Beau Canada Reports Operating Results for the Second
Quarter of 1999
AUGUST 12, 1999
CALGARY, ALBERTA-- SUMMARY
- Gas production in the first six months of 1999 has increased 10
percent over 1998.
- Cash flow for the first half of 1999 is 20 percent higher than
the same period last year due to higher prices.
- Net income and revenue in the first six months of 1999 decreased
from 1998 due to the absence of the one-time $9.3 million gain
from the Fort Chicago/Alliance disposition the previous year.
- BOE production has decreased from 1998 levels as the first half
of 1998 includes volumes from the APL acquisition while first half
1999 volumes are affected by dispositions in the fourth quarter of1998. /T/
Highlights - Second Quarter Results
Three months Six months
ended June 30 ended June 30
--------------------------------------------------------------
Percent Percent
1999 1998 Change 1999 1998 Change
--------------------------------------------------------------Financial ($000):
Revenue 24,572 24,672 - 45,922 51,809 (11)
Cash Flow 13,016 11,062 18 23,545 19,664 20
per share 0.14 0.12 17 0.26 0.22 18
Net Income (loss) 964 (1,260) 155 599 8,774 (93)
per share 0.01 (0.01) 150 - 0.10 (100)
-------------------------------------------------------------Production:
Gas (mmcf/d) 93.8 109.7 (14) 92.0 83.4 10 Oil & Liquids
(bbls/d) 6,639 9,095 (27) 6,529 8,736 (25)
--------------------------------------------------------------Barrels of oil
equivalent/d 16,019 20,067 (20) 15,727 17,072 (8)
--------------------------------------------------------------Average Prices:
Gas per mcf $ 2.16 $ 1.77 22 $ 2.22 $ 1.77 25 Oil & Liquids
per barrel 17.82 14.29 25 15.11 13.90 9
--------------------------------------------------------------
--------------------------------------------------------------
Three months ended June 30 Six months ended June 30
--------------------------------------------------------------
1999 1998 1999 1998Drilling
Results: Gross Net Gross Net Gross Net Gross Net
--------------------------------------------------------------
Gas Wells 1 0.5 4 3.3 11 8.4 12 10.2
Oil Wells 10 6.9 - - 12 8.9 6 2.1
Dry and Abandoned 1 1.0 1 1.0 9 9.0 1 1.0
--------------------------------------------------------------
12 8.4 5 4.3 32 26.3 19 13.3
--------------------------------------------------------------Success Rate
(as a percent) 88 77 66 92/T/PRODUCTION
The Company's production averaged 16,019 boe/d in the second
quarter of 1999, up 4 percent from the previous quarter, but down
20 percent from the same quarter in 1998. This significant
variance in production during the first half of 1999 as compared
to the first half of 1998 is a result of a strategic acquisition
made in the second quarter of 1998 and the planned subsequent
disposition of assets in late 1998.
Gas production in the quarter averaged 93.8 mmcf/d, up 4 percent
from the first quarter, but down 14 percent from the same period
in 1998. Increases in gas production in the quarter resulted from
the tying in of gas wells in the Helmet/Peggo area of northeast
British Columbia and the Shiningbank area of central Alberta. Gas
production in the quarter was curtailed due to longer than
expected facility maintenance in the Helmet/Peggo area and the
Gilby/Gull Lake areas of central Alberta. Additional curtailment
resulted from the unexpected testing of the pipeline
infrastructure in northwest Alberta. The Company is currently
producing approximately 95 mmcf/d. Production increases
throughout the remainder of the year will come from the tying in
of successfully drilled wells and gas wells drilled in the second
half of the year.
Oil and natural gas liquids production averaged 6,639 bbls/d in
the quarter, up 3 percent from the volumes produced in the first
quarter of 1999, while down 27 percent from the same period in
1998. Increases in natural gas liquids production were realized
from the tying in of liquids rich gas wells in the Shiningbank
area, while increases in oil production were primarily due to the
return to production of some shut-in heavy oil in west-central
Saskatchewan. The Company continues to have approximately 300
bbls/d of heavy oil production shut-in in west-central
Saskatchewan. The Company is currently producing approximately
7,000 bbls/d of oil and natural gas liquids. Production increases
are expected as the Company brings on-stream more shut-in heavy
oil and continues to drill additional oil wells in west-central Saskatchewan.
ACTIVITY Beau Canada participated in the drilling of 12 (8.4 net) wells in
the second quarter with a success rate of 88 percent. Drilling in
the quarter occurred in the Progress area of northwest Alberta,
the Wilson Creek area of central Alberta and in the Low Lake and
Baldwinton areas of west-central Saskatchewan. In the Progress
area the Company drilled 1 (0.5 net) well which is currently being
completed. In the Wilson Creek area, the Company drilled 1 (0.5
net) Pekisko horizontal gas well. In the Low Lake and Baldwinton
areas the company drilled 10 (7.4 net) wells resulting in 9 (6.4
net) oil wells and 1 (1 net) D&A well. Production from the oil
wells came onstream early in the third quarter and added
approximately 450 bbls/d. Early in the third quarter the Company
tied in gas and natural gas liquids production in the Shiningbank
area. Additional gas well tie-ins are planned for the Cranberry
area of north-west Alberta, the Shiningbank, Carrot Creek, Gilby,
Wilson Creek areas of central Alberta and the Winter area of
west-central Saskatchewan, with much of the activity currently underway.
The Company plans on drilling an additional 54 (35 net) wells for
the remainder of 1999, with significant drilling programs planned
for the Gilby/Wilson Creek and the Shiningbank/Pine Creek/Carrot
Creek areas of central Alberta targeting liquids rich in natural
gas. The Company will continue to develop its heavy oil assets in
the Baldwinton and Low Lake areas of west-central Saskatchewan. FINANCIAL
For the six months ended June 30, 1999, Beau Canada's cash flow
increased 20 percent to $23.5 million ($0.26 per share) from $19.7
million ($0.22 per share) in 1998. Higher product prices
accounted for much of the increase in cash flow. Net income was
down 93 percent in the first six months of 1999 to $0.6 million
($0.00 per share) from $8.8 million ($0.10 per share) in 1998. A
gain of $9.3 million was realized on the sale of Beau Canada's
Alliance/Fort Chicago investment in the first quarter of 1998. /T/ |
