EARNINGS / Moiibus Resource Corp. 1997 Results
MOIIBUS RESOURCE CORPORATION - 1997 YEAR END RESULTS
CALGARY, April 24 /CNW/ - 1997 was a pivotal year for Moiibus. Early in
1997, the Company was faced with excessive debt, a rapidly declining
production base, just over 12 months remaining on the Company's core
undeveloped asset at Acheson and insufficient cash flow to manage the debt and
support a capital program. Financing options were limited. Debt financing
was exhausted. Moiibus sold its entire interest in Acheson, its core
property, for net proceeds of $8,201,403. Moiibus exits 1997 with no debt,
working capital of $1,760,209, an undrawn production loan facility of
$800,000, one major asset producing 50 Bbls/d of oil, and new leadership.
Year Ended Year Ended
December 31, 1997 December 31, 1996
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Financial
Petroleum & natural gas sales $ 3,254,475 $ 3,619,829
Cash flow from operations 853,211 1,283,811
Basic per share 0.11 0.20
Fully diluted per share 0.11 0.17
Net (loss) earnings (1,896,109) 54,752
Basic per share (0.25) 0.01
Fully diluted per share (0.24) 0.01
Capital expenditures, net (6,145,437) 9,512,967
Debt $ - $ 5,226,145
Common shares outstanding
Basic at year end 7,601,257 7,417,925
Fully diluted at year end 8,220,027 8,083,425
Production
Oil & liquids (Bbls/d) 243 301
Gas (Mcf/d) 1,660 886
Total (Boe/d) 409 390
Reserves
Proven
Oil & Liquids (MBbls) 94 447
Gas (MMcf) 123 4,300
Total (MBoe) 106 877
Proven & probable
Oil & Liquids (MBbls) 150 632
Gas (MMcf) 153 4,487
Total (MBoe) 165 1,081
Present value at 15% pre-tax
Proven plus probable (risked) $ 1,120,000 $ 8,064,000
Drilling and operations
In 1997, Moiibus participated in the drilling of one (80% net) successful
Belly River gas well at Acheson and one (85% net) exploration well at Ponton
both of which occurred in the first quarter. The Belly River gas well at
Acheson was brought on production in April, 1997, at a rate of 1.2 MMcf/d (1
MMcf/d net). The Ponton well tested a Grosmont feature with reserve potential
in excess of 100 billion cubic feet of gas.
With the sale of the Acheson asset the Company entered 1998 with one core
property at Nevis. The Nevis property consists of a 37.5% working interest in
two wells in the Leduc D-3 ''E'' oil pool. The original well was suspended
due to increased water cuts, after having produced 980,000 barrels of oil.
The new well, identified and drilled by Moiibus in 1996, continues to produce
at approximately 120 Bbls/d of oil (45 Bbls/d net). In 1997, the Company
identified a horizontal project to accelerate production, however with the
advent of water production in the new well (currently 6% water cut) and
reduced oil prices, the horizontal project has been canceled. The existing
producer is well placed to recover the remaining reserves in the pool, relying
on the natural bottom waterflood to provide an optimum depletion strategy.
Going forward, the Company plans to install a treater and convert the
suspended well to a water disposal well, thereby reducing operating costs and
enhancing the ultimate recovery of reserves.
Late in 1997, the Company purchased a 33.33% working interest in a
section of freehold land in Saskatchewan with potential for lower Tilston oil
production. Currently Moiibus and the operator are evaluating the merits of
shooting 3-D seismic over the play prior to drilling the first horizontal well
this summer. The prospect has the potential for additional horizontal well
development. A typical Tilston horizontal well would be expected to initially
produce 150 - 200 Bbls/d of light oil.
In December 1997, the Company shot a 2-D seismic program in southeast
Alberta. The Company will participate in the drilling of at least one well
after spring break-up with potential gross reserve additions of 2 - 5 Bcf of
gas. With under-utilized infrastructure available in the area, production from
a successful well would commence by early fall.
Effective February 1, 1998, the Company purchased a 35% working interest
in four producing Basal Quartz oil wells averaging 50 Boe/d production net to
Moiibus. The operator drilled and Moiibus participated in a new Basal Quartz
oil well. The well will commence production after spring break-up with
initial production expected to be 25 - 35 Bbls/d net to Moiibus. Potential
exists for an additional well(s) an the property, however additional seismic
may be required prior to drilling.
Financial
Petroleum and natural gas sales for the year ended December 31, 1997, in
the amount of $3,254,475 represented $2,196,876 of oil and liquids sales and
$1,057,599 of gas sales compared to sales of $3,619,829 in 1996 represented by
$3,052,895 of oil and liquids sales and $566,934 of gas sales. Oil and
liquids production for the year ended December 31, 1997, averaged 243 Bbls/d,
gas production averaged 1,660 Mcf/d (1996 oil and liquids - 301 Bbls/d, gas -
886 Mcf/d). Gas production was derived solely from the Acheson area and
commenced in August, 1996, thereby reflecting production for only a portion of
the year and was sold in 1997 reflecting production to October 31, 1997. Oil
and liquids prices averaged $24.78/Bbl (1996 - $27.73/Bbl), gas prices
averaged $1.75/Mcf for both years.
Royalties of $643,393 (1996 - $790,454) represent $4.31 /Boe (1996 -
$5.55/Boe) for the year ended December 31, 1997. Operating costs of $823,746
(1996 - $1,095,090) were incurred in 1997, averaging $5.52/Boe (1996 -
$7.68/Boe). The Company experienced a netback of $11.98/Boe (1996 -
$12.17/Boe) in 1997. Net loss for 1997 was $1,896,109 ($0.24 per share)
compared to a net income of $54,752 ($0.01 per share) for 1996. The net loss
in 1997 is primarily due to a write-down of the Company's assets of $1,307,000
combined with a high rate of depletion and depreciation.
Outlook
The primary objective moving forward into 1998 will be to broaden the
Company's current production base ensuring each prospect undergoes a rigorous
assessment of risk and value creation for every dollar spent. A conservative
approach to debt financing will be taken and only utilized for production
acquisition and development activity. As the Company rebuilds its asset base
and management team, investor confidence will be restored. With the purchase
of producing properties in the first quarter of 1998, Moiibus has increased
production to 100 Boe/d and with the new well at Camao production is expected
to be 125 - 135 Bbls/d by May, 1998. |
