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

To: Kerm Yerman who wrote (11852)	7/22/1998 8:30:00 PM
From: Herb Duncan	Respond to of 15196

EARNINGS / Summit Resources - 1998 Second Quarter Financial and Operating Results TSE SYMBOL: SUI JULY 22, 1998 CALGARY, ALBERTA--Summit Resources Limited is pleased to present its operating and financial results for the first six months of 1998 and for the three months ended June 30, 1998. Comparative results are presented for the requisite periods in 1997. /T/ -------------------------------------------------------------- Three Months Six Months Ended Ended June 30 June 30 -------------------------------------------------------------- Percent Percent 1998 1997 Change 1998 1997 Change -------------------------------------------------------------- ($ thousands except per share amounts) Petroleum and Natural Gas Revenue 22,855 23,517 (3) 43,476 49,515 (12) Cash Flow from Operations 10,031 11,232 (11) 18,247 26,208 (30) Per Share 0.30 0.33 (9) 0.55 0.77 (29) Net Earnings (Loss) 490 393 25 (1,352) 3,182 (142) Per Share 0.02 0.01 100 (0.04) 0.09 (144) Long-term Debt 119,340 149,623 (20) 119,340 149,623 (20) Capital Expenditures (net of dispositions)5,739 78,455 (93) 30,171 94,846 (68) -------------------------------------------------------------- Common Shares Outstanding (thousands) Weighted Average 33,414 33,580 - 33,403 33,942 (2) At June 30 33,414 33,323 - 33,414 33,323 - -------------------------------------------------------------- Crude Oil and Natural Gas Liquids Production - bbls/d 6,250 6,343 (1) 6,152 5,889 4 Price - $/bbl $16.10 $23.78 (32) $16.80 $25.27 (34) Natural Gas Production - MMcf/d 62.4 55.9 12 61.3 58.8 4 Price - $/Mcf $2.38 $1.90 25 $2.20 $2.10 5 Barrels of Oil Equivalent (10 Mcf = 1 Barrel) Production - BOE/d 12,493 11,936 5 12,277 11,772 4 -------------------------------------------------------------- /T/ Summit's growth in natural gas production, combined with stronger natural gas prices, positively impacted the Company's second quarter. However, overall results were lower despite the fact that Summit's high quality, light oil production commands premium prices. The precipitous drop in crude oil prices, in addition to typical seasonal slowdowns, resulted in a dramatic reduction in oil drilling activity during the second quarter of 1998. Throughout the industry, companies were challenged to adjust their capital expenditures, cash flow and production forecasts to reflect this new reality. In response to these dramatic changes in industry economic conditions, Summit undertook the following actions: - The Company disposed of its investment in Fort Chicago Energy Partnership L.P. (Alliance Pipeline) for net proceeds of $20.6 million. These proceeds were applied against bank indebtedness. - Twenty-five wells planned for development of crude oil reserves were postponed until 1999. - Natural gas development projects were accelerated with seven new wells added for drilling in the fourth quarter of 1998. - Overall capital expenditures for 1998 were reduced to $34 million from $40 million. In light of the foregoing budget revisions, Summit expects oil production of 6,250 barrels per day and natural gas production of 65.5 million cubic feet per day. Estimated cash flow for 1998 is in the range of $46 to $48 million. Summit's long-term debt at year-end 1998 is expected to drop to approximately $100 million. PRODUCTION AND PRICING Summit's first quarter natural gas drilling program added 36 billion cubic feet of proved plus probable reserves, increasing second quarter natural gas production by 12 per cent to 62.4 million cubic feet per day over the same period in 1997. This increase was achieved despite delays in start-up of a non-operated gas plant, which impacted natural gas sales at Mirage, Alberta and curtailments in production from Two Creek, Alberta due to forest fires. Natural gas prices strengthened in the second quarter as lower-than-expected field receipts led to a tightening in Alberta gas supply. The favourable gas market, combined with proceeds from the settlement of a terminated long-term gas contract, resulted in a 25 per cent increase in Summit's second quarter natural gas price to $2.38 per