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

To: Crocodile who wrote (9792)	3/27/1998 9:26:00 AM
From: Kerm Yerman	Respond to of 15196

MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING THURSDAY, MARCH 26, 1998 (2) OIL & GAS Oil Extends Gains But Norway Votes Down Cuts LONDON, March 26 - Oil markets made fresh gains on Thursday in the expectation that OPEC will next week confirm a landmark output cut agreed with other producers. Even bigger price gains were wiped out after Norway's parliament rejected a proposal to respond to the Riyadh pact by reducing output by at least 100,000 barrels a day (bpd). Norway's minority government ran into shock opposition from parliament on Thursday when it said it wanted to join other oil producers in curbing output to push up sagging prices. ''A more stable price is an advantage both for producing and consuming countries,'' Oil and Energy Minister Marit Arnstad told a news conference. She said the government was seeking a cut of between three and six percent in Norway's actual output. Norway, the second largest oil exporter in the world behind Saudi Arabia, pumps about 3.2 million barrels per day (bpd). But a majority in the legislature came out against the proposal, for a cut of around 150,000 bpd, when she presented the plan to the foreign affairs committee. The government has just 42 of 165 seats in parliament. ''The government has been very clumsy,'' said Jan Tore Sanner of the opposition Conservative Party, which has 23 seats. ''We question if the situation is so dramatic to justify such big production cuts.'' Arnstad said: ''This is a suggestion and not a decision. We will have more consultations in the week to come.'' She added that the government would review the size of the proposed cuts. Norway, which curbed output from 1986 to 1990 to help OPEC bolster weak prices, had previously declined to say whether it would back the planned reductions launched by Saudi Arabia, Venezuela and Mexico last weekend. If cuts were made, Arnstad said a decree would be issued on Friday, April 3. Prices on the NYMEX exchange in New York fell below $17 a barrel on an initial selloff after news that parliament was against the plan, falling 32 cents to $16.80 a barrel. The market had peaked at $17.19 on expectations that Norway would cut output. Cuts pledged by other producers so far amount to 1.4 million bpd, including 1.25 from OPEC producers, from April 1 until the end of 1998. OPEC producers are to meet in Vienna on Monday to approve the deal to shrink a huge glut of crude. ''This an overreaction by the government,'' said Oyvind Vaksdal, of the opposition Progress Party, which has 25 seats in parliament. ''There has been a fall in oil prices but it has stabilised,'' he said. ''I think it's bad timing and that the government should await the OPEC meeting.'' Opposition parties suspect the government of seeking to use the cuts as a backdoor measure to achieve its policy of reducing the pace of exploitation of Norway's petroleum resources to safeguard the environment. Norway ordered oil firms to curb output by 10 percent in 1986 when prices plunged. It gradually phased out the cuts until abandoning them in July 1990. Since then, it has rebuffed OPEC's suggestions of cooperation. The Norwegian Petroleum Directorate (NPD) this week said it was revising downs its forecast for Norway's average oil in 1998. The NPD said delays to new oil fields and technical problems at some installations meant crude production this year was unlikely to reach a forecast average of 3.6 million bpd. Norwegian Oil Minister Marit Arnstad said she would continue to push for an output reduction despite the opposition of a majority in parliament. World benchmark Brent blend crude closed 27 cents a barrel higher at $15.40 as traders bet OPEC will agree to trim production in talks in Vienna on Monday. That is $3.50 a barrel up from a nine-year low touched earlier this month and marks a $2 barrel increase since the deal came to light. Dealers with long memories said the producer group that accounts for 40 percent of global output retained an alarming capacity to surprise. ''If the cuts are confirmed, the market will rally further,'' said one. ''If they aren't, they are going to have a rude awakening,'' he added, suggesting prices could sink back to recent lows. Recollections of previous price slides sparked by public OPEC rows will hover around the gathering as it prepares to bless OPEC's contribution to the deal with other world oil producers, delegates said. Under the accord, cuts from April 1 until the end of 1998 are expected from all Organisation of the Petroleum Exporting Countries members bar Iraq and non-OPEC producers Mexico, Oman, Norway, Russia, Malaysia and Eygpt, according to cartel sources. Cuts pledged so far amount to 1.4 million bpd, including 1.25 from OPEC producers. Russia says it will not cut. There have been murmurs of discontent in OPEC after Iran and Indonesia said they would cut output from their official OPEC output quotas, not actual production as is assumed under the pact. Since capacity constraints mean these countries can produce only below quotas established last December, their announced ''reductions'' would have no effect on crude supplies. Morgan Stanley Dean Witter said the agreement had come about because of producers' concerns over the price squeeze on revenues and because prices had made unprofitable much heavy oil production from OPEC members like Venezuela. The research team said the agreement ran counter to a common perception that production most at risk from low prices was in offshore non-OPEC areas such as the North Sea and Gulf of Mexico. ''The production most at risk from a falling oil price is located onshore and within OPEC,'' it said. A reminder of the crippling effect of low prices emerged on Thursday when foreign contractors in Saudi Arabia said state oil firm Saudi Aramco had been forced to review its spending plans on a series of refinery and oilfield development projects. Aramco, the world's largest oil firm, had scaled back or delayed projects to expand two domestic refineries and reviewed new facilities aimed at boosting local gas supplies. Uncertainty also lingered over likely Iraqi exports. The U.N. Security Council last Friday approved a measure more than doubling the amount of oil that Iraq can sell over six months from the current $2 billion, but Baghdad said it did not have the capability to export that volume. Indonesia and Russian energy giant Lukoil on Thursday became the latest oil producers to announce they will reduce exports because of a recent plunge in world oil prices. Indonesia will cut crude oil production by 70,000 barrels a day, Mines and Energy Minister Kuntoro Mangkusubroto said. Lukoil, Russia's biggest oil company, will cut exports of oil products by about 7 million barrels this year, company chief Vagit Alekperov said. But exports of crude oil will remain unchanged, he said. Alekperov also said that as Lukoil reduces exports, it will step up sales at home, especially in the lucrative Moscow market. The decision by Indonesia, an OPEC member, to go along with the production cuts comes despite its attempts to work its way out of its deepest economic crisis 30 years. NYMEX Crude Closes Higher On OPEC Expectations NEW YORK, March 26 - NYMEX