EARNINGS / Interaction Resources Ltd. Announces Financial and
Operating Results
Shares issued and outstanding -- 46,960,071
TSE SYMBOL: INR
APRIL 9, 1998
CALGARY, ALBERTA--Interaction Resources Ltd. ("Interaction") is
pleased to announce its financial and operating results for the
year ended December 31, 1997 and to report its updated petroleum
and natural gas reserves.
Production revenues and cash flow increased during the year ended
December 31, 1997 over the previous 15-month period ended December
31, 1996. Also the Company's reserves additions activity replaced
production 6.5 times in 1997.
The average production rate for the year was 981 barrels of oil
equivalent ("BOE") per day with an exit production rate of 1,310
BOE per day. This is an increase over the previous 12 month
calendar period of 18 percent and 42 percent respectively. The
Company's production was 59 percent natural gas and 41 percent
crude oil and NGLs. Production and revenues from the Company's
fourth quarter acquisition in the Tangent and Cecil areas of
Northwestern Alberta were included in the results beginning Dec.
1, 1997.
Revenues for the year 1997, which were derived 48 percent from
crude oil and NGL sales and 52 percent from natural gas sales,
increased 29 percent to $7.5 million compared to $5.8 million for
the 12 months ended December 31, 1996 and $7.0 million for the
previous 15-month period.
The average price received for crude oil and NGLs for the year was
$23.99 per barrel in 1997 versus $23.68 per barrel in the previous
period. The average price received for natural gas also increased
in 1997 to $1.92 per mcf compared to $1.61 per mcf in the previous
period.
Royalties decreased to 21 percent of revenues in 1997 versus 23
percent in the previous period and operating expenses increased in
1997 to $5.63 per BOE from $4.12 per BOE in the previous period.
The 1997 costs included an adjustment of prior years' costs that
amounted to $0.60 per BOE for the year.
Cash flow from operations was $2.8 million for the year which
equates to $0.08 per share. This cash flow is comparable to the
prior period which was a 15-month period. The corresponding
12-month period ended December 31, 1996 generated cash flow of
$2.3 million or $0.07 per share which calculates to a 27 percent
increase in 1997. Net income for the year was $0.6 million or
$0.02 per share. Capital expenditures made in 1997 totaled $27.2
million compared to $10.4 in the previous period. The
expenditures were comprised of $16.5 million of acquisitions and
$10.7 million of crude oil and natural gas expenditures. In
addition, Interaction made dispositions during the year of $7.3
million. The Company drilled 14 wells (8.1 net) with a success
ratio of 80 percent. On a gross basis, this resulted in seven oil
wells, four gas wells and three dry holes.
At the end of the year the Company's land holdings had increased
125 percent to 51,078 net acres (89,062 gross).
At December 31, 1997, the Company's proved plus risked probable
reserves were 5.7 million BOEs. This is comprised of 63 percent
natural gas reserves (36.1 BCF) and 37 percent oil and NGL
reserves (2.1 MMBOE). This is a 69 percent increase over the
prior year reserves (2.3 million BOE increase). The Company's
reserves are valued at $54 million discounted at 10 percent and
$44 million discounted at 15 percent. Finding costs for the year
were $7.32 for proven plus risked probable reserves.
/T/
------------------------------------------------------------
($000s) except
per share
amounts
Year Revenue Cash Cash flow Net Net income Production
Ended flow per share Income per share BOEPD
------------------------------------------------------------
1997 7,465 2,829 0.08 569 0.02 981
1996 5,771 2,291 0.07 516 0.02 831
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/T/
Interaction's Annual and Special Meeting is scheduled for 3:00
p.m. at the Petroleum Club in Calgary, Alberta on June 3, 1998. |
