EARNINGS / Bow Valley Energy Q1 Results
BOW VALLEY ANNOUNCES FIRST QUARTER RESULTS AND PROVIDES AN OPERATIONS UPDATE
CALGARY, May 28 /CNW/ - Bow Valley Energy Ltd. is pleased to provide an
update with respect to its operations and to provide the results for the first
quarter of 1998. During the first quarter of 1998, Bow Valley Energy Ltd. has
focused on progressing its projects in the United Kingdom and Iran. Although
delays were experienced in some of its projects during the quarter,
significant strides were made towards successful implementation of these
projects.
United Kingdom
An appraisal well is expected to commence drilling in the Kyle field in
June in the southwest part of the field with a horizontal section between the
29/2c-8Z and 11Z exploration wells. Options being investigated for full scale
development include a subsea tie-back by pipeline to a nearby production
facility, possibly at Banff, located 12 kilometres north of Kyle. This would
accelerate development with first oil by year end 1998. Additional production
wells are expected to be drilled in 1999. Bow Valley has a 12.5% interest in
Licence P748 in which the Kyle field is located, with Ranger Oil (UK) Limited
being the operator with a 40% interest.
The evaluation of the bids is complete and discussions are ongoing with
short-listed contractors for an Extended Well Test facility which is expected
to be leased by the Dolphin Group. Current plans are to drill the first
appraisal well in the first quarter of 1999 with production testing to follow
mid-year. The Dolphin Project is a strategic initiative to acquire fields
which are non-core to their current owners in order to put together a
comprehensive program to sequentially develop the fields.
Iran
Bow Valley is currently in active discussions with potential new partners
to participate in the Balal oilfield development project and to provide the
majority of the financing required to complete the construction of the
facilities and for commencement of production. Securing of this financing is
required in order for the Corporation to proceed with the project. The
Corporation is well advanced toward completing the front end engineering and
design for the project and has obtained the National Iranian Oil Company's
approval for the work undertaken to date.
Production
Production for the quarter ended March 31, 1998 averaged 200 barrels of
oil per day from its interest in two producing fields - Claymore and Blenheim
- held through Croft Exploration Limited, in which it has a 50% equity
interest.
Financial Review
During the first quarter, Bow Valley earned total revenues of $576,729,
comprising of revenues from the two producing fields and interest income
earned on cash and short term investments. Total expenses amounted to
$745,444 comprising of operating costs, provision for depletion and site
restoration relating to the two producing fields, and general and
administrative overhead attributable to the Calgary and UK offices. As a
result, the Corporation recorded a loss of $168,715 or $0.007 per share and
cash flow from operations of $22,430 for the first quarter. Capital
expenditures incurred during the quarter amounted to $1,502,810 which included
expenditures on the Kyle and Chestnut fields, work on the eighth round onshore
blocks, continued evaluation of the Dolphin Project and other properties. In
addition, the Corporation incurred expenditures totaling $689,947 with respect
to the Balal oilfield offshore Iran.
Bow Valley continues to remain in a strong financial position. At March
31, 1998, the Corporation had cash and short term investments in excess of
$20.7 million or 83 cents per share and no long term debt.
Bow Valley was formed in 1996 to operate as an international oil and gas
acquisition, development and production company headquartered in Calgary,
Alberta. Bow Valley has interests in the United Kingdom (both onshore and
offshore) and has signed a service contract to develop the Balal oilfield
located offshore Iran in the Persian Gulf Bow Valley trades on the Toronto
Stock Exchange under the symbol BVX.
<<
BOW VALLEY ENERGY LTD.
CONSOLIDATED BALANCE SHEET
March 31, 1998 December 31, 1997
-------------- -----------------
(unaudited)
ASSETS
Current Assets
Cash $1,546,325 $481,277
Short-term investments 19,195,448 22,550,476
Accounts receivable 1,073,918 1,014,599
Inventory 834
Prepaid expenses 61,502 41,036
-------------- -----------------
21,877,193 24,088,222
Capital Assets 15,784,923 14,443,427
Other Assets 1,484,195 794,248
-------------- -----------------
$39,146,311 $39,325,897
-------------- -----------------
-------------- -----------------
LIABILITIES
Current Liabilities
Accounts payable $998,508 $1,017,137
Future Site Restoration 345,167 337,410
SHAREHOLDERS' EQUITY
Share Capital 43,386,601 43,386,601
Deficit (5,583,965) (5,415,251)
-------------- -----------------
37,802,636 37,971,350
-------------- -----------------
$39,146,311 $39,325,897
-------------- -----------------
-------------- -----------------
BOW VALLEY ENERGY LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31,1998
(unaudited)
Revenue
Operating $347,181
Interest 229,548
--------------
576,729
--------------
Expenses
Operating 349,736
General and administrative 204,563
Depletion, depreciation and amortization 161,314
Provision for site restoration 29,831
--------------
745,444
--------------
Loss for the Period $168,715
--------------
--------------
Loss per Share $0.007
--------------
--------------
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE THREE MONTHS ENDED MARCH 31,1998
(unaudited)
1998 1997
--------------- ---------------
Cash Provided by (Used in)
Operating Activities
Loss for the Period $168,715
Non Cash Items
Depletion, depreciation and
amortization 161,314
Provision for site restoration 29,831
---------------
Cash Flow From Operations 22,430
Decrease (Increase) in Non-Cash
Working Capital (97,579) $71,249
--------------- ---------------
(75,149) 71,249
--------------- ---------------
Cash Provided by (Used in) Investing Activities
Acquisition of Capital Assets (1,502,810) (2,988,677)
Future Site Restoration (22,074)
Other (689,947)
---------------
(2,214,831) (2,988,677)
--------------- ---------------
Increase (Decrease) in Cash (2,289,980) (2,917,428)
Cash, Beginning of Period 23,031,753 6,036,402
--------------- ---------------
Cash, End of Period $20,741,773 $3,118,974
--------------- ---------------
--------------- ---------------
Cash includes cash and short term investments.
>>
-30-
For further information: Walter DeBoni, President & Chief Executive
Officer or Dinesh Dattani, Vice President, Finance & Chief Financial Officer,
(403) 232-0292, Fax: (403) 232-8920
|
