FIELD ACTIVITIES / Founders Energy Reports Increased Production
Volumes In the 2nd Quarter of 1998
TSE, ASE SYMBOL: FDE
JULY 28, 1998
CALGARY, ALBERTA--(FDE - TSE/ASE) Founders Energy Ltd. today
reported financial and operating results for the six months ended
June 30, 1998. Comparative results for the period are as follows:
/T/
Financial
(000's except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
---------------------------------------------
Percent Percent
1998 1997 Change 1998 1997 Change
Gross revenue $3,676 $2,796 31 $7,314 $5,813 26
Cash flow $1,828 $1,328 38 $3,672 $3,035 21
Per share $ 0.05 $ 0.04 25 $ 0.11 $ 0.12 (8)
Net income $ 214 $ 270 (21) $ 648 $ 952 (32)
Per share $ 0.01 $ 0.01 - $ 0.02 $ 0.04 (50)
Long-term debt $10,275 $5,162 99 $10,275 $5,162 99
Capital
expenditures $ 5,352 $3,891 38 $10,747 $6,566 64
Shareholders'
equity $18,635 $11,039 69 $18,635 $11,039 69
Weighted average
shares
Outstanding
(000's) 33,486 25,710 30 33,486 25,710 30
Operating
Production
Crude oil and Ngl's
(Bpd) 2,092 1,196 75 2,063 1,165 77
Natural gas
(Mcfd) 2,297 1,962 17 2,164 2,029 7
Oil Equivalent
(Boed) 2,322 1,392 67 2,280 1,369 66
Average selling price
Crude oil and ngl's
($/Bbl) $17.15 $23.44 (27) $17.62 $24.15 (27)
Natural gas
($/Mcf) $ 1.97 $ 1.37 44 $ 1.87 $ 1.95 (4)
Average selling
price ($/Boe) $17.40 $22.07 (21) $17.72 $23.46 (24)
Netback ($/Boe) $11.17 $12.64 (12) $11.40 $14.10 (19)
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During the second quarter of 1998, Founders participated in
drilling two (1.25 net) wells, resulting in two successful oil
wells. At Hartaven, Founders operated and participated for a 58
percent interest in a successful Winnipeg Sandstone oil well,
which was placed on production in late April 1998 at a rate of 750
(422 net) bpd. Production from this well will be restricted by a
production allowable of approximately 475 bpd, commencing in late
July 1998. In the Heward area of southeast Saskatchewan, Founders
participated for a 67 percent interest in a successful Frobisher
horizontal well. The well was completed in early July and has been
placed on production at a rate of 150 (100 net) bpd. The success
of the Heward well may result in further horizontal drilling in
the area later in 1998. Year-to-date, Founders has participated in
drilling eight (3.06 net) wells, resulting in four (1.86 net) oil
wells, two (0.35 net) gas wells and two (0.85 net) exploratory
dry holes for an overall success rate of 75 percent.
Crude oil and natural gas liquids production averaged 2,092 bpd
for the second quarter of 1998, an increase of 75 percent over
1,196 bpd for the second quarter of 1997. Natural gas production
averaged 2.3 mmcfd for same period compared to 2.0 in 1997. For
the six months ended June 30, 1998 daily production volumes have
averaged 2,280 boed, an increase of 66 percent over 1,369 boed for
the same period in 1997. Founders daily average production at June
30, 1998 was 2,600 boed.
Gross production revenue for the three months ended June 30, 1998
was $3,675,753 compared to $2,796,033 for the same period in 1997.
Year-to-date in 1998, gross revenue has increased by 26 percent to
$7,313,889 compared to $5,812,872 for the same period in 1997. The
average selling price of crude oil for the second quarter of 1998
was $17.19 per barrel, a decrease of 25 percent from $22.93 per
barrel in the second quarter of 1997.
Cash flow from operations for the three months ended June 30, 1998
was $1,828,311 ($0.05 per share) compared to $1,327,604 ($0.04
per share) in 1997. Year-to-date, Founders cash flow from
operations has increased by 21 percent to $3,672,464 ($0.11 per
share) compared to $3,034,507 ($0.12 per share) in 1997. Net
income for the three months ended June 30, 1998 was $214,101
($0.01 per share) compared to $269,975 ($0.01 per share) for the
same period in 1997. For the six months ended June 30, 1998 net
income was $647,849 ($0.02 per share) compared to $952,112 ($0.04
per share) for the same period in 1997.
Capital expenditures for the six months ended June 30, 1998
amounted to $10.8 million. To date in 1998, Founders has spent a
total of $4.6 million on drilling and completions and $3.1 million
on the acquisition of seismic and undeveloped land within our new
core exploration areas in Alberta and British Columbia. These
expenditures are consistent with our strategy of achieving
geographical and commodity diversification through internally
generated high-impact exploration opportunities in central
Alberta, northwest Alberta and northeast British Columbia. The
Company has acquired 21,367 net acres of undeveloped land to date
in 1998, increasing its undeveloped land position to approximately
82,000 net acres. Founders has also tied-up an additional 25,000
net acres of undeveloped land through seismic options and farm-in
arrangements within our core areas of activity. Capital
expenditures for 1998 also include $2.1 million expended in the
second quarter to acquire working interests from several partners
in the Hartaven area of southeast Saskatchewan, adding
approximately 185 bpd of oil production.
In June, Founders commenced an aggressive drilling program which
will include up to six high-impact exploration wells targeting
liquids-rich natural gas and light oil reserves in the Pouce Coupe
area of northwest Alberta and in the Fort St. John area of
northeast British Columbia. In the Gilby area of central Alberta,
Founders will drill three wells targeting Cretaceous natural gas
or light oil reserves and one deep, high-impact Devonian Leduc
reef well. At Hartaven in southeast Saskatchewan, Founders will
continue with an aggressive exploration and development program
drilling at least two more wells targeting Ordovician light oil
reserves in the Red River and Winnipeg Sandstone formations.
Founders Energy Ltd. is an aggressive Canadian junior oil and gas
company that is engaged in exploration, acquisition and production
of crude oil and natural gas reserves in Alberta, Saskatchewan and
British Columbia. |
