ENERGY TRUSTS / Orion Energy Trust Reports Third Quarter Results
CALGARY, Nov. 24 /CNW/ - OET.un - Orion Energy Trust (''Orion'') submits
its quarterly report for the three months ended September 30, 1998.
Results from Operations
Cash distributions for the three months ended September 30, 1998 totaled
$2,925,710, or $0.21 per trust unit. The highlights of the third quarter are
as follows:
Three months Nine months Period from
ended ended June 30 to
Sept. 30,1998 Sept. 30,1998 Sept. 30,1997
-------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Revenue $ 6,852,754 $ 19,862,945 $ 8,230,908
Net loss $ (1,213,650) $ (3,215,758) $ (334,679)
Cash distributions $ 2,925,710 $ 8,857,867 $ 5,640,000
Distributions per unit $ 0.21 $ 0.63 $ 0.40
Units outstanding - end
of quarter 14,114,422 14,114,422 14,100,000
OPERATING HIGHLIGHTS
Production
Crude oil (bbls/d) 2,633 2,488 2,592
Liquids (bbls/d) 490 459 477
Natural gas (mcf/d) 15,732 16,215 17,960
Total (BOE/d) 4,696 4,569 4,865
Average Prices
West Texas Intermediate
(US$/bbl) $ 14.15 $ 14.91 $ 19.81
Crude oil (Cdn$/bbl) $ 17.99 $ 18.46 $ 24.42
Liquids (Cdn$/bbl) $ 10.53 $ 12.67 $ 19.64
Natural gas (Cdn$/bbl) $ 1.91 $ 1.89 $ 1.56
Total (Cdn$/BOE) $ 17.58 $ 18.03 $ 20.71
-------------------------------------------------------------------------
Note: Orion Energy Trust commenced operations on June 30, 1997. Included
in 1997 cash distributions is a purchase price adjustment of $1,603,457, or
$0.11 per trust unit.
Oil and liquids production averaged 3,123 barrels per day during the
third quarter, 2% higher than in 1997 and 9% higher than the average oil and
liquids production during the second quarter. The increase in production is a
direct response to Orion's various workover programs at Sundre, East
Garrington and at the Caroline Cardium E Pool earlier in the year.
Production of natural gas in the third quarter averaged 15.7 million
cubic feet per day, 12% lower than for the same period in 1997. Natural gas
production for the full nine-month period is averaging 16.2 million cubic feet
per day, 2% higher than the average for 1997.
Crude oil and liquids prices continued their decline during the third
quarter, with the WTI crude oil price averaging US$14.15 per barrel, down from
an average of US$14.91 per barrel at the end of the second quarter. This is
also 29% lower than the average crude oil price of US$19.81 per barrel for the
same quarter in 1997. The average price received by Orion for oil and liquids
during the quarter was $16.82 per barrel, compared to $23.68 per barrel in
1997.
Natural gas prices in the third quarter averaged $1.91 per mcf, compared
to $1.56 per mcf in 1997. For the nine months ended September 30, 1998,
natural gas prices are averaging $1.89 per mcf. Commencing in November 1998,
Orion has forward sold approximately 4.0 Mmcf per day of natural gas
production for the next 12 months, at an average wellhead price of $2.48 per
mcf.
The cash distribution for the quarter of $2,925,710 represents a
distribution netback of $6.77 per barrel of oil equivalent of production,
$0.63 per barrel higher than the cash distribution for the previous quarter.
Development Activities
As a result of continuing low crude oil prices, Orion deferred the
portion of its planned 1998 capital expenditure associated with the
development of crude oil reserves. In the interim, Orion completed various
stimulation workovers at its major oil producing properties, increasing oil
and liquids production during the quarter by 9%.
Acquisition Activities
On September 30, 1998, Orion closed the acquisition of 13.2 BCF and 420
thousand bbls of established natural gas and liquids reserves respectively, for
a total purchase price of $11.34 million. The reserves are in the Ansell area
and include working interests in well-defined reservoirs, with predictable
production profiles and strong operators. The Ansell property has a low
operating cost of approximately $3.00 per BOE, compared with Orion's average
operating cost of approximately $6.78 per BOE. This acquisition increases
total production by 8% and increases natural gas production to 38% of total
production.
