Stone Energy Corporation Provides Fourth Quarter And Year-End 2013 Results

  Stone Energy Corporation Provides Fourth Quarter And Year-End 2013 Results

PR Newswire

LAFAYETTE, La., Feb. 24, 2014

LAFAYETTE, La., Feb. 24, 2014 /PRNewswire/ -- Stone Energy Corporation (NYSE:
SGY) today announced financial and operational results for the fourth quarter
and year-end of 2013. Some of the highlights include:

  oAdjusted net income before one-time charges was $143.2 million, or $2.88
    per share, for the year ended December 31, 2013; net income after one-time
    charges was $117.6 million, or $2.36 per share, for the year ended
    December 31, 2013;
  oNet daily production for 2013 was 46 MBoe (277 MMcfe) per day, a 10%
    annual increase compared to 2012;
  oEstimated proved reserves as of December 31, 2013 increased to 143 MMBoe
    or 863 Bcfe from year-end 2012, representing an annual increase of 12% and
    a production replacement of 189%; and
  oDiscoveries at the deep water Amethyst and Cardona prospects and the deep
    gas Tomcat prospect.

Financial Results

Stone earned fourth quarter 2013 adjusted net income of $27.3 million, or
$0.56 per share, and full year 2013 adjusted net income of $143.2 million, or
$2.88 per share, before one-time pre-tax charges of $12.6 million from the
state franchise tax settlement and $27.3 million for loss on early
extinguishment of debt (after-tax charges were $8.1 million and $17.5 million,
respectively). After one-time charges, reported net income was $1.8 million
for the fourth quarter of 2013, or $0.04 per share, and $117.6 million, or
$2.36 per share, for full year 2013. The 2013 net income is compared with
2012 net income of $149.4 million, or $3.03 per share. The fourth quarter
2013 net income is compared with net income of $44.2 million, or $0.89 per
share, for the fourth quarter of 2012.

Discretionary cash flow for 2013 totaled $637.3 million, compared to $619.0
million during 2012. Discretionary cash flow for the fourth quarter of 2013
of $142.5 million compared to $153.9 million during the fourth quarter of
2012. Please see "Non-GAAP Financial Measure" and the accompanying financial
statements for a reconciliation of discretionary cash flow, a non-GAAP
financial measure, to net cash flow provided by operating activities, and a
reconciliation of adjusted net income, a non-GAAP financial measure, to net
income.

Chief Executive Officer David H. Welch stated, "Execution of our plan
accelerated in 2013 and continues apace in 2014. Production from the
Marcellus shale nearly tripled in the fourth quarter of 2013 from two years
ago to over 90 MMcfe per day, we drilled the first two Stone operated deep
water wells with a successful exploration discovery at the Amethyst prospect
and a development success at Cardona, and drilled another successful
exploration discovery in our liquids rich deep gas Tomcat prospect. These
wells are expected to be on production within a relatively short period of
time and tied back to our existing infrastructure. We look forward to
building on these accomplishments with a continuing deep water and deep gas
program in the Gulf of Mexico. We will also continue our low risk Marcellus
shale drilling program and expect to augment the program with a test of the
prospective Utica shale, which substantially underlies our existing acreage
position in Appalachia. We are entering 2014 with a strong cash position, an
undrawn bank credit facility and financial flexibility."

Net daily production volumes for 2013 averaged 46 thousand barrels of oil
equivalent (MBoe) per day (277 million cubic feet of gas equivalent (MMcfe)
per day), compared with net daily production of 42 MBoe (252 MMcfe) per day in
2012. The production mix for 2013 was 41% oil, 9% natural gas liquids (NGLs)
and 50% natural gas, while the production mix for 2012 was 46% oil, 8% NGLs
and 46% natural gas. Net daily production volumes for the fourth quarter of
2013 averaged 50 MBoe (298 MMcfe) per day, which includes positive adjustments
for realized royalty relief and working interest revisions which totaled 2,000
boe per day (12 MMcfe), compared with net daily production of 45 MBoe (270
MMcfe) per day in the fourth quarter of 2012.