crude futures gained for the second straight day on Thursday, fueled by expectations of OPEC's confirmation next week of an agreement to cut oil production. The market pared early gains on an initial sell-off in the afternoon on news that Norway's parliament had rejected a government proposal to cut output by about 150,000 BPD. But overall, optimism over producers' plans to carry out an agreement to slash world oil output by 1.7 million barrels per day remained high, despite some critics' views that some producers may not reduce their output in the amounts pledged. NYMEX crude for May delivery settled at $16.83 a barrel, up 35 cents from Wednesday's close of $16.48. April heating oil contract closed at 45.73 cents a gallon, up .61 cent from Wednesday's settlement of 45.12 cents. Front-month gasoline ended at 53.82 cents a gallon, up 1.24 cent from Wednesday's close of 52.50 cents. Warren Tashnek, an analyst at Houston-based Fimat USA Futures, said trading had turned choppy and should be in for some more. The day's swing back and forth from above $17 and below before settling with a good gain developed as the market reacted to news from Norway that while its parliament had rejected a recommended oil output reduction, its oil minister was still in consultations and would push a 3-6 percent cut. ''This apparently not a done deal,'' Tashnek said, observing that '' there will still be a lot of volatility and trading will continue to be choppy ahead.'' Norway, the second biggest oil exporter after Saudi Arabia, produces about 3.2 million barrels per day. It had not previously said whether it would back efforts by other OPEC and non-OPEC producers to cut output as a way to boost oil prices. OPEC is convening an emergency meeting in Vienna on Monday and is expected to confirm an agreement spearheaded by Saudi Arabia, Venezuela and non-OPEC member Mexico to reduce global output by about 1.7 million BPD. Of the targeted cut, OPEC has pledged 1.245 million BPD. Mexico has pledged a cut of 100,000 BPD. The producers' move to do something about the currently glutted markets have heartened traders, who have seen oil price slump from a high of $23.15 a barrel in October to a nine-year low of $12.80 on Tuesday last week. The market rose Wednesday last week on Venezuela's announcement that it was seeking an agreement on the oil output reduction between OPEC and non-OPEC producers. After the announcement of the agreement on Sunday, NYMEX crude soared to $17.50 on Monday, then backtracked on Tuesday and moved up again on Wednesday, after OPEC confirmed it was holding a meeting in Vienna next week. NYMEX Natural Gas Ends Down With Soft Cash, Mild Temps NEW YORK, March 26 - NYMEX Hub natural gas futures ended lower across the board Thursday in a moderate session, with a soft physical market in the face of mild weather forecasts this week keeping paper on the defensive all day. April slipped 2.7 cents to close at $2.338 per million British thermal units. May settled 2.4 cents lower at $2.38. Other months ended down by one-half to two cents. ''It was a pretty tame close, and I don't expect to see much movement tomorrow either, but cash is still below the screen, so we could see April expire slightly weaker,'' said one Midwest trader, adding mild weather expected early next week could chase some of the speculative length from the market next week. Much warmer weather was still forecast for the East and Midwest this weekend and into early next week, with temperatures predicted to climb to as much as 25 degrees F above normal. Texas and the Gulf Coast also are expected to warm to as much as 15 degrees F above normal for the period, with more seasonal temperatures expected by midweek next week. Chart traders agreed a lagging cash market, still several cents under the screen, could lead to a soft April expiry tomorrow. Key April resistance remained at $2.43, with more selling expected at the contract high of $2.46. Interim support was seen at $2.29-2.30 and then in the $2.26 area, the 50 percent retracement of the recent leg up. Additional buying could surface at $2.20, but major support was still pegged at the recent low and double bottom at $2.105. More buying was expected at $2.06 and $2.00. For May, chartists saw major resistance at Monday's contract high of $2.46. Support was seen at $2.33 and then at $2.30, the fifty percent retracement point. Major buying was expected at the $2.135 recent low. In the cash Thursday, Gulf Coast swing quotes slipped several cents to the mid-to-high $2.20s. Midcon pipes were down a similar amount to the high-teens to $2.20. Chicago city gate gas was a few cents lower in the low-$2.30s, while New York skidded a nickel or more to about $2.50. The NYMEX 12-month Henry Hub strip eased 1.4 cents to $2.492. NYMEX said an estimated 65,057 Hub contracts traded, down from Wednesday's revised tally of 70,231. U.S. Spot Natural Gas Prices Retrench With Futures NEW YORK, March 26 - U.S. spot natural gas prices turned a little softer Thursday, in tandem with a faltering April futures contract set to expire Friday, industry sources said. Henry Hub cash prices were quoted mostly at $2.28-2.29 per mmBtu, down from about $2.33-2.34 on Wednesday and holding about a four-cent discount to April futures. In the Midcontinent, where temperatures were forecast to jump to 20-25 degrees above normal Friday, prices lost three cents to about $2.16-2.20, while Chicago city-gate prices were talked mostly at $2.33. In western Texas, Permian Basin prices eased by two cents to $2.09-2.14, with the higher-priced deals reported done in late morning trade. San Juan prices were quoted at $2.02-2.08, while southern California border prices held steady at $2.33-2.38. In the Northeast, New York city-gate prices were talked in the high-$2.40s as temperatures were expected to rise to 18-22 degrees above normal Friday. Meanwhile, American Gas Association said natgas stocks fell 78 bcf last week, with 67 bcf seen withdrawn in the East. Overall stocks were 23.3 percent ahead of year-ago tallies. Following a week of above-normal temperatures across most of the U.S., cooler weather is expected to return to the Midwest by the middle of next week, also seeping into the Northeast. Canada Spot Natural Gas Still Firm Amid Early Injections NEW YORK, March 26 - Canadian spot natural gas prices remained firm Thursday in light trade as early storage injections and limited supplies outweighed the current mild weather conditions, traders said. Spot gas at the AECO storage hub in Alberta was quoted little changed at C$1.79-1.805 per gigajoule (GJ), while April clung to about C$1.80 per GJ. Summer AECO business was also reported at C$1.80, while one-year prices were quoted at C$2.24. ''There was a net injection yesterday, and field receipts still haven't gotten above 12.4 bcf (billion cubic feet),'' one Calgary-based trader said, noting western storage rose 30 million cubic feet on Wednesday. Meanwhile, temperatures in southern Alberta continued to average above normal, with today expected to reach a high of 10 degrees Celsius. In the export markets, prices at Sumas, Wash., hovered in the high-US$1.30s per million British thermal units (mmBtu), mostly steady from Wednesday. In the east, gas at Niagara sold mostly at US$2.46-2.47 per mmBtu, off about six cents from Wednesday.

