TRGL Toreador Resources Corp. (MM)

Regulatory News:

Toreador Resources Corporation (NASDAQ:TRGL) (Paris:TOR) today announced second quarter 2011 financial results.

• Year to date Revenue for the six months ended June 30, 2011 of $19.5M million (resulting from $16.7M in oil sales and $2.86M of Other Operating Income) compared to revenue of $26.5M for the same period last year.
• Second Quarter 2011 Revenue of $10.4 million (resulting from $8.8M in oil sales and $1.5M of Other Operating Income) compared to revenue of $20.9M in the second quarter 2010.
• Production for the six months ended June 30, 2011 of 156,000 barrels.
• As of June 30, 2011, cash and cash equivalents (including restricted cash) balance of $8.1M.

Mr. Craig McKenzie, President and CEO of Toreador, said: "We are pleased with our second quarter 2011 results and believe that the company is well positioned to capitalize on significant growth opportunities going forward. In particular, we anticipate implementing our drilling program in the Paris Basin by year-end."

SECOND QUARTER 2011 FINANCIAL RESULTS

(Unaudited)     Three Months Ended           June 30, Change Change ($ million, except where noted) 2011     2010 (units) (%) Revenue and other income $ 10.4 $ 20.9 $ (10.6) -51% Sale and other operating revenue $ 8.8 $ 5.9 $ 3.0 49% Other income $ 1.5 $ 15.0 $ (13.5) -90% Operating income $ 1.0 $ 14.0 $ (13.1) -93% Loss from discontinued operations $ (2.9) $ (0.2) $ (2.7) 1081% Income (loss) available to common shares $ (3.3) $ 6.3 $ (9.5) -152% Basic income (loss) per share ($/share) - Cont. Ops $ (0.01) $ 0.27 $ (0.28) -104% Diluted income (loss) per share ($/share) - Cont. Ops $ (0.01) $ 0.27 $ (0.28) -104% Capital expenditures $ 0.05 $ 0.11 $ (0.06) -56% Production (MBbl) 78.17 82.12 (3.95) -5% Average realized price ($/Bbl) $ 116.7 $ 74.2 $ 42.4 57%

Revenue and other income

Sales and other operating revenueSales and other operating revenue for the three months ended June 30, 2011 was $8.8 million, as compared to sales and other operating revenue of $5.9 million for the three months ended June 30, 2010. This increase is primarily due to the increase in global oil prices over the period, which led to an increase in the prices at which we sell our oil from an average of $74.2 per barrel in the three months ended June 30, 2010 to an average of $116.7 per barrel in the three months ended June 30, 2011. This increase was offset by a slightly lower production, decreasing from 82 MBbls in the three months ended June 30, 2010 to 78 MBbls in the three months ended June 30, 2011.

Other incomeOther income includes all exploration, salary and general and administrative costs associated with TEF’s activities as operator of the exploration permits in the Paris Basin, which TEF is entitled to invoice to Hess under the Investment Agreement. For the three months ended June 30, 2011, $1.5 million was invoiced to Hess and recorded as “Other income” compared to $15 million in the same period last year consisting of the upfront payment of $15 million received from Hess following the execution of the Investment Agreement.

Operating costs and expenses

Lease operating expenseLease operating expense was $3.5 million, or $45.19 per BOE produced, for the three months ended June 30, 2011, as compared to $3.1 million, or $38.21 per BOE produced, for the three months ended June 30, 2010. This increase is due to an increase in certain production costs and land fees associated with our conventional production including expenses related to an environmental audit on our production sites. Lease operating expense for the three months ended June 30, 2011 also includes inventory turnover variation for an amount of $0.1 million.

Exploration expenseExploration expense for the three months ended June 30, 2011 was $0.1 million, as compared to $1.1 million for the three months ended June 30, 2010. This decrease is due primarily to higher expenses incurred in the same period last year associated with geological and technical studies the Company conducted and commissioned in connection with our proof of concept project which at the time were not invoiced to Hess under the Investment Agreement.

