Hello Len:
Year end results
Gentry Resources Ltd GNY.B
Shares issued 13,420,064 Apr 17 close $0.99
Mon 20 Apr 98 News Release
Mr Hugh Ross reports
For the year ended December 31 1997, Gentry Resources continued to achieve record additions to its production volumes, revenues, cash flow and reserves. Gentry's international strategy was also successful, with the addition of large high reward international exploration projects in West Africa and Australia.
Highlights and major accomplishments for the year ended December 31 1997 include:
Gross revenues of $4,547,205, up 38% from $3,285,389 posted in 1996.
Cash flow from operations of $1,082,306, up 28% from the $843,274 generated in 1996.
Average daily crude oil and natural gas production of 552 boe, up 46% from 379 boe posted in 1996.
Total proven and probable reserves of 3,275 mboe, up 50% from 2,183 mboe recorded at the end of 1996. Proven and probable reserves were added at a cost of $2.45 per boe in 1997, up slightly from Gentry's record low of $2.08 in 1996, but still below the industry average.
Reserve additions of 1,294 mboe replaced 1997 production by a factor of 642%. Gentry's reserve life index now stands at 11.2 years.
Participation in the drilling of 63 wells with a 95% success rate.
Four production sharing contracts with the governments of Cote d'Ivoire and Gabon, West Africa, were entered into with partners such as Ranger Oil, Clyde Expro plc (a subsidiary of Gulf Canada Resources), and Energy Africa Limited.
FINANCIAL HIGHLIGHTS
Year ended December 31
($ 000's)
1997 1996
Gross revenue $4,547 $3,285
Cash flow from
operations $1,082 $843
Cash flow per
common share $0.07 $0.06
Earnings (before tax) $16 $289
Earnings per common
share (before tax) - $0.02
Capital expenditures $4,699 $2,957
OPERATIONAL HIGHLIGHTS
Year ended December 31
1997 1996
Production
Crude oil & NGL (bbl/d) 470 323
Natural gas (mcf/d) 824 557
Oil equivalent (boe/d) 552 379
Exit rate (boe/d) 651 439
Average selling price
Crude oil (bbl) $23.05 $24.35
Natural gas (mcf) $1.73 $1.61
Oil equivalent ($/boe) $22.20 $23.13
Reserves
Crude oil & NGL (mbbl) 3,055 1,964
Natural gas (mmcf) 2,197 2,195
------- -------
Total (mboe) 3,275 2,183
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For the year, Gentry's domestic activities focused on developing reserves on its existing land base. A pool extension in the Baldwinton area of southern Saskatchewan added low cost, crude oil reserves and led to six wells being successfully drilled with an additional six wells planned for late 1998. In excess of 200,000 net barrels of reserves were added at approximately $2.30 per barrel and had a significant impact on 1997 corporate results.
The $1.7 million acquisition of a number of producing properties within the company's core southern Saskatchewan and central Alberta areas resulted in increased interests in a number of the company's existing properties. A $375,000 acquisition of a 50% working interest in a non-unit well and additional interests in the Virden Roselea unit in Manitoba was also completed and offers significant, long life reserves, which are expected to have a substantial impact in 1998 and 1999. A successful horizontal well was recently drilled and an additional two to three wells are planned for the unit in mid 1998. At Steelman in southeastern Saskatchewan, six successful horizontal wells were recently drilled and are expected to lead to additional drilling in 1998 and 1999. In the Dollard unit of southwestern Saskatchewan, a total of eight successful oil wells were drilled and tied into existing production facilities. An additional 10 wells are planned in 1998. While western Canadian-based activities contributed to Gentry's financial and operational performance, international prospects offer a longer term
strategic growth opportunity. Gentry was successful in identifying specific exploration prospects, negotiating the rights to these concessions and attracting quality industry participants, bringing international expertise and capital to these highly prospective projects. Gentry is participating with major international companies in the Cote d'Ivoire and Gabon projects.
Gentry anticipates significant growth in 1998 and continues to be opportunity driven in its efforts to add shareholder value through its strategic acquisitions and drilling programs, and particularly through its carefully conceived high impact international exploration programs. Gentry is continuing with its $3 million capital program for 1998, and its participation in the drilling of 80 gross wells. This increased level of drilling activity will generate immediate cash flow and allow production performance to continue the growth trend Gentry has consistently maintained over the past five years. Production growth in excess of 35% is the company's target for 1998. Longer term objectives in western Canada will
see the company increasing its working interest participation in its core areas. The company will also seek out new core areas where low risk development will add immediate cash flow.
The criteria for new areas will include pursuing high quality crude and natural gas in areas where Gentry can take a controlling interest and begin to more actively manage its growth. The company's international programs are well planned over the next year, and are generating their own momentum as the various exploration programs progress. Gentry is well positioned to continue to create increases in its operating and financial results through 1998 and beyond.
Gabon 3rd Quarter Cote d'Iviore 4th Quarter
Best Regards
Bob Vukovich
Manager of Investor Relations
Gentry Resources Ltd. |
