HS Resources Announces 14% Increase in Natural Gas Production; Record Quarterly Production Revenues, Cash Flow and Net Income; Increased Capital Program and Debt Repayment; Files Report on Form 8-K Providing Updated Financial Outlook

Apr 25, 2001, 01:00 ET from HS Resources, Inc.

    SAN FRANCISCO, April 25 /PRNewswire/ -- HS Resources, Inc. (NYSE:   HSE)
 today announced record results in oil and gas production, production revenues,
 operating cash flow and earnings for the quarter ended March 31, 2001.  For
 the quarter, the Company earned $32.9 million or $1.73 per diluted share,
 compared to $10.1 million or $0.53 per diluted share in the comparable prior
 year period.  Operating cash flow totaled $69.5 million or $3.65 per share,
 compared to $37.5 million or $1.96 per share for the prior year period.
 Quarterly results reflect increases in production, higher oil and natural gas
 product prices and strong operating fundamentals throughout the Company's
 business units.  During the first quarter of 2001, the Company reduced its
 outstanding indebtedness by $70.6 million.
     HS also announced that it has increased its capital expenditure program
 for 2001 to between $155 and $175 million, up from the $135 to $150 million
 planned at the beginning of the year.  The Company today filed a report on
 Form 8-K that provides details of the expanded capital program and updates the
 Company's financial outlook.  HS anticipates that the incremental capital
 expenditures will allow it to increase production by 18% to 24% in 2001 over
 2000, while generating in excess of $100 million in cash flow after capital
 expenditures.
     Oil and gas production for the quarter was 22.5 billion cubic feet of gas
 equivalent (Bcfe), or 3.76 million barrels of oil equivalent (MMBoe), an
 increase of 11% over the comparable prior year period, and 4% above the fourth
 quarter of 2000.  Approximately 80% of the production was natural gas
 (18.1 billion cubic feet) and 20% was oil (741,000 barrels).  Average daily
 gas production for the quarter was 201.1 million cubic feet (MMcf), an
 increase of 14% over the same quarter a year ago and 8% above the fourth
 quarter of 2000.  Quarterly production from the Company's D-J Basin properties
 increased 6%, to 18.6 Bcfe from 17.6 Bcfe and production from the Gulf Coast
 increased 42%, to 3.8 Bcfe from 2.7 Bcfe in the prior year quarter.
     Quarterly production revenues, including the effects of product price
 hedging, increased 68% from the comparable prior year period, to
 $104.3 million from $62.0 million, as the effect on revenue from higher
 production was compounded by materially higher commodity prices.  The
 quarterly average gas price realized by HS, including hedging effects, was
 $4.71 per thousand cubic feet (Mcf), a 59% increase from $2.96 realized in the
 first quarter of 2000.  Realized oil prices increased 26% to $25.81 from
 $20.42 per barrel (Bbl).  Hedging activities reduced current quarter realized
 gas prices by $2.60 per Mcf and realized oil prices by $2.44 per Bbl.  For the
 comparable quarter last year, hedging activities improved realized gas prices
 by $0.01 per Mcf and reduced realized oil prices by $6.91 per Bbl.  In
 addition to its oil and gas operations, the Company's wholly-owned gas
 marketing, trading and transportation company, HS Energy Services, Inc.,
 contributed $3.2 million to income before taxes for the quarter versus
 $1.5 million in the prior year quarter as a result of marketing more gas
 volumes and increasing its trading activity.
     Production taxes increased $2.1 million, principally as a result of the
 increase in production revenues on which the taxes are calculated.  Combined
 lease operating and general and administrative expenses declined on a per unit
 basis to $0.43 from $0.45 per thousand cubic feet of gas equivalent (Mcfe) or
 approximately 4%.  General and administrative expenses declined from $0.10 to
 $0.07 per Mcfe, largely due to a reclassification of certain internal costs
 into the lease operating expense category.  As a result, per unit lease
 operating expenses increased from $0.35 to $0.36 per Mcfe.  Aggregate interest
 expense decreased 9% to $11.1 million, while per-unit interest expense
 decreased to $0.49 from $0.60 per Mcfe, or 18%, resulting primarily from
 repaying debt under the Company's bank facility and amortizating principal
 associated with the December 1999 purchase and financing of the Wattenberg
 Gathering System (WGS).
 
     HS Resources also announced certain results from its oil and gas
 operations:
 