To: Crocodile who wrote (9792)	3/27/1998 9:40:00 AM
From: Kerm Yerman	Respond to of 15196

MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING THURSDAY, MARCH 26, 1998 (3) EARLY MORNING UPDATE Indonesia's Kuntoro Optimistic on OPEC Agreement JAKARTA, March 27 - Indonesia's Mines and Energy Minister Kuntoro Mangkusubroto said on Friday he was optimistic OPEC would agree to cut oil production at an extraordinary meeting scheduled for Monday in Vienna. He also reaffirmed Indonesia would cut output by 70,000 barrels per day (bpd) from its OPEC quota level of 1.45 million bpd. "The atmosphere within OPEC is very good. I am optimistic that OPEC will achieve agreement," Kuntoro told reporters on Friday when asked whether OPEC would reach agreement on production cuts after several members pledged to trim output to boost world oil prices. "Indonesia will cut output by 70,000 bpd from its OPEC quota level, but we will see the development," he said. He declined to comment whether Indonesia would flexible in the OPEC meeting. There have been murmurs of discontent in OPEC after Iran and Indonesia said they would cut output from their official OPEC output quotas, not actual production as is assumed under the pact on trimming output by members. "I will ask Pertamina to report to me on what is actual Indonesia capability on production, then I will study it," he added. "For us, the important thing is that our budget is safe," he said. Indonesia produces around 1.4 million bpd of crude oil and 170,000 bpd of condensate. Condensate is not covered under Indonesia's quota of 1.45 bpd. Indonesia, hit by a crippling currency crisis, has assumed an oil price of $17 per barrel in its 1998/99 budget but current world prices are around $15. Kuntoro was expected to fly to Vienna on Saturday and said he wanted OPEC to make the organisation more effective. "One of the important things is how to make our organisation more effective," he said. He did not elaborate. TOP STORIES Frustrated Oil Firms Mull Building New Upgrader The Financial Post Frustration over the collapse of heavy oil prices is fuelling serious talks among some industry producers about building a new upgrader - or at least finding an industry solution to the lack of upgrading capacity in Western Canada. While no decisions have been made, sources say discussions have taken place at senior levels among a number of senior producers on building a large regional upgrader that would process heavy oil from all sources. "They'd be crazy not to" build a new upgrader, a source said. The upgrader would compete with the Husky Oil Ltd. upgrader in Lloydminster, Sask., which is considering doubling or even tripling its capacity by 2001 at a cost of up to $500 million. Husky said it will make a decision later this year on whether to proceed with the expansion, after the completion of a feasibility study. Other companies such as Shell Canada Ltd. and Mobil Oil Corp. are also considering building upgraders, but haven't taken final decisions on whether to proceed, or whether to process product from other sources. "A lot [of producers] are talking to each other and saying, 'What are the options?' " said Mike Langley, senior vice-president, heavy oil division, at Ranger Oil Ltd. Many heavy oil producers like Ranger have been forced to shut in some of their higher-cost production in recent months, hit both by declining oil prices and wide differentials between heavy and light oil. The differentials have increased because of lack of upgrading capacity. The benchmark Imperial Bow River heavy oil closed at $15.89 a barrel yesterday, compared with $22.45 for light oil - a differential of $6.56. Differentials have widened to as much as $9 in recent months. Husky's upgrader is the only large one in Western Canada. Most of the basin's heavy oil is processed in the U.S., where Canadian heavy oil is facing increasing competition from Venezuelan product. The concept of a new heavy oil upgrader is one of several ideas floating in the industry to ease the pain. Another one championed by several sources, including Dee Parkinson-Marcoux, the former president of Gulf Heavy Oil who recently joined a private heavy oil research company, involves setting up small, field based upgraders. There's also talk of assisting Husky with its own expansion, to ensure it will be large enough to process heavy oil from other producers. "There is more and more common discussion among the key parties," Langley said. Canada Oil Industry Set Merger Record In 1997 The Canadian energy industry smashed previous records for merger and acquisition activity in 1997 and more deals were likely after first quarter results revealed a spate of expected weak performances, a Calgary based brokerage said on Thursday. Sayer Securities Ltd, which tracks financing and merger activity, said a total of C$16.3 billion worth of mergers and acquisitions were completed in 1997. That was 60 percent more than the previous record of C$10.2 billion set in 1996. The activity was dominated by corporate -- as opposed to property -- purchases. Corporate deals represented 60 percent of the total price tag. Some of the largest included Canadian Occidental Petroleum Ltd's C$1.7 billion takeover of Wascana Energy Inc, Pioneer Natural Resources Co's C$1.3 billion purchase of Chauvco Resources Ltd and Northstar Energy Corp's C$692 million merger with Morrison Petroleums Ltd. However, Union Pacific Resources Group Inc's C$3.5 billion buyout of Norcen Energy Resources Ltd, announced in January 1998, topped all of them. Prices for acquisitions also hit an all-time high in 1997, Sayer said. The median price for proven plus half probable oil and gas reserves hit C$6.69 per barrel of oil equivalent, a six percent increase from 1996. Purchase prices were expected to fall in 1998 in reaction to lower oil prices, which should mean acquisition activity will pick up again, Sayer analyst Sarah Clayton said. "There was a bunch of large companies and royalty trust companies that have said they were gearing up for property acquisitions," Sarah Clayton, analyst with Sayer, said. "I think that right now in the first quarter, activity's been fairly slow, but I think it's wait and see." Clayton said large, well-financed companies with easy access to funds would likely start eyeing some of the poorer performers after the first quarter, hoping to pay bargain prices. The money for deals appeared to be available. Treasury financings for Canadian energy companies totalled C$9.8 billion in 1996, then dropped 18 percent to C$7.9 billion last year, Sayer figures showed. "Over the last two years, there's been about C$17 billion raised by the industry, which is comparable to the previous five years," Clayton said. "So I think there's a lot of cash out there as well." Talisman's Buckee gets another pay increase The Financial Post Calgary - Talisman Energy Inc.'s board of directors raised the base salary of its top executive to $700,000 and expects his total compensation to hit $945,000 this year. President and chief executive Jim Buckee was paid $837,033 in 1997, including a base salary of $604,333 and a bonus of $232,700, according to the proxy circular mailed to shareholders. In 1996, he earned a lower base pay of $515,001, but a higher bonus of $360,500, for a total compensation of $875,501. Buckee also made $1.43 million last year from exercising options on 70,000 shares. He continues to hold options on 225,000 shares, of which 100,000 are exercisable. Talisman's oil and gas production has increased from about 37,400 barrels of oil equivalent daily in 1992 to more than 203,000 BOE in 1997. Marystown Shipyard Humming Along The Evening Telegram There will be no problem in fulfilling the commitment of high employment at the shipyard in Marystown, says the interim president. Work on ongoing projects is proceeding well, the yard is bidding on considerable offshore-related jobs that will involve heavy work at Marystown and the Pascagoula, Mississippi-based parent company continues to send additional work, Guy Cagnolotti said Wednesday. The shipyard now is owned and operated by Friede Goldman Newfoundland Limited, a subsidiary of Friede Goldman International Inc. which bought the operation from the provincial government last year. Judy Foote, minister of industry, trade and technology, told the House of Assembly Tuesday employment at the shipyard continues to increase and now stands at approximately 850. She noted that there were 300 employed there a year ago. "The increase in work at the yard has resulted in a management decision to implement a third shift which started Monday," Foote said. "This increased level of activity confirms that the decision to place the Marystown shipyard in the hands of a credible international operator was the right one," said the minister. "It is also a testament to the skill levels and commitment of the workforce at Friede Goldman Newfoundland Limited." Cagnolotti told The Evening Telegram Wednesday that refit work on the naval vessel Quest is about 40 per cent completed and work on two tugs for Newfoundland Transshipment Limited is progressing well as is work on five rig conversions for drilling contractor Noble Offshore Ltd. "I think there is at least three to five years left in the rig conversion and repair market," he said. He also said the shipyard is bidding on some of the work related to the Terra Nova project. Meanwhile, Foote has also announced that the government has reached an agreement with the employee groups at the former Marystown shipyard on the distribution of profit during the period April to September 1997. She said that under the agreement, a total of $433,333 will be distributed among employees. That is their share from the shipyard's profit of approximately $1.3 million during that period of time. "The work at the shipyard has created spinoff activity around the Burin Peninsula and throughout the province and we expect the benefits to continue into the future," Foote said.

