EARNINGS / Probe Exploration Q1 Results
PROBE EXPLORATION INC. - PRODUCTION INCREASES RESULT IN RECORD FIRST QUARTER RESULTS FOR PROBE EXPLORATION INC.
CALGARY, May 26 /CNW/ - Probe Exploration Inc. (PRX-TSE) is pleased to
announce its financial and operational highlights for the three months ending
March 31, 1998. The period marked the best three-month performance Probe has
experienced and set the stage for continued success for the remainder of 1998.
FINANCIAL REVIEW
Revenues for the period increased 311% to $8,411,851 from $2,046,017 for
the comparable period of the prior year. Funds flow from operations totalled
$4,631,115, an increase of 456% from $832,816 for the three months ended March
31, 1997. Net earnings amounted to $1,404,427 compared to $354,943 for the
first quarter of 1997, an increase of 296%. These year-over-year increases are
due primarily to the Leduc and Jaguar acquisitions and to the value added by
Probe since the acquisitions through new drilling, workovers and
recompletions.
<<
Three Months Ended March 31
FINANCIAL HIGHLIGHTS 1998 1997 % Change
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$ $
Total revenues 8,411,851 2,046,017 311
Cash flow from Operations 4,631,115 832,816 456
Per share 0.072 0.020 260
Net Earnings 1,404,427 354,943 296
Per share 0.022 0.009 144
Capital Expenditures, net 10,338,207 2,734,012 278
Operating Costs per BOE 3.26 7.60 (57)
Netback per BOE 8.82 10.79 (18)
General and Administrative
Expenses per BOE 0.94 2.57 (63)
Average Natural Gas Price ($/Mcf) 1.76 2.31 (23)
Average Oil and Natural Gas
Liquids Gas Price ($bbl) 12.25 19.44 (37)
Average Price ($/BOE) 14.32 20.54 (30)
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>>
The average price received for production decreased to $14.32 per BOE
from $20.54 per BOE in the prior year, reflecting the world-wide decrease in
oil prices. Natural gas prices averaged $1.76 per Mcf and are expected to
increase over the remainder of the year.
Probe's operating netback for the quarter was $8.82 per BOE compared to
$10.79 per BOE for the first quarter of 1997. The Company's general and
administrative expenses and its operating costs were $0.94 per BOE and $3.26
per BOE respectively.
On April 28, 1998, Probe announced that it had secured a new $100 million
credit facility with Bank of Montreal. This facility, along with cash flow
ensures that the Company will be able to fund its newly expanded $70 million
capital program without accessing equity markets.
OPERATIONS REVIEW
At Leduc, Probe completed its 100th operation since acquiring the
property on August 1, 1997. A total of 52 wells were drilled or recompleted
in the first quarter with a 98% success ratio. Probe's production for the
quarter ended March 31, 1998 averaged 7,725 BOE/d, and comprised 4,761 barrels
per day of crude oil and natural gas liquids and 29.64 million cubic feet per
day of natural gas. This compares favourably with fourth quarter 1997 average
volumes of 7,400 BOE/d. January, February and March's daily production
averaged approximately 4,000, 9,000 and 10,000 BOE respectively. January
volumes were negatively impacted by a three week curtailment of production at
Leduc which was caused by a tank collapse and fire at a third party facility.
Without this mishap, approximately 1,300 BOE of daily production would have
been added to the first quarter average. Current production volumes are
11,000 BOE/d with 2,500 BOE/d of shut-in capacity, which will be on-stream
early in the third quarter.
<<
Three Months Ended March 31
OPERATIONAL HIGHLIGHTS 1998 1997 % Change
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Natural Gas Production (MMcf/d) 29.64 3.75 690
Oil and Natural Gas Liquids
Production (bbls/d) 4761 860 453
Total Productlion (BOE/d) 7725 1235 525
New Wells Drilled 19
Recompletions 33
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>>
At Leduc, the Company's 20 mmcf/d zero emission sour gas reinjection
plant at Calmar began operations in the first quarter of 1998. The next phase
of expansion, to over 30 mmcf/d, is already underway with completion expected
in July.
