Gentry Poised for Record 2000 Production Volumes and Cash Flows, Provides
Exploration Update
CALGARY, Sept. 28 /CNW/ - Gentry Resources Ltd. ("Gentry") is pleased to
provide an update on its 2000 exploration and development activities along
with its 2000 production and cash flow estimates.
HIGHLIGHTS
- Gross production revenues for 2000 are now estimated at $14 million
compared to $11 million in previous estimates.
- Cash flows for 2000 are now estimated at $6 million ($0.29 per share)
compared to $3.6 million ($0.17 per share) in previous estimates.
- Net income for 2000 is estimated at $2.8 million ($0.13 per share), up
significantly from $45,000 recorded at December 31, 1999.
- Production volumes are estimated to average 1,100 boe per day, a 40%
increase from 786 boe per day recorded in 1999.
- With long-term debt at $3.9 million, the Company's ratio of bank debt
to annualized cash flow is a very healthy 0.65:1.
EXPLORATION UPDATE
Baldwinton
The Company's Baldwinton property, located in west central Saskatchewan,
continues to surpass the Company's expectations. The first well of a four-
well drilling program has recently commenced. Gentry owns a 30.5% working
interest in the Baldwinton lands.
Benson
In the Benson Unit, the first of three dual-leg horizontal wells has
recently been drilled, with the second well currently being spudded. These
dual-leg horizontal wells are expected to significantly increase existing
reserves in the unit. Gentry is the second largest working interest owner in
the unit, holding a 10.9% working interest.
Weyburn
Gentry continues to reap the benefits from a horizontal injection scheme
in the Weyburn Unit, where a $1 billion miscible flood project is currently
being carried out by PanCanadian Petroleum. A total of 10 horizontal wells
have been drilled to date, and it is anticipated that five further horizontal
wells will be drilled prior to year-end.
Carrot Creek
Drilling of one well has also commenced in the Carrot Creek area where
the Company is targeting a lower Manville sand.
Steelman
In Gentry's Steelman lands, where the Company owns working interests from
2.7% to 19.9%, two horizontal wells are scheduled for drilling in the fourth
quarter of 2000. The Steelman Units have excellent potential for additional
horizontal wells.
Thornbury
During this year, the Company participated in drilling three wells,
tieing in five additional wells from earlier drilling programs, and adding
compression to a number of wells in the field. Current exploration activities
will include the evaluation of a deeper Devonian prospect, which was the focus
of a recent seismic program, as well as continuing to develop and increase the
reserves and deliverability of the existing field. Several wells are planned
for early in the first quarter of 2001. Only 21 of the 93 sections of land
have been developed to date, leaving 72 sections to be explored over the next
several years. The Company owns an 18.3% working interest in the Thornbury
lands.
Gulf of St. Lawrence
Gentry, along with its subsidiary, Sloane Petroleums Inc. ("Sloane"), has
recently increased their interest to a 10% working interest in eight large
offshore exploration permits situated in the St. Lawrence Platform sedimentary
basin within the Gulf of St. Lawrence. The Banc Beauge and Mecatina projects
encompass 150,768 hectares of offshore acreage located in water depths of less
that 350 feet.
Sloane, which is 41% owned by Gentry, recently participated in a
significant pool extension to an existing gas discovery in the Provost area of
southern Alberta. These two highly successful wells have recently been tied
in, increasing Sloane's production to approximately 275 boe/d. Sloane and its
partner have since acquired additional land holdings in the area and two
additional wells targeting potential gas will be drilled within the next ten
days.
Gentry also holds a 40% interest in Stratic Energy Corporation
("Stratic"), a company focused exclusively on international exploration,
primarily in Africa. Stratic is planning for an ambitious yet balanced program
of exploration initiatives in Côte d'Ivoire with Canadian Natural Resources
Limited (Ranger Oil) and Gabon with Energy Africa. Stratic will be
participating as to a 35% working interest in its first exploration well in
Gabon late in the fourth quarter of 2000. Stratic recently completed a
financing, raising gross proceeds of $1,750,000 to help fund its exploration
programs in West Africa.
Cash flow and earnings estimates were calculated assuming fourth quarter
prices for WTI of $31.00 USD per bbl and NYMEX gas pricing of $5.25 USD per
mcf. The Company's increased level of drilling activity will continue to
generate strong cash flow and allow production performance to continue the
growth trend Gentry has consistently maintained. The Company has considerable
financial flexibility due to low bank debt. The Company will continue to seek
value-added acquisition and drilling opportunities within its core areas of
focus.
Gentry trades on the Toronto Stock Exchange under the symbol "GNY" and
currently has 20,617,617 common shares issued and outstanding.
ADVISORY: Certain information regarding Gentry, including management's
assessment of future plans and operations, may constitute forward-looking
statements under applicable securities law and necessarily involve risks
associated with the exploration, production, marketing and transportation of
crude oil, liquids and natural gas. Consequently, actual results may differ
materially from those anticipated in the forward-looking statements. The
Company relies on litigation protection for forward-looking statements.
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For further information: Hugh Ross, President & C.E.O., Phone: (403)
264-6161, Fax: (403) 266-3069, hugh@gentryresources.com; Ketan Panchmatia,
Chief Financial Officer, Phone: (403) 264-6161, Fax: (403) 266-3069,
ketan@gentryresources.com; R. Gordon McKay, Vice-President, Exploration,
Phone: (403) 264-6161, Fax: (403) 266-3069, gord@gentryresources.com; Roger
Fullerton, Manager, Investor Relations, Phone: (612) 929-7243, Fax: (612)
836-1094, roger@gentryresources.com, Website: www.gentryresources.com
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