To: Crocodile who wrote (9792)	3/27/1998 10:04:00 AM
From: Kerm Yerman	Respond to of 15196

MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING THURSDAY, MARCH 26, 1998 (4) TOP STORIES, con't Environmental Monitoring Helps Industry Sniff Out Problems Fort McMurray Today Fort McMurray residents concerned about their own and the environment's health lobbied to get what is possibly the most comprehensive air monitoring system in North America, said its CEO and chairman. "The community has requested it," Bob Scotten said Wednesday, after the Wood Buffalo Environmental Association's first public meeting since it took over air quality monitoring in the region. "The issues were health issues -- how air quality affected personal health, how air quality affects the environment and to be able to monitor air quality for compliance reasons for industry," Scotten said after speaking to about 70 people at the WBEA meeting. WBEA evolved from the Regional Air Quality Co-ordinating Committee when it took over the job of air quality monitoring in November, 1997. It was previously monitored separately by industry and the government. "The data we get will be reliable. You don't have to worry about, as I've heard in some places, industry fudging the data or 'you can't trust the government,'" said Doug Tupper, assistant deputy minister of Alberta Environmental Protection. Partners in the independent group are first nations in Fort Chipewyan and Fort McKay, the Fort McMurray Environmental Association, the municipality, the Northern Lights Regional Health Authority, Alberta Environmental Protection and industry members Syncrude Canada, Suncor Energy and Northlands Forest Products. "We're not only collecting relevant data, we're opening the lines of communication," Scotten said. It's the only system that monitors health and environmental effects and industry compliance to emissions standards. "Development has had its price," said Suncor oilsands vice-president Mike Ashar. He said in 1991 RAQCC's first annual report linked almosthalf of the odor incidents reported to the Suncor site. "I'm not proud of that record, but I'm proud of what we've done about it," he said. With that knowledge Suncor was able to make improvements in its facilities that reduced sulphur dioxide emissions. The monitoring system is expected to play an important role as established oilsands players Syncrude and Suncor expand and Shell Canada and Mobil Oil move in. And it will eventually expand to cover other environmental monitoring. "We're standing on the brink of over $20 billion in proposed investment that promises to bring even greater prosperity to our region," Ashar said. That includes the $2.2 billion Project Millennium Suncor will submit for government approval next month. "Improved public access to air quality information will ensure the residents of the community can play a stronger role in monitoring industry," Ashar said. Syncrude and Suncor jointly funded the $3 million system, which consists of a monitoring station at Fort McKay, two at each of the two existing oilsands plants, and two in Fort McMurray. No. eight will be built in Fort Chipewyan this summer. "Environmental issues are bound to stay near the top of everyone's agenda for a long time," said John McDougall, managing director of the Alberta Research Council. He said through its work in science and technology the council will both be watching and contributing to air emissions quality in Wood Buffalo. "It's too early to get any real trends that are going on," Scotten said about data collected so far. "We're seeing some real interesting information coming in particulates. We're confirming the monitoring previously done by industry and Alberta Environmental Protection was consistent with what we're finding." The seven monitoring stations collect data 30 times a second, averaged out over one-minute, five-minute, one-hour and 24-hour periods, with hourly readings used for compliance requirements. Atco Ltd. Calls For Compromise On Deregulation The Financial Post Atco Ltd., one of the most influential companies in Alberta, is leading a protest of utilities fighting to keep a partially regulated electricity industry in Alberta until 2041, 40 years beyond the scheduled start of deregulation. In a sharply worded letter to Premier Ralph Klein, Atco chairman and chief executive Ron Southern has asked the provincial government to change its deregulation bill to extend contracts on existing power plants an additional 20 years beyond its current plan of 2021. "The [Energy] Department's present position is the embodiment of inflexible resolution in their determination to ram this unfair and unjust scheme through the legislature on a poorly informed public," Southern wrote to Klein, his longtime friend, in the letter dated March 13. "I thought we had an agreement, but I accept that you did not," Southern writes. Atco wants the provincial government to legislate contracts for the maximum extended life of the existing plants to 2041, or alternatively, to legislate a public review of the 20-year contract in the 18th year of the agreement. Deregulation of the electricity generating industry, set to begin in 2001, has been supported by all providers, including Atco. "We are in favor of electricity deregulation, provided all of the benefits from Alberta's existing low-cost generation, including its extended life, are returned to the consumers," Southern says in the letter. The protest is also backed by several Alberta municipalities that want to see residents continue to receive a full rate of return on their investment in the plants, whether they are publicly owned or owned by companies such as Atco subsidiary Alberta Power Ltd. and TransAlta Corp. Atco said the deregulation bill fails to live up to a promise by Energy Minister Steve West that the residual value and undepreciated costs of existing plants would be recovered under the province's deregulation legislation. West said yesterday he would introduce some changes to the legislation, but did not to agree to a 20-year extension. Atco argued that ending the contracts in 2020 and opening the plants to market forces before their extended life is realized could cost customers up to $8 billion. "This is a flawed piece of legislation," said Dick Frey, president of Alberta Power. Linda Thomas, a spokeswoman for TransAlta, said her company was not in favor of any additional extension. TransAlta has always wanted full deregulation sooner rather than later, she said. Choosing the arbitrary year of 2020 to end the contracts with existing regulated power plants was a compromise position, she said. "For high-cost utilities they have an opportunity over 20 years to bring their costs down." Reductions in Crude Output Spark Rally in Oil Markets T-Chek Systems Publication Date: Mar 26, 1998 NYMEX crude oil contract increased more than $1.50 bbl in after hours futures trading. This was in response to fundamentals of a "reduction-of-crude-output" pledge by major oil alliances. Fresh news that Saudi Arabia, Venezuela and Mexico will jointly curb crude output in conjunction with other OPEC and non-OPEC countries sparked a market rally, sending NYMEX crude over $16.50 bbl. The new plan calls for reducing global supply up to two (2) million barrels per day in the hopes of strengthening the value of crude oil worldwide. Commitments appear to be made to cut over one million barrels per day starting April 1, 1998 and overall output could remove more than 2.5 percent of global crude product. Analysts speculate that initial contract gains resulted as traders moved quickly to cover short positions. Although fresh trading initially forced crude higher, prices have quickly settled back to recent levels. This rally in crude has yet to have any effect in underlying markets that continue to creep along at low levels. Ongoing issues that keep prices down are a lack of product demand (including economic distress in Asia), glut of global supply, and uncertainty in commodity trading environments. According to the DOE, demand for diesel fuel is under 3.7 mmbd, keeping prices at the lowest levels in nine years. Although the U.S. economy is strong, consumer demand is not enough to overcome the 3.4 mmbd in weekly distillate production reported by the DOE. Underlying diesel prices are held by NYMEX heating oil contract, supporting a 40 cents per gallon bottom and resisting a 41 cents per gallon top. HEAT increased slightly off the rally in crude markets, but only reached 41.50 cents per gallon before settling back. Some sources report players are bidding under current market levels, speculating lower crude output news may be overdone. Domestic spot arenas remain downcast, as the national average is under 40 cents per gallon (Source DOE). New York Harbor and Gulf Coast spot diesel are quoted at 39.40 and 37.13 cents per gallon respectively, with West Coast product available at rates not seen in years (Source: DOE). Diesel racks price have increased slightly for the week at 46.26 cents per gallon nationally (Source: AXXIS Petroleum, Inc.). Regional wholesale demand has supported increases, but wholesale marketers are not depending on this for future support. Retail truck stop pump prices continue at four year lows and have been affected very little by rallies in commodities markets. Watch output production levels for further market volatility in the coming weeks. A true decrease and balance in output and supply inventories will dictate price direction in future weeks, but should not hit consumer levels for quite some time. U.S. Senate Seeks To Block $207.5 Million Oil Sale The Senate agreed Thursday to add language to a supplemental spending bill to allow the Department of Energy to avoid selling $207.5 million worth of oil from the Strategic Petroleum Reserve. Congress required the Energy Department last year to sell the oil during the current fiscal year, which ends this Sept. 30, to cover the operating costs of the reserve. However, with crude prices so low, the DOE has said it would lose money in the sale. In addition, the oil industry is worried the sale of about 20 million barrels from the reserve would push down crude prices. The Strategic Petroleum Reserve is the world's largest stockpile of emergency crude oil, currently holding over 563 million barrels of oil. The oil, which the president can make available in a national emergency, is stored in deep underground caverns in salt domes along the Gulf Coast of Texas and Louisiana. The language to rescind the oil sale was added to a multibillion-dollar spending bill that was voted out of the Senate on Thursday evening. The legislation would still have to be approved by the House of Representatives. Senate supporters of the amendment to kill the Energy Department oil sale admitted they will have a difficult time persuading House lawmakers to go along with the plan. To meet last year's mandate from Congress, the Energy Department would have to sell oil that it previously bought for about $33 a barrel at current market prices of about $9 to $12 a barrel. "If anything, we should be buying oil now, not selling it," said the sponsor of the amendment, Senator Frank Murkowski, Republican of Alaska, pointing out that the Energy Department should take advantage of low prices and increase the reserve's crude stocks.

