EARNINGS / Pinnacle Resources Announces Unaudited Financial and
Operating Results
TSE, ME SYMBOL: PNN
MAY 8, 1998
CALGARY, ALBERTA--PINNACLE RESOURCES LTD. announces the following
unaudited financial and operational results for the three month
period ending March 31, 1998.
/T/
FINANCIAL HIGHLIGHTS
($ thousands, except where noted)
THREE MONTHS ENDED
March 31
Percent
1998 1997 Change
--------------------------------------------------------------
Oil and gas sales 55,563 38,088 +46
Cash flow 22,287 20,117 +11
Per share basic ($) 0.55 0.85 -35
Per share fully diluted ($) 0.55 0.80 -31
Net (loss) earnings (6,432) 4,108 -257
Per share basic and
fully diluted ($) (0.16) 0.17 -194
Capital expenditures, net 63,018 58,860 +7
Long-term debt 338,039 90,412 +274
Weighted average common shares
outstanding (thousands)
Basic 40,284 23,539 +71
Fully diluted 44,268 25,707 +72
Common shares outstanding at
March 31 (thousands)
Basic 40,284 23,609 +71
Fully diluted 44,268 25,763 +72
OPERATING HIGHLIGHTS
--------------------------------------------------------------
Oil and NGLs production
Thousands of barrels 2,626 998 +163
Barrels per day 29,178 11,091 +163
Netbacks ($ Cdn per barrel)
Sales price 12.45 21.68 -43
Royalties (2.34) (4.48) -48
Production expenses (4.95) (5.67) -13
-------------------------
5.16 11.53 -55
-------------------------
-------------------------
Gas production
Million cubic feet 11,083 7,605 +46
Million cubic feet per day 123.1 84.5 +46
Netbacks
($ Cdn per thousand cubic feet)
Sales price 2.06 2.16 -5
Royalties (0.31) (0.38) -18
Production expenses (0.33) (0.27) +22
-------------------------
1.42 1.51 -6
-------------------------
-------------------------
--------------------------------------------------------------
DRILLING RESULTS
--------------------------------------------------------------
Exploratory Development Total
Wells Wells
Gross Net Gross Net Gross Net
Oil 10 8.2 55 30.6 65 38.8
Gas 13 10.2 16 12.6 29 22.8
Service - - 11 5.4 11 5.4
Dry and Abandoned 20 19.5 12 9.4 32 28.9
-----------------------------------------
TOTAL 43 37.9 94 58.0 137 95.9
-----------------------------------------
-----------------------------------------
--------------------------------------------------------------
/T/
Despite a 112 percent increase in Pinnacle's BOE per day
production from 19,541 BOE per day average for the first quarter
last year to 41,488 BOE per day average for the first quarter of
1998, lower oil and gas prices seriously impacted cash flow and
earnings per share for the first quarter 1998 compared to the
previous year's first quarter. Natural gas prices have
strengthened recently, however if crude oil prices persist at
average levels below U.S. $16.00 W.T.I. through the second quarter
1998, Pinnacle can and will shift its operational focus more
significantly in favour of the exploration and development of the
Company's considerable natural gas and natural gas liquids assets
primarily in the Edson area of Alberta. Pinnacle's current
production stands at approximately 29,000 barrels of oil and
natural gas liquids per day and 127 million cubic feet of
natural gas per day or a total 41,700 BOE per day.
Pinnacle is a rapidly growing intermediate oil and gas exploration
and development company whose common shares are listed and trade
on the Toronto Stock Exchange and the Montreal Exchange under the
symbol PNN.
/T/
Pinnacle Resources Ltd.
CONSOLIDATED STATEMENTS OF (LOSS)
EARNINGS AND RETAINED EARNINGS
($ thousands, except $ per share)(unaudited)
Three Months
Ended March 31
1998 1997
--------------------------------------------------------------
Revenues
Oil and gas sales 55,563 38,088
Royalties (9,585) (7,326)
------------------------
45,978 30,762
------------------------
Expenses
Production 16,628 7,747
General and administrative 1,317 1,201
Interest 4,450 1,207
Depletion and depreciation 26,669 12,011
------------------------
49,064 22,166
------------------------
(Loss) earnings before taxes (3,086) 8,596
Capital taxes 1,296 490
Deferred income taxes 2,050 3,998
------------------------
Net (loss) earnings (6,432) 4,108
Retained earnings, beginning
of period 64,426 51,219
------------------------
Retained earnings, end of
period 57,994 55,327
----------------------------------------------------------
(Loss) earnings per share
Basic and fully diluted ($) (0.16) 0.17
----------------------------------------------------------
Pinnacle Resources Ltd.
CONSOLIDATED BALANCE SHEETS
($ thousands)
March 31 December 31
1998 1997
(unaudited) (audited)
------------------------------------------------------------
Assets
Current assets
Cash held in trust 12,620 12,620
Accounts receivable 84,645 83,931
---------------------------
97,265 96,551
Petroleum and natural gas
properties 1,061,696 1,023,704
---------------------------
1,158,961 1,120,255
------------------------------------------------------------
Liabilities
Current liabilities
Accounts payable 130,625 97,798
Long-term debt 338,039 329,421
Future site restoration and
abandonment costs 18,786 17,143
Deferred income taxes 55,077 53,027
---------------------------
542,527 497,389
---------------------------
Shareholders' Equity
Share capital 558,440 558,440
Retained earnings 57,994 64,426
---------------------------
616,434 622,866
---------------------------
1,158,961 1,120,255
------------------------------------------------------------
Pinnacle Resources Ltd.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ thousands)(unaudited)
Three Months
Ended March 31
1998 1997
------------------------------------------------------------
Operating Activities
Net (loss) earnings (6,432) 4,108
Items not involving cash
Depletion and depreciation 26,669 12,011
Deferred income taxes 2,050 3,998
-----------------------------
Cash flow from operations 22,287 20,117
Net change in non-cash working
capital (2,237) 953
-----------------------------
20,050 21,070
Financing Activities
Issue of common shares, net
of issue expenses - 2,364
Increase in long-term debt 8,618 15,032
Net change in non-cash
working capital (12,094) (1,728)
-----------------------------
(3,476) 15,668
-----------------------------
Cash available for investing
activities 16,574 36,738
-----------------------------
Investing Activities
Additions to petroleum and
natural gas properties (66,696) (58,860)
Disposition of petroleum and
natural gas properties 3,678 -
Net change in non-cash
working capital 46,444 14,370
-----------------------------
(16,574) (44,490)
-----------------------------
Increase in cash and short-term
deposits - (7,752)
Cash and short-term deposits,
beginning of period - 8,517
-----------------------------
Cash and short-term deposits,
end of period - 765
------------------------------------------------------------
/T/ |
