EARNINGS / Gulf Indonesia Resources reports 1st 3 months Results
DENVER, COLORADO, April 28 /CNW/ -
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(All dollar figures in this report are US$)
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Three Months Ended March 31,
1998 1997
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FINANCIAL (thousands of dollars)
Net oil revenue 21,118 24,555
Cash generated from operations 13,112 15,695
Earnings (loss) for the period (6,062) 4,144
Capital expenditures & exploration
expenses 42,266 47,298
PER SHARE (dollars)
Cash generated from operations 0.15 0.21
Earnings (loss) for the period (0.07) 0.06
Average number of shares(x)
(millions) 87.9 73.3
VOLUMES (gross sales)
Crude oil
(thousands of barrels per day) 21.1 17.6
(x) March 31, 1998: 87.9 million shares outstanding; Gulf Canada
Resources Limited holds 63.7 million shares
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Gulf Indonesia Resources Limited continued its aggressive exploration,
exploitation and development programs during the first quarter. These programs
resulted in two discoveries, potential natural gas field extensions on the
Corridor block, and timely progress with the natural gas projects currently
under development.
''Exploration and development activities during the quarter continue to
add to Gulf Indonesia's balanced growth outlook. The oil discovery on the
Kakap block can be tied in this year, reserve extensions at Corridor are
expected as a result of delineation drilling, and a third natural gas
discovery on the South Jambi 'B' block provides the potential for another
natural gas project,'' says Dick Auchinleck, President and Chief Executive
Officer. ''These successes provide growth opportunities for the near, mid and
long-term.''
First quarter results announced today include average sales production of
21,100 barrels per day of crude oil, cash generation of $13.1 million and a
loss of $6.0 million. Oil production increased 20 per cent over first quarter
1997, but gross revenue declined $9.1 million as a result of lower realized
oil prices. The average realized oil price of $13.37 per barrel was almost 40
per cent below the first quarter of 1997 at $21.74 per barrel. The resulting
26 per cent decline in gross oil revenues contributed to reductions in cash
generation of $2.6 million and earnings of $10.2 million compared to the first
quarter last year. Additionally, the year's more aggressive drilling program
resulted in higher exploration expenses due primarily to three wells that were
plugged and abandoned during the quarter. The Company's cash balance at March
31, 1998 of $107 million remains unchanged from the year-end 1997.
The exploration program successes included the Bungin well on the South
Jambi 'B' block. This is the third natural gas discovery on the block and,
combined with two earlier discoveries, has the potential to support a natural
gas project similar in size to the Corridor Project currently under
development. The Jangkar exploration well on the Kakap block resulted in an
oil discovery that is expected to be tied-back to the KH platform, adding to
production by year-end.
Natural gas exploitation and development activities progressed well on
the Corridor Project where Gulf has a 54 per cent working interest and
operates the project. The main gas processing plant under construction at
Grissik was 95 per cent complete at quarter-end. Construction of the natural
gas pipeline to Duri, where the gas will be exchanged for crude oil, is in
progress with mechanical completion expected at the end of August. Delineation
drilling on two key fields in the Corridor block continued during the first
quarter. On the Dayung field, the main natural gas field for the project, two
wells were completed indicating a larger pay zone than previously estimated.
Delineation drilling on the Sumpal field will be completed by the third
quarter. These two fields have the potential to double the size of the
Corridor Project.
At the Block 'A' natural gas project, the Company began an evaluation of
contractors that could provide turn-key construction of a gas plant and
pipeline to the Arun LNG facility and fertilizer plants. The intention is to
award a contract by year-end. The West Natuna Gas Group completed a
feasibility study during the quarter on constructing a pipeline from the west
Natuna area to Singapore. The Group also continued negotiations relating to
gas marketing contracts and pipeline construction contracts.
Also today, Dick Auchinleck, President and Chief Executive Officer of
both Gulf Canada Resources Limited and Gulf Indonesia Resources Limited
announced the appointment of Mr. William (Bill) T. Fanagan as the new
President and Chief Executive Officer of Gulf Indonesia Resources effective
immediately. Mr. Fanagan will be located in Jakarta. Mr. Auchinleck will
remain on the board of directors of Gulf Indonesia.
Looking forward, Gulf Indonesia remains focused on growth through the
drill-bit with an aggressive three-year exploration and development program on
its extensive land positions in Indonesia. The 1998 drilling program includes
60 wells: 15 exploration wells, 15 delineation wells and 30 development wells.
Of this total, 47 wells will be drilled during the remainder of the year. The
Company continues to explore new business opportunities including the
evaluation of land and producing property acquisitions in the area.
