EARNINGS / Penn West Petroleum Announces Record Year End Results
TSE SYMBOL: PWT
MARCH 26, 1998
CALGARY, ALBERTA--PENN WEST PETROLEUM LTD. (TSE - PWT) is pleased
to announce record results for the three months and year ended
December 31, 1997.
Gross revenues for the year ended December 31, 1997 increased by
25 percent to $217.6 million from $173.8 million for 1996. Cash
flow increased by 36 percent to $122.9 million ($3.09 basic or
$3.01 fully diluted per share) from $90.1 million ($2.51 basic or
$2.43 fully diluted per share). Net income for 1997 increased by
56 percent to $37.2 million ($0.94 per share) from $23.8 million
($0.66 per share) for the same period in 1996.
Gross revenues for the three months ended December 31, 1997
increased by 16 percent to $61.1 million from $52.6 million for
the same period in 1996. Cash flow for the fourth quarter
increased by 23 percent to $36.7 million ($0.92 basic or $0.89
fully diluted per share) from $29.9 million ($0.79 basic or $0.77
fully diluted per share) for the fourth quarter of 1996. Net
income increased by 4 percent to $10.7 million ($0.27 per share)
for the fourth quarter of 1997 versus $10.3 million ($0.27 per
share) for 1996.
/T/
The financial and operational highlights follow:
Three months ended Year ended
December 31 December 31
---------------------------------------
Percent Percent
1997 1996 Change 1997 1996 Change
---------------------------------------
FINANCIAL
($ thousands, except
per share amounts)
Gross revenues $61,096 $52,571 16 $217,559 $173,773 25
Cash flow from
Operations $36,736 $29,889 23 $122,899 $90,051 36
Basic per share $0.92 $0.79 16 $3.09 $2.51 23
Fully diluted
per share $0.89 $0.77 16 $3.01 $2.43 24
Net income $10,735 $10,307 4 $37,216 $23,839 56
Per share $0.27 $0.27 - $0.94 $0.66 42
Three months ended Year ended
December 31 December 31
-------------------------------------------
Percent Percent
1997 1996 Change 1997 1996 Change
-------------------------------------------
PRODUCTION
Oil and natural
gas liquids:
Barrels per day 13,152 11,683 13 12,604 11,483 10
------ ------ -- ------ ------ --
------ ------ -- ------ ------ --
Operating Netback
($ per barrel)
Sales price $20.50 $24.63 (17) $21.71 $21.80 -
Royalties 3.09 4.85 (36) 3.87 4.34 (11)
Operating costs 5.71 5.99 (5) 6.00 5.76 4
------ ------ ------ ------
Netback $11.70 $13.79 (15) $11.84 $11.70 1
------ ------ -- ------ ------ --
------ ------ -- ------ ------ --
Natural gas:
MMcf per day 173.9 134.0 30 164.8 129.0 28
------ ------ -- ------ ------ --
------ ------ -- ------ ------ --
Operating Netback
($ per Mcf)
Sales price $2.27 $2.12 7 $1.96 $1.74 13
Royalties 0.33 0.35 (6) 0.29 0.24 21
Operating costs 0.34 0.34 - 0.35 0.35 -
------ ------ -- ------ ------ --
Netback $1.60 $1.43 12 $1.32 $1.15 15
------ ------ -- ------ ------ --
------ ------ -- ------ ------ --
Combined totals:
Barrels of oil
Equivalent(x)
Daily Production 30,542 25,083 22 29,084 24,383 19
------ ------ -- ------ ------ --
------ ------ -- ------ ------ --
Operating Netback
($ per BOE)
Sales price $21.74 $22.78 (5) $20.50 $19.47 5
Royalties 3.20 4.13 (23) 3.29 3.30 -
Operating costs 4.42 4.57 (3) 4.57 4.59 -
------ ------ -- ------ ------ --
Netback $14.12 $14.08 - $12.64 $11.58 9
------ ------ -- ------ ------ --
------ ------ -- ------ ------ --
/T/
(x)Barrels of oil equivalent (BOE) based on 10 mcf of natural gas
equals 1 barrel of oil
/T/
DRILLING PROGRAM
Year ended Year ended
December 31, 1996 December 31, 1997
----------------- -----------------
Gross Net Gross Net
----------------- -----------------
Oil 69 64.2 63 55.3
Natural gas 71 61.7 42 31.4
Dry 22 20.8 16 15.1
--------------------------------------
162 146.7 121 101.8
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--------------------------------------
Success Rate
(in Percent) 85.8 85.2
--------- ---------
--------- ---------
UNDEVELOPED LANDS
As at December 31,
----------------------------------
Percent
1997 1996 Change
----------------------------------
Gross acres (000's)
Alberta 1,125 923 22
British Columbia 347 255 36
Saskatchewan and Manitoba 384 357 8
----------------------
Total Gross acres 1,856 1,535 21
----------------------------------
----------------------------------
Net acres (000's)
Alberta 916 745 23
British Columbia 277 221 25
Saskatchewan and Manitoba 370 352 5
----------------------
Total Net acres 1,563 1,318 19
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----------------------------------
