Results of Operations
Revenues
Changes in oil, gas and NGL production, prices and revenues from 2005 to 2007 are shown in the following tables. The amounts for all periods presented exclude results from our Egyptian and West African operations which are presented as discontinued operations. Unless otherwise stated, all dollar amounts are expressed in U.S. dollars.
| Total | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year Ended December 31, | |||||||||||||||
| 2007 | 2007 vs 2006 (2) |
2006 | 2006 vs 2005 (2) |
2005 | |||||||||||
| Production Oil (MMBbls) |
55 | +29 | % | 42 | -9 | % | 46 | ||||||||
| Gas (Bcf) | 863 | +7 | % | 808 | -1 | % | 819 | ||||||||
| NGLs (MMBbls) | 26 | +10 | % | 23 | — | 24 | |||||||||
| Total (MMBoe)(1) | 224 | +12 | % | 200 | -3 | % | 206 | ||||||||
| Average Prices Oil (per Bbl) |
$ | 63.98 | +11 | % | 57.39 | +49 | % | 38.64 | |||||||
| Gas (per Mcf) | $ | 5.99 | -1 | % | 6.08 | -14 | % | 7.03 | |||||||
| NGLs (per Bbl) | $ | 37.76 | +18 | % | 32.10 | +11 | % | 29.05 | |||||||
| Combined (per Boe)(1) | $ | 42.96 | +6 | % | 40.38 | +1 | % | 39.89 | |||||||
| Revenues ($ in millions) Oil |
$ | 3,493 | +44 | % | 2,434 | +36 | % | 1,794 | |||||||
| Gas | 5,163 | +5 | % | 4,912 | -15 | % | 5,761 | ||||||||
| NGLs | 970 | +30 | % | 749 | +10 | % | 680 | ||||||||
| Total | $ | 9,626 | +19 | % | 8,095 | -2 | % | 8,235 | |||||||
| Domestic | |||||||||||||||
| Year Ended December 31, | |||||||||||||||
| 2007 | 2007 vs 2006 (2) |
2006 | 2006 vs 2005 (2) |
2005 | |||||||||||
| Production Oil (MMBbls) |
19 | -3 | % | 19 | -23 | % | 25 | ||||||||
| Gas (Bcf) | 635 | +12 | % | 566 | +2 | % | 555 | ||||||||
| NGLs (MMBbls) | 22 | +15 | % | 19 | +3 | % | 18 | ||||||||
| Total (MMBoe)(1) | 146 | +10 | % | 132 | -3 | % | 136 | ||||||||
| Average Prices Oil (per Bbl) |
$ | 69.23 | +11 | % | 62.23 | +49 | % | 41.64 | |||||||
| Gas (per Mcf) | $ | 5.89 | -3 | % | 6.09 | -14 | % | 7.08 | |||||||
| NGLs (per Bbl) | $ | 36.11 | +23 | % | 29.42 | +10 | % | 26.68 | |||||||
| Combined (per Boe)(1) | $ | 39.87 | +1 | % | 39.31 | -2 | % | 40.21 | |||||||
| Revenues ($ in millions) Oil |
$ | 1,313 | +8 | % | 1,218 | +15 | % | 1,062 | |||||||
| Gas | 3,742 | +9 | % | 3,445 | -12 | % | 3,929 | ||||||||
| NGLs | 773 | +41 | % | 548 | +13 | % | 484 | ||||||||
| Total | $ | 5,828 | +12 | % | 5,211 | -5 | % | 5,475 | |||||||
| Canada | |||||||||||||||
| Year Ended December 31, | |||||||||||||||
| 2007 | 2007 vs 2006 (2) |
2006 | 2006 vs 2005 (2) |
2005 | |||||||||||
| Production Oil (MMBbls) | 16 | +26 | % | 13 | -2 | % | 13 | ||||||||
| Gas (Bcf) | 227 | -6 | % | 241 | -8 | % | 261 | ||||||||
| NGLs (MMBbls) | 4 | -9 | % | 4 | -11 | % | 6 | ||||||||
| Total (MMBoe)(1) | 58 | +1 | % | 58 | -7 | % | 62 | ||||||||
| Average Prices Oil (per Bbl) |
$ | 49.80 | +6 | % | 46.94 | +75 | % | 26.88 | |||||||
| Gas (per Mcf) | $ | 6.24 | +3 | % | 6.05 | -13 | % | 6.95 | |||||||
| NGLs (per Bbl) | $ | 46.07 | +8 | % | 42.67 | +15 | % | 37.19 | |||||||
| Combined (per Boe)(1) | $ | 41.51 | +6 | % | 39.21 | +3 | % | 38.17 | |||||||
| Revenues ($ in millions) Oil |
$ | 804 | +33 | % | 603 | +71 | % | 353 | |||||||
| Gas | 1,410 | -3 | % | 1,456 | -20 | % | 1,814 | ||||||||
