MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING TUESDAY, FEBRUARY 10, 1998 (5)
INSIDER TRADING NOTES
Blue Range Resource Corp. (BBR.A/TSE) - Leith Wheeler Investment Counsel Ltd., which holds more than 10%, bought almost 640,000 shares for $6.05 to $6.95 each to hold almost 4.1 million shares.
KERM'S TOP 21 - SPEC 15 - SERV 9 COMPANIES IN THE NEWS
Trican Well Service Ltd. (TCW/TSE) announced that its new fracturing equipment is now operational. Trican's new fracturing equipment performed its first treatment for Calibre Energy at Hanna, Alberta on February 5th. As of today, Trican has successfully pumped four additional fracturing treatments for other clients.
Trican's frac fleet consists of a blender, 3 pumpers to 4400 kw, a frac van, a chemical addition unit, an iron truck, CO2 equipment and sand transports. All of this equipment is based out of Red Deer, Alberta and will be working across Western Canada. Trican has a full line of fracturing fluids that includes gelled hydrocarbons, crosslinked waters, polyemulsions and foams. Trican is a well servicing company that provides stimulation, coiled tubing, cementing and related services to the oil and gas industry in Western Canada.
KERM'S WATCHLIST OF COMPANIES IN THE NEWS
Chieftain International, Inc. (CID/TSE) reported its 1997 exploration and development activities achieved record proved reserve additions of 47.4 billion cubic feet equivalent (bcfe) before production, and record proved and probable additions of 63.7 bcfe.
Chieftain's 1997 U.S. activities replaced 162% of US production and 140% of total Company production with proved reserves on a gas equivalent basis. Proved plus probable reserve additions replaced 216% of US and 187% of total Company gas equivalent production. This is the fourth consecutive year in which Company exploration and development activities have more than replaced production. In the three years ended December 31, 1997, including a major reserve purchase in 1995, Chieftain replaced 242% of its total production with proved reserves. During that period, the Company received an average price of US$2.39 per mcf equivalent for US production which generated net cash flow of US$1.51 per mcfe after payment of royalties, operating costs and production taxes. During this three year period, the Company's finding and development costs for proved reserves in the U.S. were US$1.07 per mcfe. These expenditures created an additional tax pool of US$209 million, which at the present U.S. tax rate results in potential tax savings of US$73 million. The theoretical effect of this is to reduce the Company's U.S. finding and development costs to approximately US$0.70 per mcfe. All U.S. exploration and development costs incurred during the period are included in the determination of U.S. finding and development costs.
The Company achieved an overall drilling success rate of 84% in 1997. The Company's success rate for development wells was 98% and for exploratory wells was 47%. The Company participated in a total of 61 wells of which 51 were successful, including 34 oil development wells in Utah. In the Gulf of Mexico, the Company drilled 26 exploratory and development wells, 17 of which were successful.
During the three years ended December 31, 1997, Chieftain reduced direct operating costs by 29% to US$0.34 per mcfe and general and administrative costs by 35% to US$0.13 per mcfe. Chieftain increased its exploration base in the US Gulf of Mexico to 149 blocks, including 121 in federal waters on the Continental Shelf, which ranks Chieftain among the 15 largest leaseholders on the shelf.
At December 31, 1997 proved gas reserves were 149 bcf (125 bcf net) with proved and probable gas reserves totaling 186 bcf (155 bcf net). Proved reserves of oil and natural gas liquids (ngls) were 13,006,000 (11,313,000 net) barrels and proved and probable reserves totaled 18,429,000 (15,952,000 net) barrels. Total proved reserves, expressed in gas equivalent terms, were 227 bcfe (193 bcfe net of royalties) and total proved plus probable reserves were 296 bcfe (251 bcfe net of royalties). The reserve estimates do not include oil reserves in Libya where Chieftain is participating in a long-term production test.
The Company's gas reserves are located primarily in the US Gulf of Mexico and the southern basin of the North Sea's UK sector. Light oil reserves are located in Utah and the Gulf of Mexico.
In 1998 Chieftain will continue its aggressive exploration program with the drilling of approximately 70 wells. Approximately 35 of these wells will be in the offshore Gulf of Mexico. Several are presently drilling including 3 wells of potentially high impact.
Maxx Petroleum (MXP/TSE) announced its reserve additions for 1997 based on a third party, independant reserve report. During 1997, the Company added 10 million barrels of oil equivalent (BOE) on an established basis (proven plus one- half probable) and produced 2.5 million BOE resulting in a net increase of 7.5 million BOE and production replacement of 402%. At year end, the Company's total reserves increased 39% to 26.6 million barrels from 19.1 million barrels at year end 1996.
Significantly, the Company's reserve life index increased 20% to 10.7 years in 1997 compared to 8.9 in 1996. Finding and development (F&D) costs for proven reserves also improved for the year, dropping 9% to $6.64 per BOE compared to $7.30 per BOE in 1996. F & D costs for established reserves in 1997 increased slightly by 3% as the additions to probable reserves were not as large as in 1996. The Company's three year average F&D costs for established reserves dropped to $6.28 per BOE for the three years ended December 31, 1997 compared to $6.56 per BOE for the three years ended December 31, 1996. Operating netbacks (before G & A and interest expenses) for 1997 were $13.55 per BOE.