Depreciation, depletion and amortizationDepreciation, depletion and amortization for the three months ended June 30, 2011 was $1.7 million or $21.86 per BOE produced, as compared to $0.7 million or $8.19 per BOE produced for the three months ended June 30, 2010. This increase is primarily due to the reduction at the end of 2010 of the estimated life of wells used for the depreciation, depletion and amortization to comply with the legal maturity of our production concessions.

General and administrative before stock compensation expenseGeneral and administrative expense, excluding stock compensation expense, for the three months ended June 30, 2011, totaled $3.0 million, as compared to $1.8 million for the comparable period in 2010. This increase is due to (i) higher professional and legal fees in relation to the safeguarding of our exploration permits during the public debate in France regarding the ban on hydraulic fracturing and (ii) generation of external growth.

Stock compensation expenseStock compensation expense was $1.1 million for the three months ended June 30, 2011 compared with $1.1 million for the three months ended June 30, 2010. During the three months ended June 30, 2011, we issued 88,939 shares compared to 93,392 shares issued in the comparable period last year. Stock compensation expense includes directors’ annual stock grant of immediately vested shares in the amount of $450,000.

Impairment of oil propertiesThere were no impairment charges for the three months ended June 30, 2011 and June 30, 2010.

Loss/Gain on oil derivative contractsWe recorded a gain on oil derivative contracts for the three months ended June 30, 2011 of $0.3 million as compared to a gain of $0.8 million in the three months ended June 30, 2010. This amount consists of an unrealized gain on the commodity derivative contracts with Vitol S.A as well as the margin calls related to this contract with Vitol trading due to the Dated Brent price being higher than the selling price of $91.00 per barrel under the derivative contract. The unrealized gain on the oil derivative contract for the three months ended June 30, 2011 and 2010 amounted to a gain of $1.5 million and $0.8 million respectively. The margin calls for the three months ended June 30, 2011 amounted to an expense of $1.2 million compared to zero for the same period last year.

Foreign currency exchange gain (loss)We recorded a loss on foreign currency exchange of $0.3 million for the three months ended June 30, 2011 compared with a loss of $0.1 million for the three months ended June 30, 2010. This increase is mainly due to the weakening of the U.S. dollar compared to the euro over the same period in 2011.

Interest expenseInterest expense, was $0.3 million for the three months ended June 30, 2011 as compared to $1.0 million for the three months ended June 30, 2010.

The interest expense relates to interest payments relating to the New Convertible Senior Notes issued in February 2010. Interest expense for the New Convertible Senior Notes was $585,000 for the three months ended June 30, 2011 as compared to $633,000 for the three months ended June 30, 2010. Also included in interest expense are expenses related to the amortization of issue premium and debt issuance costs associated to the New Convertible Senior Notes of $137,000 recorded for the three months ended June 30, 2011 compared to $50,000 for the three months ended June 30, 2010. This was offset by a positive accretion impact of $253,000 related to the fair value of the New Convertible Senior Notes.

Income tax (benefit) provisionAn income tax provision of $ 0.7 million was recorded in the three months ended June 30, 2011, compared to a tax provision of $ 6.4 million recognized for the three months ended June 30, 2010. This decrease is due to the fact that in the same period last year, a higher provision for income taxes was recorded due to the $15 million upfront payment received by TEF from Hess under the Investment Agreement.

Discontinued operationsSales and other operating revenue from discontinued operations for the three months ended June 30, 2011 amounted to $20,000. We recorded in discontinued operations for the three months ended June 30, 2011 a loss of $2.9 million as compared to a loss of $0.2 million for the same period last year. This increase is due to the settlement payment for an amount of $3.8 million on June 22, 2011, related to the settlement agreement with Mr. Hunnisett and Mr. Barker in which they agreed to release Toreador from all current and future claims. The $3.8 million settlement amount was partially offset by the provision release booked in prior periods for this matter in an amount of $0.9 million.

As a result of the above, for the three months ended June 30, 2011, the Company reported a loss available to common shares of $3.3 million, or $0.1 per diluted share, compared to a gain available to common shares of $6.3 million for the three months ended June 30, 2010, or $0.26 per diluted share.

