EARNINGS / Gentry Resources reports 1997 Results
CALGARY, April 20 /CNW/ - Gentry Resources Ltd. is pleased to announce
its financial results for the year ended December 31, 1997. Gentry continued
to achieve record additions to its production volumes, revenues, cash flow and
reserves. Gentry's international strategy was also very successful, with the
addition of large high-reward international exploration projects in West
Africa and Australia.
Corporate Highlights
Highlights and major accomplishments for the year ended December 31, 1997
include:
- Gross revenues of $4,547,205, up 38 percent from $3,285,389 posted in
1996.
- Cash flow from operations of $1,082,306, up 28 percent from the
$843,274 generated in 1996.
- Average daily crude oil and natural gas production of 552 boe, up 46
percent from 379 boe posted in 1996.
- Total proven and probable reserves of 3,275 mboe, up 50 percent from
2,183 mboe recorded at the end of 1996.
- Proven and probable reserves were added at a cost of $2.45 per boe in
1997, up slightly from Gentry's record low of $2.08 in 1996, but still
significantly below the industry average.
- Reserve additions of 1,294 mboe replaced 1997 production by a factor
of 642%. Gentry's reserve life index now stands at 11.2 years.
- Participation in the drilling of 63 wells with a 95 percent success
rate.
- Four significant production sharing contracts with the Governments of
C“te d'Ivoire and Gabon, West Africa, were entered into with partners
such as Ranger Oil, Clyde Expro plc (a subsidiary of Gulf Canada
Resources), and Energy Africa Limited.
Financial Highlights
<<
1997 1996 % Change
---- ---- --------
Gross Revenue 4,547 3,285 38%
Cash flow from operations 1,082 843 28%
Cash flow per common share .07 .06 14%
Earnings (before tax) 16 289 (94%)
Earnings per common share (before tax) - .02 (95%)
Capital Expenditures 4,699 2,957 59%
Operational Highlights
1997 1996 % Change
____ ____ ________
Production
Crude Oil and NGLs (bbls/d) 470 323 45%
Natural Gas (mcf/d) 824 557 48%
Oil Equivalent (boe/d) 552 379 46%
Exit Rate (boe/d) 651 439 48%
Average Selling Price
Crude Oil (bbl) $23.05 $24.35 (5%)
Natural Gas (mcf) $ 1.73 $ 1.61 7%
Oil Equivalent ($/boe) $22.20 $23.13 (4%)
Reserves
Crude Oil and NGLs (mbbls) 3,055 1,964 56%
Natural Gas (mmcf) 2,197 2,195 -
----- -----
Total (mboe) 3,275 2,183 50%
Shares Outstanding at year end 15,767,192 13,879,192 14%
>>
Corporate Activity
For the year, Gentry's domestic activities focused on developing reserves
on its existing land base.
A pool extension in the Baldwinton area of southern Saskatchewan added
low-cost, crude oil reserves and led to six wells being successfully drilled
with an additional six wells planned for late 1998. In excess of 200,000 net
barrels of reserves were added at approximately $2.30 per barrel and had a
significant impact on 1997 corporate results.
The $1.7 million acquisition of a number of producing properties within
the Company's core southern Saskatchewan and central Alberta areas resulted in
increased interests in a number of the Company's existing properties.
A $375,000 acquisition of a 50 percent working interest in a non-unit
well and additional interests in the Virden Roselea unit in Manitoba was also
completed and offers significant, long-life reserves, which are expected to
have a substantial impact in 1998 and 1999. A successful horizontal well was
recently drilled and an additional two to three wells are planned for the unit
in mid-1998.
At Steelman in southeastern Saskatchewan, six successful horizontal wells
were recently drilled and are expected to lead to additional drilling in 1998
and 1999. In the Dollard unit of southwestern Saskatchewan, a total of eight
successful oil wells were drilled and tied into existing production
facilities. An additional 10 wells are planned in 1998.
While western Canadian-based activities contributed to Gentry's financial
and operational performance, international prospects offer a longer-term
strategic growth opportunity. Gentry was successful in identifying specific
exploration prospects, negotiating the rights to these concessions and
attracting quality industry participants, bringing significant international
expertise and capital to these highly prospective projects. Gentry is
participating with major international companies in the C“te d'Ivoire and
Gabon projects.
Corporate Outlook
Gentry anticipates significant growth in 1998 and continues to be
opportunity driven in its efforts to add shareholder value through its
strategic acquisitions and drilling programs, and particularly through its
carefully conceived high-impact international exploration programs.
Gentry is continuing with its $3 million capital program for 1998, and
its participation in the drilling of 80 gross wells. This increased level of
drilling activity will generate immediate cash flow and allow production
performance to continue the growth trend Gentry has consistently maintained
over the past five years. Production growth in excess of 35 percent is our
target for 1998. Longer term objectives in western Canada will see the
Company increasing its working interest participation in its core areas. The
Company will also seek out new core areas where low risk development will add
immediate cash flow.
The criteria for new areas will include pursuing high quality crude and
natural gas in areas where Gentry can take a controlling interest and begin to
more actively manage its growth. The Company's international programs are
well planned over the next year, and are generating their own momentum as the
various exploration programs progress.
Gentry is well positioned to continue to create significant increases in
its operating and financial results through 1998 and beyond.
-------------------------------------
Hugh G. Ross,
President & CEO |
