EARNINGS-TOP 20 LISTED / Anderson Exploration Inc. Announces
its Financial and Operating Results for its Fiscal 1998 First
Quarter Ending December 31, 1997
TSE SYMBOL: AXL
FEBRUARY 11, 1998
CALGARY, ALBERTA--At its Annual General Meeting of Shareholders
today in Calgary, Anderson Exploration Ltd. announced its
financial and operating results for the first quarter of fiscal
1998 which ended on December 31, 1997. The Company met its
production targets for the first quarter, recording a seven
percent increase in production over the same period in the
previous year. Cash flow from operations was $90.8 million or
$0.74 per share and earnings were $11.3 million or $0.09 per
share.
Natural gas sales averaged 561 million cubic feet per day in the
quarter compared to 542 million cubic feet per day last year.
Increases in gas production were largely due to a successful
drilling and acquisition program in northeastern British Columbia
in the last half of fiscal 1997. Oil and natural gas liquid sales
increased 12 percent to 37,229 barrels per day from 33,165 barrels
per day. The acquisition of an additional interest in Swan Hills
and development work in eastern Alberta and Saskatchewan were the
major contributors to the increase, offset somewhat by the
disposal of the Company's interests in Argentina which contributed
1,550 barrels per day in the first quarter of last year. Natural
gas prices were similar to last year but crude oil and natural gas
liquids prices were 24 percent lower. As expected, these lower
prices, combined with higher costs, resulted in a decrease in cash
flow and earnings from the same period in the previous year.
Lower prices more than offset the increases in production
resulting in a decrease in revenues. Operating expenses increased
as a result of increased heavy oil production, the continuation of
workover programs at Swan Hills and Eagle and overall increases in
costs throughout the industry. General and administrative
expenses remained at the same low levels of previous years.
Net capital expenditures of $214.6 million for the first three
months of the year represent over 40 percent of the Company's
annual budget for fiscal 1998. These expenditures include the
purchase of an additional interest in the Company operated Swan
Hills Unit No. 1 for $98 million and $14 million of pipeline
expenditures related to the northern pipeline expansion project
being carried out by Federated Pipe Lines Ltd. Long term debt has
increased to $670.4 million as a result of these expenditures.
The Company drilled 132 gross (98 net) wells in the quarter and
participated in the construction of several new facilities. The
most active drilling area was in the Peace River Arch where a
total of 42 wells were drilled. An 18 million cubic feet per day
gas plant was constructed at Normandville to process both sweet
and sour gas and 15 wells were tied in to the plant. At
Gainsborough, a new oil battery was constructed.
Anderson Exploration is now in the midst of an active winter
drilling program with activity focused on gas prospects in
northeastern Alberta and northeastern British Columbia. The
Company is still operating on a total capital budget of $505
million for fiscal 1998. However, the outlook for commodity
prices, particularly oil, is significantly lower than the
Company's expectation at the time of budgeting. If prudent, the
Company may cut its capital spending in the second half of the
year if prices continue to deteriorate. In Anderson Exploration's
1997 annual report, the Company indicated that it expected to see
significant increases in production volumes in fiscal 1998, but
that the first half financial results would not meet the prior
year's results. The Company now extends that latter feeling to
the financial results for the whole year.
The Company still feels the outlook for future natural gas prices
is very positive. The construction of additional pipeline
capacity to supply export markets has already begun and, by
November 1998, significant increases in export capacity will be
available. This should result in higher natural gas prices for
Alberta producers. The recent reduction in crude oil prices and
the postponement of many heavy oil projects should cause a
decrease in industry activity levels once the winter drilling
season is over. This may well moderate some of the upward
pressure on costs that has been experienced at high activity
levels.
/T/
Three months ended
December 31
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1997 1996
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FINANCIAL, millions of dollars
(except per share amounts)
Total Revenue Before
Deducting Royalties $ 195.2 $ 207.1
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Cash Flow From Operations
Oil & gas $ 88.5 $ 116.7
Pipeline $ 2.3 $ 2.6
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Total $ 90.8 $ 119.3
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Per share $ 0.74 $ 0.98
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Earnings
Oil & gas $ 9.7 $ 35.4
Pipeline $ 1.6 $ 1.8
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Total $ 11.3 $ 37.2
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Per share $ 0.09 $ 0.31
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Net Capital Expenditures $ 214.6 $ 72.2
Long Term Debt $ 670.4 $ 497.1
Long Term Debt/Cash
Flow (Annualized) $ 1.8 $ 1.0
Working Capital (Deficiency) $ (13.2) $ 22.6
Shareholders' Equity $ 998.2 $ 924.9
Shares Outstanding (millions)
At End of Period 122.4 121.6
Weighted Average During Period 122.4 121.3
OPERATIONS
PRODUCTION/SALES
Natural Gas (Mmcf/d) 561 542
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Oil (Bbls/d) 30,700 26,464
NGL (Bbls/d) 6,529 6,701
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Total Liquids (Bbls/d) 37,229 33,165
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PRODUCT PRICES
Natural Gas ($/Mcf) $ 2.11 $ 2.07
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Oil ($/Bbl) $ 22.52 $ 29.36
NGL ($/Bbl) 21.86 29.50
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Total Liquids ($/Bbl) $ 22.40 $ 29.39
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CANADIAN OPERATING
NETBACKS ($/BOE(x))
Oil & Gas Revenue $ 21.65 $ 24.00
Royalties $ (4.31) $ (3.97)
Operating Costs $ (5.16) $ (3.83)
G&A $ (0.78) $ (0.78)
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Netback $ 11.40 $ 15.42
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(x) Gas converted to Oil @ 10 Mcf/Bbl
GROSS NUMBER OF WELLS DRILLED IN CANADA
Oil Wells 64 121
Gas Wells 46 40
Dry Holes 22 26
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132 187
Service Wells - 27
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Total Wells 132 214
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/T/
Anderson Exploration Ltd. is a Calgary based oil and gas company
operating exclusively in western Canada. Its common shares trade
under the symbol "AXL" on The Toronto Stock Exchange. |