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CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
AND RETAINED EARNINGS (DEFICIT)
(Unaudited)
Three months ended March 31,
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(thousands of United States dollars) 1998 1997
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EARNINGS (LOSS)
Revenues
Gross oil revenue $ 25,377 $ 34,492
Government take 4,259 9,937
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Net oil revenue 21,118 24,555
Other 1,419 155
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22,537 24,710
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Expenses
Operating 5,515 5,294
Petroleum revenue tax 374 561
Exploration 8,626 957
General and administrative 2,061 1,258
Depreciation, depletion and
amortization 10,035 8,169
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26,611 16,239
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Earnings (loss) before tax (4,074) 8,471
Income tax expense 1,988 4,327
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Earnings (loss) for the period $ (6,062) $ 4,144
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Earnings (loss) per common share $ (0.07) $ 0.06
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RETAINED EARNINGS (DEFICIT)
Balance, beginning of period $ (5,695) $ 42,757
Earnings (loss) for the period (6,062) 4,144
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Balance, end of period $ (11,757) $ 46,901
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(see note to consolidated financial statements)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March 31,
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(thousands of United States dollars) 1998 1997
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OPERATING ACTIVITIES
Earnings (loss) for the period $ (6,062) $ 4,144
Non-cash items included in
earnings (loss):
Depreciation, depletion and
amortization 10,035 8,169
Exploration expense 8,626 957
Deferred income taxes 513 2,425
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Cash generated from operations 13,112 15,695
Changes in non-cash working capital (648) (521)
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12,464 15,174
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INVESTING ACTIVITIES
Capital expenditures and
exploration expenses (42,266) (47,298)
Acquisition of Gulf Resources
(Kakap) Ltd. 0 (105,137)
Changes in non-cash working capital (8,506) 23,982
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(50,772) (128,453)
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FINANCING ACTIVITIES AND DIVIDENDS
Proceeds from issue of long-term debt 38,900 10,000
Debt placement costs (69) (6,802)
Changes in non-cash working capital (557) 107,510
Other 250 0
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38,524 110,708
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Increase (decrease) in cash 216 (2,571)
Cash at beginning of period 107,231 10,579
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Cash at end of period (1) $ 107,447 $ 8,008
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(1) Comprises cash and short-term investments.
(see note to consolidated financial statements)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
March 31, December 31,
1998 1997
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(thousands of United States dollars) (Unaudited)
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ASSETS
Current
Cash and short-term investments $ 107,447 $ 107,231
Accounts receivable 40,593 40,773
Account receivable
- parent / affiliates 24 258
Inventory and other current assets 24,030 25,062
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172,094 173,324
Deferred charges 13,301 13,482
Property, plant and equipment 603,585 579,980
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$ 788,980 $ 766,786
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable 41,410 51,163
Other current liabilities 4,296 5,700
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45,706 56,863
Long-term debt 189,300 150,400
Deferred income taxes 66,454 65,941
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301,460 273,204
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Shareholders' equity
Share capital 499,277 499,277
Deficit (11,757) (5,695)
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487,520 493,582
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$ 788,980 $ 766,786
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(see note to consolidated financial statements)
SUPPLEMENTARY INFORMATION
(Unaudited)
Three months ended March 31,
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1998 1997
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CRUDE OIL VOLUMES SOLD (1) (gross/net)
(thousands of barrels per day)
Onshore 14.5 / 10.9 13.3 / 10.1
Offshore 6.6 / 6.6 4.3 / 2.5
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21.1 / 17.5 17.6 / 12.6
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(1) ''Gross'' sales reflects the Company's interest prior to the
deduction of government take; ''net'' sales is after deduction of
government take.
CRUDE OIL GROSS AVERAGE PRICES (dollars per barrel)
Onshore 13.11 21.42
Offshore 13.95 22.71
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Average 13.37 21.74
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NET CRUDE OIL REVENUE (thousands of dollars)
Onshore 17,037 25,704
Offshore 8,340 8,788
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25,377 34,492
Less: Government take
Onshore (4,259) (6,289)
Offshore 0 (3,648)
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Net oil revenue 21,118 24,555
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Gulf Indonesia Resources Limited
20th - 24th Floor, Wisma 46 Kota BNI
Jalan Jenderal Sudirman Kavling 1
Jakarta 10020
6221/574-2120
or
1700 Lincoln, Suite 5000, Denver Colorado 80203
303/813-3800
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Shareholder Questions Can be Answered by Contacting
the Company's Transfer Agent
The Bank of New York
1-800-524-4458
E-mail Address:
Shareowner-svcs@bankofny.com
Address Shareholder Inquiries To:
Shareholder Relations Department - 11E
PO Box 11258
Church Street Station
New York, New York 10286
Answers to many of your shareholder questions and requests
for forms are available by visiting The Bank of New York's Website:
stock.bankofny.com
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This report contains forward-looking statements within the meaning of
Section 27A of the United States Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Although GRL believes that its expectations
are based on reasonable assumptions, these assumptions are subject to a wide
range of business risks, and there is no assurance GRL's objectives will be
achieved. |
