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

To: Kerm Yerman who wrote (9825)	3/30/1998 11:28:00 PM
From: Kerm Yerman	Respond to of 15196

EARNINGS / Opal Energy 1997 Results OPAL ANNOUNCES SUBSTANTIAL INCREASES IN PRODUCTION, RESERVES AND CASH FLOW CALGARY, March 30 /CNW/ - OPAL ENERGY INC. (''OPE''-TSE) is pleased to report its 1997 results. Operating and financial highlights include a 176 percent increase in average production from 525 BOEPD in 1996 to 1,462 BOEPD with an 1997 exit rate of 2,000 BOEPD. Revenue increased to $8.9 million in 1997 compared to $4.0 million in 1996 and cash flow jumped 170 percent from $1.0 million ($0.07 per share) to $2.7 million ($0.10 per share) in the same period. Opal incurred a loss after deferred taxes of $138 thousand (-$0.01 per share) versus earnings of $189 thousand in 1996 ($0.01 per share). The impact on earnings was due to commodity price erosion, which caused Opal's average oil price to decrease to a corporate average of $14.52 per barrel in 1997 versus $20.57 in 1996, however, gas prices were stronger and averaged $2.07 per Mcf in 1997 versus $1.84 in 1996. Opal completed an $11.2 million capital spending program in 1997 which included the drilling of 24 (18.8 net) wells (17 oil, 3 gas and 4 dry) with an overall success rate of 83 percent. A new core area at Atlee/Buffalo was created through exploratory drilling. Atlee gas production is presently flowing at a rate of 2.0 MMcf per day with an additional 2.0 MMcf per day behind pipe. Opal has built a land position of approximately 12,000 net acres in the area and intends to drill at least five more wells at Atlee/Buffalo by year end. Other drilling, exploitation, optimization and acquisitions added proven reserve additions of 1.67 MMBOEs in 1997 for a total of 6.65 MMBOE on a proven plus probable basis. This resulted in reserve replacement of more than 313 percent on a proven basis. Finding and development costs for 1997 were $4.70 per BOE for proven additions giving a two year average of $3.85 per proven BOE. 1997 saw Opal move its production mix from 90 percent heavy oil in January to 55 percent at year end. Natural gas exposure moved from 10 percent to 45 percent during the year. Given the success of the 1997 - 1998 winter drilling program, Opal's mix is anticipated to be 50 percent natural gas, 20 percent light oil and NGLs and 30 percent heavy quality crude by the end of the second quarter. Current production is in excess of 2,600 BOE per day, up 600 BOE per day from January 1, 1998. With increasing production volumes coming from new light oil and natural gas, the platform is set to enjoy the benefit of increasing cash flow upon a return to more historical crude prices coupled with a favourable gas environment.