***NEWS RELEASE***
Year end financial results
TUSK Energy Inc TKE
Shares issued 9,735,000 Jun 3 close $2.03
Thu 4 Jun 98 Company Review
Mr. Norman Holton reviews the company
During the year ended Dec. 31, 1997, revenue, cash flow and production were
all higher than in 1996. Cash flow per share was lower due to issuances of
additional shares.
A development well at Meekwap, drilled on a location defined by
interpretation of 3-D seismic data, is currrently producing more than 1,800
boe/d (315 boe/d net) and a gas discovery has been made at Strachan.
Current production exceeds 800 boe/d compared to a 1997 average of 605
boe/d.
Highlights
Highlights of the year included:
Increased cash flow from $2.2-million to $2.6-million;
Completed first full year as operator of the Meekwap D-2A unit;
Decreased operating costs at Meekwap by $1.4-million (24 per cent);
Expanded Strachan acreage to 16.5 contiguous sections;
Undeveloped acreage up 55 per cent to 37,360 net acres; and
Arranged farm-out of Strachan prospect.
Since the end of the fiscal year, TUSK has:
Drilled and put on production a successful oil development well at Meekwap
(Nisku reef);
Drilled a gas discovery well at Strachan (10 per cent bpo, 30 per cent
apo); and
Started new water injection at Meekwap to increase pressure and
productivity.
Financial
During the fourth quarter, TUSK issued flow-through shares, raising gross
proceeds of $2.67-million.
The company hopes to drill up to four more wells (17 per cent to 46 per
cent) at Meekwap, all on anomalies defined by interpretation of 3-D
seismic, prior to the end of 1998. New wells, if drilled into the highly
pressured southern part of the pool, typically will produce in excess of a
500 b/d average during their first year of production.
At Strachan, production testing during the summer will enable a
determination of reserves and production rates. A decision on further
drilling of this prospect will likely be deferred until testing is
completed.
STATEMENT OF EARNINGS
Year ended Dec. 31
1997 1996
Revenue
Oil and gas
revenues, net $ 4,633,819 $ 4,065,606
----------- -----------
Expenses
Oil and gas
operating 1,376,455 1,104,612
Interest on long
term debt 299,508 283,940
Provisions for
future site
restorations 63,500 67,800
General and
admin 371,303 423,172
Shareholder
information 34,976 35,688
Depreciation and
depletion 5,688,700 1,449,180
Property
impairment 73,080 -
----------- -----------
7,907,522 3,364,392
----------- -----------
Net earnings
(loss) $(3,273,703) $ 701,214
=========== ===========
Earnings (loss)
per share (41 cents) 14 cents
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
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