Venoco Inc. (VQ) filed Quarterly Report for the period ended 2009-09-30.
VENOCO INC is an independent energy company primarily engaged in the acquisition exploitation and development of oil and natural gas properties in California and Texas.They has regional headquarters in Carpinteria California and in Houston Texas and the corporate headquarters are in Denver Colorado. Venoco operates three offshore platforms in the Santa Barbara Channel has non operating interests in three other platforms and also operates two onshore properties in Southern California approximately 250 natural gas wells in Northern California and more than 100 wells in Texas. Venoco Inc. has a market cap of $656.8 million; its shares were traded at around $12.52 with a P/E ratio of 27.8 and P/S ratio of 1.2.
Highlight of Business Operations:
Production Expenses. Production expenses, which consist of lease operating expenses ("LOE") and production/property taxes, decreased $14.4 million (34%) to $28.0 million in the third quarter of 2009 from $42.4 million in the third quarter of 2008. The decrease was primarily due to the sale of Hastings in early February 2009 which was historically a relatively high cost field. On a per unit basis, LOE decreased to $13.55 per BOE in the third quarter of 2009 from $17.89 per BOE in the same period in 2008. Excluding Hastings, LOE per BOE decreased $1.49 from $15.04 per BOE in the third quarter of 2008 to $13.55 per BOE in the third quarter of 2009. The decrease is partially due to the increased proportion of Sacramento Basin natural gas production during the third quarter of 2009, which has lower operating costs than oil production. Additionally, we incurred relatively high non-recurring maintenance costs related to certain wells in the Sockeye field in the third quarter of 2008, which were not incurred in the third quarter of 2009. The decreases were partially offset by costs incurred in the third quarter of 2009 related to scheduled maintenance performed on Platform Holly in the South Ellwood field. We also continue to pursue price/cost reductions from external contractors and suppliers.
Transportation Expenses. Transportation expenses decreased $0.6 million (31%) to $1.1 million in the third quarter of 2009 from $1.7 million in the third quarter of 2008. On a per BOE basis, transportation expenses decreased $0.21 per BOE, from $0.82 per BOE in the third quarter of 2008 to $0.61 per BOE in the third quarter of 2009. The decrease is primarily due to maintenance costs incurred in the third quarter of 2008 related to the barge that transports South Ellwood oil production.
Depletion, Depreciation and Amortization (DD&A). DD&A expense decreased $10.9 million (33%) to $22.0 million in the third quarter of 2009 from $32.9 million in the third quarter of 2008. DD&A expense decreased $4.52 per BOE, from $16.31 per BOE in the third quarter of 2008 to $11.79 per BOE in the third quarter of 2009. The decrease is due to a reduced depletable base as a result of the full cost ceiling write down recorded at December 31, 2008 and the application of proceeds from the sale of the Hastings complex in February 2009 to reduce the full cost pool.
General and Administrative (G&A). G&A expense decreased $0.6 million (6%) to $9.6 million in the third quarter of 2009 from $10.2 million in the third quarter of 2008. Non-cash share-based compensation expense charged to G&A was $0.6 million for both the third quarter of 2008 and the third quarter of 2009. Excluding the effect of the non-cash share-based compensation expense, G&A expense remained relatively consistent at $4.80 per BOE in the third quarter of 2008 and $4.82 per BOE in the third quarter of 2009.
Production Expenses. Production expenses, which consist of lease operating expenses ("LOE") and production/property taxes, decreased $27.3 million (25%) to $80.3 million in the first nine months of 2009 from $107.6 million in the first nine months of 2008. The decrease was primarily due to the sale of Hastings in early February 2009 which was historically a relatively high cost field. On a per unit basis, LOE decreased to $12.59 per BOE in the first nine months of 2009 from $16.03 per BOE in the same period in 2008. Excluding Hastings, LOE per BOE decreased $1.20 from $13.68 per BOE in the first nine months of 2008 to $12.48 per BOE in the first nine months of 2009. In the first nine months of 2008, we incurred relatively high non-recurring maintenance costs related to certain wells in the Sockeye field, which were not incurred in the first nine months of 2009. Additionally, we incurred scheduled maintenance costs in the 2008 period related to Platform Gail in the Sockeye field. We did not incur these costs in 2009. We also continue to pursue price/cost reductions from external contractors and suppliers.
Transportation Expenses. Transportation expenses decreased $1.3 million (32%) to $3.0 million in the first nine months of 2009 from $4.3 million in the first nine months of 2008. On a per BOE basis, transportation expenses decreased $0.22 per BOE, from $0.74 per BOE in the first nine months of 2008 to $0.52 per BOE in the first nine months of 2009. The decrease is primarily due to maintenance costs incurr
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