfe in 2007 compared to 2006 was primarily due to the acquisition of Houston Exploration. DD&A on a per-unit basis is



40









HREF="#bg49701a_main_toc">Table of Contents






expected
to be lower in 2009 due to the $2.4 billion non-cash ceiling test impairment recorded in the fourth quarter of 2008.



        The
following costs of unproved properties were not subject to depletion at the periods indicated:
























































































December 31,



 United

States
 Canada  International  Total  
 
 (In Thousands)
 

2008

 $834,596  69,248  60,183  964,027 

2007

  445,949  63,951  58,610  568,510 

2006

  149,687  53,034  58,538  261,259 




        The increase in the total unproved properties of $395 million to $964 million in 2008 from $569 million in 2007 is
attributable to the several acquisitions made during 2008 with significant undeveloped acreage positions. The increase in the total unproved properties of $308 million in 2007 from
$261 million in 2006 is primarily attributable to the Houston Exploration acquisition completed in 2007. See Note 2 to the Consolidated Financial Statements for additional information on
acquisitions and divestitures.



These excerpts taken from the FST 10-K filed Feb 28, 2008.

Depreciation and Depletion; Undeveloped Properties

 
  Year Ended December 31,
 
  2007
  2006
  2005
 
  (In Thousands, Except Per Mcfe Amounts)

Depreciation and depletion expense   $ 390,338   266,881   368,679
Depreciation and depletion expense per Mcfe   $ 2.51   2.20   2.23

        Depreciation, depletion, and amortization expense ("DD&A") in 2007 was $390.3 million compared to $266.9 million in 2006. On an equivalent Mcf basis, DD&A expense increased to $2.51 per Mcfe in 2007 compared to $2.20 per Mcfe in 2006. The increase of $.31 per Mcfe in 2007 was primarily due to the acquisition of the Houston Exploration properties, which had higher-than-historical per-unit depletion rates. DD&A in 2006 was $266.9 million compared to $368.7 million in 2005.

        The following costs of undeveloped properties were not subject to depletion at the periods indicated:

December 31,

  United States
  Canada
  International
  Total
 
  (In Thousands)

2007   $ 445,949   63,951   58,610   568,510
2006     149,687   53,034   58,538   261,259
2005     174,249   44,798   56,637   275,684

        The increase in the total undeveloped properties of $307.3 million in 2007 from $261.3 million in 2006 is primarily attributable to the Houston Exploration acquisition completed in 2007. The decrease in the total undeveloped properties of $14.4 million in 2006 from $275.7 million in 2005 was due primarily to the Spin-off transaction noted above, offset by property acquisitions completed during 2006, including the Cotton Valley assets in East Texas. See Note 2 to the Consolidated Financial Statements for additional information on acquisitions and divestitures.

Depreciation and Depletion; Undeveloped Properties












































 
 Year Ended December 31,
 
 2007
 2006
 2005
 
 (In Thousands, Except Per Mcfe Amounts)

Depreciation and depletion expense $390,338 266,881 368,679
Depreciation and depletion expense per Mcfe $2.51 2.20 2.23




        Depreciation, depletion, and amortization expense ("DD&A") in 2007 was $390.3 million compared to $266.9 million in 2006. On an
equivalent Mcf basis, DD&A expense increased to $2.51 per Mcfe in 2007 compared to $2.20 per Mcfe in 2006. The increase of $.31 per Mcfe in 2007 was primarily due to the acquisition of the Houston
Exploration properties, which had higher-than-historical per-unit depletion rates. DD&A in 2006 was $266.9 million compared to $368.7 million in 2005.




        The
following costs of undeveloped properties were not subject to depletion at the periods indicated:

























































December 31,

 United States
 Canada
 International
 Total
 
 (In Thousands)

2007 $445,949 63,951 58,610 568,510
2006  149,687 53,034 58,538 261,259
2005  174,249 44,798 56,637 275,684




        The increase in the total undeveloped properties of $307.3 million in 2007 from $261.3 million in 2006 is primarily attributable to
the Houston Exploration acquisition completed in 2007. The decrease in the total undeveloped properties of $14.4 million in 2006 from $275.7 million in 2005 was due primarily to the
Spin-off transaction noted above, offset by property acquisitions completed during 2006, including the Cotton Valley assets in East Texas. See Note 2 to the Consolidated Financial
Statements for additional information on acquisitions and divestitures.




This excerpt taken from the FST 10-K filed Mar 16, 2006.

Depreciation and Depletion; Undeveloped Properties

 
  Years Ended December 31,
 
  2005
  2004
  2003
 
  (In Thousands Except Per Mcfe Amounts)

Depreciation and depletion expense   $ 368,679   354,092   234,822
Depreciation and depletion expense per Mcfe   $ 2.23   2.05   1.57

        The increases in depreciation and depletion expense on an equivalent unit of production basis of $.18 in 2005 compared to 2004 was due primarily to higher anticipated drilling and completion costs on future development activities as well as the effect of property divestitures in Canada in late 2004. The increase in depreciation and depletion expense on an equivalent unit of production basis of $.48 in 2004 compared to 2003 was due primarily to downward revisions in estimated proved reserves in the fourth quarter of 2003. See discussion of the revision to the estimated proved reserves in Note 14 to the Consolidated Financial Statements.

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        The following costs of undeveloped properties were not subject to depletion at the periods indicated:

December 31,

  United
States

  Canada
  International
  Total
 
  (In Thousands)

2005   $ 174,249   44,798   56,637   275,684
2004     106,908   46,730   55,966   209,604
2003     66,339   34,922   56,747   158,008

        The increase in the total undeveloped properties from 2004 to 2005 was due primarily to the additional undeveloped properties acquired in 2005 in conjunction with the Buffalo Wallow acquisition. The increase in the total undeveloped properties from 2003 to 2004 was due primarily to the additional undeveloped properties acquired in 2004 in conjunction with the purchase of Wiser. See Note 2 to the Consolidated Financial Statements for additional information on the Buffalo Wallow and Wiser acquisitions.

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