EARNINGS / Harbour Reports First Quarter 1998
TSE SYMBOL: HRP
MAY 29, 1998
CALGARY, ALBERTA--Harbour Petroleum Company Limited reports first
quarter cash flow from operations of $244,000 compared to
$1,260,000 in 1997. The 1997 numbers included revenue from the
Jenner and Cessford South properties that were sold in 1997. Net
oil and natural gas prices to the Company have also significantly
decreased from the first quarter of the previous year. The
corporate oil price was $14.71/bbl in 1998 compared to $22.74/bbl
for the first quarter of 1997. Harbour's corporate gas price in
1998 was $1.46/mcf, a 32 percent decrease for the same period in
1997.
Average daily oil production, including natural gas liquids, for
the first quarter of 1998 was 593 bbls compared to 263 for the
same period in 1997. Average daily natural gas production was
5,315 mcf in 1998 compared to 13,066 mcf in 1997.
Gross general and administrative expenses in 1998 are consistent
with previous quarters. These expenses will decrease in the
second quarter of 1998 as a result of management changes and fewer
consultants on staff. Net general and administrative expenses in
1998 are higher than previous quarters due mainly to changes in
the Company's capitalization policy.
Harbour's depletion, depreciation and amortization increased to
$941,000 ($9.30 per BOE) in 1998 as compared to $672,000 ($4.76
per BOE) in 1997. The Jenner and Cessfod South reserves were
included in the 1997 depletion calculation which helped to reduce
the rate.
Harbour has a working capital deficiency (excluding debt and the
gas contract) of $3.9 million as of March 31, 1998. The sale of
Wayne-Rosedale for $8.8 million will eliminate the negative
working capital position and reduce debt. The sale is scheduled
to close in mid-June 1998.
The gas contract liability recorded in 1998 of $3,282,000 (current
portion of $1,101,000) is the value of the open position on the
production shortfall for the remainder of the 10,000 GJ/D contract
using prices available at March 31, 1998. The increase from
December 31, 1997 is due to stronger natural gas market prices at
the end of the first quarter of 1998. Harbour did not record this
liability in the first quarter of 1997 because gas production
exceeded the contracted volume.
The Company has put in place contracts to purchase 3,000 GJ/D at
an average price of $1.80/GJ through to October 31, 1998 to reduce
the production shortfall. Any remaining shortfall will be
purchased on the spot market. Natural gas property acquisitions
are currently being evaluated with a view of mitigating the gas
contract and providing additional cash flow and growth potential.
Harbour Petroleum Company Limited has 27,882,847 outstanding
common shares and is listed on The Toronto Stock Exchange - symbol
HRP. |
