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

To: David Reid who wrote (10674)	5/13/1998 9:09:00 PM
From: Herb Duncan	Respond to of 15196

FIELD ACTIVITIES / Pan East Updates Activity in Bullmoose/Sukunka Area, British Columbia TSE SYMBOL: PEC MAY 13, 1998 CALGARY, ALBERTA--Pan East Petroleum Corp. ("Pan East"), as operator has reached total depth of 2,190 metres (measured depth) in an exploration well at Pan East et al Windfall a-5-G/93-P-4. The a-5-G well was directionally drilled on a large structure and encountered 270 metres (890 feet) of total Triassic section. Approximately 200 metres (660 feet) of Baldonnel formation contains highly fractured porosity and will be production tested through 4 1/2 inch production tubing. Testing will commence during the last week of May. Pan East has a 25 percent cost interest in this well and will earn a 35 percent working interest before pay out and 24.5 percent working interest after pay out in the well and 10,375 acres of surrounding lands. Pan East's partners in the well include Fina Resources Inc. (40 percent working interest before pay out) and Chesapeake Energy Corporation (NYSE - CHK) (25 percent working interest before pay out) with Poco Petroleums Ltd. (TSE- POC) holding an after pay out interest.

To: David Reid who wrote (10674)	5/13/1998 9:42:00 PM
From: Herb Duncan	Read Replies (1) \| Respond to of 15196

EARNINGS / Peak Energy Services Ltd. Announces Strong 1998 First Quarter Results TSE SYMBOL: PES MAY 13, 1998 CALGARY, ALBERTA--Peak Energy Services Ltd. ("Peak") is pleased to announce its 1998 first quarter results for the three month period ended March 31, 1998. /T/ Consolidated Balance Sheet -------------------------------------------------------------- March 31, 1998 March 31, 1997 (Unaudited) (Unaudited) ($000) ($000) -------------------------------------------------------------- Assets Current assets $ 16,632 $ 7,472 Property, plant and equipment 75,799 13,991 Goodwill 20,467 509 -------------------------------------------------------------- Total Assets $ 112,898 $ 21,972 -------------------------------------------------------------- -------------------------------------------------------------- Liabilities & Shareholders' Equity Current liabilities $ 8,604 $ 2,364 Long-term debt 6,128 1,175 Deferred income taxes 2,391 - Shareholders' equity 95,775 18,433 -------------------------------------------------------------- Total Liabilities & Shareholders' Equity $ 112,898 $ 21,972 -------------------------------------------------------------- -------------------------------------------------------------- Consolidated Statement of Income -------------------------------------------------------------- Three months Three months ended ended March 31, 1998 March 31, 1997 (Unaudited) (Unaudited) ($000) ($000) -------------------------------------------------------------- Revenue $ 14,862 $ 4,185 -------------------------------------------------------------- Expenses Operating 5,221 1,598 General and administration 2,728 687 Depreciation 1,543 483 Amortization of goodwill 267 9 Interest on long-term debt 105 17 -------------------------------------------------------------- 9,864 2,794 -------------------------------------------------------------- Income before income taxes 4,998 1,391 -------------------------------------------------------------- Provision for income taxes 2,618 - -------------------------------------------------------------- Net income $ 2,380 $ 1,391 -------------------------------------------------------------- -------------------------------------------------------------- Per share information --------------------- EBITDA - Fully diluted $0.19 $0.10 Cash flow from operations - Fully diluted $0.08 $0.08 Earnings - Fully diluted $0.07 $0.07 /T/ Peak continued to enjoy excellent profitability and growth in the first quarter of 1998. The Corporation continued to implement its aggressive growth strategy through internal expansion of its existing business units. As well, during the quarter the Corporation focused on effectively managing and integrating the various operations that it acquired in 1997 to exploit internal efficiencies and economies of scale. Utilization rates for the rental of the Corporation's assets continued to be strong throughout most of the first quarter. Peak experienced a decline in its utilization rates during the last two weeks of March due to an early breakup resulting from higher than normal temperatures in March. The early breakup contributed to a reduction in utilization from an average of approximately 90 percent during the first two months of 1998 to 75 percent in March. Drilling rig activity also experienced a similar reduction over the first quarter, declining from an average of approximately 93 percent in January and February to 78 percent in March. Revenues for the quarter totaled $14.9 million as compared to total revenue of $4.2 million for the comparable period in 1997. Approximately 30 percent of revenue was generated by well-site accommodations in the first quarter of 1998 compared to 25 percent in the first quarter of 1997, solids control services contributed 24 percent of the revenue in the first quarter of 1998 compared to 0 percent in 1997, drilling instrumentation contributed 17 percent of the revenue in the first quarter of 1998 compared to 50 percent in 1997, production related services contributed 14 percent of the revenue in the first quarter of 1998 compared to 25 percent in 1997 and specialized trucking services contributed 15 percent of the revenue in the first quarter of 1998 compared to 0 percent in 1997. Operating expenses for the quarter totaled $5.2 million (35 percent of revenue) as compared to $1.6 million (38 percent of revenue) for the same quarter in 1997. General and administrative expenses totaled $2.7 million (18 percent of revenue) as compared to $.7 million (17 percent of revenue) for the same period in 1997. Depreciation and amortization totaled $1.8 million for the quarter as compared to $.5 million for the same period in 1997. Interest expense increased from $17 thousand for the first quarter in 1997 to $105 thousand for the first quarter in 1998. The increase in interest expense is due to increased long-term debt in 1998. Overall, Peak maintains an optimistic outlook on the long-term industry fundamentals. In the short term, however we are experiencing normal seasonality and anticipate more of the same throughout the summer months. Going forward we believe that drilling activity will pick up substantially in the third and fourth quarters of 1998 and be poised for an extremely busy 1999. We estimate that the number of wells drilled in 1998 should fall between 13,000 and 13,500 wells. Despite the recent softening of oil prices we feel that a shift to the exploration and development of natural gas is imminent and this will fuel our positive long-term outlook. The reasons driving this are the recent strengthening of gas commodity prices and the increased take away capacity starting to come on stream in late 1998 and continuing to grow steadily over the next two years. We anticipate the number of wells drilled in 1999 to return to the level experienced in 1997 (16,540 wells drilled in Western Canada). Peak will continue with its proven criteria and strategy of aggressive growth and internal expansion over the foreseeable future. This proven formula allows Peak's management to identify the right opportunities to expand and to continually streamline each subsidiary to ensure maximum growth and profitability are being achieved.