     In the D-J Basin, during the quarter HS completed 120 individual
 activities of the more than 550 activities scheduled for this year.  These
 activities included sixteen new J Sand wells, 33 J Sand deepenings and
 52 Codell refracs.
     From inception of the J Sand program in mid-1998 through the end of the
 first quarter of 2001, 122 new wells have been drilled and 199 shallow wells
 were deepened to the J Sand.  These wells have average gross reserves of
 800 MMcfe per well and initial flow rates that range between 400 and 1,500 Mcf
 per day.  Average finding costs have been $0.30 per Mcfe for deepenings and
 $0.44 per Mcfe for new wells.  HS currently plans to drill 60 new wells and
 deepen 155 wells during 2001.
     The 52 Codell refracs completed during the quarter brought the total to
 almost 820 refracs since program inception in 1997.  The refrac program has
 achieved an overall 7-fold average increase in production per well, current
 rates of return generally from 60% to more than 100%, and an average finding
 cost for incremental reserves of less than $0.71 per Mcfe.  The Company
 currently expects to complete 250 to 275 Codell refracs during the year.
     During the first quarter, throughput on WGS averaged 223 MMcf per day, an
 increase of 11% over the prior year quarter and 6% over the fourth quarter of
 2000.  The increased throughput results from both initial remedial and
 maintenance activities, as well as the continued expansion and capital
 improvements on the system which HS has undertaken in order to accommodate
 additional production growth in the field.  Final construction has been
 completed on the new Platteville compressor station, with both
 3,000 horsepower compressors now operational and adding approximately 50 MMcf
 per day of incremental throughput.  The Company plans to add further
 compression to this station in two 10 MMcf per day stages, bringing the total
 incremental capacity to 70 MMcf per day by August.  In addition, the Company
 is finalizing installation of a gas processing facility at its Ft. Lupton
 compressor station.  Initial start up is planned for early May with throughput
 of 10 MMcf per day.  Over the next several months throughput at the Ft. Lupton
 processing facility should increase to 50 MMcf per day, recovering up to
 1,500 barrels of natural gas liquids per day.
     In the Gulf Coast region, during the quarter HS drilled or participated in
 eleven wells (5.9 net), of which nine (5.5 net) were successful, resulting in
 82% gross and 93% net success rates with indicated average gross reserves of
 approximately 2 Bcfe per well.  HS operated the nine successful wells located
 in nine different project areas.  In addition to drilling, seismic acquisition
 continues in several southeast Texas and south Louisiana project areas, as
 does ongoing interpretation of previously acquired seismic data.
      Net Gulf Coast production for the quarter averaged 42.6 MMcfe per day, an
 increase of 44% over 29.6 MMcfe per day for the comparable prior year period
 and down slightly from 44.9 MMcfe per day for the fourth quarter of 2000.
 Quarterly production includes one new well that was brought on line March 11th
 and the January 31st fracture stimulation of an existing well that increased
 net production from this well 250% to 6.6 MMcfe per day.  At quarter-end
 eleven wells (6.4 net) were awaiting testing or hookup, two of which have
 since come on line.  Incremental initial net production from these eleven
 wells is estimated to be approximately 16 MMcf per day.  Thus, total Gulf
 Coast net daily production for HS could reach 60 MMcfe per day once these
 wells are placed into production over the next several months.
     In the Mid-Continent region, the HSR Brooks 1-27 continued to produce
 approximately 1.0 MMcfe per day net to the Company from the Red Fork sands.
 Two offset development locations from this well have been identified, one of
 which was spud earlier this month.  The other should be drilled later in the
 quarter.  Also, drilling in the Company's Mountain Front project has begun.
 
     As part of its price risk management program, prior to 2001 the Company
 entered into oil and gas price hedging agreements, including natural gas and
 crude oil swap contracts, covering a portion of its oil and gas production.
 There are a significant number of variables that enter into the final
 determination of the effective price HS will receive for its gas when these
 contracts are settled.  Approximately 43% of HS' 2001 estimated gas production
 has been hedged at a net wellhead price of $3.00 per Mcf and approximately
 22% of calendar 2002 estimated gas production has been hedged at a net
 wellhead price of $3.10 per Mcf.  In addition, 23% of HS' 2001 estimated oil
 production has been hedged at a NYMEX price of $18.59 per Bbl.  There are
 currently no oil hedges in place for 2002.  Quantities of gas and oil hedged,
 prices received for those quantities and the index prices for such amounts
 vary considerably from season to season during 2001 and 2002.  As a result, to
 ensure accuracy quarterly revenues for 2001 and 2002 must be calculated based
 on the specific underlying contracts in effect for each quarterly period
 rather than simply using the summary annual amounts.  Fully detailed
 information about HS' oil and gas hedge positions are reported in the
 Company's report on Form 10-K filed with the Securities and Exchange
 Commission on March 2, 2001.  The Company may change these hedge positions at
 any time.
     In light of its continued success in its D-J Basin and Gulf Coast
 exploitation and exploration efforts, the Company has recently increased its
 2001 capital expenditure plan to between $155 and $175 million, up from
 $135 to $150 million planned at the beginning of the year.  The incremental
 capital will be largely allocated to development activity in the D-J Basin.
 Under this new program, the D-J Basin will be allocated approximately 65% of
 total capital expenditures for the year, with 30% devoted to the Gulf Coast,
 and the balance to other project areas.  HS anticipates that the incremental
 capital expenditures will allow it to increase 2001 production by 18% to
 24% over calendar year 2000.  Remaining cash flow from operations may be
 applied to various uses, including debt repayment, increased capital spending,
 strategic acquisitions and stock repurchases.
     During the quarter, HS funded its capital expenditure program out of
 operating cash flow while reducing outstanding bank indebtedness by
 $65 million and retiring approximately $5.6 million of its obligation to
 Kinder-Morgan, Inc. relating to the acquisition of WGS.  Thus, HS has made
 significant progress toward achieving its goal of reducing debt by
 $100 million during 2001.  HS also expects to repurchase or call some or all
 of its $75 million 9-7/8% Senior Subordinated Notes due 2003 that are now
 callable at a slight premium.  Replacing the 9-7/8% Notes with bank debt
 results in net annualized interest savings of more than $2 million.  The
 Company's bank group has reaffirmed the Company's $325 million borrowing base
 under its existing facility.
     Chairman and CEO Nicholas J. Sutton stated, "The first quarter results
 reflect the continuing benefits of our consolidation in the D-J Basin and our
 successful exploration effort in the onshore Gulf Coast.  We believe that the
 time is right to increase our capital program and, as a result, to increase
 production dramatically.  Because of our expansion of WGS, we have
 debottlenecked the system and lowered our field-wide gathering pressures in
 the our Wattenberg area.  By doing so we have given ourselves the opportunity
 to significantly increase our capital program in this core area.  We are
 confident that we will be able to increase 2001 production by 20% over
 calendar year 2000 amounts, and by a similar amount in 2002.  All of these
 capital expenditures will be made by exploiting our extensive opportunity
 inventory.  That inventory has more than 10,000 line-item specific activities,
 virtually all of which are held by production.  Therefore, we believe that the
 Company is well positioned to post exceptional operating results for the
 foreseeable future."
     HS Resources President P. Michael Highum commented, "The D-J Basin is on
 track to complete more than 550 activities this year.  Those activities will
 lead to continued increases in production throughout the year.  In the Gulf
 Coast, our first quarter results were exceptionally strong, covering numerous
 project areas with great success.  Based on our current production and the
 nine wells awaiting hookup we anticipate a 40% increase in Gulf Coast
 production over the first quarter level.  As a result the Gulf Coast should
 provide approximately 20% of corporate production during 2001."
     James E. Duffy, the Company's CFO, added, "We remain committed to
 maintaining an efficient and appropriate capital structure.  During the course
 of the quarter we repaid a significant amount of debt, and we anticipate we
 will be able to repay more than $100 million of debt by year-end.  We note
 that our ratio of debt to book capital stood at 63.5% at the end of the first
 quarter, down from 70.1% at year end 2000 and 76.1% a year ago.  By changing
 the mix of debt through the planned calling of the $75 million 9-7/8% Notes we
 will save nearly $2 million per year of interest expense, while maintaining
 considerable financial flexibility under our $325 million credit facility."
     Statements concerning debt repayment ability and plans, and plans to
 repurchase the 9-7/8% Senior Subordinated Notes; capital expenditure plans;
 expansion plans for the Wattenberg Gathering System and related gas processing
 facilities; anticipated increases in production and cash flow; drilling,
 deepening, refracing, exploration, exploitation, development and other plans;
 continued acquisition of seismic data; expected financial flexibility; and all
 similar statements or implications are forward looking statements within the
 meaning of Federal securities laws.  Actual results or events may differ
 materially from these forward looking statements, depending upon a variety of
 factors, including commodity prices, availability of capital, results of
 exploration and other drilling, cash flow from operations, costs of materials
 and labor, availability of equipment, regulatory burdens, opportunities to
 secure favorable hedges, Company objectives and business judgment and other
 factors, both within and outside of the Company's control.  The Company's
 forward looking statements are qualified in their entirety by these and other
 factors more fully set forth on the Company's report on Form 10-K filed
 March 2, 2001 and Form 8-K filed on April 25, 2001.
 
