EARNINGS / Prairie Pacific Energy reports 1997 Results
CALGARY, Feb. 25 /CNW/ - Prairie Pacific Energy Corp. (ASE: PRP) earned a
net income of $448,012 (7 cents per common share) in the fiscal year ended
September 30, 1997, compared to $352,792 (6 cents per common share) for 1996,
the Company announced today. The gain was 27 per cent expressed in dollar
terms and 16.6 per cent in earnings per share; the difference was due to the
issuance of 1.03 million common shares during the reporting period. The
results reflected a one-time gain on the sale of shares in Inspan Investments
Limited of $394,865 (5.9 cents per share), compared to a similar one-time gain
on the sale of securities of $797,605 (14.1 cents per share) in fiscal 1996.
This is the second consecutive year of profits and the third year of
improved financial results, Prairie Pacific Energy's president Malcolm Todd
said. Cash flow in 1997 was $592,516 (8.8 cents per share); an increase of
$107,608 or 21 per cent compared to $484,908 (8.5 cents per share) for the
previous year. Oil and gas revenues net of royalty were up 34.5 per cent to
$1.1 million in 1997, compared to $819,865 in 1996. Processing income
declined modestly by $37,244, from $273,104 to $235,860. Expenses decreased
by 23.4 per cent from $1.2 million to $964,542.
At the Annual General and Special Meeting of Shareholders on April 3,
1998 in Vancouver, British Columbia, Prairie Pacific Energy will ask
shareholders to approve the elimination of the Company's accumulated deficit
effective September 30, 1997 through a non-cash accounting transaction. If
approved, this will be accomplished by reducing the stated capital of the
Company from $9.99 million to $2.13 million, crediting the reduction of $7.86
million to the deficit. The shareholders also will be asked to approve the
issuance by private placement of up to 100 per cent of the Company's issued
and outstanding stock, subject to Alberta Stock Exchange restrictions.
Management contemplates raising equity capital in fiscal 1998 on terms
favourable to the shareholders.
The improved 1997 results reflect a successful drilling program. Prairie
Pacific initiated production of high quality oil, natural gas and gas liquids
from the Nisku reef of the Brazeau, Alberta 12-29-48-12 W5M dual zone oil and
gas discovery. The Company also commenced production in northeast British
Columbia from the Flatrock 16-18-84-16 W6M Cadomin gas discovery and tied it
into Company-interest processing facilities.
In fiscal 1997, Prairie Pacific Energy purchased its proportional share
of a partner's interest, to increase its stake in the Cecil/West Eagle gas
processing plant and oil battery from 25 per cent to 33.33 per cent.
Subsequent to year-end, two additional Cadomin discoveries were drilled on the
Flatrock lands. Prairie Pacific is evaluating the potential for a new Cadomin
play on its acreage and considering the expansion and extension of its
processing capacity.
''The Company has entered a period of sustained improvement in its
results based on successful drilling, the expansion and extension of its
processing facilities and a constant review of its assets and resources to
take advantage of opportunities to purchase or sell assets.'' Mr. Todd said.
''In the present aggressive business climate for independent Canadian oil
and gas producers, virtually all of Prairie Pacific Energy's properties were
the subject of discussions to drill, develop, expand, or dispose in 1997 and
the first quarter of 1998. In addition we reviewed several opportunities
presented by others or uncovered by our own due diligence. The Company will
take advantage of chances to grow or to realize on its equity value from deals
that can be transacted on terms favourable to its shareholders.
''First quarter results, which will be available shortly, will indicate
the performance shareholders can expect in the current year,'' Mr. Todd said.
''Fiscal 1998 is more challenging because of weaker commodity prices, but the
year has exceptional opportunities for debt-free companies with access to
capital, strict fiscal and business discipline and tough rate-of-return
guidelines for their investments.'' |