FINANCIAL RESULTS FOR THE SIX MONTHS ENDED JUNE 30TH 2011

(Unaudited)     Six Months Ended           June 30, Change Change ($ million, except where noted) 2011     2010 (units) (%) Revenue and other income $ 19.5 $ 26.5 $ (6.9) -26% Sale and other operating revenue $ 16.7 $ 11.5 $ 5.2 44% Other income $ 2.9 $ 15.0 $ (12.1) -81% Operating loss $ (1.2) $ 12.2 $ (13.4) -110% Loss from discontinued operations $ (3.1) $ (0.8) $ (2.3) 275% Loss available to common shares $ (8.5) $ (1.0) $ (7.5) 716% Basic loss per share ($/share) - Cont. Ops $ (0.21) $ (0.01) $ (0.20) 2513% Diluted loss per share ($/share) - Cont. Ops $ (0.21) $ (0.01) $ (0.20) 2525% Capital expenditures $ 0.13 $ 0.11 $ 0.02 17% Production (MBbl) 156.00 161.00 (5.00) -3% Average realized price ($/Bbl) $ 110.3 $ 73.4 $ 36.9 50%

Revenue

Sales and other operating revenueSales and other operating revenue for the six months ended June 30, 2011 were $16.7 million, as compared to $11.5 million for the six months ended June 30, 2010. This increase is primarily due to the global increase in oil prices, which led to an increase in the prices at which we sell our oil from an average of $73.4 per barrel in the six months ended June 30, 2010 to an average of $110.3 per barrel in the six months ended June 30, 2011.

Other incomeOther income includes all exploration, salary and general and administrative costs associated with TEF’s activities as operator of the exploration permits in the Paris Basin, which TEF is entitled to invoice to Hess under the Investment Agreement. For the six months ended June 30, 2011, $2.9 million was invoiced to Hess and recorded as “Other income” compared to $15 million recorded during the six months ended June 30, 2010 consisting of the upfront payment of $15 million received from Hess following the execution of the Investment Agreement.

Costs and expenses

Lease operating expenseLease operating expense was $6.1 million, or $38.95 per BOE produced, for the six months ended June 30, 2011, as compared to $4.4 million, or $27.24 per BOE produced for the six months ended June 30, 2010.

This increase is mainly due to the reclassification of certain costs associated with particular properties and mainly incurred in connection with our existing oil production and conventional reservoirs development as lease operating expenses following the strategic partnership with Hess. In addition, lease operating expense for the six months ended June 30, 2011 also includes inventory turnover variation for an amount of $0.1 million.

Exploration expenseExploration expense for the six months ended June 30, 2011 was $0.8 million, as compared to $1.1 million for the six months ended June 30, 2010. This decrease is due primarily to lower expenses associated with geological and technical studies the Company conducted and commissioned in connection with the proof of concept project in the Paris Basin for the six months ended June 30, 2011 as compared to same period last year.

Depreciation, depletion and amortizationDepreciation, depletion and amortization for the six months ended June 30, 2011 was $3.1 million compared to $1.7 million for the six months ended June 30, 2010. This increase is primarily due to the reduction at the end of 2010 of the estimated life of wells used for the depreciation, depletion and amortization to comply with the legal maturity of our production concessions.

Impairment of oil and gas propertiesThere were no impairment charges for the six months ended June 30, 2011 and 2010.

General and administrative before stock compensation expenseGeneral and administrative expense, excluding stock compensation expense, was $6.5 million for the six months ended June 30, 2011 compared to $5.7 million for the six months ended June 30, 2010. This increase is due to (i) higher professional and legal fees in relation to the safeguarding of our exploration permits during the public debate in France regarding the ban on hydraulic fracturing and (ii) generation of external growth.

Stock compensation expenseStock compensation expense was $2.3 million for the six months ended June 30, 2011 compared to $2.2million for the six months ended June 30, 2010. Stock compensation expense includes directors’ annual stock grant of immediately vested shares in the amount of $450,000.