To: Crocodile who wrote (9792)	3/27/1998 10:32:00 AM
From: Kerm Yerman	Read Replies (3) \| Respond to of 15196

MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING THURSDAY, MARCH 26, 1998 (5) MARKET ACTIVITY The Toronto Stock Exchange 300 Composite Index fell 0.1% or 9.91 to 7569.31. In comparison, the Oil & Gas Composite Index gained 0.4% or 27.06 to 6657.29. The Integrated Oil's were up 0.2% or 14.92 to 8849.05. The Oil & Gas Producers eeked out a gain of 2.30 to 5900.19. The Oil & Gas Service's climbed 3.8% or 111.31 to 3052.64. Petro-Canada, Poco Petroleums, Ranger Oil, Beau Canada Exploration, Talisman Energy, Canadian Natural Resources, Amber Energy and Renaissance Energy were among the top 50 most active traded issues on the TSE. Cabre Exploration gained $0.65 to $15.90. Imperial Oil fell $0.85 to $80.00, Alberta Energy $0.80 to $35.40 and Crestar Energy $0.55 to $20.20. Service companies had a banner day. Dreco Energy gained $2.60 to $46.00, Enerflex Systems $1.50 to $40.50, Canadian Fracmaster $1.25 to $21.85, Tesco $1.00 to $24.50, Ensign Resource Services $0.95 to $30.25, NQL Drilling $0.90 to $12.00, Badger Daylighting $0.85 to $7.35 and Precision Drilling $0.70 to $30.45. Over on the Alberta Stock Exchange, Colt Energy was the most active, closing up $0.08 to $0.98 on 1.4 million shares. Also among the most active were HEGCO Canada, up $0.30 to $2.35 and Cubacan Exploration, down $0.05 to $0.40. In New York, oil stocks rallied after crude oil prices extended their recovery on the prospects that global oil producers would reduce the glut of supplies. Dow components Chevron Corp. gained 7/16 to 84-5/16 and Exxon Corp. added 5/16 to 68-3/16. Texaco, Inc. rose 15/16 to 61. Sun. Co. rose 15/16 to 41 13/16. USX Marathon rose 1 1/16 to 38 1/16. Schlumberger rose to 78 7/16. Philadelphia Oil Service Index (OSX) gained 1.58 to 116.59 and the AMEX Oil Index (XOI) rose 1.47 to 487.55. Individual standouts included Smith International (SII), up 2 1/8 to 60 9/16 and Cliffs Drilling (CDG), which gained 1 7/16 to 43 15/16. Tesco (TESOF) rose 1 /8 to 17 1/2 on excitement about new products that could significantly enhance the oil service firm's earnings. Hondo Oil & Gas (HOG) fell 1 7/16 to 1 13/16 in a second day of selling after the company reported "disappointing" drilling results at an oil find. Mitcham Industries (MIND) fell 3 3/4 to 13 after warning that fourth quarter earnings will not meet expectations. KERM'S LISTED COMPANIES IN THE NEWS Penn West Petroleum Ltd. announced record results for the three months and year ended December 31, 1997. Gross revenues for the year ended December 31, 1997 increased by 25 percent to $217.6 million from $173.8 million for 1996. Cash flow increased by 36 percent to $122.9 million ($3.09 basic or $3.01 fully diluted per share) from $90.1 million ($2.51 basic or $2.43 fully diluted per share). Net income for 1997 increased by 56 percent to $37.2 million ($0.94 per share) from $23.8 million ($0.66 per share) for the same period in 1996. Gross revenues for the three months ended December 31, 1997 increased by 16 percent to $61.1 million from $52.6 million for the same period in 1996. Cash flow for the fourth quarter increased by 23 percent to $36.7 million ($0.92 basic or $0.89 fully diluted per share) from $29.9 million ($0.79 basic or $0.77 fully diluted per share) for the fourth quarter of 1996. Net income increased by 4 percent to $10.7 million ($0.27 per share) for the fourth quarter of 1997 versus $10.3 million ($0.27 per share) for 1996. The year 1997 represented another successful year of record growth for Penn West. Penn West met or exceeded its financial and operational targets of 1997 including production volumes, cash flow and net income. The Company now has a five year track record of continual, year-over-year growth in the crucial operating and financial benchmarks that indicate sustained creation of shareholder value. The fourth quarter of 1997 saw Penn West post its highest quarterly cash flow with growth of 23 percent over the same periodin 1996. This increase resulted from a 30 percent growth in natural gas production, a 13 percent growth in oil and liquids production, and a 7 percent increase in natural gas prices that was offset by a 17 percent decrease in oil and liquids prices. Penn West completed its capital program for 1997 with a favorable drilling success rate of over 85 percent. Penn West continued its record of successfully adding oil and natural gas reserves at low costs in 1997, with finding costs for the year of $5.93/boe on a proven plus probable basis. During 1998, the Company anticipates that capital expenditures will total $185 million. Our capital program will include the drilling of approximately 210 wells (195 net) in a program that focuses on increasing natural gas production in our Northern and Central Core areas. This capital program is expected to result in average total daily production during 1998 of between 33,000 and 34,000 barrels of oil equivalent. For table data, go here; Message 3853423 Vermilion Resources Ltd. (VRM/TSE) has closed its previously announced bought deal financing led by Griffiths McBurney & Partners and FirstEnergy Capital Corp. and included First Marathon Securities Limited and Nesbitt Burns Inc. Pursuant to the financing, Vermilion issued 5,063,291 common shares at $7.90 per common share for gross proceeds of $40,000,000. Taking into account this financing, Vermilion will now have 47.7 million shares outstanding and no long-term debt. Proceeds from the issue will be used to facilitate the expansion of Vermilion's ongoing exploration, development, and acquisition plans. Vermilion is also pleased to announce that it has finalized a new $60 million credit facility with The Chase Manhattan Bank of Canada and Credit Lyonnais Canada and together with its equity financing puts Vermilion in a very strong financial position to take advantage of new business opportunities. Vermilion Resources Ltd. is a publicly traded Canadian resource company with domestic and international operations and current market capitalization of $375 million. The company's primary objective is to maximize shareholder value by managing risk as it builds resource assets through the acquisition, exploitation and exploration of natural gas and crude oil. Trican Well Service Ltd. (TCW/TSE), a well servicing company that provides stimulation, coil tubing, cementing, fracturing and related service to the oil and gas industry in western Canada announces that today it has closed the previously announced private placement offering of 2,000,000 Special Warrants at a price of $4.50 per Special Warrant. Each Special Warrant is exchangeable for one common share of Trican at no additional cost. Goepel Shields & Partners Inc. and Peters & Co. Limited acted as underwriters in this offering. The net proceeds of the offering will be used to fund capital expenditures relating to the expansion of the business of Trican. WATCHLIST COMPANIES IN THE NEWS Chieftain International, Inc. (CID/TSE CID/AMEX) has drilled a gas / condensate discovery well on East Cameron Block 34 in 30 feet of water, 10 miles offshore Louisiana. The well logged in excess of 100 net feet of reservoir gas sands in multiple zones below 10,350 feet. Future plans include completion of the well and installation of production facilities. Initial production is expected to begin prior to year-end 1998. Chieftain has a 40% working interest in the well and the block. The remaining 60% is held by Basin Exploration, Inc. Elk Point Resources (ELK/TSE) doubles production and reserves in 1997 and reports success in the Powder River Basin of Wyoming. Elk Point more than doubled its production and reserve base in l997 providing a solid foundation for continued aggressive exploration and development. The Company grew its average daily