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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Arnie who wrote (7463)	11/26/1997 3:40:00 AM
From: Kerm Yerman	Respond to of 15196

EARNINGS / Startech Energy Nine Month Report CALGARY, Nov. 25 /CNW/ - Startech Energy Inc. announced today the Company's financial and operating results for the third quarter of 1997, where Startech again posted record quarterly production more than 70 percent higher than the third quarter of 1996. Cash flow and earnings continue to be impacted by the higher Canadian crude oil differentials experienced in 1997. ($ thousands except per 9 Months to share amounts) September 30, 1997 Year Ago % Change Revenue $ 29,078 $ 17,382 67 Cash flow $ 14,695 $ 9,210 60 Cash flow per share fully diluted $ 1.05 $ 0.78 35 Earnings $ 923 $ 1,113 (17) Earnings per share fully diluted $ 0.07 $ 0.12 (42) Weighted average shares fully diluted 14,348 11,710 23 ($ thousands except per 3 Months to share amounts) September 30, 1997 Year Ago % Change Revenue $ 10,405 $ 6,129 70 Cash flow $ 5,003 $ 3,054 64 Cash flow per share fully diluted $ 0.32 $ 0.26 23 Earnings $ 157 $ 191 (18) Earnings per share fully diluted $ 0.01 $ 0.02 (50) Weighted average shares fully diluted 16,401 12,352 33 In the third quarter of 1997, Startech's daily production averaged a record 6,718 BOED, as compared to 3,933 BOED in the second quarter of 1996. This represents an annual quarterly increase in daily production of more than 70 percent. Startech is now well positioned to exceed its upwardly revised 1997 production exit rate of 7,900 BOED with more than 15 wells yet to drill this year. In April Startech revised upward the Company's 1997 production exit rate from 7,500 BOED to 7,900 BOED. Startech has also revised upward the Company's 1998 average daily production rate from 9,500 BOED to more than 10,000 BOED. Startech's cash flow and earnings continue to be impacted by higher than expected Canadian crude oil differentials for its medium gravity crude in the third quarter of 1997. Crude oil differentials in the third quarter were approximately $ 1.00 per barrel higher than the Company's budgeted expectations, resulting in a reduction of cash flow from budget in the quarter of more than $450,000. In spite of this widening of Canadian crude oil differentials, cash flow in the third quarter of 1997 was $5 million compared to $3.1 million for the same period last year for an increase of 64 percent. This represents cash flow per fully diluted spare, of $0.32, as compared to $0.26 per fully diluted share a year ago, for an increase of 23 percent. During the third quarter of 1997 the Company cased 32 wells for production out of 44 wells drilled for a success rate of 73 percent. These drilling results include several exploration discoveries in the Company's project areas. In early December Startech will spud the first of 4 wildcat exploration wells in its new South Dakota shallow, light oil exploration area. Startech, as operator, owns an average 72 percent working interest in more than 4 townships of land in South Dakota. Startech will drill up to 175 wells in 1998. Effective December 1, 1997 Startech has agreed to acquire 3.8 million BOE of producing, liquids rich, natural gas reserves at a cost of approximately $5.60 per BOE for a total purchase consideration of approximately $21.5 million. The assets produce from the Mississippian formation and can be characterized as long life, unitized, high netback natural gas reserves with significant development drilling potential and producing infrastructure. This acquisition is consistent with management's stated gas strategy of drilling for, and acquiring, long life natural gas reserves to balance the Company's existing light and medium gravity crude oil reserve base. Startech will now exit 1997 with a reserve life index of approximately 9 years for proven reserves, and more than 11 years for proven plus probable reserves. Startech now anticipates reserve growth in 1997 of more than 80 percent over 1996.