MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING WEDNESDAY, FEBRUARY 11, 1998 (5)
KERM'S TOP 21 - SPEC 15 - SERV 9 COMPANIES IN THE NEWS
At its Annual General Meeting of Shareholders today in Calgary, Anderson Exploration Ltd. (AXL/TSE) 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.
For complete report with table data, go to Message 3407198
KERM'S WATCHLIST OF COMPANIES IN THE NEWS
Neutrino Resources Inc. (NTO/TSE) reported the closing of an agreement with a senior energy producer of Calgary, through which Neutrino acquired a further 22% interest in its operated Inverness light oilfield property at Swan Hills, Alberta. Neutrino's total working interest in the Inverness Unit is now approximately 95%.
David Beckwermert, Executive Vice-President of Neutrino, reported "Under the agreement which was effective November 1st, 1997, we arranged a swap with the other producer, whereby we gained the increased working interest in Inverness and relinquished a 27% working interest to them in our non-operated Handsworth oilfield in Saskatchewan.''
Mr. Beckwermert said, ''We are pleased we are able to increase our interest in a core operated property which is demonstrating considerable potential for Neutrino. To that end, we are planning the drilling of two additional horizontal re-entries as well as a number of re-completions in Inverness during the summer of 1998.''
Beckwerkmert reported Neutrino is currently into an aggressive winter drilling program which will see a minimum of five exploratory wells drilled. Daily production rates reached 3,501 barrels of oil equivalent (BOE) per day at year end 1997, which met the company's target level.
OTHER COMPANIES IN THE NEWS
Oxbow Exploration Inc. (OXB/ASE) provided an update to current operations. The company is currently producing approximately 2,400 BOE/day weighted 70% oil and NGLs and 30% natural gas. Three core properties comprise 72% of the Company's average daily production.
The Macoun, Saskatchewan oil property is currently producing 820 BOPD net to Oxbow.
The Noel, B.C. natural gas property is currently producing 5.5 MMCFE/day (4.4 MMCFE/day net to Oxbow). An additional 5.8 MMCFE/day (net 2.7 MMCFE/day) is expected to commence production in early March.
The Rigel, B.C. oil property is currently producing from 2 wells at a rate of 960 BOE/day (480 BOE/day net to Oxbow). A horizontal development well spudded February 7, 1998 with a second horizontal location to follow.
Geoff Williams, President and CEO of Oxbow commenting on recent developments in the Company said, "The delay in start-up of new production became unavoidable because of equipment delivery delays and rig availability. Our review of the acquired Samedan lands is progressing. A total of 11 locations (4 development; 7 exploratory) have been selected for drilling over the first half of 1998."
Lodestar Energy Inc. (LEI.A - LEI.B/ASE) and Torrington Resources Ltd. (TRN/TSE) jointly announced that the proposed amalgamation between Lodestar and a wholly owned subsidiary of Torrington, as previously announced, has been approved by both the holders of Lodestar's Class A shares and Class B shares at separate shareholders' meeting held today. A total of 99.9% of the Lodestar Class A shares voted at the Class A shareholders' meeting and a total of 100% of the Lodestar Class B shares voted at the Class B shareholders' meeting voted in favour of the amalgamation.
Under the terms of the amalgamation, holders of Lodestar Class A Shares will be entitled to receive $1.15 cash for each Class A Share held, and holders of Lodestar Class B Shares shall be entitled to receive for each Class B Share held, at their election, 0.6 of a Torrington Common Share or $3.00, subject to a maximum cash amount available to all holders of Class B Shares of $720,000.
It is anticipated that the effective date of the amalgamation will occur on or about March 20, 1998 at which time Lodestar shareholders will be entitled to receive cash or Torrington common shares, or both, and the Class A shares and Class B shares of Lodestar will be delisted from the Alberta Stock Exchange.
Wild Horses Resources Ltd. (WHR.A/ASE) announced Paul Jeffrey has been appointed president and chief executive on an interim basis. He replaces Douglas Amy, who relinquishes both titles, effective Oct. 1. The company said the change reflects its desire to retain a president highly experienced in the oil and gas industry.
Noranda Inc. reported a 77% rise in profit for its fourth quarter yesterday and said it is steaming ahead with plans to spin off two divisions to shareholders.
In November, with its stock in a deep slump, Noranda announced a plan to quit the forestry and energy businesses to focus on mining. The first move was made two weeks ago when U.S. based Union Pacific Resources Group Inc. agreed to pay Noranda $1.83 billion for its 49% stake in Norcen Energy Resources Ltd., part of a wider agreement to buy all Norcen for $3.7 billion. Noranda' chief financial officer Al Thomas said he hopes the sale will close in the next three weeks.
Noranda next plans to turn over its 49% stake in Noranda Forest Inc. and its 100% of Canadian Hunter Exploration Ltd. to shareholders. Each Noranda share would entitle the holder to 0.43 of a Noranda Forest share and one Canadian Hunter share, Thomas said, adding the company believes the divisions are undervalued as part of the parent firm. The company has applied for a tax ruling on the deal, expected by early April, and will schedule a shareholders' meeting in the second quarter to approve the spinoffs.
Canadian Forest Oil Ltd. has entered into a joint venture with Ranger Oil Limited encompassing three exploration licenses in the Central Mackenzie area of the Northwest Territories. The Exploration Licenses, covering 460,000 acres, are located approximately six miles from Norman Wells, the fourth largest oilfield in Canada, and are in close proximity to the underutilized Mackenzie Valley Pipeline. Under the terms of the joint venture, Canadian Forest will earn a 50% working interest in two of the Licenses and a 25% working interest in the third.
The joint venture will undertake an initial three-well program to test prospects on each license, with the anticipation that all three wells will be drilled during the current winter drilling season. The first well is now drilling with the spudding of the second well anticipated within the next week or two.
This joint venture complements Canadian Forest's other activity in the Northwest Territories where the Company is participating with Ranger Oil Ltd. in the P-66A well currently drilling at Flett in the Ft. Liard area of the Southern Mackenzie Valley.
In addition, the Company has retained varying interests in 20 oil and/or gas Significant Discovery Leases (SDL's) in the Beaufort Sea - Mackenzie Delta area and one SDL in the Sable Island area off Canada's east coast.
Canadian Forest Oil Ltd. is a wholly owned subsidiary of Forest Oil Corporation (FST/NYSE) of Denver, Colorado. Canadian Forest is actively involved in the exploration and production of oil and gas as well as the marketing of natural gas through its wholly owned subsidiary, Producers Marketing Ltd. (ProMark).
More on this related developement can be found at biz.yahoo.com
|
