ENERGY TRUSTS / VIking Energy Royalty Trust reports 1997 Results Viking Energy Royalty Trust is pleased to announce results for the period from its inception, December 18, 1996, to December 31, 1997, and for the Fourth Quarter of 1997. The $0.29 per unit distribution paid on January 15, 1998 brings total distributions for the period to $1.22 per unit, fully 13.5% greater than the $1.075 originally forecast in the Initial Public Offering.
The highlights for the period are as follows:
December 18, 1996 October 1 to to Financial Highlights: December 31, 1997 December 31, 1997 ----------------- ----------------- (thousands except per unit and BOE) Revenue $41,573 $11,426 Cash Flow from Operations $21,578 $ 5,562 Net Income $ 4,765 $ 982 Unitholder Distributions $18,836 $ 5,516 Distributions per Unit $ 1.22 $ 0.29 Investor Netback per BOE $ 12.89 $ 11.71 (before capital expenditures)
Operating Highlights: Production Oil and Liquids (bbls/d) 3,536 3,955 Natural Gas (mcf/d) 8,127 11,388 BOE/d (at 10:1) 4,349 5,093 Average Prices Crude Oil ($/bbl) (including hedging) $26.97 $25.72 Liquids ($/bbl) $20.07 $19.82 Natural Gas ($/mcf) $ 1.89 $ 2.08
During the period, the Trust completed acquisitions totalling $49.4 million. These acquisitions have added over 7.8 million BOE of established reserves at an average cost of $6.29 per BOE, and replaced 1997 production by over 480%. The resulting impact of this activity has been to increase forecast 1998 production by over 40% while maintaining the established reserve life index at over 12.1 years.
Highlights of Reserve Report
The Trust has received its year-end reserve report from the independent engineering firm, Gilbert Laustsen Jung Associates Ltd, (G.L.J.). Based on the G.L.J. audit, Viking is pleased to report significant reserve additions as a result of activities during 1997.
* Established reserves (net of 1997 productions, increased by 38% to 23.1 million BOE. Of this, year-over-year natural gas reserves increased by 227% and oil and liquids reserves increased by 23%.
* Using G.L.J. January 1, 1998 published pricing, the present value of Viking's established reserves (discounted at 10%) increased by 26% to a value of $171 million.
* The cost per BOE of all established reserve additions, including all development work and revisions, was $6.47 per BOE.
Monthly Distributions
Effective January 1, 1998, Viking instituted monthly distributions for holders of record on the last day of each month, payable on the 15th day of the following month. The initial monthly rate has been set at $.08 per unit and will be reviewed on a quarterly basis. Any excess that may be available will be distributed subsequent to the end of each quarter.
The Trust has partially offset the current weakness in oil prices with a hedge on 1,500 barrels per day, or 45%, of its net oil production until June 30, 1998 at $27.50 Cdn. per barrel.
Tax Status
Viking is pleased to confirm that all distributions received by unitholders in 1997 are a Return of Capital, and therefore will reduce the Adjusted Cost Base of each unit. The amount to be reported as income for 1997 is nil. The Trust is estimating that all distributions for 1998 will also be 100% tax deferred and treated as a Return of Capital.
Viking has made many strides in its first full year. The overall results are better than originally forecast and Viking is well positioned for future growth. Viking will continue to be a resourceful and dependable purchaser, a creative developer and a prudent operator of high quality, long-life oil and natural gas assets.
Viking Energy Royalty Trust is an open-end investment Trust that generates income from long-life oil and natural gas producing properties in Saskatchewan and Alberta. The beneficiaries of Viking are the holders of the Trust units who receive monthly distributions of the cash flow from the income. The Units are listed on The Toronto Stock Exchange (TSE) under the symbol "VKR.UN". Viking is managed by Viking Management Ltd., a Calgary based company.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.
For further information contact:
A. Kirk Purdy Viking Energy Royalty Trust President and C.E.O. c/o Viking Management Ltd. Suite 400 Calgary Place - or - 330 - 5th Avenue S.W. Calgary, Alberta Wayne King T2P 0L4 Vice-President, Finance and C.F.O. (403) 268-3175 |