thousand cubic feet, with first half 1998 average natural gas prices reaching $2.20 per thousand cubic feet. Crude oil prices continued their downward spiral in the second quarter of 1998, averaging US $14.69 per barrel. Summit's second quarter realized Canadian oil price was $16.10 per barrel, 32 per cent lower than the second quarter of 1997, and 34 per cent lower for the first half of 1998, with prices averaging $16.80 per barrel. Crude oil and liquids production was impacted by the Company's decision to curtail drilling activities for crude oil projects, with the exception of commitment wells and lease expiries. For the first half of 1998, crude oil production increased by four per cent over 1997 volumes to 6,152 barrels per day, however, production in the second quarter averaged 6,250 barrels of oil per day, down one per cent from the same quarter last year. FINANCIAL Summit's production on a barrel of oil equivalent basis increased five per cent in the second quarter of 1998 from the same period last year to average 12,493 barrels of oil equivalent per day. However, production gains and stronger natural gas prices were not able to offset the drop in oil prices. As a result, Summit posted oil and natural gas revenues of $22.9 million for the second quarter of 1998 compared with $23.5 million in 1997. Cash flow for the second quarter of 1998 totalled $10.0 million ($0.30 per share) compared with $11.2 million ($0.33 per share) for 1997. Results reflect lower oil and gas revenues and higher operating costs associated with increased production levels, particularly in British Columbia and the United States, where operating costs are higher. Interest charges also increased during the quarter, although long-term debt levels were significantly reduced by the end of the reporting period. The sale of the Company's investment in Fort Chicago Energy Partnership L.P. resulted in a gain of $2.6 million. This gain offset declines in cash flow and higher depletion and depreciation charges, resulting in net earnings of $490,000 ($0.02 per share), a 25 per cent increase over the same period last year. Summit's capital expenditure program for 1998 was heavily weighted to the first quarter with a focus on natural gas drilling in winter access locations. Second quarter drilling was significantly reduced, with 25 oil wells deferred in response to prevailing soft oil prices. Summit participated in three outside operated wells during the quarter, all of which were in the United States. Two exploration wells (0.5 net wells) were unsuccessful, with the third well successfully extending the Hiline pool in North Dakota. This successful Lodgepole producer is on production at a rate of 500 barrels of oil per day with Summit holding a 28 per cent working interest. With the decision to defer oil drilling, capital expenditures in the second quarter totalled $5.7 million, primarily focused on completions and workovers, as well as expanded natural gas facilities in Mirage, Alberta and Clarke Lake, British Columbia. CORPORATE As previously announced, Summit is in the process of exploring strategic alternatives designed to enhance and maximize shareholder value. Summit is looking at suitable business combinations whereby a combined entity would have the critical mass to capitalize on the exploration and exploitation opportunities the Company has within its inventory of projects in Canada and the United States. Summit has retained Morgan Stanley & Co. Incorporated and Peters & Co. Limited as its financial advisors to assist in this process. OUTLOOK With current and forward prices for Canadian natural gas remaining strong, Summit is well positioned to benefit from further improvements in natural gas prices as a result of 1.1 Bcf per day of expanded pipeline transportation to U.S. markets commencing this fall. Improving natural gas prices will bolster next year's cash flow as well as enhance the Company's underlying asset value. Summit Resources Limited is a Canadian corporation engaged in oil and gas exploration, development, acquisition, production and marketing in western Canada and selected basins in the United States. Summit's shares are listed on the Toronto Stock Exchange (trading symbol "SUI").