| NGLs | 197 | -2 | % | 201 | +2 | % | 196 | ||||||||
| Total | $ | 2,411 | +7 | % | 2,260 | -4 | % | 2,363 | |||||||
International |
|||||||||||||||
| Year Ended December 31, | |||||||||||||||
| 2007 | 2007 vs 2006 (2) |
2006 | 2006 vs 2005 (2) |
2005 | |||||||||||
| Production Oil (MMBbls) |
20 | +95 | % | 10 | +28 | % | 8 | ||||||||
| Gas (Bcf) | 1 | -6 | % | 1 | -42 | % | 3 | ||||||||
| NGLs (MMBbls) | — | N/M | — | N/M | — | ||||||||||
| Total (MMBoe)(1) | 20 | +92 | % | 10 | +23 | % | 8 | ||||||||
| Average Prices Oil (per Bbl) |
$ | 70.60 | +15 | % | 61.35 | +26 | % | 48.59 | |||||||
| Gas (per Mcf) | $ | 6.22 | +3 | % | 6.05 | +12 | % | 5.42 | |||||||
| NGLs (per Bbl) | $ | — | N/M | — | N/M | — | |||||||||
| Combined (per Boe)(1) | $ | 70.11 | +16 | % | 60.60 | +27 | % | 47.57 | |||||||
| Revenues ($ in millions) Oil |
$ | 1,376 | +125 | % | 613 | +61 | % | 379 | |||||||
| Gas | 11 | -3 | % | 11 | -35 | % | 18 | ||||||||
| NGLs | — | N/M | — | N/M | — | ||||||||||
| Total | $ | 1,387 | +122 | % | 624 | +57 | % | 397 | |||||||
(1) Gas volumes are converted to Boe or MMBoe at the rate of six Mcf of gas per barrel of oil, based upon the approximate relative energy content of natural gas and oil, which rate is not necessarily indicative of the relationship of gas and oil prices. NGL volumes are converted to Boe on a one-to-one basis with oil.
(2) All percentage changes included in this table are based on actual figures and not the rounded figures included in this table.
N/M Not meaningful.
The average prices shown in the preceding tables include the effect of our oil and gas price hedging activities. Following is a comparison of our average prices with and without the effect of hedges for each of the last three years.
| Year Ended December 31, 2007 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Oil | Gas | NGLs | Total | |||||||||
| (Per Bbl) | (Per Mcf) | (Per Bbl) | (Per Boe) | |||||||||
| Realized price without hedges | $ | 63.98 | 5.97 | 37.76 | 42.90 | |||||||
| Cash settlements | — | 0.04 | — | 0.18 | ||||||||
| Realized cash price | 63.98 | 6.01 | 37.76 | 43.08 | ||||||||
| Net unrealized losses | — | (0.02 | ) | — | (0.12 | ) | ||||||
| Realized price with hedges | $ | 63.98 | 5.99 | 37.76 | 42.96 | |||||||
| Year Ended December 31, 2006 | ||||||||||||
| Oil | Gas | NGLs | Total | |||||||||
| (Per Bbl) | (Per Mcf) | (Per Bbl) | (Per Boe) | |||||||||
| Realized price without hedges | $ | 57.39 | 6.03 | 32.10 | 40.19 | |||||||
| Cash settlements | — | — | — | — | ||||||||
| Realized cash price | 57.39 | 6.03 | 32.10 | 40.19 | ||||||||
| Net unrealized gains | — | 0.05 | — | 0.19 | ||||||||
| Realized price with hedges | $ | 57.39 | 6.08 | 32.10 | 40.38 | |||||||
| Year Ended December 31, 2005 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Oil | Gas | NGLs | Total | |||||||||
| (Per Bbl) | (Per Mcf) | (Per Bbl) | (Per Boe) | |||||||||
| Realized price without hedges | $ | 48.01 | 7.08 | 29.05 | 42.18 | |||||||
| Cash settlements | (9.37 | ) | (0.05 | ) | — | (2.29 | ) | |||||
| Realized price with hedges | $ | 38.64 | 7.03 | 29.05 | 39.89 | |||||||
The following table details the effects of changes in volumes and prices on our oil, gas and NGL revenues between 2005 and 2007.