     HS Resources, Inc. is an independent oil and gas exploration and
 development company with active projects in the D-J Basin, Gulf Coast,
 Mid-Continent and Northern Rocky Mountain regions.  The common stock of HS
 Resources, Inc. is traded on the New York Stock Exchange under the symbol
 "HSE".
 
 
                               HS Resources, Inc.
                           Summary of 2001 Operations
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In Thousands, Except Per Share Data)
 
                                                          Quarter Ended
                                                            March 31,
                                                       2001           2000
 
     Revenues:
       Oil & gas sales                               $104,303        $62,046
       Trading and transportation, net (a)              3,201          1,533
       Other gas revenues                               1,972          2,007
       Gathering and transmission system revenues       1,466          3,108
       Income from interest in gathering plant           (109)           365
       Interest and other income                          392            259
 
         Total revenues                               111,225         69,318
 
     Expenses:
       Production taxes                                 7,606          5,468
       Lease operating                                  8,109          7,024
       Gas transportation and gathering expenses        4,528          3,907
       Gathering and transmission
        system operating expense                        1,644          1,215
       DD&A                                            16,415         14,855
       Exploratory and abandonment                      3,140          2,668
       Geological and geophysical                       3,621          3,550
       Impairment and loss (gain)
        on sales of oil and gas properties                 --            100
       General and administrative                       1,493          2,026
       Interest                                        11,115         12,162
 
         Total expenses                                57,671         52,975
 
     Income before provision for income taxes          53,554         16,343
 
     Provision for income taxes - current               7,230             --
     Provision for income taxes - deferred             13,388          6,227
 
     Net income                                       $32,936        $10,116
 
     Net income per share - basic                       $1.81          $0.54
 
     Net income per share - diluted                     $1.73          $0.53
 
     Outstanding shares - basic                        18,197         18,813
 
     Outstanding shares - diluted                      19,021         19,161
 
 
     Operating cash flow (b)                          $69,500        $37,516
 
 
     Operating cash flow per share - diluted            $3.65          $1.96
 
 
     (a) Trading and transportation revenues are stated net of expenses.  The
         prior year amount, which reported the amounts on a gross basis, have
         been adjusted to reflect current period net treatment.
     (b) Net income before geological and geophysical, exploratory and
         abandonment, depreciation, depletion and amortization, impairment and
         loss on sales of oil and gas properties and deferred income taxes.
 
 
                               HS Resources, Inc.
                           Summary of 2001 Operations
 
                    SUMMARY PRODUCTION, PRICE AND COST DATA
 
                                                       Quarter Ended
                                                         March 31,
                                                                         %
                                                2001       2000        Change
 
     Production by district (MMcfe):
       D-J Basin (a)                           18,704     17,606          6%
       Gulf Coast                               3,838      2,694         42%
         Total production (MMcfe)              22,542     20,300         11%
 
     Period Production:
       Oil (MBbl)                                 741        710          4%
       Gas (MMcf)                              18,099     16,040         13%
       Equivalent Gas (MMcfe)                  22,543     20,300         11%
       Equivalent Barrels (MBoe)                3,757      3,383         11%
 
     Daily Production:
       Oil (Bbl)                                8,229      7,803          5%
       Gas (Mcf)                              201,101    176,262         14%
       Equivalent Gas (Mcfe)                  250,472    223,081         12%
       Equivalent Barrels (Boe)                41,745     37,180         12%
 
     Average oil price (Bbl)                   $25.81     $20.42         26%
     Average gas price (Mcf)                    $4.71      $2.96         59%
     Average price (Mcfe)                       $4.63      $3.06         51%
     Average price (Boe)                       $27.76     $18.34         51%
 
     Costs:
       LOE per Mcfe                             $0.36      $0.35          3%
       G&A per Mcfe                             $0.07      $0.10        -30%
       LOE and G&A per Mcfe                     $0.43      $0.45         -4%
       DD&A per Mcfe                            $0.73      $0.73          0%
       (DD&A includes depreciation
        on non oil and gas assets)
 
     (a) Includes nominal production volumes in the Northern Rockies and
         Mid-Continent.
 
