EARNINGS / Vermilion Resources reports 1997 Results
Vermilion Resources Ltd. "Vermilion" announces its audited consolidated
financial results for the year ended December 31, 1997. Revenues were
$53,693,000 in 1997 compared to $9,323,000 in 1996. Cash flow from operations
were $26,407,000 or $0.70 per share in 1997, up from $5,169,000 or $0.24 per
share in 1996. Net earnings for 1997 improved significantly to $11,358,000 or
$0.30 per share over $1,866,000 or $0.09 per share in 1996.
Effective April 15, 1998, Vermilion will be added to the TSE 300 Composite
Index. This marks a new stage for future growth of the Company and reflects
the strength of Vermilion's shareholder base and performance to date.
The following table summarizes the results for the fiscal year ending
December 31, 1997 and 1996.
Highlights
($000's except per share amount)
Fourth Quarter Fiscal Year Ending Dec. 31
1997 1997 1996
Financial
Petroleum & Natural Gas Revenues $13,028 $53,693 $9,323
Cash Flow from Operations 5,344 26,407 5,169
Per Share 0.12 0.70 0.24
Net Earnings 2,307 11,358 1,866
Per Share $0.05 $0.30 $0.09
Balance Sheet
Working Capital Deficit $2,877 $143
Long term Debt 17,549 13,404
Capital Assets 108,254 27,720
Shareholders Equity $ 77,722 $21,256
Common Shares Outstanding
End of Period 42,154,338 29,909,864
Weighted Average 37,773,872 21,403,004
Fully Diluted, End of Period 45,580,231 32,982,935
Share Trading
High $9.75 $4.50
Low 3.85 0.70
Close $8.25 $4.50
Net Asset Value per Share $6.67 $2.00
Undeveloped Land Holdings (net acres) 166,601 45,450
Acquisition and Finding Costs (per proven BOE) $2.34 $3.16
Recycle Ratio 4.7 3.4
Crude Oil and natural gas production on a barrel of oil equivalent basis
increased to 6,573 BOEPD in 1997 from 1,307 BOEPD in 1996. The increase was
a combination of the acquisition of crude oil properties in France followed
by an extensive workover and well reactivation program. In addition, the
Company's drilling success at Chip Lake has lead to increased average
production in Canada in 1997 with further production awaiting facilities and
pipeline construction in the first half of 1998.
Property Production Summary
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1997 1996
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Average Average Average Average
Oil & NGL's Gas Average Oil & NGL's Gas Average
Bbls/d Mmcf/d Boepd Bbls/d Mmcf/d Boepd
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Chip Lake 654 7.02 1,356 332 4.62 794
Minor Properties 149 1.92 341 215 2.98 513
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Total Canada 803 8.94 1,697 547 7.60 1,307
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France
Aquitaine Basin 3,120 - 3,120 - - -
Paris Basin 988 - 988 - - -
Non-operated 565 2.03 768 - - -
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Total France 4,673 2.03 4,876 - - -
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Combined Total 5,476 10.97 6,573 547 7.60 1,307
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Vermilion's capital program for 1997 increased to $78.6 million of which
$46.0 million represented the acquisition of properties in France (including
$8.1 million of pre-acquisition costs paid in 1996). The Company raised
equity to pay for the France acquisition and maintained an under-levered debt
position of $15.0 million (net of cash) entering 1998. In the first quarter
of 1998, Vermilion completed an acquisition of producing properties at Chip
Lake followed by a bought deal equity financing of $40.0 million. The Company
remains positioned for further acquisition activity in 1998.
December 31, 1997 ($000's)
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Capital Expenditures 1997 1996
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Drilling & Development Expenditures
Canada $19,267 $7,076
France 21,487 -
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40,754 7,076
Property Acquisition Costs (Net) 46,038 12,194
Preacquisition Costs - France (8,158) 8,158
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$78,634 $27,428
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Funding of Capital Program
Cash Flow $26,407 $5,169
Debt and Working Capital 7,835 8,452
Equity 44,392 13,807
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$78,634 $27,428
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Wells Drilled
Canada 15 (13.6 net)
France 2 (2.0 net)
Operating Statistics
The following operations netback of $12.94 per barrel lead to a cash flow
netback of $11.00 per barrel versus $10.78 per barrel in 1996.
Operating Statistics ($000's)
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Year Ended Dec.31,1997 Year Ended Dec.31,1996
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Oil & Oil &
NGL's Gas Total NGL's Gas Total
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Consolidated
Revenues $44,055 $9,638 $53,693 $4,759 $4,564 $9,323
Royalties
(net of ARTC) (7,200) (1,357) (8,557) (723) (690) (1,413)
Lifting Costs (11,460) (2,628) (14,088) (564) (952) (1,516)
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Operating Income $25,395 $5,653 $31,048 $3,472 $2,922 $6,394
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Consolidated
Prices $22.04 $2.41 $22.38 $23.77 $1.63 $19.43
Royalties
(net of ARTC) (3.60) (0.34) (3.57) (3.61) (0.25) (2.94)
Lifting Costs (5.73) (0.66) (5.87) (2.82) (0.34) (3.16)
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Operating netback $12.71 $1.41 $12.94 $17.34 $1.04 $13.33
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Reserves
On a consolidated basis, Vermilion's reserve base increased fivefold as at
December 31, 1997 to 50.8 million barrels of oil equivalent (MmBoe) of proven
plus 50% probable reserves from 10.1 MmBoe in the prior year. The France
acquisition and subsequent development of those assets in combination with
the drilling program in Canada accounted for the increase in reserves.
Summary of Reserves
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15% DCF
Oil Gas NGL ($000's)
Mbbls Mmcf Mbbls MBOE (before
taxes)
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Canadian Assets
Total Proven 926 70,399 4,562 12,527 $68,421
Total Proven
Plus 50%
Probable 1,066 88,522 5,451 15,369 79,697
France Assets
Total Proven 29,058 12,890 - 30,347 203,101
Total Proven
Plus 50%
Probable 33,810 15,964 - 35,406 225,512
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Combined
Total Proven 29,984 83,289 4,562 42,874 271,522
Total Proven
Plus 50%
Probable 34,876 104,486 5,451 50,775 $305,209
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For further information, please contact:
Mr. Jeff Boyce Mr. Stephen Bjornson
President & C.E.O. Vice President Finance & Corporate
Secretary
Vermilion Resources Ltd. Vermilion Resources Ltd.
(403) 269-4884 (403) 269-4884
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