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Gold/Mining/Energy : Tusk Energy (TKE) -- Ignore unavailable to you. Want to Upgrade?

To: TANTRAMAR who wrote (1148)	8/29/1999 1:21:00 PM
From: Robert McCullough	Read Replies (1) \| Respond to of 1207

August 31, 1999 TSE:TKE 12g3-2(b):82-3297 NEWS RELEASE TUSK INCREASES CASH FLOW IN FIRST HALF Increases in oil price and additional gas production from a discovery made in the early part of the year contributed to an increase in cash flow during the second quarter to $692,493 ($2,769,972 annualized). Cash flow per share for the quarter was $0.07. Net income per share for the second quarter was $0.02 compared to $0.01 during the first quarter. Net income per share for the six months was $0.03. Reflecting the improvement in oil prices, gross revenue per boe was $20.25 during the first six months of the year and $23.38 during the second quarter compared with $21.17 during the first half of 1998 and $17.12 during the first quarter of 1999. Cash flow per boe was $10.95 during the second quarter compared with $7.04 during the first quarter. Capital spending was $1,345,887 during the first six months compared to $2,184,359 one year earlier. Net Income Cash Cash Flow Net Net Income per share Flow per share Revenue BOEPD Q2 1999 $297,493 $0.02 $692,493 $0.07 $1,318,916 695 Q2 1998 $270,240 $0.02 $494,140 $0.05 $1,029,484 574 Q1 1999 $ 41,563 $0.01 $446,563 $0.04 $1,026,460 705 Q1 1998 $134,010 $0.02 $326,310 $0.04 $ 886,005 552 Oil production during the quarter was 601 bopd compared to 641 bopd in the first quarter while gas production increase 47% from 638 Mcfd in the first quarter to 939 Mcfd in the second quarter. Production averaged 700 boepd during the first half compared to 563 boepd during the first six months of 1998. At the end of the reporting period, TUSK had 10,667,834 common shares issued and outstanding and $4,465,265 in debt for an exit rate debt/cash flow ratio of 1.64. Subsequent to the end of the reporting period, TUSK completed (news release of August 19, 1999) the issue of 400,000 common shares and 3,000,000 flow-through special warrants (each convertible into one common share) for gross proceeds of $3.0 million. First Half Drilling Results During the first half, TUSK participated in two gas discoveries. The first was a dual zone gas discovery made near Edmonton (news release of March 15, 1999). The well (TUSK: 33.3%) commenced production in mid-April from the lower of two zones and averaged 1.4MMcfd (470 Mcfd net) to June 30. The upper zone has now been perforated and is flowing in excess of 2 MMcfd. A decision on whether to dual complete the well for simultaneous production from both zones will be made shortly. The second was in northeast British Columbia where, near the end of the second quarter, TUSK participated in a gas discovery (news release of July 16, 1999) utilizing new proprietary horizontal drilling technology. TUSK owns 30% before payout (20% after payout) in the discovery well and a 20% working interest in a large acreage position in the area. TUSK can earn in 20 additional sections lands by drilling two additional earning wells on the same basis. A second earning well started drilling on August 26, 1999. Capital Budget Favourable commodity prices during the latter part of 1999 will lead to increased levels of cash flow, improved access to investment capital and an accelerated rate of capital spending during the second half of 1999. Funds will be expended to tie-in a deep gas well at Strachan, tie-in a gas well at Deer, Alberta and to drill additional wells in both the northeast B.C. and Meekwap areas. Outlook TUSK expects that the latter part of 1999 and the first part of the year 2000 will be the busiest drilling season in corporate history. Drilling efforts will be focused on gas as TUSK moves towards a more balanced production base. TUSK's primary producing area continued to be Meekwap, Alberta which represented 85% of TUSK's overall production during the period. TUSK operates over 90% of its net production. Contact: Norman W. Holton, President TUSK Energy Inc. 1950, 700-4th Avenue S.W. Calgary, Alberta, T2P 3J4 Bus: (403) 264-8875 Fax: (403) 263-4247 e-mail: tusk@tusk-energy.com www.tusk-energy.com tusk\tusnews.097