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

To: SofaSpud who wrote (10874)	5/25/1998 2:26:00 PM
From: SofaSpud	Respond to of 15196

EARNINGS / Opal Energy First Quarter OPAL ENERGY ANNOUNCES CONTINUED PRODUCTION GROWTH AND DRILLING SUCCESS CALGARY, May 25 /CNW/ - Opal Energy Inc. is pleased to report its results to the shareholders for the three months ended March 31, 1998. << HIGHLIGHTS --------------------------------------------------------------------- Three Months Ended March 31, 1998 (000's) 1998 1997 % Change ------ ------ ------ Revenue 2,927 2,029 +44 Earnings (136) (57) Cash Flow 903 425 +112 Per share $.03 $.02 Net Capital Expenditures 8,889 1,665 +433 Production Oil & NGLs bbls/day 1,470 939 + 49% Natural Gas Mcf/day 7.12 1.75 +307% Total BOE/day 2,182 1,164 + 87% ---------------------------------------------------------------------- >> FINANCIAL Despite weak crude oil prices, Opal is pleased to report a 112% increase in cashflow, a 44% increase in revenue and an 87% increase in production for the three-month period ending March 31, 1998 versus the first quarter of 1997. Revenue grew to $2.92 million from $2.02 million and cash flow has grown to $903 thousand ($0.03 per share) compared to $425 thousand ($0.02 per share) in 1997. Crude oil and natural gas prices received were $12.17 per barrel of oil and liquids and $1.95 per MCF compared to $18.04 and $2.07 during the same period in 1997. As a result of the erosion in the price of crude oil, Opal incurred a loss of $136 for the period versus a loss of $57 for the same period in 1997. PRODUCTION Oil and liquids for the three months averaged 1,470 bbls/day compared to 989 bbls/day in 1997. Gas production was 7.12 MMcf/day compared to 1.75 MMcf/day in the prior year. Opal continues to improve overall operating performance as seen by the substantial gains in production as well as reduced operating costs of $8.67 per BOE in the first quarter of 1997 versus $5.40 for the first quarter of 1998. Continued efforts to further reduce costs are ongoing, setting the platform to enjoy better netbacks upon the return of historical crude oil prices. OPERATIONS Opal continued to drill and acquire in the first quarter. Capital expenditures net of dispositions were $8,889 for the three months ended March 31, 1998. These activities were funded with cashflow and bank lines. In the first three months of 1998, Opal drilled eight wells (7.4 net) resulting in 1 oil well (.4 net), 4 gas wells (3.5 net) and 3 dry holes (3 net) for a success ratio of 63%. Opal's Gilby acquisition became effective Jan 1, 1998 which brought the company 898 MBOE of long life petroleum and natural gas reserves, 9,500 net acres of land and an underutilized 8.5 MMcf/day gas plant and gathering system. Since January 1, 1998, the company has raised production in the Gilby area from 700 BOE per day to 900 BOE per day. Once recently drilled wells come onstream, production at Gilby should exceed 1100 BOE per day. Opal continues to build an inventory of drilling locations as well as numerous lower risk optimization opportunities all within its core areas. OUTLOOK Opal continues to add value. Substantial production is currently being tested and put on production. Current production capacity is over 3000 BOE/day with daily production of about 2550 BOE. Opal has set the groundwork to capitalize on the current strong gas environment and is also well positioned to enjoy the benefits of increasing crude oil prices. With a significant inventory of opportunities in place within our core areas, we look forward to continued appreciation in shareholder value. Opal anticipates exiting the second quarter producing in excess of 3,000 BOE per day split 50% oil, 50% gas with $7,000,000 of its 1998 capital budget yet to spend. Opal continues to add to its technical team in order to facilitate growth and expand into new core areas. The Toronto Stock Exchange and the Alberta Stock Exchange have neither approved nor disapproved the contents hereof. -30- For further information: Mr. Kelly J. Ogle, Chief Executive Officer, or Mr. Joseph S. Durante, Chief Financial Officer, (403) 221-4130, Fax: (403) 221-4137, E-mail: opal@cadvision.com