EARNINGS / Canadian Conquest Exploration reports 1997 Results
Canadian Conquest Exploration Inc. ("Conquest") is pleased to report its
financial and operating results for 1997, comparative highlights of which are
outlined below:
FINANCIAL (000s except per share amounts) 1997 1996 % Change
Oil and gas revenue $ 21,032 $ 23,212 -9
Cash flow 11,265 14,14 -20
Per share (basic) 19 cents 25 cents -24
Per share (fully diluted) 18 cents 24 cents -25
Net earnings 4,642 6,351 -27
Per share (basic) 8 cents 11 cents -27
Per share (fully diluted) 8 cents 11 cents -27
Gross capital expenditures 27,669 13,902 +99
Net capital expenditures 13,149 12,902 + 2
Total debt
(including working capital deficit) 16,056 14,443 +11
Shareholders' equity 39,100 33,974 + 15
Total assets 62,868 57,942 +9
Common shares outstanding at year end
Basic 60,831 58,678 +4
Fully diluted 64,878 62,731 +3
PRODUCTION
Daily production volumes
Gas (MMCF) 15.90 20.86 -24
Oil and NGLs (BBLs) 1,304 1,289 + 1
BOE 2,894 3,375 -14
Average selling prices
Natural gas per MCF $1.87 $1.61 + 16
Oil and NGLs per BBL 21.44 23.08 -7
Average netback per BOE 12.58 12.79 -2
RESERVES
BCF of natural gas 79.01 75.36 +5
MBBLs of oil and NGLs 3,915 3,602 +9
MBOE 11,816 ll,l38 +6
Present value (000s) at 15% pre-tax $ 83,462 $ 84,564 -1
Note: BOE means barrels of oil equivalent where 10,000 cubic feet of gas=1
BOE
The principal factor which impacted Conquest's financial performance during
1997 was a reduction in its production volumes. Conquest's daily production
volumes were 14 percent lower last year than in 1996 due to the sale in
February 1997 of its shallow gas producing properties in northeast Alberta.
The daily production volumes from these sold properties amounted to 134 BOE
during 1997 compared to 996 BOE in 1996.
Conquest's daily production volumes exceeded 3,900 BOE in January 1998, and
are currently 4,200 BOE, setting the stage for substantial growth in cash
flow and net earnings in 1998.
In 1997, the Company's gross capital expenditures amounted to $27,669,000,
allocated as follows:
* $3,635,000 for the purchase of undeveloped land and seismic data;
* $7,732,000 for drilling and completion costs;
* $6,190,000 for the construction of gas processing and other production
facilities;
* $8,772,000 for property acquisitions; and
* $1,340,000 of miscellaneous expenditures and capitalized administrative
expenses.
During 1997, Conquest drilled 39 gross (25.9 net) wells, resulting in 19
gross (11.5 net) gas wells, nine gross (7.4 net) oil wells and 11 (7.0 net)
dry holes, achieving a success rate of 72 percent. Through these drilling
activities, the Company added 4,116,000 BOE of proven and probable reserves.
In addition, Conquest acquired 1,366,000 BOE of proven and probable reserves
through several property acquisitions. The Company's total reserve additions
in 1997 were 5,482,000 BOE at a cost of $6.45 per BOE (proven and half
probable) or $8.91 per BOE (proven only).
Conquest's reserve additions in 1997 (net of the northeast Alberta gas
reserves sold in February 1997) replaced its production volumes for the year
by 2.44 times, ensuring growth in the Company's reserve base and future cash
flows.
Conquest's capital expenditure budget for 1998 is $30,000,000 and includes
the drilling of at least 40 wells, most of which the Company will operate
with an average 70 percent working interest. Most of these wells will be
drilled in Conquest's northwest and central Alberta core areas where the
Company owns, or controls under farmin arrangements, more than 142,000 net
acres of undeveloped land. Conquest's 1998 drilling program is expected to
yield substantial growth in reserves, production, cash flow and shareholder
value. Conquest has two drilling rigs under full-time contract until April
1999 to accommodate its drilling schedule over the next 13 months.
Conquest's balance sheet remains strong, with total debt (including working
capital deficit) amounting to $16,056,000 as of December 31, 1997. This debt
level equates to about 62 percent of Conquest's $26,000,000 line of credit
with the CIBC, providing the Company with sufficient financial flexibility to
undertake an increased exploration and development program in 1998 while
continuing to pursue strategic acquisitions.
Conquest's common shares are listed for trading on the Toronto Stock Exchange
under the symbol "CCN". For further information, please contact Michael S. P.
Cooke, President and Chief Executive Officer of Conquest, at (403) 260-6300. |