To: Kerm Yerman who wrote (11852)	7/22/1998 8:41:00 PM
From: Herb Duncan	Respond to of 15196

ENERGY TRUST / WestCastle Hires Operating Team TSE SYMBOL: WCL.UN OTC Bulletin Board SYMBOL: WCTS JULY 22, 1998 CALGARY, ALBERTA-- THIS NEWS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO UNITED STATES WIRE SERVICES. WestCastle Energy Trust is pleased to announce the hiring of a new operating team. This team includes Michael Machalski as Vice President, Chief Operating Officer and a member of the Board of Directors, Neal Grant as Manager of Development, Larry Pewar as Manager of Operations and Ken Willis as Manager of Production. Chairman and C.E.O., Brad Hurtubise says "These appointments are the most critical step in moving WestCastle to becoming the premier operated trust." This team has worked together, domestically and internationally for 10 years. Their reservoir, exploitation, production and operations engineering expertise is exactly what WestCastle requires to enhance production and lower operating costs from existing assets and build a base for the future growth of distributions. WestCastle Energy Trust is a Calgary-based petroleum and natural gas royalty trust whose units are listed on the Toronto Stock Exchange under the symbol "WCL.UN".

To: Kerm Yerman who wrote (11852)	7/22/1998 8:45:00 PM
From: Herb Duncan	Respond to of 15196

MERGERS-ACQUISITIONS / Midas Acquires Scorpion Energy TSE SYMBOL: MDS JULY 22, 1998 CALGARY, ALBERTA--Scorpion Energy Corporation (formerly, Midas Resources Ltd.) ("Midas") announced today that the offer (the "Offer") made by Midas dated June 16, 1998, as amended July 8, 1998, to purchase all of the outstanding common shares and share purchase warrants of Scorpion Energy Inc. ("Scorpion") expired on July 21, 1998. The Offer has been accepted by the holders of (i) 99.9 percent of the Scorpion Shares and Special Warrants; and (ii) 100 percent of the Scorpion Warrants (collectively, the "Scorpion Securities"). Midas has notified the Depository, Montreal Trust Company of Canada, that it intends to take up and pay for all of the Scorpion Securities tendered to the Offer. Following the acquisition of these shares, Midas will own approximately 99.9 percent of the issued and outstanding Scorpion Securities. As Midas has acquired in excess of 90 percent of the issued and outstanding Scorpion Securities, it intends to proceed with the statutory compulsory acquisition of the remaining Scorpion Securities. In accordance with the Offer, Midas has also amended its Articles of change its name to "Scorpion Energy Corporation" and to consolidate the issued and outstanding Midas Shares on the basis of one (1) new common share of Midas for each three (3) Midas Shares outstanding. Scorpion Energy Corporation expects that the Midas Shares will commence trading on a post-consolidation basis within three (3) business days after submission of required documentation to The Toronto Stock Exchange.

To: Kerm Yerman who wrote (11852)	7/22/1998 8:49:00 PM
From: Herb Duncan	Read Replies (1) \| Respond to of 15196

CORP / Energy North and Electra Energy Unable to Reach Agreement With Landhawk ASE SYMBOL: ENI AND ELECTRA ENERGY CORPORATION ASE SYMBOL: EEN JULY 22, 1998 CALGARY, ALBERTA--ENERGY NORTH INC. ("ENERGY NORTH") and ELECTRA ENERGY CORPORATION ("ELECTRA") announce that after protracted discussion's with Landhawk Petroleum Corporation and its major shareholders Landhawk was unable to meet the conditions of the previously announced Standstill Agreement of April 8, 1998. As a result ENERGY NORTH and ELECTRA have terminated merger negotiations with Landhawk. ENERGY NORTH and ELECTRA further announce that they have finalized the principal terms of a new letter of intent outlining the terms of the proposed merger between them. The letter of intent provides for an amalgamation through a plan of arrangement involving Energy North and Electra. The approximate exchange ratios for the respective shares will be based upon the following ratios: /T/ Number of Shares to be Exchanged for One Share of the Amalgamated Corporation Energy North 5.32 Electra Energy 4.12 /T/ As a result of the amalgamation, the amalgamated corporation will have 10,000,000 Common shares issued and outstanding and purchase warrants to purchase 783,208 shares. The holders of the common shares of ENERGY NORTH will acquire approximately 55 percent of the amalgamated corporation's shares and the holders of the common shares of ELECTRA will acquire approximately 45 percent of the amalgamated corporation's shares. The amalgamated corporation will have a production rate estimated at 920 barrels of oil equivalent per day (644 barrels of oil and 2.76 million cubic feet of gas). Assuming oil and oil equivalent pricing of US $17 per barrel, the amalgamated corporation is expected to have an estimated cash flow for the twelve month period following amalgamation of approximately $1,900,000 and long term debt of two times cash flow or $3,800,000. The capital expenditure forecast for the twelve month period following amalgamation is estimated at $1,900,000. Management will consist of: President and CEO - Richard N. Edgar, Executive Vice-President - Gary Kirkpatrick, Vice-President Exploration - Bruce Edgar, Treasurer and CFO - to be determined The Board of Directors will consist of: Mr. Richard N. Edgar, Mr. Francis E. Lefaivre, Mr. Morton H. Wyne, Mr. R. Greg Powers Q.C., Mr. J. D. Gary Kirkpatrick, Mr. Robert T. Malcolm Q.C. and Mr. Thomas Goodenough The transaction is subject to finalization of a definitive agreement, and approvals of the respective boards of directors and shareholders of each Corporation and the Alberta Stock Exchange. The parties anticipate mailing a Joint Information Circular presenting the arrangement to their shareholders by early October.