Cash Distributions
On August 15, 1998, monthly cash distributions commenced at a rate of
$0.07 per trust unit. Cash distributions for the third quarter totaling
$2,925,710 ($0.21 per trust unit) were paid to Unitholders on August 15,
September 15 and October 15, 1998.
DISTRIBUTION HISTORY
Record Date Payment Date Amount Taxation
Year
------------------------------------------------------------------------
September 30, 1997 October 15, 1997 $ 0.40 1997
December 31, 1997 January 15, 1997 $ 0.31 1997
March 31, 1998 April 15, 1998 $ 0.24 1998
June 30, 1998 July 15, 1998 $ 0.18 1998
July 31, 1998 August 15, 1998 $ 0.07 1998
August 31, 1998 September 15, 1998 $ 0.07 1998
September 30, 1998 October 15, 1998 $ 0.07 1998
------------------------------------------------------------------------
Cumulative Distributions since September 1997 $ 1.34
------------------------------------------------------------------------
Liquidity and Capital Resources
On September 30, 1998, Orion's bank loan balance totaled $32.6 million.
With a credit facility of $65.0 million and a borrowing base of $40.0 million,
Orion has the financial flexibility to pursue exploitation projects, which
meet our return criteria and to pursue acquisitions, which increase unitholder
value and distributions.
Outlook
Although the prevailing weakness in crude oil prices is expected to
continue in 1999, natural gas prices continue to strengthen and will help
mitigate the effect of lower oil prices on cash distributions. The recent
acquisition of natural gas reserves improves Orion's gas to oil ratio and
positions Orion to both benefit from higher natural gas prices and improved
cash distributions in 1999.
ORION ENERGY TRUST
Consolidated Balance Sheets
(unaudited)
ASSETS September 30, December 31,
1998 1997
Current Assets
Cash and short-term deposits $ 74,553 $ 885,991
Accounts receivable 2,916,782 3,925,562
Alberta royalty tax credit receivable 486,147 642,148
Prepaid expenses 322,705 12,932
------------ ------------
3,800,187 5,466,633
Reclamation fund 726,158 -
Capital assts 144,729,507 139,074,797
------------ ------------
$149,255,852 $144,541,430
------------ ------------
------------ ------------
LIABILITIES AND UNITHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities $ 3,361,299 $ 3,798,405
Unit distributions payable 956,287 4,372,093
------------ ------------
4,317,586 8,170,498
Long term debt 32,600,000 13,136,980
Future site restoration costs 1,907,130 765,813
------------ ------------
38,824,716 22,073,291
Unitholders' equity 110,431,136 122,468,139
------------ ------------
$149,255,852 $144,541,430
------------ ------------
------------ ------------
ORION ENERGY TRUST
Consolidated Statement of Earnings
(unaudited)
Three months ended Nine months Period from
September 30 ended June 30 to
1998 1997 Sept. 30, Sept. 30,
1998 1997
------------ ------------ ------------ ------------
Revenues
Petroleum and
natural gas $ 7,596,540 $ 9,273,259 $22,492,448 $ 9,273,259
Crown royalties (1,087,516) (1,512,833) (3,793,824) (1,512,833)
Alberta Royalty Tax
Credit 249,109 347,664 830,233 347,664
Freehold and other
royalties (178,635) (27,382) (521,011) (27,382)
------------ ------------ ------------ ------------
6,579,498 8,080,708 19,007,846 8,080,708
Royalty and other
income 273,256 150,200 855,099 150,200
------------ ------------ ------------ ------------
6,852,754 8,230,908 19,862,945 8,230,908
------------ ------------ ------------ ------------
Expenses
Operating 2,873,424 3,530,648 8,457,481 3,530,648
General and
administrative 314,682 284,765 997,434 284,765
Management fee 163,700 149,391 503,182 149,391
Interest 322,466 224,038 895,202 224,038
Depletion and
depreciation 3,987,775 3,946,863 11,084,087 3,946,863
Future site
restoration 404,357 429,882 1,141,317 429,882
------------ ------------ ------------ ------------
