DENVER, Nov. 13 /PRNewswire/ -- Kestrel Energy, Inc. (Nasdaq: KEST), an independent oil and gas company, today announced results for its first quarter ended September 30, 1997.
Revenue was $221,476 compared with $285,834 in the first quarter a year ago. The Company reported a net loss of $239,378, or 5 cents per share on 4,430,990 shares outstanding, versus a net loss of $174,645, or 9 cents per share on 1,907,604 shares outstanding, in the same period last year. The increased loss is primarily attributable to expenses associated with Kestrel's expanded exploration and development drilling programs, as well as lower oil and gas revenues.
During the quarter, Kestrel began exploratory efforts in California's San Joaquin Basin. The Company holds a 50% interest in various assets associated with the Basin, including petroleum leases totaling 9,000 acres net to Kestrel and seismic data covering 16,000 miles. Kestrel's exploration program also involves a number of prospects located in the Offshore Carnarvon Basin of Western Australia.
The decline in oil and gas revenues during the quarter resulted primarily from reduced production from the Pierce Waterflood Project in Wyoming. Kestrel is presently evaluating the project and is taking remedial steps to restore production on the property to previous levels.
Kestrel also is working to increase revenues through an expanded development drilling program. In December, the Company will participate in a development well in the Kinta Field of Pittsburg County, Oklahoma. Kestrel owns a 37.3% interest in the project, which is an offset well of the Gallion #6. Kestrel owns a 3.3% working interest in the Gallion #6, which was completed in July 1997 and is producing at a rate of 550 Mcf per day.
"Our efforts during the first quarter were focused on positioning Kestrel to take advantage of what we believe is a strong and diverse base of exploration and development assets," said Timothy L. Hoops, president. "We have several wells planned for the remainder of the calendar year, and many more scheduled for 1998."
Kestrel's next exploratory well, which will target the Greer Prospect in the San Joaquin Basin, is scheduled to drill in the coming days. The Greer was originally scheduled for late August, but was rescheduled following a reassessment of the well location. Seismic data suggests the prospect has the potential to contain up to 20 million barrels of oil, if oil is present and is defined by a seismic amplitude anomaly.
Kestrel will continue to finance its exploration program with existing working capital, which stood at $4.7 million at the end of the first quarter.
Headquartered in Denver, Kestrel has producing properties in California, Louisiana, New Mexico, Oklahoma, Texas and Wyoming.
FINANCIAL RECAP Three Months Ended
September 30,
1997 1996
Revenue:
Oil and gas sales $221,476 $285,834
Interest 49,726 9,921
Gain on sale of property
and equipment 10,677 ---
Other income 62 222
Total Revenues 281,941 295,977
Costs and expenses:
Lease operating expense 97,875 129,155
Dry holes, abandoned and
impaired properties 73,658 210,031
Exploration expense 134,086 11
Depreciation and depletion 25,517 30,683
General and administrative 190,183 100,742
Total costs and expenses 521,319 470,622
Net loss $(239,378) $(174,645)
Net loss per common share $(.05) $(.09)
Weighted average number of
common shares outstanding 4,430,990 1,907,604
Statements made in this news release that are not historical facts may be forward looking statements. Actual results may differ materially from those projected in any forward looking statement. There are a number of important factors that could cause actual results to differ materially from those anticipated by any forward looking information. In addition, while the Company's current plans are to drill the wells or develop the properties cited herein at the times and in the manner described, various factors, including but not limited to actual drilling results, equipment availability or breakage, financial or other problems of the operators or co-venturers, could change those plans. A description of the risks and uncertainties which are generally attendant to Kestrel Energy and its industry and other factors which could affect the Company's financial results are included in the Company's report to the Securities and Exchange Commission on Form 10-K. |