Elsewhere, Probe completed construction of a $3 million oil battery at
Majestic which will improve liquids handling capabilities and eliminate third
party processing and trucking fees, increasing netbacks for Probe's production
in the area. Five new wells were drilled which resulted in two oil wells and
three gas wells. Subsequent to the end of the period, Probe acquired an
additional 20% working interest in Majestic to bring the Company's total
working interest to 72.5%. The Company also augmented its land position at
Majestic which now total 35 sections.
OUTLOOK
While the current downturn in oil prices will affect short-term cash
flow. The lower pricing environment will also create opportunities for Probe
to consolidate and expand its current holdings and position itself for further
growth. The Company plans to use the cash flow generated by its exploitation
activities to move into new exploration projects complementary to existing
project areas and compatible with our strategy.
<<
Consolidated Balance Sheets
March 31, 1998 March 31, 1997
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ASSETS $ $
Current Assets:
Cash and short-term deposits 429,752 109,729
Accounts receivable 30,586,805 5,929,609
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31,016,557 6,039,338
Oil and gas properties 135,263,709 24,030,396
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166,280,266 30,069,734
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued 34,627,839 5,927,955
liabilities
Long term debt 74,973,602 8,753,697
Site restoration 988,039 134,693
Deferred income taxes 3,939,489 516,000
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114,528,969 15,332,345
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Shareholders' Equity:
Common shares 48,039,155 13,799,490
Retained earnings 3,712,142 937,899
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51,751,297 14,737,389
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166,280,266 30,069,734
Consolidated Statements of Operations and Retained Earnings
Three Months Ended March 31
1998 1997
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Revenues: $ $
Oil and gas sales 9,953,383 2,283,051
Royalties (1,556,405) (238,892)
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8,396,878 2,044,159
Interest and other income 14,873 1,858
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8,411,851 2,046,017
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Expenses:
Production 2,264,350 844,433
General and administrative 650,339 286,027
Depletion, depreciation and
site restoration 2,307,688 279,873
Interest 790,808 67,741
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6,013,185 1,478,074
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Earnings before tax expense 2,398,666 567,943
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Tax expense
Current 75,239 15,000
Deferred 919,000 198,000
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994,239 213,000
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Net earnings 1,404,427 354,943
Retained earnings, beginning
of period 2,307,715 623,367
Dividends paid - (40,411)
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Retained earnings, end 3,712,142 937,899
of period
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Net earnings per common share 0.022 0.009
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Consolidated Statements of Changes In Financial Position
Three Months Ended March 31
1998 1997
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Cash Provided By (Used In) $ $
Operations:
Net earnings 1,404,427 354,943
Items not Involving cash
Depletion, depreciation and 2,307,688 279,873
site restoration
Deferred Income taxes 919,000 198,000
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Cash flow from operations 4,631,115 832,816
Changes in non-cash working (14,714,331) (2,530,409)
capital items
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(10,083,216) (1,697,593)
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Investments:
Additions to oil and gas (14,947,927) (2,809,012)
properties
Proceeds from sale of oil and 4,609,720 75,000
gas properties
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(10,338,207) (2,734,012)
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Financing:
Increase in long term debt 20,168,118 4,403,697
Issue of common shares net 682,557 74,290
issue costs
Preferred Share dividends paid (40,411)
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20,850,675 4,437,576
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Increase (decrease) in cash 429,252 5,971
and short-term deposits
Cash and short-term deposits, 500 103,758
beginning of period
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Cash and short-term deposits, 429,752 109,729
end of period
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Cash Flow per common shares 0.072 0.020
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>>
-30-
For further information: Stephen P. Gibson, President & C.E.O., Barrie
Wright, Vice President and C.O.O. or David F. Perrins, C.F.O., (403) 233-2464,
Fax: (403) 233-2486 |