Average daily production for the first quarter of 2014 is expected to be
43.5-45.0 MBoe (261-270 MMcfe) per day. Production for the first quarter of
2014 has been negatively impacted by weather-related downtime in Appalachia
affecting approximately 15 MMcfe per day of projected volumes for January and
most of February. Additionally, during the first quarter of 2014, downtime at
Main Pass 288 has lasted approximately 8 weeks due to a plugged pipeline
affecting approximately 1,800 Boe per day while Ship Shoal 113 experienced
unscheduled downtime for four days impacting approximately 5,000 Boe per day.
Finally, approximately 2,500 Boe per day of production was associated with
properties divested in the fourth quarter of 2013 and January 2014. Updated
production guidance for the full year 2014 remains at 43-47 MBoe (258-282)
with just over 50% projected as natural gas. Please see "2014 Guidance."

Prices realized during the year ended December 31, 2013 averaged $103.73 per
barrel (Bbl) of oil, $37.86 per Bbl of NGLs and $3.80 per thousand cubic feet
(Mcf) of natural gas as compared to $106.70 per Bbl of oil, $41.70 per Bbl of
NGLs and $3.17 per Mcf of natural gas realized during the year ended December
31, 2012. Prices realized during the fourth quarter of 2013 averaged $95.14
per Bbl of oil, $42.94 per Bbl of NGLs and $3.76 per Mcf of natural gas, as
compared with the fourth quarter 2012 average realized prices of $106.48 per
Bbl of oil, $35.96 per Bbl of NGLs and $3.79 per Mcf of natural gas. All unit
pricing amounts include the cash settlement of effective hedging contracts.

During the fourth quarter and full year 2013, effective hedging transactions
increased the average price received for natural gas by $0.38 and $0.33 per
Mcf, respectively. Realized oil prices during the fourth quarter and full year
2013 were increased due to hedging by $0.69 and $0.51 per Bbl, respectively.
Hedging transactions increased the average price received during the fourth
quarter and full year 2012 for natural gas by $0.39 and $0.52 per Mcf,
respectively. Realized oil prices during the fourth quarter and full year 2012
were increased due to hedging by $4.04 and $1.20 per Bbl, respectively.

Lease operating expenses incurred during 2013 totaled $201.2 million ($11.94
per Boe or $1.99 per Mcfe), compared to $215.0 million ($13.97 per Boe or
$2.33 per Mcfe) during 2012. For the three months ended December 31, 2013 and
2012, lease operating expenses were $43.6 million ($9.55 per Boe or $1.59 per
Mcfe) and $58.0 million ($14.01 per Boe or $2.33 per Mcfe), respectively.

Transportation, processing and gathering expenses during 2013 totaled $42.2
million, compared to $21.8 million during 2012. For the three months ended
December 31, 2013 and 2012, transportation, processing and gathering expenses
were $14.8 million and $5.9 million, respectively. The increase is
attributable to higher Appalachian gas and NGL volumes, which have higher
fees, short term blending fees in Appalachia, and higher Gulf of Mexico
pipeline fees.

Depreciation, depletion and amortization (DD&A) expense on oil and gas
properties totaled $346.8 million ($20.58 per Boe or $3.43 per Mcfe) during
2013, compared to $341.1 million ($22.16 per Boe or $3.69 per Mcfe) during
2012. DD&A expense on oil and gas properties for the three months ended
December 31, 2013 totaled $94.1 million ($20.60 per Boe or $3.43 per Mcfe),
compared to $82.5 million ($19.94 per Boe or $3.32 per Mcfe) during the
comparable period of 2012.

