EARNINGS / CanBaikal Announces New Initiative and Year End Results
ASE SYMBOL: CBQ
MAY 19, 1998
CALGARY, ALBERTA--CanBaikal Resources Inc. (CBQ) is pleased to
announce a new initiative in its ongoing strategy to build a
significant reserve base in Russia. CanBaikal is currently
evaluating two large oil and gas properties in the Khanty Mansisyk
region of western Siberia, which have been offered to it by YUKOS
Oil Ltd. (YUKOS) of Moscow, Russia. The properties are adjacent
to CanBaikal's current license block and contain recoverable
reserves in excess of 200 million barrels of oil, as estimated by
YUKOS. The properties are in excess of 400 square kilometers each
and currently are producing over 16,000 barrels of oil per day
with a planned maximum of 60,000 bbls/day. CanBaikal expects the
technical evaluation of the properties to take up to three months,
during which time a decision will be made as to the nature of the
deal to be closed with YUKOS.
Robert Bolton, Chairman and C.E.O. of CanBaikal stated, " The
opportunity offered to us by YUKOS will allow us to significantly
shorten our time frame to generate ongoing cash flow and to add
significant reserves to our base currently under license. The
proximity of these blocks to our existing block will also allow us
to be focused in the technology of oil recovery in one area of the
Siberian basin and enable us to minimize our infrastructure costs.
Our detailed technical review will start immediately and we will
begin negotiating an arrangement to acquire the currently economic
reserves as soon as possible."
CanBaikal completed its first fiscal year on December 31, 1997 and
many milestones marked the year. The Company received the first
ever license awarded by the Khanty Mansisyk government to a
foreign company in February 1997 and completed its initial public
offering in July of 1997 for $5 million. We were successful in
opening our office in Nefteyugansk and commenced our Russian
operations in October 1997.
Revenues for the year totaled $62 thousand of interest income and
total expenses amounted to $486 thousand to generate a net loss
$424 thousand ($0.04 cents per share) for the twelve months ended
December 31, 1997. CanBaikal expended $1.3 million on capital
expenditures including seismic, evaluation, corporate and
development expenditures. CanBaikal Resources Inc.'s working
capital position at year-end was $3.4 million and the net asset
value per basic share outstanding was $2.54.
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