Average working interest
(in percent) 84 86
----------------------
----------------------
RESERVES
As at December 31,
----------------------------------
Percent
1997 1996 Change
----------------------------------
Oil and natural gas liquids:
(millions of barrels)
Proven 39.0 32.6 20
Probable 8.7 7.8 12
-----------------------
47.7 40.4 18
----------------------------------
----------------------------------
Natural gas:
(billions of cubic feet)
Proven 539.4 440.3 23
Probable 99.0 74.7 33
-----------------------
638.4 515.0 24
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----------------------------------
Present value of future
cash flow before
income tax:
($ millions)
10 percent discount rate $791.9 $695.5 14
---------------------------------
---------------------------------
15 percent discount rate $638.9 $554.7 15
---------------------------------
---------------------------------
CAPITAL EXPENDITURES
($ millions)
Years ended December 31,
---------------------------------
1997 1996
---------------------------------
Net property acquisitions $ 59.6 $ 7.9
Land acquisition and retention 16.3 12.0
Geological and geophysical 8.6 6.8
Well drilling and completion 56.2 36.5
Well equipping and production
facilities 38.3 38.3
Head office and other 0.4 0.3
--------------------------------
$179.4 $101.8
--------------------------------
--------------------------------
NET FINDING AND ON-STREAM COSTS
($/BOE)
Proven reserve additions $6.67 $5.19
--------------------------------
--------------------------------
Proven plus probable
reserve additions $5.93 $5.33
--------------------------------
--------------------------------
CONDENSED BALANCE SHEET
($ thousands) As at December 31,
--------------------------------
1997 1996
--------------------------------
Assets
Current assets $ 36,268 $ 50,201
Capital assets 548,511 414,504
--------------------------------
$584,779 $464,705
--------------------------------
--------------------------------
Liabilities and
Shareholders' Equity
Current liabilities $ 51,014 $ 46,953
Long-term debt 169,468 134,880
Deferred credits 90,271 50,895
Shareholders' Equity 274,026 231,977
-------------------------------
$584,779 $464,705
-------------------------------
-------------------------------
COMMON SHARE DATA
(millions of shares) 1997 1996
--------------------------------
Weighted average:
(years ended December 31)
Basic 39.8 35.9
--------------------------------
--------------------------------
Fully diluted 43.3 39.2
--------------------------------
--------------------------------
Outstanding:
(as at December 31)
Basic 40.0 39.3
--------------------------------
--------------------------------
Fully diluted 43.6 42.7
--------------------------------
--------------------------------
/T/
The year 1997 represented another successful year of record growth
for Penn West. Penn West met or exceeded its financial and
operational targets of 1997 including production volumes, cash
flow and net income. The Company now has a five year track record
of continual, year-over-year growth in the crucial operating and
financial benchmarks that indicate sustained creation of
shareholder value.
The fourth quarter of 1997 saw Penn West post its highest
quarterly cash flow with growth of 23 percent over the same period
in 1996. This increase resulted from a 30 percent growth in
natural gas production, a 13 percent growth in oil and liquids
production, and a 7 percent increase in natural gas prices that
was offset by a 17 percent decrease in oil and liquids prices.
Penn West completed its capital program for 1997 with a favorable
drilling success rate of over 85 percent. Penn West continued its
record of successfully adding oil and natural gas reserves at low
costs in 1997, with finding costs for the year of $5.93/boe on a
proven plus probable basis.
During 1998, the Company anticipates that capital expenditures
will total $185 million. Our capital program will include the
drilling of approximately 210 wells (195 net) in a program that
focuses on increasing natural gas production in our Northern and
Central Core areas. This capital program is expected to result in
average total daily production during 1998 of between 33,000 and
34,000 barrels of oil equivalent.
Penn West Petroleum Ltd. is a Calgary based oil and natural gas
company that focuses on exploration and development activity in
Western Canada. Penn West trades on The Toronto Stock Exchange
under the symbol PWT. |
