CORPORATE NEWS RELEASE
„„ TRACER PETROLEUM CORPORATION „„
„„ NASDAQ Symbol: TCXXF „„ Dateline: Calgary, AB, Canada
„„ VSE Symbol: TPC „„ Date: Monday, May 31, 1999
TRACER ANNOUNCES RESULTS FOR FIRST QUARTER OF 1999
(all funds in Cdn. $ unless otherwise stated)
TRACER PETROLEUM CORPORATION (“Tracer” or the “Company”) announces the results of
operations for the period ending March 31, 1999. Net loss for the three month period was $339,979, or
$0.08 per share, versus a loss of $109,841, or $0.03 per share for the first quarter of 1998. This loss is
primarily due to a decrease in oil and gas revenues as a result of lower oil prices, and an increase in
administrative expenses to $239,211, versus $158,358 for 1998. The increase in administrative
expenses can be primarily attributed to costs incurred by the Company in the pursuit of new projects in
Iran and elsewhere.
Revenue from oil and gas operations decreased to $318,504 (1998 - $544,109), reflecting the drop in
oil prices during 1998 which continued through the first quarter. Revenue was also negatively impacted
by reduced recoveries from uplift and other operational sources. Further, initial indications of natural
decline in the OK Block fields have been seen. Oil and gas expenses were reduced to $425,510, versus
$703,692 for the same period in 1998. This is mainly due to the reduction in the carried interest past
cost allocation for the Company's 4.25% interest in the Ogan Komering Block (“OK Block”).
Gross production from the OK Block in Indonesia has declined to approximately 12,300 barrels per
day. However, the operator of the block, Talisman Energy, has initiated work to drill 8 to 10
development wells, and plans commencement of the full-scale waterflood project during 1999.
Furthermore, it is understood that negotiations on gas pricing for the previously-suspended OK gas
project have been reopened at the request of Pertamina.
The first quarter of 1999 saw Tracer management redouble its efforts to acquire new, higher potential
projects outside of the current core area of Indonesia. On January 14
th
, the Company announced an
agreement with the Mullins Group to form a joint venture, Tracer Petroleum International (“TPI”), for
the purpose of acquiring certain oil and gas development opportunities in Iran. During the quarter
progress was made in positioning the Company as a viable partner in such developments and presenting
TPI to the Iranian government authorities, with positive response.
As announced in December, 1998, an agreement had been executed whereby the Company was given
the right to participate in the Sungai Gelam A, B, & D Technical Assistance Contract (“TAC”) located
in South Sumatra, Indonesia. Efforts continued during the quarter to finalize arrangements with the
operator's creditors and seek the initial financial backing prior to commencement of work. To date,
while verbal agreement of all parties has been achieved, agreement has yet to be reached on adjustments
related to the operator's accounting practices, and project financing tasks remain.
Jim |
