razor,
new figures just in. they look good at first glance. what is your take.
gw
NASDAQ SYMBOL: AKSEF
MAY 29, 1997
Arakis Reports First Quarter 1997 Results
CALGARY, ALBERTA--Arakis Energy Corporation (NASDAQ:AKSEF) today
reported a net loss of $0.8 million, or $0.01 per share, for the
three months ended March 31, 1997, compared with a net loss of
$3.6 million, or $0.11 per share, in the first three months of
1996. (All amounts are in U.S. dollars). The major factor
contributing to the reduced net loss was lower depreciation and
depletion expense compared with the previous year, when
depreciation and depletion included $1.6 million for the cost of
an unsuccessful exploration well in Papua New Guinea. Other
factors contributing to the improved performance were increased
interest income, mainly resulting from the Company's large cash
balance, and reduced general and administrative expenses.
Funds applied to operations in the first quarter of 1997 totaled
$0.5 million compared with $3.4 million applied to operations in
the first quarter of 1996. The Company's working capital at March
31, 1997 was $52.7 million versus $55.3 million at December 31,
1996.
Capital expenditures in the first quarter of 1997 totaled $1.0
million, compared with $11.4 million in the same period of 1996.
The reduced spending reflects the major cutback in Arakis' capital
requirements for the Sudan Petroleum Project as the result of
agreements reached with its new Consortium partners, China
National Petroleum Corporation ("CNPC"), holding a 40 percent
interest in the Project, Petronas Carigali Overseas SDN BHD
("Petronas"), with 30 percent, and Sudapet Limited with five
percent. Since November 29, 1996, the Consortium's effective
date, CNPC and Petronas have borne substantially all Consortium
expenses (excluding bonuses and rentals payable) and will continue
to do so until the partners have matched Arakis' investment and
value-added credits, totaling $175 million (U.S.) (subject to
audit), on a pro rata basis.
To match the Arakis credits, the other Consortium partners have to
expend $300 million (U.S.) on exploration and development and $225
million (U.S.) towards the construction of the pipeline,
effectively three times the value of the Arakis credits. Sudapet
Limited's share of expenditures is being funded by way of a loan
from the other Consortium partners, including Arakis.
Activity on the Sudan Concession in the first quarter included
significant discoveries at El Nar 72a, at El Toor 50a, at Toma
South 88c, located 12 miles southeast of the Heglig field, and at
Umm Sagura 10d. Apart from the Umm Sagura location, these wells
found oil in the primary target, the Bentiu formation. At Umm
Sagura, oil was found in a secondary objective, the Zarqa
formation. Additional drilling will be necessary to fully
evaluate the reserve and production potential of all these
discoveries.
Plans for the 1500 kilometer export pipeline, which will stretch
from the Concession to Port Sudan on the Red Sea coast, continue
to move firmly ahead and on schedule. Specifications of the
pipeline, which will have a throughput design capacity of 250,000
barrels of oil per day are currently being finalized. The
pre-qualifying of bidders for the construction contracts has been
completed and bid packages will be delivered to a short list of
selected world-scale engineering firms early in June 1997. The
target date for pipeline completion and production startup is the
fourth quarter of 1999.
Subsequent to quarter end, Arakis began drilling the Wadi Saylah
No.1 exploration well on Block 15 in Oman. After giving effect to
a farmout of a portion of its working interest, Arakis retains
approximately 48 percent in the project and is responsible for 25
percent of the well costs. Arakis' net well cost is estimated at
$1.25 million.
/T/
Selected First Quarter 1997 Data
(in thousands of U.S. dollars, except
per share items) Three months ended March 31
1997 1996
Total revenues $ 907 $ 118
Net loss $ 759 $ 3,581
- per share $ 0.01 $ 0.11
Working capital $ 52,729 $ 8,213
Long-term debt, including current
portion $ 2,982 $14,042
Shareholders' equity $184,089 $74,922
Common shares outstanding, at
quarter end (in thousands) 87,989 35,203
/T/
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FOR FURTHER INFORMATION PLEASE CONTACT:
Arakis Energy Corporation
Kristine Dow
(403) 213-6714
(403) 263-2471 (FAX)
www.arakis.com
or
Arakis Energy Corporation
Ron Burrows
(403) 213-6715
(403) 263-2471 (FAX)
INDUSTRY: OIL
SUBJECT: ERN
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