Bill Barrett Corporation (BBG)

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Bill Barrett Corporation (BBG)

Q3 FY08 Earnings Call

November 5, 2008, 12:00 PM ET


Jennifer Martin - Director of IR

Fredrick J. Barrett - Chairman and CEO

Robert W. Howard - CFO and Treasurer

Joseph N. Jaggers - President and COO


Michael Hall - Stifel Nicolaus

Tom Gardner - Simmons & Company

Ray Deacon - Pritchard Capital

Jeffrey Robertson - Barclays Capital

Dan Mcspirit - BMO Capital Markets



Good morning. My name is Jessica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Bill Barrett Corporation Third Quarter 2008 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question-and-answer session. [Operator Instructions].

Thank you. Ms. Martin, You may begin your conference.

Jennifer Martin - Director of Investor Relations

Thank you, Jessica. Good morning, everyone or afternoon to some of you, and welcome to the Bill Barrett Corporation third quarter conference call. Presenting today our Fred Barrett, Chairman and Chief Executive Officer, who'll open with an overview; Bob Howard, Chief Financial Officer, who will review financial results; Joe Jaggers, President and Chief Operating Officer, who will review operations and provide an update on our development, delineation, and exploration program, followed by closing comments from Fred Barrett.

I have a few items to mention before we get started. We have prepared a user-controlled slideshow that accompanies our discussion. It is available with the webcast or can be printed from the homepage of the website at Look around on the left at the page under current events and click on the third quarter results earnings call slides.

In addition, our 10-Q should be filed either during this call or shortly thereafter this morning, and it will also be available through our website. I will also mention that we will be participating in the Bank of America 2008 Energy Conference where Bob Howard, will present on November 13th, at 2:30 Eastern Time. Please join us for that webcast event, which will also be accessible from our website for a live or a replay.

And do we need to remind everyone to read the forward-looking and cautionary statement disclosures on slide two of our presentation, which were also included in our press release today. During our discussion we will make reference to discretionary cash flow, which is a non-GAAP measure, reconciliation of the appropriate GAAP measure was also provided in the press release today.

With that I will turn it over to Fred Barrett to get started. Fred?

Fredrick J. Barrett - Chairman and Chief Executive Officer

Thank you, Jennifer, and welcome, everyone. My introduction today will be brief, but we'll highlight three key relevant points as seen on slide number three. As you can see there exploration success, development performance and the financial health of Bill Barrett Corporation.

First as we mentioned in our press release, management is very pleased with the first two horizontal exploration wells that are Gothic Shale gas program and Yellow Jacket that's in the Paradox Basin of Southwest Colorado. We view this as a key discovery for the company and also believe this is a resource play of potentially significant size.

It's worth noting up front initial results from our too widely spaced wells in the Gothic Shale compared favorably and comparatively with published rates from the Barnett, Woodford, Fayetteville and Marcellus shale gas plays, but we also realize we have more comprehension drilling to do.

Bill Barrett Corporation is being building its drilling gas through position in Yellow Jacket for a number of years. The Gothic shale gas concept was internally generated, which carries with a key advantages cheap among them exposure to potentially significant reserves over the large acreage position at a relatively inexpensive cost.

For example, we've paid in the low 100s of dollars per acre range rather than in the 1000 of dollars per acre range. Very early on when we begin building our position in here, we were paying at acreage cost less than $100 per acre. To-date, we've assembled approximately 397,000 gross and 208,000 net end developed acres to the company in the Yellow Jacket region. The company has also been busy with the drill bit on a number of other exportation and delineation programs built simply with much of the same way as the Yellow Jacket.

Joe Jaggers will provide more information on these, as well as more detail on Yellow Jacket and other operational information later in our conference call. The second item to highlight, our third quarter operational performance speaks for itself, a record level of production, solid cash flows, a benchmark level of earnings for the company, and declining LOE reflect the depth and quality of our development programs and also our management team. Framing this execution has been sound strong, financial planning throughout 2008, the third item I would like to highlight.

Our 2008 financial strategies included building a sizeable long range production hedge position, opportunistically closing on a convertible debt deal with attractive terms earlier in the year, and most recently up sizing our borrowing base with a strong reliable syndicate.

Despite current market back drop the net result of our planning puts the company in a solid and secured financial position as we close our 2008 and finalize plans for 2009, which I will say more about in my closing remarks.

And with that said, I will hand it over to Bob Howard to expand on the financial status of Bill Barrett Corporation. Bob?

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