 
                               HS Resources, Inc.
                           Summary of 2001 Operations
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)
 
                                                     March 31,    December 31,
                                                       2001            2000
 
     Assets
 
     Cash                                                $553         $1,790
     Accounts receivable                               97,849        101,461
     Inventory                                          1,035            904
     Gas imbalance receivable                              --            942
     Fair value of derivative
      asset from hedging activities                     4,041             --
     Fair value of derivative
      asset from non hedging activities                18,350         23,189
     Deferred taxes                                    23,049             --
     Prepaid expenses and other                         1,079          3,149
         Total current assets                         145,956        131,435
 
     Net oil and gas properties,
      net gas gathering and
      transportation facilities and other             883,233        863,762
     Deferred charges and other                         7,344          7,697
     Fair value of derivative
      asset from non hedging activities                 6,347          2,763
     Goodwill, net                                      1,890          1,980
 
     Total assets                                  $1,044,770    $ 1,007,637
 
 
                                                     March 31,    December 31,
                                                       2001           2000
 
     Liabilities and Stockholders' Equity
 
     Accounts payable and accrued expenses           $148,572       $132,859
     Gas imbalance payable                                544             --
     Fair value of derivative
      liability from hedging activities                63,892             --
     Fair value of derivative
      liability from non hedging activities            13,962         16,307
     Income taxes payable                               7,231             --
     Current portion of payable to KMI                 18,795         24,419
         Total current liabilities                    252,996        173,585
 
     Bank debt                                        124,000        189,000
     9 7/8% Subordinated notes, due 2003               74,844         74,829
     9 1/4% Subordinated notes, due 2006              231,575        231,423
     Other long-term liabilities & deferred revenue    33,555         27,056
     Fair value of derivative
      liability from hedging activities                35,033             --
     Fair value of derivative
      liability from non hedging activities             7,033            339
     Deferred taxes                                    87,473         89,824
 
     Stockholders' equity
     Net common stock                                 179,005        175,258
     Other comprehensive income
      attributable to the
      fair value of derivative securities             (60,002)            --
     Retained earnings                                 79,258         46,323
         Total stockholders' equity                   198,261        221,581
 
         Total liabilities
          and stockholders' equity                 $1,044,770     $1,007,637
 
 
                               HS Resources, Inc.
                           Summary of 2001 Operations
 
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
 
                                                           Quarter Ended
                                                             March 31,
                                                        2001           2000
 
     Cash flows from operating activities:
       Net income                                     $32,936        $10,116
       Depreciation, depletion and amortization        16,415         14,855
       Depreciation expense offset against revenue        391            312
       Ineffective portion of hedge transactions          461             --
       Impairment and loss (gain)
        on sales of oil and gas properties                 --            100
       Amortization of deferred charges,
        debt issue costs and deferred compensation      1,251            892
       Surrendered and expired acreage                  1,870          1,703
       Transfer treasury stock to 401(k) plan           1,321          1,057
       Deferred income tax provision                   13,388          6,076
       Decrease (increase) in accounts receivable       5,783         (7,464)
       Increase in accounts
        payable and accrued expenses                   30,541         21,000
       Other                                            3,210         (3,558)
 
     Net cash provided by operating activities        107,567         45,089
 
     Cash flows from investing activities:
       Exploration, development and leasehold costs   (31,745)       (28,352)
       Capitalized interest on unproved properties     (1,433)        (1,644)
       Gas gathering and
        transportation facilities additions            (3,432)          (251)
       Other property additions                        (1,448)          (116)
       Net proceeds from the
        sale of oil and gas properties                     --            163
       Increase in property related payables           (1,096)        (2,492)
 
     Net cash used in investing activities            (39,154)       (32,692)
 
     Cash flows from financing activities:
       Proceeds from bank debt                         48,000         30,000
       Repayments of bank debt                       (113,000)       (37,000)
       Repayment of KMI debt                           (5,624)        (4,675)
       Exercise of options and warrants                 1,021          1,523
       Payment of officer notes and interest            1,166             --
       Purchase of treasury stock                      (1,213)        (1,783)
 
     Net cash used in financing activities            (69,650)       (11,935)
 
     Net increase (decrease)
      in cash and cash equivalents                     (1,237)           462
 
 
     Cash and cash equivalents, beginning
      of the period                                     1,790            518
 
     Cash and cash equivalents, end
      of the period                                      $553           $980
 
 
                                 HS Resources, Inc.
                           Summary of 2001 Operations
 
              2001 DEVELOPMENT, EXPLOITATION AND EXPLORATION COSTS
                                 (In Thousands)
 
      Quarter Ended  3/31/01
                                                       Northern
                                D-J Basin  Gulf Coast  Rockies   Other    Total
     Capitalized Costs
       Land                         $11      $768      $(46)      $39      $772
       Exploration Drilling          --     9,780      (312)       25     9,493
       Development Drilling       4,806        --        --        --     4,806
       Recompletions
        and Refracs              15,975       812        --        --    16,787
       Acquisitions and other         9        --        --      (122)     (113)
       Total
        Capitalized Costs        20,801    11,360      (358)      (58)   31,745
 
     Costs Charged to Income Statement (A)
       Geological & Geophysical      90     3,385        72        78     3,625
       Exploratory Dryholes          --       284       126        --       410
       Other Exploratory             47       667       113        28       855
       Total G&G
        and Exploration Costs       137     4,336       311       106     4,890
 
     Total Development,
      Exploitation and
      Exploration Costs         $20,938   $15,696      $(47)      $48   $36,635
 
     (A) Excludes non-cash charges in the current period in the amount of
         $1.87 million for certain previously capitalized leasehold costs
         attributable to expired acreage and associated capitalized interest.
 