production by over 130 percent to 4,117 barrels of oil equivalent per day in 1997 from 1,784 barrels of oil equivalent per day during 1996. In the fourth quarter of 1997, production averaged 5,192 barrels of oil equivalent per day, a 145 percent increase from 1996 fourth quarter production of 2,116 barrels of oil equivalent per day. The Company's total reserve base grew by over 150 percent to 23.5 million barrels of oil equivalent at the end of 1997 from 9.2 million barrels of oil equivalent at the end of 1996. Gross oil and natural gas revenues doubled to $30.4 million in 1997 from $15.3 million in 1996. Cash flow grew by 78 percent to $16.0 million from $9.0 million in 1996. The Company was also successful on its oil exploration initiative in the Powder River Basin of Wyoming, USA. The Company cased its first exploration well at Boley in December 1997 and followed up this success with the first development well in March 1998. The discovery well is producing approximately 120 barrels of oil per day (50 percent working interest) and the development well recently commenced production at 360 barrels of oil per day (41 percent working interest). The Company plans to drill a development well at Boley and an exploration test at Federal commencing next week. Elk Point recorded a 78 percent increase in cash flow to $16.0 million ($0.91 per share) in 1997 from $9.0 million ($0.96 per share) in 1996. The increase was directly attributable to the significant growth in Elk Point's natural gas and crude oil production from its successful exploration, development and acquisition programs. Earnings were $1.4 million ($0.08 per share) in 1997 compared to 1996 earnings of $2.6 million ($0.27 per share). As expected, these earnings reflect a higher depletion rate in 1997 that stems from the purchase of considerable probable reserves in the Truax acquisition. The Company expects earnings to improve in the long term as the Truax properties are more fully developed and probable reserves are converted into proven reserves. During 1997, Elk Point's natural gas production grew by over 230 percent averaging 24.6 million cubic feet per day compared to 7.4 million cubic feet per day in 1996. The Company averaged 32.2 million cubic feet per day during the fourth quarter of 1997, a growth of over 350 percent from 1996 fourth quarter production of 7.1 million cubic feet per day. The Company's production gains came from development projects at Saddle Hills, Pemburton Hill, Pembina and Thunder Lake as well as natural gas production from the Truax acquisition. At Pembina, the Company added 5.0 million cubic feet per day of gas production in mid November and placed an additional 2.0 million cubic feet per day of gas on stream subsequent to year-end. Oil production averaged 1,654 barrels per day during 1997, a 58 percent increase over 1996 average production of 1,047 barrels per day. The Company averaged 1,971 barrels per day in the fourth quarter of 1997 as the Pembina project came on stream mid-November. This is a 40 percent increase over 1996 fourth quarter production of 1,404 barrels per day. Elk Point drilled 100 gross (59.3 net) wells in 1997, more than double the 43 gross (28.9 net) wells drilled in 1996. The Company drilled 58 gross (32.0 net) development wells with an 83 percent (88 percent net) success rate. Elk Point drilled 42 gross (27.3 net) exploration wells with a 55 percent (46 percent net) success rate. The greater emphasis on exploration has led to several new pool discoveries that will provide a larger component of development drilling in the Company's program throughout 1998. In total, Elk Point cased 48 gross (30.5 net) wells as oil wells and 22 gross (9.1 net) wells as gas wells, while 29 gross (18.7 net) wells were dry and abandoned and one gross (1.0 net) well was a service well for an overall success rate of 71 percent (69 percent net). Elk Point replaced its production in 1997 by a factor of 10.5 times based on total reserves. Total proven and probable natural gas reserves were doubled to 118.2 billion cubic feet of gas at the end of 1997 from 56.3 billion cubic feet of gas at the end of 1996. Crude oil and natural gas liquid reserves increased by 226 percent to 11.6 million barrels of oil from 3.6 million barrels of oil at the end of 1996. On capital expenditures of $112.9 million in 1997, finding and development costs were $7.16 per barrel of oil equivalent of proven plus probable reserves and $8.69 per barrel of oil equivalent of proven plus half probable reserves ("established reserves"). Land and seismic expenditures were a significant component of capital expenditures and comprised $0.62 and $0.20, respectively, per barrel of oil equivalent of proven plus probable reserves and $0.75 and $0.24, respectively, per barrel of oil equivalent of established reserves. Development costs for facilities and equipping totalled $1.55 per barrel of oil equivalent of proven plus probable reserves and $1.87 per barrel of oil equivalent of established reserves. Finding costs net of land, seismic and facilities were $4.79 per barrel of oil equivalent of proven plus probable reserves and $5.83 per barrel of oil equivalent of established reserves. Elk Point has boosted its current productive capability to over 7,000 barrels of oil equivalent per day of which 63 percent is natural gas. The Company is planning to drill 120 gross (60 net) wells this coming year with an increased focus on natural gas. A number of development projects which will lead to further production growth are underway at Pembina, Lobstick, Corbett Creek and Newton in west central Alberta and Elcott in southeastern Saskatchewan. While directing 65 percent of its drilling towards development, the Company plans to evaluate 43 exploration prospects in 1998. Exploration efforts will be directed mainly towards multi-zone natural gas in west central and northeastern Alberta, light oil in southeastern Saskatchewan and medium oil in the Powder River Basin, Wyoming. Elk Point will operate and participate with a 10 percent working interest in a high impact, deep exploration test at Lost Hills in the San Joaquin Basin in California targeting long life, light oil reserves. For table data, go here: Message 3853479 ALL OTHER COMPANIES IN THE NEWS Two new wells were placed on production this month, resulting in Scarlet Exploration Inc. (ASE/SCO) achieving its 1998 production target of 1,000 BOEPD net to the company, effectively doubling 1997 production. One well is located in the Zama/Sousa area of Alberta, the second in southeast Saskatchewan. "This is a major milestone in Scarlet's growth," said Alan D. Jack, president and chief executive officer. "We're not only proud that we have broken the 1,000 barrel barrier, we've done it even more quickly than we anticipated." Scarlet has completed all six wells in its 97/98 winter drilling program in the Rainbow Lake region. The company's fifth well is flowing at a restricted rate of 450 BOPD (42 percent net working interest). The sixth and final well will be placed on production in the immediate future. In the Paddle River region, Scarlet recently completed two new wells on its previously announced 42 section farm-in. The first well, a gas well, flowed at 4.1 mmcf/day with 50 bbls/mmcf of liquids on perforation from the Mississippian interval. Reserves are also present in the overlying Jurassic intervals and will be evaluated at a later date. In the second well, Mississippian gas and oil pay was also encountered. A drill stem test in the overlying Jurassic recovered 1,300 m of clean oil. This well has been cased and is waiting on completion. Scarlet expects to drill additional locations on this farm-in after breakup. Earlier this month, in southeast Saskatchewan, Scarlet placed on production its first horizontal well in the Lampman area at 150 BOPD (gross). Orion Resources