Loss on oil and gas derivative contractsLoss on oil and gas derivative contracts for the six months ended June 30, 2011 was $1.9 million as compared to a gain of $0.8 million for the six months ended June 30, 2010. This amount consists of an unrealized gain on the commodity derivative contracts with Vitol S.A as well as the margin calls related to this contract with Vitol trading due to the Dated Brent price being higher than the selling price of $91.00 per barrel under the derivative contract. The unrealized gain on the oil derivative contract for the six months ended June 30, 2011 and 2010 amounted to a loss of $0.7 million and a gain of $0.8 million respectively. The margin calls for the six months ended June 30, 2011 amounted to an expense of $1.2 million compared to zero for the same period last year.

Foreign currency exchange gain (loss)We recorded a loss on foreign currency exchange of $1.0 million for the six months ended June 30, 2011 compared with a loss of $0.1 for the six months ended June 30, 2010. This increase is mainly due to the weakening of the U.S. dollar compared to the euro over the same period in 2011.

Interest expense, net of capitalized interestInterest expense, net of capitalized interest was $1.8 million for the six months ended June 30, 2011, as compared to $1.7 million for the six months ended June 30, 2010. The increase is mainly due to additional interest payments relating to the New Convertible Senior Notes issued in February 2010. Interest expense for the New Convertible Senior Notes was $1.2 million for the six months ended June 30, 2011 as compared to $0.8 million for the six months ended June 30, 2010. Also included in interest expense are expenses related to the amortization of issue premium and debt issuance costs associated to the New Convertible Senior Notes of $271,000 recorded for the six months ended June 30, 2011 compared to $98,000 for the six months ended June 30, 2010. These expenses were offset by a $253,000 positive accretion impact related to the fair value of the New Convertible Senior Notes.

Income tax (benefit) provisionAn income tax provision of $1.5 million was recorded in the six months ended June 30, 2011, compared to a tax provision of $6.4 million recognized for the six months ended June 30, 2010. This decrease is due to the fact that in the same period last year, a higher provision for income taxes was recorded due to the $15 million upfront payment received by TEF from Hess under the Investment Agreement.

Discontinued operationsWe recorded in discontinued operations for the six months ended June 30, 2011 and 2010 a loss of $3.1 million and a loss of $0.8 million. This increase is mainly due to the upfront settlement for an amount of $3.8 million on June 22, 2011, related to the settlement agreement with Mr. Hunnisett and Mr. Barker in which they agreed to release Toreador from all current and future claims. The $3.8 million settlement amount was partially offset by the provision release booked in prior periods for this matter in an amount of $0.9 million. Sales and other operating revenue from discontinued operations for the six months ended, 2011 amounted to $38,000.

As a result of the above, for the six months ended June 30, 2011, the Company reported a loss available to common shares of $8.5 million, or $0.33 per diluted share, compared to a loss available to common shares of $1 million for the second ended 2010, or $0.04 per diluted share.

Production, Production Prices and Costs

The following table summarizes our oil production, net of royalties, for the periods indicated for France. It also summarizes calculations of our total average unit sales prices and unit costs

 

For the three months endedJune 30,

2011   2010 Production Oil (Bbls) 78,170 82,123 Daily average (Bbls/Day) 869 912 Unit prices Average oil price ($/Bbl) $ 116.69 $ 74.24 Unit costs ($/BOE) Lease operating $ 45.19 $ 38.21 Exploration and acquisition* 1.82 12.86 Depreciation, depletion and amortization 21.86 8.19 Dry hole costs - - General and administrative 53.14 35.19 Total $ 122.00 $ 94.45    

For the Six Months EndedJune 30,

2011   2010 Production Oil (Bbls) 156,291 160,697 Daily average (Bbls/Day) 868 893 Unit prices Average oil price ($/Bbl) $ 110.26 $ 73.38 Unit costs ($/BOE) Lease operating $ 38.95 $ 27.24 Exploration and acquisition* 4.95 6.69 Depreciation, depletion and amortization 20.14 10.44 Dry hole costs - - General and administrative 56.30 49.13 Total $ 120.34 $ 93.50

* Exploration and acquisition expense are net of personal, general and administrative cost of Toreador Energy France as operator and invoiced to Hess under the Hess Investment Agreement.