Salaries, general and administrative (SG&A) expenses (excluding incentive
compensation expense) totaled $59.5 million ($3.53 per Boe or $0.59 per Mcfe)
during 2013, compared to $54.6 million ($3.55 per Boe or $0.59 per Mcfe)
during 2012. SG&A expenses (excluding incentive compensation expense) for the
three months ended December 31, 2013 totaled $16.2 million ($3.54 per Boe or
$0.59 per Mcfe), compared to $14.1 million ($3.41 per Boe or $0.57 per Mcfe)
during the comparable quarter of 2012. The increase in SG&A expenses in 2013
was primarily the result of increased staffing associated with the growth in
our deep water, deep gas and Marcellus shale activity.

Capital expenditures on oil and gas properties for 2013 were $695 million,
which included $83.9 million in normal and hurricane abandonment
expenditures. This is compared to capital expenditures on oil and gas
properties during 2012 of $582.8 million, which included $65.6 million in
normal and hurricane abandonment expenditures. Capitalized salaries, general
and administrative (SG&A) expenses were $32.5 million, and capitalized
interest totaled $46.9 million for 2013. In 2012, capitalized SG&A was $25.0
million, and capitalized interest was $37.7 million.

As of February 24, 2014, we had no outstanding borrowings under our bank
credit facility and cash of $299.2 million. In addition, Stone had letters of
credit totaling $21.4 million, resulting in $378.6 million available for
borrowing based on a borrowing base of $400 million. The borrowing base is
scheduled to be re-determined by May 2014.

Operational Update

Mississippi Canyon 26 – Amethyst (Deep Water). The Amethyst exploration well
(100% working interest) encountered approximately 90 feet of net hydrocarbon
pay in one interval which suggests acommercial discovery. Analysis of
logging, coring and fluid data confirmed the existence of natural gas,
condensate and natural gas liquids in the pay zone (an estimated yield of
60-80 barrels of liquids per million cubic foot of natural gas). The interval
has been placed safely behind pipe for a future completion. A full
evaluation, including seismic and subsurface data integration, is needed
before hydrocarbon quantities can be estimated and a specific development plan
is sanctioned. A single or multi-well tie-back to Stone's 100 percent owned
and operated Pompano platform, located less thanfive miles from the
discovery, is a likely development option. 

Mississippi Canyon 29 – Cardona (Deep Water). The Cardona well encountered
approximately 84 feet of net oil pay in the development portion of the well.
The company is currently running casing to protect this zone while drilling
the exploration segment of the well. The Cardona success extends the
productive zone in Stone's Mississippi Canyon 29 TB-9 well to the adjacent
fault block to the north. Plans are to flow the Cardona well to the Stone
owned and operated Pompano platform with first production expected in early
2015. The company expects to complete drilling operations on the currentwell
in March 2014. Stone holds a 65% working interest in the project and is the
operator.

Mississippi Canyon 29 – Cardona South (Deep Water). Stone batch drilled the
Cardona and Cardona South wells. In late January 2014, the Cardona South well
was drilled and cased at 4,903 feet before the rig returned to the Cardona
well. The rig will move back to the Cardona South well following completion
of the Cardona drilling operations. The Cardona South well is also targeting
the same development interval as Cardona and the TB-9 well. The well is
expected to reach total depth of approximately 12,470 feet in the second
quarter of 2014. Stone holds a 65% working interest in the project and is the
operator.

Mississippi Canyon211 – Mica Deep (Deep Water).The Mica Deep exploration
well targets the Miocene interval and is expected to spud in the first quarter
of 2014. Stone holds a 50% working interest in the project which is operated
by ExxonMobil. The well is expected to take three months to drill.

Amberjack Development Drilling Program. Stone expects to secure a platform
rig for its Amberjack (Mississippi Canyon 109) drill program. It is
anticipated that the rig will become available in the fourth quarter of 2014.
The program is expected to consist offour to sixdevelopment wells.