purchased a 25% interest in the Star Project in Texas at a cost of $500,000.00 U.S. This property is a 10,000 (+-) acre project which has 12 cased wells three of which are currently on production at a combined rate of 600,000 cubic feet of gas per day. It is expected that the remaining nine wells can be brought back into production at rate of between 200,000 and 300,000 MCF per well per day. Within the next year it is expected to increase the revenue from the property from the current $20,000 - $25,000 U.S. per month to $150,000 to $60,000 per month of which 25% will be Orion's interest. The cost of the work overs of the existing wells will be $250,000.00 U.S. for Orion's interest. The property will be operated by Orion's partner in the Texas Gulf Coast exploration plays Producers Energy of Houston (see press release January 28, 1998). As part of the production purchase which was closed on March 20, 1998 (effective date March 1, 1998) Orion and its partners have a one year option on 10,000 acres of optional land which have the potential for further development and exploration. There are five productive zones this area and when the original wells were drilled as a result of one of the zones being overpressured the productivity of the other zones were damaged by the high mud weight required to control the overpressured zone. This bypassed gas pay production could be enhanced with the use of horizontal drilling techniques which have not yet been used in this area. This project should improve Orion's cash flow by the end of this year from the current $10,000.00 (Can) per month to in excess of $60,000.00 (Can) per month. This cash flow estimate does not include any amount for any exploration success on the Star property or on the Gulf Coast properties which could add significantly to the expected cash flow.

To: Crocodile who wrote (9792)	3/27/1998 10:55:00 AM
From: Kerm Yerman	Read Replies (17) \| Respond to of 15196

MARKET ACITIVITY/TRADING NOTES FOR DAY ENDING THURSDAY, MARCH 26, 1998 (6) OTHER COMPANIES IN THE NEWS, con't Ram Petroleums Limited has received log results for its Airu-1 indicated oil discovery drilled on its 321,000 acre Rio Putumayo block in southern Colombia in which it has a 100% working interest. The well reached total depth of 6,195 on February 8, 1998. Because of logistical problems experienced by Schlumberger in bringing its logging unit on to Ram's location, Ram cased the well on February 17 to protect the hole from collapse of shale formations. Drill mud was circulated in the hole for ten days before 7'' casing was cemented resulting in fluid invasion of the exposed formation. Since March 17 Gamma Ray-Neutron, DSI (Sonic), Cement Bond and RST logs have been run. Schlumberger reports that the upper sand (6,018-6,096) has good porosity of 15-20 PU and appears to show a possible oil-water contact at about 6,050, although oil saturation readings of over 50% are recorded as far down as 6,095. Because it is impossible to evaluate the effect of the invasion of drilling fluids into the formation while it was uncased, Ram cannot determine if the interval 6,050-6,095 is oil saturated or a transition zone. There is 32' of oil saturation and the possibility that oil saturation extends from 6,018-6,095, or for 77 feet in the upper zone. The interval 6-095-6,112 is shaly sand. A second sand with porosity of 14-16 PU is reported in the interval 6,112-6,136 with oil indicated in the interval 6,112-6,126. The RST tool, used to log cased holes, was used by Schlumberger to pick possible oil water contacts. Schlumberger reports that under normal conditions the logs run would allow it to identify the oil-water contacts, but that in this case there was the added uncertainty of filtrate invasion. Ram believes that this is all the information that can be obtained currently and will proceed to complete and production test the well. Test results will be announced as soon as they are available. Pioneer Natural Resources Company (NYSE/PXD) announced that it has entered into an agreement with Mariner Energy, Inc. to acquire a 25 percent working interest in Mississippi Canyon Block 305 located in the Central Gulf of Mexico, pending award of the lease by the U.S. Minerals Management Service (MMS). A bidding group comprised of Elf Exploration, Inc. (Operator) and Mariner Energy Inc. was the apparent successful bidder on the block at the OCS Oil and Gas Lease Sale 169, which was held on March 18, 1998. If a lease is awarded by the MMS, the resulting ownership will be Elf Exploration, Inc. (50 precent), Mariner Energy, Inc. (25 percent) and Pioneer (25 percent). The potential acquisition of Mississippi Canyon Block 305, located in approximately 7,000 feet of water, will mark Pioneer's initial investment in the deep water Gulf of Mexico. Scott Sheffield, Pioneer's President and Chief Executive Officer, stated, "This is a high quality 3-D seismic prospect with reserve impacting potential. Pioneer will continue to evaluate investment opportunities in the Gulf of Mexico slope to increase its exposure to significant reserve and production growth." SERVICE SECTOR Serval Corporation (SI.UN/ASE) of Calgary has placed orders for three technologically innovative coiled tubing drilling units to be delivered in 1998. The first unit will be operating in August and the next two units will be delivered in October and December. Serval expects to invest between $18 and $24 million on serving the coiled tubing market over the next two years. Serval is one of Western Canada's leading energy service companies providing a wide range of integrated oilfield services in Canada and internationally. The coiled tubing drilling units being constructed for Serval utilize new technology and will be able to drill to a vertical depth of 1200 meters. They will be used in the drilling of shallow gas wells in southern and central regions of Alberta and are designed to accommodate vertical and directional drilling. These high penetration rate, exceptionally mobile drilling units provide significant efficiencies in rig up, rig down and drilling times. Cost savings to producers are expected to be in the order of 20 per cent and drilling times are expected to be reduced to 18 hours or less. The control cab on the units is fully computerized with real time data acquisition and data transfer links. The Serval coiled tubing units will utilize 6 1/4 inch drill bit for the hole and a 9 5/8 inch bit for surface drilling. The drilling will utilize a 2 7/8 inch 1200 metre tubing coil and can run production casing of 4 1/2 inch diameter. The compact Serval Coiled Tubing units require the moving of only four highway loads - the rig unit, a pump unit, mud tank unit and casing trailer. The four units are supported by a combined tool room and generator trailer which is towed by a one-ton crew cab. Serval provides services to clients through five business units - Coiled Tubing, Construction, Environmental, Fluid and Production Services. J&L Capital Venture Corp.