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SOURCE HS Resources, Inc.
    SAN FRANCISCO, April 25 /PRNewswire/ -- HS Resources, Inc. (NYSE:   HSE)
 today announced record results in oil and gas production, production revenues,
 operating cash flow and earnings for the quarter ended March 31, 2001.  For
 the quarter, the Company earned $32.9 million or $1.73 per diluted share,
 compared to $10.1 million or $0.53 per diluted share in the comparable prior
 year period.  Operating cash flow totaled $69.5 million or $3.65 per share,
 compared to $37.5 million or $1.96 per share for the prior year period.
 Quarterly results reflect increases in production, higher oil and natural gas
 product prices and strong operating fundamentals throughout the Company's
 business units.  During the first quarter of 2001, the Company reduced its
 outstanding indebtedness by $70.6 million.
     HS also announced that it has increased its capital expenditure program
 for 2001 to between $155 and $175 million, up from the $135 to $150 million
 planned at the beginning of the year.  The Company today filed a report on
 Form 8-K that provides details of the expanded capital program and updates the
 Company's financial outlook.  HS anticipates that the incremental capital
 expenditures will allow it to increase production by 18% to 24% in 2001 over
 2000, while generating in excess of $100 million in cash flow after capital
 expenditures.
     Oil and gas production for the quarter was 22.5 billion cubic feet of gas
 equivalent (Bcfe), or 3.76 million barrels of oil equivalent (MMBoe), an
 increase of 11% over the comparable prior year period, and 4% above the fourth
 quarter of 2000.  Approximately 80% of the production was natural gas
 (18.1 billion cubic feet) and 20% was oil (741,000 barrels).  Average daily
 gas production for the quarter was 201.1 million cubic feet (MMcf), an
 increase of 14% over the same quarter a year ago and 8% above the fourth
 quarter of 2000.  Quarterly production from the Company's D-J Basin properties
 increased 6%, to 18.6 Bcfe from 17.6 Bcfe and production from the Gulf Coast
 increased 42%, to 3.8 Bcfe from 2.7 Bcfe in the prior year quarter.
     Quarterly production revenues, including the effects of product price
 hedging, increased 68% from the comparable prior year period, to
 $104.3 million from $62.0 million, as the effect on revenue from higher
 production was compounded by materially higher commodity prices.  The
 quarterly average gas price realized by HS, including hedging effects, was
 $4.71 per thousand cubic feet (Mcf), a 59% increase from $2.96 realized in the
 first quarter of 2000.  Realized oil prices increased 26% to $25.81 from
 $20.42 per barrel (Bbl).  Hedging activities reduced current quarter realized
 gas prices by $2.60 per Mcf and realized oil prices by $2.44 per Bbl.  For the
 comparable quarter last year, hedging activities improved realized gas prices
 by $0.01 per Mcf and reduced realized oil prices by $6.91 per Bbl.  In
 addition to its oil and gas operations, the Company's wholly-owned gas
 marketing, trading and transportation company, HS Energy Services, Inc.,
 contributed $3.2 million to income before taxes for the quarter versus
 $1.5 million in the prior year quarter as a result of marketing more gas
 volumes and increasing its trading activity.
     Production taxes increased $2.1 million, principally as a result of the
 increase in production revenues on which the taxes are calculated.  Combined
 lease operating and general and administrative expenses declined on a per unit
 basis to $0.43 from $0.45 per thousand cubic feet of gas equivalent (Mcfe) or
 approximately 4%.  General and administrative expenses declined from $0.10 to
 $0.07 per Mcfe, largely due to a reclassification of certain internal costs
 into the lease operating expense category.  As a result, per unit lease
 operating expenses increased from $0.35 to $0.36 per Mcfe.  Aggregate interest
 expense decreased 9% to $11.1 million, while per-unit interest expense
 decreased to $0.49 from $0.60 per Mcfe, or 18%, resulting primarily from
 repaying debt under the Company's bank facility and amortizating principal
 associated with the December 1999 purchase and financing of the Wattenberg
 Gathering System (WGS).
 
     HS Resources also announced certain results from its oil and gas
 operations:
 
