Garry / Founders Energy
I apologize for getting back to you late. I actually prepared this
reply a couple days ago,but it got hung up in the system. Jill, here
at SI, helped me out. Here's another go at it.
Corporate History & Profile
Founders Energy Ltd. is a rapidly expanding Canadian junior oil and
gas company which has grown through exploration, acquisition and
merger. The Company's emphasis is to maintain high working interests
and operatorship in core areas and achieve a higher than average rate
of growth in production, reserves, cash flow per share and earnings
per share. In its short history, Company production has risen as a
result of drilling, acquisition, and the amalgamation with Golden
Coast Energy Ltd. from 23 barrels of oil equivalent per day (boepd)
in 1994 to a current level in excess of 1,200 boepd.
Two key acquisitions have built a strong foundation of core properties
for the Company. Earlier this year, Founders and Lateral Vector Inc.
(LVR) acquired the southeast Saskatchewan oil and gas assets of
Reserve Royalty Corporation. In August, Founders and LVR completed a
rationalization of the assets, and as a result, Founders received
$1.65 million in cash and increased its interests in the areas of
Hartaven, Weir Hill, Benson East, and Hume. Net cost of the
transaction based on proven reserves was an exceptional $0.71 per
boe.
On December 4, 1996, Founders amalgamated with former VSE listed
Golden Coast Energy Ltd. more than doubling production to the current
level in excess of 1200 boepd.
Highlights
Plan to drill two horizontal wells and one vertical well in southeast
Saskatchewan prior to year end 1996;
Aggressive 1997 capital budget highlighted by the drilling of up to
ten wells in southeast Saskatchewan by Q2 1997, comprised of seven
horizontal wells and three exploratory wells;
Up to 30% of 1997 capital budget will be dedicated to exploratory
drilling and the acquisition of undeveloped land and seismic;
Completed Special Warrants flow-through share offering in December
1996 for gross proceeds of $1.3 million;
$5 million equity financing agreed to with Research Capital
Corporation expected to be priced and closed in February, 1997;
$9 million in tax pools;
Recent buy recommendations from "The Buy Low, Sell High!" investment
newsletter and McDermid St. Lawrence (Vancouver)
Key Producing Properties
(as of December, 1996)
Daily Avg. Production
Area Status NetW/I Oil Gas Boe
Benson East, SK Op 67.0% 55 -- 55
Fosterton Main, SK Non-Op 6.2% 71 -- 71
Handsworth, SK Non-Op 23.5% 200 -- 200
Hartaven, SK Op 67.0% 120 -- 120
Hume, SK Op 54.0% 71 -- 71
Pembina BR, AB Non-Op 22.0% 200 -- 200
Weir Hill, SK Op 39.0% 35 -- 35
Weyburn Unit, SK Non-Op 0.5% 110 -- 110
Other Areas Op/Non Varies 147 2,131 360
----- ----- -----
Totals 1,009 2,131 1,222
Oil= bbl's/d.....Gas= mcf/d.....Boe= bbl's/d (10 mcf = 1 boe)
Financial Summary
Year ended December 31, (9 mo.)
(000's) 1996 1996E 1995 1994
Gross Revenue $3,022 $4,625 $ 313 $ 137
Cash Flow $1,465 $2,125 ($ 21) ($ 13)
CF/per share $ 0.10 $ 0.15 - -
Net Income $ 613 $ 900 ($ 122) ($ 54)
Net Inc per share $ 0.04 $ 0.06 ($ 0.01) ($ 0.01)
Operating Expenses $ 599 $ 800 $ 107 $ 44
General and Admin Exp. $ 197 $ 400 $ 156 $ 99
Capital Expenditures $4,124 $6,000* $ 803 $ 891
Weighted Avg Shares 14,033 14,618 9,345 7,246
Finding & Onstream Costs $ 3.33 $ 3.12 $ 2.72 $ 4.69
* Capital expenditures do not include the impact of Golden Coast
Amalgamation
Operations Summary
nine months 1996 1996E* 1995 1994
Avg. Production (boepd) 442 500** 47 23
Reserves (Mboe) 1,171 3,800 457 180
Proven 1,092 3,300 378 170
Net Undeveloped Land 6,923 8,000 5,672 3,385
Avg. W.I. 40% 35% 42% 70%
Wells Drilled, Gross 7 10 3 8
Net Wells 1.81 3.42 0.86 1.98
Success Ratio 100%(3) *** 67% 63%
* Includes amalgamation with Golden Coast Energy effective December
4, 1996
** Management is forecasting to exit 1996 with average daily
production of 1,300 boepd
*** To be determined
What's Ahead
Founders is on track to achieve projected $0.15 cash flow per share
for 1996E (Dec. year end). Two horizontal wells are planned to be
drilled at Weir Hill and Hartavan as well as one vertical well to be
drilled at Hume by year end 1996.
