Simon / Tethys Energy
Yes, there has been recent devopements.
Quite a few weeks ago you asked what I thought would be a good investment. Tethys was the #1 consideration among a few others which I sent along to you. At the time I cited good management and good properties. Also commented shareholders in the company are the who's who in the oilpatch and financial cirles in Calgary. Couldn't tell you much more -- company had just gone public. But, that was enough -- a highly heralded company. Not many new public companies emerge on the market as this one did. Actually, I discussed the company before it went public and when they announced the timing of the offering, I suggested all Canadians to look at the possibility of participating in it.
Company shares were offered at $1.25 and shares quickly went up to $2.25, typical of an IPO in good light. Then shares pulled back to $1.50 with profit taking and it was here I first mentioned the company to you. Shares consolidated here for a little time and began to move up and I brought it to your attention a second time at $1.90/share. You said you were buying --- I hope you did. Shares are now selling at a hefty price in comparison to when it went public. Actually, it is up almost three times since I first suggested you look at the company. In regards to investment in the company, it was a no brainer under $2.00/share --- now, one would have to dig into financials and operations to determine value of purchase at this point in time. I don't know one person that really listened to me as I discussed the company over a period of time. Again, I hope you were the exception.
No brainers are hard to find in today's market climate. However, I think I have found another which recently went public. More on this one in my closing.
Here's copies of news releases to bring you up to date on Tethys.
EARNINGS / Tethys posts record cash flow ( Kerm is smiling )
CALGARY, August 12 /CNW/ - Tethys Energy Inc. announced today its
unaudited financial and operating results for the three and six month periods ended June 30, 1997. A summary of performance highlights for the periods is provided on the accompanying table.
Tethys reported record cash flow from operations of $1,780,050 ($0.12 per common share) for the six month period compared to $473,532 ($0.07 per common share) in the first six months of 1996. The cash flow increase was as a result of an increase in oil and liquids production of 238% from 180 barrels per day (Bbl/d) in 1996 to 608 Bbl/d in 1997 and a 152% increase in natural gas production from 2,306 thousand cubic feet per day (Mcf/d) in 1996 to 5,819 Mcf/d in 1997. Net income was $342,574 ($0.02/share) in 1997 compared to 43,987 ($0.01/share) in 1996.
Capital expenditures for the six month period were $8,652,426 in 1997 compared to $737,703 in 1996.
Tethys drilled two 50% working interest wells in the second quarter. The 4-21-52-10 W5M well encountered a shale channel in the prospective Rock Creek zone and the well was abandoned. A successful Rock Creek gas well was drilled at 14-28-52-11 W5M and placed on production on August 1, 1997. The well tested at over 3 MMcf/d and is currently producing 1.7 MMcf/d against a flowing tubing pressure of 1,000 psi. A follow-up location will likely be drilled in section 33-52-11 W5M. In addition, Tethys is planning to drill a Cardium location in the Carrot Creek area in the second half of 1997.
Tethys is actively pursuing prospects in southeastern Saskatchewan. Tethys purchased 1,600 acres in Saskatchewan at Crown land sales during the second quarter. Numerous farmout and acquisition offers have been made. Tethys hopes to finalize a number of deals, which are currently being negotiated, which will lead to drilling locations in the fourth quarter of 1997 and the first quarter of 1998.
Tethys commenced a 3-D seismic program on an exploration play in northern Alberta at the end of the second quarter. Depending on the seismic results, drilling locations may follow in the first quarter of 1998.
During the second quarter of 1997, Tethys purchased a 100% interest in the 14-8-54-12 W5M well and associated lands in the Carrot Creek/Niton area for $2.1 million. This well adds 90 BOE/d of production to the Company and expands its reserve and production base in the Carrot Creek core area. In addition Tethys spent $145,000 purchasing a small interest in the Carrot Creek gas plant and surrounding lands.
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