Rosetta Resources Swings To Q3 Profit; Beats View

11/6/2009 6:51 PM ET

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Rosetta Resources Swings To Q3 Profit - Quick Facts

(RTTNews) - Friday, oil and gas company Rosetta Resources, Inc. (ROSE: News ), reported a return to profit in the third quarter from a huge loss last year, reflecting the absence of impairment of oil and gas properties present in the prior year period, which more than offset the sharp fall in revenues. Earnings and revenues for the quarter came in ahead of Street expectations. Looking forward, the company maintained its full year production target.

Houston, Texas-based Rosetta Resources' third quarter net income was $5.73 million or $0.11 per share compared to a net loss of $99.38 million or $1.96 per share in the year-ago period. The year earlier period included a impairment of oil and gas properties amounting to $205.66 million.

Analysts polled by Thomson Reuters expected the company to earn $0.10 per share for the quarter. Analysts' estimates typically exclude special items such as charges and gains.

Third quarter revenues plunged to $64.48 million from $130.04 million in the corresponding quarter last year. Wall Street expected Rosetta Resources to report revenues of $63.70 million for the quarter.

Revenues from natural gas sales dropped to $60.05 million from $114.331 million a year-ago, while oil sales plunged to $4.44 million from $15.73 million last year.

Revenues for the current full year period include a benefit of $22.9 million related to the effect of natural gas hedging.

Rosetta's production for the third quarter averaged 120.7 or million cubic feet equivalent or MMcfe/d, average production volumes was lower by 14% year-over-year, the decline attributed to reduced capital activity earlier in the year.

Commenting on the third quarter performance, Randy Limbacher, President and Chief Executive Officer said, "In the third quarter, Rosetta made significant progress in building a company capable of delivering and sustaining long term profitable growth in production and reserves. We are encouraged by the early results in our Eagle Ford and Bakken programs and we continue to advance our inventory efforts in our core area assets. We believe our recent results position us for the breakout performance we are seeking as part of our shift to a resource player."

The company has hedged 52,000 million British thermal units per day or MMBtu/D at an average price of $7.64 per million British thermal units or MMBtu for the remaining period of 2009. For 2010 the company has hedged 12,500 MMBtu/d at an average price of $7.79 and 5,000 MMBtu/d for 2011 at an average price of $5.72 per MMBtu.