EARNINGS / Ohio Releases Year End Results, Updates Turin Drilling
VSE SYMBOL: OHO
SEPTEMBER 24, 1998
CALGARY, ALBERTA--Ohio Resources Corporation ("Ohio") (VSE-OHO) is
pleased to report improved financial and operating results for the
fourth quarter and year ended July 31, 1998.
In the fourth quarter, petroleum and natural gas revenues before
royalties increased 94 percent from $507,673 in 1997 to $986,658
in 1998. Cash flow from operations increased 206 percent from
$174,532 or $0.016 per share in 1997 to $535,622 or $0.043 per
share in 1998. Net income for the quarter increased 145 percent
from $52,211 or $0.005 per share in 1997 to $128,252 or $0.01 per
share in 1998.
For the year ended July 31, 1998, petroleum and natural gas
revenues before royalties increased slightly from $2,639,221 in
1997 to $2,640,293 in 1998. Cash flow from operations increased
20.6 percent from $945,641 or $0.089 per share in 1997 to
$1,140,726 or $0.093 per share in 1998. Net income for the year
decreased 8.3 percent from $510,138 or $0.048 per share in 1997 to
$467,556 or $0.04 per share in 1998.
Exit rate production was 489 boe/d in July 1998 against 312 boe/d
in July 1997 an increase of 56.7 percent. On a yearly average
basis daily production before royalties averaged 343 boe/d in 1998
versus 320 boe/d in 1997 an increase of 7.2 percent. Proved plus
probable reserves as evaluated by outside independent engineers
increased from 959 mboe at the end of fiscal 1997 to 1,506 mboe
and the end of fiscal 1998 an increase of 57 percent. Production
for the year was 125 mboe versus 117 mboe in the prior year an
increase of 6.8 percent.
Greater than 95 percent of Ohio's revenues are from natural gas
sales. Ohio's revenue increased slightly despite a drop in
natural gas prices from $2.25 per mcf in 1997 to $2.14 per mcf in
1998 or 4.9 percent.
The substantial growth in the fourth quarter is a result of new
tie-ins of wells drilled during the second quarter at Westerose
and Turin, Alberta. In addition the purchases culminating in
ownership of a 25 percent interest in the Battle Creek Montana
production has bolstered production substantially.
Further growth can be forecast, at Turin, Alberta, Ohio 50 percent
(Catalina 50 percent) drilled and cased two wells during August.
One of these wells was tested over a short period and recovered
gas at over 2mmcf/d. This well will be tied in during October.
With respect to the acquisition of Catalina Energy Corporation,
Ohio engaged Sayer Securities Limited (a specialized financial
services company providing capital market and advisory services
for oil and gas companies) to provide the Ohio Board of Directors
with an opinion as to the fairness of the offer being made to the
shareholders of Catalina Energy Corporation. Sayer Securities
Limited has provided an opinion dated September 21, 1998, in which
it concludes that, the offer is fair from a financial point of
view to the shareholders of Ohio. A copy of the Fairness Opinion
is being sent to all Ohio shareholders as part of this year's
information circular which will be mailed today. |