(JLX/ASE) a junior capital pool company, announces that it has by a Letter of Intent dated March 13, 1998, reached an agreement to acquire all or substantially all of the assets (the "Assets") of Cancoil Technology Corporation ("Cancoil"), a private Alberta company. The purchase price of the Assets shall be the sum of $2,829,734. Cancoil was incorporated on April 24, 1997 and has no history of operations but is currently constructing an oil and gas drilling and service rig utilizing the latest advances in coil tubing technology (the "Rig"). Upon the acquisition of the Assets the Corporation intends to complete the manufacture of the Rig. It is anticipated that the Rig and other surface equipment to be manufactured by the Corporation will allow cost effective drilling of shallow vertical/slant wells and deep directional re-entry (underbalanced / overbalanced). It is anticipated that the Rig will also have the capability to perform underbalanced production logging / perforating with both coiled tubing and wireline. Effective March 27, 1998, the common shares of J&L Capital Venture Corp. will be listed upon and trade on the facilities of The Alberta Stock Exchange under the stock symbol "JLX". INTERNATIONAL Latin America Becoming Dominant Source of U.S. Petroleum Needs Despite steadily expanding exports of crude oil to the U.S., Canada is losing market share to Venezuela and Mexico, which now rank as the number one and two suppliers of crude oil to the United States, according to U.S. Department of Energy statistics. Between them, Mexico and Venezuela have hiked exports of crude and petroleum products to the U.S. by 929,000 bbls a day between 1994 and1997. Over the same period, Canadian exports have risen by 320,000 bbls per day. However, the real market share loser has been Saudi Arabia, which in 1994 was the dominant supplier of petroleum to the American market. While the U.S. appetite for petroleum has grown over the four year period, Saudi Arabia's exports to the U.S. have declined marginally from 1.4 million bbls per day in 1994 to 1.39 million bbls a day last year. In 1997, Canada held on to its position as the fourth largest supplier of crude to the U.S. and the second largest supplier of crude and petroleum products (see graph). Venezuela ranked first in both categories but Mexico is rapidly catching up on the crude export front. Venezuelans exported 1.73 million bbls a day to the U.S. last year (over 17% of U.S. needs), of which 1.35 million bbls were crude oil and equivalent. Mexico sent a total of 1.37 million bbls north of the border, almost all of which was crude. Canadian producers exported 1.47 million bbls per day of crude and product to the U.S. (over 13% of U.S. import requirements), of which 1.13 million bbls were crude and equivalent. In 1994, total Canadian exports south of the border amounted to 1.15 million bbls a day, of which 940,000 bbls per day consisted of crude and equivalent. With deregulation of the Canadian market in the mid-1980s, exports to the U.S. have been growing rapidly and are expected to increase further as Eastern Canadian refineries rely more on imported oil once the Sarnia pipeline is reversed. In 1992, Canada sent about 1.05 million bbls of crude and product to the U.S. market. That same year, Saudi Arabia was the dominant supplier of U.S. petroleum needs with exports totalling 1.72 million bbls. Japan Oil Firms Still Restricted Despite Reform The legalisation of self-service gasoline stations from April 1 is widely touted as the lifting of one of the last key restrictions shackling Japan's oil industry. But, some industry sources say a closer look reveals there are still bonds which prohibit oil refiners from making fully free business decisions and that Japanese firms are still at a disadvantage when facing international competition. "Deregulation is not yet complete," said Ian Scoble, the president of Mobil Sekiyu KK, an affiliate of U.S. Mobil Corp, in a written response to questions from Reuters. "There remains a number of restrictions in the refining and distribution parts of the industry that need to be addressed before I can say that the industry is fully deregulated." One Japanese oil company official said that while the industry could now be described as deregulated, there were minor details that still needed to be addressed. He said that Japanese refiners were still unable to compete on an equal footing with western companies because refining standards in areas of safety and quality were stricter in Japan than in many western countries. Such standards often added to the financial burden of Japanese firms by boosting personnel and other costs, he said. This difference in standards "definitely puts Japanese firms on a weaker footing against global competition," he said. One example raised both by him and Mobil was the guideline on refinery maintenance checks. Despite a relaxing of rules last April, Japanese oil firms must still close their refineries for routine maintenance once every two years. "There's no doubt that Japan has stricter rules on safety, and that makes it more difficult to compete globally," an oil trader at a refiner said. After years of debate, the government gave its approval last November to allow self-service stations after concluding they were safe if strict safety measures were followed. Some industry analysts believe the launch of self-service stations will add momentum to the downward spiral of gasoline prices triggered by a key reform in April 1996, which allowed companies other than oil refiners to import oil products. Other industry pundits say retail prices, which have lost 19 percent over the last three years, could not drop too dramatically. Japanese oil company executives have been heard to lament that the money for a litre of gasoline could no longer buy you litre of mineral water. Competition at the pump have ravaged the profits of leading oil companies, and many firms are expected to report poor earnings when they close their books on March 31. Few in the industry predict there will be a major wave to build self service stations because of the high costs. Mobil president Scoble said he believed Japan's oil industry would look very different five and 10 years from now. He said he believed that the number of gasoline stations, now about 59,000, would be reduced to half. Despite the severe business environment, he said the sheer size of the Japanese market was enough to lure foreign firms. "If margins remain relatively high by international standards, it could be anticipated that a number of offshore companies will look closely at entering the Japanese oil industry recognizing that Japan is the second largest market in the world for petroleum products," Scoble said. Tarim Basin Reports Highest Growth in China's Oil Production URUMQI (March 27) - The Tarim Oil Zone in northwest China's Xinjiang Uygur Autonomous Region produced 4.2 million tons of crude oil in 1997, an increase of 1.1 million tons in a year, the highest rate of increase in China's 21 oil zones. The 560,000-square-kilometer Tarim Basin is estimated to have 19.2 billiontons of oil reserves, the country's largest potential, regional Oilfield Coordinating Office sources say. Eleven oilfields have been found there in eight years of exploration. These oilfields have more than 500 million tons of proven reserves. By the end of last year, The oilfields had produced 15 million tons of oil. The Tarim Oil Zone has become China's seventh largest onshore oil zone, making up for the oil decline in east China. Five oil pipelines have been completed in the basin oil transport. The Tarim Oil Zone is expected to yield more than five million tons of oil annually. END - END

To: Crocodile who wrote (9792)	3/28/1998 4:09:00 AM
From: Kerm Yerman	Read Replies (3) \| Respond to of 15196

FIELD ACTIVITIES / CityView Energy Corp. Phillipines Update CITYVIEW ENERGY CORPORATION LIMITED RE: BLOCK GSEC 74 PHILIPPINES: ARCO PHILIPPINES INC OPERATOR 1998-03-27 HERDSMAN, WESTERN AUSTRAL Capital Structure: Fully Diluted: 12,607,068 Float: 5,522,049 MMC Exploration & Production (Philippines) Pte Ltd has been advised by the operator ARCO Philippines Inc that Hippo Well No. 1 at 0600 hours 26 March 1998 was at 3703 metres (12150 feet) depth. ARCO will now carry out logging of the lower section of the well. It appears that a sandy body of approximately 35 metres (112 feet) from 3620 metres (11878 feet) to 3655 metres (11990 feet) has been identified. The gas chromatograph indicates condensate C4 and C5. MMC Exploration & Production (Philippines) Pte Ltd is owned 51% by MMC Exploration and Production BV and 49% by CityView Energy Corporation Limited's wholly owned subsidiary Western Resources N.L.