Pompano Development Drilling Program. Stone expects to secure a platform rig
for its Pompano (Viosca Knoll 989) drill program. It is anticipated that the
rig will become available by mid-2015. The program is expected to consist
ofthree to fivedevelopment wells.

Walker Ridge89 -Goodfellow(Deep Water).TheGoodfellowexploration well
targets the Lower Tertiary and is projected to spud in 2014. Stone currently
holds an approximate 12.8% working interest in the prospect, which is operated
by Eni. The well is estimated to take five months to drill.

West Cameron 176 - Tomcat (Deep Gas).The Tomcat exploration well (100%
working interest) encountered approximately 30 feet of net hydrocarbon pay in
the Camerina interval. Based on well log analysis, combined with offset
Camerina production history, we believe that the zone may produce liquids rich
natural gas with approximately 60 barrels of condensate per Mcf of natural gas
as well as additional natural gas liquids volumes. Initial development plans
call for a tie-back to the nearby Stone operated East Cameron 64 production
platform with production estimated to commence in the second half of 2014.

Appalachian Basin-Marcellus Shale(Drilling Program Update). Stone drilled
7 Marcellus shale wells during the fourth quarter of 2013, bringing the total
for the full year 2013 to 30 wells, and also completed 30 wells in 2013. In
2014, Stone expects to drill 28 to 32 wells and to complete 30 to 34 wells in
the Marcellus shale.

Appalachian Basin – Utica Shale Test. Stone expects to spud a Utica shale
test well late in the second quarter of 2014 on its existing acreage in the
Mary Field in West Virginia with the completion and testing expected later in
the year.

Appalachian Basin-Marcellus Shale(Production Update). During the fourth
quarter of 2013, Stone averaged approximately 90 MMcfe per day (63 MMcf per
day of gas and 4,800 barrels per day of liquids) from Stone's Marcellus shale
position. During the fourth quarter of 2013, 10 new wells in the Mary field
and 2 wells in the Heather field were brought online. Stone expects to bring
an additional two wells in the Heather field online during the first quarter
of 2014.

Appalachian Basin–Upper Devonian Shale. Stone began testing a 2,450 foot
lateral Upper Devonian test well in the Mary field during the fourth quarter
of 2013.Results to date have been inconclusive as additional flow, pressure
and well interference data over time is needed.

Conventional Shelf (Drilling Program).Production from the Taildancer
discovery at Ship Shoal 113 was initiated in the fourth quarter of 2013 at a
rate of approximately 1,000 barrels of oil equivalent per day. Stone is the
operator with a 100% working interest.

Conventional Shelf (Potential Non-Core Asset Sale). Stone has closed on two
separate asset sale transactions, which represented approximately 2,500
barrels of oil equivalent per day in the fourth quarter of 2013 and the first
quarter of 2014 for a combined total of approximately $95 million. Stone
continues to market certain properties in the Conventional Shelf and Louisiana
state waters. The potential sale of the remaining properties is subject to
market conditions, and there is no assurance that it will be completed, in
whole or in part, or by any particular time.

2014 Guidance

Guidance for the first quarter and full year 2014 is shown in the table below
(updated guidance numbers are italicized and bolded). The guidance is subject
to all the cautionary statements and limitations described below and under the
caption "Forward Looking Statements."

                                                          First      Full Year
                                                          Quarter
Production - MBoe per day                                 43.5 - 45  43 - 47

 (MMcfe per day)                      (261 -     (258 -
                                                          270)       282)
Lease operating expenses (in millions)                              $195 -
                                                          -          $210
(excluding transportation/processing expenses)
Transportation, processing and gathering (in millions)               $56 - $68
Salaries, General & Administrative expenses (in millions) -          $65 - $69
(excluding incentive compensation)
Depreciation, Depletion & Amortization (per MBoe)         -          $21.00 -
                                                                     $22.50
                     $3.50 -
  (per Mcfe)                                     $3.75
Corporate Tax Rate (%)                                    -          36% - 38%
Capital Expenditure Budget (in millions)                  -          $825
 (excluding acquisitions)

