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Gold/Mining/Energy : HRP.T Harbour Petro
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To: terry astle who wrote (28)5/13/1998 12:02:00 AM
From: Richard Saunders  Read Replies (1) of 62
 
terry/ no expert here but it would seem the co. has got to do what it's got to do. A quick skim thru the recent annual release indicated something had to be done with the financials to make the bankers happy before June 14. The property being sold (Wayne-Rosedale oilfield approx. 60 miles east of calgary) was discovered more than 40 years ago and has it's ups and downs with production. Harbour announced their initial agreement to purchase their working interest in the Wayne oilfield just as prices seemed to be peaking last fall (Oct. 9 news release). You know what has happened to oil pricing since........ As of the beginning of this year operating costs in Wayne-Rosedale were relatively high, somewhere in the neighbourhood of $10 - $11 per barrel of oil equivalent. As well royalties were slamming the economics, reportedly just over 22% on all oil & gas production (12.4% freehold royalties and 9.7% overriding royalties). When Harbour purchased the property wellhead prices were approx. $24cdn. You can do the math...... back then operating netbacks before overhead and interest were less than $8. The erosion of oil pricing has obviously changed the economics of the original plan so what to do?............ bankers nipping at your tail, future oil pricing not looking too bullish, mgmt. shuffling............ Personally I think the co. did what it had to do even though it seems to be stepping backwards. I don't have a position although have held in the past.
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