CONFERENCE CALL

The Company has scheduled a conference call on Tuesday, August 9, 2011 at 12:00 p.m. Eastern, to discuss second quarter financial results and current operations. Mr. Craig M. McKenzie, President and Chief Executive Officer of the Company, will lead the conference call.

Approximately 10 minutes before the conference call, participants who wish to ask questions during the call should dial 1-800-884-5695 from within the U.S. or 001-617-786-2960 from outside the U.S. and provide the conference ID# 25908996 to access the call.

Those who wish only to listen to the live audio webcast may access the webcast via Toreador's internet home page at www.toreador.net by selecting the "Investor Relations" link on the home page and then selecting the "Conference Call" link, or click on this link to access the call http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=68298&eventID=4141569.

Those unable to participate in the live call may hear the rebroadcast for up to twelve months after the conference call at www.toreador.net by selecting the "Investor Relations" link on the home page and then selecting the "Conference Call" link. Phone replays of the call also will be available for 14 days after the call by dialing 1-888-286-8010 within the U.S. or 001-617-801-6888 from outside the U.S., Passcode 31277341.

Safe-Harbor Statement – Except for the historical information contained herein, the matters set forth in this news release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Toreador intends that all such statements be subject to the "safe-harbor" provisions of those Acts. Many important risks, factors and conditions may cause Toreador's actual results to differ materially from those discussed in any such forward-looking statement. These risks include, but are not limited to, estimates of reserves, estimates of production, future commodity prices, exchange rates, interest rates, geological and political risks, drilling risks, product demand, transportation restrictions, the ability of Toreador to obtain additional capital, and other risks and uncertainties described in the company's filings with the Securities and Exchange Commission. The historical results achieved by Toreador are not necessarily indicative of its future prospects. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Cautionary Note to Investors – The Securities and Exchange Commission (“SEC”) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this release, such a probable reserves and possible reserves, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to also consider closely the disclosure in our most recent Form 10-K, available from use by calling (214) 559-3933. You can also obtain this form from the SEC at www.sec.gov.

ABOUT TOREADOR

Toreador Resources Corporation is an independent international energy company engaged in the acquisition, development, exploration and production of crude oil. The company holds interests in developed and undeveloped oil properties in France. More information about Toreador may be found at the company's web site, http://www.toreador.net.

APPENDIX 1: CONSOLIDATED BALANCE SHEETS

        June 30,   December 31, 2011     2010 (Unaudited) (In thousands except share and per share data) ASSETS Current assets:

    Cash and cash equivalents

$ 6,577 $ 21,616

    Restricted cash

1,501 -

    Accounts receivable

6,262 4,427

    Income tax receivable

- -

    Other

3,463 2,959

    Total current assets

17,803 29,002   Oil properties

    Oil properties, gross

118,201 108,979

    Accumulated depletion, depreciation and amortization

(50,028) (43,201)

    Oil properties, net

68,173 65,778   Investments 200 200 Goodwill 3,986 3,685 Other assets 1,370 1,634   Total assets $ 91,532 $ 100,299   LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:

    Accounts payable and accrued liabilities

$ 8,986 $ 11,890

    Deferred lease payable — current portion

116 113

    Derivatives

2,066 1,330

    Income taxes payable

626 6,341

    Total current liabilities

11,794 19,674   Long-term accrued liabilities 108 348 Deferred lease payable, net of current portion 270 329 Asset retirement obligations 7,724 6,866 Deferred income tax 15,239 14,618 Long-term debt 33,928 34,394

    Total liabilities

69,063 76,229 Stockholders' equity:

    Common stock, $0.15625 par value, 50,000,000 shares authorized;     26,046,644 and 25,849,705 shares issued at June 30, 2011 and     December 31, 2010, respectively