Hedge Position

The following table illustrates our derivative positions for 2014, 2015 and
2016 as of February 24, 2014:

     Fixed-Price Swaps
     NYMEX (except where noted)
     Natural Gas          Oil
     Daily                Daily
                   Swap              Swap
     Volume               Volume
                   Price             Price
     (MMBtus/d)           (Bbls/d)
2014 10,000        4.000  1,000      90.06
2014 10,000        4.040  1,000      92.25
2014 10,000        4.105  1,000      93.55
2014 10,000        4.190  1,000      94.00
2014 10,000        4.250  1,000      98.00
2014  10,000**  4.250  1,000      98.30
2014 10,000        4.350  2,000*  98.85
2014                      1,000      99.65
2014                       1,000†  103.30
2015 10,000        4.005  1,000      89.00
2015 10,000        4.120  1,000      90.00
2015 10,000        4.150
2015 10,000        4.165
2015 10,000        4.220
2015 10,000        4.255
2016 10,000        4.110
2016 10,000        4.120

 *January – June
 **February – December
 †Brent oil contract

Annual Meeting Information

Stone Energy will hold its 2014 Annual Meeting of Stockholders on Thursday,
May 22, 2014, at 10:00 a.m. Central Time at the Stone Energy New Orleans
office at 1100 Poydras Street, Suite 1050, New Orleans, Louisiana. The
Company proposes to elect ten directors, to ratify the appointment of Ernst &
Young LLP as the Company's independent public accounting firm for the fiscal
year ending December 31, 2014, to have a non-binding advisory vote on the
compensation of the named executive officers (say on pay), and to transact
such other business as may properly come before the meeting. The close of
business on March 26, 2014 has been fixed as the record date for determination
of stockholders entitled to receive notification of and to vote at the Annual
Meeting.

Other Information

Stone Energy has planned a conference call for 9:00 a.m. Central Time on
Tuesday, February 25, 2014 to discuss the operational and financial results
for the fourth quarter and full year 2013. Anyone wishing to participate
should visit our website at www.StoneEnergy.com for a live web cast or dial
1-877-228-3598 and request the "Stone Energy Call." If you are unable to
participate in the original conference call, a replay will be available
immediately following the completion of the call on Stone Energy's website.
The replay will be available for one month.

Stone Energy expects to host an investor day on May 20, 2014 for analysts and
institutional investors at the Windsor Court Hotel in New Orleans, Louisiana.

Non-GAAP Financial Measures

In this press release, we refer to non-GAAP financial measures we call
"discretionary cash flow" and "adjusted net income." Management believes
discretionary cash flow is a financial indicator of our company's ability to
internally fund capital expenditures and service debt. Management also
believes this non-GAAP financial measure of cash flow is useful information to
investors because it is widely used by professional research analysts in the
valuation, comparison, rating and investment recommendations of companies in
the oil and gas exploration and production industry. Discretionary cash flow
should not be considered an alternative to net cash provided by operating
activities or net income, as defined by GAAP. Management believes adjusted
net income is useful to investors because it is widely used by professional
research analysts in the valuation, comparison, rating and investment
recommendations of companies in the oil and gas exploration and production
industry. Please see the "Reconciliation of Non-GAAP Financial Measures" for a
reconciliation of discretionary cash flow to cash flow provided by operating
activities and a reconciliation of adjusted net income to net income.

