Westrend Natural Gas Inc
WRN
Shares issued 18885569
1998-01-15 close $0.5
Friday Jan 16 1998
Mark Roberts, President of the Company, would like to report that Taylor Rigs
LLC has sold and is currently completing construction on seven rigs for a total
sales value of $2,989,000.
Rig # Description Price Delivery Date
C1 250 Series Swab Unit $ 362,600.00 11-1-97
C2 350 Series Service Unit $ 588,000.00 1-31-98
C3 550 Series Drilling Unit $ 572,600.00 2-15-98
C4 350 Series Service Unit $ 588,000.00 1-31-98
C5 350 Series Service Unit $ 588,000.00 1-31-98
C6 4-Axle Custom Carrier $ 254,800.00 1-16-98
T1 3-Axle Custom Trailer $ 35,000.00 11-15-97
Total Sales Value: $2,989,000.00 Cdn
Our Third Quarter ending October 31, 1997 did not reflect any of the revenues
attributable to the above contracts due to the accounting method our auditing firm
accounts for Taylor Rigs sales on Westrend's consolidated financial statements.
Our auditing firm accounts for Taylor Rigs using a "Completed Contract" method.
This means that until the rig is entirely financed and shipped, the contract is not
completed and therefore cannot be reflected on our books. Since the management
of Westrend feels that this does not accurately reflect the current financial status of
the company, we have asked our auditing firm to change our accounting practice
to a "Percentage of Completion" form of gap accounting. We will have an answer
on this accounting question this week and will keep the shareholders informed on
this situation with a further press release.
Now for some much awaited news. Our 10 rig order from Indonesia was
confirmed by the operator on January 12, 1998. The operator will be ordering 6
of the 10 rigs now and has requested the company sell it one of the rigs under
construction. We are in negotiations on this issue in order to finalize the transfer of
funds. Each one of these rigs sells for approximately $630,000.00 Cdn with the
first two being delivered in three to three and a half months and two per month
thereafter.
Taylor Rigs has bid on two 350 series service rigs for Caltex Pacific, Int. of
Indonesia. Caltex is a joint venture of Texaco and Chevron and the nation of
Indonesia. It holds the majority of all of the concessions in Indonesia and awards
contracts for services to operators in Indonesia to perform specific oil and gas
services. A representative of Caltex has recently been in Taylor Rigs facility in
Tulsa and was impressed with the quality of the rigs Taylor builds. This visit led to
Taylor being involved in this new bid process with Caltex directly. We have been
told that we are one of two companies that meet the specifications for Caltex and
feel like we have more than an even chance at receiving this contract and others in
the near future. We should hear on this first two rig order this week.
Since there are so many other orders pending and contracts being negotiated this
week I will be updating the shareholders on a daily basis in order to keep them
informed. Most of these orders were pending and being negotiated prior to the
holidays. This week appears that all of the representatives for each of these
contracts are showing up in Tulsa. Some of these contracts have been brought to
us by our two new salesman. One of which was a very reputable sales
representative for our competition. Since no one else can fill these contracts with
the speed and quality of Taylor, we seem to be picking up all of the work. On
Monday alone, the company gave quotes to 26 independent interested parties.
Existing rig manufacturing companies are either booked a year and a half in
advance or they are simply not taking any further orders.
The President would also like to report that Alamo Logging Services, Inc., a
wholly owned subsidiary of Westrend, has entered into some exciting new
contracts to provide its services and expand its operations. Alamo will start the
first of a series of jobs on January 19, 1998 for Union Pacific Resource
Corporations South Texas Division in Dimmit County, Texas. This is an ongoing
contract to provide cased hole logging services on two to three wells per week
and should last through 1998. This contract compliments Alamo's two truck
operation out of Seguin, Texas which currently services Swift Energy.
Alamo is finalizing negotiations on a contract with a San Antonio based exploration
company to follow three drilling rigs, which will create six additional jobs per
month. This contract should commence within the next two weeks.
Alamo started its joint venture with Scientific Drilling Services, a large international
gyro company, to provide joint services for deep horizontal wells in Louisiana.
This contract started July 12, 1998 with our first job for Union Pacific Resource
Corp. in Louisiana. Alamo bills $12,000-$14,000 for two days of services for
these types of jobs.
The free point back off business, which is the ability to recover expensive MWD
tools and drill pipe once a well has become stuck in the hole, has much financial
potential. This type of business would complement Alamo's operations and allow
the company to provide another much needed service to its existing clients.
However, Alamo needed to hire a qualified engineer to perform this specific oil
and gas operation. Operators are reluctant to allow a free point back off company
to work on their wells without having an experienced engineer on staff. Alamo has
recently hired a fully qualified reputable free point back off engineer for its
operations in Louisiana and is currently ordering the necessary equipment to make
fully operational its free point back off business. Some of Alamo's existing clients
such as Chesapeak, UPRC, and Amaco, have expressed interest in using these
new services once the company's equipment is in place. Some free point back off
jobs cost in excess of $100,000 for seven days of work performed. These types
of jobs have a high profit margin, and complement the existing trucks and
equipment that Alamo already has in service.
With the company's expanding business it is currently negotiating with an individual
with excellent qualifications to fill the position of administrator for Alamo. This will
enable Alamo's current sales staff, which has been providing administrative
services, to dedicate more time to sales rather than administrative functions.
The above contracts should expand Alamo's revenues and give Alamo the ability
to use its new services and employees to attract additional operators and their
contracts throughout the year. Finally, Alamo has set one of its goals for 1998 to
expand its operations into the Gulf of Mexico. Since Scientific Drilling currently
works for operators in the Gulf of Mexico, Alamo is having discussions about joint
venturing its logging services offshore.
Finally, the company has entered into an Investor Relations agreement with Roger
Fullerton. Mr. Fullerton will act in the capacity of Investor relations on behalf of
the company and utilize his many years experience in the industry to increase
awareness and interest in the company.
WESTREND NATURAL GAS INC.
Per
Mark Roberts
President and Director
Westrend Natural Gas, Inc.
9311 San Pedro Ave., Suite 1130
San Antonio, Texas 78216
("Westrend")
Symbol: WRN.V
1-210-308-7360
For more information please contact Roger Fullerton at 612-929-7243
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