     In the D-J Basin, during the quarter HS completed 120 individual
 activities of the more than 550 activities scheduled for this year.  These
 activities included sixteen new J Sand wells, 33 J Sand deepenings and
 52 Codell refracs.
     From inception of the J Sand program in mid-1998 through the end of the
 first quarter of 2001, 122 new wells have been drilled and 199 shallow wells
 were deepened to the J Sand.  These wells have average gross reserves of
 800 MMcfe per well and initial flow rates that range between 400 and 1,500 Mcf
 per day.  Average finding costs have been $0.30 per Mcfe for deepenings and
 $0.44 per Mcfe for new wells.  HS currently plans to drill 60 new wells and
 deepen 155 wells during 2001.
     The 52 Codell refracs completed during the quarter brought the total to
 almost 820 refracs since program inception in 1997.  The refrac program has
 achieved an overall 7-fold average increase in production per well, current
 rates of return generally from 60% to more than 100%, and an average finding
 cost for incremental reserves of less than $0.71 per Mcfe.  The Company
 currently expects to complete 250 to 275 Codell refracs during the year.
     During the first quarter, throughput on WGS averaged 223 MMcf per day, an
 increase of 11% over the prior year quarter and 6% over the fourth quarter of
 2000.  The increased throughput results from both initial remedial and
 maintenance activities, as well as the continued expansion and capital
 improvements on the system which HS has undertaken in order to accommodate
 additional production growth in the field.  Final construction has been
 completed on the new Platteville compressor station, with both
 3,000 horsepower compressors now operational and adding approximately 50 MMcf
 per day of incremental throughput.  The Company plans to add further
 compression to this station in two 10 MMcf per day stages, bringing the total
 incremental capacity to 70 MMcf per day by August.  In addition, the Company
 is finalizing installation of a gas processing facility at its Ft. Lupton
 compressor station.  Initial start up is planned for early May with throughput
 of 10 MMcf per day.  Over the next several months throughput at the Ft. Lupton
 processing facility should increase to 50 MMcf per day, recovering up to
 1,500 barrels of natural gas liquids per day.
     In the Gulf Coast region, during the quarter HS drilled or participated in
 eleven wells (5.9 net), of which nine (5.5 net) were successful, resulting in
 82% gross and 93% net success rates with indicated average gross reserves of
 approximately 2 Bcfe per well.  HS operated the nine successful wells located
 in nine different project areas.  In addition to drilling, seismic acquisition
 continues in several southeast Texas and south Louisiana project areas, as
 does ongoing interpretation of previously acquired seismic data.
      Net Gulf Coast production for the quarter averaged 42.6 MMcfe per day, an
 increase of 44% over 29.6 MMcfe per day for the comparable prior year period
 and down slightly from 44.9 MMcfe per day for the fourth quarter of 2000.
 Quarterly production includes one new well that was brought on line March 11th
 and the January 31st fracture stimulation of an existing well that increased
 net production from this well 250% to 6.6 MMcfe per day.  At quarter-end
 eleven wells (6.4 net) were awaiting testing or hookup, two of which have
 since come on line.  Incremental initial net production from these eleven
 wells is estimated to be approximately 16 MMcf per day.  Thus, total Gulf
 Coast net daily production for HS could reach 60 MMcfe per day once these
 wells are placed into production over the next several months.
     In the Mid-Continent region, the HSR Brooks 1-27 continued to produce
 approximately 1.0 MMcfe per day net to the Company from the Red Fork sands.
 Two offset development locations from this well have been identified, one of
 which was spud earlier this month.  The other should be drilled later in the
 quarter.  Also, drilling in the Company's Mountain Front project has begun.
 
     As part of its price risk management program, prior to 2001 the Company
 entered into oil and gas price hedging agreements, including natural gas and
 crude oil swap contracts, covering a portion of its oil and gas production.
 There are a significant number of variables that enter into the final
 determination of the effective price HS will receive for its gas when these
 contracts are settled.  Approximately 43% of HS' 2001 estimated gas production
 has been hedged at a net wellhead price of $3.00 per Mcf and approximately
 22% of calendar 2002 estimated gas production has been hedged at a net
 wellhead price of $3.10 per Mcf.  In addition, 23% of HS' 2001 estimated oil
 production has been hedged at a NYMEX price of $18.59 per Bbl.  There are
 currently no oil hedges in place for 2002.  Quantities of gas and oil hedged,
 prices received for those quantities and the index prices for such amounts
 vary considerably from season to season during 2001 and 2002.  As a result, to
 ensure accuracy quarterly revenues for 2001 and 2002 must be calculated based
 on the specific underlying contracts in effect for each quarterly period
 rather than simply using the summary annual amounts.  Fully detailed
 information about HS' oil and gas hedge positions are reported in the
 Company's report on Form 10-K filed with the Securities and Exchange
 Commission on March 2, 2001.  The Company may change these hedge positions at
 any time.
     In light of its continued success in its D-J Basin and Gulf Coast
 exploitation and exploration efforts, the Company has recently increased its
 2001 capital expenditure plan to between $155 and $175 million, up from
 $135 to $150 million planned at the beginning of the year.  The incremental
 capital will be largely allocated to development activity in the D-J Basin.
 Under this new program, the D-J Basin will be allocated approximately 65% of
 total capital expenditures for the year, with 30% devoted to the Gulf Coast,
 and the balance to other project areas.  HS anticipates that the incremental
 capital expenditures will allow it to increase 2001 production by 18% to
 24% over calendar year 2000.  Remaining cash flow from operations may be
 applied to various uses, including debt repayment, increased capital spending,
 strategic acquisitions and stock repurchases.
     During the quarter, HS funded its capital expenditure program out of
 operating cash flow while reducing outstanding bank indebtedness by
 $65 million and retiring approximately $5.6 million of its obligation to
 Kinder-Morgan, Inc. relating to the acquisition of WGS.  Thus, HS has made
 significant progress toward achieving its goal of reducing debt by
 $100 million during 2001.  HS also expects to repurchase or call some or all
 of its $75 million 9-7/8% Senior Subordinated Notes due 2003 that are now
 callable at a slight premium.  Replacing the 9-7/8% Notes with bank debt
 results in net annualized interest savings of more than $2 million.  The
 Company's bank group has reaffirmed the Company's $325 million borrowing base
 under its existing facility.
     Chairman and CEO Nicholas J. Sutton stated, "The first quarter results
 reflect the continuing benefits of our consolidation in the D-J Basin and our
 successful exploration effort in the onshore Gulf Coast.  We believe that the
 time is right to increase our capital program and, as a result, to increase
 production dramatically.  Because of our expansion of WGS, we have
 debottlenecked the system and lowered our field-wide gathering pressures in
 the our Wattenberg area.  By doing so we have given ourselves the opportunity
 to significantly increase our capital program in this core area.  We are
 confident that we will be able to increase 2001 production by 20% over
 calendar year 2000 amounts, and by a similar amount in 2002.  All of these
 capital expenditures will be made by exploiting our extensive opportunity
 inventory.  That inventory has more than 10,000 line-item specific activities,
 virtually all of which are held by production.  Therefore, we believe that the
 Company is well positioned to post exceptional operating results for the
 foreseeable future."
     HS Resources President P. Michael Highum commented, "The D-J Basin is on
 track to complete more than 550 activities this year.  Those activities will
 lead to continued increases in production throughout the year.  In the Gulf
 Coast, our first quarter results were exceptionally strong, covering numerous
 project areas with great success.  Based on our current production and the
 nine wells awaiting hookup we anticipate a 40% increase in Gulf Coast
 production over the first quarter level.  As a result the Gulf Coast should
 provide approximately 20% of corporate production during 2001."
     James E. Duffy, the Company's CFO, added, "We remain committed to
 maintaining an efficient and appropriate capital structure.  During the course
 of the quarter we repaid a significant amount of debt, and we anticipate we
 will be able to repay more than $100 million of debt by year-end.  We note
 that our ratio of debt to book capital stood at 63.5% at the end of the first
 quarter, down from 70.1% at year end 2000 and 76.1% a year ago.  By changing
 the mix of debt through the planned calling of the $75 million 9-7/8% Notes we
 will save nearly $2 million per year of interest expense, while maintaining
 considerable financial flexibility under our $325 million credit facility."
     Statements concerning debt repayment ability and plans, and plans to
 repurchase the 9-7/8% Senior Subordinated Notes; capital expenditure plans;
 expansion plans for the Wattenberg Gathering System and related gas processing
 facilities; anticipated increases in production and cash flow; drilling,
 deepening, refracing, exploration, exploitation, development and other plans;
 continued acquisition of seismic data; expected financial flexibility; and all
 similar statements or implications are forward looking statements within the
 meaning of Federal securities laws.  Actual results or events may differ
 materially from these forward looking statements, depending upon a variety of
 factors, including commodity prices, availability of capital, results of
 exploration and other drilling, cash flow from operations, costs of materials
 and labor, availability of equipment, regulatory burdens, opportunities to
 secure favorable hedges, Company objectives and business judgment and other
 factors, both within and outside of the Company's control.  The Company's
 forward looking statements are qualified in their entirety by these and other
 factors more fully set forth on the Company's report on Form 10-K filed
 March 2, 2001 and Form 8-K filed on April 25, 2001.
 