To: Kerm Yerman who wrote (11852)	7/22/1998 8:55:00 PM
From: Herb Duncan	Read Replies (1) \| Respond to of 15196

PROPERTY DISPOSITION / Raider Resources Announces Closing of Property Disposition TSE SYMBOL: RAI JULY 22, 1998 CALGARY, ALBERTA--Raider Resources is pleased to announce the closing of a property disposition on July 10, 1998. Our working interest in the Greencourt property was sold to an industry partner for $4 million. The proceeds from the transaction were applied to our bank loan, which was reduced to $3.8 million at closing. As a result of the sale, Raider's daily production rate is 577 BOE, 64 percent of which is natural gas.

To: Kerm Yerman who wrote (11852)	7/22/1998 8:59:00 PM
From: Herb Duncan	Read Replies (7) \| Respond to of 15196

PIPELINES / IPL Energy - Issuance of Line 9 Final Construction Notice Permits Project to Proceed TSE, ME SYMBOL: IPL NASDAQ SYMBOL: IPPIF JULY 22, 1998 CALGARY, ALBERTA--(July 22, 1998) Refiners supporting the Line 9 Reversal project, as approved by the National Energy Board on December 18, 1997, have issued the Final Construction Notice thereby allowing construction to commence immediately. The refiner group includes Imperial Oil, Shell Oil, Petro-Canada and Novacor Chemicals. IPL Energy's existing 30 inch diameter Line 9 pipeline between Sarnia and Montreal will be reversed to transport crude oil from Montreal, Quebec to refineries located in Oakville, Nanticoke and Sarnia, Ontario. The 832 km Line 9 will receive imported crude oil from the Portland Pipe Line and Montreal Pipeline systems, which run between Portland, Maine and Montreal. The ultimate capacity of the line will be 240,000 barrels per day and the project cost is estimated at $90 million. "We are very pleased that construction is proceeding," said Brian F. MacNeill, IPL Energy President & CEO. "The project allows IPL Energy to utilize an idle asset and meet the needs of our customers. The reversal represents a market-driven solution which allows Ontario refiners to access cost-effective offshore crude -- which enhances the competitiveness of their operations" The projected in-service date for the reversed Line 9 is April 30, 1999. IPL Energy Inc. is a leader in energy delivery and services, operating the world's longest crude oil and liquids pipeline through the combined Interprovincial Pipe Line Inc. and Lakehead Pipe Line Partners, L.P. system, and Canada's largest natural gas distribution company through The Consumers' Gas Company Ltd. which serves 1.4 million residential, commercial and industrial customers in south central and eastern Ontario, Quebec and Upper New York State. IPL Energy's common shares trade on the Toronto and Montreal stock exchanges in Canada under the symbol "IPL". In the United States the shares trade on The NASDAQ National Market under "IPPIF". Lakehead's preference units trade on the New York Stock Exchange under "LHP".