| Oil | Gas | NGLs | Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In millions) | ||||||||||||
| 2005 revenues | $ | 1,794 | 5,761 | 680 | 8,235 | |||||||
| Changes due to volumes | (155 | ) | (77 | ) | (2 | ) | (234 | ) | ||||
| Changes due to realized cash prices | 795 | (809 | ) | 71 | 57 | |||||||
| Changes due to net unrealized hedge gains | — | 37 | — | 37 | ||||||||
| 2006 revenues | 2,434 | 4,912 | 749 | 8,095 | ||||||||
| Changes due to volumes | 700 | 329 | 76 | 1,105 | ||||||||
| Changes due to realized cash prices | 359 | (53 | ) | 145 | 451 | |||||||
| Changes due to net unrealized hedge losses | — | (25 | ) | — | (25 | ) | ||||||
| 2007 revenues | $ | 3,493 | 5,163 | 970 | 9,626 | |||||||
Oil Revenues
2007 vs. 2006 Oil revenues increased $700 million due to a 13 million barrel increase in production. The increase in our 2007 oil production was primarily due to our properties in Azerbaijan where we achieved payout of certain carried interests in the last half of 2006. This led to a nine million barrel increase in 2007 as compared to 2006. Production also increased 3.5 million barrels due to increased development activity in our Lloydminster area in Canada. Also, oil sales from our Polvo field in Brazil began during the fourth quarter of 2007, which resulted in 0.5 million barrels of increased production.
Oil revenues increased $359 million as a result of an 11% increase in our realized price. The average NYMEX West Texas Intermediate index price increased 9% during the same time period, accounting for the majority of the increase.
2006 vs. 2005 Oil revenues decreased $155 million due to a four million barrel decrease in production. Production lost from properties divested in 2005 caused a decrease of four million barrels, and production declines related to our U.S. and Canadian properties caused a decrease of three million barrels. These decreases were partially offset by a three million barrel increase from reaching payout of certain carried interests in Azerbaijan.
Oil revenues increased $795 million as a result of a 49% increase in our realized price. The expiration of oil hedges at the end of 2005 and a 17% increase in the average NYMEX West Texas Intermediate index price caused the increase in our realized oil price.
Gas Revenues
2007 vs. 2006 A 55 Bcf increase in production caused gas revenues to increase by $329 million. Our drilling and development program in the Barnett Shale field in north Texas contributed 53 Bcf to the gas production increase. The June 2006 Chief Holdings LLC ("Chief") acquisition also contributed 12 Bcf of increased production. During 2007, we also began first production from the Merganser field in the deepwater Gulf of Mexico, which resulted in seven Bcf of increased production. These increases and the effects of new drilling and development in our other North American properties were partially offset by natural production declines primarily in Canada.
A 1% decline in our average realized price caused gas revenues to decrease $78 million in 2007
2006 vs. 2005 An 11 Bcf decrease in production caused gas revenues to decrease by $77 million. Production lost from the 2005 property divestitures caused a decrease of 35 Bcf. As a result of Hurricanes Katrina, Rita, Dennis and Ivan which occurred in 2005, gas volumes suspended in 2006 were three Bcf more than those suspended in 2005. These decreases were partially offset by the June 2006 Chief acquisition, which contributed 10 Bcf of production during the last half of 2006, and additional production from new drilling and development in our U.S. onshore and offshore properties.
A 14% decline in average prices caused gas revenues to decrease $772 million in 2006. The 2005 average gas price was impacted by the supply disruptions caused by that year's hurricanes.