Forward Looking Statements

Certain statements in this press release are forward-looking and are based
upon Stone's current belief as to the outcome and timing of future events. All
statements, other than statements of historical facts, that address activities
that Stone plans, expects, believes, projects, estimates or anticipates will,
should or may occur in the future, including future production of oil and gas,
future capital expenditures and drilling of wells and future financial or
operating results are forward-looking statements. Important factors that
could cause actual results to differ materially from those in the
forward-looking statements herein include the timing and extent of changes in
commodity prices for oil and gas, operating risks, liquidity risks, political
and regulatory developments and legislation, including developments and
legislation relating to our operations in the Gulf of Mexico and Appalachia,
and other risk factors and known trends and uncertainties as described in
Stone's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed
with the SEC. Should one or more of these risks or uncertainties occur, or
should underlying assumptions prove incorrect, Stone's actual results and
plans could differ materially from those expressed in the forward-looking
statements.

Estimates for Stone's future production volumes are based on assumptions of
capital expenditure levels and the assumption that market demand and prices
for oil and gas will continue at levels that allow for economic production of
these products. The production, transportation and marketing of oil and gas
are subject to disruption due to transportation and processing availability,
mechanical failure, human error, hurricanes and numerous other factors.
Stone's estimates are based on certain other assumptions, such as well
performance, which may vary significantly from those assumed. Delays
experienced in well permitting could affect the timing of drilling and
production. Lease operating expenses, which include major maintenance costs,
vary in response to changes in prices of services and materials used in the
operation of our properties and the amount of maintenance activity required.
Estimates of DD&A rates can vary according to reserve additions, capital
expenditures, future development costs, and other factors. Therefore, we can
give no assurance that our future production volumes, lease operating expenses
or DD&A rates will be as estimated.

Stone Energyis an independent oil and natural gas exploration and production
company headquartered inLafayette, Louisianawith additional offices inNew
Orleans,HoustonandMorgantown, West Virginia. Stone is engaged in the
acquisition, exploration, and development of properties in the Deep Water Gulf
of Mexico, Appalachia, and the onshore and offshore Gulf Coast.For additional
information, contactKenneth H. Beer, Chief Financial Officer, at 337-521-2210
phone, 337-521-9880 fax or via e-mail at  CFO@StoneEnergy.com

STONE ENERGY CORPORATION

SUMMARY STATISTICS
(In thousands, except per share/unit amounts)
(Unaudited)
                                       Three Months Ended  Twelve Months Ended

                                       December 31,        December 31,
                                       2013      2012      2013       2012
FINANCIAL RESULTS
 Net income                           $1,752    $44,246   $117,634   $149,426
 Net income per share                 $0.04     $0.89     $2.36      $3.03
PRODUCTION QUANTITIES
 Oil (MBbls)                          1,651     1,846     6,894      7,135
 Gas (MMcf)                           14,160    11,538    50,129     42,569
 Natural gas liquids (MBbls)          555       369       1,603      1,163
 Oil, gas and NGLs (MBoe)             4,566     4,138     16,852     15,393
 Oil, gas and NGLs (MMcfe)            27,396    24,828    101,111    92,357
AVERAGE DAILY PRODUCTION
 Oil (MBbls)                          18        20        19         20
 Gas (MMcf)                           154       125       137        116
 Natural gas liquids (MBbls)          6         4         4          3
 Oil, gas and NGLs (MBoe)             50        45        46         42
 Oil, gas and NGLs (MMcfe)            298       270       277        252
REVENUE DATA
 Oil revenue                          $157,073  $196,559  $715,104   $761,304
 Gas revenue                          53,198    43,733    190,580    134,739
 Natural gas liquids revenue          23,833    13,270    60,687     48,498
 Total oil, gas and NGLs revenue      $234,104  $253,562  $966,371   $944,541
AVERAGE PRICES
Prior to the cash settlement of
effective hedging transactions:
 Oil (per Bbl)                        $94.45    $102.44   $103.22    $105.50
 Gas (per Mcf)                        3.38      3.40      3.47       2.65
 Natural gas liquids (per Bbl)        42.94     35.96     37.86      41.70
 Oil, gas and NGLs (per Boe)          49.84     58.39     56.14      59.39
 Oil, gas and NGLs (per Mcfe)         8.31      9.73      9.36       9.90
Including the cash settlement of
effective hedging transactions:
 Oil (per Bbl)                        $95.14    $106.48   $103.73    $106.70
 Gas (per Mcf)                        3.76      3.79      3.80       3.17
 Natural gas liquids (per Bbl)        42.94     35.96     37.86      41.70
 Oil, gas and NGLs (per Boe)          51.27     61.28     57.34      61.36
 Oil, gas and NGLs (per Mcfe)         8.55      10.21     9.56       10.23
COST DATA
 Lease operating expenses             $43,606   $57,973   $201,153   $215,003
 Salaries, general and administrative 16,173    14,127    59,524     54,648
expenses
 DD&A expense on oil and gas          94,056    82,498    346,827    341,096
properties
AVERAGE COSTS (per Mcfe)
 Lease operating expenses (per Boe)   $9.55     $14.01    $11.94     $13.97
 Lease operating expenses (per Mcfe)  1.59      2.33      1.99       2.33
 Salaries, general and administrative 3.54      3.41      3.53       3.55
expenses (per Boe)
 Salaries, general and administrative 0.59      0.57      0.59       0.59
expenses (per Mcfe)
 DD&A expense on oil and gas          20.60     19.94     20.58      22.16
properties (per Boe)
 DD&A expense on oil and gas          3.43      3.32      3.43       3.69
properties (per Mcfe)
AVERAGE SHARES OUTSTANDING – Diluted   48,782    48,412    48,735     48,361

