EARNINGS / Newstar Resources Q1 Results
NEWSTAR RESOURCES INC. - FIRST QUARTER RESULTS
HOUSTON, Texas, May 26 /CNW/ - Newstar Resources Inc. (NASDAQ: NERIF and
TSE: NER) announces its first quarter 1998 operating and financial results.
Financial results are reported in U.S. dollars.
Newstar posted strong operating results including significant increases
in production and revenues. Oil and natural gas revenues for the first quarter
were $3.0 million compared to $1.1 million in the same period last year. Net
income for the period was $0.6 million, or $0.02 per share. Cash flow per
share in the first quarter 1998 was $0.06 for the period.
The Company's financial gains were accomplished despite being
significantly impacted by depressed product prices.
The Company's net production for the first quarter was 217 MBOE or
average daily production of 2.4 MBOE per day. For Canadian comparative
purposes average daily production, prior to deduction of royalty payments, was
approximately 3.0 MBOE. Production targets were not attained because of delays
in bringing wells into production. Operating and transportation costs for the
period were $2.69 per BOE.
The Company had proven reserves at March 31, 1998 of 46.6 BCF of natural
gas and 1304 MBO. These represented significant gains over the Company's 1997
U.S. reserves of 1 BCF and 76 MBO respectively.
The Company wishes to advise that it will host a conference call to
update investors at 8:30 a.m. Eastern Standard Time on Friday, May 29, 1998.
Those who wish to participate should dial 1-888-209-3778 approximately 10
minutes prior to the conference time.
Michigan-based Newstar Resources Inc. is an oil and gas exploration and
production company with operations in Michigan, Ohio and Texas. The Company
trades on the NASDAQ National Market System under the symbol NERIF and the
Toronto Stock Exchange under the symbol NER.
Certain statements in this news release regarding future expectations of
reserve potential, production and drilling may be regarded as ''forward
looking statements'' within the meaning of the U.S. Litigation Reform Act.
They are subject to various risks, such as the inherent uncertainties in
interpreting engineering data relating to underground accumulations of oil and
gas. Actual results may vary materially.
Note: At fiscal year end December 31, 1997 the Company adopted the U.S.
Dollar as the unit of measurement and presentation of its consolidated
financial statements. This change was due to the significant increase in the
company's revenues and expenditures denominated in U.S. dollars. This is the
first time the Company has reported its quarterly results in U.S. dollars.
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Newstar Resources Inc.
Consolidated Balance Sheets
As at March 31
(unaudited - in U.S. $)
1998 1997
$ $
Assets
Current:
Cash 177,210 2,631,781
Accounts receivable 2,580,495 1,356,045
Due from shareholders 229,749 220,809
------------- -------------
2,987,454 4,208,635
------------- -------------
Investments - 987,980
Oil and gas properties and fixed assets
at cost, net of accumulated depletion
and depreciation 61,040,232 21,970,527
Other assets 137,175 -
------------- -------------
64,164,861 27,167,142
------------- -------------
------------- -------------
Liabilities & Shareholder's Equity
Liabilities:
Accounts payable and accrued charges 9,206,716 159,106
Bank indebtedness 8,000,000 19,436
Other financing activities 1,366,606 -
Current portion of long term debt 20,035 -
------------- -------------
18,593,357 178,542
------------- -------------
Long-term debt 284,524 -
Deferred taxes 851,796 412,796
Shareholder's Equity:
Share capital 45,648,325 28,273,439
Retained earnings (1,213,142) (1,697,635)
------------- -------------
44,435,183 26,575,804
------------- -------------
64,164,861 27,167,142
------------- -------------
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Newstar Resources Inc.
Consolidated Statements of Income (Loss) and Deficit
For the Three Month Period Ending March 31
(unaudited - in U.S. $)
1998 1997
$ $
Revenues
Production revenues 3,037,365 1,082,593
Participation revenue - 712,500
------------- -------------
3,037,365 1,795,093
------------- -------------
Expenses
Production and well service costs 414,761 206,564
Product transportation expense 170,000 16,216
Office and administration 346,448 253,463
Depletion and depreciation 1,026,263 412,668
Interest expense and bank charges 142,749 (7,550)
Miscellaneous 22,351 (23,967)
------------- -------------
2,122,572 857,394
------------- -------------
Income (loss) before taxes 914,793 937,699
Income taxes, net of recovery of operating
losses 319,000 270,000
------------- -------------
Net income (loss) for the period 595,793 667,699
Deficit, beginning of period (1,808,935) (2,365,334)
------------- -------------
Deficit, end of period (1,213,142) (1,697,635)
------------- -------------
------------- -------------
Earnings (loss) per share $0.02 $0.03
----- -----
Cash flow per share (from operating
activities before taxes and working
capital changes $0.06 $0.07
----- -----
Weighted average shares outstanding 34,407,811 20,447,040
Newstar Resources Inc.
Consolidated Statements of Changes in Financial Position
For the Three Month Period Ending March 31
(unaudited - in U.S. $)
1998 1997
$ $
Cash from (used in ) operating activities:
Net income 595,793 667,699
Add: Depletion of reserves 1,026,263 412,668
Deferred taxes 319,000 270,000
Net change in working capital affecting
operations 3,203,156 (832,075)
------------- -------------
5,144,211 518,292
------------- -------------
Cash from (used in) investing activities:
Net purchase of oil and gas properties
and fixed assets (8,705,633) (10,175,712)
------------- -------------
(8,705,633) (10,175,712)
------------- -------------
Cash from (used in) financing activities:
Repayment of bank indebtedness (5,475,583) (4,309)
New bank borrowings 8,780,142 -
Increase in due from shareholders (8,940) (8,120)
Repayment of other financing activities (1,102,253) -
Capitalized loan fees (137,175) -
Decrease in deferred revenue - (712,500)
Issuance of share capital 108,872 11,308,416
------------- -------------
2,165,063 10,583,487
------------- -------------
Increase (decrease) in cash (1,396,359) 926,067
Cash, beginning of period 1,573,569 1,705,714
------------- -------------
Cash, end of period 177,210 2,631,781
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For further information: Tim Richardson, Investor Relations,
(416) 360-7415 or 800-363-0632; Jack Piedmonte, President, (313) 243-0719
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