EARNINGS / Blue Range Resource Corporation Announces Its Second Quarter
Results
CALGARY, Nov. 27 /CNW/ - Mr. J. Gordon Ironside, President and CEO, Blue
Range Resource Corporation (''BRRC''), today announced the Company's second
quarter results. Comparative information for the last three years is as
follows:
Six months ended September 30
---------------------------------
1998 1997 1996
FINANCIAL ($ Thousands)
Oil and gas revenues 37,777 36,578 32,832
Funds flow from operations 14,763 15,179 17,180
Net earnings (loss) (6,509) (898) 3,774
Working capital (deficiency) (5,056) (10,547) 3,694
Capital expenditures (net) 23,073 59,556 60,802
Capitalized lease obligations 10,708 0 0
Long-term debt 109,962 100,282 89,805
Shareholders' equity 224,014 223,440 189,777
Common shares issued 33,325 32,631 27,835
Avg. shares outstanding 33,323 30,646 27,768
OPERATIONS
Gas production (mmcf/d) 92.6 108.0 90.0
Average gas price ($/mcf) 1.75 1.35 1.33
NGL production (bbls/d) 1,356 1,675 1,483
Average NGL price ($/bbl) 14.33 20.67 19.76
Oil production (bbls/d) 1,362 816 1,100
Average oil price ($/bbl) 18.49 23.95 27.53
Per Share ($ Basic)
Funds flow per share 0.44 0.50 0.62
Earnings (loss) per share (0.20) (0.03) 0.14
DRILLING RESULTS (Gross)
Gas wells 14 16 9
Oil wells 3 8 9
Dry & abandoned 5 8 6
---------------------------------
Total 22 32 24
---------------------------------
The unaudited Consolidated Statements of Earnings and Retained Earnings
for the Six Month Period ended September 30, 1998 are as follows:
(unaudited) Six Months Three Months
------------------- -------------------
(Thousands of Dollars, except 1998 1997 1998 1997
per share amounts)
Revenue:
Petroleum and gas sales 37,777 36,578 17,761 18,602
Royalties (5,688) (4,493) (3,385) (2,380)
Alberta Royalty Tax Credit 1,265 800 762 457
-------- -------- -------- --------
33,354 32,885 15,138 16,679
Investment income 962 - 373 -
Other 81 801 1 399
-------- -------- -------- --------
34,397 33,686 15,512 17,078
-------- -------- -------- --------
Expenses:
Production 12,604 12,851 6,117 6,697
General and administrative 2,512 1,990 1,218 1,071
Interest on long-term debt 4,213 3,107 2,080 1,793
Depletion and depreciation 17,633 15,993 8,583 8,531
-------- -------- -------- --------
36,962 33,941 17,998 18,092
-------- -------- -------- --------
Net earnings (loss)
before income taxes (2,565) (255) (2,486) (1,014)
-------- -------- -------- --------
Income taxes:
Current 541 542 254 409
Deferred 3,403 101 (479) (336)
-------- -------- -------- --------
3,944 643 (225) 73
-------- -------- -------- --------
Net earnings (loss)
for the period (6,509) (898) (2,261) (1,087)
Retained earnings,
beginning of period 34,904 31,930 30,656 32,119
-------- -------- -------- --------
Retained earnings,
end of period 28,395 31,032 28,395 31,032
Earnings per share
Basic (0.20) (0.03) 0.07 (0.04)
-------- -------- -------- --------
-------- -------- -------- --------
Fully diluted (0.20) (0.03) 0.07 (0.04)
-------- -------- -------- --------
-------- -------- -------- --------
1. Lower gas and NGLs production continues to reflect the sale of
producing natural gas properties which had previously contributed 12
mmcf/d of volume. Higher oil volumes relate to increased rates from
our Hillsdown Viking waterflood and new oil discoveries at Boundary
Lake and Virginia Hills. First half gas production averaged 92.6
mmcf/d, down 14% from 1997. NGLs averaged 1,356 bbls/d, down 19% from
1997, while crude oil averaged 1,362 bbls/d, up 67% from 1997.
2. The Company has drilled 22 wells to date resulting in new
deliverability, most of which will be on stream by mid December,
1998. A total of 28 wells remain to be drilled prior to year end
March 31, 1999.