STONE ENERGY CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(Unaudited)
                                       Three Months Ended  Twelve Months Ended

                                       December 31,        December 31,
                                       2013      2012      2013       2012
 Operating revenue:
 Oil production             $157,073  $196,559  $715,104   $761,304
 Gas production             53,198    43,733    190,580    134,739
 Natural gas liquids        23,833    13,270    60,687     48,498
production
 Other operational income   5,149     1,000     7,808      3,520
 Derivative income, net     -         309       -          3,428
 Total      239,253   254,871   974,179    951,489
operating revenue
 Operating expenses:
 Lease operating expenses   43,606    57,973    201,153    215,003
 Transportation,            14,798    5,871     42,172     21,782
processing and gathering
 Production taxes           3,625     2,437     15,029     10,015
 Depreciation, depletion    95,077    83,383    350,574    344,365
and amortization
 Accretion expense          8,563     8,405     33,575     33,331
 Salaries, general and      16,173    14,127    59,524     54,648
administrative expenses
 Incentive compensation     7,293     4,206     15,340     8,113
expense
 Derivative expenses, net   553       -         2,090      -
 Franchise tax settlement   12,590    -         12,590     -
 Other operational expenses  (231)     72        151        267
 Total operating expenses       202,047   176,474   732,198    687,524
Income from operations        37,206    78,397    241,981    263,965
Other (income) expenses:
 Interest expense             6,385     9,268     32,837     30,375
 Interest income              (152)     (373)     (1,695)    (600)
 Other income                 (609)     (576)     (2,799)    (1,805)
 Loss on early                27,279    1,972     27,279     1,972
extinguishment of debt
 Total other expenses     32,903    10,291    55,622     29,942
 Income before taxes            4,303     68,106    186,359    234,023
 Provision (benefit) for
income taxes:
 Current portion              (77)      13,858    (10,904)   15,022
 Deferred portion             2,628     10,002    79,629     69,575
 Total income taxes       2,551     23,860    68,725     84,597
Net income                      $1,752    $44,246   $117,634   $149,426

STONE ENERGY CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE

DISCRETIONARY CASH FLOW to NET CASH FLOW FROM OPERATING ACTIVITIES
(In thousands)
(Unaudited)
                                       Three Months Ended  Twelve Months Ended

