EARNINGS / Rio Alto - Nine Month Results
CALGARY, ALBERTA--RIO ALTO EXPLORATION LTD. (TSE - RAX) is pleased
to present the Company's nine month results for the period ended
September 30, 1998. During the period the Company increased
production by 46 percent to an average of 35,477 BOE (Barrels of
oil equivalent per day) over the same period in 1997.
Three Months Nine Months
Ended September 30 Ended September 30
---------------------------------------
Percent Percent
FINANCIAL 1998 1997 Change 1998 1997 Change
---- ---- ------- ---- ---- -------
($ thousands, except
per share amounts)
Revenue $62,606 $48,390 +29 $178,274 $126,478 +41
Cash flow 32,219 27,082 +19 94,866 74,774 +27
Per share 0.50 0.51 -2 1.55 1.46 +6
Net earnings 8,175 8,163 - 24,428 24,638 -1
Per share 0.13 0.15 -13 0.40 0.48 -17
Capital expenditures
Land acquisition
and retention $8,326 $7,602 +10 $20,772 $16,389 +27
Exploratory seismic 1,954 1,211 +61 13,760 14,742 -7
Property
acquisitions 21,827 208,579 -90 168,398 217,363 -23
Proceeds on
disposition - - - (910) (1,773)-49
Exploration and
development 26,048 27,760 -6 131,354 127,741 +3
------ ------ ------- -------
Total $58,155$245,152 -76 $333,374 $374,462 -11
------ ------- ------- -------
------ ------- ------- -------
PRODUCTION
Natural gas
Mcf per day 311,103 253,200 +23 295,800 218,300 +36
Netback per mcf
Sales price $1.89 $1.78 +6 $1.91 $1.89 +1
Royalties 0.34 0.33 +3 0.32 0.30 +6
Operating costs 0.23 0.23 - 0.23 0.24 -4
---- ---- ---- ----
$1.32 $1.22 +8 $1.36 $1.35 +1
---- ---- ---- ----
---- ---- ---- ----
Oil and natural gas
liquids
Barrels per day 6,653 3,587 +85 5,897 2,426 +143
Netback per barrel
Sales price $14.36 $20.21 -29 $15.38 $21.66 -29
Royalties 3.73 6.22 -40 3.90 5.92 -34
Operating Costs 4.87 4.90 -1 4.95 5.03 -2
----- ----- ----- -----
$5.76 $9.09 -37 $6.53 $10.71 -39
----- ----- ----- -----
----- ----- ----- -----
Nine Months Ended Nine Months Ended
September 30, 1998 September 30, 1997
------------------ ------------------
WELLS DRILLED Gross Net Gross Net
----- --- ----- ---
Natural gas 92 79.5 133 116.8
Oil 1 1.0 3 2.6
Service 1 0.8 - -
Dry 28 27.0 29 28.0
-- ---- -- ----
Total 122 108.3 165 147.4
--- ----- --- -----
--- ----- --- -----
Compared to the same period in 1997, net average natural gas
production for the nine months to September 30, 1998 increased 36
percent to 295.8 million cubic feet per day while daily average
oil and natural gas liquids production increased 143 percent to
5,897 barrels per day. With current production rates at 311
million cubic feet per day of natural gas and 6,600 barrels per
day of oil and natural gas liquids the Company is on track to meet
its 1998 average daily production target of 300 million cubic feet
of natural gas and 6,200 barrels per day of oil and natural gas
liquids. Operating costs averaged $0.23 per thousand cubic feet
for natural gas and $4.95 per barrel for oil and natural gas
liquids, while general and administrative costs averaged $0.07 per
thousand cubic feet on a gas equivalent basis.
Due to increased production, total revenues for the nine months
ended September 30, 1998 increased 41 percent to $178,273,548 from
$126,477,566 in 1997. As a result, cash flow for the same period
increased by 27 percent to $94,864,954 ($1.55 per share) from
$74,773,212 ($1.46 per share) while earnings remained essentially
flat, due to lower liquids prices, at $24,327,375 ($0.40 per
share) compared to $24,637,987 ($0.48 per share) in 1997.
The Company is currently finalizing its plans for the 1998/99
winter program which anticipates the drilling of approximately 130
wells, further increasing average production rates for 1999 to 356
million cubic feet per day of natural gas and 7,800 barrels per
day of oil and natural gas liquids. |
