EARNINGS / Tier One Energy Corp. reports 1997 Results
TIER ONE ENERGY CORP. announces solid 1997 financial and operating results
for its first full year of operations. Tier One credits its aggressive and
successful development and exploration drilling program at Wildmere, Alberta
for exceeding corporate production targets for 1997. Tier One exited 1997
producing 315 barrels of oil per day and over the year yielded an average of
133 barrels of oil per day. During 1997, the Company operated 76% of its
drilling program consisting of 29 gross wells (11.9 net) with a success rate
of 90%.
Financial results were significant. 1997 cashflow and earnings were $366,929
and $45,916 respectively on revenues of $918,728. The Company's average oil
price was $22.35/barrel, with the fourth quarter price achieving
$20.91/barrel despite a significant decrease in world oil prices. Tier One
entered 1998 with financial flexibility, having only $750,000 drawn at year
end on its $2.5 million bank facility.
Tier One increased its proven reserves in 1997 by 777,000 barrels of oil
equivalent, replacing production sixteen fold. 89% of this growth was
achieved through the drill bit, with the balance coming from acquisitions and
revisions. The Company's total year-end reserves, as evaluated by McDaniel's
& Associates, stand at 816,200 proven and 1,410,300 proven and probable
barrels. This provides the Company with a proven and half probable reserve
life index of 9.7 years, based on 1997 exit production.
Tier One's capital expenditures for the year were $5.8 million, including
$1.9 million for drilling and completing wells, $2.0 million for equipping,
pipelines and facilities; $ 1 million for property and Crown lease
acquisitions; and $0.9 million on seismic. For 1997 only, Tier One's finding
and development costs for proved and half probable were $5.57 per BOE.
During the second half of 1997, Tier One made significant progress towards
establishing two new light oil focus areas in Edmonton and Utikuma. Both
areas offer attractive netbacks and will command the majority of Tier One's
current 1998 capital budget of $5 million. In Edmonton, the Company controls
a 73% working interest in an abandoned Basal Quartz, oil pool evaluated by
the AEUB to have 3.0 million barrels remaining oil in place. Tier One will
exploit this 27 degrees API oil pool using proven horizontal drilling
technology. Successful results from the first well would precipitate an
additional three to five locations by year end, with potential follow-up
locations in 1999. Tier One anticipates spudding the first horizontal well
after break-up.
The Company has initiated its goal of a balanced portfolio by positioning
itself to have a strong focus on natural gas exploration activities in the
third and fourth quarter. The Company will concentrate its efforts on its
recently acquired 20,000 acre (31 sections) contiguous land block in Ukalta,
Alberta. The block is owned 100% by Tier One and is within a proven gas prone
area. Tier One's current undeveloped land base now stands at 35,000 acres.
Tier One's Class A and Class B shares trade on the Alberta Stock Exchange
under the symbols TO.A and TO.B respectively.
For further information contact Scott Dawson, President of Tier One Energy
Corp, at (403) 205-3704 or fax (403) 205-3709. |