                                       December 31,        December 31,
                                       2013      2012      2013       2012
Net income as reported        $1,752    $44,246   $117,634   $149,426
Reconciling items:
Depreciation, depletion and            95,077    83,383    350,574    344,365
amortization
Deferred income tax provision          2,628     10,002    79,629     69,575
Accretion expense                      8,563     8,405     33,575     33,331
Stock compensation expense             2,764     1,899     10,347     8,699
Loss on early extinguishment of debt   27,279    1,972     27,279     1,972
Non-cash interest expense              3,835     4,017     16,219     13,085
Other                                  613       (8)       2,083      (1,458)
Discretionary cash flow                142,511   153,916   637,340    618,995
Changes in income taxes payable        3,471     13,858    2,767      10,618
Settlement of asset retirement         (22,676)  (18,356)  (83,854)   (65,567)
obligations
Other working capital changes          31,389    (13,582)  37,952     (54,297)
Net cash provided by operating         $154,695  $135,836  $594,205   $509,749
activities

STONE ENERGY CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
ADJUSTED NET INCOME to NET INCOME
(In thousands)
(Unaudited)
                                       Three Months Ended  Twelve Months Ended
                                       December 31, 2013  December 31, 2013
Net income as reported                 $1,752              $117,634
Reconciling items:
 Loss on early extinguishment of   $27,279             $27,279
debt
 Franchise tax settlement          12,590              12,590
 Tax effect                        (14,353)            (14,353)
 One-time charges net of tax       25,516              25,516
Adjusted net income                    $27,268             $143,150
Net income per share as reported       $0.04               $2.36
Per share effect of one-time charges   $0.52               $0.52
Net income per share before one-time   $0.56               $2.88
charges

STONE ENERGY CORPORATION
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
                                                    December 31,  December 31,
                                                    2013          2012
Assets
Current assets:
 Cash and cash equivalents               $331,224      $279,526
 Accounts receivable                     171,971       167,288
 Fair value of hedging contracts         4,549         39,655
 Current income tax receivable           7,366         10,027
 Deferred taxes                          31,710        15,514
 Inventory                               3,723         4,207
 Other current assets                    1,874         3,626
Total current assets             552,417       519,843
Oil and gas properties, full cost method of
accounting:
 Proved                                  7,804,117     7,244,466
 Less: accumulated depreciation,         (5,908,760)   (5,510,166)
depletion and amortization
 Net proved oil and gas properties       1,895,357     1,734,300
 Unevaluated                             724,339       447,795
Other property and equipment, net                   26,178        22,115
Fair value of hedging contracts                     1,378         9,199
Other assets, net                                   48,887        43,179
 Total assets                            $3,248,556    $2,776,431
Liabilities and Stockholders' Equity
Current liabilities:
 Accounts payable to vendors             $195,677      $94,361
 Undistributed oil and gas proceeds      37,029        23,414
 Accrued interest                        9,022         18,546
 Fair value of hedging contracts         7,753         149
 Asset retirement obligations            67,161        66,260
 Other current liabilities               54,520        16,765
 Total current  liabilities      371,162       219,495
8⅝% Senior Notes due 2017                           -             375,000
7½% Senior Notes due 2022                           775,000       300,000
1¾% Convertible Notes due 2017                      252,084       239,126
Deferred taxes                                      390,693       310,830
Asset retirement obligations                        435,352       422,042
Fair value of hedging contracts                     470           1,530
Other long-term liabilities                         53,509        36,275
Total liabilities                        2,278,270     1,904,298
Common stock                                        488           484
Treasury stock                                      (860)         (860)
Additional paid-in capital                          1,397,885     1,386,475
Accumulated deficit                                 (425,165)     (542,799)
Accumulated other comprehensive income (loss)       (2,062)       28,833
 Total stockholders' equity              970,286       872,133
 Total liabilities and stockholders'     $3,248,556    $2,776,431
equity



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SOURCE Stone Energy Corporation

Website: http://www.stoneenergy.com
 
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