3. Three successful Halfway gas wells have been drilled at Highway/Beg.
Two wells are now on stream at a combined rate of 5.7 mmcf/d. The
third well tested 5.2 mmcf/d of gas on completion and will be tied in
by December 4th at an expected rate of 4 mmcf/d. The Company plans to
drill three offset wells to this discovery, the first of which will
spud during the first week of December.
4. At Virginia Hills three in-fill oil wells were drilled and placed on
stream at approximately 250 bbls/d. A further 4 mmcf/d of natural gas
is expected to be tied in by December 15, 1998 and at least five
wells remain to be drilled in the area prior to March 31, 1999.
5. At Pine Creek our first Wabamun gas well commenced production in mid
August and continues to flow at a rate of 5.2 mmcf/d (1.8 mmcf/d
net). A follow up to this well tested at a rate of 9 mmcf/d (1.2
mmcf/d net) on completion. This well will be on stream by the end of
December, 1998. A third well was recently cased and is waiting on
completion. At least one additional well is planned for this prospect
prior to March 31, 1999.
6. Paddock Lindstrom & Associates have completed a review of the
Company's oil and gas reserve base as of October 1, 1998 and have
indicated that during the period April 1, 1998 to October 1, 1998,
4.1 mmboe of net proven reserves were added. During the same period
the Company incurred net capital expenditures of $23.1 million,
resulting in favorable proven finding and development costs of
$5.63/boe.
7. Oil and gas revenues increased by 3% to $37.8 million from $36.6
million in 1997. Natural gas prices averaged $1.75/mcf and were 30%
higher than 1997. Preliminary data indicates our gas price for the
month of November will be in range of $2.25/mcf or 29% higher than
the most recent six-month period. Corresponding revenues would have
been $8.5 million higher for the period based on this price.
Offsetting higher gas prices were lower NGLs and crude oil prices
which were down 31% and 23% respectively.
8. Blue Range recently announced that it had entered into two separate
natural gas hedging transactions. These hedges for approximately 15
mmcf/d production will ensure prices in excess of $2.50/mcf on a year
round basis for the period November 1, 1998 to October 31, 2003.
9. Funds flow from operations was $14.8 million compared to $15.2
million in 1997 with a net loss of $6.5 million for the six months
compared to a net loss of $898,000 last year. Approximately $4.1
million of this loss is attributable to a one-time deferred tax
charge relating to the sale of our natural gas portfolio to Enron
Capital & Trade. A net loss of $2.3 million was recorded for the
second quarter versus a net loss of $1.1 million during the same
period last year.
10. Production expenses for the six-month period were $12.6 million
($5.75/boe) compared to $12.9 million ($5.30/boe) in 1997. General
and administrative expenses increased to $2.5 million ($1.15/boe)
from $2.0 million ($0.82/boe) last year. The Company has maintained
a full contingent of staff in anticipation of securing joint venture
funds to accelerate exploration and development of a significant
prospect inventory. Interest expense was $4.2 million ($1.92/boe)
compared to $3.1 million ($1.27/boe) in 1997.
11. On November 13, 1998 Big Bear Exploration Ltd. made its offer to
purchase (''the Offer'') Blue Range Resource Corporation on the basis
of 11 Big Bear shares for each Blue Range share. The Board of
Directors of Blue Range has stated the Offer is not in the best
interests of Blue Range Shareholders and the consideration offered is
inadequate from a financial point of view. The Directors' Circular
recommending Rejection of the Offer dated November 23, 1998, has been
distributed to all Blue Range shareholders and additional copies are
available upon request. The full text of the rejection can be
obtained from our website. The Board of Directors is aggressively
pursuing alternatives to the Offer. It is the Board of Directors'
clear intention to sell Blue Range to a legitimate buyer. Blue Range
has commenced discussions with interested parties with a view to
obtaining a superior bid.
12. The Board of Directors and Management of Blue Range are determined to
maximize value for all of our shareholders. In this regard, we have
received letters of support from over 120 shareholders representing
over 7.1 million shares, 20% of the current issued and outstanding
shares. Management is also committed to ensure continuity for our
operations and for our employees. The staff and consultants of Blue
Range are to be commended for their exceptional efforts in these
difficult times for the company.
Blue Range is a natural gas exploration, development and production
company based in Calgary, Alberta. The Company concentrates its activities on
liquid-rich natural gas prospects in Central Alberta, Northwest Alberta and
Northeast British Columbia. Blue Range's common shares are listed for trading
on The Toronto Stock Exchange and The Alberta Stock Exchange under the symbol
BBR.A. |
