EARNINGS / Coho Energy Reports First Quarter 1998 Results
NASDAQ SYMBOL: COHO
MAY 13, 1998
DALLAS, TEXAS--Coho Energy, Inc. today reported a 33 percent
increase in revenues in the first quarter 1998 to $21.1 million as
compared with $15.5 million in the first quarter of 1997. Crude
oil and natural gas production increased 89 percent, to 18,805
barrels of oil equivalent (boepd), compared to the first quarter
1997 production of 9,974 boepd. The production increase reflected
the ongoing activity in Coho's Mississippi operations and the
addition of the Company's Oklahoma properties which were acquired
in December 1997. However, the financial benefits of an increased
production base were negatively impacted by a 33 percent year to
year decrease in its realized crude oil price per barrel and a 14
percent decrease in the realized gas price per thousand cubic
feet. The sharp decline in commodity prices, higher interest
expense and a $32 million non-cash ceiling test provision in the
carrying costs of its oil and gas properties resulted in the
Company reporting a net loss of $22.3 million or $0.87 per share
as compared with net income of $2.1 million ($0.10 per share) in
the prior period. Cash flow from operations (before working
capital adjustments) in the first three months of 1998 was $4.0
million ($0.16 per share) as compared with $8.2 million ($0.40 per
share) for the same period in 1997.
Capital expenditures for the first quarter were $22.6 million and
included the drilling and completion of nine oil wells in
Mississippi. In addition at March 31, 1998, five wells in
Mississippi were in various stages of drilling and completion.
Highlights of the first quarter activity in Mississippi included
the Brookhaven field, where average net production was 1,485
boepd, a 25 percent increase over the fourth quarter 1997, and
drilling activities in the Company's Laurel, Martinville and
Summerland fields.
In Oklahoma, the first quarter capital program was minimal, as
Coho proceeded with its effort to purchase additional working
interests from other parties in the Company's major fields prior
to any major development activity. For the remainder of the year,
Coho expects to increase its activity level significantly in
Oklahoma, where a large inventory of projects have been developed
since Coho acquired the properties in December 1997.
In response to continuing low oil prices, capital expenditures
during the second quarter will be curtailed to approximately $12
million. Commenting on the first quarter 1998 results, Jeffrey
Clarke, Coho's Chairman and Chief Executive Officer, said,
"Because of the steep decline in crude oil prices, the quarter was
difficult for Coho. The ceiling test writedown, which was
required by accounting rules, reflects current low prices and not
a fundamental erosion in the real long term value of our
properties. The Company remains optimistic that a rebound of
prices will occur and that Coho's substantial asset base, 80
percent of which is oil, will continue to expand."
Coho Energy, Inc., is a Dallas based independent oil and gas
producer focusing on exploitation of underdeveloped oil properties
and exploration in Oklahoma and Mississippi.
/T/
COHO ENERGY, INC.
SUMMARY OF FINANCIAL RESULTS
(In Thousands, Except Per Share Data)
Three Months
Ended
March 31,
1998 1997
---- ----
OIL PRODUCTION (BBL/D) 14,667 6,724
GAS PRODUCTION (MCF/D) 24,824 19,499
PRODUCTION (BOE/D) 18,805 9,974
Average Sales Price
$/BBL $12.33 $18.35
$/MCF $2.17 $2.53
OPERATING REVENUES
Net Oil and Gas Production $21,143 $15,536
------- -------
OPERATING EXPENSES
Oil and Gas Production 6,413 3,080
Taxes on Oil and Gas Production 1,002 540
General and Administrative 2,140 1,776
Depletion and Depreciation 7,794 4,536
Writedown of crude oil and natural
gas properties 32,000 --
------- -------
TOTAL OPERATING EXPENSES 49,349 9,932
------- -------
NET INTEREST EXPENSE (7,763) (2,098)
INCOME TAXES (13,668) 1,402
NET EARNINGS $(22,301) $2,104
------- -------
------- -------
BASIC EARNINGS PER COMMON SHARE $(0.87) $0.10
CASH FLOW FROM OPERATING ACTIVITIES
(before working capital adjustments) $4,012 $8,155
CASH FLOW PER COMMON SHARE - BASIC $0.16 $0.40
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES - BASIC 25,604 20,373
COHO ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In Thousands)
March 31, December 31,
1998 1997
---- ----
ASSETS
Current Assets 15,390 17,074
Property and Equipment 514,254 531,409
Other 6,491 6,645
-------- --------
$536,135 $555,128
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities 25,598 19,095
Long Term Debt 380,941 369,924
Deferred Income Taxes 6,094 20,306
-------- --------
412,633 409,325
-------- --------
Commitments and Contingencies 3,700 3,700
Shareholders' Equity 119,802 142,103
-------- --------
$536,135 $555,128
-------- --------
-------- --------
Common Shares Outstanding - Basic 25,604 20,373
/T/
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