EARNINGS / PanCanadian Petroleum reports 1997 Results & Field Activities
CALGARY, April 16 /CNW/ - A year of ambitious drilling and internal
restructuring is paying off in solid performance and has set the stage for
long-term profitable growth at PanCanadian Petroleum Limited, David Tuer,
PanCanadian President and Chief Executive Officer, told shareholders at the
company's annual meeting today.
''With our land assets, our infrastructure assets and our human and
intellectual capital, PanCanadian is well positioned for the growth ahead,''
said Tuer, who detailed 1997 accomplishments and outlined 1998 plans and
programs.
1997 Achievements
- Net income of $330 million, or $1.31 per share, on revenue of $3.4
billion and cash flow of $961 million, or $3.82 per share.
- Daily production averaged 214,400 barrels of oil equivalent per day.
- PanCanadian found 122 million barrels of oil equivalent proved
reserves, representing a production replacement rate of 156 per cent.
- Successful acquisition of CS Resources Limited.
- Record number of working interest wells drilled was 1,820.
1998 Events and Outlook
- PanCanadian currently plans capital spending of $960 million, resulting
in the drilling of about 1,250 wells. Most spending is being directed
to exploration and development in Western Canada, where the company
anticipates accelerated development of gas reserves across its
extensive land holdings.
- Natural gas production in 1998 is expected to average 800 million cubic
feet a day and reach 880 million cubic feet a day by year end, at which
time new export pipeline capacity is scheduled to come onstream to the
U.S. Under the current budget, crude oil and natural gas liquids
production is expected to average 148,000 barrels per day and this
estimate will depend upon the crude oil price environment for the
remainder of the year.
- The company recently made six deep discoveries in Alberta, four oil and
two natural gas. For example in the Ferrier area of west central
Alberta, liquids-rich natural gas wells flowed at stabilized test rates
of 17 million cubic feet per day. This exploration success of the
deeper zones holds significant potential for future development.
- PanCanadian will save up to $23 million a year from inter-Alberta gas
transportation costs as a result of the approved load retention
service.
- PanCanadian will drill the Grand Pre exploration well off Nova Scotia.
This will test a prospect located on a block of land the company
purchased in 1997.
- PanCanadian and its partners are drilling the Llano well in the Gulf of
Mexico. First drilled in late 1997 to a depth of 25,000 feet, the well
encountered a number of petroleum-bearing zones before reaching the
depth limits of the rig. A larger rig was recently moved onto the well
and is drilling to the target depth of 28,000 feet.
- PanCanadian holds interests in 24 Gulf of Mexico blocks, making this
deep water region an exploration focus. In addition to Llano,
PanCanadian is a partner in the drilling of two other wells on
prospects called Sheba and Elvis. Sheba is currently drilling.
- Internationally PanCanadian will pursue a series of exploration and
development opportunities.
- PanCanadian's North American natural gas marketing company -
PanCanadian Energy Services - was recently established. It sells about
two billion cubic feet of gas a day from offices in Houston, Calgary
and at six other key U.S. locations.
''We are effective stewards of PanCanadian's powerful suite of assets. At
the same time, we are prepared to respond to market signals and alter our
capital program accordingly. There is little we can do to impact the price we
receive for our products - we are price takers in the world market,'' Tuer
said.
''We are focusing on things we can control, such as reducing our
operating, transportation, finding and developing costs. We are aggressively
growing our gas production while we adapt our oil strategy to meet the
challenges of the market. In addition, we are accelerating our exploration
focus in the Gulf of Mexico and internationally to build a foundation for
future growth while maintaining our strong financial position,'' Tuer said.
''With that foundation, our powerful assets will translate into growth
ahead.''
At Thursday's meeting, PanCanadian shareholders elected two new members
to its board of directors, Michael A. Grandin, Executive Vice President and
Chief Financial Officer of Canadian Pacific Limited, and Dennis A. Sharp,
Chairman and Chief Executive Officer of United Tri-Star Resources Ltd.
PanCanadian is one of Canada's largest producers and marketers of crude
oil, natural gas and natural gas liquids. Its extensive exploration and
production activities stretch from coast to coast in Canada and include a
variety of international interests in the Gulf of Mexico, the United Kingdom,
Australia, South Africa and Venezuela.
PanCanadian Petroleum Limited
David Tuer
President and Chief Executive Officer
PanCanadian Petroleum Limited
Shares Listed - Symbol: PCP
Alberta Stock Exchange
Toronto Stock Exchange
Montreal Exchange
Website: www.pancanadian.ca |