     HS Resources, Inc. is an independent oil and gas exploration and
 development company with active projects in the D-J Basin, Gulf Coast,
 Mid-Continent and Northern Rocky Mountain regions.  The common stock of HS
 Resources, Inc. is traded on the New York Stock Exchange under the symbol
 "HSE".
 
 
                               HS Resources, Inc.
                           Summary of 2001 Operations
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In Thousands, Except Per Share Data)
 
                                                          Quarter Ended
                                                            March 31,
                                                       2001           2000
 
     Revenues:
       Oil & gas sales                               $104,303        $62,046
       Trading and transportation, net (a)              3,201          1,533
       Other gas revenues                               1,972          2,007
       Gathering and transmission system revenues       1,466          3,108
       Income from interest in gathering plant           (109)           365
       Interest and other income                          392            259
 
         Total revenues                               111,225         69,318
 
     Expenses:
       Production taxes                                 7,606          5,468
       Lease operating                                  8,109          7,024
       Gas transportation and gathering expenses        4,528          3,907
       Gathering and transmission
        system operating expense                        1,644          1,215
       DD&A                                            16,415         14,855
       Exploratory and abandonment                      3,140          2,668
       Geological and geophysical                       3,621          3,550
       Impairment and loss (gain)
        on sales of oil and gas properties                 --            100
       General and administrative                       1,493          2,026
       Interest                                        11,115         12,162
 
         Total expenses                                57,671         52,975
 
     Income before provision for income taxes          53,554         16,343
 
     Provision for income taxes - current               7,230             --
     Provision for income taxes - deferred             13,388          6,227
 
     Net income                                       $32,936        $10,116
 
     Net income per share - basic                       $1.81          $0.54
 
     Net income per share - diluted                     $1.73          $0.53
 
     Outstanding shares - basic                        18,197         18,813
 
     Outstanding shares - diluted                      19,021         19,161
 
 
     Operating cash flow (b)                          $69,500        $37,516
 
 
     Operating cash flow per share - diluted            $3.65          $1.96
 
 
     (a) Trading and transportation revenues are stated net of expenses.  The
         prior year amount, which reported the amounts on a gross basis, have
         been adjusted to reflect current period net treatment.
     (b) Net income before geological and geophysical, exploratory and
         abandonment, depreciation, depletion and amortization, impairment and
         loss on sales of oil and gas properties and deferred income taxes.
 
 
                               HS Resources, Inc.
                           Summary of 2001 Operations
 
                    SUMMARY PRODUCTION, PRICE AND COST DATA
 
                                                       Quarter Ended
                                                         March 31,
                                                                         %
                                                2001       2000        Change
 
     Production by district (MMcfe):
       D-J Basin (a)                           18,704     17,606          6%
       Gulf Coast                               3,838      2,694         42%
         Total production (MMcfe)              22,542     20,300         11%
 
     Period Production:
       Oil (MBbl)                                 741        710          4%
       Gas (MMcf)                              18,099     16,040         13%
       Equivalent Gas (MMcfe)                  22,543     20,300         11%
       Equivalent Barrels (MBoe)                3,757      3,383         11%
 
     Daily Production:
       Oil (Bbl)                                8,229      7,803          5%
       Gas (Mcf)                              201,101    176,262         14%
       Equivalent Gas (Mcfe)                  250,472    223,081         12%
       Equivalent Barrels (Boe)                41,745     37,180         12%
 
     Average oil price (Bbl)                   $25.81     $20.42         26%
     Average gas price (Mcf)                    $4.71      $2.96         59%
     Average price (Mcfe)                       $4.63      $3.06         51%
     Average price (Boe)                       $27.76     $18.34         51%
 
     Costs:
       LOE per Mcfe                             $0.36      $0.35          3%
       G&A per Mcfe                             $0.07      $0.10        -30%
       LOE and G&A per Mcfe                     $0.43      $0.45         -4%
       DD&A per Mcfe                            $0.73      $0.73          0%
       (DD&A includes depreciation
        on non oil and gas assets)
 
     (a) Includes nominal production volumes in the Northern Rockies and
         Mid-Continent.
 
