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Friday July 24, 12:24 pm Eastern Time
Company Press Release
Northstar Cash Flow Hits $62 Million in First Six Months
CALGARY, Alberta--(BUSINESS WIRE)--July 24, 1998--Northstar Energy Corporation (TSE: NEN - news; ME: NEN - news; Alberta Stock Exchange: NEN - news) today announced its financial and operating results for the six months ended June 30, 1998.
For the six month period, cash flow was $62.3 million, or $0.91 per share. In the second quarter, cash flow from operations was $35.2 million, or $0.51 per share, on revenues of $61.3 million. Earnings for the first six months were $32.7 million, or $0.48 per share, which included $2.5 million, or $0.04 per share, in the second quarter.
Natural gas production for the second quarter averaged 202 million cubic feet per day, while oil and natural gas liquids production averaged 18,000 barrels per day. John Hagg, chief executive officer, stated that ''during the second quarter, our natural gas production was constrained by modifications to the Coleman gas plant and scheduled maintenance at some of the company's other production facilities. In addition, warmer than expected weather in the late winter resulted in a number of new gas discoveries not being tied in prior to spring break-up. With the completion of the Coleman plant modifications at the end of July, we expect natural gas production volumes to increase during the third quarter.'' Mr. Hagg went on to say that ''crude oil and natural gas liquids volumes are down from the first quarter reflecting the sale, in March, of 3,300 barrels per day of non-core oil production.'' The company is scheduled to close the previously announced swap of its 25 percent interest in Morrison Middlefield Resources Limited for the remaining 50 per cent of the shares of Mountain Energy Inc. [OTC BB:MTEI - news] in the third quarter which will increase oil and liquids production from the effective date of June 30, 1998.
Northstar's average natural gas price in the second quarter was $2.19 per thousand cubic feet, reflecting higher spot prices in Alberta and the restructuring of a long term contract. Crude oil and natural gas liquids prices averaged $15.76 per barrel. Mr. Hagg noted that ''the price realized by the company for oil and natural gas liquids reflects continuing low world oil prices and high crude oil quality differentials, through the period.'' Operating costs for the three months ended June 30, 1998 were $4.08 per barrel of oil equivalent, up $0.15 from the first quarter, primarily as a result of major maintenance activities. In commenting on the operating costs, Mr. Hagg indicated that ''while operating costs are slightly above the company's historic average, we expect those costs to decline throughout the remainder of 1998.''
Long-term debt was steady quarter-over-quarter, at $443 million. John Richels, chief financial officer noted that ''since most of the company's 1998 capital expenditures occurred during the first and second quarters, we expect long-term debt to decrease significantly by year-end.''
FINANCIAL HIGHLIGHTS
for the periods ended June 30
Three months Six months
1998 1997 1998 1997
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(millions, except per share amounts)
Revenue (net of royalties) $61.3 $58.7 $114.5 $129.3
Cash flow from operations 35.2 38.3 62.3 86.1
Cash flow per share - basic 0.51 0.54 0.91 1.09
- fully diluted 0.49 0.51 0.87 1.04
Net earnings 2.5 3.1 32.7 41.0
Earnings per share - basic 0.04 0.08 0.48 0.52
- fully diluted 0.05 0.08 0.46 0.50
Capital expenditures (net) (5.4) 38.9 45.3 122.8
Long term debt 443.4 432.2 443.4 432.2
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OPERATING HIGHLIGHTS
for the periods ended June 30 Three months Six months
1998 1997 1998 1997
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Natural gas production (mmcf/d) 202 208 203 195
Average price ($/mcf) 2.19 1.62 1.98 1.92
Wellhead netback ($/mcf) 1.58 1.14 1.34 1.34
Oil and liquid production
(bbls/d) 18,000 21,600 19,900 22,200
Average price ($/bbl) 15.76 20.90 15.74 22.28
Wellhead netback ($/bbl) 8.79 11.81 8.86 12.71
Operating costs ($/boe) 4.08 3.19 4.00 3.26
Wells drilled (gross) 20 33 180 150
Natural gas 5 2 95 68
Oil 7 17 36 28
Dry and other 8 14 49 54
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weighted average shares outstanding
for six month period 68.2 million (1997 - 79.2 million)
shares outstanding at
June 30, 1998 68.3 million (1997 - 67.9 million)
Northstar Energy Corporation is engaged in petroleum and natural gas exploration and production in Canada. On June 29, 1998 the company announced it had agreed to merge with Oklahoma-based Devon Energy Corporation [AMEX:DVN - news]. Northstar shareholders will receive 0.227 fractional Devon common equivalent shares for each existing Northstar share subject to approval by the shareholders of both companies. Northstar's common shares are listed on the Toronto, Montreal and Alberta stock exchanges under the trading symbol NEN.
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Contact:
Northstar Energy Corporation
John A. Hagg, 403/213-8000
403/ 213-8100 (fax)
or
Northstar Energy Corporation
John Richels, 403/213-8000
403/213-8100 (fax)
or
Northstar Energy Corporation
Gretchen Thompson, 403/213-8000
403/213-8100 (fax)
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