EARNINGS / Tarragon Oil and Gas Year End Results
TSE, ME SYMBOL: TN
MARCH 12, 1998
CALGARY, ALBERTA--Tarragon Oil and Gas Limited announces operating
and financial results for the year ended December 31, 1997:
/T/
Three Months Year Ended
Ended December 31 December 31
----------------- -----------
Percent Percent
1997 1996 Increase 1997 1996 Increase
---- ---- -------- ---- ---- --------
Gross production
revenue ($000s) 67,252 61,563 9 250,909 199,406 26
Cash flow from
operations($000s) 34,435 35,106 (2) 137,571 110,330 25
Per share ($)
- basic 0.68 0.70 (3) 2.70 2.30 17
- full diluted 0.60 0.65 (8) 2.49 2.18 14
Net income ($000s) 7,543 9,850 (23) 32,742 28,391 15
Per share ($)
- basic 0.15 0.20 (25) 0.64 0.59 8
- fully diluted 0.14 0.19 (26) 0.61 0.58 5
Daily production
Oil - bbl 15,045 15,266 (1) 15,014 13,312 13
Gas - mmcf 181.9 151.2 20 174.3 133.2 31
Combined - boe/d 33,235 30,386 9 32,444 26,632 22
Average prices
Before hedging
Oil - $/bbl 20.24 27.64 (27) 21.40 25.19 (15)
Gas - $/mcf 2.41 2.13 13 2.10 1.88 12
After hedging
Oil - $/bbl 20.56 24.35 (16) 21.45 23.19 (8)
Gas - $/mcf 2.31 1.97 17 2.09 1.77 18
Common Shares
Total outstanding
(000s) 52,100 50,714 3 52,100 50,714 3
Weighted average
(000s) 51,089 50,701 1 51,003 47,907 6
/T/
Tarragon achieved record cash flow and earnings in 1997 primarily
through a 22 percent increase in total production as average
commodity prices remained relatively flat when compared to 1996.
Conventional oil production averaged 12,150 barrels per day in
1997, essentially the same as the 12,394 barrels per day one year
ago. Heavy oil production increased to 2,864 from 918 barrels per
day in 1996. Natural gas production also grew to 174.3 million
cubic feet per day, up from 133.2 million cubic feet per day last
year.
Conventional oil wellhead price decreased 9 percent to $23.19 per
barrel from $25.51 per barrel in 1996. Heavy oil wellhead price
suffered most of the year from the widening differentials,
dropping to $13.80 per barrel compared to $20.76 one year ago.
Natural gas wellhead prices, however, were strong posting a 12
percent gain to $2.10 per thousand cubic feet for the year. The
Company incurred a net gain of $149,000 in 1997 from various
hedging activities, compared to a total hedging loss of $15
million last year.
Tarragon participated in the drilling of 220 (157.4 net) wells in
1997, resulting in 65 (37.6 net) oil wells, 73 (52.4 net) gas
wells, 31 (28.5 net) service wells and 51 (38.9 net) dry holes.
The overall success ratio was 76.8 (75.3 net) percent.
Capital expenditures incurred in 1997 amounted to $273.9 million,
including $204.7 million on exploration and development, $109.1
million on asset acquisitions and $39.9 million of proceeds from
the sale of properties. Total proved (plus probable) reserves at
year end as assigned by independent engineers were 91 (141.9)
million barrels of crude oil and natural gas liquids and 673 (794)
billion cubic feet of natural gas. Undeveloped land holdings at
year end 1997 totalled 2.4 million net acres, up from 1.9 million
net acres at the end of last year.
The 1997 capital program replaced production 450 percent (750
percent), yielding a finding and development cost of $5.16 ($3.07)
per barrel equivalent. During the last three years, Tarragon
expended a total of $715 million in its capital programs,
achieving an average finding and development cost of $6.10 ($4.36)
per barrel equivalent, and replacing production 390 percent (550
percent).
Long-term debt (net of working capital) totalled $362.4 million at
year end, a reduction from $414.7 million at the end of the third
quarter. This reduction was attributable to a property
disposition program in the fourth quarter for proceeds of $35
million and an equity issue of one million flow-through common
shares for proceeds of $14.5 million. After giving effect to the
disposed properties, daily production at year end 1997
approximated 10,500 barrels of conventional oil, 3,500 barrels of
heavy oil and 185 million cubic feet of natural gas.
On February 13, 1998, Tarragon announced a business combination
agreement with Unocal Canada Limited whereby Tarragon will acquire
substantially all of the petroleum and natural gas assets of
Unocal in Alberta and British Columbia in exchange for 21 million
Tarragon common shares and a $100 million subordinated debenture.
An annual and special meeting of the Tarragon shareholders has
been scheduled for April 15, 1998 (with a record date of March 10,
1998) to approve this transaction and to deal with other
appropriate matters. An Information Circular - Proxy Statement
describing this transaction will be mailed on or around March 17,
1998 to all registered shareholders.
Tarragon Oil and Gas Limited is a Canadian-owned exploration and
production company whose thrust is to build assets and cash flow
through exploration, development, and selective asset purchases in
Western Canada. Its common shares trade on The Toronto Stock
Exchange and The Montreal Exchange under the symbol TN. |