8,066,404 8,565,587 23,078,703 8,565,587
------------ ------------ ------------ ------------
Net loss for the
period $(1,213,650) $ (334,679) $(3,215,758) $ (334,679)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net loss per trust
unit $ (0.09) $ (0.02) $ (0.23) $ (0.02)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
ORION ENERGY TRUST
Consolidated Statement of Unitholders' Equity
Nine months ended September 30, 1998 (unaudited)
Unitholders' equity, beginning of period $122,468,139
Proceeds on issue of trust units 60,522
Net loss for the period (3,215,758)
Cash distributions (8,857,867)
Dividends (23,900)
---------------
Unitholders' equity - end of period $110,431,136
---------------
---------------
ORION ENERGY TRUST
Consolidated Statement of Changes in Financial Position
(unaudited)
Three months ended Nine months Period from
September 30 ended June 30 to
1998 1997 Sept. 30, Sept. 30,
1998 1997
------------ ------------ ------------ ------------
Operating Activities
Net loss for the
period $(1,213,650) (334,679) (3,215,758) (334,679)
Items not involving
cash
Depletion and
depreciation 3,987,775 3,946,863 11,084,087 3,946,863
Future site
restoration 404,357 429,882 1,141,317 429,882
Change in non cash
working capital (1,585,876) 5,125,923 (2,997,904) 5,125,923
------------ ------------ ------------ ------------
1,592,606 9,167,989 6,011,742 9,167,989
------------ ------------ ------------ ------------
Financing Activities
Issuance of trust
units 18,820 131,695,253 60,522 131,695,253
Unit distributions
paid (2,925,710) (5,640,000) (8,857,867) (5,640,000)
Dividends (8,700) - (23,900) -
Increase in long
term debt 11,700,000 17,936,980 19,463,020 17,936,980
------------ ------------ ------------ ------------
8,784,410 143,992,233 10,641,775 143,992,233
------------ ------------ ------------ ------------
Investing Activities
Capital assets (13,502,561) (144,687,162) (16,738,797) (144,687,162)
Reclamation fund
contribution (244,270) - (726,158) -
------------ ------------ ------------ ------------
(13,746,831) (144,687,162) (17,464,955) (144,687,162)
------------ ------------ ------------ ------------
Increase in cash and
short-term deposits (3,369,815) 8,473,060 (811,438) 8,473,060
Cash and short-term
deposits, beginning
of period 3,444,368 - 885,991 -
------------ ------------ ------------ ------------
Cash and short-term
deposits, end of
period $ 74,553 $ 8,473,060 $ 74,553 $ 8,473,060
------------ ------------ ------------ ------------
ORION ENERGY TRUST
Consolidated Statement of Cash Available for Distribution
(unaudited)
Three months ended Nine months Period from
September 30 ended June 30 to
1998 1997 Sept. 30, Sept. 30,
1998 1997
------------ ------------ ------------ ------------
Net loss for the
period $(1,213,650) (334,679) $(3,215,758) $ (334,679)
Adjustments:
Depletion and
depreciation 3,987,775 3,946,863 11,084,087 3,946,863
Future site
restoration 404,357 429,882 1,141,317 429,882
Income from direct
royalties (325,001) (120,320) (739,706) (120,320)
Drawdown reserve to
fund future costs - - 600,000 -
Site reclamation fund (240,000) - (720,000) -
Non cash management
fee 13,498 35,250 50,223 35,250
------------ ------------ ------------ ------------
Cash available for
distribution 2,626,979 3,956,996 8,200,163 3,956,996
------------ ------------ ------------ ------------
Unit distributions
payable (99%) 2,600,709 3,917,426 8,118,161 3,917,426
Income from direct
royalties 325,001 120,320 739,706 120,320
Purchase price
adjustment - 1,602,254 - 1,602,254
------------ ------------ ------------ ------------
Cash distribution $ 2,925,710 $ 5,640,000 $ 8,857,867 $ 5,640,000
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Cash distribution per
trust unit 0.21 $ 0.40 0.63 $ 0.40
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ |
