EARNINGS / Spire Energy Ltd. Reports Financial Results For The Nine
Months Ended September 30, 1998
CALGARY, Nov. 17 /CNW/ - Spire Energy Ltd. reports that its results for
the nine months ended September 30, 1998 were essentially unchanged from the
results attained in the first nine months of 1997.
Highlights
NINE MONTHS ENDED SEPTEMBER 30
1998 1997
-----------------------------------------------------------------------
FINANCIAL
Revenue, net of royalties $ 4,210,004 $ 4,120,818
Funds from operations 2,440,502 2,537,145
Per share 0.15 0.19
Net earnings 494,502 984,645
Per share 0.03 0.07
Capital expenditures 3,505,596 7,962,951
Total assets 19,137,424 16,983,199
Net debt 4,010,228 4,303,717
Shareholders' equity $ 10,918,911 $ 9,431,602
Common shares outstanding
Weighted average 16,661,996 13,384,956
At period end 16,844,593 16,038,645
-----------------------------------------------------------------------
OPERATIONAL
-----------------------------------------------------------------------
Production (before royalties)
Natural gas (MCFD) 10,145 10,176
Average wellhead price per MCF $ 1.73 $ 1.69
Operating netback per MCF $ 1.14 $ 1.15
All-in netback per MCF $ 0.88 $ 0.92
-----------------------------------------------------------------------
The suspension of the Company's drilling activities during the previously
announced process whereby the Company had engaged financial advisors to review
alternatives to maximize shareholder value interrupted Spire's production
growth. Consequently, natural gas production for the nine months ended
September 30, 1998 remained essentially flat at 10,145 MCFD compared to 10,176
MCFD for the nine months ended September 30, 1997.
Higher natural gas prices led to a small increase in revenue, net of
royalties, for the nine months ended September 30, 1998 to $4,210,004 compared
to $4,120,818 in the equivalent period last year. However, a 15% increase in
operating costs decreased funds flow from operations to $2,440,502 in 1998
compared to $2,537,145 in 1997.
Production declines and a re-evaluation of reserves in both Abee and Oyen
increased the depletion rate to $0.65/MCF in the first nine months of 1998
compared to $0.36/MCF in the nine months ended September 30, 1997. As a
consequence, net earnings for the nine months ended September 30, 1998
declined to $494,502 from $984,645 in the first nine months of 1997.
Spire has entered into commitments to sell 3.8 MMCFD of natural gas at
$2.58/MCF for the upcoming winter heating season and $2.38/MCF for the summer
of 1999. The balance of the Company's production is currently sold on the
spot market, which has performed very well this year.
Spire is well positioned to capitalize on the current state of the
industry and will continue to grow aggressively. The Company has a modest
level of debt and it is estimated that at December 31, 1998, its debt will
represent 1.4 times Spire's trailing cash flow for the year. This will allow
the Company to pursue a growth strategy that combines acquisitions offering
low risk drilling potential with the continued development of its existing
core areas. |