Production for the month of December 1997 of 8,400 BOE/D, exceeded the target exit rate of 8,000 BOE/D by 400 BOE/D or 5% and the 1996 exit rate of 6,100 BOE/D by 2,300 BOE/D or 38%.
Net asset value of the Company using a 15% discount factor was $2.46 per basic share as at December 31, 1997, compared to $2.25 per share at December 31, 1996.
For table data, go to techstocks.com
Maxx Petroleum Ltd. is a junior oil and gas exploration and development company based in Calgary, Alberta. Maxx shares trade on The Toronto Stock Exchange under the symbol "MXP" and on the American Stock Exchange under the symbol "MMX".
Archer Resources Ltd. (ARC/TSE) announced it has commenced production at the rate of six mmcf per day from two new wells at its Willingdon project through a recently installed compression facility. In late December Archer also commenced production at the rate of five mmcf per day at its new Hattie Lake facility in the Sedgewick area. These two projects have raised Archer's current gas production to 68 mmcf per day, an increase of 19 percent over the same period last year. Total equivalent production is now 85 mmcfe per day.
At Willingdon, the 15-23 well, drilled in October, initially flowed at six mmcf per day of gas with a five percent drawdown. The 10-26 well, drilled in November, into a separate closure on the same Leduc reef, initially flowed at eight mmcf per day at an eight percent drawdown. The second well also encountered a Colony send which drillstem tested gas at 2.7 mmcf per day. The 15-23 Leduc zone and the 10-26 Colony zone are currently producing, while the 10-26 Leduc zone is yet to be brought onstream.
The new facility is operating at full capacity. This raises the total production level in the Willingdon area to eight mmcf per day. Archer is currently considering alternatives to bring the incremental Leduc production capacity onstream.
Petrobank Energy And Resources Ltd. (PBG/TSE) provided an update to their Alder Flats exploration and development. Petrobank announced continued exploration success on its medium depth exploration and development program has resulted in two new 100 percent working interest wells. These wells are followup wells to Petrobank's 1-27 well (100 percent WI) which commenced production in December,1997 at over 1,000 Boe/d and continues to produce at 800 Boe/d. Results of the 11-2-47-8W5 and 5-1-47-8W5 wells are as follows:
11-2-47-8W5 - The well encountered both Rock Creek and Ostracod sands. The Rock Creek interval has been perforated and fracture stimulated and has tested at restricted rates of 750 Boe/d. The Ostracod interval will be completed in the next week.
5-1-47-8W5 - The well is down and cased and encountered both Rock Creek and Ostracod sands similar in quality to 11-2. Completion of the Rock Creek interval is currently underway. The Ostracod interval will be completed in the next two weeks.
Pipeline tie-in of both wells is currently underway. Petrobank has identified five additional Rock Creek/Ostracod drilling locations on its Alder Flats lands. Drilling on these locations will continue throughout the year.
Evaluation of Petrobank's 100 percent WI deep Nisku exploration well (12-34-45-8W5) has yielded gas volumes in insufficient quantity to warrant further testing. The Company is incorporatingthese results into its model of the play to determine its next steps. In the uphole section, the 12-34 wellbore encountered a significant Rock Creek pay interval and is currently being completed in that zone. The well is immediately adjacent to a Petrobank gas gathering line and one mile from Petrobank's gas plant.
Petrobank has received Alberta Energy and Utilities Board approval to proceed with its Alder Flats gas plant expansion. Current throughput at the plant is 16 mmcf/d. The expanded plant will be capable of processing 35 mmcf/d and is designed to improve liquids recovery over the existing plant process. The Company has taken delivery of its new compressor and shop construction of the plant process skid is approximately 75 percent complete. All other major equipment has been sourced. Site preparation will begin shortly with an anticipated on-stream date of mid-second quarter.
With the continued Rock Creek/Ostracod exploration success and the imminent gas plant expansion, Petrobank is well on its way to achieving its 1998 production targets. These production gains together with improving gas prices will contribute significantly to Petrobank's continuing rapid growth in cash flow per share.
OTHER COMPANIES IN THE NEWS
Wilshire Oil Company of Texas (NYSE/WOC) announced today its participation in the successful completion of twelve gas wells in Southeastern Alberta, Canada. Plans have already been made to drill an additional fourteen wells in the same area. The wells are all being completed in both the Medicine Hat and the Milk River formations. All of this activity is taking place in the Medicine Hat Field. Wilshire has a 30% interest in this project. This activity is being directed by the Company's wholly owned Canadian subsidiary. This project will continue to be of significance to Wilshire since in addition to the 26 wells described above, there are thirty more wells available for future drilling.
S. Wilzig Izak, Chairman of Wilshire, stated, "This successful undertaking will substantially enhance the Company's revenues and earnings for our Canadian subsidiary." Wilshire is a New York Stock Exchange listed corporation engaged in oil and gas exploration and real estate investment operations.
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