EARNINGS / Tessex Energy Inc reports 1997 Results
A 134% increase in natural gas production has resulted in record revenue,
cash flow and earnings for Tessex Energy Inc. (see table below).
In 1997, Tessex also grew its production of oil and liquids, with exit
production of 115 Bopd, for an average 75 Bopd in 1997, compared to 57 Bopd
in 1996, an increase of 32%.
1997 exit gas production was 4.3 Mmcf/day and average gas production was 2.6
Mmcf/day as compared to 1.11 Mmcf/day in 1996. However, most importantly, for
1998 cash flow, current production is 5.56 Mmcf/day with an additional 1.6
Mmcf/day from Cecil expected to come on stream in May, 1998.
The Company's average oil price was $26.60 / barrel down from $28.22 in 1996.
The Company's gas price; however, on a weighted average basis was $2.01/Mcf
for the year. The average price received in 1996 was $1.15/Mcf.
Average production for the year was 335 BOE, exit production was 545 BOE and
current production is 657 BOE. Of this, 77%, 79% and 85% respectively was
natural gas production.
The Company's main production gains came from its Lethbridge multizone gas
project, which went on stream in June of 1997, and from its Gold Creek oil
project.
Over 1997, the Company drilled or participated in the drilling of 7 wells
resulting in 4 multizone gas wells, 2 at it each of Lethbridge (1.9 net) and
Cecil (.5 net) and 2 (.67 net) oilwells at Gold Creek. A dry hole was drilled
at Cecil East (.5 net).
With respect to the 4th quarter; cash flow was $673,000 or 47% of total cash
flow. (2.5 cents/share).
Subject only to Shareholder and Regulatory approvals, the previously
announced Plan of Arrangement with Encounter Energy Inc. (Feb 24, 1998 and
Feb 26, 1998) will proceed with an anticipated closing of May 13, 1998.
In addition to a management team comprised of Messrs John H. Carruthers, Paul
L. Mitchell, C.A. (Butch) Bauer and Donald C. Ross; Encounter brings $5.4
million in working capital, which will be used to fund drilling and
development activities in 1998. The Plan will result in the former
shareholders of Encounter owning 21.1 % of the issued and outstanding share
capital of Tessex on a fully diluted basis. As disclosed previously, the
intent is to roll back the shares of the Amalgamated Company on a three for
one basis.
The shares of Tessex are listed on the Alberta Stock Exchange and trade under
the symbol of TES.A and the Annual and Special General Meeting will be held
May 12, 1998 at 10:00 A.M. at the Calgary Petroleum Club.
For further information, please contact: Wilfred J. Wilson, President, or
Bernie Pedersen at Tessex Energy Inc., 950, 717 - 7 Avenue S.W. Calgary,
Alberta T2P 0Z3, Telephone: (403) 266-2651.
Year Profit Profit/Share Cash Flow C.F. Share Revenue
1997 $478,000 $0.018 $1,435,000 $0.053 $2,257,000
1996 $68,000 $0.004 $399,000 $0.022 $996,000
1995 $129,000 $0.007 $371,000 $0.021 $803,000
(SIGNED)
W.J. (Bill) Wilson
President |
