EARNINGS - Spec 15 Listed / Zargon Oil & Gas Announces 1997
Earnings
ZARGON OIL AND GAS LTD. - YEAR END OPERATING AND FINANCIAL
RESULTS
1998-03-27
CALGARY, ALBERTA
Zargon Oil & Gas Ltd. reported record operating and financial results for the
year ended December 31, 1997 (see table). Calendar 1997 was Zargon's fifth
year of uninterrupted growth in reserves, production, cash flow and earnings,
all on a per share basis. On a year to year comparison, 1997 revenues climbed
43 percent, cash flow improved 50 percent and earnings increased 31 percent.
Fully diluted per share cash flow and earnings improved 22 percent and 5
percent, respectively.
Oil production averaged 1,385 Bbl/d in 1997, an increase of 37 percent from
1,012 Bbl/d in 1996. Zargon's composite 32 degree API light-medium crude
received an average field price of $24.70/Bbl in 1997, down 8 percent from
$26.91/Bbl in 1996. Natural gas production increased 72 percent to 6,360
Mcf/d in 1997 from 3,700 Mcf/d in 1996 demonstrating an increased emphasis on
gas projects. Zargon's average natural gas price increased 15 percent to
$1.86/Mcf in 1997 compared to $1.62/Mcf in l996. On an oil equivalents basis,
Zargon's 1997 production of 2,021 BOE/d represented a 46 percent increase
over the 1,382 BOE/d recorded in 1996.
Total proved reserves increased 26 percent in 1997 to 6,340 MBOE. During the
year, Zargon expanded its proved gas reserves 67 percent and oil reserves 12
percent to 22.1 Bcf and 4,134 MBbl, respectively. Total 1997 year end proved
and probable reserves are 8,333 MBOE. During 1997, Zargon replaced its
production by a factor of 2.8 times and delivered a proved finding and
development cost of $5.75/BOE.
Zargon completed a record $13.38 million capital expenditure program in 1997,
a 71 percent increase over the $7.82 million expended in 1996. Within the
1997 program, Zargon drilled 14.6 net wells (8.5 net wells in 1996), upgraded
and expanded its undeveloped land base by 28 percent to 81,400 net acres, and
acquired Oasis Energy Corporation. Oasis brought Zargon $6.72 million of
transferable non-capital tax losses in addition to production, reserves and
undeveloped acreage in West Central Alberta. Also, Zargon took advantage of
a buoyant market for oil and gas assets in 1997, divesting of $3.27 million
of non-operated, non-strategic properties.
Despite record 1997 reserve and production gains, Zargon enters 1998 in a
very strong financial position carrying a bank debt of $4.87 million,
representing less than 8 months of 1997 cash flow.
Zargon's $12-15 million 1998 capital budget is expected to deliver
substantial growth in shareholder value. Development and exploitation
activities in Zargon's core East Central Alberta and Southeast Saskatchewan
areas will provide the foundation for another year of solid production and
reserve gains. By building on the first quarter gas exploration success at
Sturgeon Lake, and with continuing property acquisitions in our Pembina joint
venture area, Zargon plans to make West Central Alberta a third important
focus area.
Earnings/ Cash Cash Flow/
Year Earnings(1) Share(2) Flow(1) Share(2) Revenue(1)
---------------------------------------------------------------------------
4th Quarter
1997 $0.54 $0.04 $2.03 $0.16 $4.60
1996 $0.85 $0.08 $1.61 $0.15 $3.61
1995 $0.12 $0.01 $0.87 $0.09 $2.10
Calendar
1997 $2.48 $0.20 $7.66 $0.62 $16.76
1996 $1.90 $0.19 $5.11 $0.51 $11.72
1995 $0.80 $0.10 $3.26 $0.37 $8.24
(1) Millions of Dollars
(2) Fully Diluted Shares
Zargon Oil & Gas Ltd. is an oil and gas company listed on the Toronto Stock
Exchange trading under the symbol "ZAR". There are currently 12.55 million
shares issued and outstanding. |
