ENERGY TRUSRS / Maximum Energy Trust Announces 1998 First Quarter
Operating Results
TSE SYMBOL: MXT.UN
MAY 14, 1998
CALGARY, ALBERTA--
NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES
Maximum Energy Trust announced today its results of operations for
the three months ended March 31, 1998.
/T/
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Three months Per Unit
ended
March 31, 1998
--------------------------------------------------------------
Financial
Oil and Natural gas revenue $ 5,992,000 $ 0.50
Net processing and gathering
revenue $ 141,000 $ 0.01
Funds from operations $ 2,601,000 $ 0.22
Cash distributed $ 2,100,000 $ 0.175
Net income (loss) $ (227,000) $ (0.02)
Operating
Sales
Oil & Liquids (BBLS per day) 2,983
Natural gas (MCF per day) 3,002
Oil equivalent (BOE per day) 3,283
Pricing
Oil (per BBL) $ 20.67
Oil, including oil hedge
(per BBL) $ 20.64
Natural gas (per MCF) $ 1.72
Statistics (per BOE)
Operating Netback $ 11.14
Investor Netback $ 6.85
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Three months Per Unit
ended
March 31, 1997
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Financial
Oil and Natural gas revenue $ 7,786,000 $ 0.65
Net processing and gathering
revenue $ 62,000 $ 0.01
Funds from operations $ 4,159,000 $ 0.35
Cash distributed $ 4,080,000 $ 0.34
Net income (loss) $ 1,421,000 $ 0.12
Operating
Sales
Oil & Liquids (BBLS per day) 2,897
Natural gas (MCF per day) 3,086
Oil equivalent (BOE per day) 3,206
Pricing
Oil (per BBL) $ 29.51
Oil, including oil hedge
(per BBL) $ 28.21
Natural gas (per MCF) $ 1.48
Statistics (per BOE)
Operating Netback $ 17.42
Investor Netback $ 14.07
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/T/
Production averaged 3,283 barrels of oil equivalent (BOE) per day
for the quarter, up from 3,206 BOE per day in 1997, primarily from
the acquisition of producing properties in Provost, Alberta in
October 1997 subsequently complemented by a 20 well development
drilling project on the property. These wells were all on
production by the end of the first quarter of 1998.
Oil prices were down 30 percent from the first quarter of 1997 to
average CDN $20.67 before accounting for hedging activities. For
calendar 1998, the Trust has hedged US$800,000 per month ensuring
a minimum exchange rate of CDN$1.41 and a maximum exchange rate of
CDN$1.43. There are currently no commodity hedges in place.
Oil and natural gas operating expenses averaged of $7.83 per BOE
in the quarter which was a 10 percent increase over first quarter
1997 expenses of $7.27 per BOE. The increase was attributable to
increased prices within the service sector and operating costs
related to Provost production, which are typically higher than
costs in the Kindersley area.
General and administrative expenses were $0.61 per BOE for the
quarter, down from $0.66 per BOE in 1997. Capital overhead
recoveries on drilling activity initiated in late 1997 and
completed in the first quarter of 1998 accounted for the majority
of the reduction.
It is currently estimated that none of the 1998 cash distributions
will result in taxable income to unitholders.
As at March 31, 1998, Maximum had drawn approximately $39 million
on its $45 million credit facility. Notwithstanding that
approximately $6 million of borrowing base remains on this
facility, Maximum's governing royalty agreement contains a
covenant that, at this time, restricts Maximum's ability to incur
additional indebtedness. The covenant provides that Maximum's
aggregate indebtedness may not exceed 35 percent of its adjusted
asset value (based on Maximum's 1997 year-end independent
evaluation of properties with cash flows therefrom discounted at
15 percent). As a result, any further capital expenditures must
be funded with the proceeds of equity offerings or withholdings
from unitholder distributions until aggregate indebtedness falls
below the 35 percent threshold. Given that Maximum completed
substantially all of its 1998 capital program in late 1997 and
will internally fund the last phase of its Provost drilling
program (the tie-in to pipeline of 20 recently drilled infill
wells), this restriction will have minimal impact on 1998
operations. Maximum continues to focus on complimentary
acquisition opportunities which can be substantially funded with
equity investment, with a view to accretively growing its reserve
and production base.
Maximum Energy Trust trades on the T.S.E. under the symbol of
MXT.UN
MAXIMUM HOLDINGS CORP. acts as trustee for, and on behalf of,
MAXIMUM HOLDINGS TRUST, which operates properties on behalf of
MAXIMUM ENERGY TRUST, a royalty trust trading on the TSE under the
symbol MXT.UN
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