EARNINGS / Q Energy Limited Announces Year-End Financials and
Updates Recent Corporate Developments
ASE SYMBOL: QE
MAY 14, 1998
CALGARY, ALBERTA--Q Energy Limited today announced its audited
financial results for the year ending December 31, 1997. The
financial results reflect, for the most part, company operations
subsequent to September 16, 1997 when Q Energy's assets were
acquired pursuant to a Plan of Arrangement between Q Energy
Limited, NuGas Limited and Tarragon Oil and Gas Limited.
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Year Ending Dec. 31, 1997
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Total Revenues $ 192,000
Cash Flow $ 40,000
Net Income ($ 2,000)
Gas Price ($/Mcf) $ 2.32
Liquids price ($/Bbl) $ 25.79
Production 45 Boe/d
Shares Outstanding (Basic) 18,475,212
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Q Energy also announces that it will be entering into a three-part
transaction which will strengthen the Company's balance sheet,
increase its production and add a significant component of proven
undeveloped gas reserves.
The proposed transaction is as follows:
- Subject to all necessary regulatory and shareholder approvals,
the Company will issue, by way of a private placement up to
$4,000,000 of convertible debentures to a group of investors with
a conversion price of $0.45/share and an 8 percent coupon. The
debentures will mature five years from the date of issue subject
to earlier conversion to common shares in certain circumstances.
- Subject to regulatory approval, the Company will grant to a
third party an option to purchase 1,000,000 shares for 18 months
at an exercise price of $0.50/share. Q has agreed to sell certain
assets, to the same party, to offset the Company's short-term debt
obligation arising out of the Plan of Arrangement.
- Q Energy will be granted an option to purchase a gas producing
property with a large proven undeveloped reserve component. A
portion of the proceeds from the proposed convertible debenture
offering will be applied to the acquisition.
After closing the above transactions, anticipated to occur over
the next 30 to 90 days, Q will have achieved the following:
- Eliminated all of its indebtedness.
- Increased production to approximately 200 Boe/d from the current
rate of 30 Boe/d.
- Added a new property to inventory which has approximately 16 Bcf
of proven undeveloped reserve as estimated by independent
engineering consultants. Q will have a 100 percent working
interest in this undeveloped asset.
- Increased working capital to approximately $1,600,000.
- Maintained the Company's exposure in high impact prospects in
Louisiana, North Dakota and Saskatchewan. |