During 1997, the Company will focus on the continued exploitation of
existing core properties in southeast Saskatchewan through horizontal
drilling. Founders will also be drilling a number of new exploratory
prospects in southeast Saskatchewan as well as developing one or more
new core areas through acquisition or drilling. As part of this
strategy, Founders will be aggressively pursuing acquisition of new
lands to increase its undeveloped land holdings.
Corporate Information
Incorporated: August, 1993
Listed (ASE): December, 1994
Symbol: FDE
Amalgamation with
Golden Coast
Energy Ltd. Dec. 4, 1996
Share Structure
(As at December 5, 1996)
Basic 20.8 MM
Public Float
(64%) 16.2 MM
Management & Insiders
(36%) 4.6 MM
Special Warrants
(Issued Dec/96) 1.7 MM
Stock Options 1.2 MM
Warrants 2.7 MM
Convertible Debentures 1.2 MM
-------
Fully Diluted 27.6 MM
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RECENT NEWS RELEASES:
FOUNDERS ENERGY CLOSES ACQUISITION OF ROYALTY INTEREST
CALGARY, Dec. 23 /CNW/ - (FDE-ASE) - Founders Energy Ltd. ("Founders")
of Calgary, Alberta today announced today that it has completed the
acquisition of a 38 percent Royalty Interest from Reserve Royalty
Corporation ("Reserve"). The Royalty Interest had been granted to
Reserve by 637678 Alberta Ltd., a wholly owned subsidiary of
Founders, which holds 50 percent of all assets of the former Golden
Coast Energy Ltd. The acquisition will result in a reduction of
royalty obligations and a corresponding increase in consolidated cash
flow of approximately $800,000 for 1997. The purchase price of
$3.0 million was funded from the Company's bank facilities.
FOUNDERS ENERGY LTD. ANNOUNCES $10 MILLION CAPITAL PROGRAM FOR 1997
CALGARY, January 22 /CNW/ (FDE-ASE) -- Founders Energy Ltd. announced
today a $10 million capital program which will include the drilling of
20 wells consisting of eleven development wells, of which seven are
horizontal, and nine vertical exploration wells. The horizontal
wells will be drilled in southeast Saskatchewan while the nine
vertical exploration wells are planned for southeast Saskatchewan (to
include 2 Ordovician test wells), northwest Alberta and northeast
B.C. Founders will also be aggressively expanding its land holdings
with expenditures currently budgeted at $2 million.
To date in 1997, the Company has completed one (0.62 net) horizontal
well at Hartaven and is currently drilling one (0.42 net) horizontal
well at Weir Hill, both areas in southeast Saskatchewan. The
Hartaven has commenced production and the Company expects to have
production results available within the next two weeks. The 1997
capital program will be funded through a combination of cash flow,
proceeds on exercise of outstanding convertible instruments and bank
debt.
The Company is also in the process of finalizing a preliminary
prospectus to be filed by January 31, 1997 in respect of the
previously announced equity offering with Research Capital
Corporation. The current capital program is not dependent on the
proceeds from this offering.
Note: Just posted news release at Kerm's Korner on the company. |
