Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: The Fix who wrote (9540)	2/13/2003 11:50:47 PM
From: Kerm Yerman	Respond to of 24921

The Fix / RXI Moves Most definitely. Right now they are drilling in NW Alberta in a multiple well natural gas play. I suspect you will see them move into the NE British Columbia area also. The current farm in Alberta could lead to big and better things, dependent upon the success of the farm in. I believe these guys have the necessary contacts to negotiate more farm in situations, as well as joint ventures. I would watch Crown sales to see where they are acquiring acreage. They will attempt (my guess) to gain a sizable position in a single area to get Canadian operations underway. Due to the cash flow resulting from oil production in S. America, I would not be surprised to see them acquiring a company with a foothold in an area they wish to explore. The following is the company's outlook as presented in their 3rd Qtr report. (November release) OUTLOOK Management was pleased with the scope of capital investments that were successfully completed during the quarter. Production gains were achieved in both operational areas. The majority of the activity was driven by prior commitments, which will have been largely satisfied by year end. Overall, performance results remain on track with previous six month guidance: cash flow between $15 to $20 million, production between 7,500 and 8,000 barrels per day, and capital spending between $20 to $25 million. Looking forward, we are continuing to assess the business climate in both Ecuador and Argentina. Significant near term challenges are evident in both countries while longer term prospects, though far from certain, remain promising. In light of this backdrop we will increase the emphasis on our stated goal of introducing a domestic component to our portfolio in the near future. We have designed the 2003 investment plan to start to reposition our asset base and focus more towards Western Canada. During the continued uncertainty in the South American economic climate we will utilize our strong cash flow from the region to fund domestic growth opportunities, while continuing to be opportunistic in our investigation of further business opportunities in South America, in particular Argentina. Going into 2003 we would anticipate a highly disciplined approach to capital investment, particularly regarding any discretionary capital for our Latin American operations. Development attention will be focused on growing an Alberta production base. Overall we have established a preliminary capital budget of $12.5 million net of acquisitions, representing approximately one half of forecast cash flow of $23 million at $23 WTI. Two thirds of this budget will be directed to domestic activities. This initial allocation will lead to an anticipated decline of approximately 10% in average company production relative to current rates but will enable us to retain a cash flow reserve to fund additional growth opportunities through the period as we refocus operations. We remain very positive about the prospects of our existing operations and the leverage that they will provide towards future growth.