 
                               HS Resources, Inc.
                           Summary of 2001 Operations
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)
 
                                                     March 31,    December 31,
                                                       2001            2000
 
     Assets
 
     Cash                                                $553         $1,790
     Accounts receivable                               97,849        101,461
     Inventory                                          1,035            904
     Gas imbalance receivable                              --            942
     Fair value of derivative
      asset from hedging activities                     4,041             --
     Fair value of derivative
      asset from non hedging activities                18,350         23,189
     Deferred taxes                                    23,049             --
     Prepaid expenses and other                         1,079          3,149
         Total current assets                         145,956        131,435
 
     Net oil and gas properties,
      net gas gathering and
      transportation facilities and other             883,233        863,762
     Deferred charges and other                         7,344          7,697
     Fair value of derivative
      asset from non hedging activities                 6,347          2,763
     Goodwill, net                                      1,890          1,980
 
     Total assets                                  $1,044,770    $ 1,007,637
 
 
                                                     March 31,    December 31,
                                                       2001           2000
 
     Liabilities and Stockholders' Equity
 
     Accounts payable and accrued expenses           $148,572       $132,859
     Gas imbalance payable                                544             --
     Fair value of derivative
      liability from hedging activities                63,892             --
     Fair value of derivative
      liability from non hedging activities            13,962         16,307
     Income taxes payable                               7,231             --
     Current portion of payable to KMI                 18,795         24,419
         Total current liabilities                    252,996        173,585
 
     Bank debt                                        124,000        189,000
     9 7/8% Subordinated notes, due 2003               74,844         74,829
     9 1/4% Subordinated notes, due 2006              231,575        231,423
     Other long-term liabilities & deferred revenue    33,555         27,056
     Fair value of derivative
      liability from hedging activities                35,033             --
     Fair value of derivative
      liability from non hedging activities             7,033            339
     Deferred taxes                                    87,473         89,824
 
     Stockholders' equity
     Net common stock                                 179,005        175,258
     Other comprehensive income
      attributable to the
      fair value of derivative securities             (60,002)            --
     Retained earnings                                 79,258         46,323
         Total stockholders' equity                   198,261        221,581
 
         Total liabilities
          and stockholders' equity                 $1,044,770     $1,007,637
 
 
                               HS Resources, Inc.
                           Summary of 2001 Operations
 
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
 
                                                           Quarter Ended
                                                             March 31,
                                                        2001           2000
 
     Cash flows from operating activities:
       Net income                                     $32,936        $10,116
       Depreciation, depletion and amortization        16,415         14,855
       Depreciation expense offset against revenue        391            312
       Ineffective portion of hedge transactions          461             --
       Impairment and loss (gain)
        on sales of oil and gas properties                 --            100
       Amortization of deferred charges,
        debt issue costs and deferred compensation      1,251            892
       Surrendered and expired acreage                  1,870          1,703
       Transfer treasury stock to 401(k) plan           1,321          1,057
       Deferred income tax provision                   13,388          6,076
       Decrease (increase) in accounts receivable       5,783         (7,464)
       Increase in accounts
        payable and accrued expenses                   30,541         21,000
       Other                                            3,210         (3,558)
 
     Net cash provided by operating activities        107,567         45,089
 
     Cash flows from investing activities:
       Exploration, development and leasehold costs   (31,745)       (28,352)
       Capitalized interest on unproved properties     (1,433)        (1,644)
       Gas gathering and
        transportation facilities additions            (3,432)          (251)
       Other property additions                        (1,448)          (116)
       Net proceeds from the
        sale of oil and gas properties                     --            163
       Increase in property related payables           (1,096)        (2,492)
 
     Net cash used in investing activities            (39,154)       (32,692)
 
     Cash flows from financing activities:
       Proceeds from bank debt                         48,000         30,000
       Repayments of bank debt                       (113,000)       (37,000)
       Repayment of KMI debt                           (5,624)        (4,675)
       Exercise of options and warrants                 1,021          1,523
       Payment of officer notes and interest            1,166             --
       Purchase of treasury stock                      (1,213)        (1,783)
 
     Net cash used in financing activities            (69,650)       (11,935)
 
     Net increase (decrease)
      in cash and cash equivalents                     (1,237)           462
 
 
     Cash and cash equivalents, beginning
      of the period                                     1,790            518
 
     Cash and cash equivalents, end
      of the period                                      $553           $980
 
 
                                 HS Resources, Inc.
                           Summary of 2001 Operations
 
              2001 DEVELOPMENT, EXPLOITATION AND EXPLORATION COSTS
                                 (In Thousands)
 
      Quarter Ended  3/31/01
                                                       Northern
                                D-J Basin  Gulf Coast  Rockies   Other    Total
     Capitalized Costs
       Land                         $11      $768      $(46)      $39      $772
       Exploration Drilling          --     9,780      (312)       25     9,493
       Development Drilling       4,806        --        --        --     4,806
       Recompletions
        and Refracs              15,975       812        --        --    16,787
       Acquisitions and other         9        --        --      (122)     (113)
       Total
        Capitalized Costs        20,801    11,360      (358)      (58)   31,745
 
     Costs Charged to Income Statement (A)
       Geological & Geophysical      90     3,385        72        78     3,625
       Exploratory Dryholes          --       284       126        --       410
       Other Exploratory             47       667       113        28       855
       Total G&G
        and Exploration Costs       137     4,336       311       106     4,890
 
     Total Development,
      Exploitation and
      Exploration Costs         $20,938   $15,696      $(47)      $48   $36,635
 
     (A) Excludes non-cash charges in the current period in the amount of
         $1.87 million for certain previously capitalized leasehold costs
         attributable to expired acreage and associated capitalized interest.
 
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