EARNINGS / New Cache Petroleums Well Positioned Entering 1999
CALGARY, Oct. 29 /CNW/ - New Cache continues to be well positioned to
enter the 1999 winter season by having approximately 65% of its production
coming from gas sales.
During the fourth quarter, the Company participated in six gross (1.5
net) wells resulting in four (0.65 net) gas wells and two (0.85 net) abandoned
wells. This gives the Company a 62% success rate year-to-date while drilling
a total of 29 (13.37 net) wells.
The Doris property continues to perform well, averaging 20.5 mmcfd and
152 bpd of liquids during the three months ending August 31, 1998, despite a
week-long plant turnaround at the Doris I processing facility. Effective July
1, 1998, New Cache increased its ownership in the Doris I plant from 13.5% to
22.91%, thereby reducing its processing fees for the area. The Company plans
to drill up to seven development wells and three exploration wells during the
upcoming winter. Each of the exploration plays provides New Cache the
opportunity to duplicate the success of the initial Doris pool.
At Bronson, the 10-20-57-17 W5M (50% W.I.) well drilled during the second
quarter was placed on production in August and has been producing at
approximately 6.5 mmcfd from the Wabamun formation. Gross recoverable
reserves of 18.0 Bcf and 386 mbbls of liquids have been assigned to this well.
A step-out well (50% W.I.) was drilled four miles to the north of the existing
production during the third quarter. The targeted zones were encountered but
were not well enough developed to justify economic completion. Subsequent to
the third quarter, New Cache participated in a successful gas well (14% W.I.)
which, when completed, should be capable of the same production rates as the
10-20 producer. The Company has defined three lower risk development
locations that will be drilled in the next six months and, depending on the
results, New Cache could drill up to five additional development locations on
the seven undrilled surrounding sections.
At Mink Lake, New Cache has a 100% working interest in five prospective
shallow gas sections where five surrounding wells were tied-in last year. An
initial well is planned for early winter and, if successful, up to four
additional locations are identified on seismic. The production rate associated
with each well is expected to be 2 to 3 mmcfd with reserves of 2 to 4 Bcf.
Cash flow from operations for the nine month period ended August 31, 1998
remained 23% ahead of the same period last year, despite a 32% drop in oil
prices, with $8.644 million ($0.61 per share) being recorded in 1998 and
$7.002 million ($0.73 per share) in 1997. For the three months ended August
31, 1998, cash flow from operations totalled $2.395 million ($0.17 per share),
compared to $1.936 million ($0.17 per share) in the third quarter of 1997.
Gas production for the nine months ended August 31, 1998, at 28.588
mmcfd, is 241% higher than the 8.387 mmcfd achieved during the same period in
1997. Gas prices are 17% higher for this period in 1998, $1.89 per mcf
compared to $1.62 per mcf in 1997, and the prices are strengthening even more
as we approach the winter heating season.
Oil and liquids production was down marginally at 1,693 bpd for the nine
months ended August 31, 1998, 4% lower than the 1,761 bpd for the same period
in 1997. Oil prices continued to remain low, with an average price received
for oil and liquids of $17.28 per bbl for the first three quarters of 1998
compared to $25.60 per bbl for the same period in 1997.
On a year-to-date basis, production expenses averaged $5.63 per boe to
August 31, 1998 compared to $5.21 per boe in 1997. General and administrative
expenses, on a per unit basis, were down to $1.59 per boe in 1998 from $2.22
per boe in the same period of 1997.
For the nine months ended August 31, 1998, New Cache incurred a net loss
of $2.423 million ($0.17 per share) as compared to a net income of $0.458
million ($0.05 per share) for the first nine months in 1997.
The Company has invested $21.893 million in the first nine months of
1998, compared to $40.629 million during the same period in 1997. At August
31, 1998, New Cache had debt, net of working capital, of $35.312 million,
compared to $25.532 million at August 31, 1997.
New Cache currently has approximately 14.185 million shares outstanding
with 15.407 million on a fully diluted basis. |
