EARNINGS / Kensington Energy Ltd. Releases First Quarter 1998
Financial Results
ASE SYMBOL: KNN.A KNN.B
JUNE 1, 1998
CALGARY, ALBERTA--Kensington Energy Ltd. is pleased to present its
financial and operating results for the three months ended March
31, 1998.
/T/
HIGHLIGHTS
Three Months Ended March 31
---------------------------
Financial 1998 1997
-------------------------------------------------------------
Petroleum and natural gas sales $501,300 $848,803
Funds from operations $250,191 $501,007
per Class A share (basic) $0.05 $0.13
Net income (loss) ($64,199) $102,037
per Class A share (basic) ($0.01) $0.03
Field netbacks per boe $15.23 $15.88
Working capital (deficiency) $378,199 $(351,969)
Long term debt $1,440,000 -
Capital expenditures $721,537 $2,050,670
Proceeds from sale of properties $900,000 -
Class A shares outstanding
weighted average 5,439,893 3,804,595
end of period 5,752,876 3,808,400
Operating
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Production
Oil & NGLs (bbl/d) 166 216
Natural Gas (mmcf/d) 1.07 2.09
Barrels of Oil Equivalent (boe/d) (1) 273 425
Undeveloped Land
Gross Acres 84,944 59,865
Net Acres 31,697 20,471
Drilling Activities
Gross Wells 3.0 9.0
Net Wells 1.9 3.3
/T/
(1) During the first quarter of 1998, the Company sold 125 boe/d
of production effective March 1, 1998.
Revenue, funds from operations and net income for the quarter were
lower than the first quarter of 1997 primarily due to lower
production volumes and lower prices for oil, NGLs and natural gas.
Natural gas production was lower due to gas plant restrictions at
Sangudo and the sale of this property effective March 1 (125 boe/d
at the time of sale). Oil production from all the wells at the
Company's Giroux Lake Viking "F" Pool was restricted to allowables
set by the Alberta Energy and Utilities Board pending
implementation of the waterflood. In previous periods a number of
these wells were producing much higher volumes as allowed under
initial 4 month test periods. Water injection has begun at Giroux
Lake which will result in increasing oil production over the next
few months.
Revenue per boe was $20.37 compared to $22.19 during the first
quarter of 1997 as a result of lower prices for oil, NGLs and
natural gas. Revenue per boe would have been significantly lower
were it not for the Company's hedging program - 100 bbl/d were
hedged at US $20.28 per barrel. Field netbacks remained high at
$15.23 per boe due to the hedging program, low operating costs of
$3.75 per boe, and lower royalties. Capital expenditures for the
period were $721,537 while proceeds from the sale of properties
were $900,000.
During the quarter, new gas production was brought onstream in the
Kaybob area and Cherhill area. Two wells were drilled during the
quarter which are both cased as potential gas wells. One well was
recompleted which produced oil with high water cuts and was
susequently abandoned.
After a relatively quiet period of activity during the early part
of this year, Kensington has a number of new prospects which will
be evaluated by drilling beginning in the summer months. These
include 2 exploitation projects with large reserve potential to be
evaluated by horizontal drilling and 1 or more development
locations on Company land directly offsetting a new pool oil
discovery.
The Company's Class A Shares and Class B Shares trade on The
Alberta Stock Exchange under the symbols KNN.A and KNN.B,
respectively.
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