4,070 4,039

    Additional paid-in capital

202,496 200,230

    Accumulated deficit

(194,579) (186,068)

    Accumulated other comprehensive income

13,016 8,403

    Treasury stock at cost, 721,027 shares for 2010 and 2011

(2,534) (2,534)

    Total stockholders' equity

22,469 24,070   Total liabilities and stockholders' equity $ 91,532 $ 100,299  

APPENDIX 2: CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

        Three Months Ended June 30, 2011   2010   (Unaudited) (In thousands, except per share data) Revenues and other income:

    Sales and other operating revenue

$ 8,833 $ 5,946

    Other income

1,520 15,000

    Total revenues and other income

10,353 20,946 Operating costs and expenses:

    Lease operating expense

3,532 3,138

    Exploration expense

142 1,055

    Depreciation, depletion and amortization

1,709 673

    Accretion on discounted assets and liabilities

148 31

    General and administrative

4,154 2,837

    Gain on oil derivative contracts

(313) (783)

    Total operating costs and expenses

9,372 6,951 Operating income 981 13,995 Other expense

    Foreign currency exchange loss

(266) (83)

    Interest expense, net of interest capitalized

(331) (1,011)

    Total other expense

(597) (1,094) Income before taxes from continuing operations 384 12,901 Income tax provision 716 6,351 Income (Loss) from continuing operations, net of income taxes (332) 6,550 Loss from discontinued operations, net of income taxes (2,919) (247) Net income (loss) available to common shares $ (3,251) $ 6,303  

    Basic income (loss) available to common shares per share:

    From continuing operations, net of income taxes

$ (0.01) $ 0.27

    From discontinued operations, net of income taxes

(0.11) (0.01)

    Total basic income (loss) available to common shares per share:

$ (0.12) $ 0.26  

    Diluted income (loss) available to common shares per share:

    From continuing operations, net of income taxes

$ (0.01) $ 0.27

    From discontinued operations, net of income taxes

(0.11) (0.01)

    Total diluted income (loss) available to common shares per share:

$ (0.12) $ 0.26   Weighted average shares outstanding: Basic 25,988 24,640 Diluted 25,988 24,658  

APPENDIX 3: CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME YTD

          Six Months Ended June 30, 2011   2010   (Unaudited) (In thousands, except per share data) Revenues and other income:

    Sales and other operating revenue

$ 16,688 $ 11,456

    Other income

2,859 15,000

    Total revenues and other income

19,547 26,456 Operating costs and expenses:

    Lease operating expense

6,087 4,378

    Exploration expense

774 1,075

    Depreciation, depletion and amortization

3,148 1,677

    Accretion on discounted assets and liabilities

36 87

    General and administrative

8,800 7,842

    Loss (gain) on oil and gas derivative contracts

1,944 (814)

    Total operating costs and expenses

20,789 14,245 Operating income (loss) (1,242) 12,211 Other expense:

    Foreign currency exchange loss

(965) (77)

    Loss on the early extinguishment of debt

(4,256)

    Interest expense, net of interest capitalized

(1,752) (1,720)

    Total other expense

(2,717) (6,053) Income (Loss) before taxes from continuing operations (3,959) 6,158 Income tax provision 1,470 6,351 Loss from continuing operations, net of income taxes (5,429) (193) Loss from discontinued operations, net of income taxes (3,082) (822) Net loss available to common shares $ (8,511) $ (1,015)  

    Basic loss available to common shares per share:

    From continuing operations, net of income taxes

$ (0.21) $ (0.01)

    From discontinued operations, net of income taxes

(0.12) (0.03)

    Total basic loss available to common shares per share:

$ (0.33) $ (0.04)  

    Diluted loss available to common shares per share:

    From continuing operations, net of income taxes

$ (0.21) $ (0.01)

    From continuing operations, net of income taxes

(0.12) (0.03)

    Total diluted loss available to common shares per share:

$ (0.33) $ (0.04)   Weighted average shares outstanding: Basic 25,959 23,958 Diluted 25,959 23,958